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BANK OF AMERICA CORP /DE/ - Quarter Report: 2022 September (Form 10-Q)


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q

(Mark One)
☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 2022
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from          to
Commission file number:
1-6523
Exact name of registrant as specified in its charter:
Bank of America Corporation
State or other jurisdiction of incorporation or organization:
Delaware
IRS Employer Identification No.:
56-0906609
Address of principal executive offices:
Bank of America Corporate Center
100 N. Tryon Street
Charlotte, North Carolina 28255
Registrant’s telephone number, including area code:
(704) 386-5681
Former name, former address and former fiscal year, if changed since last report:
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareBACNew York Stock Exchange
Depositary Shares, each representing a 1/1,000th interest in a shareBAC PrENew York Stock Exchange
 of Floating Rate Non-Cumulative Preferred Stock, Series E
Depositary Shares, each representing a 1/1,000th interest in a shareBAC PrBNew York Stock Exchange
 of 6.000% Non-Cumulative Preferred Stock, Series GG
Depositary Shares, each representing a 1/1,000th interest in a shareBAC PrKNew York Stock Exchange
 of 5.875% Non-Cumulative Preferred Stock, Series HH
7.25% Non-Cumulative Perpetual Convertible Preferred Stock, Series LBAC PrLNew York Stock Exchange
Depositary Shares, each representing a 1/1,200th interest in a shareBML PrGNew York Stock Exchange
of Bank of America Corporation Floating Rate
Non-Cumulative Preferred Stock, Series 1


Title of each classTrading Symbol(s)Name of each exchange on which registered
Depositary Shares, each representing a 1/1,200th interest in a shareBML PrHNew York Stock Exchange
 of Bank of America Corporation Floating Rate
Non-Cumulative Preferred Stock, Series 2
Depositary Shares, each representing a 1/1,200th interest in a shareBML PrJNew York Stock Exchange
 of Bank of America Corporation Floating Rate
Non-Cumulative Preferred Stock, Series 4
Depositary Shares, each representing a 1/1,200th interest in a shareBML PrLNew York Stock Exchange
 of Bank of America Corporation Floating Rate
Non-Cumulative Preferred Stock, Series 5
Floating Rate Preferred Hybrid Income Term Securities of BAC CapitalBAC/PFNew York Stock Exchange
 Trust XIII (and the guarantee related thereto)
5.63% Fixed to Floating Rate Preferred Hybrid Income Term SecuritiesBAC/PGNew York Stock Exchange
 of BAC Capital Trust XIV (and the guarantee related thereto)
Income Capital Obligation Notes initially due December 15, 2066 ofMER PrKNew York Stock Exchange
Bank of America Corporation
Senior Medium-Term Notes, Series A, Step Up Callable Notes, dueBAC/31BNew York Stock Exchange
 November 28, 2031 of BofA Finance LLC (and the guarantee
of the Registrant with respect thereto)
Depositary Shares, each representing a 1/1,000th interest in a share of
BAC PrMNew York Stock Exchange
 5.375% Non-Cumulative Preferred Stock, Series KK
Depositary Shares, each representing a 1/1,000th interest in a shareBAC PrNNew York Stock Exchange
of 5.000% Non-Cumulative Preferred Stock, Series LL
Depositary Shares, each representing a 1/1,000th interest in a share ofBAC PrONew York Stock Exchange
4.375% Non-Cumulative Preferred Stock, Series NN
Depositary Shares, each representing a 1/1,000th interest in a share ofBAC PrPNew York Stock Exchange
4.125% Non-Cumulative Preferred Stock, Series PP
Depositary Shares, each representing a 1/1,000th interest in a share ofBAC PrQNew York Stock Exchange
4.250% Non-Cumulative Preferred Stock, Series QQ
Depositary Shares, each representing a 1/1,000th interest in a shareBAC PrSNew York Stock Exchange
of 4.750% Non-Cumulative Preferred Stock, Series SS
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer☑Accelerated filer☐Non-accelerated filer☐Smaller reporting company☐
                                         Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2).
Yes ☐ No ☑
On October 27, 2022, there were 8,022,432,239 shares of Bank of America Corporation Common Stock outstanding.


Bank of America Corporation and Subsidiaries
September 30, 2022
Form 10-Q
INDEX
Part I. Financial Information
Item 1. Financial StatementsPage
Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Part II. Other Information
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Bank of America Corporation (the “Corporation”) and its management may make certain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as “anticipates,” “targets,” “expects,” “hopes,” “estimates,” “intends,” “plans,” “goals,” “believes,” “continue” and other similar expressions or future or conditional verbs such as “will,” “may,” “might,” “should,” “would” and “could.” Forward-looking statements represent the Corporation’s current expectations, plans or forecasts of its future results, revenues, provision for credit losses, expenses, efficiency ratio, capital measures, strategy, and future business and economic conditions more generally, and other future matters. These statements are not guarantees of future results or performance and involve certain known and unknown risks, uncertainties and assumptions that are difficult to predict and are often beyond the Corporation’s control. Actual outcomes and results may differ materially from those expressed in, or implied by, any of these forward-looking statements.
You should not place undue reliance on any forward-looking statement and should consider the following uncertainties and risks, as well as the risks and uncertainties more fully discussed under Item 1A. Risk Factors of the Corporation’s 2021 Annual Report on Form 10-K and in any of the Corporation’s subsequent Securities and Exchange Commission filings: the Corporation’s potential judgments, orders, settlements, penalties, fines and reputational damage resulting from pending or future litigation and regulatory investigations, proceedings and enforcement actions, including as a result of our participation in and execution of government programs related to the Coronavirus Disease 2019 (COVID-19) pandemic, such as the processing of unemployment benefits for California and certain other states; the possibility that the Corporation's future liabilities may be in excess of its recorded liability and estimated range of possible loss for litigation, and regulatory and government actions; the possibility that the Corporation could face increased claims from one or more parties involved in mortgage securitizations; the Corporation's ability to resolve representations and warranties repurchase and related claims; the risks related to the discontinuation of the London Interbank Offered Rate and other reference rates, including increased expenses and litigation and the effectiveness of hedging strategies; uncertainties about the financial stability and growth rates of non-U.S. jurisdictions, the risk that those jurisdictions may face difficulties servicing their sovereign debt, and related stresses on financial markets, currencies and trade, and the Corporation’s exposures to such risks, including direct, indirect and operational; the impact of U.S. and global interest rates, inflation, currency exchange rates, economic conditions, trade policies and tensions, including tariffs,
and potential geopolitical instability; the impact of the interest rate, inflationary and macroeconomic environment on the Corporation’s business, financial condition and results of operations; the possibility that future credit losses may be higher than currently expected due to changes in economic assumptions, customer behavior, adverse developments with respect to U.S. or global economic conditions and other uncertainties, including the impact of supply chain disruptions, inflationary pressures and labor shortages on economic conditions and our business; potential losses related to the Corporation’s concentration of credit risk; the Corporation’s ability to achieve its expense targets and expectations regarding revenue, net interest income, provision for credit losses, net charge-offs, effective tax rate, loan growth or other projections; adverse changes to the Corporation’s credit ratings from the major credit rating agencies; an inability to access capital markets or maintain deposits or borrowing costs; estimates of the fair value and other accounting values, subject to impairment assessments, of certain of the Corporation’s assets and liabilities; the estimated or actual impact of changes in accounting standards or assumptions in applying those standards; uncertainty regarding the content, timing and impact of regulatory capital and liquidity requirements; the impact of adverse changes to total loss-absorbing capacity requirements, stress capital buffer requirements and/or global systemically important bank surcharges; the potential impact of actions of the Board of Governors of the Federal Reserve System on the Corporation’s capital plans; the effect of changes in or interpretations of income tax laws and regulations; the impact of implementation and compliance with U.S. and international laws, regulations and regulatory interpretations, including, but not limited to, recovery and resolution planning requirements, Federal Deposit Insurance Corporation assessments, the Volcker Rule, fiduciary standards, derivatives regulations and the Coronavirus Aid, Relief, and Economic Security Act and any similar or related rules and regulations; a failure or disruption in or breach of the Corporation’s operational or security systems or infrastructure, or those of third parties, including as a result of cyberattacks or campaigns; the risks related to the transition and physical impacts of climate change; our ability to achieve environmental, social and governance goals and commitments or the impact of any changes in the Corporation’s sustainability strategy or commitments generally; the impact of any future federal government shutdown and uncertainty regarding the federal government’s debt limit or changes in fiscal, monetary or regulatory policy; the emergence of widespread health emergencies or pandemics, including the magnitude and duration of the COVID-19 pandemic and its impact on U.S. and/or global financial market conditions and our business, results of operations, financial condition and prospects; the impact of
Bank of America 2

natural disasters, extreme weather events, military conflict (including the Russia/Ukraine conflict, the possible expansion of such conflict and potential geopolitical consequences), terrorism or other geopolitical events; and other matters.
Forward-looking statements speak only as of the date they are made, and the Corporation undertakes no obligation to update any forward-looking statement to reflect the impact of circumstances or events that arise after the date the forward-looking statement was made.
Notes to the Consolidated Financial Statements referred to in Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) are incorporated by reference into the MD&A. Certain prior-period amounts have been reclassified to conform to current-period presentation. Throughout the MD&A, the Corporation uses certain acronyms and abbreviations which are defined in the Glossary.
Executive Summary
Business Overview
The Corporation is a Delaware corporation, a bank holding company (BHC) and a financial holding company. When used in this report, “the Corporation,” “we,” “us” and “our” may refer to Bank of America Corporation individually, Bank of America Corporation and its subsidiaries, or certain of Bank of America Corporation’s subsidiaries or affiliates. Our principal executive offices are located in Charlotte, North Carolina. Through our various bank and nonbank subsidiaries throughout the U.S. and in international markets, we provide a diversified range of banking and nonbank financial services and products through four business segments: Consumer Banking, Global Wealth & Investment Management (GWIM), Global Banking and Global Markets, with the remaining operations recorded in All Other. We operate our banking activities primarily under the Bank of America, National Association (Bank of America, N.A. or BANA) charter. At September 30, 2022, the Corporation had $3.1 trillion in assets and a headcount of approximately 213,000 employees.
As of September 30, 2022, we served clients through operations across the U.S., its territories and approximately 35 countries. Our retail banking footprint covers all major markets in the U.S., and we serve approximately 68 million consumer and small business clients with approximately 3,900 retail financial centers, approximately 16,000 ATMs, and leading digital banking platforms (www.bankofamerica.com) with approximately 43 million active users, including approximately 35 million active mobile users. We offer industry-leading support to approximately three million small business households. Our GWIM businesses, with client balances of $3.2 trillion, provide tailored solutions to meet client needs through a full set of investment management, brokerage, banking, trust and retirement products. We are a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world.
The Corporation’s website is www.bankofamerica.com, and the Investor Relations portion of our website is https://investor.bankofamerica.com. We use our website to distribute company information, including as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. We routinely post and make accessible financial and other information, including environmental, social and governance (ESG) information, regarding the Corporation on our website. Investors should monitor our website, including the Investor Relations portion, in
addition to our press releases, U.S. Securities and Exchange Commission (SEC) filings, public conference calls and webcasts. Notwithstanding the foregoing, the information contained on our website as referenced in this paragraph is not incorporated by reference into this Quarterly Report on Form 10-Q.
Recent Developments
Monoline Insurance Litigation Settlement
As previously disclosed, on October 6, 2022, the Corporation and certain wholly owned subsidiaries entered into an agreement with Ambac Assurance Corporation (together with its subsidiaries, “Ambac”) to resolve all pending Ambac lawsuits against the Corporation and its subsidiaries previously disclosed in the Corporation’s 2021 Annual Report on Form 10-K and in prior SEC reports. Under the terms of the agreement, in exchange for the Corporation’s payment of $1.84 billion, Ambac, among other things, caused all pending litigation between the parties to be dismissed with prejudice, and released the Corporation and its subsidiaries from all outstanding claims related to Ambac’s issuance of bond insurance policies for certain of the Corporation’s and legacy entities’ securitized pools of residential mortgage loans. The Corporation recorded litigation expense of $354 million in the third quarter of 2022 for the portion of the settlement in excess of previously accrued amounts. For more information, see Note 10 – Commitments and Contingencies to the Consolidated Financial Statements.
Changes in U.S. Tax Law
On August 16, 2022, the U.S. enacted the Inflation Reduction Act of 2022, which contained a number of tax-related provisions. The tax changes included the extension and expansion of renewable energy tax credit programs, the establishment of a new 15 percent alternative minimum tax on adjusted financial statement income for large corporations and a one percent excise tax on stock repurchases. For more information, see Financial Highlights – Income Tax Expense on page 7.
Capital Management
In June 2022, the Board of Governors of the Federal Reserve System (Federal Reserve) announced the results of the 2022 Comprehensive Capital Analysis and Review (CCAR) supervisory stress tests, which included preliminary stress capital buffers (SCBs) that were finalized in August 2022. Based on the results, our SCB increased to 3.4 percent from 2.5 percent, resulting in a minimum Common equity tier 1 (CET1) capital ratio requirement of 10.4 percent under the Standardized approach, effective October 1, 2022 through September 30, 2023.
On October 19, 2022, the Corporation’s Board of Directors (the Board) declared a quarterly common stock dividend of $0.22 per share, payable on December 30, 2022 to shareholders of record as of December 2, 2022.
For more information on our capital resources, see Capital Management on page 23.
Russia/Ukraine Conflict
As previously disclosed, due to the Russia/Ukraine conflict, there has been significant volatility in financial and commodities markets, and multiple jurisdictions have implemented various economic sanctions. At September 30, 2022, June 30, 2022 and December 31, 2021, our direct net country exposure to Russia was $461 million, $550 million and $733 million,
3 Bank of America


primarily consisting of outstanding loans and leases totaling $390 million, $468 million and $686 million, respectively, and our net country exposure to Ukraine was not significant. While the Corporation’s direct exposure to Russia is limited, the potential duration, course and impact of the Russia/Ukraine conflict remain uncertain and could adversely affect macroeconomic and geopolitical conditions, which could negatively impact the Corporation's businesses, results of operations and financial position. For more information on the Russia/Ukraine conflict, including related risks, see Recent Developments – Russia/Ukraine in the MD&A of the Corporation’s quarterly reports on Form 10-Q for the quarters ended June 30, 2022 and March 31, 2022, and the Market and Geopolitical sections within Item 1A. Risk Factors of the Corporation’s 2021 Annual Report on Form 10-K.
LIBOR and Other Benchmark Rates
Immediately after December 31, 2021, ICE Benchmark Administration ceased publishing British Pound Sterling (GBP), Euro, Swiss Franc, and Japanese Yen (JPY) London Interbank Offered Rate (LIBOR) settings and one-week and two-month U.S. dollar (USD) LIBOR settings. However, certain GBP and JPY LIBOR settings that became no longer representative of the underlying market that such rates sought to measure are being published using a modified calculation (i.e., on a “synthetic” basis). The remaining USD LIBOR settings (i.e., overnight, one month, three month, six month and 12 month) will cease or become non-representative immediately after June 30, 2023.
The Corporation continues to execute its enterprise-wide transition program with respect to LIBOR and other impacted benchmark rates. The Corporation has ceased entering into new contracts that use USD LIBOR as a reference rate, subject to limited exceptions, including those consistent with supervisory guidance issued by the Federal Reserve, the Office of the Comptroller of the Currency and the Federal Deposit Insurance
Corporation (FDIC). The Corporation also continues to monitor a variety of market scenarios as part of its transition efforts, including risks associated with insufficient preparation by individual market participants or the overall market ecosystem, ability of market participants to transition away from impacted benchmarks, and access and demand by clients and market participants to liquidity in certain products, including LIBOR products.
As previously disclosed, the Corporation has remediated a significant majority of its notional contractual exposure to LIBOR products referencing USD LIBOR settings that will cease or become non-representative immediately after June 30, 2023 (i.e., updated to include fallback provisions to alternative reference rates (ARRs), such as the Secured Overnight Financing Rate for USD LIBOR, that are based on market-driven protocols, regulatory guidance, and industry-recommended fallback provisions and related mechanisms). The remaining non-remediated USD LIBOR exposure, a majority of which is made up of derivatives and commercial loans, represents a small minority of outstanding USD LIBOR notional contractual exposure of the Corporation and requires active dialogue with clients to modify such contracts. For any residual exposures after June 2023 that continue to have no fallback provisions, the Corporation is assessing and planning to leverage relevant contractual and statutory solutions, including the Adjustable Interest Rate (LIBOR) Act, enacted in March 2022 at the federal level in the U.S. and subject to the issuance of final implementing rules by the Federal Reserve, and other relevant legislation, to transition such exposure to ARRs.
For more information on the expected replacement of LIBOR and other benchmark rates, see Executive Summary – Recent Developments – LIBOR and Other Benchmark Rates in the MD&A and Item 1A. Risk Factors – Other of the Corporation’s 2021 Annual Report on Form 10-K.
Bank of America 4

Financial Highlights
Table 1Summary Income Statement and Selected Financial Data
Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions, except per share information)2022202120222021
Income statement  
Net interest income$13,765 $11,094 $37,781 $31,524 
Noninterest income10,737 11,672 32,637 35,529 
Total revenue, net of interest expense24,502 22,766 70,418 67,053 
Provision for credit losses898 (624)1,451 (4,105)
Noninterest expense15,303 14,440 45,895 45,000 
Income before income taxes8,301 8,950 23,072 26,158 
Income tax expense1,219 1,259 2,676 1,193 
Net income7,082 7,691 20,396 24,965 
Preferred stock dividends503 431 1,285 1,181 
Net income applicable to common shareholders$6,579 $7,260 $19,111 $23,784 
Per common share information    
Earnings$0.81 $0.86 $2.35 $2.77 
Diluted earnings0.81 0.85 2.34 2.75 
Dividends paid0.22 0.21 0.64 0.57 
Performance ratios  
Return on average assets (1)
0.90 %0.99 %0.86 %1.12 %
Return on average common shareholders’ equity (1)
10.79 11.43 10.58 12.67 
Return on average tangible common shareholders’ equity (2)
15.21 15.85 14.93 17.61 
Efficiency ratio (1)
62.45 63.43 65.17 67.11 
September 30
2022
December 31 2021
Balance sheet  
Total loans and leases$1,032,466 $979,124 
Total assets3,072,953 3,169,495 
Total deposits1,938,097 2,064,446 
Total liabilities2,803,429 2,899,429 
Total common shareholders’ equity240,390 245,358 
Total shareholders’ equity269,524 270,066 
(1)For definitions, see Key Metrics on page 101.
(2)Return on average tangible common shareholders’ equity is a non-GAAP financial measure. For more information and a corresponding reconciliation to the most closely related financial measures defined by accounting principles generally accepted in the United States of America (GAAP), see Non-GAAP Reconciliations on page 48.
Net income was $7.1 billion and $20.4 billion, or $0.81 and $2.34 per diluted share, for the three and nine months ended September 30, 2022 compared to $7.7 billion and $25.0 billion, or $0.85 and $2.75 per diluted share, for the same periods in 2021. The decrease in net income was primarily due to an increase in provision for credit losses, lower noninterest income and higher noninterest expense, partially offset by higher net interest income. In addition, the nine-month period in the prior year included a positive income tax adjustment related to the revaluation of U.K. net deferred tax assets.
Total assets decreased $96.5 billion from December 31, 2021 to $3.1 trillion primarily driven by lower cash and cash equivalents due to deposit outflows related to the rising interest rate environment and lower debt securities, partially offset by loan growth across commercial and consumer products, as well as higher trading account assets and derivative assets to support Global Markets activity.
Total liabilities decreased $96.0 billion from December 31, 2021 to $2.8 trillion primarily driven by deposit outflows related to the rising interest rate environment and customer tax payments.
Shareholders’ equity decreased $542 million from December 31, 2021 primarily due to market value decreases on derivatives and debt securities, as well as returns of capital to
shareholders through common and preferred stock dividends and common stock repurchases, partially offset by net income and the issuance of preferred stock.
Net Interest Income
Net interest income increased $2.7 billion to $13.8 billion, and $6.3 billion to $37.8 billion for the three and nine months ended September 30, 2022 compared to the same periods in 2021. Net interest yield on a fully taxable-equivalent (FTE) basis increased 38 basis points (bps) to 2.06 percent, and 21 bps to 1.87 percent for the same periods. The increase in net interest income for the three-month period was primarily driven by benefits from higher interest rates, including lower premium amortization expense, and loan growth, partially offset by lower deposits and securities. The increase in the nine-month period was primarily driven by lower premium amortization expense, loan growth and higher interest rates, partially offset by a decrease in the acceleration of net capitalized loan fees due to Paycheck Protection Program (PPP) loan forgiveness. For more information on net interest yield and the FTE basis, see Supplemental Financial Data on page 8, and for more information on interest rate risk management, see Interest Rate Risk Management for the Banking Book on page 45.

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Noninterest Income
Table 2Noninterest Income
Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)2022202120222021
Fees and commissions:
Card income$1,573 $1,583 $4,531 $4,604 
Service charges1,466 1,928 5,016 5,594 
Investment and brokerage services3,795 4,236 12,178 12,422 
Investment banking fees1,167 2,168 3,752 6,536 
Total fees and commissions8,001 9,915 25,477 29,156 
Market making and similar activities3,068 2,005 9,023 7,360 
Other income(332)(248)(1,863)(987)
Total noninterest income$10,737 $11,672 $32,637 $35,529 
Noninterest income decreased $935 million to $10.7 billion and decreased $2.9 billion to $32.6 billion for the three and nine months ended September 30, 2022 compared to the same periods in 2021. The following highlights the significant changes.
●    Service charges decreased $462 million and $578 million primarily driven by the impact of non-sufficient funds and overdraft policy changes as well as lower treasury service charges.
●    Investment and brokerage services decreased $441 million and $244 million primarily driven by lower market valuations.
●    Investment banking fees decreased $1.0 billion and $2.8 billion primarily driven by a decline in demand resulting in lower equity and debt issuance fees and lower advisory fees.
●    Market making and similar activities increased $1.1 billion and $1.7 billion primarily driven by improved performance across macro products in fixed income, currencies and commodities (FICC) and derivative products in Equities.
●    Other income decreased $84 million and $876 million primarily due to certain valuation adjustments.
Provision for Credit Losses
The provision for credit losses increased $1.5 billion to $898 million and $5.6 billion to $1.5 billion for the three and nine months ended September 30, 2022 compared to the same periods in 2021. The provision for credit losses for the three months ended September 30, 2022 was primarily driven by loan growth and a dampening macroeconomic outlook, and the nine-month period was driven by the same factors as well as a reserve build related to Russian exposure, partially offset by asset quality improvement and reduced COVID-19 pandemic (the pandemic) uncertainties. For the same periods in the prior year, the benefit in the provision for credit losses was due to an improved macroeconomic outlook. For more information on the provision for credit losses, see Allowance for Credit Losses on page 42.

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Noninterest Expense
Table 3Noninterest Expense
Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)2022202120222021
Compensation and benefits$8,887 $8,714 $27,286 $27,103 
Occupancy and equipment1,777 1,764 5,285 5,353 
Information processing and communications1,546 1,416 4,621 4,289 
Product delivery and transaction related892 987 2,749 2,940 
Marketing505 347 1,365 1,528 
Professional fees525 434 1,493 1,263 
Other general operating1,171 778 3,096 2,524 
Total noninterest expense$15,303 $14,440 $45,895 $45,000 
Noninterest expense increased $863 million to $15.3 billion and $895 million to $45.9 billion for the three and nine months ended September 30, 2022 compared to the same periods in 2021. The increase in the three-month period was primarily due to higher investments in people and technology and the settlement of the legacy monoline insurance litigation, partially
offset by lower net COVID-19 related costs. The increase in the nine-month period was primarily due to the same factors as described in the three-month period, as well as expenses recognized for certain regulatory matters during the second quarter of 2022.
Income Tax Expense
Table 4Income Tax Expense
Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)2022202120222021
Income before income taxes$8,301 $8,950 $23,072 $26,158 
Income tax expense1,219 1,259 2,676 1,193 
Effective tax rate14.7 %14.1 %11.6 %4.6 %
Changes in the effective tax rates for the three and nine months ended September 30, 2022 compared to the same periods a year ago were primarily driven by changes in our recurring preference benefits. Also included in the nine months ended September 30, 2021 was the impact of the 2021 U.K. tax law change further discussed in this section. The majority of our recurring tax preference benefits consists of tax credits from ESG investments in affordable housing, where the recurring tax credits are recognized ratably over a term of up to 10 years, and wind and solar energy investments, where the tax credits are recognized either at inception for transactions electing Investment Tax Credits (ITCs) or as energy is produced if electing Production Tax Credits (PTCs), as further discussed below. Absent ESG tax credits and unusual items, the effective tax rates would have been approximately 25 percent.
On August 16, 2022, the U.S. enacted the Inflation Reduction Act of 2022, which contained a number of tax-related provisions, including the extension and expansion of renewable energy tax credit programs. In particular, partnerships are no longer limited to an ITC, but can now elect a PTC for solar energy production facilities placed in service after December 31, 2021. As a result, the Corporation changed its estimated impact of solar-related tax credits and reversed the impact of certain solar investment tax credits recognized in the first half of
2022, which increased income tax expense by $152 million in the third quarter of 2022. If there is a change in the expected tax credit election, an income tax adjustment will be recognized in the quarter in which the change occurs.
Other notable tax law changes include the establishment of a new 15 percent alternative minimum tax (AMT) on adjusted financial statement income for large corporations and a one percent excise tax on net stock repurchases, both of which are effective for tax years beginning on or after January 1, 2023. The tax law changes for the new AMT permit business credits, including those from ESG investments in renewable energy and affordable housing, to offset potential AMT liability. The Corporation has assessed the potential impacts of these two U.S. tax law changes and does not expect the changes will have a significant effect on its future effective tax rate.
On June 10, 2021, the U.K. enacted the 2021 Finance Act, which increased the U.K. corporation income tax rate to 25 percent from 19 percent. This change is effective April 1, 2023 and unfavorably affects income tax expense on future U.K. earnings. As a result, during the three months ended June 30, 2021, the Corporation recorded a positive income tax adjustment of approximately $2.0 billion with a corresponding write-up of U.K. net deferred tax assets, which reflected a reversal of previously recorded write-downs of net deferred tax assets for prior changes in the U.K. corporation income tax rate.
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Supplemental Financial Data
Non-GAAP Financial Measures
In this Form 10-Q, we present certain non-GAAP financial measures. Non-GAAP financial measures exclude certain items or otherwise include components that differ from the most directly comparable measures calculated in accordance with GAAP. Non-GAAP financial measures are provided as additional useful information to assess our financial condition, results of operations (including period-to-period operating performance) or compliance with prospective regulatory requirements. These non-GAAP financial measures are not intended as a substitute for GAAP financial measures and may not be defined or calculated the same way as non-GAAP financial measures used by other companies.
We view net interest income and related ratios and analyses on an FTE basis, which when presented on a consolidated basis are non-GAAP financial measures. To derive the FTE basis, net interest income is adjusted to reflect tax-exempt income on an equivalent before-tax basis with a corresponding increase in income tax expense. For purposes of this calculation, we use the federal statutory tax rate of 21 percent and a representative state tax rate. Net interest yield, which measures the basis points we earn over the cost of funds, utilizes net interest income on an FTE basis. We believe that presentation of these items on an FTE basis allows for comparison of amounts from both taxable and tax-exempt sources and is consistent with industry practices.
We may present certain key performance indicators and ratios excluding certain items (e.g., debit valuation adjustment (DVA) gains (losses)), which result in non-GAAP financial measures. We believe that the presentation of measures that exclude these items is useful because such measures provide additional information to assess the underlying operational performance and trends of our businesses and to allow better comparison of period-to-period operating performance.
We also evaluate our business based on certain ratios that utilize tangible equity, a non-GAAP financial measure. Tangible equity represents shareholders’ equity or common shareholders’ equity reduced by goodwill and intangible assets (excluding mortgage servicing rights (MSRs)), net of related deferred tax liabilities (“adjusted” shareholders’ equity or common shareholders’ equity). These measures are used to evaluate our use of equity. In addition, profitability, relationship and investment models use both return on average tangible
common shareholders’ equity and return on average tangible shareholders’ equity as key measures to support our overall growth objectives. These ratios are:
●    Return on average tangible common shareholders’ equity measures our net income applicable to common shareholders as a percentage of adjusted average common shareholders’ equity. The tangible common equity ratio represents adjusted ending common shareholders’ equity divided by total tangible assets.
●    Return on average tangible shareholders’ equity measures our net income as a percentage of adjusted average total shareholders’ equity. The tangible equity ratio represents adjusted ending shareholders’ equity divided by total tangible assets.
●    Tangible book value per common share represents adjusted ending common shareholders’ equity divided by ending common shares outstanding.
We believe ratios utilizing tangible equity provide additional useful information because they present measures of those assets that can generate income. Tangible book value per common share provides additional useful information about the level of tangible assets in relation to outstanding shares of common stock.
The aforementioned supplemental data and performance measures are presented in Table 5 on page 9.
For more information on the reconciliation of these non-GAAP financial measures to the corresponding GAAP financial measures, see Non-GAAP Reconciliations on page 48.
Key Performance Indicators
We present certain key financial and nonfinancial performance indicators (key performance indicators) that management uses when assessing our consolidated and/or segment results. We believe they are useful to investors because they provide additional information about our underlying operational performance and trends. These key performance indicators (KPIs) may not be defined or calculated in the same way as similar KPIs used by other companies. For information on how these metrics are defined, see Key Metrics on page 101.
Our consolidated key performance indicators, which include various equity and credit metrics, are presented in Table 1 on page 5 and Table 5 on page 9.
For information on key segment performance metrics, see Business Segment Operations on page 12.
Bank of America 8

Table 5Selected Financial Data
Nine Months Ended
2022 Quarters2021 QuartersSeptember 30
(In millions, except per share information)ThirdSecondFirstFourthThird20222021
Income statement  
Net interest income$13,765 $12,444 $11,572 $11,410 $11,094 $37,781 $31,524 
Noninterest income 10,737 10,244 11,656 10,650 11,672 32,637 35,529 
Total revenue, net of interest expense24,502 22,688 23,228 22,060 22,766 70,418 67,053 
Provision for credit losses898 523 30 (489)(624)1,451 (4,105)
Noninterest expense15,303 15,273 15,319 14,731 14,440 45,895 45,000 
Income before income taxes8,301 6,892 7,879 7,818 8,950 23,072 26,158 
Income tax expense 1,219 645 812 805 1,259 2,676 1,193 
Net income 7,082 6,247 7,067 7,013 7,691 20,396 24,965 
Net income applicable to common shareholders6,579 5,932 6,600 6,773 7,260 19,111 23,784 
Average common shares issued and outstanding
8,107.7 8,121.6 8,136.8 8,226.5 8,430.7 8,122.2 8,583.1 
Average diluted common shares issued and outstanding
8,160.8 8,163.1 8,202.1 8,304.7 8,492.8 8,173.3 8,702.2 
Performance ratios       
Return on average assets (1)
0.90 %0.79 %0.89 %0.88 %0.99 %0.86 %1.12 %
Four-quarter trailing return on average assets (2)
0.87 0.89 0.99 1.05 1.04 n/an/a
Return on average common shareholders’ equity (1)
10.79 9.93 11.02 10.90 11.43 10.58 12.67 
Return on average tangible common shareholders’ equity (3)
15.21 14.05 15.51 15.25 15.85 14.93 17.61 
Return on average shareholders’ equity (1)
10.37 9.34 10.64 10.27 11.08 10.12 12.15 
Return on average tangible shareholders’ equity (3)
13.99 12.66 14.40 13.87 14.87 13.68 16.33 
Total ending equity to total ending assets8.77 8.65 8.23 8.52 8.83 8.77 8.83 
Common equity ratio (1)
7.82 7.71 7.40 7.74 8.07 7.82 8.07 
Total average equity to total average assets8.73 8.49 8.40 8.56 8.95 8.54 9.19 
Dividend payout (1)
27.06 28.68 25.86 25.33 24.10 27.15 20.43 
Per common share data       
Earnings $0.81 $0.73 $0.81 $0.82 $0.86 $2.35 $2.77 
Diluted earnings 0.81 0.73 0.80 0.82 0.85 2.34 2.75 
Dividends paid0.22 0.21 0.21 0.21 0.21 0.64 0.57 
Book value (1)
29.96 29.87 29.70 30.37 30.22 29.96 30.22 
Tangible book value (3)
21.21 21.13 20.99 21.68 21.69 21.21 21.69 
Market capitalization$242,338 $250,136 $332,320 $359,383 $349,841 $242,338 $349,841 
Average balance sheet     
Total loans and leases$1,034,334 $1,014,886 $977,793 $945,062 $920,509 
Total assets3,105,546 3,157,855 3,207,702 3,164,118 3,076,452 
Total deposits1,962,775 2,012,079 2,045,811 2,017,223 1,942,705 
Long-term debt250,204 245,781 246,042 248,525 248,988 
Common shareholders’ equity241,882 239,523 242,865 246,519 252,043 
Total shareholders’ equity271,017 268,197 269,309 270,883 275,484 
Asset quality      
Allowance for credit losses (4)
$13,817 $13,434 $13,483 $13,843 $14,693 
Nonperforming loans, leases and foreclosed properties (5)
4,156 4,326 4,778 4,697 4,831 
Allowance for loan and lease losses as a percentage of total loans and leases outstanding (5)
1.20 %1.17 %1.23 %1.28 %1.43 %
Allowance for loan and lease losses as a percentage of total nonperforming loans and leases (5)
309 288 262 271 279 
Net charge-offs $520 $571 $392 $362 $463 
Annualized net charge-offs as a percentage of average loans and leases outstanding (5)
0.20 %0.23 %0.16 %0.15 %0.20 %
Capital ratios at period end (6)
     
Common equity tier 1 capital
11.0 %10.5 %10.4 %10.6 %11.1 %
Tier 1 capital
12.8 12.3 12.0 12.1 12.6 
Total capital
14.7 14.2 14.0 14.1 14.7 
Tier 1 leverage
6.8 6.5 6.3 6.4 6.6 
Supplementary leverage ratio
5.8 5.5 5.4 5.5 5.6 
Tangible equity (3)
6.6 6.5 6.2 6.4 6.7 
Tangible common equity (3)
5.7 5.6 5.3 5.7 5.9 
Total loss-absorbing capacity and long-term debt metrics
Total loss-absorbing capacity to risk-weighted assets28.9 %27.8 %27.2 %26.9 %27.7 %
Total loss-absorbing capacity to supplementary leverage exposure13.0 12.6 12.2 12.1 12.4 
Eligible long-term debt to risk-weighted assets15.2 14.7 14.4 14.1 14.4 
Eligible long-term debt to supplementary leverage exposure6.8 6.6 6.5 6.3 6.4 
(1)For definitions, see Key Metrics on page 101.
(2)Calculated as total net income for four consecutive quarters divided by annualized average assets for four consecutive quarters.
(3)Tangible equity ratios and tangible book value per share of common stock are non-GAAP financial measures. For more information on these ratios and corresponding reconciliations to GAAP financial measures, see Supplemental Financial Data on page 8 and Non-GAAP Reconciliations on page 48.
(4)Includes the allowance for loan and lease losses and the reserve for unfunded lending commitments.
(5)Balances and ratios do not include loans accounted for under the fair value option. For additional exclusions from nonperforming loans, leases and foreclosed properties, see Consumer Portfolio Credit Risk Management – Nonperforming Consumer Loans, Leases and Foreclosed Properties Activity on page 35 and corresponding Table 25 and Commercial Portfolio Credit Risk Management – Nonperforming Commercial Loans, Leases and Foreclosed Properties Activity on page 39 and corresponding Table 32.
(6)For more information, including which approach is used to assess capital adequacy, see Capital Management on page 23.
n/a = not applicable
9 Bank of America


Table 6Quarterly Average Balances and Interest Rates - FTE Basis
Average
Balance
Interest
Income/
Expense (1)
Yield/
Rate		Average
Balance
Interest
Income/
Expense (1)
Yield/
Rate
(Dollars in millions)Third Quarter 2022Third Quarter 2021
Earning assets      
Interest-bearing deposits with the Federal Reserve, non-U.S. central
   banks and other banks
$184,263 $848 1.83 %$240,054 $50 0.08 %
Time deposits placed and other short-term investments10,352 34 1.33 6,419 4 0.24 
Federal funds sold and securities borrowed or purchased under
   agreements to resell
278,059 1,446 2.06 270,094 6 0.01 
Trading account assets163,744 1,465 3.55 147,196 979 2.64 
Debt securities901,654 4,259 1.88 949,009 3,296 1.39 
Loans and leases (2)
Residential mortgage228,474 1,616 2.83 215,652 1,487 2.76 
Home equity27,282 229 3.32 30,069 263 3.47 
Credit card85,009 2,187 10.20 75,569 1,952 10.25 
Direct/Indirect and other consumer108,300 923 3.38 98,148 578 2.34 
Total consumer449,065 4,955 4.39 419,438 4,280 4.06 
U.S. commercial377,183 3,427 3.60 323,659 2,315 2.84 
Non-U.S. commercial127,793 1,028 3.19 101,967 446 1.73 
Commercial real estate (3)
66,707 738 4.39 59,881 378 2.51 
Commercial lease financing13,586 124 3.65 15,564 116 2.98 
Total commercial585,269 5,317 3.61 501,071 3,255 2.58 
Total loans and leases 1,034,334 10,272 3.94 920,509 7,535 3.25 
Other earning assets98,172 1,403 5.67 120,734 567 1.86 
Total earning assets2,670,578 19,727 2.94 2,654,015 12,437 1.86 
Cash and due from banks27,250 30,101 
Other assets, less allowance for loan and lease losses407,718 392,336 
Total assets$3,105,546 $3,076,452 
Interest-bearing liabilities      
U.S. interest-bearing deposits      
Demand and money market deposits$981,145 $832 0.34 %$931,964 $79 0.03 %
Time and savings deposits164,313 193 0.47 162,337 41 0.10 
Total U.S. interest-bearing deposits1,145,458 1,025 0.35 1,094,301 120 0.04 
Non-U.S. interest-bearing deposits79,383 210 1.05 84,098 13 0.06 
Total interest-bearing deposits1,224,841 1,235 0.40 1,178,399 133 0.04 
Federal funds purchased and securities loaned or sold under agreements
    to repurchase
211,346 1,338 2.51 216,869 147 0.27 
Short-term borrowings and other interest-bearing liabilities (4)
137,253 926 2.68 107,713 (188)(0.69)
Trading account liabilities46,507 383 3.27 56,496 285 2.00 
Long-term debt250,204 1,974 3.14 248,988 865 1.37 
Total interest-bearing liabilities1,870,151 5,856 1.24 1,808,465 1,242 0.27 
Noninterest-bearing sources
Noninterest-bearing deposits737,934 764,306 
Other liabilities (5)
226,444 228,197 
Shareholders’ equity271,017 275,484 
Total liabilities and shareholders’ equity$3,105,546 $3,076,452 
Net interest spread1.70 %1.59 %
Impact of noninterest-bearing sources0.36 0.09 
Net interest income/yield on earning assets (6)
$13,871 2.06 %$11,195 1.68 %
(1)Includes the impact of interest rate risk management contracts. For more information, see Interest Rate Risk Management for the Banking Book on page 45.
(2)Nonperforming loans are included in the respective average loan balances. Income on these nonperforming loans is generally recognized on a cost recovery basis.
(3)Includes U.S. commercial real estate loans of $62.5 billion and $56.0 billion, and non-U.S. commercial real estate loans of $4.2 billion and $3.9 billion for the third quarter of 2022 and 2021.
(4)For more information on negative interest, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K.
(5)Includes $29.2 billion and $29.6 billion of structured notes and liabilities for the third quarter of 2022 and 2021.
(6)Net interest income includes FTE adjustments of $106 million and $101 million for the third quarter of 2022 and 2021.
Bank of America 10

Table 7Year-to-Date Average Balances and Interest Rates - FTE Basis
Average
Balance
Interest
Income/
Expense (1)
Yield/
Rate		Average
Balance
Interest
Income/
Expense (1)
Yield/
Rate
Nine Months Ended September 30
(Dollars in millions)20222021
Earning assets      
Interest-bearing deposits with the Federal Reserve, non-U.S. central
   banks and other banks		$202,293 $1,216 0.80 %$255,136 $106 0.06 %
Time deposits placed and other short-term investments9,091 58 0.86 7,738 8 0.14 
Federal funds sold and securities borrowed or purchased under
   agreements to resell (2)
293,971 1,835 0.83 263,581 (43)(0.02)
Trading account assets154,428 3,802 3.29 148,205 2,831 2.55 
Debt securities940,808 12,164 1.72 878,437 8,875 1.36 
Loans and leases (3)
      
Residential mortgage227,010 4,712 2.77 216,239 4,514 2.78 
Home equity27,492 684 3.32 31,761 811 3.41 
Credit card81,505 6,081 9.97 74,383 5,775 10.38 
Direct/Indirect and other consumer107,204 2,198 2.74 94,658 1,698 2.40 
Total consumer443,211 13,675 4.12 417,041 12,798 4.10 
U.S. commercial362,669 8,079 2.98 322,773 6,415 2.66 
Non-U.S. commercial124,965 2,228 2.38 96,445 1,284 1.78 
Commercial real estate (4)
64,295 1,601 3.33 59,632 1,114 2.50 
Commercial lease financing14,071 334 3.17 16,200 356 2.94 
Total commercial566,000 12,242 2.89 495,050 9,169 2.48 
Total loans and leases1,009,211 25,917 3.43 912,091 21,967 3.22 
Other earning assets108,968 2,813 3.45 106,978 1,696 2.12 
Total earning assets2,718,770 47,805 2.35 2,572,166 35,440 1.84 
Cash and due from banks28,116  31,886  
Other assets, less allowance for loan and lease losses409,771   386,932   
Total assets$3,156,657   $2,990,984   
Interest-bearing liabilities      
U.S. interest-bearing deposits      
Demand and money market deposits$989,364 $1,101 0.15 %$912,547 $234 0.03 %
Time and savings deposits161,707 275 0.23 161,156 132 0.11 
Total U.S. interest-bearing deposits1,151,071 1,376 0.16 1,073,703 366 0.05 
Non-U.S. interest-bearing deposits80,235 343 0.57 82,743 28 0.04 
Total interest-bearing deposits1,231,306 1,719 0.19 1,156,446 394 0.05 
Federal funds purchased and securities loaned or sold under agreements
   to repurchase (5)
214,404 1,871 1.17 208,431 381 0.24 
Short-term borrowings and other interest-bearing liabilities (2,5)
132,873 834 0.84 104,395 (586)(0.75)
Trading account liabilities54,852 1,117 2.72 52,797 824 2.09 
Long-term debt247,357 4,168 2.25 234,056 2,581 1.48 
Total interest-bearing liabilities1,880,792 9,709 0.69 1,756,125 3,594 0.27 
Noninterest-bearing sources      
Noninterest-bearing deposits775,278   723,151   
Other liabilities (6)
231,073   236,982   
Shareholders’ equity269,514   274,726   
Total liabilities and shareholders’ equity$3,156,657   $2,990,984   
Net interest spread  1.66 %  1.57 %
Impact of noninterest-bearing sources  0.21   0.09 
Net interest income/yield on earning assets (7)
 $38,096 1.87 % $31,846 1.66 %
(1)Includes the impact of interest rate risk management contracts. For more information, see Interest Rate Risk Management for the Banking Book on page 45.
(2)For more information on negative interest, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K.
(3)Nonperforming loans are included in the respective average loan balances. Income on these nonperforming loans is generally recognized on a cost recovery basis.
(4)Includes U.S. commercial real estate loans of $60.0 billion and $56.2 billion and non-U.S. commercial real estate loans of $4.3 billion and $3.4 billion for the nine months ended September 30, 2022 and 2021.
(5)Certain prior-period amounts have been reclassified to conform to current-period presentation.
(6)Includes $29.7 billion and $30.5 billion of structured notes and liabilities for the nine months ended September 30, 2022 and 2021.
(7)Net interest income includes FTE adjustments of $315 million and $322 million for the nine months ended September 30, 2022 and 2021.




11 Bank of America


Business Segment Operations
Segment Description and Basis of Presentation
We report our results of operations through four business segments: Consumer Banking, GWIM, Global Banking and Global Markets, with the remaining operations recorded in All Other. We manage our segments and report their results on an FTE basis. For more information, see Business Segment Operations in the MD&A of the Corporation’s 2021 Annual Report on Form 10-K.
We periodically review capital allocated to our businesses and allocate capital annually during the strategic and capital planning processes. We utilize a methodology that considers the effect of regulatory capital requirements in addition to internal risk-based capital models. Our internal risk-based capital models use a risk-adjusted methodology incorporating each segment’s credit, market, interest rate, business and operational risk components. For more information on the nature of these risks, see Managing Risk on page 22. The capital allocated to the business segments is referred to as
allocated capital. Allocated equity in the reporting units is comprised of allocated capital plus capital for the portion of goodwill and intangibles specifically assigned to the reporting unit. For more information, including the definition of a reporting unit, see Note 7 – Goodwill and Intangible Assets to the Consolidated Financial Statements.
For more information on our presentation of financial information on an FTE basis, see Supplemental Financial Data on page 8, and for reconciliations to consolidated total revenue, net income and period-end total assets, see Note 17 – Business Segment Information to the Consolidated Financial Statements.
Key Performance Indicators
We present certain key financial and nonfinancial performance indicators that management uses when evaluating segment results. We believe they are useful to investors because they provide additional information about our segments’ operational performance, customer trends and business growth.
Consumer Banking
DepositsConsumer LendingTotal Consumer Banking
Three Months Ended September 30
(Dollars in millions)202220212022202120222021% Change
Net interest income$5,006 $3,730 $2,778 $2,763 $7,784 $6,493 20 %
Noninterest income:
Card income(10)(7)1,341 1,324 1,331 1,317 1 
Service charges597 934 — 1 597 935 (36)
All other income141 58 51 35 192 93 106 
Total noninterest income728 985 1,392 1,360 2,120 2,345 (10)
Total revenue, net of interest expense
5,734 4,715 4,170 4,123 9,904 8,838 12 
Provision for credit losses173 53 565 194 738 247 n/m
Noninterest expense3,141 2,724 1,956 1,834 5,097 4,558 12 
Income before income taxes2,420 1,938 1,649 2,095 4,069 4,033 1 
Income tax expense593 475 404 513 997 988 1 
Net income$1,827 $1,463 $1,245 $1,582 $3,072 $3,045 1 
Effective tax rate (1)
24.5 %24.5 %
Net interest yield1.87 %1.49 %3.76 %3.95 %2.79 %2.49 %
Return on average allocated capital56 48 18 24 30 31 
Efficiency ratio54.78 57.75 46.92 44.48 51.47 51.56 
Balance Sheet
Three Months Ended September 30
Average202220212022202120222021% Change
Total loans and leases$4,153 $4,387 $291,078 $276,993 $295,231 $281,380 5 %
Total earning assets (2)
1,064,585 991,186 293,366 277,491 1,106,513 1,034,471 7 
Total assets (2)
1,096,911 1,026,811 300,374 283,631 1,145,846 1,076,236 6 
Total deposits1,063,075 993,624 6,018 7,141 1,069,093 1,000,765 7 
Allocated capital13,000 12,000 27,000 26,500 40,000 38,500 4 
(1)Estimated at the segment level only.
(2)In segments and businesses where the total of liabilities and equity exceeds assets, we allocate assets from All Other to match the segments’ and businesses’ liabilities and allocated shareholders’ equity. As a result, total earning assets and total assets of the businesses may not equal total Consumer Banking.
n/m = not meaningful
Bank of America 12

DepositsConsumer LendingTotal Consumer Banking
Nine Months Ended September 30
(Dollars in millions)202220212022202120222021% Change
Net interest income$13,535 $10,489 $8,016 $7,897 $21,551 $18,386 17 %
Noninterest income:
Card income(27)(19)3,863 3,837 3,836 3,818 — 
Service charges2,118 2,615 2 2 2,120 2,617 (19)
All other income264 151 82 121 346 272 27 
Total noninterest income2,355 2,747 3,947 3,960 6,302 6,707 (6)
Total revenue, net of interest expense
15,890 13,236 11,963 11,857 27,853 25,093 11 
Provision for credit losses388 174 648 (1,241)1,036 (1,067)n/m
Noninterest expense9,204 8,789 5,773 5,759 14,977 14,548 3 
Income before income taxes6,298 4,273 5,542 7,339 11,840 11,612 2 
Income tax expense1,543 1,047 1,358 1,798 2,901 2,845 2 
Net income$4,755 $3,226 $4,184 $5,541 $8,939 $8,767 2 
Effective tax rate (1)
24.5 %24.5 %
Net interest yield1.70 %1.46 %3.73 %3.76 %2.61 %2.45 %
Return on average allocated capital49 36 21 28 30 30 
Efficiency ratio57.92 66.40 48.26 48.57 53.77 57.97 
Balance Sheet
Nine Months Ended September 30
Average202220212022202120222021% Change
Total loans and leases$4,171 $4,479 $285,501 $280,165 $289,672 $284,644 2 %
Total earning assets (2)
1,062,668 957,561 287,422 280,617 1,104,653 1,001,590 10 
Total assets (2)
1,095,830 994,562 294,193 285,813 1,144,587 1,043,787 10 
Total deposits1,061,876 961,266 5,909 7,006 1,067,785 968,272 10 
Allocated capital13,000 12,000 27,000 26,500 40,000 38,500 4 
Period endSeptember 30
2022		December 31
2021		September 30
2022		December 31
2021		September 30
2022		December 31
2021		% Change
Total loans and leases$4,134 $4,206 $293,691 $282,305 $297,825 $286,511 4 %
Total earning assets (2)
1,068,130 1,048,009 295,637 282,850 1,110,524 1,090,331 2 
Total assets (2)
1,100,517 1,082,449 302,644 289,220 1,149,918 1,131,142 2 
Total deposits1,066,522 1,049,085 6,058 5,910 1,072,580 1,054,995 2 
See page 12 for footnotes.
n/m = not meaningful
Consumer Banking, comprised of Deposits and Consumer Lending, offers a diversified range of credit, banking and investment products and services to consumers and small businesses. For more information about Consumer Banking, see Business Segment Operations in the MD&A of the Corporation’s 2021 Annual Report on Form 10-K.
Consumer Banking Results
Three-Month Comparison
Net income for Consumer Banking increased $27 million to $3.1 billion due to higher revenue, largely offset by higher noninterest expense and an increase in provision for credit losses. Net interest income increased $1.3 billion to $7.8 billion primarily due to higher interest rates and the benefits of higher deposit and loan balances, partially offset by a decrease in the acceleration of net capitalized loan fees due to PPP loan forgiveness. Noninterest income decreased $225 million to $2.1 billion primarily driven by the impact of non-sufficient funds and overdraft policy changes.
The provision for credit losses increased $491 million to $738 million primarily driven by loan growth in the current-year period compared to the prior-year period that benefited from an improved macroeconomic outlook. Noninterest expense increased $539 million to $5.1 billion primarily driven by continued investments for business growth, including marketing, technology and compensation and benefits expenses, as well as increased client activity.

The return on average allocated capital was 30 percent, down from 31 percent, primarily driven by an increase in allocated capital. For more information on capital allocated to the business segments, see Business Segment Operations on page 12.
Nine-Month Comparison
Net income for Consumer Banking increased $172 million to $8.9 billion due to higher revenue, partially offset by an increase in provision for credit losses and higher noninterest expense. Net interest income increased $3.2 billion to $21.6 billion primarily due to the same factors as described in the three-month discussion. Noninterest income decreased $405 million to $6.3 billion primarily driven by the impact of non-sufficient funds and overdraft policy changes and lower mortgage banking income, partially offset by higher other service charges and card income due to increased client activity.
The provision for credit losses increased $2.1 billion to $1.0 billion primarily driven by loan growth and a dampening macroeconomic outlook in the current-year period compared to a benefit in the prior-year period due to an improved macroeconomic outlook. Noninterest expense increased $429 million to $15.0 billion primarily driven by continued investments for business growth and increased client activity, partially offset by an impairment charge for real estate rationalization and the contribution to the Bank of America Foundation in the prior-year period.
The return on average allocated capital was 30 percent, unchanged from the prior-year period.
13 Bank of America


Deposits
Three-Month Comparison
Net income for Deposits increased $364 million to $1.8 billion due to higher revenue, partially offset by higher noninterest expense. Net interest income increased $1.3 billion to $5.0 billion primarily due to higher interest rates and the benefit of higher deposit balances. Noninterest income decreased $257 million to $728 million primarily driven by the impact of non-sufficient funds and overdraft policy changes.
Noninterest expense increased $417 million to $3.1 billion primarily driven by continued investments for business growth and increased client activity.
Average deposits increased $69.5 billion to $1.1 trillion primarily due to net inflows of $38.8 billion in checking and $33.3 billion in money market savings largely driven by strong organic growth.
Nine-Month Comparison
Net income for Deposits increased $1.5 billion to $4.8 billion primarily due to higher revenue, partially offset by higher
noninterest expense. Net interest income increased $3.0 billion to $13.5 billion primarily due to the same factors as described in the three-month discussion. Noninterest income decreased $392 million to $2.4 billion primarily due to the same factor as described in the three-month discussion.
Noninterest expense increased $415 million to $9.2 billion primarily driven by continued investments for business growth and increased client activity, partially offset by an impairment charge for real estate rationalization in the prior-year period.
Average deposits increased $100.6 billion to $1.1 trillion primarily due to net inflows of $58.4 billion in checking and $42.2 billion in money market savings largely driven by strong organic growth.
The table below provides key performance indicators for Deposits. Management uses these metrics, and we believe they are useful to investors because they provide additional information to evaluate our deposit profitability and digital/mobile trends.
Key Statistics – Deposits
Three Months Ended September 30Nine Months Ended September 30
2022202120222021
Total deposit spreads (excludes noninterest costs) (1)
1.88%1.68%1.74%1.70%
Period End
Consumer investment assets (in millions) (2)
$302,413$353,280
Active digital banking users (in thousands) (3)
43,49640,911
Active mobile banking users (in thousands) (4)
34,92232,455
Financial centers3,9324,215
ATMs15,57216,513
(1)Includes deposits held in Consumer Lending.
(2)Includes client brokerage assets, deposit sweep balances and AUM in Consumer Banking.
(3)Represents mobile and/or online active users over the past 90 days.
(4)Represents mobile active users over the past 90 days.
Consumer investment assets decreased $50.9 billion to $302.4 billion driven by market performance, partially offset by client flows. Active mobile banking users increased approximately two million, reflecting continuing changes in our clients’ banking preferences. We had a net decrease of 283 financial centers and 941 ATMs as we continue to optimize our consumer banking network.
Consumer Lending
Three-Month Comparison
Net income for Consumer Lending decreased $337 million to $1.2 billion primarily due to an increase in provision for credit losses. Net interest income increased $15 million to $2.8 billion primarily due to higher interest rates and loan balances, largely offset by a decrease in the acceleration of net capitalized loan fees due to PPP loan forgiveness. Noninterest income increased $32 million to $1.4 billion primarily driven by higher card income.
The provision for credit losses increased $371 million to $565 million primarily driven by loan growth in the current-year period compared to the prior-year period that benefited from an improved macroeconomic outlook. Noninterest expense increased $122 million to $2.0 billion primarily driven by increased client activity.
Average loans increased $14.1 billion to $291.1 billion primarily driven by an increase in credit card loans and first mortgage loans, partially offset by a decline in PPP loans.
Nine-Month Comparison
Net income for Consumer Lending decreased $1.4 billion to $4.2 billion primarily due to an increase in provision for credit losses. Net interest income increased $119 million to $8.0 billion primarily due to the same factors as described in the three-month discussion. Noninterest income decreased $13 million to $3.9 billion primarily driven by lower mortgage banking income, largely offset by higher card income.
The provision for credit losses increased $1.9 billion to $648 million primarily driven by loan growth and a dampening macroeconomic outlook in the current-year period compared to a benefit in the prior-year period due to an improved macroeconomic outlook. Noninterest expense increased $14 million to $5.8 billion primarily driven by increased client activity, largely offset by the contribution to the Bank of America Foundation in the prior-year period.
Average loans increased $5.3 billion to $285.5 billion primarily driven by an increase in credit card loans and first mortgage loans, partially offset by a decline in PPP loans.
The table below provides key performance indicators for Consumer Lending. Management uses these metrics, and we believe they are useful to investors because they provide additional information about loan growth and profitability.
Bank of America 14

Key Statistics – Consumer Lending
Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)2022202120222021
Total credit card (1)
Gross interest yield (2)
10.71 %10.10 %10.14 %10.24 %
Risk-adjusted margin (3)
10.07 10.70 10.13 9.93 
New accounts (in thousands)1,256 1,049 3,301 2,654 
Purchase volumes$91,064 $80,925 $263,788 $223,900 
Debit card purchase volumes
$127,135 $119,680 $373,426 $349,492 
(1)Includes GWIM's credit card portfolio.
(2)Calculated as the effective annual percentage rate divided by average loans.
(3)Calculated as the difference between total revenue, net of interest expense, and net credit losses divided by average loans.
During the three months ended September 30, 2022, the total risk-adjusted margin decreased 63 bps primarily driven by lower net interest margin and lower fee income, partially offset by lower net credit losses. During the nine months ended September 30, 2022, the total risk-adjusted margin increased 20 bps primarily driven by lower net credit losses, partially
offset by lower net interest margin and lower fee income. During the three and nine months ended September 30, 2022, total credit card purchase volumes increased $10.1 billion and $39.9 billion, and debit card purchase volumes increased $7.5 billion and $23.9 billion, reflecting higher levels of consumer spending.
Key Statistics – Loan Production (1)
Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)2022202120222021
Consumer Banking: 
First mortgage$4,028 $12,510 $18,695 $33,194 
Home equity1,999 1,262 5,875 2,579 
Total (2):
First mortgage$8,724 $21,232 $39,548 $56,731 
Home equity2,420 1,523 6,995 3,192 
(1)The loan production amounts represent the unpaid principal balance of loans and, in the case of home equity, the principal amount of the total line of credit.
(2)In addition to loan production in Consumer Banking, there is also first mortgage and home equity loan production in GWIM.
First mortgage loan originations for Consumer Banking and the total Corporation decreased $8.5 billion and $12.5 billion during the three months ended September 30, 2022 primarily driven by changes in demand. During the nine months ended September 30, 2022, Consumer Banking and the total Corporation decreased $14.5 billion and $17.2 billion primarily driven by changes in demand.
Home equity production in Consumer Banking and the total Corporation increased $737 million and $897 million during the three months ended September 30, 2022 primarily driven by higher demand. During the nine months ended September 30, 2022, Consumer Banking and the total Corporation increased $3.3 billion and $3.8 billion primarily driven by higher demand.
15 Bank of America


Global Wealth & Investment Management
Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)20222021% Change20222021% Change
Net interest income$1,981 $1,452 36 %$5,451 $4,137 32 %
Noninterest income:
Investment and brokerage services3,255 3,682 (12)10,395 10,610 (2)
All other income193 176 10 492 599 (18)
Total noninterest income3,448 3,858 (11)10,887 11,209 (3)
Total revenue, net of interest expense5,429 5,310 2 16,338 15,346 6 
Provision for credit losses37 (58)n/m29 (185)(116)
Noninterest expense3,816 3,744 2 11,706 11,425 2 
Income before income taxes1,576 1,624 (3)4,603 4,106 12 
Income tax expense386 398 (3)1,128 1,006 12 
Net income$1,190 $1,226 (3)$3,475 $3,100 12 
Effective tax rate24.5 %24.5 %24.5 %24.5 %
Net interest yield2.12 1.54 1.84 1.51 
Return on average allocated capital27 30 27 25 
Efficiency ratio70.28 70.51 71.65 74.45 
Balance Sheet
Three Months Ended September 30Nine Months Ended September 30
Average20222021% Change20222021% Change
Total loans and leases$223,734 $199,664 12 %$218,030 $194,090 12 %
Total earning assets370,733 373,691 (1)395,023 367,239 8 
Total assets383,468 386,346 (1)407,819 379,802 7 
Total deposits339,487 339,357 — 362,611 333,119 9 
Allocated capital17,500 16,500 6 17,500 16,500 6 
Period endSeptember 30
2022		December 31
2021		% Change
Total loans and leases$224,858 $208,971 8 %
Total earning assets357,434 425,112 (16)
Total assets370,790 438,275 (15)
Total deposits324,859 390,143 (17)
n/m = not meaningful

GWIM consists of two primary businesses: Merrill Wealth Management and Bank of America Private Bank. For more information about GWIM, see Business Segment Operations in the MD&A of the Corporation’s 2021 Annual Report on Form 10-K.
Three-Month Comparison
Net income for GWIM of $1.2 billion remained relatively unchanged. The operating margin was 29 percent compared to 31 percent a year ago.
Net interest income increased $529 million to $2.0 billion driven by the benefits of higher interest rates and higher loan balances.
Noninterest income, which primarily includes investment and brokerage services income, decreased $410 million to $3.4 billion primarily due to the impacts of lower market valuations and declines in assets under management (AUM) pricing, partially offset by the impact of positive AUM flows.
The provision for credit losses increased $95 million to $37 million primarily due to loan growth and a dampening macroeconomic outlook in the current-year period. Noninterest expense increased $72 million to $3.8 billion primarily driven by continued investments in the business, partially offset by lower revenue-related incentives.
The return on average allocated capital was 27 percent, down from 30 percent, due to an increase in allocated capital and lower net income. For more information on capital allocated to the business segments, see Business Segment Operations on page 12.
Average loans increased $24.1 billion to $223.7 billion primarily driven by residential mortgage, custom lending and securities-based lending. Average deposits of $339.5 billion remained relatively unchanged.
Merrill Wealth Management revenue of $4.5 billion increased one percent as the benefits of higher interest rates and higher loan balances were largely offset by the impact of lower market valuations and declines in AUM pricing.
Bank of America Private Bank revenue of $905 million increased eight percent driven by the benefits of higher deposit and loan balances and higher interest rates.
Nine-Month Comparison
Net income for GWIM increased $375 million to $3.5 billion driven by higher revenue, partially offset by higher noninterest expense and provision for credit losses. The operating margin was 28 percent compared to 27 percent a year ago.
Net interest income increased $1.3 billion to $5.5 billion due to the same factors as described in the three-month discussion, as well as the benefits of higher deposit balances.
Noninterest income, which primarily includes investment and brokerage services income, decreased $322 million to $10.9 billion primarily due to the same factors as described in the three-month discussion.
The provision for credit losses increased $214 million primarily due to the same factors as described in the three-month discussion. Noninterest expense increased $281 million to $11.7 billion primarily due to the same factors as described in the three-month discussion.
Bank of America 16

The return on average allocated capital was 27 percent, up from 25 percent, due to higher net income, partially offset by an increase in allocated capital.
Average loans increased $23.9 billion to $218.0 billion primarily due to the same factors as described in the three-month discussion. Average deposits increased $29.5 billion to $362.6 billion primarily driven by inflows from new and existing accounts.
Merrill Wealth Management revenue of $13.6 billion increased six percent primarily driven by the benefits of higher interest rates, higher deposit and loan balances and positive AUM flows, partially offset by the impact of lower market valuations and declines in AUM pricing.
Bank of America Private Bank revenue of $2.7 billion increased 11 percent primarily driven by the same factors as described in the three-month discussion.
Key Indicators and Metrics
Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)2022202120222021
Revenue by Business
Merrill Wealth Management$4,524 $4,471 $13,649 $12,916 
Bank of America Private Bank905 839 2,689 2,430 
Total revenue, net of interest expense$5,429 $5,310 $16,338 $15,346 
Client Balances by Business, at period end
Merrill Wealth Management$2,710,985 $3,108,358 
Bank of America Private Bank
537,771 584,475 
Total client balances$3,248,756 $3,692,833 
Client Balances by Type, at period end
Assets under management$1,329,557 $1,578,630 
Brokerage and other assets1,413,946 1,612,472 
Deposits324,859 345,590 
Loans and leases (1)
228,129 205,055 
Less: Managed deposits in assets under management(47,735)(48,914)
Total client balances$3,248,756 $3,692,833 
Assets Under Management Rollforward
Assets under management, beginning of period$1,411,344 $1,549,069 $1,638,782 $1,408,465 
Net client flows 4,110 14,776 20,680 44,698 
Market valuation/other
(85,897)14,785 (329,905)125,467 
Total assets under management, end of period$1,329,557 $1,578,630 $1,329,557 $1,578,630 
Total wealth advisors, at period end (2)
18,841 18,855 
(1)Includes margin receivables which are classified in customer and other receivables on the Consolidated Balance Sheet.
(2)Includes advisors across all wealth management businesses in GWIM and Consumer Banking.
Client Balances
Client balances decreased $444.1 billion, or 12 percent, to $3.2 trillion at September 30, 2022 compared to September 30, 2021. The decrease in client balances was primarily due to the impact of lower market valuations, partially offset by positive client flows.
17 Bank of America


Global Banking
Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)20222021% Change20222021% Change
Net interest income$3,326 $2,185 52 %$8,304 $6,150 35 %
Noninterest income:
Service charges771 889 (13)2,590 2,637 (2)
Investment banking fees726 1,297 (44)2,298 3,642 (37)
All other income768 874 (12)2,599 2,538 2 
Total noninterest income2,265 3,060 (26)7,487 8,817 (15)
Total revenue, net of interest expense 5,591 5,245 7 15,791 14,967 6 
Provision for credit losses170 (781)(122)492 (2,738)(118)
Noninterest expense2,651 2,534 5 8,133 7,915 3 
Income before income taxes2,770 3,492 (21)7,166 9,790 (27)
Income tax expense 734 943 (22)1,899 2,643 (28)
Net income$2,036 $2,549 (20)$5,267 $7,147 (26)
Effective tax rate 26.5 %27.0 %26.5 %27.0 %
Net interest yield2.53 1.55 2.05 1.53 
Return on average allocated capital18 24 16 22 
Efficiency ratio47.41 48.31 51.50 52.88 
Balance Sheet
Three Months Ended September 30Nine Months Ended September 30
Average20222021% Change20222021% Change
Total loans and leases
$384,305 $324,736 18 %$373,547 $326,632 14 %
Total earning assets521,555 560,181 (7)541,670 537,037 1 
Total assets585,683 621,699 (6)605,884 597,947 1 
Total deposits495,154 534,166 (7)514,612 509,445 1 
Allocated capital44,500 42,500 5 44,500 42,500 5 
Period endSeptember 30
2022		December 31
2021		% Change
Total loans and leases$377,711 $352,933 7 %
Total earning assets511,494 574,583 (11)
Total assets575,442 638,131 (10)
Total deposits484,309 551,752 (12)
Global Banking, which includes Global Corporate Banking, Global Commercial Banking, Business Banking and Global Investment Banking, provides a wide range of lending-related products and services, integrated working capital management and treasury solutions, and underwriting and advisory services through our network of offices and client relationship teams. For more information about Global Banking, see Business Segment Operations in the MD&A of the Corporation’s 2021 Annual Report on Form 10-K.
Three-Month Comparison
Net income for Global Banking decreased $513 million to $2.0 billion driven by higher provision for credit losses and higher noninterest expense, partially offset by higher revenue.
Net interest income increased $1.1 billion to $3.3 billion primarily due to the benefits of higher interest rates and loan growth, partially offset by the impact of lower deposit balances.
Noninterest income decreased $795 million to $2.3 billion driven by lower investment banking fees, income from ESG investment activities and treasury service charges.
The provision for credit losses increased $951 million to $170 million primarily driven by a dampening macroeconomic outlook compared to a benefit in the provision for credit losses of $781 million in the prior-year period due to an improved macroeconomic outlook.
Noninterest expense increased $117 million to $2.7 billion primarily due to continued investments in the business, including strategic hiring.
The return on average allocated capital was 18 percent, down from 24 percent, due to lower net income and higher allocated capital. For more information on capital allocated to the business segments, see Business Segment Operations on page 12.
Nine-Month Comparison
Net income for Global Banking decreased $1.9 billion to $5.3 billion driven by higher provision for credit losses and higher noninterest expense, partially offset by higher revenue.
Net interest income increased $2.2 billion to $8.3 billion primarily due to the benefits of higher interest rates and loan growth.
Noninterest income decreased $1.3 billion to $7.5 billion driven by lower investment banking fees and valuation adjustments on leveraged loans.
The provision for credit losses increased $3.2 billion to $492 million primarily driven by a dampening macroeconomic outlook and loan growth as well as a reserve build in the current-year period for our Russian exposure, compared to a benefit in the provision for credit losses of $2.7 billion in the prior-year period due to an improved macroeconomic outlook.

Bank of America 18

Noninterest expense increased $218 million to $8.1 billion, primarily due to continued investments in the business, partially offset by an acceleration of expenses due to incentive compensation award changes in the prior-year period.
The return on average allocated capital was 16 percent, down from 22 percent, due to lower net income and higher allocated capital.
Global Corporate, Global Commercial and Business Banking
The following table and discussion present a summary of the results, which exclude certain investment banking and PPP activities in Global Banking.
Global Corporate, Global Commercial and Business Banking
 Global Corporate BankingGlobal Commercial BankingBusiness BankingTotal
Three Months Ended September 30
(Dollars in millions)20222021202220212022202120222021
Revenue
Business Lending$902 $885 $1,111 $923 $66 $54 $2,079 $1,862 
Global Transaction Services (1)
1,369 850 1,112 855 322 240 2,803 1,945 
Total revenue, net of interest expense
$2,271 $1,735 $2,223 $1,778 $388 $294 $4,882 $3,807 
Balance Sheet
Average
Total loans and leases$177,166 $147,906 $193,828 $159,986 $12,697 $12,635 $383,691 $320,527 
Total deposits (1)
241,289 263,478 198,479 213,713 55,386 56,935 495,154 534,126 
Global Corporate BankingGlobal Commercial BankingBusiness BankingTotal
Nine Months Ended September 30
(Dollars in millions)20222021202220212022202120222021
Revenue
Business Lending$2,908 $2,528 $3,128 $2,688 $186 $165 $6,222 $5,381 
Global Transaction Services (1)
3,456 2,324 2,981 2,432 835 692 7,272 5,448 
Total revenue, net of interest expense
$6,364 $4,852 $6,109 $5,120 $1,021 $857 $13,494 $10,829 
Balance Sheet
Average
Total loans and leases
$173,740 $148,101 $185,981 $158,939 $12,799 $12,778 $372,520 $319,818 
Total deposits (1)
247,924 246,269 209,583 207,783 57,106 55,361 514,613 509,413 
Period end
Total loans and leases $172,806 $150,797 $191,739 $162,371 $12,663 $12,640 $377,208 $325,808 
Total deposits (1)
242,837 257,462 187,899 221,160 53,572 57,814 484,308 536,436 
(1)Prior periods have been revised to conform to current-period presentation.
Business Lending revenue increased $217 million for the three months ended September 30, 2022 compared to the same period in 2021 primarily due to the benefits of loan growth and higher interest rates, partially offset by lower income from ESG investment activities. Business Lending revenue increased $841 million for the nine months ended September 30, 2022 primarily due to the benefits of loan growth and higher interest rates.
Global Transaction Services revenue increased $858 million for the three months ended September 30, 2022 driven by higher interest rates, partially offset by the impact of lower deposit balances and treasury service charges. Global Transaction Services revenue increased $1.8 billion for the nine months ended September 30, 2022 driven by higher interest rates.
Average loans and leases increased 20 percent and 16 percent for the three and nine months ended September 30, 2022 due to higher client demand. Average deposits decreased
seven percent during the three months ended September 30, 2022 due to declines in domestic and international balances, and increased one percent during the nine months ended September 30, 2022 due to portfolio growth.
Global Investment Banking
Client teams and product specialists underwrite and distribute debt, equity and loan products, and provide advisory services and tailored risk management solutions. The economics of certain investment banking and underwriting activities are shared primarily between Global Banking and Global Markets under an internal revenue-sharing arrangement. Global Banking originates certain deal-related transactions with our corporate and commercial clients that are executed and distributed by Global Markets. To provide a complete discussion of our consolidated investment banking fees, the table below presents total Corporation investment banking fees and the portion attributable to Global Banking.
19 Bank of America


Investment Banking Fees
Global BankingTotal CorporationGlobal BankingTotal Corporation
Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)20222021202220212022202120222021
Products
Advisory$397 $608 $432 $654 $1,197 $1,341 $1,297 $1,461 
Debt issuance273 401 616 933 915 1,306 2,109 3,031 
Equity issuance56 288 156 637 186 995 520 2,239 
Gross investment banking fees
726 1,297 1,204 2,224 2,298 3,642 3,926 6,731 
Self-led deals(17)(24)(37)(56)(74)(85)(174)(195)
Total investment banking fees
$709 $1,273 $1,167 $2,168 $2,224 $3,557 $3,752 $6,536 
Total Corporation investment banking fees, which exclude self-led deals and are primarily included within Global Banking and Global Markets, were $1.2 billion and $3.8 billion for the three and nine months ended September 30, 2022. The three-month and nine-month periods decreased 46 percent and 43 percent compared to the same periods in 2021 primarily driven by lower equity issuance, debt issuance and advisory fees.
Global Markets
Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)20222021% Change20222021% Change
Net interest income$743 $1,000 (26)%$2,717 $2,980 (9)%
Noninterest income:
Investment and brokerage services457 471 (3)1,520 1,504 1 
Investment banking fees430 844 (49)1,473 2,784 (47)
Market making and similar activities2,874 2,014 43 8,721 7,448 17 
All other income(21)190 (111)(154)721 (121)
Total noninterest income3,740 3,519 6 11,560 12,457 (7)
Total revenue, net of interest expense4,483 4,519 (1)14,277 15,437 (8)
Provision for credit losses11 16 (31)24 33 (27)
Noninterest expense3,023 3,252 (7)9,249 10,150 (9)
Income before income taxes1,449 1,251 16 5,004 5,254 (5)
Income tax expense384 325 18 1,326 1,366 (3)
Net income$1,065 $926 15 $3,678 $3,888 (5)
Effective tax rate26.5 %26.0 %26.5 %26.0 %
Return on average allocated capital10 10 12 14 
Efficiency ratio67.42 71.94 64.78 65.75 
Balance Sheet
Three Months Ended September 30Nine Months Ended September 30
20222021% Change20222021% Change
Average
Trading-related assets:
Trading account securities$308,514 $304,133 1 %$301,690 $291,500 3 %
Reverse repurchases112,828 117,486 (4)127,527 111,330 15 
Securities borrowed114,032 101,086 13 115,898 97,205 19 
Derivative assets57,017 41,010 39 53,098 44,308 20 
Total trading-related assets592,391 563,715 5 598,213 544,343 10 
Total loans and leases120,435 97,148 24 114,505 87,535 31 
Total earning assets591,883 557,333 6 600,477 528,113 14 
Total assets847,899 804,938 5 857,747 775,552 11 
Total deposits38,820 54,650 (29)41,448 54,699 (24)
Allocated capital42,500 38,000 12 42,500 38,000 12 
Period endSeptember 30
2022		December 31
2021		% Change
Total trading-related assets$592,938 $491,160 21 %
Total loans and leases121,721 114,846 6 
Total earning assets595,988 561,135 6 
Total assets848,752 747,794 14 
Total deposits37,318 46,374 (20)

Bank of America 20

Global Markets offers sales and trading services and research services to institutional clients across fixed-income, credit, currency, commodity and equity businesses. Global Markets product coverage includes securities and derivative products in both the primary and secondary markets. For more information about Global Markets, see Business Segment Operations in the MD&A of the Corporation’s 2021 Annual Report on Form 10-K.
Except as otherwise noted below, the following explanations for current period-over-period changes for Global Markets, including those disclosed under Sales and Trading Revenue, are the same for amounts including and excluding net DVA. Amounts excluding net DVA are a non-GAAP financial measure. For more information on net DVA, see Supplemental Financial Data on page 8.
Three-Month Comparison
Net income for Global Markets increased $139 million to $1.1 billion. Net DVA losses were $14 million compared to losses of $20 million in the prior-year period. Excluding net DVA, net income increased $135 million to $1.1 billion. These increases were primarily driven by lower noninterest expense.
Revenue decreased $36 million to $4.5 billion primarily driven by lower investment banking fees, largely offset by higher sales and trading revenue. Sales and trading revenue increased $478 million, and excluding net DVA, increased $472 million. These increases were driven by higher revenue in FICC.
Noninterest expense decreased $229 million to $3.0 billion primarily driven by the realignment of a liquidating business activity from Global Markets to All Other in the fourth quarter of 2021.
Average total assets increased $43.0 billion to $847.9 billion driven by loan growth, higher derivative balances due to a strong U.S. dollar and higher interest rates, as well as growth in commodities activity.
The return on average allocated capital was 10 percent, unchanged from the prior-year period, reflecting higher net income offset by an increase in allocated capital. For more information on capital allocated to the business segments, see Business Segment Operations on page 12.
Nine-Month Comparison
Net income for Global Markets decreased $210 million to $3.7 billion. Net DVA gains were $213 million compared to losses of $56 million in the prior-year period. Excluding net DVA, net income decreased $415 million to $3.5 billion. These decreases were primarily driven by lower revenue, partially offset by lower noninterest expense.
Revenue decreased $1.2 billion to $14.3 billion primarily due to the same factors as described in the three-month discussion. Sales and trading revenue increased $711 million and excluding net DVA, sales and trading revenue increased $442 million. These increases were driven by higher revenue in both FICC and Equities.
Noninterest expense decreased $901 million to $9.2 billion primarily due to the same factor as described in the three-month discussion and an acceleration of expenses from incentive compensation award changes in the prior-year period.
Average total assets increased $82.2 billion to $857.7 billion driven by loan growth and commodities activity in FICC as well as higher balances in Equities. Period-end total assets increased $101.0 billion from December 31, 2021 to $848.8 billion driven by higher derivative balances due to a strong U.S. dollar and higher interest rates, higher levels of inventory in FICC to facilitate client activity, and increased hedging of client activity with stock positions relative to derivatives in Equities.
The return on average allocated capital was 12 percent, down from 14 percent, reflecting lower net income and an increase in allocated capital.
Sales and Trading Revenue
For a description of sales and trading revenue, see Business Segment Operations in the MD&A of the Corporation’s 2021 Annual Report on Form 10-K. The table below and related discussion present sales and trading revenue, substantially all of which is in Global Markets, with the remainder in Global Banking. In addition, the following table and related discussion present sales and trading revenue, excluding net DVA, which is a non-GAAP financial measure. For more information on net DVA, see Supplemental Financial Data on page 8.
Sales and Trading Revenue (1, 2, 3)
Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)2022202120222021
Sales and trading revenue
Fixed income, currencies and commodities
$2,552 $2,009 $7,760 $7,188 
Equities1,540 1,605 5,204 5,065 
Total sales and trading revenue$4,092 $3,614 $12,964 $12,253 
Sales and trading revenue, excluding net DVA (4)
Fixed income, currencies and commodities
$2,567 $2,025 $7,555 $7,241 
Equities1,539 1,609 5,196 5,068 
Total sales and trading revenue, excluding net DVA
$4,106 $3,634 $12,751 $12,309 
(1)For more information on sales and trading revenue, see Note 3 – Derivatives to the Consolidated Financial Statements.
(2)Includes FTE adjustments of $58 million and $253 million for the three and nine months ended September 30, 2022 compared to $99 million and $232 million for the same periods in 2021.
(3)    Includes Global Banking sales and trading revenue of $287 million and $785 million for the three and nine months ended September 30, 2022 compared to $138 million and $412 million for the same periods in 2021.
(4)    FICC and Equities sales and trading revenue, excluding net DVA, is a non-GAAP financial measure. FICC net DVA gains (losses) were $(15) million and $205 million for the three and nine months ended September 30, 2022 compared to losses of $16 million and $53 million for the same periods in 2021. Equities net DVA gains were $1 million and $8 million for the three and nine months ended September 30, 2022 compared to losses of $4 million and $3 million for the same periods in 2021.

21 Bank of America


Three-Month Comparison
FICC revenue increased $542 million driven by improved performance across macro products, partially offset by a weaker trading performance in credit and mortgage products. Equities revenue decreased $70 million driven by lower client activity in Asia and a weaker trading performance in cash, partially offset by increased client activity in derivatives.
Nine-Month Comparison
FICC revenue increased $314 million driven by improved trading performance across interest rate and currency products, partially offset by gains in commodities in the prior-year period for a weather-related event and a weaker trading environment for credit products in the current-year period. Equities revenue increased $128 million driven by a strong trading performance in derivatives, partially offset by a weaker trading performance in cash.
All Other
Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)20222021% Change20222021% Change
Net interest income$37 $65 (43)%$73 $193 (62)%
Noninterest income (loss)(836)(1,110)(25)(3,599)(3,661)(2)
Total revenue, net of interest expense(799)(1,045)(24)(3,526)(3,468)2 
Provision for credit losses(58)(48)21 (130)(148)(12)
Noninterest expense716 352 103 1,830 962 90 
Loss before income taxes(1,457)(1,349)8 (5,226)(4,282)22 
Income tax benefit(1,176)(1,294)(9)(4,263)(6,345)(33)
Net income (loss)$(281)$(55)n/m$(963)$2,063 (147)
Balance Sheet
Three Months Ended September 30Nine Months Ended September 30
Average20222021% Change20222021% Change
Total loans and leases$10,629 $17,581 (40)%$13,457 $19,190 (30)%
Total assets (1)
142,650 187,233 (24)140,620 193,896 (27)
Total deposits20,221 13,767 47 20,128 14,062 43 
Period endSeptember 30
2022		December 31
2021		% Change
Total loans and leases$10,351 $15,863 (35)%
Total assets (1)
128,051 214,153 (40)
Total deposits19,031 21,182 (10)
(1)In segments where the total of liabilities and equity exceeds assets, which are generally deposit-taking segments, we allocate assets from All Other to those segments to match liabilities (i.e., deposits) and allocated shareholders’ equity. Average allocated assets were $1.1 trillion for both the three and nine months ended September 30, 2022 compared to $1.1 trillion for both periods in 2021, and period-end allocated assets were $1.1 trillion and $1.2 trillion at September 30, 2022 and December 31, 2021.
n/m = not meaningful

All Other primarily consists of asset and liability management (ALM) activities, liquidating businesses and certain expenses not otherwise allocated to a business segment. ALM activities encompass interest rate and foreign currency risk management activities for which substantially all of the results are allocated to our business segments. For more information on our ALM activities, see Note 17 – Business Segment Information to the Consolidated Financial Statements.
Three-Month Comparison
The net loss of All Other increased $226 million to a loss of $281 million primarily due to higher noninterest expense and a lower income tax benefit, partially offset by higher revenue.
Revenue increased $246 million primarily driven by lower valuation adjustments.
Noninterest expense increased $364 million primarily driven by higher litigation expense due to the legacy monoline insurance litigation settlement and the realignment of a liquidating business activity from Global Markets to All Other in the fourth quarter of 2021, partially offset by decreases in other expenses.
The income tax benefit decreased $118 million primarily due to the impact of lower levels of income tax credits associated with ESG investment activities, which were impacted by enactment of the Inflation Reduction Act of 2022 in the third quarter of 2022. For more information, see Financial Highlights – Income Tax Expense on page 7. Both periods included
income tax benefit adjustments to eliminate the FTE treatment of certain tax credits recorded in Global Banking.
Nine-Month Comparison
Net income decreased $3.0 billion to a loss of $963 million primarily due to a lower income tax benefit and higher noninterest expense.
Noninterest expense increased $868 million primarily due to the same factors as described in the three-month discussion and expenses recognized for certain regulatory matters during the second quarter of 2022.
The income tax benefit decreased $2.1 billion primarily due to the impact of the 2021 U.K. tax law change. For more information, see Financial Highlights – Income Tax Expense on page 7. Both periods included income tax benefit adjustments to eliminate the FTE treatment of certain tax credits recorded in Global Banking.
Managing Risk
Risk is inherent in all our business activities. The seven key types of risk faced by the Corporation are strategic, credit, market, liquidity, compliance, operational and reputational. Sound risk management enables us to serve our customers and deliver for our shareholders. If not managed well, risk can result in financial loss, regulatory sanctions and penalties, and damage to our reputation, each of which may adversely impact our ability to execute our business strategies. We take a comprehensive approach to risk management with a defined
Bank of America 22

Risk Framework and an articulated Risk Appetite Statement, which are approved annually by the Enterprise Risk Committee and the Board.
Our Risk Framework serves as the foundation for the consistent and effective management of risks facing the Corporation. The Risk Framework sets forth roles and responsibilities for the management of risk and provides a blueprint for how the Board, through delegation of authority to committees and executive officers, establishes risk appetite and associated limits for our activities.
Our risk appetite provides a common set of measures for senior management and the Board to clearly indicate the level of risk we are willing to take in alignment with our strategic and capital plans and ensure that the Corporation’s risk profile remains aligned with our risk appetite. Our risk appetite is formally articulated in the Risk Appetite Statement, which includes both qualitative components and quantitative limits that are reviewed and approved by the Board at least annually.
For more information about the Corporation’s risks, including those related to the pandemic, see Item 1A. Risk Factors of the Corporation’s 2021 Annual Report on Form 10-K. These risks are being managed within our Risk Framework and supporting risk management programs.
For more information on our Risk Framework, our risk management activities and the key types of risk faced by the Corporation, see the Managing Risk section in the MD&A of the Corporation’s 2021 Annual Report on Form 10-K.
Capital Management
The Corporation manages its capital position so that its capital is more than adequate to support its business activities and aligns with risk, risk appetite and strategic planning. For more information, including related regulatory requirements, see Capital Management in the MD&A of the Corporation’s 2021 Annual Report on Form 10-K.
CCAR and Capital Planning
The Federal Reserve requires BHCs to submit a capital plan and planned capital actions on an annual basis, consistent with the rules governing the CCAR capital plan. Based on the results of our 2022 CCAR stress test, our SCB increased to 3.4 percent from 2.5 percent, effective October 1, 2022 through September 30, 2023.
In October 2021, the Board renewed the Corporation’s $25 billion common stock repurchase program previously announced in April 2021. The Board’s authorization replaced the previous program. As with the April 2021 authorization, the Board also authorized common stock repurchases to offset shares awarded under the Corporation’s equity-based compensation plans. Pursuant to the Board’s authorizations, during the third quarter of 2022, we repurchased $450 million of common stock, predominantly offsetting shares awarded under equity-based compensation plans.
The timing and amount of common stock repurchases are subject to various factors, including the Corporation’s capital position, liquidity, financial performance and alternative uses of capital, stock trading price, regulatory requirements and general market conditions, and may be suspended at any time. Such repurchases may be effected through open market purchases or privately negotiated transactions, including repurchase plans that satisfy the conditions of Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (Exchange Act).
Regulatory Capital
As a financial services holding company, we are subject to regulatory capital rules, including Basel 3, issued by U.S. banking regulators. The Corporation's depository institution subsidiaries are also subject to the Prompt Corrective Action (PCA) framework. The Corporation and its primary affiliated banking entity, BANA, are Advanced approaches institutions under Basel 3 and are required to report regulatory risk-based capital ratios and risk-weighted assets (RWA) under both the Standardized and Advanced approaches. The approach that yields the lower ratio is used to assess capital adequacy, including under the PCA framework. As of September 30, 2022, the CET1, Tier 1 capital and Total capital ratios for the Corporation were lower under the Standardized approach.
Minimum Capital Requirements
In order to avoid restrictions on capital distributions and discretionary bonus payments, the Corporation must meet risk-based capital ratio requirements that include a capital conservation buffer of 2.5 percent (under the Advanced approaches only), an SCB (under the Standardized approach only), plus any applicable countercyclical capital buffer and a global systemically important bank (G-SIB) surcharge. The buffers and surcharge must be comprised solely of CET1 capital. For the period from October 1, 2021 through September 30, 2022, the Corporation's minimum CET1 capital ratio requirement was 9.5 percent under both the Standardized and Advanced approaches. Based on the results of our 2022 CCAR stress test, the Corporation’s SCB increased to 3.4 percent, resulting in a minimum CET1 capital ratio requirement of 10.4 percent under the Standardized approach for the period from October 1, 2022 through September 30, 2023. At September 30, 2022, the Corporation’s CET1 capital ratio of 11.0 percent under the Standardized approach exceeded its new CET1 capital ratio requirement that was effective October 1, 2022. Our minimum CET1 capital ratio requirement under the Advanced approaches remains unchanged at 9.5 percent.
The Corporation is required to calculate its G-SIB surcharge on an annual basis under two methods and is subject to the higher of the resulting two surcharges. Method 1 is consistent with the approach prescribed by the Basel Committee’s assessment methodology and is calculated using specified indicators of systemic importance. Method 2 modifies the Method 1 approach by, among other factors, including a measure of the Corporation’s reliance on short-term wholesale funding. The Corporation’s G-SIB surcharge, which is higher under Method 2, is expected to increase to 3.0 percent on January 1, 2024 unless its surcharge calculated as of December 31, 2022 is lower than 3.0 percent.
The Corporation is also required to maintain a minimum supplementary leverage ratio (SLR) of 3.0 percent plus a leverage buffer of 2.0 percent in order to avoid certain restrictions on capital distributions and discretionary bonus payments. Our insured depository institution subsidiaries are required to maintain a minimum 6.0 percent SLR to be considered well capitalized under the PCA framework.
Capital Composition and Ratios
Table 8 presents Bank of America Corporation’s capital ratios and related information in accordance with Basel 3 Standardized and Advanced approaches as measured at September 30, 2022 and December 31, 2021. For the periods presented herein, the Corporation met the definition of well capitalized under current regulatory requirements.
23 Bank of America


Table 8Bank of America Corporation Regulatory Capital under Basel 3
Standardized
Approach (1)
Advanced
Approaches (1)
Regulatory
Minimum (2)
(Dollars in millions, except as noted)September 30, 2022
Risk-based capital metrics:
Common equity tier 1 capital$175,554 $175,554 
Tier 1 capital204,675 204,675 
Total capital (3)
235,276 228,334 
Risk-weighted assets (in billions) 1,599 1,391 
Common equity tier 1 capital ratio11.0 %12.6 %9.5 %
Tier 1 capital ratio12.8 14.7 11.0 
Total capital ratio14.7 16.4 13.0 
Leverage-based metrics:
Adjusted quarterly average assets (in billions) (4)
$3,028 $3,028 
Tier 1 leverage ratio6.8 %6.8 %4.0 
Supplementary leverage exposure (in billions)$3,556 
Supplementary leverage ratio5.8 %5.0 
December 31, 2021
Risk-based capital metrics:
Common equity tier 1 capital$171,759 $171,759 
Tier 1 capital196,465 196,465 
Total capital (3)
227,592 220,616 
Risk-weighted assets (in billions)1,618 1,399 
Common equity tier 1 capital ratio10.6 %12.3 %9.5 %
Tier 1 capital ratio12.1 14.0 11.0 
Total capital ratio14.1 15.8 13.0 
Leverage-based metrics:
Adjusted quarterly average assets (in billions) (4)
$3,087 $3,087 
Tier 1 leverage ratio6.4 %6.4 %4.0 
Supplementary leverage exposure (in billions) $3,604 
Supplementary leverage ratio5.5 %5.0 
(1)Capital ratios as of September 30, 2022 and December 31, 2021 are calculated using the regulatory capital rule that allows a five-year transition period related to the adoption of the current expected credit losses (CECL) accounting standard.
(2)The capital conservation buffer and G-SIB surcharge were 2.5 percent at both September 30, 2022 and December 31, 2021. At both September 30, 2022 and December 31, 2021, the Corporation's SCB of 2.5 percent was applied in place of the capital conservation buffer under the Standardized approach. The countercyclical capital buffer for both periods was zero. The CET1 capital regulatory minimum is the sum of the CET1 capital ratio minimum of 4.5 percent, our G-SIB surcharge of 2.5 percent and our SCB or the capital conservation buffer, as applicable, of 2.5 percent. The SLR regulatory minimum includes a leverage buffer of 2.0 percent.
(3)Total capital under the Advanced approaches differs from the Standardized approach due to differences in the amount permitted in Tier 2 capital related to the qualifying allowance for credit losses.
(4)Reflects total average assets adjusted for certain Tier 1 capital deductions.

At September 30, 2022, CET1 capital was $175.6 billion, an increase of $3.8 billion from December 31, 2021, due to earnings, partially offset by dividends, an increase in net unrealized losses on available-for-sale debt securities included in accumulated other comprehensive income (OCI), and common stock repurchases. Tier 1 capital increased $8.2 billion primarily driven by the same factors as CET1 capital as well as non-cumulative perpetual preferred stock issuances. Total capital under the Standardized approach increased $7.7 billion primarily due to the same factors driving the increase in Tier 1
capital and an increase in the adjusted allowance for credit losses included in Tier 2 capital. RWA under the Standardized approach, which yielded the lower CET1 capital ratio at September 30, 2022, decreased $18.5 billion during the nine months ended September 30, 2022 to $1,599 billion primarily due to lower client activity in Global Markets and a decrease in debt securities, partially offset by loan growth. Supplementary leverage exposure at September 30, 2022 decreased $48.2 billion primarily due to lower debt securities, driven by lower deposits, partially offset by loan growth.
Bank of America 24

Table 9 shows the capital composition at September 30, 2022 and December 31, 2021.
Table 9Capital Composition under Basel 3
(Dollars in millions)September 30
2022		December 31
2021
Total common shareholders’ equity$240,390 $245,358 
CECL transitional amount (1)
1,881 2,508 
Goodwill, net of related deferred tax liabilities(68,641)(68,641)
Deferred tax assets arising from net operating loss and tax credit carryforwards(7,658)(7,743)
Intangibles, other than mortgage servicing rights, net of related deferred tax liabilities(1,561)(1,605)
Defined benefit pension plan net assets(1,227)(1,261)
Cumulative unrealized net (gain) loss related to changes in fair value of financial liabilities attributable to own creditworthiness,
 net-of-tax		(240)1,400 
Accumulated net (gain) loss on certain cash flow hedges (2)
12,762 1,870 
Other(152)(127)
Common equity tier 1 capital175,554 171,759 
Qualifying preferred stock, net of issuance cost29,134 24,707 
Other(13)(1)
Tier 1 capital204,675 196,465 
Tier 2 capital instruments19,507 20,750 
Qualifying allowance for credit losses (3)
11,325 10,534 
Other(231)(157)
Total capital under the Standardized approach235,276 227,592 
Adjustment in qualifying allowance for credit losses under the Advanced approaches (3)
(6,942)(6,976)
Total capital under the Advanced approaches$228,334 $220,616 
(1)December 31, 2021 includes the impact of the Corporation's adoption of the CECL accounting standard on January 1, 2020 and 25 percent of the increase in reserves since the initial adoption. September 30, 2022 includes 75 percent of the transition provision’s impact as of December 31, 2021.
(2)Includes amounts in accumulated other comprehensive income related to the hedging of items that are not recognized at fair value on the Consolidated Balance Sheet.
(3)Includes the impact of transition provisions related to the CECL accounting standard.
Table 10 shows the components of RWA as measured under Basel 3 at September 30, 2022 and December 31, 2021.
Table 10Risk-weighted Assets under Basel 3
Standardized ApproachAdvanced ApproachesStandardized ApproachAdvanced Approaches
(Dollars in billions)
September 30, 2022December 31, 2021
Credit risk$1,536 $903 $1,549 $913 
Market risk63 63 69 69 
Operational riskn/a379 n/a378 
Risks related to credit valuation adjustmentsn/a46 n/a39 
Total risk-weighted assets$1,599 $1,391 $1,618 $1,399 
n/a = not applicable
25 Bank of America


Bank of America, N.A. Regulatory Capital
Table 11 presents regulatory capital information for BANA in accordance with Basel 3 Standardized and Advanced approaches as measured at September 30, 2022 and December 31, 2021. BANA met the definition of well capitalized under the PCA framework for both periods.
Table 11Bank of America, N.A. Regulatory Capital under Basel 3
Standardized
Approach (1)
Advanced
Approaches (1)
Regulatory
Minimum (2)
(Dollars in millions, except as noted)September 30, 2022
Risk-based capital metrics:
Common equity tier 1 capital$185,255 $185,255 
Tier 1 capital185,255 185,255 
Total capital (3)
198,008 191,303 
Risk-weighted assets (in billions) 1,376 1,056 
Common equity tier 1 capital ratio13.5 %17.6 %7.0 %
Tier 1 capital ratio13.5 17.6 8.5 
Total capital ratio14.4 18.1 10.5 
Leverage-based metrics:
Adjusted quarterly average assets (in billions) (4)
$2,383 $2,383 
Tier 1 leverage ratio7.8 %7.8 %5.0 
Supplementary leverage exposure (in billions)$2,814 
Supplementary leverage ratio6.6 %6.0 




December 31, 2021
Risk-based capital metrics:
Common equity tier 1 capital$182,526 $182,526 
Tier 1 capital182,526 182,526 
Total capital (3)
194,773 188,091 
Risk-weighted assets (in billions) 1,352 1,048 
Common equity tier 1 capital ratio13.5 %17.4 %7.0 %
Tier 1 capital ratio13.5 17.4 8.5 
Total capital ratio14.4 17.9 10.5 
Leverage-based metrics:
Adjusted quarterly average assets (in billions) (4)
$2,414 $2,414 
Tier 1 leverage ratio7.6 %7.6 %5.0 
Supplementary leverage exposure (in billions)$2,824 
Supplementary leverage ratio6.5 %6.0 
(1)Capital ratios as of September 30, 2022 and December 31, 2021 are calculated using the regulatory capital rule that allows a five-year transition period related to the adoption of the CECL accounting standard.
(2)Risk-based capital regulatory minimums at both September 30, 2022 and December 31, 2021 are the minimum ratios under Basel 3 including a capital conservation buffer of 2.5 percent. The regulatory minimums for the leverage ratios as of both period ends are the percent required to be considered well capitalized under the PCA framework.
(3)Total capital under the Advanced approaches differs from the Standardized approach due to differences in the amount permitted in Tier 2 capital related to the qualifying allowance for credit losses.
(4)Reflects total average assets adjusted for certain Tier 1 capital deductions.
Total Loss-Absorbing Capacity Requirements
Total loss-absorbing capacity (TLAC) consists of the Corporation’s Tier 1 capital and eligible long-term debt issued directly by the Corporation. Eligible long-term debt for TLAC ratios is comprised of unsecured debt that has a remaining maturity of at least one year and satisfies additional requirements as prescribed in the TLAC final rule. As with the
risk-based capital ratios and SLR, the Corporation is required to maintain TLAC ratios in excess of minimum requirements plus applicable buffers to avoid restrictions on capital distributions and discretionary bonus payments. Table 12 presents the Corporation's TLAC and long-term debt ratios and related information as of September 30, 2022 and December 31, 2021.
Bank of America 26

Table 12Bank of America Corporation Total Loss-Absorbing Capacity and Long-Term Debt

TLAC (1)
Regulatory Minimum (2)
Long-term
Debt
Regulatory Minimum (3)
(Dollars in millions)September 30, 2022
Total eligible balance$461,928 $242,473 
Percentage of risk-weighted assets (4)
28.9 %22.0 %15.2 %8.5 %
Percentage of supplementary leverage exposure13.0 9.5 6.8 4.5 
December 31, 2021
Total eligible balance$435,904 $227,714 
Percentage of risk-weighted assets (4)
26.9 %22.0 %14.1 %8.5 %
Percentage of supplementary leverage exposure12.1 9.5 6.3 4.5 
(1)As of September 30, 2022 and December 31, 2021, TLAC ratios are calculated using the regulatory capital rule that allows a five-year transition period related to the adoption of CECL.
(2)The TLAC RWA regulatory minimum consists of 18.0 percent plus a TLAC RWA buffer comprised of 2.5 percent plus the Method 1 G-SIB surcharge of 1.5 percent. The countercyclical buffer is zero for both periods. The TLAC supplementary leverage exposure regulatory minimum consists of 7.5 percent plus a 2.0 percent TLAC leverage buffer. The TLAC RWA and leverage buffers must be comprised solely of CET1 capital and Tier 1 capital, respectively.
(3)The long-term debt RWA regulatory minimum is comprised of 6.0 percent plus an additional 2.5 percent requirement based on the Corporation’s Method 2 G-SIB surcharge. The long-term debt leverage exposure regulatory minimum is 4.5 percent.
(4)The approach that yields the higher RWA is used to calculate TLAC and long-term debt ratios, which was the Standardized approach as of September 30, 2022 and December 31, 2021.

Regulatory Developments
For information on regulatory developments, see Capital Management – Regulatory Developments in the MD&A of the Corporation’s 2021 Annual Report on Form 10-K.
Regulatory Capital and Securities Regulation
The Corporation’s principal U.S. broker-dealer subsidiaries are BofA Securities, Inc. (BofAS), Merrill Lynch Professional Clearing Corp. (MLPCC) and Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S). The Corporation's principal European broker-dealer subsidiaries are Merrill Lynch International (MLI) and BofA Securities Europe SA (BofASE).
The U.S. broker-dealer subsidiaries are subject to the net capital requirements of Rule 15c3-1 under the Exchange Act. BofAS computes its minimum capital requirements as an alternative net capital broker-dealer under Rule 15c3-1e, and MLPCC and MLPF&S compute their minimum capital requirements in accordance with the alternative standard under Rule 15c3-1. BofAS and MLPCC are also registered as futures commission merchants and are subject to Commodity Futures Trading Commission (CFTC) Regulation 1.17. The U.S. broker-dealer subsidiaries are also registered with the Financial Industry Regulatory Authority, Inc. (FINRA). Pursuant to FINRA Rule 4110, FINRA may impose higher net capital requirements than Rule 15c3-1 under the Exchange Act with respect to each of the broker-dealers.
BofAS provides institutional services, and in accordance with the alternative net capital requirements, is required to maintain tentative net capital in excess of $5.0 billion and net capital in excess of the greater of $1.0 billion or a certain percentage of its reserve requirement in addition to a certain percentage of securities-based swap risk margin. BofAS must also notify the SEC in the event its tentative net capital is less than $6.0 billion. BofAS is also required to hold a certain percentage of its customers' and affiliates' risk-based margin in order to meet its CFTC minimum net capital requirement. At September 30, 2022, BofAS had tentative net capital of $19.1 billion. BofAS also had regulatory net capital of $16.2 billion, which exceeded the minimum requirement of $4.1 billion.
MLPCC is a fully-guaranteed subsidiary of BofAS and provides clearing and settlement services as well as prime brokerage and arranged financing services for institutional clients. At September 30, 2022, MLPCC’s regulatory net capital of $7.8 billion exceeded the minimum requirement of $1.5 billion.
MLPF&S provides retail services. At September 30, 2022, MLPF&S' regulatory net capital was $5.6 billion, which exceeded the minimum requirement of $158 million.
Our European broker-dealers are subject to requirements from U.S. and non-U.S. regulators. MLI, a U.K. investment firm, is regulated by the Prudential Regulation Authority and the Financial Conduct Authority and is subject to certain regulatory capital requirements. At September 30, 2022, MLI’s capital resources were $33.1 billion, which exceeded the minimum Pillar 1 requirement of $12.1 billion. BofASE, a French investment firm, is regulated by the Autorité de Contrôle Prudentiel et de Résolution and the Autorité des Marchés Financiers, and is subject to certain regulatory capital requirements. At September 30, 2022, BofASE's capital resources were $7.5 billion, which exceeded the minimum Pillar 1 requirement of $3.2 billion.
In addition, MLI and BofASE became conditionally registered with the SEC as security-based swap dealers in the fourth quarter of 2021, and maintained net liquid assets at September 30, 2022 that exceeded the applicable minimum requirements under the Exchange Act.
Liquidity Risk
Funding and Liquidity Risk Management
Our primary liquidity risk management objective is to meet expected or unexpected cash flow and collateral requirements, including payments under long-term debt agreements, commitments to extend credit and customer deposit withdrawals, while continuing to support our businesses and customers under a range of economic conditions. To achieve that objective, we analyze and monitor our liquidity risk under expected and stressed conditions, maintain liquidity and access to diverse funding sources, including our stable deposit base, and seek to align liquidity-related incentives and risks. These liquidity risk management practices have allowed us to effectively manage the market fluctuation from the rising interest rate environment, inflationary pressures and macroeconomic environment.
We define liquidity as readily available assets, limited to cash and high-quality, liquid, unencumbered securities that we can use to meet our contractual and contingent financial obligations as they arise. We manage our liquidity position through line-of-business and ALM activities, as well as through our legal entity funding strategy, on both a forward and current (including intraday) basis under both expected and stressed conditions. We believe that a centralized approach to funding
27 Bank of America


and liquidity management enhances our ability to monitor liquidity requirements, maximizes access to funding sources, minimizes borrowing costs and facilitates timely responses to liquidity events. For more information regarding global funding and liquidity risk management, as well as liquidity sources, liquidity arrangements, contingency planning and credit ratings discussed below, see Liquidity Risk in the MD&A of the Corporation’s 2021 Annual Report on Form 10-K.
NB Holdings Corporation
The parent company, which is a separate and distinct legal entity from our bank and nonbank subsidiaries, has an intercompany arrangement with our wholly-owned holding company subsidiary, NB Holdings Corporation (NB Holdings). We have transferred, and agreed to transfer, additional parent company assets not required to satisfy anticipated near-term expenditures to NB Holdings. The parent company is expected to continue to have access to the same flow of dividends, interest and other amounts of cash necessary to service its debt, pay dividends and perform other obligations as it would have had it not entered into these arrangements and transferred any assets. These arrangements support our preferred single point of entry resolution strategy, under which only the parent company would be resolved under the U.S. Bankruptcy Code.
Global Liquidity Sources and Other Unencumbered Assets
Table 13 presents average Global Liquidity Sources (GLS) for the three months ended September 30, 2022 and December 31, 2021.
Table 13Average Global Liquidity Sources
Three Months Ended
(Dollars in billions)September 30
2022		December 31
2021
Bank entities$763 $1,006 
Nonbank and other entities (1)
178 152 
Total Average Global Liquidity Sources
$941 $1,158 
(1) Nonbank includes Parent, NB Holdings and other regulated entities.
Our bank subsidiaries’ liquidity is primarily driven by deposit and lending activity, as well as securities valuation and net debt activity. Bank subsidiaries can also generate incremental liquidity by pledging a range of unencumbered loans and securities to certain Federal Home Loan Banks (FHLBs) and the Federal Reserve Discount Window. The cash we could have obtained by borrowing against this pool of specifically-identified eligible assets was $349 billion and $322 billion at September 30, 2022 and December 31, 2021. We have established operational procedures to enable us to borrow against these assets, including regularly monitoring our total pool of eligible loans and securities collateral. Eligibility is defined in guidelines from the FHLBs and the Federal Reserve and is subject to change at their discretion. Due to regulatory restrictions, liquidity generated by the bank subsidiaries can generally be used only to fund obligations within the bank subsidiaries, and transfers to the parent company or nonbank subsidiaries may be subject to prior regulatory approval.
Liquidity is also held in nonbank entities, including the parent, NB Holdings and other regulated entities. The parent company and NB Holdings liquidity is typically in the form of cash deposited at BANA, which is excluded from the liquidity at
bank subsidiaries, and high-quality, liquid, unencumbered securities. Liquidity held in other regulated entities, comprised primarily of broker-dealer subsidiaries, is primarily available to meet the obligations of that entity, and transfers to the parent company or to any other subsidiary may be subject to prior regulatory approval due to regulatory restrictions and minimum requirements. Our other regulated entities also hold unencumbered investment-grade securities and equities that we believe could be used to generate additional liquidity.
Table 14 presents the composition of average GLS for the three months ended September 30, 2022 and December 31, 2021.
Table 14Average Global Liquidity Sources Composition
Three Months Ended
(Dollars in billions)September 30
2022		December 31
2021
Cash on deposit$184 $259 
U.S. Treasury securities255 278 
U.S. agency securities, mortgage-backed securities, and other investment-grade securities
487 606 
Non-U.S. government securities
15 15 
Total Average Global Liquidity Sources$941 $1,158 
Our GLS are substantially the same in composition to what qualifies as High Quality Liquid Assets (HQLA) under the final U.S. Liquidity Coverage Ratio (LCR) rules. However, HQLA for purposes of calculating LCR is not reported at market value, but at a lower value that incorporates regulatory deductions and the exclusion of excess liquidity held at certain subsidiaries. The LCR is calculated as the amount of a financial institution’s unencumbered HQLA relative to the estimated net cash outflows the institution could encounter over a 30-day period of significant liquidity stress, expressed as a percentage. Our average consolidated HQLA, on a net basis, was $618 billion and $617 billion for the three months ended September 30, 2022 and December 31, 2021. For the same periods, the average consolidated LCR was 123 percent and 115 percent. Our LCR fluctuates due to normal business flows from customer activity.
Liquidity Stress Analysis
We utilize liquidity stress analysis to assist us in determining the appropriate amounts of liquidity to maintain at the parent company and our subsidiaries to meet contractual and contingent cash outflows under a range of scenarios. For more information on liquidity stress analysis, see Liquidity Risk – Liquidity Stress Analysis in the MD&A of the Corporation’s 2021 Annual Report on Form 10-K.
Net Stable Funding Ratio
The Net Stable Funding Ratio (NSFR) is a liquidity requirement for large banks to maintain a minimum level of stable funding over a one-year period. The requirement is intended to support the ability of banks to lend to households and businesses in both normal and adverse economic conditions and is complementary to the LCR, which focuses on short-term liquidity risks. The U.S. NSFR applies to the Corporation on a consolidated basis and to our insured depository institutions. At September 30, 2022, the Corporation and its insured depository institutions were in compliance with this requirement.

Bank of America 28

Diversified Funding Sources
We fund our assets primarily with a mix of deposits, and secured and unsecured liabilities through a centralized, globally coordinated funding approach diversified across products, programs, markets, currencies and investor groups. We fund a substantial portion of our lending activities through our deposits, which totaled $1.9 trillion and $2.1 trillion at September 30, 2022 and December 31, 2021.
Our trading activities in other regulated entities are primarily funded on a secured basis through securities lending and repurchase agreements, and these amounts will vary based on customer activity and market conditions.
Long-term Debt
During the nine months ended September 30, 2022, we issued $56.0 billion of long-term debt consisting of $41.5 billion of notes issued by Bank of America Corporation, substantially all of which was TLAC compliant, $5.9 billion of notes issued by Bank of America, N.A. and $8.6 billion of other debt, which is primarily structured liabilities.
During the nine months ended September 30, 2022, we had total long-term debt maturities and redemptions in the aggregate of $24.3 billion consisting of $13.6 billion for Bank of America Corporation, $7.6 billion for Bank of America, N.A. and $3.1 billion of other debt. Table 15 presents the carrying value of aggregate annual contractual maturities of long-term debt at September 30, 2022.
Table 15Long-term Debt by Maturity
(Dollars in millions)Remainder of 20222023202420252026ThereafterTotal
Bank of America Corporation
Senior notes (1)
$— $13,877 $22,295 $24,286 $23,380 $122,517 $206,355 
Senior structured notes141 711 447 500 907 7,619 10,325 
Subordinated notes— — 3,230 5,123 4,907 12,394 25,654 
Junior subordinated notes— — — — — 743 743 
Total Bank of America Corporation141 14,588 25,972 29,909 29,194 143,273 243,077 
Bank of America, N.A.
Senior notes— 2,150 — — — — 2,150 
Subordinated notes— — — — — 1,485 1,485 
Advances from Federal Home Loan Banks— 500 — 15 9 58 582 
Securitizations and other Bank VIEs (2)
— 998 1,000 1,000 — 50 3,048 
Other1 315 50 71 30 4 471 
Total Bank of America, N.A.1 3,963 1,050 1,086 39 1,597 7,736 
Other debt
Structured Liabilities1,030 4,468 1,881 2,039 1,363 7,336 18,117 
Nonbank VIEs (2)
— — — — — 192 192 
Other— — — — — — — 
Total other debt1,030 4,468 1,881 2,039 1,363 7,528 18,309 
Total long-term debt$1,172 $23,019 $28,903 $33,034 $30,596 $152,398 $269,122 
(1)Total includes $180.0 billion of outstanding notes that are both TLAC eligible and callable one year before their stated maturities, including $6.0 billion during the remainder of 2022, and $16.4 billion, $21.1 billion, $20.8 billion and $15.8 billion during each year of 2023 through 2026, respectively, and $99.9 billion thereafter. For more information on our TLAC eligible and callable outstanding notes, see Liquidity Risk – Diversified Funding Sources in the MD&A of the Corporation’s 2021 Annual Report on Form 10-K.
(2)Represents liabilities of consolidated variable interest entities (VIEs) included in total long-term debt on the Consolidated Balance Sheet.
Total long-term debt decreased $11.0 billion to $269.1 billion during the nine months ended September 30, 2022, primarily due to debt valuation adjustments, maturities and redemptions, partially offset by debt issuances. We may, from time to time, purchase outstanding debt instruments in various transactions, depending on market conditions, liquidity and other factors. Our other regulated entities may also make markets in our debt instruments to provide liquidity for investors.
During the nine months ended September 30, 2022, we issued $8.6 billion of structured notes, which are debt obligations that pay investors returns linked to other debt or equity securities, indices, currencies or commodities. These structured notes are typically issued to meet client demand, and notes with certain attributes may also be TLAC eligible. We typically hedge the returns we are obligated to pay on these liabilities with derivatives and/or investments in the underlying instruments, so that from a funding perspective, the cost is similar to our other unsecured long-term debt. We could be required to settle certain structured note obligations for cash or other securities prior to maturity under certain circumstances, which we consider for liquidity planning purposes. We believe, however, that a portion of such borrowings will remain outstanding beyond the earliest put or redemption date.
Substantially all of our senior and subordinated debt obligations contain no provisions that could trigger a requirement for an early repayment, require additional collateral support, result in changes to terms, accelerate maturity or create additional financial obligations upon an adverse change in our credit ratings, financial ratios, earnings, cash flows or stock price. For more information on long-term debt funding, including issuances and maturities and redemptions, see Note 11 – Long-term Debt to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K.
We use derivative transactions to manage the duration, interest rate and currency risks of our borrowings, considering the characteristics of the assets they are funding. For more information on our ALM activities, see Interest Rate Risk Management for the Banking Book on page 45.
Credit Ratings
Credit ratings and outlooks are opinions expressed by rating agencies on our creditworthiness and that of our obligations or securities, including long-term debt, short-term borrowings, preferred stock and other securities, including asset securitizations. Table 16 presents the Corporation’s current long-term/short-term senior debt ratings and outlooks expressed by the rating agencies.
29 Bank of America


The ratings and outlooks from Moody's Investors Service, Standard & Poor’s Global Ratings and Fitch Ratings for the Corporation and its subsidiaries have not changed from those disclosed in the Corporation's 2021 Annual Report on Form 10-K.

For more information on additional collateral and termination payments that could be required in connection with certain over-the-counter derivative contracts and other trading agreements in the event of a credit rating downgrade, see Note 3 – Derivatives to the Consolidated Financial Statements herein and Item 1A. Risk Factors of the Corporation’s 2021 Annual Report on Form 10-K.
Table 16Senior Debt Ratings
Moody’s Investors ServiceStandard & Poor’s Global RatingsFitch Ratings
Long-termShort-termOutlookLong-termShort-termOutlookLong-termShort-termOutlook
Bank of America CorporationA2P-1PositiveA-A-2PositiveAA-F1+Stable
Bank of America, N.A.Aa2P-1PositiveA+A-1PositiveAAF1+Stable
Bank of America Europe Designated Activity CompanyNRNRNRA+A-1PositiveAAF1+Stable
Merrill Lynch, Pierce, Fenner & Smith IncorporatedNRNRNRA+A-1PositiveAAF1+Stable
BofA Securities, Inc.NRNRNRA+A-1PositiveAAF1+Stable
Merrill Lynch InternationalNRNRNRA+A-1PositiveAAF1+Stable
BofA Securities Europe SANRNRNRA+A-1PositiveAAF1+Stable
NR = not rated
Finance Subsidiary Issuers and Parent Guarantor
BofA Finance LLC, a Delaware limited liability company (BofA Finance), is a consolidated finance subsidiary of the Corporation that has issued and sold, and is expected to continue to issue and sell, its senior unsecured debt securities (Guaranteed Notes) that are fully and unconditionally guaranteed by the Corporation. The Corporation guarantees the due and punctual payment, on demand, of amounts payable on the Guaranteed Notes if not paid by BofA Finance. In addition, each of BAC Capital Trust XIII, BAC Capital Trust XIV and BAC Capital Trust XV, Delaware statutory trusts (collectively, the Trusts), is a 100 percent owned finance subsidiary of the Corporation that has issued and sold trust preferred securities (the Trust Preferred Securities) or capital securities (the Capital Securities and, together with the Guaranteed Notes and the Trust Preferred Securities, the Guaranteed Securities), as applicable, that remained outstanding at September 30, 2022. The Corporation has fully and unconditionally guaranteed (or effectively provided for the full and unconditional guarantee of) all such securities issued by such finance subsidiaries. For more information regarding such guarantees by the Corporation, see Liquidity Risk – Finance Subsidiary Issuers and Parent Guarantor in the MD&A of the Corporation’s 2021 Annual Report on Form 10-K.
Representations and Warranties Obligations
For information on representations and warranties obligations in connection with the sale of mortgage loans, see Note 12 – Commitments and Contingencies to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K.
Credit Risk Management
For information on our credit risk management activities, see the following: Consumer Portfolio Credit Risk Management, Commercial Portfolio Credit Risk Management on page 35, Non-U.S. Portfolio on page 41, Allowance for Credit Losses on page 42, and Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses to the Consolidated Financial Statements.
During the nine months ended September 30, 2022, asset quality continued to improve. Excluding losses associated with non-core mortgage sales, our net charge-off ratio remained near historic lows, and nonperforming loans and commercial reservable criticized utilized exposure decreased, which was partially offset by an increase in reservable criticized exposure
associated with our direct exposure to Russia as a result of the Russia/Ukraine conflict. While uncertainty around the pandemic has largely dissipated, uncertainty remains regarding broader economic impacts as a result of inflationary pressures, rising rates and the current geopolitical situation and could lead to adverse impacts to credit quality metrics in future periods.
Consumer Portfolio Credit Risk Management
Credit risk management for the consumer portfolio begins with initial underwriting and continues throughout a borrower’s credit cycle. Statistical techniques in conjunction with experiential judgment are used in all aspects of portfolio management including underwriting, product pricing, risk appetite, setting credit limits, and establishing operating processes and metrics to quantify and balance risks and returns. Statistical models are built using detailed behavioral information from external sources, such as credit bureaus and/or internal historical experience, and are a component of our consumer credit risk management process. These models are used in part to assist in making both new and ongoing credit decisions, as well as portfolio management strategies, including authorizations and line management, collection practices and strategies, and determination of the allowance for loan and lease losses and allocated capital for credit risk.
Consumer Credit Portfolio
During the nine months ended September 30, 2022, the U.S. unemployment rate continued to decline and home prices increased compared to the same period a year ago; however, inflationary pressures continued to persist. Net charge-offs increased $130 million to $459 million during the three months ended September 30, 2022 and decreased $211 million to $1.3 billion during the nine months ended September 30, 2022 compared to the same periods in 2021. The increase in the three-month period was primarily due to overdrafts charged off in other consumer, and the decrease in the nine-month period was primarily due to lower credit card losses, as loss rates remain near historic lows. During the nine months ended September 30, 2022, nonperforming loans declined primarily due to decreases from consumer real estate loan sales, partially offset by increases from loans with expired deferrals that were modified as troubled debt restructurings (TDRs) during the first quarter of 2022.

Bank of America 30

The consumer allowance for loan and lease losses decreased $153 million during the nine months ended September 30, 2022 to $6.9 billion. For more information, see Allowance for Credit Losses on page 42.
For more information on our accounting policies regarding delinquencies, nonperforming status, charge-offs and TDRs for the consumer portfolio, see Note 1 – Summary of Significant
Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K and Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses to the Consolidated Financial Statements.
Table 17 presents our outstanding consumer loans and leases, consumer nonperforming loans and accruing consumer loans past due 90 days or more.
Table 17Consumer Credit Quality
 OutstandingsNonperformingAccruing Past Due
90 Days or More
(Dollars in millions)September 30
2022		December 31
2021		September 30
2022		December 31
2021		September 30
2022		December 31
2021
Residential mortgage (1)
$229,062 $221,963 $2,187 $2,284 $427 $634 
Home equity 26,845 27,935 532 630 — — 
Credit card87,296 81,438 n/an/a547 487 
Direct/Indirect consumer (2)
107,159 103,560 41 75 27 11 
Other consumer171 190 — — — — 
Consumer loans excluding loans accounted for under the fair value option
$450,533 $435,086 $2,760 $2,989 $1,001 $1,132 
Loans accounted for under the fair value option (3)
355 618 
Total consumer loans and leases $450,888 $435,704 
Percentage of outstanding consumer loans and leases (4)
n/an/a0.61 %0.69 %0.22 %0.26 %
Percentage of outstanding consumer loans and leases, excluding fully-insured loan portfolios (4)
n/an/a0.63 0.71 0.13 0.12 
(1)Residential mortgage loans accruing past due 90 days or more are fully-insured loans. At September 30, 2022 and December 31, 2021, residential mortgage includes $321 million and $444 million of loans on which interest had been curtailed by the Federal Housing Administration (FHA), and therefore were no longer accruing interest, although principal was still insured, and $106 million and $190 million of loans on which interest was still accruing.
(2)Outstandings primarily include auto and specialty lending loans and leases of $50.7 billion and $48.5 billion, U.S. securities-based lending loans of $52.6 billion and $51.1 billion and non-U.S. consumer loans of $2.9 billion and $3.0 billion at September 30, 2022 and December 31, 2021.
(3)For more information on the fair value option, see Note 15 – Fair Value Option to the Consolidated Financial Statements.
(4)Excludes consumer loans accounted for under the fair value option. At September 30, 2022 and December 31, 2021, $8 million and $21 million of loans accounted for under the fair value option were past due 90 days or more and not accruing interest.
n/a = not applicable
Table 18 presents net charge-offs and related ratios for consumer loans and leases.
Table 18Consumer Net Charge-offs and Related Ratios
Net Charge-offs
Net Charge-off Ratios (1)
 Three Months Ended September 30Nine Months Ended September 30Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)20222021202220212022202120222021
Residential mortgage$(3)$(7)$73 $(17)(0.01)%(0.01)%0.04 %(0.01)%
Home equity(18)(34)(72)(93)(0.25)(0.46)(0.35)(0.40)
Credit card328 321 948 1,443 1.53 1.69 1.55 2.59 
Direct/Indirect consumer9 (18)17 4 0.03 (0.07)0.02 0.01 
Other consumer143 67 358 198 n/mn/mn/mn/m
Total$459 $329 $1,324 $1,535 0.41 0.31 0.40 0.49 
(1)Net charge-off ratios are calculated as annualized net charge-offs divided by average outstanding loans and leases, excluding loans accounted for under the fair value option.
n/m = not meaningful
We believe that the presentation of information adjusted to exclude the impact of the fully-insured loan portfolio and loans accounted for under the fair value option is more representative of the ongoing operations and credit quality of the business. As a result, in the following tables and discussions of the residential mortgage and home equity portfolios, we exclude loans accounted for under the fair value option and provide information that excludes the impact of the fully-insured loan portfolio in certain credit quality statistics.
Residential Mortgage
The residential mortgage portfolio made up the largest percentage of our consumer loan portfolio at 51 percent of consumer loans and leases at September 30, 2022. Approximately 52 percent of the residential mortgage portfolio was in Consumer Banking and 45 percent was in GWIM. The
remaining portion was in All Other.
Outstanding balances in the residential mortgage portfolio increased $7.1 billion during the nine months ended September 30, 2022 as originations were partially offset by paydowns and loan sales.
At September 30, 2022 and December 31, 2021, the residential mortgage portfolio included $11.9 billion and $12.7 billion of outstanding fully-insured loans, of which both had FHA insurance of $2.2 billion, with the remainder protected by Fannie Mae long-term standby agreements.
Table 19 presents certain residential mortgage key credit statistics on both a reported basis and excluding the fully-insured loan portfolio. The following discussion presents the residential mortgage portfolio excluding the fully-insured loan portfolio.
31 Bank of America


Table 19Residential Mortgage – Key Credit Statistics
Reported Basis (1)
Excluding Fully-insured Loans (1)
(Dollars in millions)September 30
2022		December 31
2021		September 30
2022		December 31
2021
Outstandings$229,062 $221,963 $217,130 $209,259 
Accruing past due 30 days or more1,392 1,753 720 866 
Accruing past due 90 days or more427 634 — — 
Nonperforming loans (2)
2,187 2,284 2,187 2,284 
Percent of portfolio    
Refreshed LTV greater than 90 but less than or equal to 1001 %1 %1 %1 %
Refreshed LTV greater than 100— — — — 
Refreshed FICO below 6201 2 1 1 
(1)Outstandings, accruing past due, nonperforming loans and percentages of portfolio exclude loans accounted for under the fair value option.
(2)Includes loans that are contractually current which primarily consist of collateral-dependent TDRs, including those that have been discharged in Chapter 7 bankruptcy and loans that have not yet demonstrated a sustained period of payment performance following a TDR.
Nonperforming outstanding balances in the residential mortgage portfolio decreased $97 million during the nine months ended September 30, 2022 primarily due to decreases from consumer real estate loan sales in the second quarter of 2022, partially offset by increases from loans with expired deferrals that were modified as TDRs during the first quarter of 2022. Of the nonperforming residential mortgage loans at September 30, 2022, $1.4 billion, or 65 percent, were current on contractual payments. Loans accruing past due 30 days or more decreased $146 million.
Net recoveries of $3 million for the three months ended September 30, 2022 remained relatively unchanged compared to the same period in 2021. Net charge-offs of $73 million for the nine months ended September 30, 2022 increased $90 million compared to the same period in 2021 primarily due to loan sales that occurred in the second quarter of 2022.
Of the $217.1 billion in total residential mortgage loans outstanding at September 30, 2022, 28 percent were originated as interest-only loans. The outstanding balance of interest-only residential mortgage loans that have entered the amortization period was $3.4 billion, or six percent, at September 30, 2022. Residential mortgage loans that have entered the amortization period generally experienced a higher rate of early stage delinquencies and nonperforming status compared to the residential mortgage portfolio as a whole. At September 30,
2022, $37 million, or one percent, of outstanding interest-only residential mortgages that had entered the amortization period were accruing past due 30 days or more compared to $720 million, or less than one percent, for the entire residential mortgage portfolio. In addition, at September 30, 2022, $213 million, or six percent, of outstanding interest-only residential mortgage loans that had entered the amortization period were nonperforming, of which $84 million were contractually current. Loans that have yet to enter the amortization period in our interest-only residential mortgage portfolio are primarily well-collateralized loans to our wealth management clients and have an interest-only period of three to ten years. Approximately 95 percent of these loans that have yet to enter the amortization period will not be required to make a fully-amortizing payment until 2025 or later.
Table 20 presents outstandings, nonperforming loans and net charge-offs by certain state concentrations for the residential mortgage portfolio. The Los Angeles-Long Beach-Santa Ana Metropolitan Statistical Area (MSA) within California represented 14 percent and 15 percent of outstandings at September 30, 2022 and December 31, 2021. In the New York area, the New York-Northern New Jersey-Long Island MSA made up 15 percent of outstandings at both September 30, 2022 and December 31, 2021.
Table 20Residential Mortgage State Concentrations
Outstandings (1)
Nonperforming (1)
Net Charge-offs
September 30
2022		December 31
2021		September 30
2022		December 31
2021		Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)2022202120222021
California$80,782 $77,819 $665 $693 $(2)$(3)$38 $(10)
New York26,034 24,975 328 358 (1)— 4 2 
Florida15,125 13,883 142 158 — (1)(1)(5)
Texas9,273 9,002 89 86 — — 1 — 
New Jersey8,834 8,723 100 117 (1)2 — 
Other77,082 74,857 863 872 1 (3)29 (4)
Residential mortgage loans$217,130 $209,259 $2,187 $2,284 $(3)$(7)$73 $(17)
Fully-insured loan portfolio11,932 12,704     
Total residential mortgage loan portfolio
$229,062 $221,963     
(1)Outstandings and nonperforming loans exclude loans accounted for under the fair value option.
Home Equity
At September 30, 2022, the home equity portfolio made up six percent of the consumer portfolio and was comprised of home equity lines of credit (HELOCs), home equity loans and reverse mortgages. HELOCs generally have an initial draw period of 10 years, and after the initial draw period ends, the loans generally
convert to 15- or 20-year amortizing loans. We no longer originate home equity loans or reverse mortgages.
At September 30, 2022, 82 percent of the home equity portfolio was in Consumer Banking, nine percent was in All Other and the remainder of the portfolio was primarily in GWIM. Outstanding balances in the home equity portfolio decreased
Bank of America 32

$1.1 billion during the nine months ended September 30, 2022 primarily due to paydowns outpacing draws on existing lines and new originations. Of the total home equity portfolio at September 30, 2022 and December 31, 2021, $11.4 billion and $12.2 billion, or 43 percent and 44 percent, were in first-lien positions. At September 30, 2022, outstanding balances in the home equity portfolio that were in a second-lien or more junior-lien position and where we also held the first-lien loan
totaled $4.6 billion, or 17 percent of our total home equity portfolio.
Unused HELOCs totaled $41.4 billion and $40.5 billion at September 30, 2022 and December 31, 2021. The HELOC utilization rate was 38 percent and 39 percent at September 30, 2022 and December 31, 2021.
Table 21 presents certain home equity portfolio key credit statistics.
Table 21
Home Equity – Key Credit Statistics (1)
(Dollars in millions)September 30
2022		December 31
2021
Outstandings$26,845 $27,935 
Accruing past due 30 days or more83 157 
Nonperforming loans (2)
532 630 
Percent of portfolio
Refreshed CLTV greater than 90 but less than or equal to 100— %— %
Refreshed CLTV greater than 100— 1 
Refreshed FICO below 6202 3 
(1)Outstandings, accruing past due, nonperforming loans and percentages of the portfolio exclude loans accounted for under the fair value option.
(2)Includes loans that are contractually current which primarily consist of collateral-dependent TDRs, including those that have been discharged in Chapter 7 bankruptcy, junior-lien loans where the underlying first lien is 90 days or more past due, as well as loans that have not yet demonstrated a sustained period of payment performance following a TDR.

Nonperforming outstanding balances in the home equity portfolio decreased $98 million to $532 million at September 30, 2022, primarily driven by loan sales. Of the nonperforming home equity loans at September 30, 2022, $277 million, or 52 percent, were current on contractual payments. In addition, $189 million, or 36 percent, of nonperforming home equity loans were 180 days or more past due and had been written down to the estimated fair value of the collateral, less costs to sell. Accruing loans that were 30 days or more past due decreased $74 million during the nine months ended September 30, 2022.
Net recoveries decreased $16 million to $18 million and $21 million to $72 million for the three and nine months ended September 30, 2022 compared to the same periods in 2021.
Of the $26.8 billion in total home equity portfolio outstandings at September 30, 2022, as shown in Table 21, 14 percent require interest-only payments. The outstanding balance of HELOCs that have reached the end of their draw period and have entered the amortization period was $5.5 billion at September 30, 2022. The HELOCs that have entered the amortization period have experienced a higher percentage of early stage delinquencies and nonperforming status when
compared to the HELOC portfolio as a whole. At September 30, 2022, $47 million, or one percent, of outstanding HELOCs that had entered the amortization period were accruing past due 30 days or more. In addition, at September 30, 2022, $380 million, or seven percent, were nonperforming.
For our interest-only HELOC portfolio, we do not actively track how many of our home equity customers pay only the minimum amount due on their home equity loans and lines; however, we can infer some of this information through a review of our HELOC portfolio that we service and is still in its revolving period. During the three months ended September 30, 2022, 21 percent of these customers with an outstanding balance did not pay any principal on their HELOCs.
Table 22 presents outstandings, nonperforming balances and net recoveries by certain state concentrations for the home equity portfolio. In the New York area, the New York-Northern New Jersey-Long Island MSA made up 13 percent of the outstanding home equity portfolio at both September 30, 2022 and December 31, 2021. The Los Angeles-Long Beach-Santa Ana MSA within California made up 11 percent and 10 percent of the outstanding home equity portfolio at September 30, 2022 and December 31, 2021.
Table 22Home Equity State Concentrations
Outstandings (1)
Nonperforming (1)
Net Charge-offs
September 30
2022		December 31
2021		September 30
2022		December 31
2021		Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)2022202120222021
California$7,464 $7,600 $127 $140 $(4)$(9)$(17)$(31)
Florida2,768 2,977 63 78 (5)(5)(18)(16)
New Jersey2,113 2,259 54 69 (1)(1)(1)(3)
New York1,866 2,072 84 96 (1)(2)(4)(3)
Massachusetts1,380 1,422 25 32 (1)(2)(2)(2)
Other11,254 11,605 179 215 (6)(15)(30)(38)
Total home equity loan portfolio$26,845 $27,935 $532 $630 $(18)$(34)$(72)$(93)
(1)Outstandings and nonperforming loans exclude loans accounted for under the fair value option.

33 Bank of America


Credit Card
At September 30, 2022, 97 percent of the credit card portfolio was managed in Consumer Banking with the remainder in GWIM. Outstandings in the credit card portfolio increased $5.9 billion during the nine months ended September 30, 2022 to $87.3 billion primarily driven by increased purchase volumes, partially offset by the transfer of a $1.6 billion affinity card loan portfolio to held for sale that was sold in October 2022. Net charge-offs increased $7 million to $328 million during the three months ended September 30, 2022 and decreased $495 million to $948 million during the nine months ended September 30, 2022 compared to the same periods in 2021, as loss rates
remained near historic lows. In addition, the nine-month period in the prior year included charge-offs associated with deferrals that expired in 2020. Credit card loans 30 days or more past due and still accruing interest increased $205 million, and 90 days or more past due and still accruing interest increased $60 million.
Unused lines of credit for credit card increased to $367.4 billion at September 30, 2022 from $361.2 billion at December 31, 2021.
Table 23 presents certain state concentrations for the credit card portfolio.
Table 23Credit Card State Concentrations
OutstandingsAccruing Past Due
90 Days or More		Net Charge-offs
September 30
2022		December 31
2021		September 30
2022		December 31
2021		Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)2022202120222021
California$14,287 $13,076 $97 $82 $58 $60 $164 $273 
Florida8,843 8,046 75 71 44 46 130 205 
Texas7,590 6,894 54 47 30 30 87 132 
New York5,070 4,725 42 35 25 24 71 116 
Washington4,563 4,080 17 13 9 7 25 32 
Other46,943 44,617 262 239 162 154 471 685 
Total credit card portfolio$87,296 $81,438 $547 $487 $328 $321 $948 $1,443 
Direct/Indirect Consumer
At September 30, 2022, 47 percent of the direct/indirect portfolio was included in Consumer Banking (consumer auto and recreational vehicle lending) and 53 percent was included in GWIM (principally securities-based lending loans). Outstandings in the direct/indirect portfolio increased $3.6 billion during
the nine months ended September 30, 2022 to $107.2 billion driven by growth in our auto portfolio and client demand for liquidity in securities-based lending.
Table 24 presents certain state concentrations for the direct/indirect consumer loan portfolio.
Table 24Direct/Indirect State Concentrations
OutstandingsAccruing Past Due
90 Days or More		Net Charge-offs
September 30
2022		December 31
2021		September 30
2022		December 31
2021		Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)2022202120222021
California$15,526 $15,061 $4 $2 $1 $(2)$4 $3 
Florida13,749 13,352 2 1 2 (2)2 — 
Texas10,104 9,505 3 2 2 (4)3 2 
New York8,148 7,802 1 1 1 1 2 4 
New Jersey4,494 4,228 1 — 1 — 1 (1)
Other55,138 53,612 16 5 2 (11)5 (4)
Total direct/indirect loan portfolio$107,159 $103,560 $27 $11 $9 $(18)$17 $4 

Nonperforming Consumer Loans, Leases and Foreclosed Properties Activity
Table 25 presents nonperforming consumer loans, leases and foreclosed properties activity for the three and nine months ended September 30, 2022 and 2021. During the nine months ended September 30, 2022, nonperforming consumer loans decreased $229 million to $2.8 billion primarily due to decreases from loan sales, partially offset by increases from loans with expired deferrals that were modified as TDRs during the first quarter of 2022.
At September 30, 2022, $639 million, or 23 percent, of nonperforming loans were 180 days or more past due and had
been written down to their estimated property value less costs to sell. In addition, at September 30, 2022, $1.7 billion, or 63 percent, of nonperforming consumer loans were modified and are now current after successful trial periods, or are current loans classified as nonperforming loans in accordance with applicable policies.
Foreclosed properties increased $24 million during the nine months ended September 30, 2022 to $125 million. Nonperforming loans also include certain loans that have been modified in TDRs where economic concessions have been granted to borrowers experiencing financial difficulties.
Bank of America 34

Table 25Nonperforming Consumer Loans, Leases and Foreclosed Properties Activity
Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)2022202120222021
Nonperforming loans and leases, beginning of period$2,866 $3,044 $2,989 $2,725 
Additions 236 353 1,245 1,635 
Reductions:
Paydowns and payoffs(124)(163)(446)(446)
Sales(1)(1)(401)(3)
Returns to performing status (1)
(193)(201)(552)(839)
Charge-offs(12)(12)(50)(49)
Transfers to foreclosed properties (12)(3)(25)(6)
Total net additions/(reductions) to nonperforming loans and leases(106)(27)(229)292 
Total nonperforming loans and leases, September 30
2,760 3,017 2,760 3,017 
Foreclosed properties, September 30 (2)
125 87 125 87 
Nonperforming consumer loans, leases and foreclosed properties, September 30
$2,885 $3,104 $2,885 $3,104 
Nonperforming consumer loans and leases as a percentage of outstanding consumer loans and leases (3)
0.61 %0.71 %
Nonperforming consumer loans, leases and foreclosed properties as a percentage of outstanding consumer loans, leases and foreclosed properties (3)
0.64 0.73 
(1)Consumer loans may be returned to performing status when all principal and interest is current and full repayment of the remaining contractual principal and interest is expected, or when the loan otherwise becomes well-secured and is in the process of collection.
(2)Foreclosed property balances do not include properties insured by certain government-guaranteed loans, principally FHA-insured, of $75 million and $55 million at September 30, 2022 and 2021.
(3)Outstanding consumer loans and leases exclude loans accounted for under the fair value option.
Table 26 presents TDRs for the consumer real estate portfolio. Performing TDR balances are excluded from nonperforming loans and leases in Table 25.
Table 26Consumer Real Estate Troubled Debt Restructurings
September 30, 2022December 31, 2021
(Dollars in millions)NonperformingPerformingTotalNonperformingPerformingTotal
Residential mortgage (1, 2)
$1,721 $1,588 $3,309 $1,498 $2,278 $3,776 
Home equity (3)
327 552 879 254 652 906 
Total consumer real estate troubled debt restructurings$2,048 $2,140 $4,188 $1,752 $2,930 $4,682 
(1)At September 30, 2022 and December 31, 2021, residential mortgage TDRs deemed collateral dependent totaled $1.8 billion and $1.6 billion, and included $1.6 billion and $1.4 billion of loans classified as nonperforming and $187 million and $279 million of loans classified as performing.
(2)At September 30, 2022 and December 31, 2021, residential mortgage performing TDRs include $1.1 billion and $1.2 billion of loans that were fully-insured.
(3)At September 30, 2022 and December 31, 2021, home equity TDRs deemed collateral dependent totaled $413 million and $370 million, and include $290 million and $222 million of loans classified as nonperforming and $123 million and $148 million of loans classified as performing.
In addition to modifying consumer real estate loans, we work with customers who are experiencing financial difficulty by modifying credit card and other consumer loans. Credit card and other consumer loan modifications generally involve a reduction in the customer’s interest rate on the account and placing the customer on a fixed payment plan not exceeding 60 months.
Modifications of credit card and other consumer loans are made through programs utilizing direct customer contact, but may also utilize external programs. At September 30, 2022 and December 31, 2021, our credit card and other consumer TDR portfolio was $608 million and $672 million, of which $533 million and $599 million were current or less than 30 days past due under the modified terms.
Commercial Portfolio Credit Risk Management
Commercial credit risk is evaluated and managed with the goal that concentrations of credit exposure continue to be aligned with our risk appetite. We review, measure and manage concentrations of credit exposure by industry, product, geography, customer relationship and loan size. We also review, measure and manage commercial real estate loans by geographic location and property type. In addition, within our non-U.S. portfolio, we evaluate exposures by region and by country. Tables 31, 34 and 37 summarize our concentrations. We also utilize syndications of exposure to third parties, loan sales, hedging and other risk mitigation techniques to manage the size and risk profile of the commercial credit portfolio. For
more information on our industry concentrations, see Table 34 and Commercial Portfolio Credit Risk Management – Industry Concentrations on page 39.
For more information on our accounting policies regarding delinquencies, nonperforming status, net charge-offs and TDRs for the commercial portfolio, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K.
Commercial Credit Portfolio
During the nine months ended September 30, 2022, commercial credit quality improved as charge-offs, nonperforming commercial loans and reservable criticized utilized exposure declined during this period. Due to the ongoing Russia/Ukraine conflict, all direct exposure to Russian counterparties was downgraded and reported as reservable criticized exposure, and expected credit losses have been incorporated into our estimate of the allowance for credit losses. Outstanding commercial loans and leases increased $38.2 billion during the nine months ended September 30, 2022 due to growth in commercial and industrial, primarily in Global Banking. This increase was partially offset by lower U.S. small business commercial loans due to repayments of PPP loans by the Small Business Administration (SBA) under the terms of the program. For more information on PPP loans, see Note 1 – Summary of Significant Accounting Principles to the
35 Bank of America


Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K.
Credit quality of commercial real estate borrowers continued to stabilize as pandemic-impacted sectors are recovering. However, many real estate markets, while improving, are still experiencing disruptions in demand, supply chain challenges, tenant difficulties and challenging capital markets. Demand for office space continues to be uncertain as companies evaluate space needs with employment models that utilize a mix of remote and conventional office use.
The commercial allowance for loan and lease losses remained relatively unchanged at $5.4 billion at September 30, 2022, as asset quality improvement and reduced pandemic uncertainties were offset by a dampening macroeconomic outlook, loan growth and a reserve build related to Russian exposure. For more information, see Allowance for Credit Losses on page 42.

Total commercial utilized credit exposure increased $65.0 billion during the nine months ended September 30, 2022 to $718.6 billion primarily driven by higher loans and leases and derivative assets. The utilization rate for loans and leases, standby letters of credit (SBLCs) and financial guarantees, and commercial letters of credit, in the aggregate, was 57 percent and 56 percent at September 30, 2022 and December 31, 2021.
Table 27 presents commercial credit exposure by type for utilized, unfunded and total binding committed credit exposure. Commercial utilized credit exposure includes SBLCs and financial guarantees and commercial letters of credit that have been issued and for which we are legally bound to advance funds under prescribed conditions during a specified time period, and excludes exposure related to trading account assets. Although funds have not yet been advanced, these exposure types are considered utilized for credit risk management purposes.
Table 27Commercial Credit Exposure by Type
 
Commercial Utilized (1)
Commercial Unfunded (2, 3, 4)
Total Commercial Committed
(Dollars in millions)September 30
2022		December 31
2021		September 30
2022		December 31
2021		September 30
2022		December 31
2021
Loans and leases$581,578 $543,420 $466,564 $454,256 $1,048,142 $997,676 
Derivative assets (5)
71,956 35,344 — — 71,956 35,344 
Standby letters of credit and financial guarantees35,080 34,389 1,344 639 36,424 35,028 
Debt securities and other investments18,647 19,427 3,227 4,638 21,874 24,065 
Loans held-for-sale3,909 13,185 11,308 16,581 15,217 29,766 
Operating leases5,516 5,935 — — 5,516 5,935 
Commercial letters of credit1,036 1,176 65 247 1,101 1,423 
Other838 652 — — 838 652 
Total$718,560 $653,528 $482,508 $476,361 $1,201,068 $1,129,889 
(1)Commercial utilized exposure includes loans of $4.5 billion and $7.2 billion accounted for under the fair value option at September 30, 2022 and December 31, 2021.
(2)Commercial unfunded exposure includes commitments accounted for under the fair value option with a notional amount of $3.5 billion and $4.8 billion at September 30, 2022 and December 31, 2021.
(3)Excludes unused business card lines, which are not legally binding.
(4)Includes the notional amount of unfunded legally binding lending commitments, net of amounts distributed (i.e., syndicated or participated) to other financial institutions. The distributed amounts were $10.4 billion and $10.7 billion at September 30, 2022 and December 31, 2021.
(5)Derivative assets are carried at fair value, reflect the effects of legally enforceable master netting agreements and have been reduced by cash collateral of $40.6 billion and $30.8 billion at September 30, 2022 and December 31, 2021. Not reflected in utilized and committed exposure is additional non-cash derivative collateral held of $59.3 billion and $44.8 billion at September 30, 2022 and December 31, 2021, which consists primarily of other marketable securities.
Nonperforming commercial loans decreased $355 million. Table 28 presents our commercial loans and leases portfolio and related credit quality information at September 30, 2022 and December 31, 2021.
Table 28Commercial Credit Quality
OutstandingsNonperforming Accruing Past Due
90 Days or More
(Dollars in millions)September 30
2022		December 31
2021		September 30
2022		December 31
2021		September 30
2022		December 31
2021
Commercial and industrial:
U.S. commercial$355,370 $325,936 $640 $825 $300 $171 
Non-U.S. commercial123,035 113,266 274 268 22 19 
Total commercial and industrial478,405 439,202 914 1,093 322 190 
Commercial real estate67,952 63,009 282 382 34 40 
Commercial lease financing12,956 14,825 11 80 12 8 
559,313 517,036 1,207 1,555 368 238 
U.S. small business commercial (1)
17,769 19,183 16 23 252 87 
Commercial loans excluding loans accounted for under the fair value option$577,082 $536,219 $1,223 $1,578 $620 $325 
Loans accounted for under the fair value option (2)
4,496 7,201 
Total commercial loans and leases$581,578 $543,420 
(1)Includes card-related products.
(2)Commercial loans accounted for under the fair value option include U.S. commercial of $2.4 billion and $4.6 billion and non-U.S. commercial of $2.1 billion and $2.6 billion at September 30, 2022 and December 31, 2021. For more information on the fair value option, see Note 15 – Fair Value Option to the Consolidated Financial Statements.
Bank of America 36

Table 29 presents net charge-offs and related ratios for our commercial loans and leases for the three and nine months ended September 30, 2022 and 2021.
Table 29Commercial Net Charge-offs and Related Ratios
Net Charge-offs
Net Charge-off Ratios (1)
 Three Months Ended
September 30		Nine Months Ended
September 30		Three Months Ended
September 30		Nine Months Ended
September 30
(Dollars in millions)20222021202220212022202120222021
Commercial and industrial:
U.S. commercial$23 $15 $24 $(4)0.03 %0.02 %0.01 %— %
Non-U.S. commercial(6)1 (10)41 (0.02)— (0.01)0.06 
Total commercial and industrial17 16 14 37 0.01 0.02 — 0.01 
Commercial real estate13 — 32 28 0.08 — 0.07 0.06 
Commercial lease financing(1)(1)3 (1)(0.05)— 0.03 — 
29 15 49 64 0.02 0.01 0.01 0.02 
U.S. small business commercial32 119 110 282 0.72 1.76 0.82 1.16 
Total commercial$61 $134 $159 $346 0.04 0.11 0.04 0.09 
(1)Net charge-off ratios are calculated as annualized net charge-offs divided by average outstanding loans and leases, excluding loans accounted for under the fair value option.
Table 30 presents commercial reservable criticized utilized exposure by loan type. Criticized exposure corresponds to the Special Mention, Substandard and Doubtful asset categories as defined by regulatory authorities. Total commercial reservable criticized utilized exposure decreased $4.7 billion during the nine months ended September 30, 2022, which was broad-based across industries. At both September 30, 2022 and December 31, 2021, 87 percent of commercial reservable criticized utilized exposure was secured.
Table 30
Commercial Reservable Criticized Utilized Exposure (1, 2)
(Dollars in millions)September 30, 2022December 31, 2021
Commercial and industrial:
U.S. commercial$9,811 2.56 %$11,327 3.20 %
Non-U.S. commercial2,683 2.06 2,582 2.17 
Total commercial and industrial12,494 2.43 13,909 2.94 
Commercial real estate4,532 6.52 7,572 11.72 
Commercial lease financing236 1.82 387 2.61 
17,262 2.90 21,868 3.96 
U.S. small business commercial397 2.23 513 2.67 
Total commercial reservable criticized utilized exposure$17,659 2.88 $22,381 3.91 
(1)Total commercial reservable criticized utilized exposure includes loans and leases of $17.0 billion and $21.2 billion and commercial letters of credit of $662 million and $1.2 billion at September 30, 2022 and December 31, 2021.
(2)Percentages are calculated as commercial reservable criticized utilized exposure divided by total commercial reservable utilized exposure for each exposure category.
Commercial and Industrial
Commercial and industrial loans include U.S. commercial and non-U.S. commercial portfolios.
U.S. Commercial
At September 30, 2022, 64 percent of the U.S. commercial loan portfolio, excluding small business, was managed in Global Banking, 20 percent in Global Markets, 15 percent in GWIM (loans that provide financing for asset purchases, business investments and other liquidity needs for high net worth clients) and the remainder primarily in Consumer Banking. U.S. commercial loans increased $29.4 billion, or nine percent, during the nine months ended September 30, 2022 primarily driven by Global Banking. Reservable criticized utilized exposure decreased $1.5 billion, or 13 percent, driven by decreases across a broad range of industries.
Non-U.S. Commercial
At September 30, 2022, 66 percent of the non-U.S. commercial loan portfolio was managed in Global Banking, 33 percent in Global Markets and the remainder in GWIM. Non-U.S. commercial loans increased $9.8 billion, or nine percent, during the nine months ended September 30, 2022, as loan growth in Global Banking and Global Markets was partially offset by foreign currency valuation adjustments on foreign currency-denominated loans. Reservable criticized utilized exposure increased $101
million, or four percent, due to downgrades for direct exposure to Russian counterparties. For information on the non-U.S. commercial portfolio, see Non-U.S. Portfolio on page 41. For more information on the Russia/Ukraine conflict, see Recent Developments on page 3.
Commercial Real Estate
Commercial real estate primarily includes commercial loans secured by non-owner-occupied real estate and is dependent on the sale or lease of the real estate as the primary source of repayment. Outstanding loans increased $4.9 billion, or eight percent, during the nine months ended September 30, 2022 to $68.0 billion due to new originations outpacing paydowns and increased utilizations under existing credit facilities. Reservable criticized utilized exposure decreased $3.0 billion, or 40 percent, primarily driven by Hotels due to improving vacancy rates and reduced travel restrictions. The portfolio remains diversified across property types and geographic regions. California represented the largest state concentration at 20 percent and 21 percent of the commercial real estate portfolio at September 30, 2022 and December 31, 2021. The commercial real estate portfolio is predominantly managed in Global Banking and consists of loans made primarily to public and private developers, and commercial real estate firms.
For the three and nine months ended September 30, 2022 and 2021, we continued to see low default rates and varying
37 Bank of America


degrees of improvement in certain geographic regions and property types of the portfolio. We use a number of proactive risk mitigation initiatives to reduce adversely rated exposure in the commercial real estate portfolio, including transfers of deteriorating exposures for management by independent special asset officers and the pursuit of loan restructurings or asset
sales to achieve the best results for our customers and the Corporation.
Table 31 presents outstanding commercial real estate loans by geographic region, based on the geographic location of the collateral, and by property type.
Table 31Outstanding Commercial Real Estate Loans
(Dollars in millions)September 30
2022		December 31
2021
By Geographic Region   
Northeast$16,630 $14,318 
California13,424 13,145 
Southwest8,099 7,510 
Southeast7,170 6,758 
Florida5,304 4,367 
Midwest3,498 3,221 
Illinois3,223 2,878 
Midsouth2,359 2,289 
Northwest1,574 1,709 
Non-U.S. 4,606 4,760 
Other 2,065 2,054 
Total outstanding commercial real estate loans
$67,952 $63,009 
By Property Type  
Non-residential
Office$18,245 $18,309 
Industrial / Warehouse12,763 10,749 
Multi-family rental10,176 8,173 
Shopping centers /Retail6,017 6,502 
Hotel / Motels5,608 5,932 
Unsecured2,883 3,178 
Multi-use2,403 1,835 
Other8,534 7,238 
Total non-residential66,629 61,916 
Residential1,323 1,093 
Total outstanding commercial real estate loans
$67,952 $63,009 
U.S. Small Business Commercial
The U.S. small business commercial loan portfolio is comprised of small business card loans and small business loans primarily managed in Consumer Banking, and included $1.5 billion and $4.7 billion of PPP loans outstanding at September 30, 2022 and December 31, 2021. The decline of $3.2 billion in PPP loans during the nine months ended September 30, 2022 was primarily due to repayment of the loans by the SBA under the terms of the program. Excluding PPP, credit card-related products were 54 percent and 50 percent of the U.S. small business commercial portfolio at September 30, 2022 and December 31, 2021 and represented all of the net charge-offs for the three and nine months ended September 30, 2022 compared to 100 percent and 96 percent for the same periods in 2021. The increase of $165 million in accruing past due 90 days or more for the nine months ended September 30, 2022 was driven by PPP loans, which are fully guaranteed by the SBA.

Nonperforming Commercial Loans, Leases and Foreclosed Properties Activity
Table 32 presents the nonperforming commercial loans, leases and foreclosed properties activity during the three and nine months ended September 30, 2022 and 2021. Nonperforming loans do not include loans accounted for under the fair value option. During the nine months ended September 30, 2022, nonperforming commercial loans and leases decreased $355 million to $1.2 billion. At September 30, 2022, 98 percent of commercial nonperforming loans, leases and foreclosed properties were secured and 56 percent were contractually current. Commercial nonperforming loans were carried at 86 percent of their unpaid principal balance, as the carrying value of these loans has been reduced to the estimated collateral value less costs to sell.
Bank of America 38

Table 32
Nonperforming Commercial Loans, Leases and Foreclosed Properties Activity (1, 2)
Three Months Ended
September 30		Nine Months Ended
September 30
(Dollars in millions)2022202120222021
Nonperforming loans and leases, beginning of period$1,298 $1,863 $1,578 $2,227 
Additions307 275 811 1,250 
Reductions:  
Paydowns(180)(297)(681)(873)
Sales(12)(29)(53)(128)
Returns to performing status (3)
(148)(82)(299)(169)
Charge-offs(42)(33)(94)(219)
Transfers to loans held-for-sale— — (39)(391)
Total net reductions to nonperforming loans and leases(75)(166)(355)(530)
Total nonperforming loans and leases, September 301,223 1,697 1,223 1,697 
Foreclosed properties, September 3048 30 48 30 
Nonperforming commercial loans, leases and foreclosed properties, September 30$1,271 $1,727 $1,271 $1,727 
Nonperforming commercial loans and leases as a percentage of outstanding commercial loans and leases (4)
0.21 %0.34 %
Nonperforming commercial loans, leases and foreclosed properties as a percentage of outstanding commercial loans, leases and foreclosed properties (4)
0.22 0.35 
(1)Balances do not include nonperforming loans held-for-sale of $222 million and $279 million at September 30, 2022 and 2021.
(2)Includes U.S. small business commercial activity. Small business card loans are excluded as they are not classified as nonperforming.
(3)Commercial loans and leases may be returned to performing status when all principal and interest is current and full repayment of the remaining contractual principal and interest is expected, or when the loan otherwise becomes well-secured and is in the process of collection. TDRs are generally classified as performing after a sustained period of demonstrated payment performance.
(4)Outstanding commercial loans exclude loans accounted for under the fair value option.
Table 33 presents our commercial TDRs by product type and performing status. U.S. small business commercial TDRs are comprised of renegotiated small business card loans and small business loans. The renegotiated small business card loans are not classified as nonperforming as they are charged off no later
than the end of the month in which the loan becomes 180 days past due. Commercial TDRs increased $799 million, or 42 percent, during the nine months ended September 30, 2022 primarily due to commercial real estate loans that were modified as TDRs during the first half of the year.
Table 33Commercial Troubled Debt Restructurings
September 30, 2022December 31, 2021
(Dollars in millions)NonperformingPerformingTotalNonperformingPerformingTotal
Commercial and industrial:
U.S. commercial$351 $956 $1,307 $359 $685 $1,044 
Non-U.S. commercial102 105 207 72 8 80 
Total commercial and industrial453 1,061 1,514 431 693 1,124 
Commercial real estate78 1,052 1,130 244 437 681 
Commercial lease financing3 6 9 50 7 57 
534 2,119 2,653 725 1,137 1,862 
U.S. small business commercial— 46 46 — 38 38 
Total commercial troubled debt restructurings
$534 $2,165 $2,699 $725 $1,175 $1,900 
Industry Concentrations
Table 34 presents commercial committed and utilized credit exposure by industry. For information on net notional credit protection purchased to hedge funded and unfunded exposures for which we elected the fair value option, as well as certain other credit exposures, see Commercial Portfolio Credit Risk Management – Risk Mitigation.
Our commercial credit exposure is diversified across a broad range of industries. Total commercial committed exposure increased $71.2 billion, or six percent, during the nine months ended September 30, 2022 to $1.2 trillion. The increase in commercial committed exposure was concentrated in Asset managers and funds, Global commercial banks and Financial markets infrastructure (clearinghouses).
For information on industry limits, see Commercial Portfolio Credit Risk Management – Industry Concentrations in the MD&A of the Corporation’s 2021 Annual Report on Form 10-K.
Asset managers and funds, our largest industry concentration with committed exposure of $172.5 billion,
increased $35.6 billion, or 26 percent, during the nine months ended September 30, 2022, which was primarily driven by investment-grade exposures.
Real estate, our second largest industry concentration with committed exposure of $98.6 billion, increased $2.4 billion, or two percent, during the nine months ended September 30, 2022. For more information on the commercial real estate and related portfolios, see Commercial Portfolio Credit Risk Management – Commercial Real Estate on page 37.
Capital goods, our third largest industry concentration with committed exposure of $89.4 billion, increased $5.2 billion, or six percent, during the nine months ended September 30, 2022.
While the U.S. and global economies have shown signs of relief from the pandemic, uncertainty remains as a result of geopolitical and inflationary pressures, and a number of industries will likely continue to be adversely impacted due to these conditions. We continue to monitor all industries, particularly higher risk industries that are experiencing or could experience a more significant impact to their financial condition.
39 Bank of America


Table 34
Commercial Credit Exposure by Industry (1)
Commercial
Utilized
Total Commercial
Committed (2)
(Dollars in millions)September 30
2022		December 31
2021		September 30
2022		December 31
2021
Asset managers & funds$118,183 $89,786 $172,468 $136,914 
Real estate (3)
70,535 69,384 98,590 96,202 
Capital goods47,669 42,784 89,447 84,293 
Finance companies50,749 59,327 74,003 86,009 
Healthcare equipment and services32,693 32,003 57,834 58,195 
Materials26,552 25,133 55,599 53,652 
Retailing26,850 24,514 52,916 50,816 
Government & public education36,635 37,597 48,991 50,066 
Food, beverage and tobacco23,258 21,584 48,317 45,419 
Consumer services26,250 28,172 46,186 48,052 
Individuals and trusts34,976 29,752 44,640 39,869 
Commercial services and supplies23,010 22,390 43,769 42,451 
Utilities19,280 17,082 39,560 36,855 
Energy16,934 14,217 37,829 34,136 
Transportation21,671 21,079 34,033 32,015 
Global commercial banks30,209 20,062 32,482 21,390 
Technology hardware and equipment10,993 10,159 28,135 26,910 
Media12,282 12,495 27,331 26,318 
Software and services13,908 10,663 26,678 27,643 
Consumer durables and apparel10,251 9,740 21,167 21,226 
Insurance12,427 5,743 20,901 14,323 
Vehicle dealers11,788 11,030 19,698 15,678 
Pharmaceuticals and biotechnology7,722 5,608 18,779 19,439 
Telecommunication services8,530 10,056 16,608 21,270 
Automobiles and components7,529 9,236 15,685 17,052 
Financial markets infrastructure (clearinghouses)7,894 3,876 12,704 6,076 
Food and staples retailing7,046 6,902 11,728 12,226 
Religious and social organizations2,736 3,154 4,990 5,394 
Total commercial credit exposure by industry$718,560 $653,528 $1,201,068 $1,129,889 
(1)Includes U.S. small business commercial exposure.
(2)Includes the notional amount of unfunded legally binding lending commitments, net of amounts distributed (i.e., syndicated or participated) to other financial institutions. The distributed amounts were $10.4 billion and $10.7 billion at September 30, 2022 and December 31, 2021.
(3)Industries are viewed from a variety of perspectives to best isolate the perceived risks. For purposes of this table, the real estate industry is defined based on the primary business activity of the borrowers or counterparties using operating cash flows and primary source of repayment as key factors.
Risk Mitigation
We purchase credit protection to cover the funded portion as well as the unfunded portion of certain credit exposures. To lower the cost of obtaining our desired credit protection levels, we may add credit exposure within an industry, borrower or counterparty group by selling protection.
At September 30, 2022 and December 31, 2021, net notional credit default protection purchased in our credit derivatives portfolio to hedge our funded and unfunded exposures for which we elected the fair value option, as well as certain other credit exposures, was $9.1 billion and $2.6 billion. We recorded net losses of $56 million and gains of $66 million for the three and nine months ended September 30, 2022 compared to net losses of $18 million and $86 million for the same periods in 2021. The gains and losses on these instruments were largely offset by gains and losses on the related exposures. The Value-at-Risk (VaR) results for these exposures are included in the fair value option portfolio information in Table 40. For more information, see Trading Risk Management on page 44.
Tables 35 and 36 present the maturity profiles and the credit exposure debt ratings of the net credit default protection portfolio at September 30, 2022 and December 31, 2021.
Table 35Net Credit Default Protection by Maturity
September 30
2022		December 31
2021
Less than or equal to one year20 %34 %
Greater than one year and less than or equal to five years
77 62 
Greater than five years3 4 
Total net credit default protection100 %100 %
Table 36Net Credit Default Protection by Credit Exposure Debt Rating
Net
Notional (1)
Percent of
Total
Net
Notional (1)
Percent of
Total
(Dollars in millions)September 30, 2022December 31, 2021
Ratings (2, 3)
    
AAA$(379)4.2 %$— — %
AA(852)9.4 — — 
A(3,103)34.1 (350)13.4 
BBB(2,828)31.1 (710)27.1 
BB(1,050)11.6 (809)30.9 
B(748)8.2 (659)25.2 
CCC and below(79)0.9 (35)1.3 
NR (4)
(48)0.5 (55)2.1 
Total net credit
default protection
$(9,087)100.0 %$(2,618)100.0 %
(1)Represents net credit default protection purchased.
(2)Ratings are refreshed on a quarterly basis.
(3)Ratings of BBB- or higher are considered to meet the definition of investment grade.
(4)NR is comprised of index positions held and any names that have not been rated.
Bank of America 40

For more information on credit derivatives and counterparty credit risk valuation adjustments, see Note 3 – Derivatives to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K.
Non-U.S. Portfolio
Our non-U.S. credit and trading portfolios are subject to country risk. We define country risk as the risk of loss from unfavorable economic and political conditions, currency fluctuations, social instability and changes in government policies. A risk management framework is in place to measure, monitor and manage non-U.S. risk and exposures. In addition to the direct risk of doing business in a country, we also are exposed to indirect country risks (e.g., related to the collateral received on secured financing transactions or related to client clearing
activities). These indirect exposures are managed in the normal course of business through credit, market and operational risk governance rather than through country risk governance. For more information on our non-U.S. credit and trading portfolios, see Non-U.S. Portfolio in the MD&A of the Corporation’s 2021 Annual Report on Form 10-K.
Table 37 presents our 20 largest non-U.S. country exposures at September 30, 2022. These exposures accounted for 89 percent of our total non-U.S. exposure at both September 30, 2022 and December 31, 2021. Net country exposure for these 20 countries increased $1.8 billion during the nine months ended September 30, 2022 primarily driven by increases in Japan, the United Kingdom, Ireland and India, partially offset by reductions in France, Canada and Australia.

Table 37Top 20 Non-U.S. Countries Exposure
(Dollars in millions)Funded Loans
 and Loan
 Equivalents		Unfunded
 Loan
 Commitments		Net
 Counterparty
 Exposure		Securities/
Other
Investments		Country Exposure at September 30
2022		Hedges and Credit Default ProtectionNet Country Exposure at September 30
2022		Increase (Decrease) from December 31
2021
United Kingdom$32,150 $14,730 $10,068 $2,300 $59,248 $(1,259)$57,989 $3,020 
Germany22,653 7,101 2,146 2,468 34,368 (823)33,545 (280)
Canada10,632 9,144 1,868 3,561 25,205 (617)24,588 (1,723)
Japan16,988 1,840 1,816 1,062 21,706 (723)20,983 3,721 
Australia12,404 4,078 1,434 2,059 19,975 (333)19,642 (1,662)
France8,683 7,342 1,450 2,863 20,338 (1,000)19,338 (5,569)
Brazil6,366 1,251 537 3,693 11,847 (88)11,759 (991)
China7,192 295 1,909 2,381 11,777 (299)11,478 (1,104)
India6,798 305 609 3,121 10,833 (114)10,719 2,088 
Netherlands3,945 4,215 1,011 1,234 10,405 (651)9,754 158 
South Korea5,983 860 1,351 1,369 9,563 (78)9,485 1,333 
Singapore4,178 622 356 4,116 9,272 (36)9,236 (1,429)
Switzerland5,187 3,316 570 440 9,513 (298)9,215 640 
Ireland6,965 961 175 263 8,364 (50)8,314 2,775 
Hong Kong5,858 312 321 1,494 7,985 (25)7,960 633 
Mexico4,516 1,661 254 521 6,952 (245)6,707 245 
Italy3,066 2,352 294 879 6,591 (375)6,216 1,012 
Spain2,146 1,778 750 1,496 6,170 (215)5,955 35 
Belgium1,284 1,452 289 934 3,959 (179)3,780 (1,251)
Saudi Arabia2,366 932 300 32 3,630 (49)3,581 108 
Total top 20 non-U.S. countries exposure
$169,360 $64,547 $27,508 $36,286 $297,701 $(7,457)$290,244 $1,759 
Our largest non-U.S. country exposure at September 30, 2022 was the United Kingdom with net exposure of $58.0 billion, which represents a $3.0 billion increase from December 31, 2021. The increase was primarily driven by net counterparty exposure with financial institutions, partially offset by a reduction in deposits with the central bank. Our second
largest non-U.S. country exposure was Germany with net exposure of $33.5 billion at September 30, 2022, a $280 million decrease from December 31, 2021. The reduction was driven by a decrease in exposure with financial institutions and corporates, offset by an increase in deposits with the central bank.
41 Bank of America


Allowance for Credit Losses
The allowance for credit losses decreased $26 million from December 31, 2021 to $13.8 billion at September 30, 2022, which included a $171 million reserve decrease related to the consumer portfolio and a $145 million reserve increase related to the commercial portfolio. The decrease in the allowance was primarily driven by asset quality improvement and reduced
pandemic uncertainties, partially offset by reserve builds related to loan growth, a dampening macroeconomic outlook and Russian exposure.
Table 38 presents an allocation of the allowance for credit losses by product type at September 30, 2022 and December 31, 2021.
Table 38Allocation of the Allowance for Credit Losses by Product Type
AmountPercent of
Total
Percent of
Loans and
Leases
Outstanding (1)
AmountPercent of
Total
Percent of
Loans and
Leases
Outstanding (1)
(Dollars in millions)September 30, 2022December 31, 2021
Allowance for loan and lease losses      
Residential mortgage$282 2.29 %0.12 %$351 2.83 %0.16 %
Home equity102 0.83 0.38 206 1.66 0.74 
Credit card5,879 47.79 6.74 5,907 47.70 7.25 
Direct/Indirect consumer525 4.27 0.49 523 4.22 0.51 
Other consumer92 0.75 n/m46 0.37 n/m
Total consumer6,880 55.93 1.53 7,033 56.78 1.62 
U.S. commercial (2)
3,018 24.53 0.81 3,019 24.37 0.87 
Non-U.S. commercial1,191 9.68 0.97 975 7.87 0.86 
Commercial real estate1,161 9.44 1.71 1,292 10.43 2.05 
Commercial lease financing52 0.42 0.40 68 0.55 0.46 
Total commercial5,422 44.07 0.94 5,354 43.22 1.00 
Allowance for loan and lease losses12,302 100.00 %1.20 12,387 100.00 %1.28 
Reserve for unfunded lending commitments1,515 1,456  
Allowance for credit losses$13,817 $13,843 
(1)Ratios are calculated as allowance for loan and lease losses as a percentage of loans and leases outstanding excluding loans accounted for under the fair value option.
(2)Includes allowance for loan and lease losses for U.S. small business commercial loans of $864 million and $1.2 billion at September 30, 2022 and December 31, 2021.
n/m = not meaningful
Net charge-offs for the three and nine months ended September 30, 2022 were $520 million and $1.5 billion compared to $463 million and $1.9 billion for the same periods in 2021. During the three months ended September 30, 2022, net charge-offs increased $57 million, or 12 percent, primarily due to overdrafts charged off in other consumer. During the nine months ended September 30, 2022, net charge-offs decreased $398 million, or 21 percent, primarily driven by lower credit card losses, as loss rates remained near historic lows. The provision for credit losses increased $1.5 billion to an expense of $898 million, and $5.6 billion to an expense of $1.5 billion for the three and nine months ended September 30, 2022 compared to the same periods in 2021. The provision for credit losses for the three months ended September 30, 2022 was primarily driven by loan growth and a dampening macroeconomic outlook, and the nine-month period was driven by the same factors as well as a reserve build related to Russian exposure, partially offset by asset quality improvement and reduced pandemic uncertainties. For the same periods in the prior year, the benefit in the provision for credit losses was due to an improved macroeconomic outlook. The provision for credit losses for the
consumer portfolio, including unfunded lending commitments, increased $641 million to an expense of $722 million and $2.5 billion to an expense of $1.1 billion for the three and nine months ended September 30, 2022 compared to the same periods in 2021. The provision for credit losses for the commercial portfolio, including unfunded lending commitments, increased $881 million to an expense of $176 million and $3.0 billion to an expense of $304 million for the three and nine months ended September 30, 2022 compared to the same periods in 2021.
Table 39 presents a rollforward of the allowance for credit losses, including certain loan and allowance ratios for the three and nine months ended September 30, 2022 and 2021. For more information on the Corporation’s credit loss accounting policies and activity related to the allowance for credit losses, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K and Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses to the Consolidated Financial Statements.
Bank of America 42

Table 39Allowance for Credit Losses
Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)2022202120222021
Allowance for loan and lease losses, beginning of period$11,973 $14,095 $12,387 $18,802 
Loans and leases charged off
Residential mortgage(5)(7)(155)(27)
Home equity(8)(8)(41)(33)
Credit card(487)(495)(1,452)(1,956)
Direct/Indirect consumer(63)(59)(184)(229)
Other consumer(146)(72)(371)(217)
Total consumer charge-offs(709)(641)(2,203)(2,462)
U.S. commercial (1)
(85)(159)(239)(509)
Non-U.S. commercial(1)(2)(3)(44)
Commercial real estate(14)(4)(37)(38)
Commercial lease financing— — (5)— 
Total commercial charge-offs(100)(165)(284)(591)
Total loans and leases charged off(809)(806)(2,487)(3,053)
Recoveries of loans and leases previously charged off
Residential mortgage8 14 82 44 
Home equity26 42 113 126 
Credit card159 174 504 513 
Direct/Indirect consumer54 77 167 225 
Other consumer3 5 13 19 
Total consumer recoveries250 312 879 927 
U.S. commercial (2)
30 25 105 231 
Non-U.S. commercial7 1 13 3 
Commercial real estate1 4 5 10 
Commercial lease financing1 1 2 1 
Total commercial recoveries39 31 125 245 
Total recoveries of loans and leases previously charged off289 343 1,004 1,172 
Net charge-offs (520)(463)(1,483)(1,881)
Provision for loan and lease losses845 (475)1,394 (3,766)
Other4 (2)4 — 
Allowance for loan and lease losses, September 30
12,302 13,155 12,302 13,155 
Reserve for unfunded lending commitments, beginning of period1,461 1,687 1,456 1,878 
Provision for unfunded lending commitments53 (149)57 (339)
Other 1 — 2 (1)
Reserve for unfunded lending commitments, September 30
1,515 1,538 1,515 1,538 
Allowance for credit losses, September 30
$13,817 $14,693 $13,817 $14,693 
Loan and allowance ratios (3) :
Loans and leases outstanding at September 30
$1,027,615 $920,170 $1,027,615 $920,170 
Allowance for loan and lease losses as a percentage of total loans and leases outstanding at September 30
1.20 %1.43 %1.20 %1.43 %
Consumer allowance for loan and lease losses as a percentage of total consumer loans and leases outstanding at September 30
1.53 1.70 1.53 1.70 
Commercial allowance for loan and lease losses as a percentage of total commercial loans and leases outstanding at September 30
0.94 1.20 0.94 1.20 
Average loans and leases outstanding$1,029,084 $913,113 $1,003,014 $905,214 
Annualized net charge-offs as a percentage of average loans and leases outstanding0.20 %0.20 %0.20 %0.28 %
Allowance for loan and lease losses as a percentage of total nonperforming loans and leases at September 30
309 279 309 279 
Ratio of the allowance for loan and lease losses at September 30 to annualized net charge-offs
5.96 7.16 6.20 5.23 
Amounts included in allowance for loan and lease losses for loans and leases that are excluded from nonperforming loans and leases at September 30 (4)
$6,746 $7,375 $6,746 $7,375 
Allowance for loan and lease losses as a percentage of total nonperforming loans and leases, excluding the allowance for loan and lease losses for loans and leases that are excluded from nonperforming loans and leases at September 30 (4)
140 %123 %140 %123 %
(1)Includes U.S. small business commercial charge-offs of $43 million and $150 million for the three and nine months ended September 30, 2022 compared to $137 million and $343 million for the same periods in 2021.
(2)Includes U.S. small business commercial recoveries of $11 million and $40 million for the three and nine months ended September 30, 2022 compared to $18 million and $61 million for the same periods in 2021.
(3)Ratios are calculated as allowance for loan and lease losses as a percentage of loans and leases outstanding excluding loans accounted for under the fair value option.
(4)Primarily includes amounts related to credit card and unsecured consumer lending portfolios in Consumer Banking.
43 Bank of America


Market Risk Management
For more information on our market risk management process, see Market Risk Management in the MD&A of the Corporation’s 2021 Annual Report on Form 10-K.
Market risk is the risk that changes in market conditions may adversely impact the value of assets or liabilities, or otherwise negatively impact earnings. This risk is inherent in the financial instruments associated with our operations, primarily within our Global Markets segment. We are also exposed to these risks in other areas of the Corporation (e.g., our ALM activities). In the event of market stress, these risks could have a material impact on our results.
Trading Risk Management
To evaluate risks in our trading activities, we focus on the actual and potential volatility of revenues generated by individual positions as well as portfolios of positions. VaR is a common statistic used to measure market risk. Our primary VaR statistic is equivalent to a 99 percent confidence level, which means that for a VaR with a one-day holding period, there should not be losses in excess of VaR, on average, 99 out of 100 trading days.
Table 40 presents the total market-based portfolio VaR, which is the combination of the total covered positions (and
less liquid trading positions) portfolio and the fair value option portfolio. For more information on the market risk VaR for trading activities, see Trading Risk Management in the MD&A of the Corporation’s 2021 Annual Report on Form 10-K.
The total market-based portfolio VaR results in Table 40 include market risk to which we are exposed from all business segments, excluding credit valuation adjustment (CVA), DVA and related hedges. The majority of this portfolio is within the Global Markets segment.
Table 40 presents period-end, average, high and low daily trading VaR for the three months ended September 30, 2022, June 30, 2022 and September 30, 2021 using a 99 percent confidence level as well as average daily trading VaR for the nine months ended September 30, 2022 and 2021. The amounts disclosed in Table 40 and Table 41 align to the view of covered positions used in the Basel 3 capital calculations. Foreign exchange and commodity positions are always considered covered positions, regardless of trading or banking treatment for the trade, except for structural foreign currency positions that are excluded with prior regulatory approval.
The average of total covered positions and less liquid trading positions portfolio VaR for the three months ended September 30, 2022 compared to the prior quarter remained relatively unchanged.
Table 40Market Risk VaR for Trading Activities
Three Months EndedNine Months Ended September 30
September 30, 2022June 30, 2022September 30, 2021
(Dollars in millions)Period
End		Average
High (1)
Low (1)
Period
End		Average
High (1)
Low (1)
Period
End		Average
High (1)
Low (1)
2022 Average2021 Average
Foreign exchange$24 $19 $32 $12 $21 $17 $22 $12 $12 $13 $21 $9 $18 $13 
Interest rate35 34 55 25 36 36 56 24 33 32 48 20 36 42 
Credit90 68 95 54 71 73 106 53 72 66 80 54 68 68 
Equity22 16 23 12 21 22 33 19 32 24 32 19 20 24 
Commodities12 13 18 9 14 17 27 12 6 8 11 5 13 8 
Portfolio diversification(102)(85)n/an/a(62)(84)n/an/a(94)(91)n/an/a(88)(101)
Total covered positions portfolio81 65 95 42 101 81 140 56 61 52 71 41 67 54 
Impact from less liquid exposures (2)
82 52 n/an/a48 37 n/an/a40 26 n/an/a38 22 
Total covered positions and less liquid trading positions portfolio
163 117 173 84 149 118 236 76 101 78 123 51 105 76 
Fair value option loans59 50 60 37 47 53 65 39 50 45 54 31 52 50 
Fair value option hedges17 16 18 13 14 18 24 14 18 17 20 14 17 15 
Fair value option portfolio diversification(39)(36)n/an/a(28)(35)n/an/a(44)(36)n/an/a(35)(32)
Total fair value option portfolio37 30 37 23 33 36 44 30 24 26 33 23 34 33 
Portfolio diversification(5)(4)n/an/a(8)(14)n/an/a(21)(12)n/an/a(13)(7)
Total market-based portfolio$195 $143 203 103 $174 $140 287 91 $104 $92 141 60 $126 $102 
(1)The high and low for each portfolio may have occurred on different trading days than the high and low for the components. Therefore the impact from less liquid exposures and the amount of portfolio diversification, which is the difference between the total portfolio and the sum of the individual components, is not relevant.
(2)Impact is net of diversification effects between the covered positions and less liquid trading positions portfolios.
n/a = not applicable
The following graph presents the daily covered positions and less liquid trading positions portfolio VaR for the previous five quarters, corresponding to the data in Table 40.
bac-20220930_g1.jpg

Bank of America 44

Additional VaR statistics produced within our single VaR model are provided in Table 41 at the same level of detail as in Table 40. Evaluating VaR with additional statistics allows for an increased understanding of the risks in the portfolio, as the historical market data used in the VaR calculation does not necessarily follow a predefined statistical distribution. Table 41 presents average trading VaR statistics at 99 percent and 95 percent confidence levels for the three months ended September 30, 2022, June 30, 2022 and September 30, 2021.
Table 41Average Market Risk VaR for Trading Activities – 99 percent and 95 percent VaR Statistics
Three Months Ended
September 30, 2022June 30, 2022September 30, 2021
(Dollars in millions)99 percent95 percent99 percent95 percent99 percent95 percent
Foreign exchange$19 $11 $17 $10 $13 $9 
Interest rate34 18 36 18 32 16 
Credit68 26 73 27 66 20 
Equity16 8 22 12 24 11 
Commodities13 7 17 9 8 4 
Portfolio diversification(85)(43)(84)(46)(91)(35)
Total covered positions portfolio65 27 81 30 52 25 
Impact from less liquid exposures52 7 37 6 26 3 
Total covered positions and less liquid trading positions portfolio
117 34 118 36 78 28 
Fair value option loans50 14 53 16 45 10 
Fair value option hedges16 10 18 11 17 9 
Fair value option portfolio diversification(36)(13)(35)(15)(36)(9)
Total fair value option portfolio30 11 36 12 26 10 
Portfolio diversification(4)(7)(14)(8)(12)(6)
Total market-based portfolio$143 $38 $140 $40 $92 $32 
Backtesting
The accuracy of the VaR methodology is evaluated by backtesting, which compares the daily VaR results, utilizing a one-day holding period, against a comparable subset of trading revenue. For more information on our backtesting process, see Trading Risk Management – Backtesting in the MD&A of the Corporation’s 2021 Annual Report on Form 10-K.
During the three and nine months ended September 30, 2022, there was one day where this subset of trading revenue had losses that exceeded our total covered portfolio VaR, utilizing a one-day holding period.
Total Trading-related Revenue
Total trading-related revenue, excluding brokerage fees, and CVA, DVA and funding valuation adjustment gains (losses), represents the total amount earned from trading positions, including market-based net interest income, which are taken in a diverse range of financial instruments and markets. For more information, see Trading Risk Management – Total Trading-related Revenue in the MD&A of the Corporation’s 2021 Annual Report on Form 10-K.
The following histogram is a graphic depiction of trading volatility and illustrates the daily level of trading-related revenue for the three months ended September 30, 2022 compared to the three months ended June 30, 2022 and March 31, 2022. During the three months ended September 30, 2022, positive trading-related revenue was recorded for 100 percent of the trading days, of which 94 percent were daily trading gains of over $25 million. This compares to the three months ended June 30, 2022 where positive trading-related revenue was recorded for 98 percent of the trading days, of which 85 percent were daily trading gains of over $25 million. During the three months ended March 31, 2022, positive trading-related revenue was recorded for 100 percent of the trading days, of which 95 percent were daily trading gains of over $25 million.

bac-20220930_g2.jpg
Trading Portfolio Stress Testing
Because the very nature of a VaR model suggests results can exceed our estimates and it is dependent on a limited historical window, we also stress test our portfolio using scenario analysis. This analysis estimates the change in the value of our trading portfolio that may result from abnormal market movements. For more information, see Trading Risk Management – Trading Portfolio Stress Testing in the MD&A of the Corporation’s 2021 Annual Report on Form 10-K.
Interest Rate Risk Management for the Banking Book
The following discussion presents net interest income for banking book activities. For more information, see Interest Rate Risk Management for the Banking Book in the MD&A of the Corporation’s 2021 Annual Report on Form 10-K.
Table 42 presents the spot and 12-month forward rates used in our baseline forecasts at September 30, 2022 and December 31, 2021.
45 Bank of America


Table 42Forward Rates
September 30, 2022
 Federal
Funds		Three-month
LIBOR		10-Year
Swap
Spot rates3.25 %3.75 %3.88 %
12-month forward rates4.50 4.56 3.76 
December 31, 2021
Spot rates0.25 %0.21 %1.58 %
12-month forward rates1.00 1.07 1.84 
Table 43 shows the pretax impact to forecasted net interest income over the next 12 months from September 30, 2022 and December 31, 2021 resulting from instantaneous parallel and non-parallel shocks to the market-based forward curve. Periodically, we evaluate the scenarios presented so that they are meaningful in the context of the current rate environment. The interest rate scenarios also assume U.S. dollar interest rates are floored at zero. Depending on the level of interest rates, Down-rate scenarios may not receive the full impact of the rate shock, particularly in low rate environments.
During the nine months ended September 30, 2022, the overall decrease in asset sensitivity of our balance sheet to Up-rate scenarios was primarily due to an increase in long-end and short-end rates. We continue to be asset sensitive to a parallel upward move in interest rates with the majority of that impact coming from the short end of the yield curve. Additionally, higher interest rates negatively impact the fair value of our debt securities classified as available for sale and adversely affect accumulated OCI and thus capital levels under the Basel 3 capital rules. Under instantaneous upward parallel shifts, the near-term adverse impact to Basel 3 capital would be reduced over time by offsetting positive impacts to net interest income generated from the banking book activities. For more information on Basel 3, see Capital Management – Regulatory Capital on page 23.
Table 43Estimated Banking Book Net Interest Income Sensitivity to Curve Changes
Short
Rate (bps)		Long
Rate (bps)
(Dollars in millions)September 30,
2022		December 31,
2021
Parallel Shifts
+100 bps
instantaneous shift
+100+100$4,220 $6,542 
 -100 bps
  instantaneous shift		-100-100(5,419)n/m
Flatteners  
Short-end
instantaneous change
+100— 4,039 4,982 
Long-end
instantaneous change
— -100(210)n/m
Steepeners  
Short-end
instantaneous change
-100 — (5,209)n/m
Long-end
instantaneous change
— +100186 1,646 
n/m = not meaningful
The sensitivity analysis in Table 43 assumes that we take no action in response to these rate shocks and does not assume any change in other macroeconomic variables normally correlated with changes in interest rates. As part of our ALM activities, we use securities, certain residential mortgages, and interest rate and foreign exchange derivatives in managing interest rate sensitivity.
The behavior of our deposit portfolio in the baseline forecast and in alternate interest rate scenarios is a key assumption in
our projected estimates of net interest income. The sensitivity analysis in Table 43 assumes no change in deposit portfolio size or mix from the baseline forecast in alternate rate environments. In higher rate scenarios, any customer activity resulting in the replacement of low-cost or noninterest-bearing deposits with higher yielding deposits or market-based funding would reduce our benefit in those scenarios.
Interest Rate and Foreign Exchange Derivative Contracts
We use interest rate and foreign exchange derivative contracts in our ALM activities to manage our interest rate and foreign exchange risks. Specifically, we use those derivatives to manage both the variability in cash flows and changes in fair value of various assets and liabilities arising from those risks. Our interest rate derivative contracts are generally non-leveraged swaps tied to various benchmark interest rates and foreign exchange basis swaps, options, futures and forwards, and our foreign exchange contracts include cross-currency interest rate swaps, foreign currency futures contracts, foreign currency forward contracts and options.
The derivatives used in our ALM activities can be split into two broad categories: designated accounting hedges and other risk management derivatives. Designated accounting hedges are primarily used to manage our exposure to interest rates as described in the Interest Rate Risk Management for the Banking Book section and are included in the sensitivities presented in Table 43. The Corporation also uses foreign currency derivatives in accounting hedges to manage substantially all of the foreign exchange risk of our foreign operations. By hedging the foreign exchange risk of our foreign operations, the Corporation's market risk exposure in this area is not significant.
Risk management derivatives are predominantly used to hedge foreign exchange risks related to various foreign currency-denominated assets and liabilities and eliminate substantially all foreign currency exposures in the cash flows of the Corporation’s non-trading foreign currency-denominated financial instruments. These foreign exchange derivatives are sensitive to other market risk exposures such as cross-currency basis spreads and interest rate risk. However, as these features are not a significant component of these foreign exchange derivatives, the market risk related to this exposure is not significant. For more information on the accounting for derivatives, see Note 3 – Derivatives to the Consolidated Financial Statements.
Mortgage Banking Risk Management
We originate, fund and service mortgage loans, which subject us to credit, liquidity and interest rate risks, among others. We determine whether loans will be held for investment or held for sale at the time of commitment and manage credit and liquidity risks by selling or securitizing a portion of the loans we originate.
Changes in interest rates impact the value of interest rate lock commitments (IRLCs) and the related residential first mortgage loans held-for-sale (LHFS), as well as the value of the MSRs. Because the interest rate risks of these hedged items offset, we combine them into one overall hedged item with one combined economic hedge portfolio consisting of derivative contracts and securities. For more information on IRLCs and the related residential mortgage LHFS, see Mortgage Banking Risk Management in the MD&A of the Corporation’s 2021 Annual Report on Form 10-K.
There were no significant gains or losses related to the change in fair value of MSR, IRLCs and LHFS, net of gains and
Bank of America 46

losses on the hedge portfolio, for the three and nine months ended September 30, 2022 and 2021. For more information on MSRs, see Note 14 – Fair Value Measurements to the Consolidated Financial Statements.
Climate Risk Management
Climate-related risks are divided into two major categories: (1) risks related to the transition to a low-carbon economy, which may entail extensive policy, legal, technology and market changes, and (2) risks related to the physical impacts of climate change, driven by extreme weather events, such as hurricanes and floods, as well as chronic longer-term shifts, such as rising average global temperatures and sea levels. These changes and events can have broad impacts on operations, supply chains, distribution networks, customers and markets and are otherwise referred to, respectively, as transition risk and physical risk. These risks can impact both financial and nonfinancial risk types. The impacts of transition risk can lead to and amplify credit risk or market risk by reducing our customers’ operating income or the value of their assets as well as expose us to reputational and/or litigation risk due to increased regulatory scrutiny or negative public sentiment. Physical risk can lead to increased credit risk by diminishing borrowers’ repayment capacity or impacting the value of collateral. In addition, it could pose increased operational risk to our facilities and people.
In 2021, we publicly announced our commitment to achieve net zero greenhouse gas emissions in our financing activities, operations, and supply chain before 2050 (Net Zero Goal) and set 2030 emissions targets for our operations and supply chain. In connection with our Net Zero Goal, we committed to reduce emissions by 2030 associated with our financing activities related to auto manufacturing, energy, and power generation (2030 Targets). In our September 2022 Task Force on Climate-related Financial Disclosures report, we disclosed our 2019 and 2020 financed emissions and emissions intensity metrics for these sectors, with 2019 serving as the baseline for our 2030 Targets.
In line with our participation in the Net Zero Banking Alliance, we plan to disclose the financed emissions for additional portions of our business loan portfolio in 2023, and we expect to set financing activity emission reduction targets for other key sectors by April 2024. These reduction targets are intended to align with the International Energy Agency Net Zero Emissions 2050 global pathway to limit warming to 1.5 degrees Celsius.
Achieving our climate--related goals and targets, including our Net Zero Goal and 2030 Targets, will require technological advances, clearly defined roadmaps for industry sectors, public policies, including those that improve the cost of capital for
net zero transition and better emissions data reporting, as
well as ongoing, strong and active engagement with customers, suppliers, investors, government officials and other stakeholders.
Given the extended period of these and other climate-related goals we have established, our initiatives have not resulted in a significant effect on our results of operations or financial condition in the relevant periods presented herein, and are not expected to have a significant effect on our results of operations or financial condition in the near-term.
For more information on our governance framework and climate risk management process, see the Managing Risk and Climate Risk Management sections in the MD&A of the Corporation’s 2021 Annual Report on Form 10-K. For more information on climate risk, see Item 1A. Risk Factors – Other of the Corporation’s 2021 Annual Report on Form 10-K. For more information about climate-related matters and the Corporation’s climate-related goals and commitments, including our plans to achieve our Net Zero Goal and progress on our sustainable finance goals, see the Corporation’s website and the 2021 Annual Report to shareholders available on the Investor Relations portion of our website. The contents of the Corporation’s website and the 2021 Annual Report to shareholders are not incorporated by reference into this Quarterly Report on Form 10-Q.
The foregoing discussion and our discussion in the 2021 Annual Report to shareholders regarding our goals and commitments with respect to climate risk management, including environmental transition considerations, include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future results or performance and involve certain known and unknown risks, uncertainties and assumptions that are difficult to predict and are often beyond the Corporation’s control. Actual outcomes and results may differ materially from those expressed in, or implied by, any of these forward-looking statements.
Complex Accounting Estimates
Our significant accounting principles, are essential in understanding the MD&A. Many of our significant accounting principles require complex judgments to estimate the values of assets and liabilities. We have procedures and processes in place to facilitate making these judgments. For more information, see Complex Accounting Estimates in the MD&A of the Corporation’s 2021 Annual Report on Form 10-K and Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K.

47 Bank of America


Non-GAAP Reconciliations
Table 44 provides reconciliations of certain non-GAAP financial measures to the most closely related GAAP financial measures.
Table 44
Average and Period-end Supplemental Financial Data and Reconciliations to GAAP Financial Measures (1)
Average
Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)2022202120222021
Shareholders’ equity$271,017 $275,484 $269,514 $274,726 
Goodwill(69,022)(69,023)(69,022)(68,999)
Intangible assets (excluding MSRs)(2,107)(2,185)(2,127)(2,181)
Related deferred tax liabilities920 915 925 916 
Tangible shareholders’ equity$200,808 $205,191 $199,290 $204,462 
Preferred stock(29,134)(23,441)(28,094)(23,837)
Tangible common shareholders’ equity$171,674 $181,750 $171,196 $180,625 
Period-end
September 30 2022June 30 2022March 31 2022December 31 2021September 30 2021
(Dollars in millions)
Shareholders’ equity$269,524 $269,118 $266,617 $270,066 $272,464 
Goodwill(69,022)(69,022)(69,022)(69,022)(69,023)
Intangible assets (excluding MSRs)(2,094)(2,114)(2,133)(2,153)(2,172)
Related deferred tax liabilities915 920926 929 913 
Tangible shareholders’ equity$199,323 $198,902 $196,388 $199,820 $202,182 
Preferred stock(29,134)(29,134)(27,137)(24,708)(23,441)
Tangible common shareholders’ equity$170,189 $169,768 $169,251 $175,112 $178,741 
Total assets$3,072,953 $3,111,606 $3,238,223 $3,169,495 $3,085,446 
Goodwill(69,022)(69,022)(69,022)(69,022)(69,023)
Intangible assets (excluding MSRs)(2,094)(2,114)(2,133)(2,153)(2,172)
Related deferred tax liabilities 915 920926 929 913 
Tangible assets$3,002,752 $3,041,390 $3,167,994 $3,099,249 $3,015,164 
(1)For more information on non-GAAP financial measures and ratios we use in assessing the results of the Corporation, see Supplemental Financial Data on page 8.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
See Market Risk Management on page 44 in the MD&A and the sections referenced therein for Quantitative and Qualitative Disclosures about Market Risk.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
As of the end of the period covered by this report, the Corporation’s management, including the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness and design of the Corporation’s disclosure controls and procedures (as that term is defined in Rule 13a-15(e) of the Exchange Act). Based upon that evaluation, the Corporation’s Chief Executive Officer and Chief Financial Officer concluded that the Corporation’s disclosure controls and procedures were effective, as of the end of the period covered by this report.
Changes in Internal Control Over Financial Reporting
There have been no changes in the Corporation’s internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the three months ended September 30, 2022, that have materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.
Bank of America 48

Part I. Financial Information
Item 1. Financial Statements
Bank of America Corporation and Subsidiaries
Consolidated Statement of Income
Three Months Ended September 30Nine Months Ended September 30
(In millions, except per share information)2022202120222021
Net interest income  
Interest income$19,621 $12,336 $47,490 $35,118 
Interest expense5,856 1,242 9,709 3,594 
Net interest income13,765 11,094 37,781 31,524 
Noninterest income  
Fees and commissions8,001 9,915 25,477 29,156 
Market making and similar activities3,068 2,005 9,023 7,360 
Other income(332)(248)(1,863)(987)
Total noninterest income10,737 11,672 32,637 35,529 
Total revenue, net of interest expense24,502 22,766 70,418 67,053 
Provision for credit losses898 (624)1,451 (4,105)
Noninterest expense  
Compensation and benefits8,887 8,714 27,286 27,103 
Occupancy and equipment1,777 1,764 5,285 5,353 
Information processing and communications1,546 1,416 4,621 4,289 
Product delivery and transaction related892 987 2,749 2,940 
Professional fees525 434 1,493 1,263 
Marketing505 347 1,365 1,528 
Other general operating1,171 778 3,096 2,524 
Total noninterest expense15,303 14,440 45,895 45,000 
Income before income taxes8,301 8,950 23,072 26,158 
Income tax expense1,219 1,259 2,676 1,193 
Net income$7,082 $7,691 $20,396 $24,965 
Preferred stock dividends503 431 1,285 1,181 
Net income applicable to common shareholders$6,579 $7,260 $19,111 $23,784 
Per common share information  
Earnings$0.81 $0.86 $2.35 $2.77 
Diluted earnings0.81 0.85 2.34 2.75 
Average common shares issued and outstanding8,107.7 8,430.7 8,122.2 8,583.1 
Average diluted common shares issued and outstanding8,160.8 8,492.8 8,173.3 8,702.2 
Consolidated Statement of Comprehensive Income
Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)2022202120222021
Net income$7,082 $7,691 $20,396 $24,965 
Other comprehensive income (loss), net-of-tax:
Net change in debt securities(1,112)(153)(6,381)(1,243)
Net change in debit valuation adjustments462 27 1,298 292 
Net change in derivatives(3,703)(431)(10,890)(1,130)
Employee benefit plan adjustments37 50 97 170 
Net change in foreign currency translation adjustments(37)(26)(47)(29)
Other comprehensive income (loss)(4,353)(533)(15,923)(1,940)
Comprehensive income (loss)$2,729 $7,158 $4,473 $23,025 













See accompanying Notes to Consolidated Financial Statements.
49 Bank of America


Bank of America Corporation and Subsidiaries
Consolidated Balance Sheet
September 30
2022		December 31
2021
(Dollars in millions)
Assets
Cash and due from banks$27,802 $29,222 
Interest-bearing deposits with the Federal Reserve, non-U.S. central banks and other banks177,174 318,999 
Cash and cash equivalents204,976 348,221 
Time deposits placed and other short-term investments7,449 7,144 
Federal funds sold and securities borrowed or purchased under agreements to resell
   (includes $165,521 and $150,665 measured at fair value)
275,247 250,720 
Trading account assets (includes $112,374 and $103,434 pledged as collateral)
293,458 247,080 
Derivative assets71,956 35,344 
Debt securities: 
Carried at fair value236,245 308,073 
Held-to-maturity, at cost (fair value – $527,553 and $665,890)
643,713 674,554 
Total debt securities879,958 982,627 
Loans and leases (includes $4,851 and $7,819 measured at fair value)
1,032,466 979,124 
Allowance for loan and lease losses(12,302)(12,387)
Loans and leases, net of allowance1,020,164 966,737 
Premises and equipment, net11,117 10,833 
Goodwill69,022 69,022 
Loans held-for-sale (includes $2,395 and $4,455 measured at fair value)
7,629 15,635 
Customer and other receivables76,211 72,263 
Other assets (includes $7,326 and $12,144 measured at fair value)
155,766 163,869 
Total assets$3,072,953 $3,169,495 
Liabilities  
Deposits in U.S. offices:  
Noninterest-bearing$696,976 $784,189 
Interest-bearing (includes $453 and $408 measured at fair value)
1,143,317 1,165,914 
Deposits in non-U.S. offices:
Noninterest-bearing21,630 27,457 
Interest-bearing76,174 86,886 
Total deposits1,938,097 2,064,446 
Federal funds purchased and securities loaned or sold under agreements to repurchase
   (includes $165,390 and $139,641 measured at fair value)
215,627 192,329 
Trading account liabilities84,768 100,690 
Derivative liabilities50,156 37,675 
Short-term borrowings (includes $1,993 and $4,279 measured at fair value)
21,044 23,753 
Accrued expenses and other liabilities (includes $6,764 and $11,489 measured at fair value
   and $1,515 and $1,456 of reserve for unfunded lending commitments)
224,615 200,419 
Long-term debt (includes $27,531 and $29,708 measured at fair value)
269,122 280,117 
Total liabilities2,803,429 2,899,429 
Commitments and contingencies (Note 6 – Securitizations and Other Variable Interest Entities
   and Note 10 – Commitments and Contingencies)
Shareholders’ equity 
Preferred stock, $0.01 par value; authorized – 100,000,000 shares; issued and outstanding – 4,117,652 and 3,939,686 shares
29,134 24,708 
Common stock and additional paid-in capital, $0.01  par value; authorized – 12,800,000,000 shares;
   issued and outstanding – 8,024,450,244 and 8,077,831,463 shares
59,460 62,398 
Retained earnings201,957 188,064 
Accumulated other comprehensive income (loss)(21,027)(5,104)
Total shareholders’ equity269,524 270,066 
Total liabilities and shareholders’ equity$3,072,953 $3,169,495 
Assets of consolidated variable interest entities included in total assets above (isolated to settle the liabilities of the variable interest entities)
Trading account assets$2,794 $5,004 
Loans and leases16,073 17,135 
Allowance for loan and lease losses(802)(958)
Loans and leases, net of allowance15,271 16,177 
All other assets93 189 
Total assets of consolidated variable interest entities$18,158 $21,370 
Liabilities of consolidated variable interest entities included in total liabilities above  
Short-term borrowings (includes $33 and $51 of non-recourse short-term borrowings)
$82 $247 
Long-term debt (includes $3,240 and $3,587 of non-recourse debt)
3,240 3,587 
All other liabilities (includes $9 and $7 of non-recourse liabilities)
9 7 
Total liabilities of consolidated variable interest entities$3,331 $3,841 
See accompanying Notes to Consolidated Financial Statements.
Bank of America 50

Bank of America Corporation and Subsidiaries
Consolidated Statement of Changes in Shareholders’ Equity
Preferred
Stock		Common Stock and
Additional Paid-in Capital		Retained
Earnings		Accumulated
Other
Comprehensive
Income (Loss)		Total
Shareholders’
Equity
(In millions)SharesAmount
Balance, June 30, 2022$29,134 8,035.2 $59,499 $197,159 $(16,674)$269,118 
Net income   7,082 7,082 
Net change in debt securities    (1,112)(1,112)
Net change in debit valuation adjustments462 462 
Net change in derivatives    (3,703)(3,703)
Employee benefit plan adjustments    37 37 
Net change in foreign currency translation adjustments   (37)(37)
Dividends declared:    
Common (1,780) (1,780)
Preferred  (503) (503)
Common stock issued under employee plans, net, and other2.5 411 (1) 410 
Common stock repurchased(13.2)(450)(450)
Balance, September 30, 2022$29,134 8,024.5 $59,460 $201,957 $(21,027)$269,524 
Balance, December 31, 2021$24,708 8,077.8 $62,398 $188,064 $(5,104)$270,066 
Net income20,396 20,396 
Net change in debt securities(6,381)(6,381)
Net change in debit valuation adjustments1,298 1,298 
Net change in derivatives(10,890)(10,890)
Employee benefit plan adjustments97 97 
Net change in foreign currency translation adjustments(47)(47)
Dividends declared:
Common(5,188)(5,188)
Preferred(1,285)(1,285)
Issuance of preferred stock4,426 4,426 
Common stock issued under employee plans, net, and other44.5 1,137 (30)1,107 
Common stock repurchased(97.8)(4,075)(4,075)
Balance, September 30, 2022$29,134 8,024.5 $59,460 $201,957 $(21,027)$269,524 
Balance, June 30, 2021$23,441 8,487.2 $79,242 $177,499 $(3,063)$277,119 
Net income7,691 7,691 
Net change in debt securities(153)(153)
Net change in debit valuation adjustments27 27 
Net change in derivatives(431)(431)
Employee benefit plan adjustments50 50 
Net change in foreign currency translation adjustments(26)(26)
Dividends declared:
Common(1,749)(1,749)
Preferred(431)(431)
Common stock issued under employee plans, net, and other2.0 284 (3)281 
Common stock repurchased(248.0)(9,914)(9,914)
Balance, September 30, 2021$23,441 8,241.2 $69,612 $183,007 $(3,596)$272,464 
Balance, December 31, 2020$24,510 8,650.8 $85,982 $164,088 $(1,656)$272,924 
Net income24,965 24,965 
Net change in debt securities(1,243)(1,243)
Net change in debit valuation adjustments292 292 
Net change in derivatives(1,130)(1,130)
Employee benefit plan adjustments170 170 
Net change in foreign currency translation adjustments(29)(29)
Dividends declared:
Common(4,859)(4,859)
Preferred(1,181)(1,181)
Issuance of preferred stock902 902 
Redemption of preferred stock(1,971)(1,971)
Common stock issued under employee plans, net, and other42.2 1,223 (6)1,217 
Common stock repurchased(451.8)(17,593)(17,593)
Balance, September 30, 2021$23,441 8,241.2 $69,612 $183,007 $(3,596)$272,464 






See accompanying Notes to Consolidated Financial Statements.
51 Bank of America


Bank of America Corporation and Subsidiaries
Consolidated Statement of Cash Flows
Nine Months Ended September 30
(Dollars in millions)20222021
Operating activities
Net income$20,396 $24,965 
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses1,451 (4,105)
Gains on sales of debt securities(37)(4)
Depreciation and amortization1,476 1,403 
Net amortization of premium/discount on debt securities1,862 4,534 
Deferred income taxes620 (1,151)
Stock-based compensation2,235 2,031 
Loans held-for-sale:
Originations and purchases(18,736)(27,003)
Proceeds from sales and paydowns of loans originally classified as held for sale and instruments
from related securitization activities
27,260 24,852 
Net change in:
Trading and derivative assets/liabilities(106,322)(55,310)
Other assets7,623 (34,337)
Accrued expenses and other liabilities23,869 8,713 
Other operating activities, net978 3,568 
Net cash used in operating activities(37,325)(51,844)
Investing activities
Net change in:
Time deposits placed and other short-term investments(305)28 
Federal funds sold and securities borrowed or purchased under agreements to resell(24,527)42,124 
Debt securities carried at fair value:
Proceeds from sales58,888 3,732 
Proceeds from paydowns and maturities90,161 124,149 
Purchases(114,027)(174,517)
Held-to-maturity debt securities:
Proceeds from paydowns and maturities53,340 94,437 
Purchases(24,059)(340,425)
Loans and leases:
Proceeds from sales of loans originally classified as held for investment and instruments
from related securitization activities
20,544 7,767 
Purchases(4,618)(3,363)
Other changes in loans and leases, net(69,267)(5,866)
Other investing activities, net(3,039)(2,450)
Net cash used in investing activities(16,909)(254,384)
Financing activities
Net change in:
Deposits(126,434)169,324 
Federal funds purchased and securities loaned or sold under agreements to repurchase23,298 37,105 
Short-term borrowings(2,709)957 
Long-term debt:
Proceeds from issuance55,202 65,459 
Retirement(24,390)(38,787)
Preferred stock:
Proceeds from issuance4,426 902 
Redemption— (1,971)
Common stock repurchased(4,075)(17,593)
Cash dividends paid(6,471)(6,090)
Other financing activities, net(501)(696)
Net cash provided by (used in) financing activities(81,654)208,610 
Effect of exchange rate changes on cash and cash equivalents(7,357)(2,991)
Net decrease in cash and cash equivalents(143,245)(100,609)
Cash and cash equivalents at January 1348,221 380,463 
Cash and cash equivalents at September 30$204,976 $279,854 


See accompanying Notes to Consolidated Financial Statements.
Bank of America 52

Bank of America Corporation and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 1 Summary of Significant Accounting Principles
Bank of America Corporation, a bank holding company and a financial holding company, provides a diverse range of financial services and products throughout the U.S. and in certain international markets. The term “the Corporation” as used herein may refer to Bank of America Corporation, individually, Bank of America Corporation and its subsidiaries, or certain of Bank of America Corporation’s subsidiaries or affiliates.
Principles of Consolidation and Basis of Presentation
The Consolidated Financial Statements include the accounts of the Corporation and its majority-owned subsidiaries and those variable interest entities (VIEs) where the Corporation is the primary beneficiary. Intercompany accounts and transactions have been eliminated. Results of operations of acquired companies are included from the dates of acquisition, and for VIEs, from the dates that the Corporation became the primary beneficiary. Assets held in an agency or fiduciary capacity are not included in the Consolidated Financial Statements. The Corporation accounts for investments in companies for which it owns a voting interest and for which it has the ability to exercise significant influence over operating and financing decisions using the equity method of accounting. These investments, which include the Corporation’s interests in affordable housing and renewable energy partnerships, are recorded in other assets. Equity method investments are subject to impairment testing, and the Corporation’s proportionate share of income or loss is included in other income.
The preparation of the Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts and
disclosures. Actual results could materially differ from those estimates and assumptions.
These unaudited Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements, and related notes thereto, of the Corporation’s 2021 Annual Report on Form 10-K.
The nature of the Corporation’s business is such that the results of any interim period are not necessarily indicative of results for a full year. In the opinion of management, all adjustments, which consist of normal recurring adjustments necessary for a fair statement of the interim period results, have been made. The Corporation evaluates subsequent events through the date of filing with the Securities and Exchange Commission (SEC). Certain prior-period amounts have been reclassified to conform to current-period presentation.
Accounting Standards Issued and Not Yet Adopted
Hedge Accounting
The FASB issued a new accounting standard effective on January 1, 2023, with early adoption permitted, that makes targeted improvements to the application of the fair value hedge accounting guidance for closed portfolios of financial assets. Upon adoption, the application of these hedge strategies would be applied prospectively.
Financial Instruments – Credit Losses
The FASB amended the accounting and disclosure requirements for expected credit losses by removing the recognition and measurement guidance on troubled debt restructurings (TDRs) and enhancing certain disclosures. The amendments are effective on January 1, 2023 with early adoption permitted. The effects of these changes on the Corporation’s financial statements are not expected to have a material impact on its consolidated financial position, results of operations or disclosures in the Notes to the Consolidated Financial Statements.
53 Bank of America


NOTE 2 Net Interest Income and Noninterest Income
The table below presents the Corporation’s net interest income and noninterest income disaggregated by revenue source for the three and nine months ended September 30, 2022 and 2021. For more information, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K. For a disaggregation of noninterest income by business segment and All Other, see Note 17 – Business Segment Information.
Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)2022202120222021
Net interest income
Interest income
Loans and leases$10,231 $7,502 $25,805 $21,859 
Debt securities4,239 3,282 12,111 8,832 
Federal funds sold and securities borrowed or purchased under agreements to resell (1)
1,446 6 1,835 (43)
Trading account assets1,449 967 3,753 2,793 
Other interest income2,256 579 3,986 1,677 
Total interest income19,621 12,336 47,490 35,118 
Interest expense
Deposits1,235 133 1,719 394 
Short-term borrowings (1)
2,264 (41)2,705 (205)
Trading account liabilities383 285 1,117 824 
Long-term debt1,974 865 4,168 2,581 
Total interest expense5,856 1,242 9,709 3,594 
Net interest income$13,765 $11,094 $37,781 $31,524 
Noninterest income
Fees and commissions
Card income
Interchange fees (2)
$1,060 $1,154 $3,067 $3,431 
Other card income513 429 1,464 1,173 
Total card income1,573 1,583 4,531 4,604 
Service charges
Deposit-related fees1,162 1,619 4,109 4,671 
Lending-related fees304 309 907 923 
Total service charges1,466 1,928 5,016 5,594 
Investment and brokerage services
Asset management fees2,920 3,276 9,308 9,434 
Brokerage fees875 960 2,870 2,988 
Total investment and brokerage services 3,795 4,236 12,178 12,422 
Investment banking fees
Underwriting income452 1,168 1,559 4,028 
Syndication fees283 346 896 1,047 
Financial advisory services432 654 1,297 1,461 
Total investment banking fees1,167 2,168 3,752 6,536 
Total fees and commissions8,001 9,915 25,477 29,156 
Market making and similar activities3,068 2,005 9,023 7,360 
Other income (loss)(332)(248)(1,863)(987)
Total noninterest income$10,737 $11,672 $32,637 $35,529 
(1)For more information on negative interest, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K.
(2)Gross interchange fees and merchant income were $3.3 billion and $3.0 billion for the three months ended September 30, 2022 and 2021 and are presented net of $2.2 billion and $1.8 billion of expenses for rewards and partner payments as well as certain other card costs for the same periods. Gross interchange fees and merchant income were $9.5 billion and $8.3 billion for the nine months ended September 30, 2022 and 2021 and are presented net of $6.4 billion and $4.9 billion of expenses for rewards and partner payments as well as certain other card costs for the same periods.
Bank of America 54

NOTE 3 Derivatives
Derivative Balances
Derivatives are entered into on behalf of customers, for trading or to support risk management activities. Derivatives used in risk management activities include derivatives that may or may not be designated in qualifying hedge accounting relationships. Derivatives that are not designated in qualifying hedge accounting relationships are referred to as other risk management derivatives. For more information on the Corporation’s derivatives and hedging activities, see Note 1 – Summary of Significant Accounting Principles and Note 3 –
Derivatives to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K. The following tables present derivative instruments included on the Consolidated Balance Sheet in derivative assets and liabilities at September 30, 2022 and December 31, 2021. Balances are presented on a gross basis, prior to the application of counterparty and cash collateral netting. Total derivative assets and liabilities are adjusted on an aggregate basis to take into consideration the effects of legally enforceable master netting agreements and have been reduced by cash collateral received or paid.
September 30, 2022
Gross Derivative AssetsGross Derivative Liabilities
(Dollars in billions)
Contract/
Notional (1)
Trading and Other Risk Management DerivativesQualifying
Accounting
Hedges		TotalTrading and Other Risk Management DerivativesQualifying
Accounting
Hedges		Total
Interest rate contracts       
Swaps $22,304.3 $131.8 $22.2 $154.0 $114.1 $37.7 $151.8 
Futures and forwards3,105.7 19.1 — 19.1 17.3 — 17.3 
Written options1,629.2 — — — 45.7 — 45.7 
Purchased options1,580.4 46.5 — 46.5 — — — 
Foreign exchange contracts 
Swaps1,495.0 53.5 0.5 54.0 51.9 0.3 52.2 
Spot, futures and forwards4,521.9 85.0 0.9 85.9 87.4 — 87.4 
Written options443.8 — — — 11.9 — 11.9 
Purchased options430.4 12.7 — 12.7 — — — 
Equity contracts 
Swaps376.0 22.0 — 22.0 17.9 — 17.9 
Futures and forwards101.2 2.9 0.1 3.0 1.1 — 1.1 
Written options761.4 — — — 48.8 — 48.8 
Purchased options681.2 50.1 — 50.1 — — — 
Commodity contracts  
Swaps55.7 8.1 — 8.1 6.9 — 6.9 
Futures and forwards171.2 3.7 — 3.7 3.4 0.2 3.6 
Written options75.8 — — — 4.9 — 4.9 
Purchased options62.9 5.5 — 5.5 — — — 
Credit derivatives (2)
   
Purchased credit derivatives:   
Credit default swaps 354.1 4.5 — 4.5 1.4 — 1.4 
Total return swaps/options110.9 1.5 — 1.5 2.9 — 2.9 
Written credit derivatives:  
Credit default swaps333.0 1.6 — 1.6 4.3 — 4.3 
Total return swaps/options120.3 4.9 — 4.9 1.4 — 1.4 
Gross derivative assets/liabilities$453.4 $23.7 $477.1 $421.3 $38.2 $459.5 
Less: Legally enforceable master netting agreements   (364.5)  (364.5)
Less: Cash collateral received/paid    (40.6)  (44.8)
Total derivative assets/liabilities    $72.0   $50.2 
(1)Represents the total contract/notional amount of derivative assets and liabilities outstanding.
(2)The net derivative asset (liability) and notional amount of written credit derivatives for which the Corporation held purchased credit derivatives with identical underlying referenced names were $(2.9) billion and $312.4 billion at September 30, 2022.
55 Bank of America


December 31, 2021
Gross Derivative AssetsGross Derivative Liabilities
(Dollars in billions)
Contract/
Notional (1)
Trading and Other Risk Management DerivativesQualifying
Accounting
Hedges		TotalTrading and Other Risk Management DerivativesQualifying
Accounting
Hedges		Total
Interest rate contracts       
Swaps $18,068.1 $150.5 $8.9 $159.4 $156.4 $4.4 $160.8 
Futures and forwards 2,243.2 1.1 — 1.1 1.0 — 1.0 
Written options1,616.1 — — — 28.8 — 28.8 
Purchased options1,673.6 33.1 — 33.1 — — — 
Foreign exchange contracts      
Swaps1,420.9 28.6 0.2 28.8 30.5 0.2 30.7 
Spot, futures and forwards4,087.2 37.1 0.3 37.4 37.7 0.2 37.9 
Written options287.2 — — — 4.1 — 4.1 
Purchased options267.6 4.1 — 4.1 — — — 
Equity contracts       
Swaps443.8 12.3 — 12.3 14.5 — 14.5 
Futures and forwards113.3 0.5 — 0.5 1.7 — 1.7 
Written options737.7 — — — 58.5 — 58.5 
Purchased options657.0 55.9 — 55.9 — — — 
Commodity contracts       
Swaps47.7 3.1 — 3.1 6.0 — 6.0 
Futures and forwards101.5 2.3 — 2.3 0.3 1.1 1.4 
Written options44.4 — — — 2.6 — 2.6 
Purchased options38.3 3.2 — 3.2 — — — 
Credit derivatives (2)
       
Purchased credit derivatives:       
Credit default swaps 297.0 1.9 — 1.9 4.3 — 4.3 
Total return swaps/options85.3 0.2 — 0.2 1.1 — 1.1 
Written credit derivatives:      
Credit default swaps279.8 4.2 — 4.2 1.6 — 1.6 
Total return swaps/options85.3 0.9 — 0.9 0.5 — 0.5 
Gross derivative assets/liabilities $339.0 $9.4 $348.4 $349.6 $5.9 $355.5 
Less: Legally enforceable master netting agreements    (282.3)  (282.3)
Less: Cash collateral received/paid   (30.8)  (35.5)
Total derivative assets/liabilities   $35.3   $37.7 
(1)Represents the total contract/notional amount of derivative assets and liabilities outstanding.
(2)The net derivative asset (liability) and notional amount of written credit derivatives for which the Corporation held purchased credit derivatives with identical underlying referenced names were $2.3 billion and $258.4 billion at December 31, 2021.
Offsetting of Derivatives
The Corporation enters into International Swaps and Derivatives Association, Inc. (ISDA) master netting agreements or similar agreements with substantially all of the Corporation’s derivative counterparties. For more information, see Note 3 – Derivatives to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K.
The following table presents derivative instruments included in derivative assets and liabilities on the Consolidated Balance Sheet at September 30, 2022 and December 31, 2021 by primary risk (e.g., interest rate risk) and the platform, where
applicable, on which these derivatives are transacted. Balances are presented on a gross basis, prior to the application of counterparty and cash collateral netting. Total gross derivative assets and liabilities are adjusted on an aggregate basis to take into consideration the effects of legally enforceable master netting agreements, which include reducing the balance for counterparty netting and cash collateral received or paid.
For more information on offsetting of securities financing agreements, see Note 9 – Securities Financing Agreements, Collateral and Restricted Cash.
Bank of America 56

Offsetting of Derivatives (1)
Derivative
Assets		Derivative
 Liabilities		Derivative
Assets		Derivative
 Liabilities
(Dollars in billions)September 30, 2022December 31, 2021
Interest rate contracts    
Over-the-counter$149.0 $140.3 $171.3 $166.3 
Exchange-traded 0.5 0.1 0.2 — 
Over-the-counter cleared69.5 71.2 22.6 22.5 
Foreign exchange contracts
Over-the-counter147.6 147.2 67.9 70.5 
Over-the-counter cleared2.2 2.1 1.1 1.1 
Equity contracts
Over-the-counter33.8 28.3 29.2 32.9 
Exchange-traded 40.4 37.8 38.3 38.4 
Commodity contracts
Over-the-counter13.1 12.2 6.1 7.6 
Exchange-traded 3.1 2.6 1.4 1.3 
Over-the-counter cleared0.3 0.3 0.1 0.1 
Credit derivatives
Over-the-counter11.4 8.6 5.2 5.3 
Over-the-counter cleared0.9 1.0 1.8 1.8 
Total gross derivative assets/liabilities, before netting
Over-the-counter354.9 336.6 279.7 282.6 
Exchange-traded 44.0 40.5 39.9 39.7 
Over-the-counter cleared72.9 74.6 25.6 25.5 
Less: Legally enforceable master netting agreements and cash collateral received/paid
Over-the-counter(295.1)(298.9)(250.3)(254.6)
Exchange-traded (38.5)(38.5)(37.8)(37.8)
Over-the-counter cleared(71.5)(71.9)(25.0)(25.4)
Derivative assets/liabilities, after netting66.7 42.4 32.1 30.0 
Other gross derivative assets/liabilities (2)
5.3 7.8 3.2 7.7 
Total derivative assets/liabilities 72.0 50.2 35.3 37.7 
Less: Financial instruments collateral (3)
(26.0)(5.8)(11.8)(10.6)
Total net derivative assets/liabilities$46.0 $44.4 $23.5 $27.1 
(1)Over-the-counter derivatives include bilateral transactions between the Corporation and a particular counterparty. Over-the-counter cleared derivatives include bilateral transactions between the Corporation and a counterparty where the transaction is cleared through a clearinghouse. Exchange-traded derivatives include listed options transacted on an exchange.
(2)Consists of derivatives entered into under master netting agreements where the enforceability of these agreements is uncertain under bankruptcy laws in some countries or industries.
(3)Amounts are limited to the derivative asset/liability balance and, accordingly, do not include excess collateral received/pledged. Financial instruments collateral includes securities collateral received or pledged and cash securities held and posted at third-party custodians that are not offset on the Consolidated Balance Sheet but shown as a reduction to derive net derivative assets and liabilities.
Derivatives Designated as Accounting Hedges
The Corporation uses various types of interest rate and foreign exchange derivative contracts to protect against changes in the fair value of its assets and liabilities due to fluctuations in interest rates and exchange rates (fair value hedges). The Corporation also uses these types of contracts to protect against changes in the cash flows of its assets and liabilities, and other forecasted transactions (cash flow hedges). The Corporation hedges its net investment in consolidated non-U.S.
operations determined to have functional currencies other than the U.S. dollar using forward exchange contracts and cross-currency basis swaps, and by issuing foreign currency-denominated debt (net investment hedges).
Fair Value Hedges
The table below summarizes information related to fair value hedges for the three and nine months ended September 30, 2022 and 2021.
Gains and Losses on Derivatives Designated as Fair Value Hedges
Three Months Ended September 30, 2022Three Months Ended September 30, 2021
(Dollars in millions)DerivativeHedged ItemDerivativeHedged Item
Interest rate risk on long-term debt (1)
$(8,435)$8,437 $(1,658)$1,660 
Interest rate and foreign currency risk on long-term debt (2)
(77)78 (49)46 
Interest rate risk on available-for-sale securities (3)
9,681 (9,707)867 (859)
Total$1,169 $(1,192)$(840)$847 
`Nine Months Ended September 30, 2022Nine Months Ended September 30, 2021
DerivativeHedged ItemDerivativeHedged Item
Interest rate risk on long-term debt (1)
$(27,458)$27,630 $(6,237)$6,208 
Interest rate and foreign currency risk on long-term debt (2)
(137)137 (72)67 
Interest rate risk on available-for-sale securities (3)
24,816 (24,975)4,245 (4,184)
Total$(2,779)$2,792 $(2,064)$2,091 
(1)Amounts are recorded in interest expense in the Consolidated Statement of Income.
(2)For the three and nine months ended September 30, 2022, the derivative amount includes gains (losses) of $(6) million and $(40) million in interest expense, $(71) million and $(96) million in market making and similar activities, and $0 and $(1) million in accumulated other comprehensive income (OCI). For the same periods in 2021, the derivative amount includes gains (losses) of $(11) million and $(62) million in interest expense, $(33) million and $(2) million in market making and similar activities, and $(5) million and $(8) million in accumulated OCI. Line item totals are in the Consolidated Statement of Income and on the Consolidated Balance Sheet.
(3)Amounts are recorded in interest income in the Consolidated Statement of Income.
57 Bank of America


The table below summarizes the carrying value of hedged assets and liabilities that are designated and qualifying in fair value hedging relationships along with the cumulative amount of fair value hedging adjustments included in the carrying value that have been recorded in the current hedging relationships. These fair value hedging adjustments are open basis adjustments that are not subject to amortization as long as the hedging relationship remains designated.
Designated Fair Value Hedged Assets and Liabilities
September 30, 2022December 31, 2021
(Dollars in millions)Carrying Value
Cumulative
Fair Value
 Adjustments (1)
Carrying Value
Cumulative
Fair Value
 Adjustments (1)
Long-term debt (2)
$179,266 $(21,897)$181,745 $3,987 
Available-for-sale debt securities (2, 3, 4)
175,943 (20,153)209,038 (2,294)
Trading account assets (5)
11,872 680 2,067 32 
(1)Increase (decrease) to carrying value.
(2)At September 30, 2022 and December 31, 2021, the cumulative fair value adjustments remaining on long-term debt and available-for-sale debt securities from discontinued hedging relationships resulted in a decrease of $103 million and an increase of $1.5 billion in the related liability and a decrease in the related asset of $5.2 billion and $1.0 billion, which are being amortized over the remaining contractual life of the de-designated hedged items.
(3)These amounts include the amortized cost of the prepayable financial assets used to designate hedging relationships in which the hedged item is the last layer expected to be remaining at the end of the hedging relationship (i.e. last-of-layer hedging relationship). At September 30, 2022 and December 31, 2021, the amortized cost of the closed portfolios used in these hedging relationships was $22.0 billion and $21.1 billion, of which $9.2 billion and $6.9 billion was designated in the last-of-layer hedging relationship. At September 30, 2022 and December 31, 2021, the cumulative adjustment associated with these hedging relationships was a decrease of $488 million and $172 million.
(4)Carrying value represents amortized cost.
(5)Represents hedging activities related to certain commodities inventory.
Cash Flow and Net Investment Hedges
The table below summarizes certain information related to cash flow hedges and net investment hedges for the three and nine months ended September 30, 2022 and 2021. Of the $12.8 billion after-tax net loss ($17.0 billion pretax) on derivatives in accumulated OCI at September 30, 2022, losses of $3.7 billion after-tax ($4.9 billion pretax) related to both open and terminated cash flow hedges are expected to be reclassified into earnings in the next 12 months. These net losses
reclassified into earnings are expected to primarily decrease net interest income related to the respective hedged items. For open cash flow hedges, the maximum length of time over which forecasted transactions are hedged is approximately seven years. For terminated cash flow hedges, the time period over which the forecasted transactions will be recognized in interest income is approximately five years, with the aggregated amount beyond this time period being insignificant.
Gains and Losses on Derivatives Designated as Cash Flow and Net Investment Hedges
Gains (Losses)
 Recognized in
Accumulated OCI
on Derivatives		Gains (Losses)
in Income
Reclassified from
 Accumulated OCI		Gains (Losses)
 Recognized in
Accumulated OCI
on Derivatives		Gains (Losses)
in Income
Reclassified from
 Accumulated OCI
(Dollars in millions, amounts pretax)Three Months Ended September 30, 2022Nine Months Ended September 30, 2022
Cash flow hedges
Interest rate risk on variable-rate assets (1)
$(5,045)$(110)$(14,443)$(191)
Price risk on forecasted MBS purchases (1)
— — (129)13 
Price risk on certain compensation plans (2)
(13)5 (107)24 
Total$(5,058)$(105)$(14,679)$(154)
Net investment hedges  
Foreign exchange risk (3)
$1,541 $3 $3,339 $3 
Three Months Ended September 30, 2021Nine Months Ended September 30, 2021
Cash flow hedges
Interest rate risk on variable-rate assets (1)
$(539)$38 $(1,115)$111 
Price risk on forecasted MBS purchases (1)
29 5 (272)20 
Price risk on certain compensation plans (2)
(2)14 57 40 
Total$(512)$57 $(1,330)$171 
Net investment hedges
Foreign exchange risk (3)
$642 $— $1,145 $— 
(1)Amounts reclassified from accumulated OCI are recorded in interest income in the Consolidated Statement of Income.
(2)Amounts reclassified from accumulated OCI are recorded in compensation and benefits expense in the Consolidated Statement of Income.
(3)Amounts reclassified from accumulated OCI are recorded in other income in the Consolidated Statement of Income. For the three and nine months ended September 30, 2022, amounts excluded from effectiveness testing and recognized in market making and similar activities were gains of $38 million and losses of $109 million. For the same periods in 2021, amounts excluded from effectiveness testing and recognized in market making and similar activities were losses of $36 million and $86 million.
Bank of America 58

Other Risk Management Derivatives
Other risk management derivatives are used by the Corporation to reduce certain risk exposures by economically hedging various assets and liabilities. The table below presents gains (losses) on these derivatives for the three and nine months ended September 30, 2022 and 2021. These gains (losses) are largely offset by the income or expense recorded on the hedged item.
Gains and Losses on Other Risk Management Derivatives
Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)2022202120222021
Interest rate risk on mortgage activities (1, 2)
$(64)$10 $(321)$(49)
Credit risk on loans (2)
(30)(9)(17)(40)
Interest rate and foreign currency risk on asset and liability management activities (3)
1,591 552 7,204 1,495 
Price risk on certain compensation plans (4)
(192)(23)(1,283)575 
(1)Includes hedges of interest rate risk on mortgage servicing rights and interest rate lock commitments (IRLCs) to originate mortgage loans that will be held for sale.
(2)Gains (losses) on these derivatives are recorded in other income.
(3)Gains (losses) on these derivatives are recorded in market making and similar activities.
(4)Gains (losses) on these derivatives are recorded in compensation and benefits expense.
Transfers of Financial Assets with Risk Retained through Derivatives
The Corporation enters into certain transactions involving the transfer of financial assets that are accounted for as sales where substantially all of the economic exposure to the transferred financial assets is retained through derivatives (e.g., interest rate and/or credit), but the Corporation does not retain control over the assets transferred. At both September 30, 2022 and December 31, 2021, the Corporation had transferred $4.8 billion non-U.S. government-guaranteed mortgage-backed securities to a third-party trust and retained economic exposure to the transferred assets through derivative contracts. In connection with these transfers, the Corporation received gross cash proceeds of $4.9 billion and $4.8 billion at the transfer dates. At September 30, 2022 and December 31, 2021, the fair value of the transferred securities was $4.6 billion and $5.0 billion.
Sales and Trading Revenue
The Corporation enters into trading derivatives to facilitate client transactions and to manage risk exposures arising from trading
account assets and liabilities. It is the Corporation’s policy to include these derivative instruments in its trading activities, which include derivatives and non-derivative cash instruments. The resulting risk from these derivatives is managed on a portfolio basis as part of the Corporation’s Global Markets business segment. For more information on sales and trading revenue, see Note 3 – Derivatives to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K.
The table below, which includes both derivatives and non-derivative cash instruments, identifies the amounts in the respective income statement line items attributable to the Corporation’s sales and trading revenue in Global Markets, categorized by primary risk, for the three and nine months ended September 30, 2022 and 2021. This table includes debit valuation adjustment (DVA) and funding valuation adjustment (FVA) gains (losses). Global Markets results in Note 17 – Business Segment Information are presented on a fully taxable-equivalent (FTE) basis. The table below is not presented on an FTE basis.
Sales and Trading Revenue
Market making and similar activitiesNet Interest
Income
Other (1)
TotalMarket making and similar activitiesNet Interest
Income
Other (1)
Total
(Dollars in millions)Three Months Ended September 30, 2022Nine Months Ended September 30, 2022
Interest rate risk$372 $432 $140 $944 $1,452 $1,381 $291 $3,124 
Foreign exchange risk552 13 (54)511 1,562 (13)(51)1,498 
Equity risk1,532 (399)416 1,549 4,474 (694)1,404 5,184 
Credit risk252 544 114 910 561 1,559 176 2,296 
Other risk (2)
165 (62)17 120 670 (138)77 609 
Total sales and trading revenue
$2,873 $528 $633 $4,034 $8,719 $2,095 $1,897 $12,711 
Three Months Ended September 30, 2021Nine Months Ended September 30, 2021
Interest rate risk$180 $442 $43 $665 $590 $1,350 $141 $2,081 
Foreign exchange risk345 (22)2 325 1,082 (62)7 1,027 
Equity risk1,196 (28)433 1,601 3,657 7 1,389 5,053 
Credit risk248 458 158 864 1,491 1,263 446 3,200 
Other risk (2)
45 (30)45 60 627 (58)91 660 
Total sales and trading revenue
$2,014 $820 $681 $3,515 $7,447 $2,500 $2,074 $12,021 
(1)Represents amounts in investment and brokerage services and other income that are recorded in Global Markets and included in the definition of sales and trading revenue. Includes investment and brokerage services revenue of $444 million and $1.5 billion for the three and nine months ended September 30, 2022 compared to $460 million and $1.5 billion for the same periods in 2021.
(2)Includes commodity risk.

59 Bank of America


Credit Derivatives
The Corporation enters into credit derivatives primarily to facilitate client transactions and to manage credit risk exposures. Credit derivatives are classified as investment and non-investment grade based on the credit quality of the underlying referenced obligation. The Corporation considers ratings of BBB- or higher as investment grade. Non-investment grade includes non-rated credit derivative instruments. The Corporation discloses internal categorizations of investment
grade and non-investment grade consistent with how risk is managed for these instruments. For more information on credit derivatives, see Note 3 – Derivatives to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K.
Credit derivative instruments where the Corporation is the seller of credit protection and their expiration at September 30, 2022 and December 31, 2021 are summarized in the table below.
Credit Derivative Instruments
Less than
One Year		One to
Three Years		Three to
Five Years		Over Five
Years		Total
September 30, 2022
(Dollars in millions)Carrying Value
Credit default swaps:     
Investment grade$1 $52 $502 $287 $842 
Non-investment grade57 854 1,497 1,001 3,409 
Total58 906 1,999 1,288 4,251 
Total return swaps/options:     
Investment grade146 249 — — 395 
Non-investment grade902 6 86 6 1,000 
Total1,048 255 86 6 1,395 
Total credit derivatives$1,106 $1,161 $2,085 $1,294 $5,646 
Credit-related notes:     
Investment grade$— $— $— $673 $673 
Non-investment grade— 2 4 1,118 1,124 
Total credit-related notes$— $2 $4 $1,791 $1,797 
 Maximum Payout/Notional
Credit default swaps:     
Investment grade$32,510 $66,961 $96,170 $42,448 $238,089 
Non-investment grade14,613 28,393 40,136 11,781 94,923 
Total47,123 95,354 136,306 54,229 333,012 
Total return swaps/options:     
Investment grade65,805 8,907 — — 74,712 
Non-investment grade40,840 2,273 1,581 890 45,584 
Total106,645 11,180 1,581 890 120,296 
Total credit derivatives$153,768 $106,534 $137,887 $55,119 $453,308 
December 31, 2021
Carrying Value
Credit default swaps:
Investment grade$— $5 $79 $49 $133 
Non-investment grade34 250 453 769 1,506 
Total34 255 532 818 1,639 
Total return swaps/options:     
Investment grade35 388 — — 423 
Non-investment grade105 — 16 — 121 
Total140 388 16 — 544 
Total credit derivatives$174 $643 $548 $818 $2,183 
Credit-related notes:     
Investment grade$— $— $36 $412 $448 
Non-investment grade5 — 9 1,334 1,348 
Total credit-related notes$5 $— $45 $1,746 $1,796 
 Maximum Payout/Notional
Credit default swaps:
Investment grade$34,503 $66,334 $73,444 $17,844 $192,125 
Non-investment grade16,119 29,233 34,356 7,961 87,669 
Total50,622 95,567 107,800 25,805 279,794 
Total return swaps/options:     
Investment grade49,626 11,494 78 — 61,198 
Non-investment grade22,621 717 642 73 24,053 
Total72,247 12,211 720 73 85,251 
Total credit derivatives$122,869 $107,778 $108,520 $25,878 $365,045 

Bank of America 60

The notional amount represents the maximum amount payable by the Corporation for most credit derivatives. However, the Corporation does not monitor its exposure to credit derivatives based solely on the notional amount because this measure does not take into consideration the probability of occurrence. As such, the notional amount is not a reliable indicator of the Corporation’s exposure to these contracts. Instead, a risk framework is used to define risk tolerances and establish limits so that certain credit risk-related losses occur within acceptable, predefined limits.
Credit-related notes in the preceding table include investments in securities issued by collateralized debt obligation (CDO), collateralized loan obligation and credit-linked note vehicles. These instruments are primarily classified as trading securities. The carrying value of these instruments equals the Corporation’s maximum exposure to loss. The Corporation is not obligated to make any payments to the entities under the terms of the securities owned.
Credit-related Contingent Features and Collateral
Certain of the Corporation’s derivative contracts contain credit risk-related contingent features, primarily in the form of ISDA master netting agreements and credit support documentation that enhance the creditworthiness of these instruments compared to other obligations of the respective counterparty with whom the Corporation has transacted. These contingent features may be for the benefit of the Corporation as well as its counterparties with respect to changes in the Corporation’s creditworthiness and the mark-to-market exposure under the derivative transactions. At September 30, 2022 and December 31, 2021, the Corporation held cash and securities collateral of $120.0 billion and $91.4 billion and posted cash and securities collateral of $85.8 billion and $79.3 billion in the normal course of business under derivative agreements, excluding cross-product margining agreements where clients are permitted to margin on a net basis for both derivative and secured financing arrangements.
In connection with certain OTC derivative contracts and other trading agreements, the Corporation can be required to provide additional collateral or to terminate transactions with certain counterparties in the event of a downgrade of the senior debt ratings of the Corporation or certain subsidiaries. The amount of additional collateral required depends on the contract and is usually a fixed incremental amount and/or the market value of the exposure. For more information on credit-related contingent features and collateral, see Note 3 – Derivatives to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K.
At September 30, 2022, the amount of collateral, calculated based on the terms of the contracts, that the Corporation and certain subsidiaries could be required to post to counterparties but had not yet posted to counterparties was $4.0 billion, including $2.5 billion for Bank of America, National Association (BANA).
Some counterparties are currently able to unilaterally terminate certain contracts, or the Corporation or certain
subsidiaries may be required to take other action such as find a suitable replacement or obtain a guarantee. At September 30, 2022 and December 31, 2021, the liability recorded for these derivative contracts was not significant.
The table below presents the amount of additional collateral that would have been contractually required by derivative contracts and other trading agreements at September 30, 2022 if the rating agencies had downgraded their long-term senior debt ratings for the Corporation or certain subsidiaries by one incremental notch and by an additional second incremental notch. The table also presents derivative liabilities that would be subject to unilateral termination by counterparties upon downgrade of the Corporation's or certain subsidiaries' long-term senior debt ratings.
Additional Collateral Required to be Posted and Derivative Liabilities Subject to Unilateral Termination Upon Downgrade
at September 30, 2022
(Dollars in millions)One
Incremental
 Notch		Second
Incremental
 Notch
Additional collateral required to be posted upon downgrade
Bank of America Corporation$430 $1,043 
Bank of America, N.A. and subsidiaries (1)
199 789 
Derivative liabilities subject to unilateral termination upon downgrade
Derivative liabilities$10 $939 
Collateral posted— 629 
(1)Included in Bank of America Corporation collateral requirements in this table.
Valuation Adjustments on Derivatives
The table below presents credit valuation adjustment (CVA), DVA and FVA gains (losses) on derivatives (excluding the effect of any related hedge activities), which are recorded in market making and similar activities, for the three and nine months ended September 30, 2022 and 2021. For more information on the valuation adjustments on derivatives, see Note 3 – Derivatives to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K.
Valuation Adjustments Gains (Losses) on Derivatives (1)
Three Months Ended September 30
(Dollars in millions)20222021
Derivative assets (CVA)$(44)$54 
Derivative assets/liabilities (FVA)
67 19 
Derivative liabilities (DVA)103 (5)
Nine Months Ended September 30
(Dollars in millions)20222021
Derivative assets (CVA)$(217)$212 
Derivative assets/liabilities (FVA)
147 34 
Derivative liabilities (DVA)444 (13)
(1)At September 30, 2022 and December 31, 2021, cumulative CVA reduced the derivative assets balance by $655 million and $438 million, cumulative FVA reduced the net derivative balance by $32 million and $179 million, and cumulative DVA reduced the derivative liabilities balance by $756 million and $312 million.
61 Bank of America


NOTE 4 Securities
The table below presents the amortized cost, gross unrealized gains and losses, and fair value of available-for-sale (AFS) debt securities, other debt securities carried at fair value and held-to-maturity (HTM) debt securities at September 30, 2022 and December 31, 2021.
Debt Securities
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair
Value		Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair
Value
(Dollars in millions)September 30, 2022December 31, 2021
Available-for-sale debt securities
Mortgage-backed securities:
Agency$25,743 $5 $(2,144)$23,604 $45,268 $1,257 $(186)$46,339 
Agency-collateralized mortgage obligations2,589 — (220)2,369 3,331 74 (25)3,380 
Commercial6,248 24 (499)5,773 19,036 647 (79)19,604 
Non-agency residential (1)
467 16 (83)400 591 25 (33)583 
Total mortgage-backed securities35,047 45 (2,946)32,146 68,226 2,003 (323)69,906 
U.S. Treasury and government agencies169,368 42 (1,797)167,613 197,853 1,610 (318)199,145 
Non-U.S. securities11,046 1 (44)11,003 11,933 — — 11,933 
Other taxable securities3,481 — (76)3,405 2,725 39 (3)2,761 
Tax-exempt securities12,544 — (372)12,172 15,155 317 (39)15,433 
Total available-for-sale debt securities 231,486 88 (5,235)226,339 295,892 3,969 (683)299,178 
Other debt securities carried at fair value (2)
10,223 54 (371)9,906 8,873 105 (83)8,895 
Total debt securities carried at fair value241,709 142 (5,606)236,245 304,765 4,074 (766)308,073 
Held-to-maturity debt securities
Agency mortgage-backed securities513,977 — (94,111)419,866 553,721 3,855 (10,366)547,210 
U.S. Treasury and government agencies121,585 — (21,089)100,496 111,859 254 (2,395)109,718 
Other taxable securities8,181 — (990)7,191 9,011 147 (196)8,962 
Total held-to-maturity debt securities643,743 — (116,190)527,553 674,591 4,256 (12,957)665,890 
Total debt securities (3,4)
$885,452 $142 $(121,796)$763,798 $979,356 $8,330 $(13,723)$973,963 
(1)At September 30, 2022 and December 31, 2021, the underlying collateral type included approximately 17 percent and 21 percent prime and 83 percent and 79 percent subprime.
(2)Primarily includes non-U.S. securities used to satisfy certain international regulatory requirements. Any changes in value are reported in market making and similar activities. For detail on the components, see Note 14 – Fair Value Measurements.
(3)Includes securities pledged as collateral of $103.1 billion and $111.9 billion at September 30, 2022 and December 31, 2021.
(4)The Corporation held debt securities from Fannie Mae (FNMA) and Freddie Mac (FHLMC) that each exceeded 10 percent of shareholders’ equity, with an amortized cost of $296.5 billion and $179.4 billion, and a fair value of $241.8 billion and $145.1 billion at September 30, 2022, and an amortized cost of $345.3 billion and $205.3 billion, and a fair value of $342.5 billion and $202.4 billion at December 31, 2021.
At September 30, 2022, the accumulated net unrealized loss on AFS debt securities, excluding the amount related to debt securities previously transferred to held to maturity, included in accumulated OCI was $3.9 billion, net of the related income tax benefit of $1.3 billion. At September 30, 2022 and December 31, 2021, nonperforming AFS debt securities held by the Corporation were not significant.
At September 30, 2022 and December 31, 2021, the Corporation had $199.3 billion and $268.5 billion in AFS debt securities, which were primarily U.S. agency and U.S. Treasury securities that have a zero credit loss assumption. For more information on the zero credit loss assumption, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K. For the remaining $27.0 billion and $30.7 billion in AFS debt securities at September 30, 2022 and December 31, 2021, the amount of expected credit losses was not significant. At September 30, 2022 and December 31, 2021, the Corporation had $527.6 billion and $665.9 billion in HTM debt securities, which were substantially all U.S agency and U.S. Treasury securities that have a zero credit loss assumption.
At September 30, 2022 and December 31, 2021, the Corporation held equity securities at an aggregate fair value of
$620 million and $513 million and other equity securities, as valued under the measurement alternative, at a carrying value of $311 million and $266 million, both of which are included in other assets. At September 30, 2022 and December 31, 2021, the Corporation also held money market investments at a fair value of $682 million and $707 million, which are included in time deposits placed and other short-term investments.
The gross realized gains and losses on sales of AFS debt securities for the three and nine months ended September 30, 2022 and 2021 are presented in the table below.
Gains and Losses on Sales of AFS Debt Securities
Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)2022202120222021
Gross gains$540 $4 $1,243 $19 
Gross losses(526)— (1,206)(15)
Net gains on sales of AFS debt securities$14 $4 $37 $4 
Income tax expense attributable to realized net gains on sales of AFS debt securities
$4 $1 $9 $1 
Bank of America 62

The table below presents the fair value and the associated gross unrealized losses on AFS debt securities and whether these securities have had gross unrealized losses for less than 12 months or for 12 months or longer at September 30, 2022 and December 31, 2021.
Total AFS Debt Securities in a Continuous Unrealized Loss Position
Less than Twelve MonthsTwelve Months or LongerTotal
Fair
Value		Gross
 Unrealized
 Losses		Fair
Value		Gross
 Unrealized
 Losses		Fair
Value		Gross
 Unrealized
 Losses
(Dollars in millions)September 30, 2022
Continuously unrealized loss-positioned AFS debt securities
Mortgage-backed securities:   
Agency$20,518 $(1,625)$2,937 $(519)$23,455 $(2,144)
Agency-collateralized mortgage obligations1,342 (87)989 (133)2,331 (220)
Commercial3,831 (264)1,366 (235)5,197 (499)
Non-agency residential272 (60)101 (23)373 (83)
Total mortgage-backed securities25,963 (2,036)5,393 (910)31,356 (2,946)
U.S. Treasury and government agencies125,543 (1,129)31,867 (668)157,410 (1,797)
Non-U.S. securities9,221 (23)732 (21)9,953 (44)
Other taxable securities2,373 (20)759 (56)3,132 (76)
Tax-exempt securities931 (98)4,297 (274)5,228 (372)
Total AFS debt securities in a continuous
   unrealized loss position		$164,031 $(3,306)$43,048 $(1,929)$207,079 $(5,235)
December 31, 2021
Continuously unrealized loss-positioned AFS debt securities
Mortgage-backed securities:
Agency$11,733 $(166)$815 $(20)$12,548 $(186)
Agency-collateralized mortgage obligations1,427 (22)122 (3)1,549 (25)
Commercial3,451 (41)776 (38)4,227 (79)
Non-agency residential241 (13)174 (20)415 (33)
Total mortgage-backed securities16,852 (242)1,887 (81)18,739 (323)
U.S. Treasury and government agencies103,307 (272)4,850 (46)108,157 (318)
Other taxable securities— — 82 (3)82 (3)
Tax-exempt securities502 (16)109 (23)611 (39)
Total AFS debt securities in a continuous
   unrealized loss position		$120,661 $(530)$6,928 $(153)$127,589 $(683)

63 Bank of America


The remaining contractual maturity distribution and yields of the Corporation’s debt securities carried at fair value and HTM debt securities at September 30, 2022 are summarized in the table below. Actual duration and yields may differ as prepayments on the loans underlying the mortgage-backed securities (MBS) or other asset-backed securities (ABS) are passed through to the Corporation.
Maturities of Debt Securities Carried at Fair Value and Held-to-maturity Debt Securities
Due in One
Year or Less		Due after One Year
through Five Years		Due after Five Years
through Ten Years		Due after
Ten Years		Total
(Dollars in millions)Amount
Yield (1)
Amount
Yield (1)
Amount
Yield (1)
Amount
Yield (1)
Amount
Yield (1)
Amortized cost of debt securities carried at fair value          
Mortgage-backed securities:          
Agency$— — %$5 5.20 %$40 4.88 %$25,698 3.36 %$25,743 3.36 %
Agency-collateralized mortgage obligations— — 15 2.60 — — 2,574 2.91 2,589 2.91 
Commercial36 2.22 488 2.79 4,227 1.78 1,509 2.07 6,260 1.93 
Non-agency residential— — — — — — 867 8.31 867 8.31 
Total mortgage-backed securities36 2.22 508 2.81 4,267 1.81 30,648 3.40 35,459 3.20 
U.S. Treasury and government agencies7,222 1.40 62,354 1.76 100,285 1.65 28 3.00 169,889 1.68 
Non-U.S. securities17,773 1.67 2,429 4.22 6 4.24 128 5.34 20,336 2.00 
Other taxable securities1,635 3.56 1,241 3.56 469 3.04 136 3.46 3,481 3.49 
Tax-exempt securities939 1.60 5,135 2.45 2,330 2.67 4,140 3.03 12,544 2.62 
Total amortized cost of debt securities carried at fair value
$27,605 1.71 $71,667 1.93 $107,357 1.68 $35,080 3.36 $241,709 2.01 
Amortized cost of HTM debt securities
Agency mortgage-backed securities$— — %$— — %$14 2.71 %$513,963 2.13 %$513,977 2.13 %
U.S. Treasury and government agencies— — 4,539 1.80 117,046 1.37 — — 121,585 1.39 
Other taxable securities37 9.52 1,064 2.13 433 2.93 6,647 2.49 8,181 2.49 
Total amortized cost of HTM debt securities$37 — $5,603 1.86 $117,493 1.37 $520,610 2.13 $643,743 1.99 
Debt securities carried at fair value          
Mortgage-backed securities:          
Agency$—  $5  $40  $23,559  $23,604  
Agency-collateralized mortgage obligations—  15  —  2,354  2,369  
Commercial36  473  3,977  1,297  5,783  
Non-agency residential—  2  —  787  789  
Total mortgage-backed securities36 495 4,017 27,997 32,545 
U.S. Treasury and government agencies7,250 61,839 99,020 25 168,134 
Non-U.S. securities17,466  2,396  6  121  19,989  
Other taxable securities1,631  1,224  428  122  3,405  
Tax-exempt securities937  5,051  2,267  3,917  12,172  
Total debt securities carried at fair value$27,320  $71,005  $105,738  $32,182  $236,245  
Fair value of HTM debt securities
Agency mortgage-backed securities$— $— $13 $419,853 $419,866 
U.S. Treasury and government agencies— 4,129 96,367 — 100,496 
Other taxable securities37 993 401 5,760 7,191 
Total fair value of HTM debt securities$37 $5,122 $96,781 $425,613 $527,553 
(1)The weighted-average yield is computed based on a constant effective interest rate over the contractual life of each security. The average yield considers the contractual coupon and the amortization of premiums and accretion of discounts, excluding the effect of related hedging derivatives.
Bank of America 64

NOTE 5 Outstanding Loans and Leases and Allowance for Credit Losses
The following tables present total outstanding loans and leases and an aging analysis for the Consumer Real Estate, Credit Card and Other Consumer, and Commercial portfolio segments, by class of financing receivables, at September 30, 2022 and December 31, 2021.
30-59 Days
 Past Due (1)
60-89 Days
 Past Due (1)
90 Days or
More
Past Due (1)
Total Past
Due 30 Days
or More
Total
 Current or
 Less Than
 30 Days
 Past Due (1)
Loans
 Accounted
 for Under
 the Fair
 Value
 Option		Total
Outstandings
(Dollars in millions)September 30, 2022
Consumer real estate      
Residential mortgage$905 $235 $1,014 $2,154 $226,908 $229,062 
Home equity79 27 232 338 26,507 26,845 
Credit card and other consumer
Credit card393 262 547 1,202 86,094 87,296 
Direct/Indirect consumer (2)
199 53 33 285 106,874 107,159 
Other consumer— — — — 171 171 
Total consumer1,576 577 1,826 3,979 446,554 450,533 
Consumer loans accounted for under the fair value option (3)
     $355 355 
Total consumer loans and leases1,576 577 1,826 3,979 446,554 355 450,888 
Commercial
U.S. commercial519 327 447 1,293 354,077 355,370 
Non-U.S. commercial48 67 228 343 122,692 123,035 
Commercial real estate (4)
299 36 74 409 67,543 67,952 
Commercial lease financing28 7 20 55 12,901 12,956 
U.S. small business commercial (5)
196 143 253 592 17,177 17,769 
Total commercial1,090 580 1,022 2,692 574,390 577,082 
Commercial loans accounted for under the fair value option (3)
     4,496 4,496 
Total commercial loans and leases1,090 580 1,022 2,692 574,390 4,496 581,578 
Total loans and leases (6)
$2,666 $1,157 $2,848 $6,671 $1,020,944 $4,851 $1,032,466 
Percentage of outstandings 0.26 %0.11 %0.28 %0.65 %98.88 %0.47 %100.00 %
(1)Consumer real estate loans 30-59 days past due includes fully-insured loans of $173 million and nonperforming loans of $101 million. Consumer real estate loans 60-89 days past due includes fully-insured loans of $72 million and nonperforming loans of $98 million. Consumer real estate loans 90 days or more past due includes fully-insured loans of $427 million. Consumer real estate loans current or less than 30 days past due includes $1.7 billion, and direct/indirect consumer includes $29 million of nonperforming loans.
(2)Total outstandings primarily includes auto and specialty lending loans and leases of $50.7 billion, U.S. securities-based lending loans of $52.6 billion and non-U.S. consumer loans of $2.9 billion.
(3)Consumer loans accounted for under the fair value option includes residential mortgage loans of $74 million and home equity loans of $281 million. Commercial loans accounted for under the fair value option includes U.S. commercial loans of $2.4 billion and non-U.S. commercial loans of $2.1 billion. For more information, see Note 14 – Fair Value Measurements and Note 15 – Fair Value Option.
(4)Total outstandings includes U.S. commercial real estate loans of $63.9 billion and non-U.S. commercial real estate loans of $4.0 billion.
(5)Includes Paycheck Protection Program loans.
(6)Total outstandings includes loans and leases pledged as collateral of $13.3 billion. The Corporation also pledged $163.6 billion of loans with no related outstanding borrowings to secure potential borrowing capacity with the Federal Reserve Bank and Federal Home Loan Bank.
65 Bank of America


30-59 Days
Past Due (1)
60-89 Days
 Past Due (1)
90 Days or
More
Past Due (1)
Total Past
Due 30 Days
or More
Total
Current or
Less Than
30 Days
Past Due (1)
Loans
Accounted
for Under
the Fair
Value Option		Total Outstandings
(Dollars in millions)December 31, 2021
Consumer real estate      
Residential mortgage$1,005 $297 $1,571 $2,873 $219,090 $221,963 
Home equity123 69 369 561 27,374 27,935 
Credit card and other consumer     
Credit card298 212 487 997 80,441  81,438 
Direct/Indirect consumer (2)
147 52 18 217 103,343  103,560 
Other consumer — — — — 190  190 
Total consumer1,573 630 2,445 4,648 430,438 435,086 
Consumer loans accounted for under the fair value option (3)
$618 618 
Total consumer loans and leases1,573 630 2,445 4,648 430,438 618 435,704 
Commercial       
U.S. commercial815 308 396 1,519 324,417  325,936 
Non-U.S. commercial148 20 83 251 113,015  113,266 
Commercial real estate (4)
115 34 285 434 62,575  63,009 
Commercial lease financing104 28 13 145 14,680  14,825 
U.S. small business commercial (5)
129 259 89 477 18,706  19,183 
Total commercial1,311 649 866 2,826 533,393  536,219 
Commercial loans accounted for under the fair value option (3)
7,201 7,201 
Total commercial loans and leases
1,311 649 866 2,826 533,393 7,201 543,420 
Total loans and leases (6)
$2,884 $1,279 $3,311 $7,474 $963,831 $7,819 $979,124 
Percentage of outstandings 0.29 %0.13 %0.34 %0.76 %98.44 %0.80 %100.00 %
(1)Consumer real estate loans 30-59 days past due includes fully-insured loans of $164 million and nonperforming loans of $118 million. Consumer real estate loans 60-89 days past due includes fully-insured loans of $89 million and nonperforming loans of $100 million. Consumer real estate loans 90 days or more past due includes fully-insured loans of $633 million. Consumer real estate loans current or less than 30 days past due includes $1.4 billion, and direct/indirect consumer includes $55 million of nonperforming loans.
(2)Total outstandings primarily includes auto and specialty lending loans and leases of $48.5 billion, U.S. securities-based lending loans of $51.1 billion and non-U.S. consumer loans of $3.0 billion.
(3)Consumer loans accounted for under the fair value option includes residential mortgage loans of $279 million and home equity loans of $339 million. Commercial loans accounted for under the fair value option includes U.S. commercial loans of $4.6 billion and non-U.S. commercial loans of $2.6 billion. For more information, see Note 14 – Fair Value Measurements and Note 15 – Fair Value Option.
(4)Total outstandings includes U.S. commercial real estate loans of $58.2 billion and non-U.S. commercial real estate loans of $4.8 billion.
(5)Includes Paycheck Protection Program loans.
(6)Total outstandings includes loans and leases pledged as collateral of $13.0 billion. The Corporation also pledged $146.6 billion of loans with no related outstanding borrowings to secure potential borrowing capacity with the Federal Reserve Bank and Federal Home Loan Bank.
The Corporation has entered into long-term credit protection agreements with FNMA and FHLMC on loans totaling $9.7 billion and $10.5 billion at September 30, 2022 and December 31, 2021, providing full credit protection on residential mortgage loans that become severely delinquent. All of these loans are individually insured, and therefore the Corporation does not record an allowance for credit losses related to these loans.
Nonperforming Loans and Leases
Commercial nonperforming loans decreased to $1.2 billion at September 30, 2022 from $1.6 billion at December 31, 2021. Consumer nonperforming loans decreased to $2.8 billion at September 30, 2022 from $3.0 billion at December 31, 2021 primarily due to decreases from consumer real estate loan
sales, partially offset by increases from loans with expired deferrals that were modified in TDRs during the first quarter of 2022.
The following table presents the Corporation’s nonperforming loans and leases, including nonperforming TDRs, and loans accruing past due 90 days or more at September 30, 2022 and December 31, 2021. Nonperforming loans held-for-sale (LHFS) are excluded from nonperforming loans and leases as they are recorded at either fair value or the lower of cost or fair value. For more information on the criteria for classification as nonperforming, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K.

Bank of America 66

Credit Quality
Nonperforming Loans
and Leases		Accruing Past Due
90 Days or More
(Dollars in millions)September 30
2022		December 31
2021		September 30
2022		December 31
2021
Residential mortgage (1)
$2,187 $2,284 $427 $634 
With no related allowance (2)
1,942 1,950 — — 
Home equity (1)
532 630 — — 
With no related allowance (2)
394 414 — — 
Credit Card                     n/a              n/a547 487 
Direct/indirect consumer41 75 27 11 
Total consumer2,760 2,989 1,001 1,132 
U.S. commercial640 825 300 171 
Non-U.S. commercial274 268 22 19 
Commercial real estate282 382 34 40 
Commercial lease financing11 80 12 8 
U.S. small business commercial16 23 252 87 
Total commercial1,223 1,578 620 325 
Total nonperforming loans$3,983 $4,567 $1,621 $1,457 
Percentage of outstanding loans and leases
0.39 %0.47 %0.16 %0.15 %
(1)Residential mortgage loans accruing past due 90 days or more are fully-insured loans. At September 30, 2022 and December 31, 2021 residential mortgage includes $321 million and $444 million of loans on which interest had been curtailed by the Federal Housing Administration (FHA), and therefore were no longer accruing interest, although principal was still insured, and $106 million and $190 million of loans on which interest was still accruing.
(2)Primarily relates to loans for which the estimated fair value of the underlying collateral less any costs to sell is greater than the amortized cost of the loans as of the reporting date.
n/a = not applicable
Credit Quality Indicators
The Corporation monitors credit quality within its Consumer Real Estate, Credit Card and Other Consumer, and Commercial portfolio segments based on primary credit quality indicators. For more information on the portfolio segments, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K. Within the Consumer Real Estate portfolio segment, the primary credit quality indicators are refreshed loan-to-value (LTV) and refreshed Fair Isaac Corporation (FICO) score. Refreshed LTV measures the carrying value of the loan as a percentage of the value of the property securing the loan, refreshed quarterly. Home equity loans are evaluated using combined loan-to-value (CLTV), which measures the carrying value of the Corporation’s loan and available line of credit combined with any outstanding senior liens against the property as a percentage of the value of the property securing the loan, refreshed quarterly. FICO score measures the creditworthiness of the borrower based on the financial obligations of the borrower and the borrower’s credit history. FICO scores are typically refreshed quarterly or more frequently. Certain borrowers (e.g., borrowers that have had debts discharged in a bankruptcy proceeding) may not have their FICO scores updated.
FICO scores are also a primary credit quality indicator for the Credit Card and Other Consumer portfolio segment and the business card portfolio within U.S. small business commercial. Within the Commercial portfolio segment, loans are evaluated using the internal classifications of pass rated or reservable criticized as the primary credit quality indicators. The term reservable criticized refers to those commercial loans that are internally classified or listed by the Corporation as Special Mention, Substandard or Doubtful, which are asset quality categories defined by regulatory authorities. These assets have an elevated level of risk and may have a high probability of default or total loss. Pass rated refers to all loans not considered reservable criticized. In addition to these primary credit quality indicators, the Corporation uses other credit quality indicators for certain types of loans.
The following tables present certain credit quality indicators for the Corporation's Consumer Real Estate, Credit Card and Other Consumer, and Commercial portfolio segments by class of financing receivables and year of origination for term loan balances at September 30, 2022, including revolving loans that converted to term loans without an additional credit decision after origination or through a TDR.
67 Bank of America


Residential Mortgage – Credit Quality Indicators By Vintage
Term Loans by Origination Year
(Dollars in millions)Total as of
September 30,
 2022		20222021202020192018Prior
Residential Mortgage
Refreshed LTV
   
Less than or equal to 90 percent$215,122 $35,371 $82,564 $37,941 $19,347 $5,900 $33,999 
Greater than 90 percent but less than or equal to 100 percent
1,446 803 513 87 15 9 19 
Greater than 100 percent
562 331 119 39 18 10 45 
Fully-insured loans
11,932 511 3,737 3,173 977 165 3,369 
Total Residential Mortgage$229,062 $37,016 $86,933 $41,240 $20,357 $6,084 $37,432 
Residential Mortgage
Refreshed FICO score
Less than 620$2,054 $317 $489 $343 $108 $86 $711 
Greater than or equal to 620 and less than 680
4,933 903 1,356 836 371 240 1,227 
Greater than or equal to 680 and less than 740
24,594 4,303 8,441 4,372 2,159 812 4,507 
Greater than or equal to 740
185,549 30,982 72,910 32,516 16,742 4,781 27,618 
Fully-insured loans
11,932 511 3,737 3,173 977 165 3,369 
Total Residential Mortgage$229,062 $37,016 $86,933 $41,240 $20,357 $6,084 $37,432 
Home Equity - Credit Quality Indicators
Total
Home Equity Loans and Reverse Mortgages (1)
Revolving LoansRevolving Loans Converted to Term Loans
(Dollars in millions)September 30, 2022
Home Equity
Refreshed LTV
   
Less than or equal to 90 percent$26,662 $1,406 $19,805 $5,451 
Greater than 90 percent but less than or equal to 100 percent
68 25 24 19 
Greater than 100 percent
115 41 37 37 
Total Home Equity$26,845 $1,472 $19,866 $5,507 
Home Equity
Refreshed FICO score
Less than 620$689 $177 $175 $337 
Greater than or equal to 620 and less than 680
1,210 167 475 568 
Greater than or equal to 680 and less than 740
4,228 355 2,550 1,323 
Greater than or equal to 740
20,718 773 16,666 3,279 
Total Home Equity$26,845 $1,472 $19,866 $5,507 
(1)Includes reverse mortgages of $1.2 billion and home equity loans of $450 million, which are no longer originated.
Credit Card and Direct/Indirect Consumer – Credit Quality Indicators By Vintage
Direct/Indirect
Term Loans by Origination YearCredit Card
(Dollars in millions)Total Direct/
Indirect as of September 30,
2022		Revolving Loans20222021202020192018PriorTotal Credit Card as of September 30,
2022		Revolving Loans
Revolving Loans Converted to Term Loans (1)
Refreshed FICO score  
Less than 620$730 $12 $140 $262 $108 $90 $48 $70 $3,442 $3,277 $165 
Greater than or equal to 620 and less than 6802,381 12 832 867 293 177 81 119 10,134 9,950 184 
Greater than or equal to 680 and less than 740
8,723 53 3,290 3,036 1,116 619 254 355 30,181 30,012 169 
Greater than or equal to 74038,988 86 12,944 12,425 6,354 3,675 1,505 1,999 43,539 43,496 43 
Other internal credit
   metrics (2,3)
56,337 55,534 168 292 79 56 39 169 — — — 
Total credit card and other
   consumer		$107,159 $55,697 $17,374 $16,882 $7,950 $4,617 $1,927 $2,712 $87,296 $86,735 $561 
(1)Represents TDRs that were modified into term loans.
(2)Other internal credit metrics may include delinquency status, geography or other factors.
(3)Direct/indirect consumer includes $55.5 billion of securities-based lending, which is typically supported by highly liquid collateral with market value greater than or equal to the outstanding loan balance and therefore has minimal credit risk at September 30, 2022.

Bank of America 68

Commercial – Credit Quality Indicators By Vintage (1)
Term Loans
Amortized Cost Basis by Origination Year
(Dollars in millions)Total as of
September 30,
2022		20222021202020192018PriorRevolving Loans
U.S. Commercial
Risk ratings    
Pass rated$346,130 $51,059 $42,706 $19,446 $17,967 $9,431 $31,503 $174,018 
Reservable criticized9,240 176 636 665 831 1,320 918 4,694 
Total U.S. Commercial
$355,370 $51,235 $43,342 $20,111 $18,798 $10,751 $32,421 $178,712 
Non-U.S. Commercial
Risk ratings
Pass rated$120,431 $19,045 $21,046 $5,827 $4,393 $2,964 $5,185 $61,971 
Reservable criticized2,604 60 387 241 315 194 483 924 
Total Non-U.S. Commercial
$123,035 $19,105 $21,433 $6,068 $4,708 $3,158 $5,668 $62,895 
Commercial Real Estate
Risk ratings
Pass rated$63,433 $11,573 $13,619 $6,313 $9,474 $5,080 $9,066 $8,308 
Reservable criticized4,519 9 366 567 1,513 888 1,065 111 
Total Commercial Real Estate
$67,952 $11,582 $13,985 $6,880 $10,987 $5,968 $10,131 $8,419 
Commercial Lease Financing
Risk ratings
Pass rated$12,720 $1,583 $2,699 $2,076 $2,048 $1,404 $2,910 $— 
Reservable criticized236 5 23 14 76 47 71 — 
Total Commercial Lease Financing
$12,956 $1,588 $2,722 $2,090 $2,124 $1,451 $2,981 $— 
U.S. Small Business Commercial (2)
Risk ratings
Pass rated$8,910 $1,323 $2,174 $1,688 $907 $657 $2,030 $131 
Reservable criticized313 3 21 41 75 53 117 3 
Total U.S. Small Business Commercial
$9,223 $1,326 $2,195 $1,729 $982 $710 $2,147 $134 
 Total$568,536 $84,836 $83,677 $36,878 $37,599 $22,038 $53,348 $250,160 
(1) Excludes $4.5 billion of loans accounted for under the fair value option at September 30, 2022.
(2)     Excludes U.S. Small Business Card loans of $8.5 billion. Refreshed FICO scores for this portfolio are $244 million for less than 620; $786 million for greater than or equal to 620 and less than 680; $2.3 billion for greater than or equal to 680 and less than 740; and $5.2 billion greater than or equal to 740.


69 Bank of America


The following tables present certain credit quality indicators for the Corporation's Consumer Real Estate, Credit Card and Other Consumer, and Commercial portfolio segments by class of financing receivables and year of origination for term loan balances at December 31, 2021, including revolving loans that converted to term loans without an additional credit decision after origination or through a TDR.
Residential Mortgage – Credit Quality Indicators By Vintage
Term Loans by Origination Year
(Dollars in millions)Total as of
 December 31,
 2021		20212020201920182017Prior
Residential Mortgage
Refreshed LTV
Less than or equal to 90 percent$206,562 $87,051 $43,597 $23,205 $7,392 $10,956 $34,361 
Greater than 90 percent but less than or equal to 100 percent
1,938 1,401 331 81 17 14 94 
Greater than 100 percent
759 520 112 29 11 12 75 
Fully-insured loans
12,704 3,845 3,486 1,150 216 235 3,772 
Total Residential Mortgage$221,963 $92,817 $47,526 $24,465 $7,636 $11,217 $38,302 
Residential Mortgage
Refreshed FICO score
Less than 620$2,451 $636 $442 $140 $120 $104 $1,009 
Greater than or equal to 620 and less than 680
5,199 1,511 1,123 477 294 307 1,487 
Greater than or equal to 680 and less than 740
24,532 8,822 5,454 2,785 1,057 1,434 4,980 
Greater than or equal to 740177,077 78,003 37,021 19,913 5,949 9,137 27,054 
Fully-insured loans
12,704 3,845 3,486 1,150 216 235 3,772 
Total Residential Mortgage$221,963 $92,817 $47,526 $24,465 $7,636 $11,217 $38,302 
Home Equity - Credit Quality Indicators
Total
Home Equity Loans and Reverse Mortgages (1)
Revolving LoansRevolving Loans Converted to Term Loans
(Dollars in millions)December 31, 2021
Home Equity
Refreshed LTV
Less than or equal to 90 percent$27,594 $1,773 $19,095 $6,726 
Greater than 90 percent but less than or equal to 100 percent
130 55 34 41 
Greater than 100 percent
211 85 54 72 
Total Home Equity$27,935 $1,913 $19,183 $6,839 
Home Equity
Refreshed FICO score
Less than 620$893 $244 $209 $440 
Greater than or equal to 620 and less than 680
1,434 222 495 717 
Greater than or equal to 680 and less than 740
4,625 468 2,493 1,664 
Greater than or equal to 740
20,983 979 15,986 4,018 
Total Home Equity$27,935 $1,913 $19,183 $6,839 
(1)Includes reverse mortgages of $1.3 billion and home equity loans of $582 million, which are no longer originated.
Bank of America 70

Credit Card and Direct/Indirect Consumer – Credit Quality Indicators By Vintage
Direct/Indirect
Term Loans by Origination YearCredit Card
(Dollars in millions)Total Direct/Indirect as of December 31, 2021Revolving Loans20212020201920182017PriorTotal Credit Card as of December 31, 2021Revolving Loans
Revolving Loans Converted to Term Loans (1)
Refreshed FICO score
Less than 620$685 $13 $179 $115 $129 $79 $101 $69 $3,017 $2,857 $160 
Greater than or equal to 620 and less than 680
2,313 14 1,170 414 313 148 134 120 9,264 9,064 200 
Greater than or equal to 680 and less than 740
8,530 60 4,552 1,659 1,126 466 314 353 28,347 28,155 192 
Greater than or equal to 74037,164 94 15,876 8,642 6,465 2,679 1,573 1,835 40,810 40,762 48 
Other internal credit
   metrics (2, 3)
54,868 54,173 283 53 77 75 63 144 — — — 
Total credit card and other
   consumer		$103,560 $54,354 $22,060 $10,883 $8,110 $3,447 $2,185 $2,521 $81,438 $80,838 $600 
(1)Represents TDRs that were modified into term loans.
(2)Other internal credit metrics may include delinquency status, geography or other factors.
(3)Direct/indirect consumer includes $54.2 billion of securities-based lending, which is typically supported by highly liquid collateral with market value greater than or equal to the outstanding loan balance and therefore has minimal credit risk at December 31, 2021.

Commercial – Credit Quality Indicators By Vintage (1)
Term Loans
Amortized Cost Basis by Origination Year
(Dollars in millions)Total as of December 31, 202120212020201920182017PriorRevolving Loans
U.S. Commercial
Risk ratings    
Pass rated$315,618 $55,862 $25,012 $23,373 $11,439 $10,426 $23,877 $165,629 
Reservable criticized10,318 598 687 1,308 1,615 514 1,072 4,524 
Total U.S. Commercial
$325,936 $56,460 $25,699 $24,681 $13,054 $10,940 $24,949 $170,153 
Non-U.S. Commercial
Risk ratings
Pass rated$110,787 $25,749 $8,703 $7,133 $4,521 $3,016 $3,062 $58,603 
Reservable criticized2,479 223 324 487 275 257 216 697 
Total Non-U.S. Commercial
$113,266 $25,972 $9,027 $7,620 $4,796 $3,273 $3,278 $59,300 
Commercial Real Estate
Risk ratings
Pass rated$55,511 $14,402 $7,244 $11,237 $5,710 $3,326 $6,831 $6,761 
Reservable criticized7,498 277 990 2,237 1,710 596 1,464 224 
Total Commercial Real Estate
$63,009 $14,679 $8,234 $13,474 $7,420 $3,922 $8,295 $6,985 
Commercial Lease Financing
Risk ratings
Pass rated$14,438 $3,280 $2,485 $2,427 $2,030 $1,741 $2,475 $— 
Reservable criticized387 25 18 91 67 48 138 — 
Total Commercial Lease Financing
$14,825 $3,305 $2,503 $2,518 $2,097 $1,789 $2,613 $— 
U.S. Small Business Commercial (2)
Risk ratings
Pass rated$11,618 $4,257 $2,922 $1,059 $763 $623 $1,853 $141 
Reservable criticized433 12 29 91 87 64 147 3 
Total U.S. Small Business Commercial
$12,051 $4,269 $2,951 $1,150 $850 $687 $2,000 $144 
 Total $529,087 $104,685 $48,414 $49,443 $28,217 $20,611 $41,135 $236,582 
(1) Excludes $7.2 billion of loans accounted for under the fair value option at December 31, 2021.
(2) Excludes U.S. Small Business Card loans of $7.1 billion. Refreshed FICO scores for this portfolio are $192 million for less than 620; $618 million for greater than or equal to 620 and less than 680; $1.9 billion for greater than or equal to 680 and less than 740; and $4.4 billion greater than or equal to 740.


71 Bank of America


During the nine months ended September 30, 2022, commercial credit quality showed signs of stabilization. Commercial reservable criticized utilized exposure decreased to $17.7 billion at September 30, 2022 from $22.4 billion (to 2.88 percent from 3.91 percent of total commercial reservable utilized exposure) at December 31, 2021, which was broad-based across industries.
Troubled Debt Restructurings
Consumer Real Estate
Modifications of consumer real estate loans are classified as TDRs when the borrower is experiencing financial difficulties and a concession has been granted. Concessions may include reductions in interest rates, capitalization of past due amounts, principal and/or interest forbearance, payment extensions, principal and/or interest forgiveness, or combinations thereof. Prior to permanently modifying a loan, the Corporation may enter into trial modifications with certain borrowers under both government and proprietary programs. Trial modifications generally represent a three- to four-month period during which the borrower makes monthly payments under the anticipated modified payment terms. Upon successful completion of the trial period, the Corporation and the borrower enter into a permanent modification. Binding trial modifications are classified as TDRs when the trial offer is made and continue to be classified as TDRs regardless of whether the borrower enters into a permanent modification.
Consumer real estate loans of $224 million that have been discharged in Chapter 7 bankruptcy with no change in
repayment terms and not reaffirmed by the borrower were included in TDRs at September 30, 2022, of which $56 million were classified as nonperforming and $38 million were loans fully insured.
At September 30, 2022 and December 31, 2021, remaining commitments to lend additional funds to debtors whose terms have been modified in a consumer real estate TDR were not significant. Consumer real estate foreclosed properties totaled $125 million and $101 million at September 30, 2022 and December 31, 2021. The carrying value of consumer real estate loans, including fully-insured loans, for which formal foreclosure proceedings were in process at September 30, 2022 and December 31, 2021 was $946 million and $1.1 billion. During the nine months ended September 30, 2022 and 2021, the Corporation reclassified $151 million and $33 million of consumer real estate loans to foreclosed properties or, for properties acquired upon foreclosure of certain government-guaranteed loans (principally FHA-insured loans), to other assets. The reclassifications represent non-cash investing activities and, accordingly, are not reflected in the Consolidated Statement of Cash Flows.
The table below presents the September 30, 2022 and 2021 unpaid principal balance, carrying value, and average pre- and post-modification interest rates of consumer real estate loans that were modified in TDRs during the three and nine months ended September 30, 2022 and 2021. The following Consumer Real Estate portfolio segment tables include loans that were initially classified as TDRs during the period and also loans that had previously been classified as TDRs and were modified again during the period.
Consumer Real Estate – TDRs Entered into During the Three and Nine Months Ended September 30, 2022 and 2021
Unpaid Principal BalanceCarrying
Value		Pre-Modification Interest Rate
Post-Modification Interest Rate (1)
Unpaid Principal BalanceCarrying
Value		Pre-Modification Interest Rate
Post-Modification Interest Rate (1)
(Dollars in millions)Three Months Ended September 30, 2022Nine Months Ended September 30, 2022
Residential mortgage$420 $379 3.35 %3.34 %$1,036 $929 3.50 %3.36 %
Home equity99 86 4.58 4.83 216 176 4.20 4.31 
Total $519 $465 3.58 3.62 $1,252 $1,105 3.62 3.52 
Three Months Ended September 30, 2021Nine Months Ended September 30, 2021
Residential mortgage$451 $399 3.52 %3.49 %$832 $742 3.49 %3.44 %
Home equity61 45 3.51 3.51 97 73 3.56 3.58 
Total $512 $444 3.52 3.49 $929 $815 3.50 3.46 
(1)The post-modification interest rate reflects the interest rate applicable only to permanently completed modifications, which exclude loans that are in a trial modification period.

The table below presents the September 30, 2022 and 2021 carrying value for consumer real estate loans that were modified in a TDR during the three and nine months ended September 30, 2022 and 2021, by type of modification.
Consumer Real Estate – Modification Programs
TDRs Entered into During the
Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)2022202120222021
Modifications under government programs $— $— $— $4 
Modifications under proprietary programs 420 417 999 740 
Loans discharged in Chapter 7 bankruptcy (1)
4 9 12 29 
Trial modifications41 18 94 42 
Total modifications$465 $444 $1,105 $815 
(1)Includes loans discharged in Chapter 7 bankruptcy with no change in repayment terms that are classified as TDRs.
The following table presents the carrying value of consumer real estate loans that entered into payment default during the three and nine months ended September 30, 2022 and 2021 that were modified in a TDR during the 12 months preceding payment default. A payment default for consumer real estate TDRs is recognized when a borrower has missed three monthly payments (not necessarily consecutively) since modification.
Bank of America 72

Consumer Real Estate – TDRs Entering Payment Default that were Modified During the Preceding 12 Months
Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)2022202120222021
Modifications under government programs$— $1 $— $3 
Modifications under proprietary programs63 35 135 80 
Loans discharged in Chapter 7 bankruptcy (1)
1 1 2 6 
Trial modifications (2)
8 3 19 15 
Total modifications$72 $40 $156 $104 
(1)Includes loans discharged in Chapter 7 bankruptcy with no change in repayment terms that are classified as TDRs.
(2)Includes trial modification offers to which the customer did not respond.
Credit Card and Other Consumer
The Corporation seeks to assist customers who are experiencing financial difficulty by modifying loans while ensuring compliance with federal and local laws and guidelines. Credit card and other consumer loan modifications generally involve reducing the interest rate on the account, placing the customer on a fixed payment plan not exceeding 60 months and canceling the customer’s available line of credit, all of which are considered TDRs. The Corporation makes loan modifications directly with borrowers for debt held only by the Corporation (internal programs). Additionally, the Corporation makes loan modifications for borrowers working with third-party renegotiation
agencies that provide solutions to customers’ entire unsecured debt structures (external programs). The Corporation classifies other secured consumer loans that have been discharged in Chapter 7 bankruptcy as TDRs, which are written down to collateral value and placed on nonaccrual status no later than the time of discharge.
The table below provides information on the Corporation’s Credit Card and Other Consumer TDR portfolio including the September 30, 2022 and 2021 unpaid principal balance, carrying value, and average pre- and post-modification interest rates of loans that were modified in TDRs during the three and nine months ended September 30, 2022 and 2021.
Credit Card and Other Consumer – TDRs Entered into During the Three and Nine Months Ended September 30, 2022 and 2021
 Unpaid Principal Balance
Carrying
Value (1)
Pre-Modification Interest RatePost-Modification Interest RateUnpaid Principal Balance
Carrying
Value (1)
Pre-Modification Interest RatePost-Modification Interest Rate
(Dollars in millions)Three Months Ended September 30, 2022Nine Months Ended September 30, 2022
Credit card$86 $90 21.17 %3.80 %$198 $206 21.02 %3.82 %
Direct/Indirect consumer2 2 5.65 5.65 5 4 5.48 5.48 
Total $88 $92 20.87 3.83 $203 $210 20.69 3.86 
Three Months Ended September 30, 2021Nine Months Ended September 30, 2021
Credit card$66 $71 18.48 %3.71 %$189 $200 18.47 %4.26 %
Direct/Indirect consumer4 2 5.20 5.20 13 8 5.53 5.53 
Total $70 $73 18.06 3.76 $202 $208 17.99 4.31 
(1)Includes accrued interest and fees.
The table below presents the September 30, 2022 and 2021 carrying value for Credit Card and Other Consumer loans that were modified in a TDR during the three and nine months ended September 30, 2022 and 2021 by program type.
Credit Card and Other Consumer – TDRs by Program Type (1)
TDRs Entered into During the
Three Months Ended September 30		TDRs Entered into During the
Nine Months Ended September 30
(Dollars in millions)
2022202120222021
Internal programs$77 $60 $174 $166 
External programs
13 11 32 37 
Other
2 2 4 5 
Total$92 $73 $210 $208 
(1) Includes accrued interest and fees.
Credit card and other consumer loans are deemed to be in payment default during the quarter in which a borrower misses the second of two consecutive payments. Payment defaults are one of the factors considered when projecting future cash flows in the calculation of the allowance for loan and lease losses for credit card and other consumer. Based on historical experience, the Corporation estimates that 12 percent of new credit card TDRs and 20 percent of new direct/indirect consumer TDRs may be in payment default within 12 months after modification.
Commercial Loans
Modifications of loans to commercial borrowers that are experiencing financial difficulty are designed to reduce the Corporation’s loss exposure while providing the borrower with an
opportunity to work through financial difficulties, often to avoid foreclosure or bankruptcy. Each modification is unique and reflects the individual circumstances of the borrower. Modifications that result in a TDR may include extensions of maturity at a concessionary (below market) rate of interest, payment forbearances or other actions designed to benefit the borrower while mitigating the Corporation’s risk exposure. Reductions in interest rates are rare. Instead, the interest rates are typically increased, although the increased rate may not represent a market rate of interest. Infrequently, concessions may also include principal forgiveness in connection with foreclosure, short sale or other settlement agreements leading to termination or sale of the loan.
73 Bank of America


At the time of restructuring, the loans are remeasured to reflect the impact, if any, on projected cash flows resulting from the modified terms. If a portion of the loan is deemed to be uncollectible, a charge-off may be recorded at the time of restructuring. Alternatively, a charge-off may have already been recorded in a previous period such that no charge-off is required at the time of modification.
During the three and nine months ended September 30, 2022, the carrying value of the Corporation’s commercial loans that were modified as TDRs was $745 million and $1.7 billion compared to $213 million and $1.1 billion for the same periods in 2021. At September 30, 2022 and December 31, 2021, the Corporation had commitments to lend $347 million and $283 million to commercial borrowers whose loans were classified as TDRs. The balance of commercial TDRs in payment default was $117 million and $262 million at September 30, 2022 and December 31, 2021.
Loans Held-for-sale
The Corporation had LHFS of $7.6 billion and $15.6 billion at September 30, 2022 and December 31, 2021. Cash and non-cash proceeds from sales and paydowns of loans originally classified as LHFS were $27.8 billion and $27.0 billion for the nine months ended September 30, 2022 and 2021. Cash used for originations and purchases of LHFS totaled $18.7 billion and $27.0 billion for the nine months ended September 30, 2022 and 2021. Also included were non-cash net transfers into LHFS of $2.1 billion for the nine months ended September 30, 2022, primarily driven by the transfer of a $1.6 billion affinity card loan portfolio to held for sale that was sold in October 2022, and $804 million for the nine months ended September 30, 2021.
Accrued Interest Receivable
Accrued interest receivable for loans and leases and loans held-for-sale at September 30, 2022 and December 31, 2021 was $3.0 billion and $2.2 billion and is reported in customer and other receivables on the Consolidated Balance Sheet.
Outstanding credit card loan balances include unpaid principal, interest and fees. Credit card loans are not classified as nonperforming but are charged off no later than the end of the month in which the account becomes 180 days past due, within 60 days after receipt of notification of death or bankruptcy, or upon confirmation of fraud. During the three and nine months ended September 30, 2022, the Corporation reversed $81 million and $241 million of interest and fee income against the income statement line item in which it was originally recorded upon charge-off of the principal balance of the loan compared to $87 million and $369 million for the same periods in 2021.
For the outstanding residential mortgage, home equity, direct/indirect consumer and commercial loan balances classified as nonperforming during the three and nine months ended September 30, 2022 and 2021, interest and fee income reversed at the time the loans were classified as nonperforming was not significant. For more information on the Corporation's nonperforming loan policies, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K.
Allowance for Credit Losses
The allowance for credit losses is estimated using quantitative and qualitative methods that consider a variety of factors, such as historical loss experience, the current credit quality of the portfolio and an economic outlook over the life of the loan. Qualitative reserves cover losses that are expected but, in the
Corporation's assessment, may not be adequately reflected in the quantitative methods or the economic assumptions. The Corporation incorporates forward-looking information through the use of several macroeconomic scenarios in determining the weighted economic outlook over the forecasted life of the assets. These scenarios include key macroeconomic variables such as gross domestic product, unemployment rate, real estate prices and corporate bond spreads. The scenarios that are chosen each quarter and the weighting given to each scenario depend on a variety of factors including recent economic events, leading economic indicators, internal and third-party economist views, and industry trends. For more information on the Corporation's credit loss accounting policies including the allowance for credit losses, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K.
The September 30, 2022 estimate for allowance for credit losses was based on various economic outlooks that included a baseline scenario derived from consensus estimates, a moderate recession scenario, a downside scenario to account for persistent inflation and interest rates at levels above what is factored into the baseline, and a tail risk scenario. In addition, an upside scenario considers the potential for improvement in the consensus outlooks. The weighted economic outlook assumes that the U.S. average unemployment rate will be above five percent in the fourth quarter of 2023 and fall just below five percent by the end of 2024. Additionally, in this economic outlook, U.S. gross domestic product is forecasted to grow at 0.2 percent and 1.5 percent year-over-year in the fourth quarters of 2023 and 2024. While asset quality continues to improve and the pandemic appears to have largely dissipated, uncertainty remains regarding broader economic impacts as a result of inflationary pressures, rising rates and the current geopolitical situation and could lead to adverse impacts to credit quality metrics in future periods. As such, the Corporation has factored the aforementioned uncertainties into its allowance for credit losses.
The allowance for credit losses at September 30, 2022 was $13.8 billion, a decrease of $26 million compared to December 31, 2021. The decrease in the allowance for credit losses was primarily driven by asset quality improvement and reduced pandemic uncertainties, partially offset by reserve builds related to loan growth, a dampening macroeconomic outlook and Russian exposure. The change in the allowance for credit losses was comprised of a net decrease of $85 million in the allowance for loan and lease losses and a $59 million increase in the reserve for unfunded lending commitments. The decrease in the allowance for credit losses was attributed to $191 million in the consumer real estate portfolio, partially offset by an increase of $20 million in the credit card and other consumer portfolio, and an increase of $145 million in the commercial portfolio. The provision for credit losses increased $1.5 billion to an expense of $898 million, and $5.6 billion to an expense of $1.5 billion for the three and nine months ended September 30, 2022 compared to the same periods in 2021. The provision for credit losses for the three months ended September 30, 2022 was primarily driven by loan growth and a dampening macroeconomic outlook, and the nine-month period was driven by the same factors as well as a reserve build related to Russian exposure, partially offset by asset quality improvement and reduced pandemic uncertainties. For the same periods in the prior year, the benefit in the provision for credit losses was due to an improved macroeconomic outlook.
Bank of America 74

Outstanding loans and leases excluding loans accounted for under the fair value option increased $56.3 billion during the nine months ended September 30, 2022 driven by commercial loans, which increased $40.9 billion, driven by broad-based
growth, and consumer loans, which increased $15.4 billion, primarily driven by residential mortgage and credit card.
The changes in the allowance for credit losses, including net charge-offs and provision for loan and lease losses, are detailed in the table below.
Consumer
Real Estate		Credit Card and
 Other Consumer		CommercialTotal
(Dollars in millions)Three Months Ended September 30, 2022
Allowance for loan and lease losses, July 1$396 $6,216 $5,361 $11,973 
Loans and leases charged off(13)(696)(100)(809)
Recoveries of loans and leases previously charged off34 216 39 289 
Net charge-offs21 (480)(61)(520)
Provision for loan and lease losses(37)760 122 845 
Other 4 — — 4 
Allowance for loan and lease losses, September 30
384 6,496 5,422 12,302 
Reserve for unfunded lending commitments, July 179 — 1,382 1,461 
Provision for unfunded lending commitments(1)— 54 53 
Other— — 1 1 
Reserve for unfunded lending commitments, September 30
78 — 1,437 1,515 
Allowance for credit losses, September 30
$462 $6,496 $6,859 $13,817 
Three Months Ended September 30, 2021
Allowance for loan and lease losses, July 1$597 $6,835 $6,663 $14,095 
Loans and leases charged off(15)(626)(165)(806)
Recoveries of loans and leases previously charged off56 256 31 343 
Net charge-offs41 (370)(134)(463)
Provision for loan and lease losses(85)175 (565)(475)
Other2 (1)(3)(2)
Allowance for loan and lease losses, September 30
555 6,639 5,961 13,155 
Reserve for unfunded lending commitments, July 1107 — 1,580 1,687 
Provision for unfunded lending commitments(9)— (140)(149)
Reserve for unfunded lending commitments, September 30
98 — 1,440 1,538 
Allowance for credit losses, September 30
$653 $6,639 $7,401 $14,693 
(Dollars in millions)Nine Months Ended September 30, 2022
Allowance for loan and lease losses, January 1$557 $6,476 $5,354 $12,387 
Loans and leases charged off(196)(2,007)(284)(2,487)
Recoveries of loans and leases previously charged off195 684 125 1,004 
Net charge-offs(1)(1,323)(159)(1,483)
Provision for loan and lease losses(179)1,344 229 1,394 
Other7 (1)(2)4 
Allowance for loan and lease losses, September 30
384 6,496 5,422 12,302 
Reserve for unfunded lending commitments, January 196 — 1,360 1,456 
Provision for unfunded lending commitments(18)— 75 57 
Other— — 2 2 
Reserve for unfunded lending commitments, September 30
78 — 1,437 1,515 
Allowance for credit losses, September 30
$462 $6,496 $6,859 $13,817 
Nine Months Ended September 30, 2021
Allowance for loan and lease losses, January 1$858 $9,213 $8,731 $18,802 
Loans and leases charged off(60)(2,402)(591)(3,053)
Recoveries of loans and leases previously charged off170 757 245 1,172 
Net charge-offs110 (1,645)(346)(1,881)
Provision for loan and lease losses(414)(929)(2,423)(3,766)
Other1 — (1)— 
Allowance for loan and lease losses, September 30
555 6,639 5,961 13,155 
Reserve for unfunded lending commitments, January 1137 — 1,741 1,878 
Provision for unfunded lending commitments(39)— (300)(339)
Other— — (1)(1)
Reserve for unfunded lending commitments, September 30
98 — 1,440 1,538 
Allowance for credit losses, September 30
$653 $6,639 $7,401 $14,693 




75 Bank of America


NOTE 6 Securitizations and Other Variable Interest Entities
The Corporation utilizes VIEs in the ordinary course of business to support its own and its customers’ financing and investing needs. The tables in this Note present the assets and liabilities of consolidated and unconsolidated VIEs at September 30, 2022 and December 31, 2021 in situations where the Corporation has continuing involvement with transferred assets or if the Corporation otherwise has a variable interest in the VIE. The tables also present the Corporation’s maximum loss exposure at September 30, 2022 and December 31, 2021 resulting from its involvement with consolidated VIEs and unconsolidated VIEs in which the Corporation holds a variable interest. For more information on the Corporation’s use of VIEs and related maximum loss exposure, see Note 1 – Summary of Significant Accounting Principles and Note 6 – Securitizations and Other Variable Interest Entities to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K.
The Corporation invests in ABS issued by third-party VIEs with which it has no other form of involvement and enters into certain commercial lending arrangements that may also incorporate the use of VIEs, for example to hold collateral.
These securities and loans are included in Note 4 – Securities or Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses. In addition, the Corporation has used VIEs in connection with its funding activities.
The Corporation did not provide financial support to consolidated or unconsolidated VIEs during the three and nine months ended September 30, 2022 or the year ended December 31, 2021 that it was not previously contractually required to provide, nor does it intend to do so.
The Corporation had liquidity commitments, including written put options and collateral value guarantees, with certain unconsolidated VIEs of $908 million and $968 million at September 30, 2022 and December 31, 2021.
First-lien Mortgage Securitizations
As part of its mortgage banking activities, the Corporation securitizes a portion of the first-lien residential mortgage loans it originates or purchases from third parties. Except as described in Note 10 – Commitments and Contingencies, the Corporation does not provide guarantees or recourse to the securitization trusts other than standard representations and warranties.
The table below summarizes select information related to first-lien mortgage securitizations for the three and nine months ended September 30, 2022 and 2021.
First-lien Mortgage Securitizations
 
Residential Mortgage - AgencyCommercial Mortgage
Three Months Ended September 30Nine Months Ended September 30Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)20222021202220212022202120222021
Proceeds from loan sales (1)
$3,259 $2,153 $7,000 $5,047 $779 $3,122 $5,194 $5,961 
Gains on securitizations (2)
— 3 8 8 13 41 39 105 
Repurchases from securitization trusts (3)
21 156 46 512 — — — — 
(1)The Corporation transfers residential mortgage loans to securitizations sponsored primarily by the government-sponsored enterprises or Government National Mortgage Association (GNMA) in the normal course of business and primarily receives residential mortgage-backed securities in exchange. Substantially all of these securities are classified as Level 2 within the fair value hierarchy and are typically sold shortly after receipt.
(2)A majority of the first-lien residential mortgage loans securitized are initially classified as LHFS and accounted for under the fair value option. Gains recognized on these LHFS prior to securitization, which totaled $5 million and $35 million net of hedges, during the three and nine months ended September 30, 2022 and compared to $24 million and $97 million for the same periods in 2021, are not included in the table above.
(3)The Corporation may have the option to repurchase delinquent loans out of securitization trusts, which reduces the amount of servicing advances it is required to make. The Corporation may also repurchase loans from securitization trusts to perform modifications. Repurchased loans include FHA-insured mortgages collateralizing GNMA securities.
The Corporation recognizes consumer mortgage servicing rights (MSRs) from the sale or securitization of consumer real estate loans. The unpaid principal balance of loans serviced for investors, including residential mortgage and home equity loans, totaled $102.6 billion and $129.6 billion at September 30, 2022 and 2021. Servicing fee and ancillary fee income on serviced loans was $71 million and $215 million during the three and nine months ended September 30, 2022 compared to $101 million and $318 million for the same periods in 2021. Servicing advances on serviced loans, including loans serviced for others and loans held for investment, were $1.6 billion and $2.0 billion at September 30, 2022 and December 31, 2021.
For more information on MSRs, see Note 14 – Fair Value Measurements.
During the three and nine months ended September 30, 2022, the Corporation deconsolidated agency residential mortgage securitization trusts with total assets of $22 million and $585 million, with no significant deconsolidations during the three and nine months ended September 30, 2021.
The following table summarizes select information related to first-lien mortgage securitization trusts in which the Corporation held a variable interest at September 30, 2022 and December 31, 2021.
Bank of America 76

First-lien Mortgage VIEs
Residential Mortgage  
   Non-agency  
 AgencyPrimeSubprimeAlt-ACommercial Mortgage
(Dollars in millions)Sep 30 2022December 31
2021		Sep 30 2022December 31
2021		Sep 30 2022December 31
2021		Sep 30 2022December 31
2021		Sep 30 2022December 31
2021
Unconsolidated VIEs          
Maximum loss exposure (1)
$9,465 $11,600 $108 $121 $757 $908 $12 $14 $1,560 $1,445 
On-balance sheet assets
          
Senior securities:
          
Trading account assets
$347 $175 $3 $8 $28 $44 $10 $12 $58 $21 
Debt securities carried at fair value
3,142 5,009 — — 430 537 — — — — 
Held-to-maturity securities
5,976 6,416 — — — — — — 1,268 1,157 
All other assets— — 3 3 25 29 2 2 102 93 
Total retained positions
$9,465 $11,600 $6 $11 $483 $610 $12 $14 $1,428 $1,271 
Principal balance outstanding (2)
$83,659 $93,142 $4,123 $4,710 $5,110 $6,179 $11,856 $13,627 $83,475 $85,540 
Consolidated VIEs          
Maximum loss exposure (1)
$1,961 $1,644 $— $49 $83 $— $— $— $— $— 
On-balance sheet assets
          
Trading account assets
$1,961 $1,644 $— $— $83 $— $— $— $— $— 
Loans and leases, net— — — 58 — — — — — — 
Total assets$1,961 $1,644 $— $58 $83 $— $— $— $— $— 
Total liabilities$— $— $— $9 $— $— $— $— $— $— 
(1)Maximum loss exposure includes obligations under loss-sharing reinsurance and other arrangements for non-agency residential mortgage and commercial mortgage securitizations, but excludes the reserve for representations and warranties obligations and corporate guarantees and also excludes servicing advances and other servicing rights and obligations. For more information, see Note 10 – Commitments and Contingencies and Note 14 – Fair Value Measurements.
(2)Principal balance outstanding includes loans where the Corporation was the transferor to securitization VIEs with which it has continuing involvement, which may include servicing the loans.
Other Asset-backed Securitizations
The table below summarizes select information related to home equity, credit card and other asset-backed VIEs in which the Corporation held a variable interest at September 30, 2022 and December 31, 2021.
Home Equity Loan, Credit Card and Other Asset-backed VIEs
 
Home Equity (1)
Credit Card (2)
Resecuritization TrustsMunicipal Bond Trusts
(Dollars in millions)Sep 30 2022December 31
2021		Sep 30 2022December 31
2021		Sep 30 2022December 31
2021		Sep 30 2022December 31
2021
Unconsolidated VIEs      
Maximum loss exposure$124 $152 $— $— $5,228 $6,089 $3,138 $4,094 
On-balance sheet assets      
Securities (3):
      
Trading account assets$— $— $— $— $1,271 $1,030 $— $— 
Debt securities carried at fair value
1 1 — — 1,340 1,903 — — 
Held-to-maturity securities— — — — 2,617 3,156 — — 
Total retained positions$1 $1 $— $— $5,228 $6,089 $— $— 
Total assets of VIEs $344 $430 $— $— $16,379 $18,633 $3,634 $4,655 
Consolidated VIEs      
Maximum loss exposure$35 $45 $10,264 $10,279 $341 $680 $59 $210 
On-balance sheet assets      
Trading account assets$— $— $— $— $349 $686 $59 $122 
Loans and leases105 140 14,025 14,434 — — — — 
Allowance for loan and lease losses
13 14 (812)(970)— — — — 
All other assets2 3 58 70 — — — 88 
Total assets$120 $157 $13,271 $13,534 $349 $686 $59 $210 
On-balance sheet liabilities      
Short-term borrowings
$— $— $— $— $— $— $49 $196 
Long-term debt85 113 2,998 3,248 8 6 — — 
All other liabilities— — 9 7 — — — — 
Total liabilities$85 $113 $3,007 $3,255 $8 $6 $49 $196 
(1)For unconsolidated home equity loan VIEs, the maximum loss exposure includes outstanding trust certificates issued by trusts in rapid amortization, net of recorded reserves. For both consolidated and unconsolidated home equity loan VIEs, the maximum loss exposure excludes the reserve for representations and warranties obligations and corporate guarantees. For more information, see Note 10 – Commitments and Contingencies.
(2)At September 30, 2022 and December 31, 2021, loans and leases in the consolidated credit card trust included $4.2 billion and $4.3 billion of seller’s interest.
(3)The retained senior securities were valued using quoted market prices or observable market inputs (Level 2 of the fair value hierarchy).

77 Bank of America


Home Equity Loans
The Corporation retains interests, primarily senior securities, in home equity securitization trusts to which it transferred home equity loans. In addition, the Corporation may be obligated to provide subordinate funding to the trusts during a rapid amortization event. This obligation is included in the maximum loss exposure in the preceding table. The charges that will ultimately be recorded as a result of the rapid amortization events depend on the undrawn portion of the home equity lines of credit, performance of the loans, the amount of subsequent draws and the timing of related cash flows.
Credit Card Securitizations
The Corporation securitizes originated and purchased credit card loans. The Corporation’s continuing involvement with the securitization trust includes servicing the receivables, retaining an undivided interest (seller’s interest) in the receivables, and holding certain retained interests, including subordinate interests in accrued interest and fees on the securitized receivables and cash reserve accounts.
Senior debt securities totaling $1.0 billion were issued to third-party investors from the credit card securitization trust during the nine months ended September 30, 2022 and 2021.
At both September 30, 2022 and December 31, 2021, the Corporation held subordinate securities issued by the credit card securitization trust with a notional principal amount of $6.5 billion. These securities serve as a form of credit enhancement to the senior debt securities and have a stated interest rate of zero percent. There were $161 million of subordinate securities issued by the credit card securitization trust during the nine months ended September 30, 2022 and 2021.
Resecuritization Trusts
The Corporation transfers securities, typically MBS, into resecuritization VIEs generally at the request of customers seeking securities with specific characteristics. Generally, there are no significant ongoing activities performed in a
resecuritization trust, and no single investor has the unilateral ability to liquidate the trust.
The Corporation resecuritized $5.3 billion and $19.5 billion of securities during the three and nine months ended September 30, 2022 compared to $5.9 billion and $20.6 billion for the same periods in 2021. Securities transferred into resecuritization VIEs were measured at fair value with changes in fair value recorded in market making and similar activities prior to the resecuritization and, accordingly, no gain or loss on sale was recorded. During the three and nine months ended September 30, 2022 and 2021, resecuritization proceeds included securities with an initial fair value of $670 million and $2.4 billion compared to $1.0 billion and $1.6 billion, of which substantially all of the securities were classified as trading account assets for both periods and categorized as Level 2 within the fair value hierarchy.
Municipal Bond Trusts
The Corporation administers municipal bond trusts that hold highly-rated, long-term, fixed-rate municipal bonds. The trusts obtain financing by issuing floating-rate trust certificates that reprice on a weekly or other short-term basis to third-party investors.
The Corporation’s liquidity commitments to unconsolidated municipal bond trusts, including those for which the Corporation was transferor, totaled $3.1 billion and $4.1 billion at September 30, 2022 and December 31, 2021. The weighted-average remaining life of bonds held in the trusts at September 30, 2022 was 7.9 years. There were no significant write-downs or downgrades of assets or issuers during the nine months ended September 30, 2022 and 2021.
Other Variable Interest Entities
The table below summarizes select information related to other VIEs in which the Corporation held a variable interest at September 30, 2022 and December 31, 2021.
Other VIEs
ConsolidatedUnconsolidatedTotalConsolidatedUnconsolidatedTotal
(Dollars in millions)September 30, 2022December 31, 2021
Maximum loss exposure $2,133 $28,835 $30,968 $4,819 $27,790 $32,609 
On-balance sheet assets      
Trading account assets $342 $557 $899 $2,552 $626 $3,178 
Debt securities carried at fair value — 4 4 — 7 7 
Loans and leases 1,943 86 2,029 2,503 47 2,550 
Allowance for loan and lease losses (3)(11)(14)(2)(12)(14)
All other assets 33 27,606 27,639 28 26,628 26,656 
Total$2,315 $28,242 $30,557 $5,081 $27,296 $32,377 
On-balance sheet liabilities      
Short-term borrowings$33 $— $33 $51 $— $51 
Long-term debt149 — 149 211 — 211 
All other liabilities — 7,009 7,009 — 6,548 6,548 
Total $182 $7,009 $7,191 $262 $6,548 $6,810 
Total assets of VIEs $2,315 $95,767 $98,082 $5,081 $92,249 $97,330 

Bank of America 78

Customer VIEs
Customer VIEs include credit-linked, equity-linked and commodity-linked note VIEs, repackaging VIEs and asset acquisition VIEs, which are typically created on behalf of customers who wish to obtain market or credit exposure to a specific company, index, commodity or financial instrument.
The Corporation’s maximum loss exposure to consolidated and unconsolidated customer VIEs totaled $999 million and $2.9 billion at September 30, 2022 and December 31, 2021, including the notional amount of derivatives to which the Corporation is a counterparty, net of losses previously recorded, and the Corporation’s investment, if any, in securities issued by the VIEs.
Collateralized Debt Obligation VIEs
The Corporation receives fees for structuring CDO VIEs, which hold diversified pools of fixed-income securities, typically corporate debt or ABS, which the CDO VIEs fund by issuing multiple tranches of debt and equity securities. CDOs are generally managed by third-party portfolio managers. The Corporation typically transfers assets to these CDOs, holds securities issued by the CDOs and may be a derivative counterparty to the CDOs. The Corporation’s maximum loss exposure to consolidated and unconsolidated CDOs totaled $111 million and $235 million at September 30, 2022 and December 31, 2021.
Investment VIEs
The Corporation sponsors, invests in or provides financing, which may be in connection with the sale of assets, to a variety of investment VIEs that hold loans, real estate, debt securities or other financial instruments and are designed to provide the desired investment profile to investors or the Corporation. At September 30, 2022 and December 31, 2021, the Corporation’s consolidated investment VIEs had total assets of $665 million and $1.0 billion. The Corporation also held investments in unconsolidated VIEs with total assets of $7.9 billion and $7.1 billion at September 30, 2022 and December 31, 2021. The Corporation’s maximum loss exposure associated with both consolidated and unconsolidated investment VIEs totaled $1.8 billion and $2.0 billion at September 30, 2022 and December 31, 2021 comprised primarily of on-balance sheet assets less non-recourse liabilities.
Leveraged Lease Trusts
The Corporation’s net investment in consolidated leveraged lease trusts totaled $1.3 billion and $1.5 billion at September 30, 2022 and December 31, 2021. The trusts hold long-lived equipment such as rail cars, power generation and distribution equipment, and commercial aircraft. The Corporation structures the trusts and holds a significant residual interest. The net investment represents the Corporation’s maximum loss exposure to the trusts in the unlikely event that the leveraged lease investments become worthless. Debt issued by the leveraged lease trusts is non-recourse to the Corporation.
Tax Credit VIEs
The Corporation holds investments in unconsolidated limited partnerships and similar entities that construct, own and operate affordable housing, wind and solar projects. An
unrelated third party is typically the general partner or managing member and has control over the significant activities of the VIE. The Corporation earns a return primarily through the receipt of tax credits allocated to the projects. The maximum loss exposure included in the Other VIEs table was $26.5 billion and $25.7 billion at September 30, 2022 and December 31, 2021. The Corporation’s risk of loss is generally mitigated by policies requiring that the project qualify for the expected tax credits prior to making its investment.
The Corporation’s investments in affordable housing partnerships, which are reported in other assets on the Consolidated Balance Sheet, totaled $13.4 billion and $12.6 billion, including unfunded commitments to provide capital contributions of $6.3 billion and $5.8 billion, at September 30, 2022 and December 31, 2021. The unfunded commitments are expected to be paid over the next five years. During the three and nine months ended September 30, 2022, the Corporation recognized tax credits and other tax benefits from investments in affordable housing partnerships of $409 million and $1.2 billion and reported pretax losses in other income of $311 million and $938 million. For the same periods in 2021, the Corporation recognized tax credits and other tax benefits of $350 million and $1.1 billion and reported pretax losses in other income of $282 million and $837 million. These tax credits are recognized as part of the Corporation’s annual effective tax rate used to determine tax expense in a given quarter. The Corporation may be asked to invest additional amounts to support a troubled affordable housing project. Such additional investments have not been and are not expected to be significant.
NOTE 7 Goodwill and Intangible Assets
Goodwill
The table below presents goodwill balances by business segment at September 30, 2022 and December 31, 2021. The reporting units utilized for goodwill impairment testing are the operating segments or one level below.
Goodwill
September 30December 31
(Dollars in millions)20222021
Consumer Banking$30,137 $30,137 
Global Wealth & Investment Management9,677 9,677 
Global Banking24,026 24,026 
Global Markets5,182 5,182 
Total goodwill$69,022 $69,022 
Intangible Assets
At September 30, 2022 and December 31, 2021, the net carrying value of intangible assets was $2.1 billion and $2.2 billion. At both September 30, 2022 and December 31, 2021, intangible assets included $1.6 billion of intangible assets associated with trade names, substantially all of which had an indefinite life and, accordingly, are not being amortized. Amortization of intangibles expense was $20 million and $59 million for the three and nine months ended September 30, 2022 compared to $19 million and $56 million for the same periods in 2021.
79 Bank of America


NOTE 8 Leases
The Corporation enters into both lessor and lessee arrangements. For more information on lease accounting, see Note 1 – Summary of Significant Accounting Principles and Note 8 – Leases to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K. For more information on lease financing receivables, see Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses.
Lessor Arrangements
The Corporation’s lessor arrangements primarily consist of operating, sales-type and direct financing leases for equipment. Lease agreements may include options to renew and for the lessee to purchase the leased equipment at the end of the lease term.
The table below presents the net investment in sales-type and direct financing leases at September 30, 2022 and December 31, 2021.
Net Investment (1)
(Dollars in millions)September 30
2022		December 31
2021
Lease receivables$14,937 $16,806 
Unguaranteed residuals1,793 2,078 
   Total net investment in sales-type and direct
      financing leases		$16,730 $18,884 
(1)In certain cases, the Corporation obtains third-party residual value insurance to reduce its residual asset risk. The carrying value of residual assets with third-party residual value insurance for at least a portion of the asset value was $6.6 billion and $7.1 billion at September 30, 2022 and December 31, 2021.
The table below presents lease income for the three and nine months ended September 30, 2022 and 2021.
Lease Income
Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)2022202120222021
Sales-type and direct
   financing leases		$149 $152 $428 $468 
Operating leases241 235 704 689 
   Total lease income$390 $387 $1,132 $1,157 

Lessee Arrangements
The Corporation's lessee arrangements predominantly consist of operating leases for premises and equipment; the Corporation's financing leases are not significant.
The table below provides information on the right-of-use assets and lease liabilities at September 30, 2022 and December 31, 2021.
Lessee Arrangements
(Dollars in millions)September 30
2022		December 31
2021
Right-of-use asset$9,743 $10,233 
Lease liabilities10,310 10,858 
NOTE 9 Securities Financing Agreements, Collateral and Restricted Cash
The Corporation enters into securities financing agreements which include securities borrowed or purchased under agreements to resell and securities loaned or sold under agreements to repurchase. These financing agreements (also referred to as “matched-book transactions”) are to accommodate customers, obtain securities to cover short positions and finance inventory positions. The Corporation elects to account for certain securities financing agreements under the fair value option. For more information on the fair value option, see Note 15 – Fair Value Option.
Offsetting of Securities Financing Agreements
The Securities Financing Agreements table presents securities financing agreements included on the Consolidated Balance Sheet in federal funds sold and securities borrowed or purchased under agreements to resell, and in federal funds purchased and securities loaned or sold under agreements to repurchase at September 30, 2022 and December 31, 2021. Balances are presented on a gross basis, prior to the application of counterparty netting. Gross assets and liabilities are adjusted on an aggregate basis to take into consideration the effects of legally enforceable master netting agreements. For more information on the offsetting of derivatives, see Note 3 – Derivatives. For more information on the securities financing agreements and the offsetting of securities financing transactions, see Note 10 – Securities Financing Agreements, Short-term Borrowings and Restricted Cash to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K.
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Securities Financing Agreements
Gross Assets/Liabilities (1)
Amounts OffsetNet Balance Sheet Amount
Financial Instruments (2)
Net Assets/Liabilities
(Dollars in millions)September 30, 2022
Securities borrowed or purchased under agreements to resell (3)
$550,757 $(275,510)$275,247 $(251,549)$23,698 
Securities loaned or sold under agreements to repurchase$491,137 $(275,510)$215,627 $(201,129)$14,498 
Other (4)
6,564 — 6,564 (6,564)— 
Total$497,701 $(275,510)$222,191 $(207,693)$14,498 
December 31, 2021
Securities borrowed or purchased under agreements to resell (3)
$527,054 $(276,334)$250,720 $(229,525)$21,195 
Securities loaned or sold under agreements to repurchase$468,663 $(276,334)$192,329 $(181,860)$10,469 
Other (4)
11,391 — 11,391 (11,391)— 
Total$480,054 $(276,334)$203,720 $(193,251)$10,469 
(1)Includes activity where uncertainty exists as to the enforceability of certain master netting agreements under bankruptcy laws in some countries or industries.
(2)Includes securities collateral received or pledged under repurchase or securities lending agreements where there is a legally enforceable master netting agreement. These amounts are not offset on the Consolidated Balance Sheet, but are shown as a reduction to derive a net asset or liability. Securities collateral received or pledged where the legal enforceability of the master netting agreements is uncertain is excluded from the table.
(3)Excludes repurchase activity of $9.2 billion and $20.1 billion reported in loans and leases on the Consolidated Balance Sheet at September 30, 2022 and December 31, 2021.
(4)Balance is reported in accrued expenses and other liabilities on the Consolidated Balance Sheet and relates to transactions where the Corporation acts as the lender in a securities lending agreement and receives securities that can be pledged as collateral or sold. In these transactions, the Corporation recognizes an asset at fair value, representing the securities received, and a liability, representing the obligation to return those securities.
Repurchase Agreements and Securities Loaned Transactions Accounted for as Secured Borrowings
The following tables present securities sold under agreements to repurchase and securities loaned by remaining contractual term to maturity and class of collateral pledged. Included in “Other” are transactions where the Corporation acts as the lender in a securities lending agreement and receives securities that can be pledged as collateral or sold. Certain agreements
contain a right to substitute collateral and/or terminate the agreement prior to maturity at the option of the Corporation or the counterparty. Such agreements are included in the table below based on the remaining contractual term to maturity. For more information on collateral requirements, see Note 10 – Securities Financing Agreements, Short-term Borrowings and Restricted Cash to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K.
Remaining Contractual Maturity
Overnight and Continuous30 Days or LessAfter 30 Days Through 90 Days
Greater than
90 Days (1)
Total
(Dollars in millions)September 30, 2022
Securities sold under agreements to repurchase$200,049 $150,817 $38,774 $32,748 $422,388 
Securities loaned63,666 417 627 4,039 68,749 
Other6,564 — — — 6,564 
Total$270,279 $151,234 $39,401 $36,787 $497,701 
December 31, 2021
Securities sold under agreements to repurchase$148,023 $194,964 $36,939 $36,501 $416,427 
Securities loaned46,231 466 1,428 4,111 52,236 
Other11,391 — — — 11,391 
Total$205,645 $195,430 $38,367 $40,612 $480,054 
(1)No agreements have maturities greater than three years.
81 Bank of America


Class of Collateral Pledged
Securities Sold Under Agreements to RepurchaseSecurities
Loaned		OtherTotal
(Dollars in millions)September 30, 2022
U.S. government and agency securities$206,265 $— $— $206,265 
Corporate securities, trading loans and other13,544 1,939 245 15,728 
Equity securities6,338 66,727 6,319 79,384 
Non-U.S. sovereign debt194,281 83 — 194,364 
Mortgage trading loans and ABS1,960 — — 1,960 
Total$422,388 $68,749 $6,564 $497,701 
December 31, 2021
U.S. government and agency securities$201,546 $27 $— $201,573 
Corporate securities, trading loans and other12,838 3,440 1,148 17,426 
Equity securities19,907 48,650 10,192 78,749 
Non-U.S. sovereign debt178,019 119 51 178,189 
Mortgage trading loans and ABS4,117 — — 4,117 
Total$416,427 $52,236 $11,391 $480,054 
Collateral
The Corporation accepts securities and loans as collateral that it is permitted by contract or practice to sell or repledge. At September 30, 2022 and December 31, 2021, the fair value of this collateral was $774.4 billion and $854.8 billion, of which $712.4 billion and $782.7 billion were sold or repledged. The primary source of this collateral is securities borrowed or purchased under agreements to resell. For more information on collateral, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K.
Restricted Cash
At September 30, 2022 and December 31, 2021, the Corporation held restricted cash included within cash and cash equivalents on the Consolidated Balance Sheet of $6.6 billion and $5.9 billion, predominantly related to cash segregated in compliance with securities regulations and cash held on deposit with central banks to meet reserve requirements.
NOTE 10 Commitments and Contingencies
In the normal course of business, the Corporation enters into a number of off-balance sheet commitments. These commitments expose the Corporation to varying degrees of credit and market risk and are subject to the same credit and market risk limitation reviews as those instruments recorded on the Consolidated Balance Sheet. For more information on commitments and contingencies, see Note 12 – Commitments and Contingencies to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K.

Credit Extension Commitments
The Corporation enters into commitments to extend credit such as loan commitments, standby letters of credit (SBLCs) and commercial letters of credit to meet the financing needs of its customers. The following table includes the notional amount of unfunded legally binding lending commitments net of amounts distributed (i.e., syndicated or participated) to other financial institutions. The distributed amounts were $10.4 billion and $10.7 billion at September 30, 2022 and December 31, 2021. The carrying value of the Corporation’s credit extension commitments at both September 30, 2022 and December 31, 2021, excluding commitments accounted for under the fair value option, were $1.5 billion, which predominantly related to the reserve for unfunded lending commitments. The carrying value of these commitments is classified in accrued expenses and other liabilities on the Consolidated Balance Sheet.
Legally binding commitments to extend credit generally have specified rates and maturities. Certain of these commitments have adverse change clauses that help to protect the Corporation against deterioration in the borrower’s ability to pay.
The following table includes the notional amount of commitments of $3.5 billion and $4.8 billion at September 30, 2022 and December 31, 2021 that are accounted for under the fair value option. However, the table excludes the cumulative net fair value for these commitments of $200 million and $97 million at September 30, 2022 and December 31, 2021, which is classified in accrued expenses and other liabilities. For more information regarding the Corporation’s loan commitments accounted for under the fair value option, see Note 15 – Fair Value Option.
Bank of America 82

Credit Extension Commitments
Expire in One
Year or Less		Expire After One
Year Through
Three Years		Expire After Three Years Through
Five Years		Expire After
Five Years		Total
(Dollars in millions)September 30, 2022
Notional amount of credit extension commitments     
Loan commitments (1)
$108,780 $159,380 $210,765 $20,174 $499,099 
Home equity lines of credit1,285 6,643 11,310 22,120 41,358 
Standby letters of credit and financial guarantees (2)
23,186 10,561 2,762 449 36,958 
Letters of credit946 70 37 49 1,102 
Other commitments (3)
25 65 43 1,161 1,294 
Legally binding commitments134,222 176,719 224,917 43,953 579,811 
Credit card lines (4)
426,749 — — — 426,749 
Total credit extension commitments$560,971 $176,719 $224,917 $43,953 $1,006,560 
 December 31, 2021
Notional amount of credit extension commitments     
Loan commitments (1)
$102,464 $190,687 $174,978 $26,635 $494,764 
Home equity lines of credit890 5,097 10,268 24,276 40,531 
Standby letters of credit and financial guarantees (2)
22,359 10,742 2,017 422 35,540 
Letters of credit1,145 124 56 98 1,423 
Other commitments (3)
18 59 81 1,233 1,391 
Legally binding commitments126,876 206,709 187,400 52,664 573,649 
Credit card lines (4)
406,169 — — — 406,169 
Total credit extension commitments$533,045 $206,709 $187,400 $52,664 $979,818 
(1)     At September 30, 2022 and December 31, 2021, $3.2 billion and $4.6 billion of these loan commitments were held in the form of a security.
(2) The notional amounts of SBLCs and financial guarantees classified as investment grade and non-investment grade based on the credit quality of the underlying reference name within the instrument were $26.4 billion and $10.1 billion at September 30, 2022, and $26.3 billion and $8.7 billion at December 31, 2021. Amounts in the table include consumer SBLCs of $534 million and $512 million at September 30, 2022 and December 31, 2021.
(3)     Primarily includes second-loss positions on lease-end residual value guarantees.
(4)     Includes business card unused lines of credit.
Other Commitments
At September 30, 2022 and December 31, 2021, the Corporation had commitments to purchase loans (e.g., residential mortgage and commercial real estate) of $655 million and $181 million, which upon settlement will be included in trading account assets, loans or LHFS, and commitments to purchase commercial loans of $395 million and $518 million, which upon settlement will be included in trading account assets.
At September 30, 2022 and December 31, 2021, the Corporation had commitments to purchase commodities, primarily liquefied natural gas, of $253 million and $949 million, which upon settlement will be included in trading account assets.
At September 30, 2022 and December 31, 2021, the Corporation had commitments to enter into resale and forward-dated resale and securities borrowing agreements of $89.5 billion and $92.0 billion, and commitments to enter into forward-dated repurchase and securities lending agreements of $70.1 billion and $32.6 billion. These commitments generally expire within the next 12 months.
At September 30, 2022 and December 31, 2021, the Corporation had a commitment to originate or purchase up to $3.7 billion and $4.0 billion on a rolling 12-month basis, of auto loans and leases from a strategic partner. This commitment extends through November 2026 and can be terminated with 12 months prior notice.
At September 30, 2022 and December 31, 2021, the Corporation had unfunded equity investment commitments of $720 million and $395 million.
Other Guarantees
Bank-owned Life Insurance Book Value Protection
The Corporation sells products that offer book value protection to insurance carriers who offer group life insurance policies to
corporations, primarily banks. At September 30, 2022 and December 31, 2021, the notional amount of these guarantees totaled $4.4 billion and $6.3 billion. At September 30, 2022 and December 31, 2021, the Corporation’s maximum exposure related to these guarantees totaled $650 million and $928 million, with estimated maturity dates between 2033 and 2039.
Merchant Services
The Corporation in its role as merchant acquirer or as a sponsor of other merchant acquirers may be held liable for any reversed charges that cannot be collected from the merchants, due to, among other things, merchant fraud or insolvency. If charges are properly reversed after a purchase and cannot be collected from either the merchants or merchant acquirers, the Corporation may be held liable for these reversed charges. The ability to reverse a charge is primarily governed by the applicable payment network rules and regulations, which include, but are not limited to, the type of charge, type of payment used and time limits. The total amount of transactions subject to reversal under payment network rules and regulations processed for the preceding six-month period, which was approximately $509 billion, is an estimate of the Corporation’s maximum potential exposure as of September 30, 2022. The Corporation’s risk in this area primarily relates to circumstances where a cardholder has purchased goods or services for future delivery. The Corporation mitigates this risk by requiring cash deposits, guarantees, letters of credit or other types of collateral from certain merchants. The Corporation’s reserves for contingent losses and the losses incurred related to the merchant processing activity were not significant.
Representations and Warranties Obligations and Corporate Guarantees
For more information on representations and warranties obligations and corporate guarantees, see Note 12 – Commitments and Contingencies to the Consolidated Financial
83 Bank of America


Statements of the Corporation’s 2021 Annual Report on Form 10-K.
The reserve for representations and warranties obligations and corporate guarantees was $1.0 billion and $1.2 billion at September 30, 2022 and December 31, 2021 and is included in accrued expenses and other liabilities on the Consolidated Balance Sheet, and the related provision is included in other income in the Consolidated Statement of Income. The representations and warranties reserve represents the Corporation’s best estimate of probable incurred losses, is based on its experience in previous negotiations, and is subject to judgment, a variety of assumptions, and known or unknown uncertainties. Future representations and warranties losses may occur in excess of the amounts recorded for these exposures; however, the Corporation does not expect such amounts to be material to the Corporation's financial condition and liquidity. See Litigation and Regulatory Matters below for the Corporation's combined range of possible loss in excess of the reserve for representations and warranties and the accrued liability for litigation.
Fixed Income Clearing Corporation Sponsored Member Repo Program
The Corporation acts as a sponsoring member in a repo program whereby the Corporation clears certain eligible resale and repurchase agreements through the Government Securities Division of the Fixed Income Clearing Corporation on behalf of clients that are sponsored members in accordance with the Fixed Income Clearing Corporation’s rules. As part of this program, the Corporation guarantees the payment and performance of its sponsored members to the Fixed Income Clearing Corporation. The Corporation’s guarantee obligation is secured by a security interest in cash or high-quality securities collateral placed by clients with the clearinghouse and therefore, the potential for the Corporation to incur significant losses under this arrangement is remote. The Corporation’s maximum potential exposure, without taking into consideration the related collateral, was $38.6 billion and $42.0 billion at September 30, 2022 and December 31, 2021.
Other Guarantees
In the normal course of business, the Corporation periodically guarantees the obligations of its affiliates in a variety of transactions including ISDA-related transactions and non-ISDA related transactions such as commodities trading, repurchase agreements, prime brokerage agreements and other transactions.
Guarantees of Certain Long-term Debt
The Corporation, as the parent company, fully and unconditionally guarantees the securities issued by BofA Finance LLC, a consolidated finance subsidiary of the Corporation, and effectively provides for the full and unconditional guarantee of trust securities issued by certain statutory trust companies that are 100 percent owned finance subsidiaries of the Corporation.
Litigation and Regulatory Matters
The following disclosures supplement the disclosure in Note 12 – Commitments and Contingencies to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K (the prior commitments and contingencies disclosure).

In the ordinary course of business, the Corporation and its subsidiaries are routinely defendants in or parties to many pending and threatened legal, regulatory and governmental actions and proceedings. In view of the inherent difficulty of predicting the outcome of such matters, particularly where the claimants seek very large or indeterminate damages or where the matters present novel legal theories or involve a large number of parties, the Corporation generally cannot predict the eventual outcome of the pending matters, timing of the ultimate resolution of these matters, or eventual loss, fines or penalties related to each pending matter.
As a matter develops, the Corporation, in conjunction with any outside counsel handling the matter, evaluates whether such matter presents a loss contingency that is probable and estimable, and, for the matters below and the matters disclosed in the prior commitments and contingencies disclosure, whether a loss in excess of any accrued liability is reasonably possible in future periods. Once the loss contingency is deemed to be both probable and estimable, the Corporation will establish an accrued liability and record a corresponding amount of litigation-related expense. The Corporation continues to monitor the matter for further developments that could affect the amount of the accrued liability that has been previously established. Excluding expenses of internal and external legal service providers, litigation-related expense of $507 million and $1.1 billion was recognized for the three and nine months ended September 30, 2022 compared to $66 million and $155 million for the same periods in 2021.
For any matter disclosed in this Note and in the prior commitments and contingencies disclosure for which a loss in future periods is reasonably possible and estimable (whether in excess of an accrued liability or where there is no accrued liability) and for representations and warranties exposures, the Corporation’s estimated range of possible loss is $0 to $0.7 billion in excess of the accrued liability, if any, as of September 30, 2022.
The accrued liability and estimated range of possible loss are based upon currently available information and subject to significant judgment, a variety of assumptions and known and unknown uncertainties. The matters underlying the accrued liability and estimated range of possible loss are unpredictable and may change from time to time, and actual losses may vary significantly from the current estimate and accrual. The estimated range of possible loss does not represent the Corporation’s maximum loss exposure.
Information is provided below and in the prior commitments and contingencies disclosure regarding the nature of the litigation and, where specified, associated claimed damages. Based on current knowledge, and taking into account accrued liabilities, management does not believe that loss contingencies arising from pending matters, including the matters described below and in the prior commitments and contingencies disclosure, will have a material adverse effect on the consolidated financial condition or liquidity of the Corporation. However, in light of the significant judgment, variety of assumptions and uncertainties involved in those matters, some of which are beyond the Corporation’s control, and the very large or indeterminate damages sought in some of those matters, an adverse outcome in one or more of those matters could be material to the Corporation’s business or results of operations for any particular reporting period, or cause significant reputational harm.
Bank of America 84

Ambac Bond Insurance Litigation
Ambac v. Countrywide I
Ambac v. Countrywide II
Ambac v. First Franklin
On October 6, 2022, the Corporation and certain wholly owned subsidiaries entered into an agreement with Ambac Assurance Corporation (together with its subsidiaries, “Ambac”) to resolve the above referenced matters. Under the terms of the agreement, in exchange for the Corporation’s payment of $1.84 billion, Ambac, among other things, caused these matters to be dismissed with prejudice, and released the Corporation and its subsidiaries from all outstanding claims related to Ambac’s issuance of bond insurance policies for certain of the Corporation’s and legacy entities’ securitized pools of residential mortgage loans.
Prepaid Debit Card Investigations
On July 14, 2022, BANA agreed to settle two separate proceedings with the Office of the Comptroller of the Currency (OCC) and Consumer Financial Protection Bureau (CFPB) related to BANA’s administration of prepaid debit cards to distribute unemployment benefits. The orders found that BANA’s fraud prevention measures and resolution of potentially unauthorized transactions improperly delayed or denied access by certain cardholders to account funds. Without admitting or denying the findings, BANA consented to orders requiring it to improve its processes, review accounts and compensate cardholders, and pay penalties of $125 million and $100 million to the OCC and CFPB, respectively. The Corporation continues to defend civil litigation, including putative class actions, concerning BANA’s administration of these prepaid debit card programs.
Record-keeping Investigations
Certain of the Corporation’s U.S. subsidiaries have been cooperating with investigations by the SEC and U.S. Commodity Futures Trading Commission (CFTC) regarding compliance by financial institutions with record-keeping obligations for broker-dealers, investment advisors, swap dealers and futures commission merchants pertaining to business-related electronic communications sent over unapproved electronic messaging channels. On September 27, 2022, these subsidiaries entered into resolutions with the SEC and CFTC to resolve their respective civil investigations. The SEC and CFTC found that BofA Securities, Inc. and Merrill Lynch, Pierce Fenner & Smith
Incorporated did not maintain copies of certain communications required to be maintained under their respective record-keeping rules, where such communications were sent or received by employees over electronic messaging channels that had not been approved for employee use. The CFTC resolution also includes BANA. The SEC and CFTC also found related supervision failures. Under these resolutions, a $125 million civil monetary penalty was paid to the SEC, and a $100 million civil monetary penalty was paid to the CFTC.
NOTE 11 Shareholders’ Equity
Common Stock
Declared Quarterly Cash Dividends on Common Stock (1)
Declaration DateRecord DatePayment DateDividend Per Share
October 19, 2022December 2, 2022December 30, 2022$0.22 
July 20, 2022September 2, 2022September 30, 20220.22 
April 27, 2022June 3, 2022June 24, 20220.21 
February 2, 2022March 4, 2022March 25, 20220.21 
(1) In 2022, and through October 28, 2022.
On October 19 2022, the Board of Directors declared a quarterly common stock dividend of $0.22 per share.
During the three and nine months ended September 30, 2022, the Corporation repurchased and retired 13 million and 98 million shares of common stock, which reduced shareholders’ equity by $450 million and $4.1 billion.
During the nine months ended September 30, 2022, in connection with employee stock plans, the Corporation issued 73 million shares of its common stock and, to satisfy tax withholding obligations, repurchased 28 million shares of its common stock.
Preferred Stock
During the three months ended September 30, 2022, June 30, 2022 and March 31, 2022 the Corporation declared $503 million, $315 million and $467 million of cash dividends on preferred stock, or a total of $1.3 billion for the nine months ended September 30, 2022. For more information on the Corporation’s preferred stock, including liquidation preference, dividend requirements and redemption period, see Note 13 – Shareholders’ Equity to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K.
NOTE 12 Accumulated Other Comprehensive Income (Loss)
The table below presents the changes in accumulated OCI after-tax for the nine months ended September 30, 2022 and 2021.
(Dollars in millions)Debt Securities Debit Valuation AdjustmentsDerivatives
Employee
Benefit Plans
Foreign
Currency
Total
Balance, December 31, 2020$5,122 $(1,992)$426 $(4,266)$(946)$(1,656)
Net change(1,243)292 (1,130)170 (29)(1,940)
Balance, September 30, 2021$3,879 $(1,700)$(704)$(4,096)$(975)$(3,596)
Balance, December 31, 2021$3,045 $(1,636)$(1,880)$(3,642)$(991)$(5,104)
Net change(6,381)1,298 (10,890)97 (47)(15,923)
Balance, September 30, 2022$(3,336)$(338)$(12,770)$(3,545)$(1,038)$(21,027)

85 Bank of America


The table below presents the net change in fair value recorded in accumulated OCI, net realized gains and losses reclassified into earnings and other changes for each component of OCI pre- and after-tax for the nine months ended September 30, 2022 and 2021.
PretaxTax
effect		After-
tax		PretaxTax
effect		After-
tax
Nine Months Ended September 30
(Dollars in millions)20222021
Debt securities:
Net increase (decrease) in fair value$(8,417)$2,064 $(6,353)$(1,650)$410 $(1,240)
Net realized (gains) losses reclassified into earnings (1)
(37)9 (28)(4)1 (3)
Net change(8,454)2,073 (6,381)(1,654)411 (1,243)
Debit valuation adjustments:
Net increase (decrease) in fair value1,698 (411)1,287 365 (82)283 
Net realized (gains) losses reclassified into earnings (1)
14 (3)11 12 (3)9 
Net change1,712 (414)1,298 377 (85)292 
Derivatives:
Net increase (decrease) in fair value(14,681)3,673 (11,008)(1,339)334 (1,005)
Reclassifications into earnings:
Net interest income182 (46)136 (125)30 (95)
Compensation and benefits expense(24)6 (18)(40)10 (30)
Net realized (gains) losses reclassified into earnings158 (40)118 (165)40 (125)
Net change(14,523)3,633 (10,890)(1,504)374 (1,130)
Employee benefit plans:
Net actuarial losses and other reclassified into earnings (2)
135 (38)97 209 (39)170 
Net change135 (38)97 209 (39)170 
Foreign currency:
Net increase (decrease) in fair value726 (774)(48)240 (269)(29)
Net realized (gains) losses reclassified into earnings (1)
— 1 1 — — — 
Net change726 (773)(47)240 (269)(29)
Total other comprehensive income (loss)$(20,404)$4,481 $(15,923)$(2,332)$392 $(1,940)
(1)    Reclassifications of pretax debt securities, DVA and foreign currency (gains) losses are recorded in other income in the Consolidated Statement of Income.
(2)    Reclassifications of pretax employee benefit plan costs are recorded in other general operating expense in the Consolidated Statement of Income.
NOTE 13 Earnings Per Common Share
The calculation of earnings per common share (EPS) and diluted EPS for the three and nine months ended September 30, 2022 and 2021 is presented below. For more information on the calculation of EPS, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K.
Three Months Ended September 30Nine Months Ended September 30
(In millions, except per share information)2022202120222021
Earnings per common share   
Net income$7,082 $7,691 $20,396 $24,965 
Preferred stock dividends(503)(431)(1,285)(1,181)
Net income applicable to common shareholders$6,579 $7,260 $19,111 $23,784 
Average common shares issued and outstanding8,107.7 8,430.7 8,122.2 8,583.1 
Earnings per common share$0.81 $0.86 $2.35 $2.77 
Diluted earnings per common share    
Net income applicable to common shareholders$6,579 $7,260 $19,111 $23,784 
Add preferred stock dividends due to assumed conversions— — — 168 
Net income allocated to common shareholders$6,579 $7,260 $19,111 $23,952 
Average common shares issued and outstanding8,107.7 8,430.7 8,122.2 8,583.1 
Dilutive potential common shares (1)
53.1 62.1 51.1 119.1 
Total diluted average common shares issued and outstanding8,160.8 8,492.8 8,173.3 8,702.2 
Diluted earnings per common share$0.81 $0.85 $2.34 $2.75 
(1)Includes incremental dilutive shares from preferred stock, restricted stock units, restricted stock and warrants.
For both the three and nine months ended September 30, 2022, and the three months ended September 30, 2021, 62 million average dilutive potential common shares associated with the Series L preferred stock were antidilutive, whereas they were included in the diluted share count under the “if-converted” method for the nine months ended September 30, 2021.
NOTE 14 Fair Value Measurements
Under applicable accounting standards, fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly
transaction between market participants on the measurement date. The Corporation determines the fair values of its financial instruments under applicable accounting standards and conducts a review of fair value hierarchy classifications on a quarterly basis. Transfers into or out of fair value hierarchy classifications are made if the significant inputs used in the financial models measuring the fair values of the assets and liabilities become unobservable or observable in the current marketplace. During the nine months ended September 30, 2022, there were no changes to valuation approaches or techniques that had, or are expected to have, a material impact
Bank of America 86

on the Corporation’s consolidated financial position or results of operations.
For more information regarding the fair value hierarchy, how the Corporation measures fair value and valuation techniques, see Note 1 – Summary of Significant Accounting Principles and Note 20 – Fair Value Measurements to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K. The Corporation accounts for certain financial
instruments under the fair value option. For more information, see Note 15 – Fair Value Option.
Recurring Fair Value
Assets and liabilities carried at fair value on a recurring basis at September 30, 2022 and December 31, 2021, including financial instruments that the Corporation accounts for under the fair value option, are summarized in the following tables.
September 30, 2022
 Fair Value Measurements
(Dollars in millions)Level 1Level 2Level 3
Netting Adjustments (1)
Assets/Liabilities at Fair Value
Assets     
Time deposits placed and other short-term investments
$682 $— $— $— $682 
Federal funds sold and securities borrowed or purchased under agreements to resell
— 165,521 — — 165,521 
Trading account assets:     
U.S. Treasury and government agencies62,200 501 — — 62,701 
Corporate securities, trading loans and other— 44,931 2,349 — 47,280 
Equity securities82,645 28,537 171 — 111,353 
Non-U.S. sovereign debt11,613 22,537 485 — 34,635 
Mortgage trading loans, MBS and ABS:
U.S. government-sponsored agency guaranteed— 26,743 50 — 26,793 
Mortgage trading loans, ABS and other MBS— 9,283 1,413 — 10,696 
Total trading account assets (2)
156,458 132,532 4,468 — 293,458 
Derivative assets20,236 453,548 3,286 (405,114)71,956 
AFS debt securities:     
U.S. Treasury and government agencies166,691 922 — — 167,613 
Mortgage-backed securities:     
Agency— 23,604 — — 23,604 
Agency-collateralized mortgage obligations— 2,369 — — 2,369 
Non-agency residential— 134 266 — 400 
Commercial— 5,773 — — 5,773 
Non-U.S. securities7 10,579 417 — 11,003 
Other taxable securities— 3,405 — — 3,405 
Tax-exempt securities— 12,120 52 — 12,172 
Total AFS debt securities166,698 58,906 735 — 226,339 
Other debt securities carried at fair value:
U.S. Treasury and government agencies520 — — — 520 
Non-agency residential MBS— 286 100 — 386 
Non-U.S. and other securities
3,656 5,344 — — 9,000 
Total other debt securities carried at fair value4,176 5,630 100 — 9,906 
Loans and leases— 4,654 197 — 4,851 
Loans held-for-sale— 2,123 272 — 2,395 
Other assets (3)
4,660 861 1,805 — 7,326 
Total assets (4)
$352,910 $823,775 $10,863 $(405,114)$782,434 
Liabilities     
Interest-bearing deposits in U.S. offices$— $453 $— $— $453 
Federal funds purchased and securities loaned or sold under agreements to repurchase
— 165,390 — — 165,390 
Trading account liabilities:    
U.S. Treasury and government agencies16,495 419 — — 16,914 
Equity securities35,187 5,873 — — 41,060 
Non-U.S. sovereign debt11,283 8,086 — — 19,369 
Corporate securities and other— 7,412 13 — 7,425 
Total trading account liabilities62,965 21,790 13 — 84,768 
Derivative liabilities19,609 434,324 5,503 (409,280)50,156 
Short-term borrowings— 1,987 6 — 1,993 
Accrued expenses and other liabilities5,652 1,049 63 — 6,764 
Long-term debt— 26,738 793 — 27,531 
Total liabilities (4)
$88,226 $651,731 $6,378 $(409,280)$337,055 
(1)Amounts represent the impact of legally enforceable master netting agreements and also cash collateral held or placed with the same counterparties.
(2)Includes securities with a fair value of $17.7 billion that were segregated in compliance with securities regulations or deposited with clearing organizations. This amount is included in the parenthetical disclosure on the Consolidated Balance Sheet. Trading account assets also includes certain commodities inventory of $918 million that is accounted for at the lower of cost or net realizable value, which is the current selling price less any costs to sell.
(3)Includes MSRs of $1.0 billion, which are classified as Level 3 assets.
(4)Total recurring Level 3 assets were 0.35 percent of total consolidated assets, and total recurring Level 3 liabilities were 0.23 percent of total consolidated liabilities.
87 Bank of America


December 31, 2021
Fair Value Measurements
(Dollars in millions)Level 1Level 2Level 3
Netting Adjustments (1)
Assets/Liabilities at Fair Value
Assets     
Time deposits placed and other short-term investments
$707 $— $— $— $707 
Federal funds sold and securities borrowed or purchased under agreements to resell
— 150,665 — — 150,665 
Trading account assets:     
U.S. Treasury and government agencies44,599 803 — — 45,402 
Corporate securities, trading loans and other— 31,601 2,110 — 33,711 
Equity securities61,425 38,383 190 — 99,998 
Non-U.S. sovereign debt3,822 25,612 396 — 29,830 
Mortgage trading loans, MBS and ABS:
U.S. government-sponsored agency guaranteed— 25,645 109 — 25,754 
Mortgage trading loans, ABS and other MBS— 10,967 1,418 — 12,385 
Total trading account assets (2)
109,846 133,011 4,223 — 247,080 
Derivative assets34,748 310,581 3,133 (313,118)35,344 
AFS debt securities:     
U.S. Treasury and government agencies198,071 1,074 — — 199,145 
Mortgage-backed securities:     
Agency— 46,339 — — 46,339 
Agency-collateralized mortgage obligations— 3,380 — — 3,380 
Non-agency residential— 267 316 — 583 
Commercial— 19,604 — — 19,604 
Non-U.S. securities— 11,933 — — 11,933 
Other taxable securities— 2,690 71 — 2,761 
Tax-exempt securities— 15,381 52 — 15,433 
Total AFS debt securities198,071 100,668 439 — 299,178 
Other debt securities carried at fair value:
U.S. Treasury and government agencies575 — — — 575 
Non-agency residential MBS— 343 242 — 585 
Non-U.S. and other securities2,580 5,155 — — 7,735 
Total other debt securities carried at fair value3,155 5,498 242 — 8,895 
Loans and leases— 7,071 748 — 7,819 
Loans held-for-sale— 4,138 317 — 4,455 
Other assets (3)
7,657 2,915 1,572 — 12,144 
Total assets (4)
$354,184 $714,547 $10,674 $(313,118)$766,287 
Liabilities     
Interest-bearing deposits in U.S. offices$— $408 $— $— $408 
Federal funds purchased and securities loaned or sold under agreements to repurchase
— 139,641 — — 139,641 
Trading account liabilities:    
U.S. Treasury and government agencies19,826 313 — — 20,139 
Equity securities41,744 6,491 — — 48,235 
Non-U.S. sovereign debt10,400 13,781 — — 24,181 
Corporate securities and other— 8,124 11 — 8,135 
Total trading account liabilities71,970 28,709 11 — 100,690 
Derivative liabilities35,282 314,380 5,795 (317,782)37,675 
Short-term borrowings— 4,279 — — 4,279 
Accrued expenses and other liabilities8,359 3,130 — — 11,489 
Long-term debt— 28,633 1,075 — 29,708 
Total liabilities (4)
$115,611 $519,180 $6,881 $(317,782)$323,890 
(1)Amounts represent the impact of legally enforceable master netting agreements and also cash collateral held or placed with the same counterparties.
(2)Includes securities with a fair value of $10.6 billion that were segregated in compliance with securities regulations or deposited with clearing organizations. This amount is included in the parenthetical disclosure on the Consolidated Balance Sheet. Trading account assets also includes certain commodities inventory of $752 million that is accounted for at the lower of cost or net realizable value, which is the current selling price less any costs to sell.
(3)Includes MSRs of $818 million, which are classified as Level 3 assets.
(4)Total recurring Level 3 assets were 0.34 percent of total consolidated assets, and total recurring Level 3 liabilities were 0.24 percent of total consolidated liabilities.

Bank of America 88

The following tables present a reconciliation of all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three and nine months ended September 30, 2022 and 2021, including net realized and unrealized gains (losses) included in earnings and accumulated OCI. Transfers into Level 3 occur primarily due
to decreased price observability, and transfers out of Level 3 occur primarily due to increased price observability. Transfers occur on a regular basis for long-term debt instruments due to changes in the impact of unobservable inputs on the value of the embedded derivative in relation to the instrument as a whole.
Level 3 – Fair Value Measurements (1)
Balance July 1
Total
Realized/Unrealized Gains
 (Losses) in Net
 Income (2)
Gains
(Losses)
in OCI (3)
GrossGross
Transfers
into
Level 3 		Gross
Transfers
out of
Level 3 		Balance September 30
Change in Unrealized Gains (Losses) in Net Income Related to Financial Instruments Still Held (2)
(Dollars in millions)PurchasesSalesIssuancesSettlements
Three Months Ended September 30, 2022
Trading account assets:       
Corporate securities, trading loans and other
$2,367 $(28)$(1)$176 $(144)$— $(300)$329 $(50)$2,349 $(30)
Equity securities179 (5)— 13 (7)— — 3 (12)171 (5)
Non-U.S. sovereign debt470 39 (12)11 (2)— (18)2 (5)485 39 
Mortgage trading loans, MBS and ABS1,386 (57)— 166 (72)— (6)113 (67)1,463 (47)
Total trading account assets4,402 (51)(13)366 (225)— (324)447 (134)4,468 (43)
Net derivative assets (liabilities) (4)
(1,682)(266)— 97 (238)— 49 (62)(115)(2,217)(293)
AFS debt securities:          
Non-agency residential MBS299 (1)(11)— — — (8)— (13)266 (1)
Non-U.S. and other taxable securities200 2 (3)— — — (5)224 (1)417 (2)
Tax-exempt securities52 — — — — — — — — 52 — 
Total AFS debt securities551 1 (14)— — — (13)224 (14)735 (3)
Other debt securities carried at fair value – Non-agency residential MBS
112 (2)— — — — (4)— (6)100 (2)
Loans and leases (5)
256 (1)— — — — (58)— — 197 (2)
Loans held-for-sale (5)
345 (27)(2)— — — (44)— — 272 (27)
Other assets (6,7)
1,750 70 (20)— (2)78 (68)— (3)1,805 61 
Trading account liabilities – Corporate securities
   and other
(14)1 — — — — — — — (13)— 
Short-term borrowings (5)
— 1 — — (4)— — (3)— (6)1 
Accrued expenses and other liabilities (5)
(63)7 — (7)— — — — — (63)7 
Long-term debt (5)
(812)26 (12)— — — 18 (13)— (793)26 
Three Months Ended September 30, 2021
Trading account assets:
Corporate securities, trading loans and other
$1,764 $(2)$— $89 $(43)$— $(118)$239 $(295)$1,634 $(20)
Equity securities260 (2)— 18 (11)— — 20 (76)209 (2)
Non-U.S. sovereign debt414 4 (26)16 — — (9)— — 399 4 
Mortgage trading loans, MBS and ABS1,498 (43)— 97 (89)— (61)180 (8)1,574 (41)
Total trading account assets3,936 (43)(26)220 (143)— (188)439 (379)3,816 (59)
Net derivative assets (liabilities) (4)
(2,884)564 — 124 (168)— 23 173 (157)(2,325)512 
AFS debt securities:       
Non-agency residential MBS205 (1)(2)— — — (12)208 — 398 (4)
Non-U.S. and other taxable securities85 (3)(1)— — — 2 — — 83 — 
Tax-exempt securities51 2 — — — — — — — 53 2 
Total AFS debt securities341 (2)(3)— — — (10)208 — 534 (2)
Other debt securities carried at fair value – Non-agency residential MBS
281 (2)— — — — (9)26 — 296 (2)
Loans and leases (5)
857 (59)— — — — (67)— (13)718 (59)
Loans held-for-sale (5)
263 13 (7)94 (1)— (22)— — 340 10 
Other assets (6,7)
1,775 15 (6)1 1 51 (95)2 — 1,744 49 
Trading account liabilities – Corporate securities
   and other
(17)6 — — — — — — — (11)(1)
Long-term debt (5)
(1,060)(65)2 — — (9)30 (25)1 (1,126)(65)
(1)Assets (liabilities). For assets, increase (decrease) to Level 3 and for liabilities, (increase) decrease to Level 3.
(2)Includes gains (losses) reported in earnings in the following income statement line items: Trading account assets/liabilities - predominantly market making and similar activities; Net derivative assets (liabilities) - market making and similar activities and other income; AFS debt securities - other income; Other debt securities carried at fair value - other income; Loans and leases - other income; Loans held-for-sale - other income; Other assets - market making and similar activities and other income related to MSRs; Short-term borrowings - market making and similar activities; Accrued expenses and other liabilities - other income; Long-term debt - market making and similar activities.
(3)Includes unrealized gains (losses) in OCI on AFS debt securities, foreign currency translation adjustments and the impact of changes in the Corporation’s credit spreads on long-term debt accounted for under the fair value option.  Amounts include net unrealized losses of $60 million and $38 million related to financial instruments still held at September 30, 2022 and 2021.
(4)Net derivative assets (liabilities) include derivative assets of $3.3 billion and $3.8 billion and derivative liabilities of $5.5 billion and $6.2 billion at September 30, 2022 and 2021.
(5)Amounts represent instruments that are accounted for under the fair value option.
(6)Issuances represent MSRs recognized following securitizations or whole-loan sales.
(7)Settlements primarily represent the net change in fair value of the MSR asset due to the recognition of modeled cash flows and the passage of time.
89 Bank of America


Level 3 – Fair Value Measurements (1)
Balance
January 1
Total Realized/Unrealized Gains (Losses) in Net
Income (2)
Gains
(Losses)
in OCI (3)
GrossGross
Transfers
into
Level 3 		Gross
Transfers
out of
Level 3 		Balance
September 30
Change in Unrealized Gains (Losses) in Net Income Related to Financial Instruments Still Held (2)
(Dollars in millions)
PurchasesSalesIssuancesSettlements
Nine Months Ended September 30, 2022
Trading account assets:       
Corporate securities, trading loans and other
$2,110 $(97)$(2)$943 $(342)$— $(417)$849 $(695)$2,349 $(141)
Equity securities
190 2 — 41 (22)— (4)29 (65)171 (20)
Non-U.S. sovereign debt
396 58 8 18 (4)— (33)52 (10)485 55 
Mortgage trading loans, MBS and ABS1,527 (235)— 373 (389)— (100)429 (142)1,463 (124)
Total trading account assets4,223 (272)6 1,375 (757)— (554)1,359 (912)4,468 (230)
Net derivative assets (liabilities) (4)
(2,662)1,076 — 222 (589)— 393 (241)(416)(2,217)701 
AFS debt securities:          
Non-agency residential MBS316 1 (33)— (8)— (71)74 (13)266 1 
Non-U.S. and other taxable securities71 5 (12)126 — — (14)311 (70)417 1 
Tax-exempt securities52 — — — — — — — — 52 (1)
Total AFS debt securities439 6 (45)126 (8)— (85)385 (83)735 1 
Other debt securities carried at fair value – Non-agency residential MBS
242 (42)— — — — (77)— (23)100 (7)
Loans and leases (5)
748 (42)— — (154)— (106)— (249)197 (20)
Loans held-for-sale (5)
317 (3)3 170 (6)— (217)8 — 272 (11)
Other assets (6,7)
1,572 296 (25)— (1)163 (201)4 (3)1,805 152 
Trading account liabilities – Corporate securities
   and other
(11)— — — — — (2)— — (13)— 
Short-term borrowings (5)
— 1 — — (4)— — (3)— (6)1 
Accrued expenses and other liabilities (5)
— (56)— (7)— — — — — (63)(33)
Long-term debt (5)
(1,075)(96)67 — 14 (1)35 (19)282 (793)(102)
Nine Months Ended September 30, 2021
Trading account assets:     
Corporate securities, trading loans and other
$1,359 $23 $— $515 $(300)$— $(251)$697 $(409)$1,634 $(42)
Equity securities227 20 — 71 (60)— — 98 (147)209 (17)
Non-U.S. sovereign debt354 24 (14)18 — — (9)26 — 399 27 
Mortgage trading loans, MBS and ABS1,440 (4)— 344 (584)1 (125)624 (122)1,574 (65)
Total trading account assets3,380 63 (14)948 (944)1 (385)1,445 (678)3,816 (97)
Net derivative assets (liabilities) (4)
(3,468)855 — 473 (517)— 206 (18)144 (2,325)579 
AFS debt securities:       
Non-agency residential MBS378 (16)(96)— — — (37)244 (75)398 (7)
Non-U.S. and other taxable securities89 (4)(6)8 — — (4)— — 83 — 
Tax-exempt securities176 19 — — — — — — (142)53 18 
Total AFS debt securities643 (1)(102)8 — — (41)244 (217)534 11 
Other debt securities carried at fair value – Non-agency residential MBS
267 — — — — — (29)58 — 296 — 
Loans and leases (5)
717 45 — — — 70 (147)46 (13)718 52 
Loans held-for-sale (5)
236 17 (4)132 (1)— (62)26 (4)340 40 
Other assets (6,7)
1,970 36 2 56 (144)115 (300)9 — 1,744 92 
Trading account liabilities – Corporate securities
   and other
(16)6 — — — (1)— — — (11)— 
Long-term debt (5)
(1,164)(83)4 2 — (11)67 (57)116 (1,126)(54)
(1)Assets (liabilities). For assets, increase (decrease) to Level 3 and for liabilities, (increase) decrease to Level 3.
(2)Includes gains (losses) reported in earnings in the following income statement line items: Trading account assets/liabilities - predominantly market making and similar activities; Net derivative assets (liabilities) - market making and similar activities and other income; AFS debt securities - other income; Other debt securities carried at fair value - other income; Loans and leases - other income; Loans held-for-sale - other income; Other assets - market making and similar activities and other income related to MSRs; Short-term borrowings - market making and similar activities; Accrued expenses and other liabilities - market making and similar activities and other income; Long-term debt - market making and similar activities.
(3)Includes unrealized gains (losses) in OCI on AFS debt securities, foreign currency translation adjustments and the impact of changes in the Corporation’s credit spreads on long-term debt accounted for under the fair value option. Amounts include net unrealized gains (losses) of $2 million and $(45) million related to financial instruments still held at September 30, 2022 and 2021.
(4)Net derivative assets (liabilities) include derivative assets of $3.3 billion and $3.8 billion and derivative liabilities of $5.5 billion and $6.2 billion at September 30, 2022 and 2021.
(5)Amounts represent instruments that are accounted for under the fair value option.
(6)Issuances represent MSRs recognized following securitizations or whole-loan sales.
(7)Settlements primarily represent the net change in fair value of the MSR asset due to the recognition of modeled cash flows and the passage of time.




Bank of America 90

The following tables present information about significant unobservable inputs related to the Corporation’s material categories of Level 3 financial assets and liabilities at September 30, 2022 and December 31, 2021.
Quantitative Information about Level 3 Fair Value Measurements at September 30, 2022
(Dollars in millions)Inputs
Financial InstrumentFair
Value		Valuation
Technique		Significant Unobservable
Inputs		Ranges of
Inputs
Weighted Average (1)
Loans and Securities (2)
Instruments backed by residential real estate assets$787 Discounted cash flow, Market comparables Yield
0% to 25%
9 %
Trading account assets – Mortgage trading loans, MBS and ABS276 Prepayment speed
0% to 34% CPR
13% CPR
Loans and leases145 Default rate
0% to 3% CDR
1% CDR
AFS debt securities – Non-agency residential266 Price
$0 to $113
$28
Other debt securities carried at fair value – Non-agency residential100 Loss severity
0% to 100%
23 %
Instruments backed by commercial real estate assets$346 Discounted cash
flow		Yield
0% to 25%
12 %
Trading account assets – Corporate securities, trading loans and other282 Price
$0 to $101
$75
Trading account assets – Mortgage trading loans, MBS and ABS64 
Commercial loans, debt securities and other$4,468 Discounted cash flow, Market comparablesYield
5% to 69%
16 %
Trading account assets – Corporate securities, trading loans and other
2,067 Prepayment speed
10% to 20%
17 %
Trading account assets – Non-U.S. sovereign debt485 Default rate
3% to 4%
4 %
Trading account assets – Mortgage trading loans, MBS and ABS1,123 Loss severity
35% to 40%
37 %
AFS debt securities – Tax-exempt securities52 Price
$0 to $158
$76
AFS debt securities – Non-U.S. and other taxable securities417 
Loans and leases52 
Loans held-for-sale272 
Other assets, primarily auction rate securities$780 Discounted cash flow, Market comparablesPrice
$10 to $98
$95

Discount rate11 %n/a
MSRs$1,025 Discounted cash
flow
Weighted-average life, fixed rate (5)
0 to 14 years
6 years
Weighted-average life, variable rate (5)
0 to 11 years
3 years
Option-adjusted spread, fixed rate
7% to 14%
9 %
Option-adjusted spread, variable rate
9% to 15%
12 %
Structured liabilities
Long-term debt $(793)
Discounted cash flow, Market comparables, Industry standard derivative pricing (3)
Yield
20% to 69%
22 %
Equity correlation
0% to 92%
59 %
Price
$0 to $127
$91
Natural gas forward price
$3/MMBtu to $9/MMBtu
$5 /MMBtu
Net derivative assets (liabilities)
Credit derivatives$(33)Discounted cash flow, Stochastic recovery correlation modelCredit spreads
2 to 94 bps
28 bps
Upfront points
0 to 100 points
 78 points
Prepayment speed
15% CPR
n/a
Default rate
2% CDR
n/a
Credit correlation
20% to 55%
38 %
Price
$0 to $151
$61
Equity derivatives$(1,151)
Industry standard derivative pricing (3)
Equity correlation
0% to 99%
71 %
Long-dated equity volatilities
5% to 90%
46 %
Commodity derivatives$(380)
Discounted cash flow, Industry standard derivative pricing (3)
Natural gas forward price
$3/MMBtu to $9/MMBtu
$5 /MMBtu
Power forward price
$17 to $197
$50
Interest rate derivatives$(653)
Industry standard derivative pricing (4)
Correlation (IR/IR)
(35)% to 92%
67 %
Correlation (FX/IR)
11% to 58%
42 %
Long-dated inflation rates
 (12)% to 51%
1 %
Long-dated inflation volatilities
3% to 7%
5 %
Interest rate volatilities
0% to 2%
1 %
Total net derivative assets (liabilities)$(2,217)
(1)For loans and securities, structured liabilities and net derivative assets (liabilities), the weighted average is calculated based upon the absolute fair value of the instruments.
(2)The categories are aggregated based upon product type which differs from financial statement classification. The following is a reconciliation to the line items in the table on page 87: Trading account assets – Corporate securities, trading loans and other of $2.3 billion, Trading account assets – Non-U.S. sovereign debt of $485 million, Trading account assets – Mortgage trading loans, MBS and ABS of $1.5 billion, AFS debt securities of $735 million, Other debt securities carried at fair value - Non-agency residential of $100 million, Other assets, including MSRs, of $1.8 billion, Loans and leases of $197 million and LHFS of $272 million.
(3)Includes models such as Monte Carlo simulation and Black-Scholes.
(4)Includes models such as Monte Carlo simulation, Black-Scholes and other methods that model the joint dynamics of interest, inflation and foreign exchange rates.
(5)The weighted-average life is a product of changes in market rates of interest, prepayment rates and other model and cash flow assumptions.
CPR = Constant Prepayment Rate
CDR = Constant Default Rate
MMBtu = Million British thermal units
IR = Interest Rate
FX = Foreign Exchange
n/a = not applicable
91 Bank of America


Quantitative Information about Level 3 Fair Value Measurements at December 31, 2021
(Dollars in millions)Inputs
Financial InstrumentFair
Value		Valuation
Technique		Significant Unobservable
Inputs		Ranges of
Inputs
Weighted Average (1)
Loans and Securities (2)
Instruments backed by residential real estate assets$1,269 Discounted cash
flow, Market comparables		Yield
0% to 25%
6 %
Trading account assets – Mortgage trading loans, MBS and ABS338 
Prepayment speed
1% to 40% CPR
19% CPR
Loans and leases373 Default rate
0% to 3% CDR
1% CDR
AFS debt securities - Non-agency residential316 Price
$0 to $168
$92
Other debt securities carried at fair value - Non-agency residential242 Loss severity
0% to 43%
13 %
Instruments backed by commercial real estate assets$298 Discounted cash
flow		Yield
0% to 25%
4 %
Trading account assets – Corporate securities, trading loans and other138 Price
$0 to $101
$57
Trading account assets – Mortgage trading loans, MBS and ABS77 
AFS debt securities – Non-U.S. and other taxable securities71 
Loans held-for-sale12 
Commercial loans, debt securities and other$4,212 Discounted cash flow, Market comparablesYield
 0% to 19%
10 %
Trading account assets – Corporate securities, trading loans and other
1,972 
Prepayment speed
10% to 20%
16 %
Trading account assets – Non-U.S. sovereign debt396 Default rate
3% to 4%
4 %
Trading account assets – Mortgage trading loans, MBS and ABS1,112 Loss severity
35% to 40%
37 %
AFS debt securities – Tax-exempt securities52 Price
 $0 to $189
$73
Loans and leases375 Long-dated equity volatilities
45%
n/a
Loans held-for-sale305 
Other assets, primarily auction rate securities$754 Discounted cash flow, Market comparables
Price
$10 to $96
$91

Discount rate
9%
n/a
MSRs$818 Discounted cash
flow
Weighted-average life, fixed rate (5)
0 to 14 years
4 years
Weighted-average life, variable rate (5)
0 to 10 years
3 years
Option-adjusted spread, fixed rate
7% to 14%
9 %
Option-adjusted spread, variable rate
9% to 15%
12 %
Structured liabilities
Long-term debt $(1,075)
Discounted cash flow, Market comparables, Industry standard derivative pricing (3)
Yield
 0% to 19%
18 %
Equity correlation
 3% to 100%
80 %
Long-dated equity volatilities
5% to 78%
36 %
Price
$0 to $125
$82
Natural gas forward price
$2/MMBtu to $8/MMBtu
$4/MMBtu
Net derivative assets (liabilities)
Credit derivatives
$(104)Discounted cash flow, Stochastic recovery correlation modelCredit spreads
7 to 155 bps
61 bps
Upfront points
16 to 100 points
 68 points
Prepayment speed
15% CPR
n/a
Default rate
2% CDR
n/a
Credit correlation
20% to 60%
55 %
Price
$0 to $120
$53
Equity derivatives
$(1,710)
Industry standard derivative pricing (3)
Equity correlation
3% to 100%
80 %
Long-dated equity volatilities
5% to 78%
36 %
Commodity derivatives
$(976)
Discounted cash flow, Industry standard derivative pricing (3)
Natural gas forward price
$2/MMBtu to $8/MMBtu
$4/MMBtu
Correlation
65% to 85%
76 %
Power forward price
$11 to $103
$32
Volatilities
41% to 69%
63 %
Interest rate derivatives
$128 
Industry standard derivative pricing (4)
Correlation (IR/IR)
(1)% to 90%
54 %
Correlation (FX/IR)
(1)% to 58%
44 %
Long-dated inflation rates
G(10)% to 11%
3 %
Long-dated inflation volatilities
0% to 2%
2 %
Interest rates volatilities
0% to 2%
1 %
Total net derivative assets (liabilities)$(2,662)
(1)For loans and securities, structured liabilities and net derivative assets (liabilities), the weighted average is calculated based upon the absolute fair value of the instruments.
(2)The categories are aggregated based upon product type which differs from financial statement classification. The following is a reconciliation to the line items in the table on page 88: Trading account assets – Corporate securities, trading loans and other of $2.1 billion, Trading account assets – Non-U.S. sovereign debt of $396 million, Trading account assets – Mortgage trading loans, MBS and ABS of $1.5 billion, AFS debt securities of $439 million, Other debt securities carried at fair value - Non-agency residential of $242 million, Other assets, including MSRs, of $1.6 billion, Loans and leases of $748 million and LHFS of $317 million.
(3)Includes models such as Monte Carlo simulation and Black-Scholes.
(4)Includes models such as Monte Carlo simulation, Black-Scholes and other methods that model the joint dynamics of interest, inflation and foreign exchange rates.
(5)The weighted-average life is a product of changes in market rates of interest, prepayment rates and other model and cash flow assumptions.
CPR = Constant Prepayment Rate
CDR = Constant Default Rate
MMBtu = Million British thermal units
IR = Interest Rate
FX = Foreign Exchange
n/a = not applicable
Uncertainty of Fair Value Measurements from Unobservable Inputs
For information on the types of instruments, valuation approaches and the impact of changes in unobservable inputs used in Level 3 measurements, see Note 20 – Fair Value Measurements to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K.
Bank of America 92

Nonrecurring Fair Value
The Corporation holds certain assets that are measured at fair value only in certain situations (e.g., the impairment of an asset), and these measurements are referred to herein as nonrecurring. The amounts below represent assets still held as of the reporting date for which a nonrecurring fair value adjustment was recorded during the three and nine months ended September 30, 2022 and 2021.
Assets Measured at Fair Value on a Nonrecurring Basis
September 30, 2022Three Months Ended September 30, 2022Nine Months Ended September 30, 2022
(Dollars in millions)Level 2Level 3Gains (Losses)
Assets  
Loans held-for-sale$1,752 $398 $119 $87 
Loans and leases (1)
— 152 (13)(44)
Foreclosed properties (2, 3)
— 6 (2)(3)
Other assets80 48 — (40)
 September 30, 2021Three Months Ended September 30, 2021Nine Months Ended September 30, 2021
Assets  
Loans held-for-sale$124 $20 $(2)$4 
Loans and leases (1)
— 182 (16)(47)
Foreclosed properties (2, 3)
— 17 (3)(4)
Other assets354 2,101 (35)(494)
(1)Includes $6 million and $17 million of losses on loans that were written down to a collateral value of zero during the three and nine months ended September 30, 2022 compared to losses of $7 million and $18 million for the same periods in 2021.
(2)Amounts are included in other assets on the Consolidated Balance Sheet and represent the carrying value of foreclosed properties that were written down subsequent to their initial classification as foreclosed properties. Losses on foreclosed properties include losses recorded during the first 90 days after transfer of a loan to foreclosed properties.
(3)Excludes $75 million and $55 million of properties acquired upon foreclosure of certain government-guaranteed loans (principally FHA-insured loans) at September 30, 2022 and 2021.
The table below presents information about significant unobservable inputs utilized in the Corporation's nonrecurring Level 3 fair value measurements during the nine months ended September 30, 2022 and the year ended December 31, 2021.
Quantitative Information about Nonrecurring Level 3 Fair Value Measurements
Inputs
Financial InstrumentFair ValueValuation
Technique		Significant Unobservable
Inputs		Ranges of
Inputs
Weighted
Average (1)
(Dollars in millions)Nine Months Ended September 30, 2022
Loans held-for-sale$398 Market comparablesPrice
$88 to $100
$91
Loans and leases (2)
152 Market comparablesOREO discount
10% to 66%
26 %
Costs to sell
8% to 24%
9 %
Other assets (3)
48 Discounted cash flowDiscount rate7 %n/a
Year Ended December 31, 2021
Loans and leases (2)
$213 Market comparablesOREO discount
13% to 59%
24 %
Costs to sell
8% to 26%
9 %
Other assets (4)
1,875 Discounted cash flowDiscount rate
7%
n/a
166Market comparablesEstimated appraisal valuen/an/a
(1)The weighted average is calculated based upon the fair value of the loans.
(2)Represents residential mortgages where the loan has been written down to the fair value of the underlying collateral.
(3)Represents the fair value of certain impaired renewable energy investments.
(4)Represents the fair value of certain impaired renewable energy investments and impaired assets related to the Corporation’s real estate rationalization.
n/a = not applicable
NOTE 15 Fair Value Option
The Corporation elects to account for certain financial instruments under the fair value option. For more information on the primary financial instruments for which the fair value option elections have been made, see Note 21 – Fair Value Option to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K. The following tables provide information about the fair value carrying amount and the
contractual principal outstanding of assets and liabilities accounted for under the fair value option at September 30, 2022 and December 31, 2021, and information about where changes in the fair value of assets and liabilities accounted for under the fair value option are included in the Consolidated Statement of Income for the three and nine months ended September 30, 2022 and 2021.
93 Bank of America


Fair Value Option Elections
September 30, 2022December 31, 2021
(Dollars in millions)
Fair Value
 Carrying
 Amount		Contractual
 Principal
 Outstanding		Fair Value
Carrying
Amount Less
 Unpaid Principal		Fair Value
Carrying
Amount		Contractual
 Principal
 Outstanding		Fair Value
Carrying
  Amount Less
 Unpaid Principal
Federal funds sold and securities borrowed or purchased under agreements to resell
$165,521 $165,673 $(152)$150,665 $150,677 $(12)
Loans reported as trading account assets (1)
10,100 17,358 (7,258)10,864 18,895 (8,031)
Trading inventory – other16,910 n/an/a21,986 n/an/a
Consumer and commercial loans4,851 4,988 (137)7,819 7,888 (69)
Loans held-for-sale (1)
2,395 3,100 (705)4,455 5,343 (888)
Other assets560 n/an/a544 n/an/a
Long-term deposits453 509 (56)408 401 7 
Federal funds purchased and securities loaned or sold under agreements to repurchase
165,390 165,228 162 139,641 139,682 (41)
Short-term borrowings1,993 1,797 196 4,279 4,127 152 
Unfunded loan commitments200 n/an/a97 n/an/a
Long-term debt27,531 33,867 (6,336)29,708 30,903 (1,195)
(1)A significant portion of the loans reported as trading account assets and LHFS are distressed loans that were purchased at a deep discount to par, and the remainder are loans with a fair value near contractual principal outstanding.
n/a = not applicable
Gains (Losses) Related to Assets and Liabilities Accounted for Under the Fair Value Option
Three Months Ended September 30
20222021
(Dollars in millions)Market making
 and similar
 activities		Other
Income		TotalMarket making
 and similar
 activities		Other
Income		Total
Loans reported as trading account assets$(62)$— $(62)$5 $— $5 
Trading inventory – other (1)
(2,141)— (2,141)(1,155)— (1,155)
Consumer and commercial loans(16)25 9 (56)(11)(67)
Loans held-for-sale (2)
— (86)(86)— 53 53 
Short-term borrowings81 — 81 548 — 548 
Unfunded loan commitments— 27 27 — 8 8 
Long-term debt (3)
1,562 (16)1,546 225 (9)216 
Other (4)
12 (1)11 7 — 7 
Total$(564)$(51)$(615)$(426)$41 $(385)
Nine Months Ended September 30
20222021
Loans reported as trading account assets$(211)$— $(211)$288 $— $288 
Trading inventory – other (1)
(4,269)— (4,269)419 — 419 
Consumer and commercial loans(86)(53)(139)58 34 92 
Loans held-for-sale (2)
— (308)(308)— 64 64 
Short-term borrowings643 — 643 1,022 — 1,022 
Unfunded loan commitments— (61)(61)— 2 2 
Long-term debt (3)
5,049 (36)5,013 (436)(33)(469)
Other (4)
6 23 29 18 (24)(6)
Total$1,132 $(435)$697 $1,369 $43 $1,412 
(1)    The gains (losses) in market making and similar activities are primarily offset by (losses) gains on trading liabilities that hedge these assets.
(2)    Includes the value of IRLCs on funded loans, including those sold during the period.
(3)    The net gains (losses) in market making and similar activities relate to the embedded derivatives in structured liabilities and are typically offset by (losses) gains on derivatives and securities that hedge these liabilities. For the cumulative impact of changes in the Corporation’s own credit spreads and the amount recognized in accumulated OCI, see Note 12 – Accumulated Other Comprehensive Income (Loss). For more information on how the Corporation’s own credit spread is determined, see Note 20 – Fair Value Measurements to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K.
(4)    Includes gains (losses) on federal funds sold and securities borrowed or purchased under agreements to resell, other assets, long-term deposits and federal funds purchased and securities loaned or sold under agreements to repurchase.

Gains (Losses) Related to Borrower-specific Credit Risk for Assets and Liabilities Accounted for Under the Fair Value Option
Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)2022202120222021
Loans reported as trading account assets$(123)$(21)$(434)$166 
Consumer and commercial loans19 (22)(72)10 
Loans held-for-sale(3)37 (14)35 
Unfunded loan commitments27 8 (61)2 
Bank of America 94

NOTE 16 Fair Value of Financial Instruments
The following disclosures include financial instruments that are not carried at fair value or only a portion of the ending balance is carried at fair value on the Consolidated Balance Sheet. Certain loans, deposits, long-term debt, unfunded lending commitments and other financial instruments are accounted for under the fair value option. For more information, see Note 21 – Fair Value Option to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K.
Fair Value of Financial Instruments
The carrying values and fair values by fair value hierarchy of certain financial instruments where only a portion of the ending balance was carried at fair value at September 30, 2022 and December 31, 2021 are presented in the following table.
Fair Value of Financial Instruments
Fair Value
Carrying ValueLevel 2Level 3Total
(Dollars in millions)September 30, 2022
Financial assets
Loans
$1,002,181 $49,561 $930,927 $980,488 
Loans held-for-sale7,629 5,158 2,587 7,745 
Financial liabilities
Deposits (1)
1,938,097 1,937,724 — 1,937,724 
Long-term debt269,122 261,060 1,044 262,104 
Commercial unfunded lending commitments (2)
1,716 137 7,796 7,933 
December 31, 2021
Financial assets
Loans
$946,142 $53,544 $919,980 $973,524 
Loans held-for-sale15,635 15,016 627 15,643 
Financial liabilities
Deposits (1)
2,064,446 2,064,438 — 2,064,438 
Long-term debt280,117 286,802 1,288 288,090 
Commercial unfunded lending commitments (2)
1,554 97 6,384 6,481 
(1)    Includes demand deposits of $930.3 billion and $1.0 trillion with no stated maturities at September 30, 2022 and December 31, 2021.
(2)    The carrying value of commercial unfunded lending commitments is included in accrued expenses and other liabilities on the Consolidated Balance Sheet. The Corporation does not estimate the fair value of consumer unfunded lending commitments because, in many instances, the Corporation can reduce or cancel these commitments by providing notice to the borrower. For more information on commitments, see Note 10 – Commitments and Contingencies.
NOTE 17 Business Segment Information
The Corporation reports its results of operations through the following four business segments: Consumer Banking, Global Wealth & Investment Management, Global Banking and Global Markets, with the remaining operations recorded in All Other. For more information, see Note 23 – Business Segment Information to the Consolidated Financial Statements of the Corporation’s
2021 Annual Report on Form 10-K. The following tables present net income and the components thereto (with net interest income on an FTE basis for the business segments, All Other and the total Corporation) for the three and nine months ended September 30, 2022 and 2021, and total assets at September 30, 2022 and 2021 for each business segment, as well as All Other.
95 Bank of America


Results of Business Segments and All Other
At and for the three months ended September 30
Total Corporation (1)
Consumer BankingGlobal Wealth & Investment Management
(Dollars in millions)202220212022202120222021
Net interest income$13,871 $11,195 $7,784 $6,493 $1,981 $1,452 
Noninterest income10,737 11,672 2,120 2,345 3,448 3,858 
Total revenue, net of interest expense24,608 22,867 9,904 8,838 5,429 5,310 
Provision for credit losses898 (624)738 247 37 (58)
Noninterest expense15,303 14,440 5,097 4,558 3,816 3,744 
Income before income taxes8,407 9,051 4,069 4,033 1,576 1,624 
Income tax expense1,325 1,360 997 988 386 398 
Net income$7,082 $7,691 $3,072 $3,045 $1,190 $1,226 
Period-end total assets$3,072,953 $3,085,446 $1,149,918 $1,091,431 $370,790 $393,708 
 Global BankingGlobal MarketsAll Other
 202220212022202120222021
Net interest income$3,326 $2,185 $743 $1,000 $37 $65 
Noninterest income2,265 3,060 3,740 3,519 (836)(1,110)
Total revenue, net of interest expense5,591 5,245 4,483 4,519 (799)(1,045)
Provision for credit losses170 (781)11 16 (58)(48)
Noninterest expense2,651 2,534 3,023 3,252 716 352 
Income before income taxes2,770 3,492 1,449 1,251 (1,457)(1,349)
Income tax expense734 943 384 325 (1,176)(1,294)
Net income$2,036 $2,549 $1,065 $926 $(281)$(55)
Period-end total assets$575,442 $623,640 $848,752 $776,929 $128,051 $199,738 
(1)There were no material intersegment revenues.

Results of Business Segments and All Other
At and for the nine months ended September 30
Total Corporation (1)
Consumer BankingGlobal Wealth & Investment Management
(Dollars in millions)202220212022202120222021
Net interest income$38,096 $31,846 $21,551 $18,386 $5,451 $4,137 
Noninterest income32,637 35,529 6,302 6,707 10,887 11,209 
Total revenue, net of interest expense70,733 67,375 27,853 25,093 16,338 15,346 
Provision for credit losses1,451 (4,105)1,036 (1,067)29 (185)
Noninterest expense45,895 45,000 14,977 14,548 11,706 11,425 
Income before income taxes23,387 26,480 11,840 11,612 4,603 4,106 
Income tax expense2,991 1,515 2,901 2,845 1,128 1,006 
Net income$20,396 $24,965 $8,939 $8,767 $3,475 $3,100 
Period-end total assets$3,072,953 $3,085,446 $1,149,918 $1,091,431 $370,790 $393,708 
 Global BankingGlobal MarketsAll Other
 202220212022202120222021
Net interest income$8,304 $6,150 $2,717 $2,980 $73 $193 
Noninterest income7,487 8,817 11,560 12,457 (3,599)(3,661)
Total revenue, net of interest expense15,791 14,967 14,277 15,437 (3,526)(3,468)
Provision for credit losses492 (2,738)24 33 (130)(148)
Noninterest expense8,133 7,915 9,249 10,150 1,830 962 
Income before income taxes7,166 9,790 5,004 5,254 (5,226)(4,282)
Income tax expense1,899 2,643 1,326 1,366 (4,263)(6,345)
Net income$5,267 $7,147 $3,678 $3,888 $(963)$2,063 
Period-end total assets$575,442 $623,640 $848,752 $776,929 $128,051 $199,738 
(1) There were no material intersegment revenues.
Bank of America 96

The tables below present noninterest income and the associated components for the three and nine months ended September 30, 2022 and 2021 for each business segment, All Other and the total Corporation. For more information, see Note 2 – Net Interest Income and Noninterest Income.
Noninterest Income by Business Segment and All Other
Total CorporationConsumer BankingGlobal Wealth &
Investment Management
Three Months Ended September 30
(Dollars in millions)202220212022202120222021
Fees and commissions:
Card income
Interchange fees $1,060 $1,154 $834 $905 $4 $11 
Other card income 513 429 497 412 12 12 
Total card income1,573 1,583 1,331 1,317 16 23 
Service charges
Deposit-related fees1,162 1,619 597 935 18 18 
Lending-related fees304 309 — — — — 
Total service charges1,466 1,928 597 935 18 18 
Investment and brokerage services
Asset management fees2,920 3,276 47 49 2,874 3,228 
Brokerage fees875 960 26 32 381 454 
Total investment and brokerage services
3,795 4,236 73 81 3,255 3,682 
Investment banking fees
Underwriting income452 1,168 — — 47 83 
Syndication fees283 346 — — — — 
Financial advisory services432 654 — — — — 
Total investment banking fees1,167 2,168 — — 47 83 
Total fees and commissions 8,001 9,915 2,001 2,333 3,336 3,806 
Market making and similar activities3,068 2,005 3 — 30 9 
Other income (loss)(332)(248)116 12 82 43 
Total noninterest income$10,737 $11,672 $2,120 $2,345 $3,448 $3,858 
Global BankingGlobal Markets
All Other (1)
Three Months Ended September 30
202220212022202120222021
Fees and commissions:
Card income
Interchange fees $204 $180 $18 $59 $— $(1)
Other card income 2 5 — — 2 — 
Total card income206 185 18 59 2 (1)
Service charges
Deposit-related fees524 633 24 30 (1)3 
Lending-related fees247 256 57 53 — — 
Total service charges771 889 81 83 (1)3 
Investment and brokerage services
Asset management fees— — — — (1)(1)
Brokerage fees11 9 457 471 — (6)
Total investment and brokerage services
11 9 457 471 (1)(7)
Investment banking fees
Underwriting income181 512 260 629 (36)(56)
Syndication fees148 177 135 170 — (1)
Financial advisory services397 608 35 45 — 1 
Total investment banking fees726 1,297 430 844 (36)(56)
Total fees and commissions 1,714 2,380 986 1,457 (36)(61)
Market making and similar activities52 40 2,874 2,014 109 (58)
Other income (loss)499 640 (120)48 (909)(991)
Total noninterest income$2,265 $3,060 $3,740 $3,519 $(836)$(1,110)
(1)All Other includes eliminations of intercompany transactions.

97 Bank of America


Noninterest Income by Business Segment and All Other
Total CorporationConsumer BankingGlobal Wealth &
Investment Management
Nine Months Ended September 30
(Dollars in millions)202220212022202120222021
Fees and commissions:
Card income
Interchange fees $3,067 $3,431 $2,430 $2,687 $15 $33 
Other card income 1,464 1,173 1,406 1,131 36 29 
Total card income4,531 4,604 3,836 3,818 51 62 
Service charges
Deposit-related fees4,109 4,671 2,120 2,617 56 54 
Lending-related fees907 923 — — — — 
Total service charges5,016 5,594 2,120 2,617 56 54 
Investment and brokerage services
Asset management fees9,308 9,434 149 136 9,164 9,298 
Brokerage fees2,870 2,988 83 100 1,231 1,312 
Total investment and brokerage services
12,178 12,422 232 236 10,395 10,610 
Investment banking fees
Underwriting income1,559 4,028 — — 154 305 
Syndication fees896 1,047 — — — — 
Financial advisory services1,297 1,461 — — — — 
Total investment banking fees3,752 6,536 — — 154 305 
Total fees and commissions 25,477 29,156 6,188 6,671 10,656 11,031 
Market making and similar activities9,023 7,360 5 1 66 31 
Other income (loss)(1,863)(987)109 35 165 147 
Total noninterest income$32,637 $35,529 $6,302 $6,707 $10,887 $11,209 
Global BankingGlobal Markets
All Other (1)
Nine Months Ended September 30
202220212022202120222021
Fees and commissions:
Card income
Interchange fees $573 $503 $49 $208 $— $— 
Other card income 5 12 — — 17 1 
Total card income578 515 49 208 17 1 
Service charges
Deposit-related fees1,849 1,877 80 117 4 6 
Lending-related fees741 760 166 163 — — 
Total service charges2,590 2,637 246 280 4 6 
Investment and brokerage services
Asset management fees— — — — (5)— 
Brokerage fees36 90 1,520 1,504 — (18)
Total investment and brokerage services
36 90 1,520 1,504 (5)(18)
Investment banking fees
Underwriting income635 1,754 944 2,165 (174)(196)
Syndication fees466 547 430 500 — — 
Financial advisory services1,197 1,341 99 119 1 1 
Total investment banking fees2,298 3,642 1,473 2,784 (173)(195)
Total fees and commissions 5,502 6,884 3,288 4,776 (157)(206)
Market making and similar activities181 99 8,721 7,448 50 (219)
Other income (loss)1,804 1,834 (449)233 (3,492)(3,236)
Total noninterest income$7,487 $8,817 $11,560 $12,457 $(3,599)$(3,661)
(1)All Other includes eliminations of intercompany transactions.

Bank of America 98

Business Segment Reconciliations
Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)2022202120222021
Segments’ total revenue, net of interest expense$25,407 $23,912 $74,259 $70,843 
Adjustments (1):
    
Asset and liability management activities(13)3 (146)(41)
Liquidating businesses, eliminations and other(786)(1,048)(3,380)(3,427)
FTE basis adjustment(106)(101)(315)(322)
Consolidated revenue, net of interest expense$24,502 $22,766 $70,418 $67,053 
Segments’ total net income7,363 7,746 21,359 22,902 
Adjustments, net-of-tax (1):
  
Asset and liability management activities(24)10 (106)(20)
Liquidating businesses, eliminations and other(257)(65)(857)2,083 
Consolidated net income$7,082 $7,691 $20,396 $24,965 
September 30
20222021
Segments’ total assets$2,944,902 $2,885,708 
Adjustments (1):
Asset and liability management activities, including securities portfolio1,129,824 1,296,026 
Elimination of segment asset allocations to match liabilities(1,065,057)(1,162,175)
Other63,284 65,887 
Consolidated total assets$3,072,953 $3,085,446 
(1)Adjustments include consolidated income, expense and asset amounts not specifically allocated to individual business segments.
99 Bank of America


Glossary
Alt-A Mortgage – A type of U.S. mortgage that is considered riskier than A-paper, or “prime,” and less risky than “subprime,” the riskiest category. Typically, Alt-A mortgages are characterized by borrowers with less than full documentation, lower credit scores and higher LTVs.
Assets Under Management (AUM) – The total market value of assets under the investment advisory and/or discretion of GWIM which generate asset management fees based on a percentage of the assets’ market values. AUM reflects assets that are generally managed for institutional, high net worth and retail clients, and are distributed through various investment products including mutual funds, other commingled vehicles and separate accounts.
Banking Book – All on- and off-balance sheet financial instruments of the Corporation except for those positions that are held for trading purposes.
Brokerage and Other Assets – Non-discretionary client assets which are held in brokerage accounts or held for safekeeping.
Committed Credit Exposure – Any funded portion of a facility plus the unfunded portion of a facility on which the lender is legally bound to advance funds during a specified period under prescribed conditions.
Credit Derivatives – Contractual agreements that provide protection against a specified credit event on one or more referenced obligations.
Credit Valuation Adjustment (CVA) – A portfolio adjustment required to properly reflect the counterparty credit risk exposure as part of the fair value of derivative instruments.
Debit Valuation Adjustment (DVA) – A portfolio adjustment required to properly reflect the Corporation’s own credit risk exposure as part of the fair value of derivative instruments and/or structured liabilities.
Funding Valuation Adjustment (FVA) – A portfolio adjustment required to include funding costs on uncollateralized derivatives and derivatives where the Corporation is not permitted to use the collateral it receives.
Interest Rate Lock Commitment (IRLC) – Commitment with a loan applicant in which the loan terms are guaranteed for a designated period of time subject to credit approval.
Letter of Credit – A document issued on behalf of a customer to a third party promising to pay the third party upon presentation of specified documents. A letter of credit effectively substitutes the issuer’s credit for that of the customer.

Loan-to-value (LTV) – A commonly used credit quality metric. LTV is calculated as the outstanding carrying value of the loan divided by the estimated value of the property securing the loan.
Macro Products – Include currencies, interest rates and commodities products.
Margin Receivable – An extension of credit secured by eligible securities in certain brokerage accounts.
Matched Book – Repurchase and resale agreements or securities borrowed and loaned transactions where the overall asset and liability position is similar in size and/or maturity. Generally, these are entered into to accommodate customers where the Corporation earns the interest rate spread.
Mortgage Servicing Rights (MSR) – The right to service a mortgage loan when the underlying loan is sold or securitized. Servicing includes collections for principal, interest and escrow payments from borrowers and accounting for and remitting principal and interest payments to investors.
Nonperforming Loans and Leases – Includes loans and leases that have been placed on nonaccrual status, including nonaccruing loans whose contractual terms have been restructured in a manner that grants a concession to a borrower experiencing financial difficulties.
Prompt Corrective Action (PCA) – A framework established by the U.S. banking regulators requiring banks to maintain certain levels of regulatory capital ratios, comprised of five categories of capitalization: “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized” and “critically undercapitalized.” Insured depository institutions that fail to meet certain of these capital levels are subject to increasingly strict limits on their activities, including their ability to make capital distributions, pay management compensation, grow assets and take other actions.
Subprime Loans – Although a standard industry definition for subprime loans (including subprime mortgage loans) does not exist, the Corporation defines subprime loans as specific product offerings for higher risk borrowers.
Troubled Debt Restructurings (TDRs) – Loans whose contractual terms have been restructured in a manner that grants a concession to a borrower experiencing financial difficulties. Certain consumer loans for which a binding offer to restructure has been extended are also classified as TDRs.
Value-at-Risk (VaR) – VaR is a model that simulates the value of a portfolio under a range of hypothetical scenarios in order to generate a distribution of potential gains and losses. VaR represents the loss the portfolio is expected to experience with a given confidence level based on historical data. A VaR model is an effective tool in estimating ranges of potential gains and losses on our trading portfolios.


Bank of America 100

Key Metrics
Active Digital Banking Users – Mobile and/or online active users over the past 90 days.
Active Mobile Banking Users – Mobile active users over the past 90 days.
Book Value – Ending common shareholders’ equity divided by ending common shares outstanding.
Common Equity Ratio - Ending common shareholders’ equity divided by ending total assets.
Deposit Spread – Annualized net interest income divided by average deposits.
Dividend Payout Ratio – Common dividends declared divided by net income applicable to common shareholders.
Efficiency Ratio – Noninterest expense divided by total revenue, net of interest expense.
Gross Interest Yield – Effective annual percentage rate divided by average loans.

Net Interest Yield – Net interest income divided by average total interest-earning assets.
Operating Margin – Income before income taxes divided by total revenue, net of interest expense.
Return on Average Allocated Capital – Adjusted net income divided by allocated capital.
Return on Average Assets – Net income divided by total average assets.
Return on Average Common Shareholders’ Equity – Net income applicable to common shareholders divided by average common shareholders’ equity.
Return on Average Shareholders’ Equity – Net income divided by average shareholders’ equity.
Risk-adjusted Margin – Difference between total revenue, net of interest expense, and net credit losses divided by average loans.
101 Bank of America


Acronyms
ABSAsset-backed securities
AFSAvailable-for-sale
ALMAsset and liability management
ARRAlternative reference rates
AUMAssets under management
BANABank of America, National Association
BHCBank holding company
BofASBofA Securities, Inc.
BofASEBofA Securities Europe SA
bpsBasis points
CCARComprehensive Capital Analysis and Review
CDOCollateralized debt obligation
CDSCredit default swap
CECLCurrent expected credit losses
CET1Common equity tier 1
CFTCCommodity Futures Trading Commission
CLTVCombined loan-to-value
CVACredit valuation adjustment
DVADebit valuation adjustment
EPSEarnings per common share
ESGEnvironmental, social and governance
FCAFinancial Conduct Authority
FDICFederal Deposit Insurance Corporation
FHAFederal Housing Administration
FHLBFederal Home Loan Bank
FHLMCFreddie Mac
FICCFixed income, currencies and commodities
FICOFair Isaac Corporation (credit score)
FNMAFannie Mae
FTEFully taxable-equivalent
FVAFunding valuation adjustment
GAAP
Accounting principles generally accepted in the United States of America
GLS
Global Liquidity Sources
GNMAGovernment National Mortgage Association
GWIM
Global Wealth & Investment Management
HELOCHome equity line of credit
HQLAHigh Quality Liquid Assets
HTMHeld-to-maturity
IRLC
Interest rate lock commitment
ISDA
International Swaps and Derivatives Association, Inc.
LCRLiquidity Coverage Ratio
LHFSLoans held-for-sale
LIBORLondon Interbank Offered Rate
LTVLoan-to-value
MBSMortgage-backed securities
MD&A
Management’s Discussion and Analysis of Financial Condition and Results of Operations
MLI
Merrill Lynch International
MLPCCMerrill Lynch Professional Clearing Corp
MLPF&S
Merrill Lynch, Pierce, Fenner & Smith Incorporated
MSAMetropolitan Statistical Area
MSRMortgage servicing right
NSFRNet Stable Funding Ratio
OCCOffice of the Comptroller of the Currency
OCIOther comprehensive income
OREOOther real estate owned
PCAPrompt Corrective Action
PPPPaycheck Protection Program
RWARisk-weighted assets
SBASmall Business Administration
SBLCStandby letter of credit
SCBStress capital buffer
SECSecurities and Exchange Commission
SLRSupplementary leverage ratio
TDRTroubled debt restructurings
TLACTotal loss-absorbing capacity
VaRValue-at-Risk
VIEVariable interest entity
Bank of America 102

Part II. Other Information
Bank of America Corporation and Subsidiaries
Item 1. Legal Proceedings
See Litigation and Regulatory Matters in Note 10 – Commitments and Contingencies to the Consolidated Financial Statements, which is incorporated by reference in this Item 1, for litigation and regulatory disclosure that supplements the disclosure in Note 12 – Commitments and Contingencies to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K.
Item 1A. Risk Factors
There are no material changes from the risk factors set forth under Part 1, Item 1A. Risk Factors of the Corporation’s 2021 Annual Report on Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The table below presents share repurchase activity for the three months ended September 30, 2022. The primary source of funds for cash distributions by the Corporation to its shareholders is dividends received from its banking subsidiaries. Each of the banking subsidiaries is subject to various regulatory policies and requirements relating to the payment of dividends, including requirements to maintain capital above regulatory minimums. All of the Corporation’s preferred stock outstanding has preference over the Corporation’s common stock with respect to payment of dividends.
(Dollars in millions, except per share information; shares in thousands)
Total Common Shares Repurchased (1,2)
Weighted-Average Per Share Price
Total Shares
Purchased as
Part of Publicly
Announced Programs (2)
Remaining Buyback
Authority Amounts (3)
July 1 - 31, 20226 $32.67 — $16,412 
August 1 - 31, 20223,335 35.28 1,415 16,408 
September 1 - 30, 202211,776 34.14 11,773 16,373 
Three months ended September 30, 202215,117 34.39 13,188  
(1)Includes 2 million shares of the Corporation’s common stock acquired by the Corporation in connection with satisfaction of tax withholding obligations on vested restricted stock or restricted stock units and certain forfeitures and terminations of employment-related awards and for potential re-issuance to certain employees under equity incentive plans.
(2)On October 20, 2021, the Corporation announced its Board of Directors (Board) authorized the repurchase of up to $25 billion of common stock over time (October 2021 Authorization). The Board also authorized repurchases to offset shares awarded under equity-based compensation plans. This October 2021 Authorization replaced the April 15, 2021 authorization for repurchases of up to $25 billion of common stock. During the three months ended September 30, 2022, pursuant to the Board’s authorization, the Corporation repurchased 13 million shares, or $450 million, of its common stock, predominantly offsetting shares awarded under equity-based compensation plans. For more information, see Capital Management - CCAR and Capital Planning in the MD&A on page 23 and Note 11 – Shareholders’ Equity to the Consolidated Financial Statements.
(3)Remaining Buyback Authority Amounts represents the remaining buyback authority of the October 2021 Authorization. Excludes repurchases to offset shares awarded under equity-based compensation plans.
The Corporation did not have any unregistered sales of equity securities during the three months ended September 30, 2022.
Item 5. Other Information
Pursuant to Section 13(r) of the Securities Exchange Act of 1934, as amended (Exchange Act), an issuer is required to disclose in its annual or quarterly reports, as applicable, whether it or any of its affiliates knowingly engaged in certain activities, transactions or dealings relating to Iran or with individuals or entities designated pursuant to certain Executive Orders. Disclosure may be required even where the activities, transactions or dealings were conducted in compliance with applicable law. Except as set forth below, as of the date of this Quarterly Report on Form 10-Q, the Corporation is not aware of any other activity, transaction or dealing by any of its affiliates during the quarter ended September 30, 2022 that requires disclosure under Section 13(r) of the Exchange Act.
During the third quarter of 2022, Bank of America, National Association (BANA), a U.S. subsidiary of Bank of America Corporation, processed transactions pursuant to a specific license and a general license issued by the U.S. Department of
the Treasury’s Office of Foreign Assets Control (OFAC). First, pursuant to a specific license issued on April 21, 2022, BANA processed four authorized wire deposits totaling $883,806 on behalf of a U.S. client into its account at BANA. The wire deposits settled invoices owed to the U.S. client and were unblocked funds belonging to Jammal Trust Bank, which at the time of the deposits was designated pursuant to Executive Order 13224. Second, BANA processed one authorized payment pursuant to a general license issued by OFAC regarding the provision of legal services for or on behalf of persons designated pursuant to Executive Order 13324. BANA processed the payment, which totaled $178,901, for a U.S. client.
There was no measurable gross revenue or net profit to the Corporation relating to these transactions. The Corporation may in the future engage in similar transactions for its clients to the extent permitted by U.S. law.
103 Bank of America


Item 6. Exhibits
Incorporated by Reference
Exhibit No.DescriptionNotesFormExhibitFiling DateFile No.
3.110-Q3.14/29/221-6523
3.210-Q3.24/29/221-6523
10.11,2
2210-Q2210/29/211-6523
31.11
31.21
32.13
32.23
101.INSInline XBRL Instance Document4
101.SCHInline XBRL Taxonomy Extension Schema Document1
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document 1
101.LABInline XBRL Taxonomy Extension Label Linkbase Document1
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document1
101.DEFInline XBRL Taxonomy Extension Definitions Linkbase Document1
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
(1)Filed herewith.
(2)Exhibit is a management contract or compensatory plan or arrangement.
(3)Furnished herewith. This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section. Such exhibit shall not be deemed incorporated into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.
(4)The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.


Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
Bank of America Corporation
Registrant
 
Date:October 28, 2022 /s/ Rudolf A. Bless 
Rudolf A. Bless 
Chief Accounting Officer

Bank of America 104