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BANK OF AMERICA CORP /DE/ - Quarter Report: 2023 March (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 March 31, 2023
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 April 28, 2023, there were 7,969,152,819 shares of Bank of America Corporation Common Stock outstanding.


Bank of America Corporation and Subsidiaries
March 31, 2023
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
1 Bank of America


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, liquidity, provision for credit losses, expenses, efficiency ratio, capital measures, strategy, deposits, assets, 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 2022 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, macroeconomic, banking and regulatory environment on the Corporation’s assets, business, financial condition and results of operations; the impact of adverse developments affecting the U.S. or global banking industry, including bank failures and liquidity concerns, which could cause continued or worsening economic and market volatility, and regulatory responses thereto; 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
Bank of America 2

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 or continuation 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 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, “Bank of America,” “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 March 31, 2023, the Corporation had $3.2 trillion in assets and a headcount of approximately 217,000 employees.
As of March 31, 2023, we served clients through operations across the U.S., its territories and more than 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 15,000 ATMs, and leading digital banking platforms (www.bankofamerica.com) with approximately 45 million active users, including approximately 36 million active mobile users. We offer industry-leading support to approximately three million small business households. Our GWIM businesses, with client balances of $3.5 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
Capital Management
On April 26, 2023, the Corporation’s Board of Directors (the Board) declared a quarterly common stock dividend of $0.22 per share, payable on June 30, 2023 to shareholders of record as of June 2, 2023.
For more information on our capital resources, see Capital Management on page 17.
Financial Market Events
In March 2023, the global financial system experienced increased volatility due to the failure of certain financial institutions. At March 31, 2023, Bank of America’s direct exposure to these financial institutions was not significant.
To help deploy financial strength and liquidity into the larger banking system, Bank of America and certain other U.S. financial institutions made uninsured deposits totaling $30 billion into First Republic Bank. The amount of Bank of America’s uninsured deposit was $5 billion and is recorded in Time deposits placed and other short-term investments on the Consolidated Balance Sheet.
On May 1, 2023, the Federal Deposit Insurance Corporation (FDIC) announced that it was appointed as receiver of First Republic Bank and entered into a purchase and assumption agreement with JPMorgan Chase Bank, National Association (JPMorgan Chase Bank) to assume all of the deposits and substantially all of the assets of First Republic Bank. As a result, Bank of America has become a depositor of JPMorgan Chase Bank with regard to its $5 billion uninsured deposit originally deposited into First Republic Bank.
The potential impacts of rising interest rates and continued deposit outflows on global markets, financial institutions and macroeconomic conditions, generally, remain uncertain. Episodes of increased economic and market volatility may continue to occur and could worsen if there are additional instances of actual or threatened bank failures, which could adversely affect the Corporation’s businesses, results of operations and financial condition. For more information on the risks related to rising interest rates, declining asset values and liquidity, see the Market, Liquidity and Credit sections within Item 1A. Risk Factors of the Corporation’s 2022 Annual Report on Form 10-K.

3 Bank of America


U.S. Government Debt Ceiling
In response to the upcoming U.S. government’s deadline to raise the debt ceiling, the Corporation has implemented protocols and processes to prepare for the impacts that could begin in the period leading up to a potential breach of the U.S. government’s debt ceiling and increasing in severity if a default occurs. The Corporation is monitoring these potential events through regular routines. For more information on the risks related to a potential U.S. government debt ceiling breach, see the Market and Geopolitical sections within Item 1A. Risk Factors of the Corporation’s 2022 Annual Report on Form 10-K.
LIBOR and Other Benchmark Rates
The Corporation and the global financial markets continue to make progress with respect to the transition away from the London Interbank Offered Rate (LIBOR) and other Interbank Offered Rates (IBORs) to alternative reference rates (ARRs). As previously disclosed, the remaining U.S. dollar (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, although the Financial Conduct Authority (FCA) announced on April 3, 2023 that it will require LIBOR’s administrator, ICE Benchmark Administration Limited, to continue publication of the one-month, three-month and six-month USD LIBOR settings on a “synthetic” basis (calculated using the relevant CME Term SOFR Reference Rate plus the respective International Swaps and Derivatives Association (ISDA) fixed spread adjustment) for use in legacy contracts and that it intends for such publication to cease on September 30, 2024.
In April 2023, certain central counterparties (CCPs) completed processes to convert certain outstanding USD LIBOR-cleared derivatives to ARR positions, and the Corporation expects those CCPs will convert remaining USD LIBOR-cleared derivatives to ARR positions in the second quarter of 2023. In March 2023, the Corporation announced that after June 30, 2023, the relevant CME Term SOFR Reference Rate, plus the respective ISDA fixed spread adjustment, will be the replacement reference rate for certain outstanding floating rate and fixed-to-floating rate debt securities, preferred stock represented by depositary shares and trust preferred securities issued by the Corporation, BofA Finance LLC and certain other affiliated issuers (USD LIBOR Securities) that use USD LIBOR as the reference rate and are governed by New York and Delaware law. For more information on the Corporation’s replacement of relevant USD LIBOR rates of certain USD LIBOR Securities, see the Corporation’s Current Report on Form 8-K filed with the SEC on March 31, 2023. Additionally, as the Corporation continues to transition IBOR-based products to various ARRs, including the Secured Overnight Financing Rate (SOFR), it has increased the use of those ARRs in its baseline forecast of net interest income. For more information, see Interest Rate Risk Management for the Banking Book on page 40.
For more information on the expected replacement of LIBOR and other benchmark rates, including the Corporation’s efforts and overall progress with respect to LIBOR transition, see Executive Summary – Recent Developments – LIBOR and Other Benchmark Rates in the MD&A and Item 1A. Risk Factors – Other of the Corporation’s 2022 Annual Report on Form 10-K.
Financial Highlights
Table 1Summary Income Statement and Selected Financial Data
Three Months Ended March 31
(Dollars in millions, except per share information)20232022
Income statement
Net interest income$14,448 $11,572 
Noninterest income11,810 11,656 
Total revenue, net of interest expense26,258 23,228 
Provision for credit losses931 30 
Noninterest expense16,238 15,319 
Income before income taxes9,089 7,879 
Income tax expense928 812 
Net income8,161 7,067 
Preferred stock dividends505 467 
Net income applicable to common shareholders$7,656 $6,600 
Per common share information  
Earnings$0.95 $0.81 
Diluted earnings0.94 0.80 
Dividends paid0.22 0.21 
Performance ratios
Return on average assets (1)
1.07 %0.89 %
Return on average common shareholders’ equity (1)
12.48 11.02 
Return on average tangible common shareholders’ equity (2)
17.38 15.51 
Efficiency ratio (1)
61.84 65.95 
March 31 2023
December 31 2022
Balance sheet  
Total loans and leases$1,046,406 $1,045,747 
Total assets3,194,657 3,051,375 
Total deposits1,910,402 1,930,341 
Total liabilities2,914,461 2,778,178 
Total common shareholders’ equity251,799 244,800 
Total shareholders’ equity280,196 273,197 
(1)For definitions, see Key Metrics on page 94.
(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 43.
Net income was $8.2 billion, or $0.94 per diluted share, for the three months ended March 31, 2023 compared to $7.1 billion, or $0.80 per diluted share, for the same period in 2022. The increase in net income was primarily due to higher net interest income, partially offset by higher noninterest expense and provision for credit losses.

Bank of America 4

Total assets increased $143.3 billion from December 31, 2022 to $3.2 trillion primarily driven by higher cash and cash equivalents due to securities financing activity to support balance sheet and liquidity positioning, as well as higher trading account assets to support Global Markets client activity.
Total liabilities increased $136.3 billion from December 31, 2022 to $2.9 trillion primarily driven by higher securities financing activity and short-term borrowings to support balance sheet and liquidity positioning, partially offset by lower deposits primarily due to customers’ movement of balances to higher yielding investment alternatives.
Shareholders’ equity increased $7.0 billion from December 31, 2022 primarily due to net income and market value increases on derivatives, partially offset by returns of capital to shareholders through common and preferred stock dividends and common stock repurchases.
Net Interest Income
Net interest income increased $2.9 billion to $14.4 billion for the three months ended March 31, 2023 compared to the same period in 2022. Net interest yield on a fully taxable-equivalent (FTE) basis increased 51 basis points (bps) to 2.20 percent. The increase was primarily driven by benefits from higher interest rates, including lower premium amortization expense and loan growth, partially offset by lower net interest income related to Global Markets activity, higher rates paid on deposits and lower debt securities. For more information on net interest yield and FTE basis, see Supplemental Financial Data on page 6, and for more information on interest rate risk management, see Interest Rate Risk Management for the Banking Book on page 40.
Noninterest Income
Table 2Noninterest Income
Three Months Ended March 31
(Dollars in millions)20232022
Fees and commissions:
Card income$1,469 $1,403 
Service charges1,410 1,833 
Investment and brokerage services3,852 4,292 
Investment banking fees1,163 1,457 
Total fees and commissions7,894 8,985 
Market making and similar activities4,712 3,238 
Other income(796)(567)
Total noninterest income$11,810 $11,656 
Noninterest income increased $154 million to $11.8 billion for the three months ended March 31, 2023 compared to the same period in 2022. The following highlights the significant changes.
●    Service charges decreased $423 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 $440 million primarily driven by lower market valuations and declines in assets under management (AUM) pricing, partially offset by the impact of positive AUM flows.
●    Investment banking fees decreased $294 million primarily due to lower debt issuance, advisory and equity issuance fees.
●    Market making and similar activities increased $1.5 billion primarily driven by improved performance in fixed income, currencies and commodities (FICC) and by the impact of higher interest rates on client financing activities in Equities.
●    Other income decreased $229 million primarily due to losses on sales of available-for-sale (AFS) debt securities.
Provision for Credit Losses
The provision for credit losses increased $901 million to $931 million for the three months ended March 31, 2023 compared to the same period in 2022. The provision for credit losses for the current-year period was driven by our consumer portfolio primarily due to higher-than-expected credit card balances, partially offset by certain improved macroeconomic conditions that primarily benefited our commercial portfolio. The provision for credit losses in the prior-year period was $30 million, as asset quality improvement was offset by a reserve build related to our Russian exposure and loan growth. For more information on the provision for credit losses, see Allowance for Credit Losses on page 36.
Noninterest Expense
Table 3Noninterest Expense
Three Months Ended March 31
(Dollars in millions)20232022
Compensation and benefits$9,918 $9,482 
Occupancy and equipment1,799 1,760 
Information processing and communications1,697 1,540 
Product delivery and transaction related890 933 
Marketing458 397 
Professional fees537 450 
Other general operating939 757 
Total noninterest expense$16,238 $15,319 
Noninterest expense increased $919 million to $16.2 billion for the three months ended March 31, 2023 compared to the same period in 2022. The increase was primarily due to higher investments in people and technology and higher FDIC expense, partially offset by lower revenue-related incentive compensation.
Income Tax Expense
Table 4Income Tax Expense
Three Months Ended March 31
(Dollars in millions)20232022
Income before income taxes$9,089 $7,879 
Income tax expense928 812 
Effective tax rate10.2 %10.3 %
The effective tax rates for the three months ended March 31, 2023 and 2022 were primarily driven by our recurring tax preference benefits that mainly consist of tax credits from ESG investments in affordable housing and renewable energy. Absent ESG tax credits and discrete tax benefits, the effective tax rates would have been approximately 26 percent and 25 percent.
5 Bank of America


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.
When presented on a consolidated basis, we view net interest income on an FTE basis as a non-GAAP financial measure. 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 7.
For more information on the reconciliation of these non-GAAP financial measures to the corresponding GAAP financial measures, see Non-GAAP Reconciliations on page 43.
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 94.
Our consolidated key performance indicators, which include various equity and credit metrics, are presented in Table 1 on page 4 and Table 5 on page 7.
For information on key segment performance metrics, see Business Segment Operations on page 9.
Bank of America 6

Table 5Selected Quarterly Financial Data
2023 Quarter2022 Quarters
(In millions, except per share information)FirstFourthThirdSecondFirst
Income statement  
Net interest income$14,448 $14,681 $13,765 $12,444 $11,572 
Noninterest income 11,810 9,851 10,737 10,244 11,656 
Total revenue, net of interest expense26,258 24,532 24,502 22,688 23,228 
Provision for credit losses931 1,092 898 523 30 
Noninterest expense16,238 15,543 15,303 15,273 15,319 
Income before income taxes9,089 7,897 8,301 6,892 7,879 
Income tax expense 928 765 1,219 645 812 
Net income 8,161 7,132 7,082 6,247 7,067 
Net income applicable to common shareholders7,656 6,904 6,579 5,932 6,600 
Average common shares issued and outstanding
8,065.9 8,088.3 8,107.7 8,121.6 8,136.8 
Average diluted common shares issued and outstanding
8,182.3 8,155.7 8,160.8 8,163.1 8,202.1 
Performance ratios     
Return on average assets (1)
1.07 %0.92 %0.90 %0.79 %0.89 %
Four-quarter trailing return on average assets (2)
0.92 0.88 0.87 0.89 0.99 
Return on average common shareholders’ equity (1)
12.48 11.24 10.79 9.93 11.02 
Return on average tangible common shareholders’ equity (3)
17.38 15.79 15.21 14.05 15.51 
Return on average shareholders’ equity (1)
11.94 10.38 10.37 9.34 10.64 
Return on average tangible shareholders’ equity (3)
15.98 13.98 13.99 12.66 14.40 
Total ending equity to total ending assets8.77 8.95 8.77 8.65 8.23 
Common equity ratio (1)
7.88 8.02 7.82 7.71 7.40 
Total average equity to total average assets8.95 8.87 8.73 8.49 8.40 
Dividend payout (1)
23.17 25.71 27.06 28.68 25.86 
Per common share data     
Earnings $0.95 $0.85 $0.81 $0.73 $0.81 
Diluted earnings 0.94 0.85 0.81 0.73 0.80 
Dividends paid0.22 0.22 0.22 0.21 0.21 
Book value (1)
31.58 30.61 29.96 29.87 29.70 
Tangible book value (3)
22.78 21.83 21.21 21.13 20.99 
Market capitalization$228,012 $264,853 $242,338 $250,136 $332,320 
Average balance sheet     
Total loans and leases$1,041,352 $1,039,247 $1,034,334 $1,014,886 $977,793 
Total assets3,096,058 3,074,289 3,105,546 3,157,885 3,207,702 
Total deposits1,893,649 1,925,544 1,962,775 2,012,079 2,045,811 
Long-term debt244,759 243,871 250,204 245,781 246,042 
Common shareholders’ equity248,855 243,647 241,882 239,523 242,865 
Total shareholders’ equity277,252 272,629 271,017 268,197 269,309 
Asset quality      
Allowance for credit losses (4)
$13,951 $14,222 $13,817 $13,434 $13,483 
Nonperforming loans, leases and foreclosed properties (5)
4,083 3,978 4,156 4,326 4,778 
Allowance for loan and lease losses as a percentage of total loans and leases outstanding (5)
1.20 %1.22 %1.20 %1.17 %1.23 %
Allowance for loan and lease losses as a percentage of total nonperforming loans and leases (5)
319 333 309 288 262 
Net charge-offs $807 $689 $520 $571 $392 
Annualized net charge-offs as a percentage of average loans and leases outstanding (5)
0.32 %0.26 %0.20 %0.23 %0.16 %
Capital ratios at period end (6)
     
Common equity tier 1 capital
11.4 %11.2 %11.0 %10.5 %10.4 %
Tier 1 capital
13.1 13.0 12.8 12.3 12.0 
Total capital
15.0 14.9 14.7 14.2 14.0 
Tier 1 leverage
7.1 7.0 6.8 6.5 6.3 
Supplementary leverage ratio
6.0 5.9 5.8 5.5 5.4 
Tangible equity (3)
6.7 6.8 6.6 6.5 6.2 
Tangible common equity (3)
5.8 5.9 5.7 5.6 5.3 
Total loss-absorbing capacity and long-term debt metrics
Total loss-absorbing capacity to risk-weighted assets28.8 %29.0 %28.9 %27.8 %27.2 %
Total loss-absorbing capacity to supplementary leverage exposure13.1 13.2 13.0 12.6 12.2 
Eligible long-term debt to risk-weighted assets14.8 15.2 15.2 14.7 14.4 
Eligible long-term debt to supplementary leverage exposure6.7 6.9 6.8 6.6 6.5 
(1)For definitions, see Key Metrics on page 94.
(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 6 and Non-GAAP Reconciliations on page 43.
(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 29 and corresponding Table 24 and Commercial Portfolio Credit Risk Management – Nonperforming Commercial Loans, Leases and Foreclosed Properties Activity on page 33 and corresponding Table 30.
(6)For more information, including which approach is used to assess capital adequacy, see Capital Management on page 17.
7 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)First Quarter 2023First Quarter 2022
Earning assets      
Interest-bearing deposits with the Federal Reserve, non-U.S. central
   banks and other banks
$202,700 $1,999 4.00 %$244,971 $86 0.14 %
Time deposits placed and other short-term investments10,581 108 4.16 9,253 12 0.52 
Federal funds sold and securities borrowed or purchased under
   agreements to resell (2)
287,532 3,712 5.24 299,404 (7)(0.01)
Trading account assets183,657 2,040 4.50 151,969 1,096 2.92 
Debt securities851,177 5,485 2.58 975,656 3,838 1.58 
Loans and leases (3)
Residential mortgage229,275 1,684 2.94 223,979 1,525 2.73 
Home equity26,513 317 4.84 27,784 220 3.21 
Credit card91,775 2,426 10.72 78,409 1,940 10.03 
Direct/Indirect and other consumer105,657 1,186 4.55 104,632 579 2.25 
Total consumer453,220 5,613 5.00 434,804 4,264 3.96 
U.S. commercial376,852 4,471 4.81 346,510 2,127 2.49 
Non-U.S. commercial127,003 1,778 5.68 118,767 504 1.72 
Commercial real estate (4)
70,591 1,144 6.57 63,065 387 2.49 
Commercial lease financing13,686 147 4.33 14,647 106 2.92 
Total commercial588,132 7,540 5.20 542,989 3,124 2.33 
Total loans and leases 1,041,352 13,153 5.11 977,793 7,388 3.06 
Other earning assets94,427 2,292 9.82 120,798 587 1.97 
Total earning assets2,671,426 28,789 4.36 2,779,844 13,000 1.89 
Cash and due from banks27,784 28,082 
Other assets, less allowance for loan and lease losses396,848 399,776 
Total assets$3,096,058 $3,207,702 
Interest-bearing liabilities      
U.S. interest-bearing deposits      
Demand and money market deposits$975,085 $2,790 1.16 %$1,001,184 $80 0.03 %
Time and savings deposits196,984 919 1.89 163,981 40 0.10 
Total U.S. interest-bearing deposits1,172,069 3,709 1.28 1,165,165 120 0.04 
Non-U.S. interest-bearing deposits91,603 605 2.68 81,879 44 0.22 
Total interest-bearing deposits1,263,672 4,314 1.38 1,247,044 164 0.05 
Federal funds purchased and securities loaned or sold under agreements
    to repurchase
256,015 3,551 5.63 217,152 79 0.15 
Short-term borrowings and other interest-bearing liabilities (2)
156,887 2,629 6.79 126,454 (191)(0.61)
Trading account liabilities43,953 504 4.65 64,240 364 2.30 
Long-term debt244,759 3,209 5.28 246,042 906 1.50 
Total interest-bearing liabilities1,965,286 14,207 2.93 1,900,932 1,322 0.28 
Noninterest-bearing sources
Noninterest-bearing deposits629,977 798,767 
Other liabilities (5)
223,543 238,694 
Shareholders’ equity277,252 269,309 
Total liabilities and shareholders’ equity$3,096,058 $3,207,702 
Net interest spread1.43 %1.61 %
Impact of noninterest-bearing sources0.77 0.08 
Net interest income/yield on earning assets (6)
$14,582 2.20 %$11,678 1.69 %
(1)Includes the impact of interest rate risk management contracts. For more information, see Interest Rate Risk Management for the Banking Book on page 40.
(2)For more information on negative interest, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2022 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 $65.5 billion and $58.5 billion, and non-U.S. commercial real estate loans of $5.1 billion and $4.5 billion for the first quarter of 2023 and 2022.
(5)Includes $37.3 billion and $30.2 billion of structured notes and liabilities for the first quarter of 2023 and 2022.
(6)Net interest income includes FTE adjustments of $134 million and $106 million for the first quarter of 2023 and 2022.
Bank of America 8

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 2022 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. 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 6, 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 March 31
(Dollars in millions)202320222023202220232022% Change
Net interest income$5,816 $4,052 $2,777 $2,628 $8,593 $6,680 29 %
Noninterest income:
Card income(10)(8)1,284 1,193 1,274 1,185 8 
Service charges598 843 1 1 599 844 (29)
All other income197 68 43 36 240 104 131 
Total noninterest income785 903 1,328 1,230 2,113 2,133 (1)
Total revenue, net of interest expense
6,601 4,955 4,105 3,858 10,706 8,813 21 
Provision for credit losses183 73 906 (125)1,089 (52)n/m
Noninterest expense3,415 3,008 2,058 1,913 5,473 4,921 11 
Income before income taxes3,003 1,874 1,141 2,070 4,144 3,944 5 
Income tax expense751 459 285 507 1,036 966 7 
Net income$2,252 $1,415 $856 $1,563 $3,108 $2,978 4 
Effective tax rate (1)
25.0 %24.5 %
Net interest yield2.31 %1.56 %3.76 %3.79 %3.27 %2.48 %
Return on average allocated capital67 44 12 23 30 30 
Efficiency ratio51.76 60.71 50.10 49.58 51.12 55.84 
Balance Sheet
Three Months Ended March 31
Average202320222023202220232022% Change
Total loans and leases$4,119 $4,215 $299,653 $279,853 $303,772 $284,068 7 %
Total earning assets (2)
1,022,445 1,050,490 299,794 281,255 1,065,202 1,092,742 (3)
Total assets (2)
1,056,007 1,084,343 306,275 287,660 1,105,245 1,133,001 (2)
Total deposits1,021,374 1,050,247 4,868 5,853 1,026,242 1,056,100 (3)
Allocated capital13,700 13,000 28,300 27,000 42,000 40,000 5 
Period endMarch 31 2023December 31
2022		March 31
2023		December 31
2022		March 31
2023		December 31
2022		% Change
Total loans and leases$4,065 $4,148 $300,415 $300,613 $304,480 $304,761 — %
Total earning assets (2)
1,038,545 1,043,049 300,595 300,787 1,081,780 1,085,079 — 
Total assets (2)
1,074,571 1,077,203 307,227 308,007 1,124,438 1,126,453 — 
Total deposits1,039,744 1,043,194 5,024 5,605 1,044,768 1,048,799 — 
(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
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 2022 Annual Report on Form 10-K.

Consumer Banking Results
Net income for Consumer Banking increased $130 million to $3.1 billion for the three months ended March 31, 2023 compared to the same period in 2022 due to higher revenue, largely offset by an increase in provision for credit losses and higher noninterest expense. Net interest income increased $1.9 billion to $8.6 billion primarily driven by higher interest rates and loan balances. Noninterest income decreased $20 million to $2.1 billion, relatively unchanged from the same period a year ago.
9 Bank of America


The provision for credit losses increased $1.1 billion to $1.1 billion primarily driven by higher-than-expected credit card balances in the current-year period. Noninterest expense increased $552 million to $5.5 billion primarily driven by continued investments for business growth, including people and technology.
The return on average allocated capital was 30 percent, unchanged from the same period a year ago. For more information on capital allocated to the business segments, see Business Segment Operations on page 9.
Deposits
Net income for Deposits increased $837 million to $2.3 billion primarily due to higher revenue, partially offset by higher noninterest expense. Net interest income increased $1.8 billion to $5.8 billion primarily due to higher interest rates. Noninterest income decreased $118 million to $785 million primarily driven by the impact of non-sufficient funds and overdraft policy changes.
Noninterest expense increased $407 million to $3.4 billion primarily driven by continued investments for business growth, including people and technology.
Average deposits decreased $28.9 billion to $1.0 trillion primarily due to net outflows of $15.0 billion in money market savings and $11.5 billion in checking. The decline was largely driven by clients moving deposits to higher yielding investment alternatives and higher levels of consumer spending.
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 March 31
20232022
Total deposit spreads (excludes noninterest costs) (1)
2.54%1.65%
Period End
Consumer investment assets (in millions) (2)
$354,892$357,593
Active digital banking users (in thousands) (3)
44,96242,269
Active mobile banking users (in thousands) (4)
36,32233,589
Financial centers3,8924,056
ATMs15,40715,959
(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 $2.7 billion to $354.9 billion driven by market performance, partially offset by client flows. Active mobile banking users increased approximately three million, reflecting continuing changes in our clients’ banking preferences. We had a net decrease of 164 financial centers and 552 ATMs as we continue to optimize our consumer banking network.
Consumer Lending
Net income for Consumer Lending decreased $707 million to $856 million primarily due to an increase in provision for credit
losses. Net interest income increased $149 million to $2.8 billion due to higher interest rates and loan balances. Noninterest income increased $98 million to $1.3 billion primarily driven by card income.
The provision for credit losses increased $1.0 billion to $906 million primarily driven by higher-than-expected credit card balances in the current-year period. Noninterest expense increased $145 million to $2.1 billion largely driven by continued investments for business growth, including people and technology.
Average loans increased $19.8 billion to $299.7 billion primarily driven by an increase in credit card 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.
Key Statistics – Consumer Lending
Three Months Ended March 31
(Dollars in millions)20232022
Total credit card (1)
Gross interest yield (2)
11.85 %9.90 %
Risk-adjusted margin (3)
8.69 10.40 
New accounts (in thousands)1,187 977 
Purchase volumes$85,544 $80,914 
Debit card purchase volumes
$124,376 $117,584 
(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 March 31, 2023, the total risk-adjusted margin decreased 171 bps compared to the same period in 2022 driven by lower net interest margin, lower fee income and higher net credit losses. Total credit card purchase volumes increased $4.6 billion to $85.5 billion, and debit card purchase volumes increased $6.8 billion to $124.4 billion, reflecting higher levels of consumer spending.
Key Statistics – Loan Production (1)
Three Months Ended March 31
(Dollars in millions)20232022
Consumer Banking: 
First mortgage$1,956 $8,116 
Home equity2,183 1,725 
Total (2):
First mortgage$3,937 $16,353 
Home equity2,596 2,040 
(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 $6.2 billion and $12.4 billion during the three months ended March 31, 2023 compared to the same period in 2022 primarily driven by higher interest rates, resulting in lower customer demand.
Home equity production in Consumer Banking and the total Corporation increased $458 million and $556 million during the three months ended March 31, 2023 primarily driven by higher demand.
Bank of America 10

Global Wealth & Investment Management
Three Months Ended March 31
(Dollars in millions)20232022% Change
Net interest income$1,876 $1,668 12 %
Noninterest income:
Investment and brokerage services3,238 3,654 (11)
All other income201 154 31 
Total noninterest income3,439 3,808 (10)
Total revenue, net of interest expense5,315 5,476 (3)
Provision for credit losses25 (41)n/m
Noninterest expense4,067 4,015 1 
Income before income taxes1,223 1,502 (19)
Income tax expense306 368 (17)
Net income$917 $1,134 (19)
Effective tax rate25.0 %24.5 %
Net interest yield2.20 1.62 
Return on average allocated capital20 26 
Efficiency ratio76.53 73.31 
Balance Sheet
Three Months Ended March 31
Average20232022% Change
Total loans and leases$221,448 $210,937 5 %
Total earning assets346,384 418,248 (17)
Total assets359,164 431,040 (17)
Total deposits314,019 384,902 (18)
Allocated capital18,500 17,500 6 
Period endMarch 31
2023		December 31
2022		% Change
Total loans and leases$217,804 $223,910 (3)%
Total earning assets336,560 355,461 (5)
Total assets349,888 368,893 (5)
Total deposits301,471 323,899 (7)
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 2022 Annual Report on Form 10-K.
Net income for GWIM decreased $217 million to $917 million for the three months ended March 31, 2023 compared to the same period in 2022 primarily driven by lower revenue. The operating margin was 23 percent compared to 27 percent a year ago.
Net interest income increased $208 million to $1.9 billion due to the impacts of higher interest rates and loan balances, partially offset by lower deposit balances.
Noninterest income, which primarily includes investment and brokerage services income, decreased $369 million to $3.4 billion primarily due to the impacts of lower market valuations and declines in AUM pricing, partially offset by the impact of positive AUM flows.
Noninterest expense increased $52 million to $4.1 billion primarily due to continued investments in the business, including strategic hiring and technology, largely offset by lower revenue-related incentives.
The return on average allocated capital was 20 percent, down from 26 percent, due to lower net income and an increase in allocated capital. For more information on capital allocated to the business segments, see Business Segment Operations on page 9.
Average loans increased $10.5 billion to $221.4 billion primarily due to residential mortgages and custom lending, partially offset by securities-based lending. Average deposits decreased $70.9 billion to $314.0 billion primarily driven by clients moving deposits to higher yielding investment alternatives.
Merrill Wealth Management revenue of $4.4 billion decreased four percent primarily driven by the impact of lower market valuations and declines in AUM pricing, partially offset by the impact of higher interest rates.
Bank of America Private Bank revenue of $918 million increased three percent primarily driven by the benefits of higher interest rates, partially offset by the impact of lower market valuations.

11 Bank of America


Key Indicators and Metrics
Three Months Ended March 31
(Dollars in millions)20232022
Revenue by Business
Merrill Wealth Management$4,397 $4,589 
Bank of America Private Bank918 887 
Total revenue, net of interest expense$5,315 $5,476 
Client Balances by Business, at period end
Merrill Wealth Management$2,952,681 $3,116,052 
Bank of America Private Bank
568,925 598,100 
Total client balances$3,521,606 $3,714,152 
Client Balances by Type, at period end
Assets under management$1,467,242 $1,571,605 
Brokerage and other assets1,571,409 1,592,802 
Deposits301,471 385,288 
Loans and leases (1)
220,633 217,461 
Less: Managed deposits in assets under management(39,149)(53,004)
Total client balances$3,521,606 $3,714,152 
Assets Under Management Rollforward
Assets under management, beginning of period$1,401,474 $1,638,782 
Net client flows 15,262 15,537 
Market valuation/other
50,506 (82,714)
Total assets under management, end of period$1,467,242 $1,571,605 
Total wealth advisors, at period end (2)
19,243 18,571 
(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 $192.5 billion, or five percent, to $3.5 trillion at March 31, 2023 compared to March 31, 2022. The decrease in client balances was primarily due to the impact of lower market valuations, partially offset by positive client flows.
Bank of America 12

Global Banking
Three Months Ended March 31
(Dollars in millions)20232022% Change
Net interest income$3,907 $2,344 67 %
Noninterest income:
Service charges714 886 (19)
Investment banking fees668 880 (24)
All other income914 1,084 (16)
Total noninterest income2,296 2,850 (19)
Total revenue, net of interest expense 6,203 5,194 19 
Provision for credit losses(237)165 n/m
Noninterest expense2,940 2,683 10 
Income before income taxes3,500 2,346 49 
Income tax expense 945 622 52 
Net income$2,555 $1,724 48 
Effective tax rate 27.0 %26.5 %
Net interest yield3.03 1.68 
Return on average allocated capital21 16 
Efficiency ratio47.41 51.65 
Balance Sheet
Three Months Ended March 31
Average20232022% Change
Total loans and leases
$381,009 $358,807 6 %
Total earning assets522,374 566,277 (8)
Total assets588,886 630,517 (7)
Total deposits492,577 539,912 (9)
Allocated capital49,250 44,500 11 
Period EndMarch 31 2023December 31 2022% Change
Total loans and leases$383,491 $379,107 1 %
Total earning assets524,299 522,539 — 
Total assets591,231 588,466 — 
Total deposits495,949 498,661 (1)
n/m = not meaningful
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 2022 Annual Report on Form 10-K.
Net income for Global Banking increased $831 million to $2.6 billion for the three months ended March 31, 2023 compared to the same period in 2022 driven by higher revenue and lower provision for credit losses, partially offset by higher noninterest expense.
Net interest income increased $1.6 billion to $3.9 billion primarily due to the benefit of higher interest rates, partially offset by the impact of lower deposit balances.
Noninterest income decreased $554 million to $2.3 billion driven by lower investment banking fees, lower treasury service charges due to higher earnings credit rates and lower revenue from ESG investment activities.
The provision for credit losses improved $402 million to a benefit of $237 million primarily driven by certain improved macroeconomic conditions.
Noninterest expense increased $257 million to $2.9 billion, primarily due to continued investments in the business, including strategic hiring in 2022.
The return on average allocated capital was 21 percent, up from 16 percent, due to higher net income, partially offset by higher allocated capital. For more information on capital allocated to the business segments, see Business Segment Operations on page 9.
Global Corporate, Global Commercial and Business Banking
The following table and discussion present a summary of the results, which exclude certain investment banking and Paycheck Protection Program (PPP) activities in Global Banking.
13 Bank of America


Global Corporate, Global Commercial and Business Banking
Global Corporate BankingGlobal Commercial BankingBusiness BankingTotal
Three Months Ended March 31
(Dollars in millions)20232022202320222023202220232022
Revenue
Business Lending$1,034 $1,060 $1,233 $993 $67 $58 $2,334 $2,111 
Global Transaction Services 1,549 949 1,129 896 387 243 3,065 2,088 
Total revenue, net of interest expense
$2,583 $2,009 $2,362 $1,889 $454 $301 $5,399 $4,199 
Balance Sheet
Average
Total loans and leases
$175,293 $166,994 $192,796 $177,483 $12,618 $12,837 $380,707 $357,314 
Total deposits
259,177 257,903 182,614 223,741 50,795 58,268 492,586 539,912 
Period end
Total loans and leases $175,777 $174,134 $194,889 $179,253 $12,580 $12,794 $383,246 $366,181 
Total deposits263,131 255,694 181,315 219,462 51,511 58,660 495,957 533,816 
Business Lending revenue increased $223 million for the three months ended March 31, 2023 compared to the same period in 2022 primarily due to the benefits of higher interest rates, partially offset by lower ESG investment activities.
Global Transaction Services revenue increased $977 million for the three months ended March 31, 2023 driven by higher interest rates, partially offset by the impact of lower deposit balances and treasury service charges.
Average loans and leases increased seven percent for the three months ended March 31, 2023 due to client demand. Average deposits decreased nine percent due to declines in domestic balances.
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.
Investment Banking Fees
Global BankingTotal Corporation
Three Months Ended March 31
(Dollars in millions)2023202220232022
Products
Advisory$313 $439 $363 $473 
Debt issuance290 359 644 831 
Equity issuance65 82 168 225 
Gross investment banking fees
668 880 1,175 1,529 
Self-led deals(4)(29)(12)(72)
Total investment banking fees
$664 $851 $1,163 $1,457 
Total Corporation investment banking fees of $1.2 billion, which exclude self-led deals and are primarily included within Global Banking and Global Markets, decreased 20 percent for the three months ended March 31, 2023 compared to the same period in 2022. The decrease was primarily due to lower debt issuance, advisory and equity issuance fees.

Bank of America 14

Global Markets
Three Months Ended March 31
(Dollars in millions)20232022% Change
Net interest income$109 $993 (89)%
Noninterest income:
Investment and brokerage services533 545 (2)
Investment banking fees469 582 (19)
Market making and similar activities4,398 3,190 38 
All other income117 (18)n/m
Total noninterest income5,517 4,299 28 
Total revenue, net of interest expense5,626 5,292 6 
Provision for credit losses(53)5 n/m
Noninterest expense3,351 3,117 8 
Income before income taxes2,328 2,170 7 
Income tax expense640 575 11 
Net income$1,688 $1,595 6 
Effective tax rate27.5 %26.5 %
Return on average allocated capital15 15 
Efficiency ratio59.56 58.90 
Balance Sheet
Three Months Ended March 31
20232022% Change
Average
Trading-related assets:
Trading account securities$339,248 $301,285 13 %
Reverse repurchases126,760 138,581 (9)
Securities borrowed116,280 114,468 2 
Derivative assets43,747 41,820 5 
Total trading-related assets626,035 596,154 5 
Total loans and leases125,046 108,576 15 
Total earning assets627,935 610,926 3 
Total assets870,038 858,719 1 
Total deposits36,109 44,393 (19)
Allocated capital45,500 42,500 7 
Period endMarch 31
2023		December 31
2022		% Change
Total trading-related assets$599,841 $564,769 6 %
Total loans and leases130,804 127,735 2 
Total earning assets632,873 587,772 8 
Total assets861,477 812,489 6 
Total deposits33,624 39,077 (14)
n/m = not meaningful
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 2022 Annual Report on Form 10-K.
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 6.
Net income for Global Markets increased $93 million to $1.7 billion for the three months ended March 31, 2023 compared to the same period in 2022. Net DVA gains were $14 million compared to $69 million in the same period in 2022. Excluding net DVA, net income increased $134 million to $1.7 billion. These increases were primarily driven by higher revenue, partially offset by higher noninterest expense.
Revenue increased $334 million to $5.6 billion primarily due to higher sales and trading revenue. Sales and trading revenue increased $348 million, and excluding net DVA, sales and trading revenue increased $403 million. These increases were driven by higher revenue in FICC, partially offset by lower revenue in Equities.
Noninterest expense increased $234 million to $3.4 billion primarily driven by continued investments in the business, including people and technology.
Average total assets increased $11.3 billion to $870.0 billion for the three months ended March 31, 2023 compared to the same period in 2022 driven by loan growth in FICC. Period-end total assets increased $49.0 billion from December 31, 2022 to $861.5 billion driven by increased securities financing activity and higher levels of inventory in FICC to satisfy client demand.
The return on average allocated capital was 15 percent, unchanged from the same period a year ago. For more information on capital allocated to the business segments, see Business Segment Operations on page 9.
15 Bank of America


Sales and Trading Revenue
For a description of sales and trading revenue, see Business Segment Operations in the MD&A of the Corporation’s 2022 Annual Report on Form 10-K. The following table 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 also 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 6.
Sales and Trading Revenue (1, 2, 3)
Three Months Ended March 31
(Dollars in millions)20232022
Sales and trading revenue
Fixed income, currencies and commodities
$3,440 $2,708 
Equities1,627 2,011 
Total sales and trading revenue$5,067 $4,719 
Sales and trading revenue, excluding net DVA (4)
Fixed income, currencies and commodities
$3,429 $2,648 
Equities1,624 2,002 
Total sales and trading revenue, excluding net DVA
$5,053 $4,650 
(1)For more information on sales and trading revenue, see Note 3 – Derivatives to the Consolidated Financial Statements.
(2)Includes FTE adjustments of $90 million and $93 million for the three months ended March 31, 2023 and 2022.
(3)    Includes Global Banking sales and trading revenue of $177 million and $179 million for the three months ended March 31, 2023 and 2022.
(4)    FICC and Equities sales and trading revenue, excluding net DVA, is a non-GAAP financial measure. FICC net DVA gains were $11 million and $60 million for the three months ended March 31, 2023 and 2022. Equities net DVA gains were $3 million and $9 million for the three months ended March 31, 2023 and 2022.
Including and excluding net DVA, FICC revenue increased $732 million and $781 million for the three months ended March 31, 2023 compared to the same period in 2022 primarily driven by improved trading performance across mortgage, credit and municipal products and increased secured financing activity. Including and excluding net DVA, Equities revenue decreased $384 million and $378 million driven by weaker trading performance and lower client activity in derivatives and cash.
All Other
Three Months Ended March 31
(Dollars in millions)20232022% Change
Net interest income$97 $(7)n/m
Noninterest income (loss)(1,555)(1,434)8 %
Total revenue, net of interest expense(1,458)(1,441)1 
Provision for credit losses107 (47)n/m
Noninterest expense407 583 (30)
Loss before income taxes(1,972)(1,977)— 
Income tax benefit(1,865)(1,613)16 
Net loss$(107)$(364)(71)
Balance Sheet
Three Months Ended March 31
Average20232022% Change
Total loans and leases$10,077 $15,405 (35)%
Total assets (1)
172,725 154,425 12 
Total deposits24,702 20,504 20 
Period endMarch 31
2023		December 31
2022		% Change
Total loans and leases$9,827 $10,234 (4)%
Total assets (1)
267,623 155,074 73 
Total deposits34,590 19,905 74 
(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 $1.0 trillion and $1.2 trillion for the three months ended March 31, 2023 and 2022, and period-end allocated assets were $1.0 trillion at both March 31, 2023 and December 31 2022.
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.
The net loss in All Other decreased $257 million to a loss of $107 million primarily due to a higher income tax benefit,
partially offset by lower noninterest income.
Noninterest income decreased $121 million primarily due to $220 million of losses on sales of AFS debt securities, primarily offset by derivative gains related to risk management activities.
The income tax benefit increased $252 million reflecting an increase in tax preference benefits primarily driven from income tax credits related to ESG investment activity. Both periods included income tax benefit adjustments to eliminate the FTE treatment of certain tax credits recorded in Global Banking and Global Markets.
Bank of America 16

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 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 framework that includes a set of measures to assist senior management and the Board in assessing the Corporation’s risk profile against our risk appetite and risk capacity. Our risk appetite is formally articulated in the Risk Appetite Statement, which includes both qualitative statements and quantitative limits.
For more information on the Corporation’s risks, see Item 1A. Risk Factors of the Corporation’s 2022 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, 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 2022 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 2022 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 Comprehensive Capital Analysis and Review (CCAR) capital plan. Based on the results of our 2022 CCAR stress test, we are subject to a 3.4 percent stress capital buffer (SCB) from October 1, 2022 through September 30, 2023. In April 2023, we submitted our 2023 CCAR capital plan and related supervisory stress tests. The Federal Reserve has indicated that it will disclose CCAR capital plan supervisory stress test results by June 30, 2023.
In October 2021, the Board authorized the Corporation’s $25 billion common stock repurchase program. Additionally, the Board authorized common stock repurchases to offset shares awarded under the Corporation’s equity-based compensation plans. Pursuant to the Board’s authorizations, during the first quarter of 2023, we repurchased $2.2 billion of common stock, including repurchases to offset 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 lower of the capital ratios under Standardized or Advanced approaches compared to their respective regulatory capital ratio requirements is used to assess capital adequacy, including under the PCA framework. As of March 31, 2023, the Common equity tier 1 (CET1), Tier 1 capital and Total capital ratios under the Standardized approach were the binding ratios.
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, 2022 through September 30, 2023, the Corporation's minimum CET1 capital ratio requirements are 10.4 percent under the Standardized approach and 9.5 percent under the Advanced approaches.
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 from 2.5 percent on January 1, 2024, which will increase our minimum CET1 capital ratio requirement. At March 31, 2023, the Corporation’s CET1 capital ratio of 11.4 percent under the Standardized approach exceeded its current CET1 capital ratio requirement as well as the minimum requirement expected to be in place as of January 1, 2024 due to the anticipated increase in our G-SIB surcharge.
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.

17 Bank of America


Capital Composition and Ratios
Table 7 presents Bank of America Corporation’s capital ratios and related information in accordance with Basel 3 Standardized and Advanced approaches as measured at March 31, 2023 and December 31, 2022. For the periods presented herein, the Corporation met the definition of well capitalized under current regulatory requirements.
Table 7Bank of America Corporation Regulatory Capital under Basel 3
Standardized
Approach (1)
Advanced
Approaches (1)
Regulatory
Minimum (2)
(Dollars in millions, except as noted)March 31, 2023
Risk-based capital metrics:
Common equity tier 1 capital$184,432 $184,432 
Tier 1 capital212,825 212,825 
Total capital (3)
242,743 233,877 
Risk-weighted assets (in billions) 1,622 1,427 
Common equity tier 1 capital ratio11.4 %12.9 %10.4 %
Tier 1 capital ratio13.1 14.9 11.9 
Total capital ratio15.0 16.4 13.9 
Leverage-based metrics:
Adjusted quarterly average assets (in billions) (4)
$3,018 $3,018 
Tier 1 leverage ratio7.1 %7.1 %4.0 
Supplementary leverage exposure (in billions)$3,555 
Supplementary leverage ratio6.0 %5.0 
December 31, 2022
Risk-based capital metrics:
Common equity tier 1 capital$180,060 $180,060 
Tier 1 capital208,446 208,446 
Total capital (3)
238,773 230,916 
Risk-weighted assets (in billions)1,605 1,411 
Common equity tier 1 capital ratio11.2 %12.8 %10.4 %
Tier 1 capital ratio13.0 14.8 11.9 
Total capital ratio14.9 16.4 13.9 
Leverage-based metrics:
Adjusted quarterly average assets (in billions) (4)
$2,997 $2,997 
Tier 1 leverage ratio7.0 %7.0 %4.0 
Supplementary leverage exposure (in billions) $3,523 
Supplementary leverage ratio5.9 %5.0 
(1)Capital ratios as of March 31, 2023 and December 31, 2022 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 on January 1, 2020.
(2)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 capital conservation buffer of 2.5 percent (under the Advanced approaches) or the SCB of 3.4 percent (under the Standardized approach), as applicable, at both March 31, 2023 and December 31, 2022. The Corporation's SCB under the Standardized approach was 3.4 percent, the G-SIB surcharge was 2.5 percent and the countercyclical capital buffer was zero for both periods. 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 March 31, 2023, CET1 capital was $184.4 billion, an increase of $4.4 billion from December 31, 2022, primarily due to earnings, partially offset by dividends and common stock repurchases. Tier 1 capital increased $4.4 billion primarily driven by the same factors as CET1 capital. Total capital under the Standardized approach increased $4.0 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, partially offset by a decrease in subordinated
debt. RWA under the Standardized approach, which yielded the lower CET1 capital ratio at March 31, 2023, increased $17.0 billion during the three months ended March 31, 2023 to $1,622 billion primarily due to higher counterparty exposures in Global Markets. Supplementary leverage exposure at March 31, 2023 increased $31.4 billion primarily due to higher trading assets from increased business activities and higher cash held at central banks, partially offset by lower derivative exposures and debt securities balances.

Bank of America 18

Table 8 shows the capital composition at March 31, 2023 and December 31, 2022.
Table 8Capital Composition under Basel 3
(Dollars in millions)March 31 2023December 31 2022
Total common shareholders’ equity$251,799 $244,800 
CECL transitional amount (1)
1,254 1,881 
Goodwill, net of related deferred tax liabilities(68,644)(68,644)
Deferred tax assets arising from net operating loss and tax credit carryforwards(7,835)(7,776)
Intangibles, other than mortgage servicing rights, net of related deferred tax liabilities(1,538)(1,554)
Defined benefit pension plan net assets(882)(867)
Cumulative unrealized net (gain) loss related to changes in fair value of financial liabilities attributable to own creditworthiness,
 net-of-tax		484 496 
Accumulated net (gain) loss on certain cash flow hedges (2)
9,886 11,925 
Other(92)(201)
Common equity tier 1 capital184,432 180,060 
Qualifying preferred stock, net of issuance cost28,396 28,396 
Other(3)(10)
Tier 1 capital212,825 208,446 
Tier 2 capital instruments17,845 18,751 
Qualifying allowance for credit losses (3)
12,449 11,739 
Other(376)(163)
Total capital under the Standardized approach242,743 238,773 
Adjustment in qualifying allowance for credit losses under the Advanced approaches (3)
(8,866)(7,857)
Total capital under the Advanced approaches$233,877 $230,916 
(1)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.
(2)Includes amounts in accumulated other comprehensive income (OCI) 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 9 shows the components of RWA as measured under Basel 3 at March 31, 2023 and December 31, 2022.
Table 9Risk-weighted Assets under Basel 3
Standardized ApproachAdvanced ApproachesStandardized ApproachAdvanced Approaches
(Dollars in billions)
March 31, 2023December 31, 2022
Credit risk$1,558 $958 $1,538 $939 
Market risk64 63 67 67 
Operational risk n/a 364 n/a364 
Risks related to credit valuation adjustments n/a 42 n/a41 
Total risk-weighted assets$1,622 $1,427 $1,605 $1,411 
n/a = not applicable
19 Bank of America


Bank of America, N.A. Regulatory Capital
Table 10 presents regulatory capital information for BANA in accordance with Basel 3 Standardized and Advanced approaches as measured at March 31, 2023 and December 31, 2022. BANA met the definition of well capitalized under the PCA framework for both periods.
Table 10Bank of America, N.A. Regulatory Capital under Basel 3
Standardized
Approach (1)
Advanced
Approaches (1)
Regulatory
Minimum (2)
(Dollars in millions, except as noted)March 31, 2023
Risk-based capital metrics:
Common equity tier 1 capital$185,410 $185,410 
Tier 1 capital185,410 185,410 
Total capital (3)
199,325 190,730 
Risk-weighted assets (in billions) 1,389 1,104 
Common equity tier 1 capital ratio13.3 %16.8 %7.0 %
Tier 1 capital ratio13.3 16.8 8.5 
Total capital ratio14.3 17.3 10.5 
Leverage-based metrics:
Adjusted quarterly average assets (in billions) (4)
$2,365 $2,365 
Tier 1 leverage ratio7.8 %7.8 %5.0 
Supplementary leverage exposure (in billions)$2,799 
Supplementary leverage ratio6.6 %6.0 




December 31, 2022
Risk-based capital metrics:
Common equity tier 1 capital$181,089 $181,089 
Tier 1 capital181,089 181,089 
Total capital (3)
194,254 186,648 
Risk-weighted assets (in billions) 1,386 1,087 
Common equity tier 1 capital ratio13.1 %16.7 %7.0 %
Tier 1 capital ratio13.1 16.7 8.5 
Total capital ratio14.0 17.2 10.5 
Leverage-based metrics:
Adjusted quarterly average assets (in billions) (4)
$2,358 $2,358 
Tier 1 leverage ratio7.7 %7.7 %5.0 
Supplementary leverage exposure (in billions)$2,785 
Supplementary leverage ratio6.5 %6.0 
(1)Capital ratios as of March 31, 2023 and December 31, 2022 are calculated using the regulatory capital rule that allows a five-year transition period related to the adoption of the CECL accounting standard on January 1, 2020.
(2)Risk-based capital regulatory minimums at both March 31, 2023 and December 31, 2022 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 11 presents the Corporation's TLAC and long-term debt ratios and related information as of March 31, 2023 and December 31, 2022.
Bank of America 20

Table 11Bank 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)March 31, 2023
Total eligible balance$466,319 $239,255 
Percentage of risk-weighted assets (4)
28.8 %22.0 %14.8 %8.5 %
Percentage of supplementary leverage exposure13.1 9.5 6.7 4.5 
December 31, 2022
Total eligible balance$465,451 $243,833 
Percentage of risk-weighted assets (4)
29.0 %22.0 %15.2 %8.5 %
Percentage of supplementary leverage exposure13.2 9.5 6.9 4.5 
(1)As of March 31, 2023 and December 31, 2022, 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 March 31, 2023 and December 31, 2022.

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 March 31, 2023, BofAS had tentative net capital of $19.3 billion. BofAS also had regulatory net capital of $17.1 billion, which exceeded the minimum requirement of $4.5 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 March 31, 2023, MLPCC’s regulatory net capital of $7.1 billion exceeded the minimum requirement of $1.5 billion.
MLPF&S provides retail services. At March 31, 2023, MLPF&S' regulatory net capital was $6.3 billion, which exceeded the minimum requirement of $137 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 FCA and is subject to certain regulatory capital requirements. At
March 31, 2023, MLI’s capital resources were $33.5 billion, which exceeded the minimum Pillar 1 requirement of $11.7 billion.
BofASE, an authorized credit institution with its head office located in France, is regulated by the Autorité de Contrôle Prudentiel et de Résolution and the Autorité des Marchés Financiers, and supervised under the Single Supervisory Mechanism by the European Central Bank. At March 31, 2023, BofASE's capital resources were $9.1 billion, which exceeded the minimum Pillar 1 requirement of $3.3 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 March 31, 2023 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 stress from increased volatility due to the failure of certain financial institutions in March 2023. For more information, see Executive Summary – Recent Developments – Financial Market Events on page 3. Our practices have also allowed us to effectively manage market fluctuations from the rising interest rate environment, inflationary pressures and changes in the 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 and liquidity management enhances our ability to monitor
21 Bank of America


liquidity requirements, maximizes access to funding sources, minimizes borrowing costs and facilitates timely responses to liquidity events. For more information on the Corporation’s liquidity risks, see the Liquidity section within Item 1A. Risk Factors of the Corporation’s 2022 Annual Report on Form 10-K. 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 2022 Annual Report on Form 10-K.
NB Holdings Corporation
Bank of America Corporation, as the parent company (the Parent), 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 assets not required to satisfy anticipated near-term expenditures to NB Holdings. The Parent 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 would be resolved under the U.S. Bankruptcy Code.
Global Liquidity Sources and Other Unencumbered Assets
We maintain liquidity available to the Corporation, including the Parent and selected subsidiaries, in the form of cash and high-quality, liquid, unencumbered securities. Our liquidity buffer, referred to as Global Liquidity Sources (GLS), is comprised of assets that are readily available to the Parent and selected subsidiaries, including holding company, bank and broker-dealer subsidiaries, even during stressed market conditions. Our cash is primarily on deposit with the Federal Reserve Bank and, to a lesser extent, central banks outside of the U.S. We limit the composition of high-quality, liquid, unencumbered securities to U.S. government securities, U.S. agency securities, U.S. agency mortgage-backed securities and other investment-grade securities, and a select group of non-U.S. government securities. We can obtain cash for these securities, even in stressed conditions, through repurchase agreements or outright sales. We hold our GLS in legal entities that allow us to meet the liquidity requirements of our global businesses, and we consider the impact of potential regulatory, tax, legal and other restrictions that could limit the transferability of funds among entities.
Table 12 presents average GLS for the three months ended March 31, 2023 and December 31, 2022.
Table 12Average Global Liquidity Sources
Three Months Ended
(Dollars in billions)March 31 2023December 31 2022
Bank entities$683 $694 
Nonbank and other entities (1)
171 174 
Total Average Global Liquidity Sources
$854 $868 
(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 $319 billion and $348 billion at March 31, 2023 and December 31, 2022. 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 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 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 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 13 presents the composition of average GLS for the three months ended March 31, 2023 and December 31, 2022.
Table 13Average Global Liquidity Sources Composition
Three Months Ended
(Dollars in billions)March 31
2023		December 31 2022
Cash on deposit$204 $174 
U.S. Treasury securities225 252 
U.S. agency securities, mortgage-backed
   securities, and other investment-grade securities		411 427 
Non-U.S. government securities14 15 
Total Average Global Liquidity Sources$854 $868 
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 $591 billion and $605 billion for the three months ended March 31, 2023 and December 31, 2022. For the same periods, the average consolidated LCR was 117 percent and 120 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
Bank of America 22

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 2022 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 March 31, 2023, the Corporation and its insured depository institutions were in compliance with this requirement.
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 were $1.91 trillion and $1.93 trillion at March 31, 2023 and December 31, 2022. 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.
Deposits
Our deposit base is well-diversified by clients, geography and product type across our business segments. At March 31,
2023, 55 percent of our deposits were in Consumer Banking, 16 percent in GWIM and 26 percent in Global Banking. We consider a substantial portion of our deposit base to be a stable, low-cost and consistent source of liquidity. At March 31, 2023, approximately 67 percent of consumer and small business deposits and 80 percent of U.S. deposits in Global Banking were held by clients who have had accounts with us for 10 or more years. In addition, at March 31, 2023 and December 31, 2022, 33 percent and 34 percent of our deposits were noninterest-bearing and included operating accounts of our consumer and commercial clients. Deposits at March 31, 2023 decreased $19.9 billion, or one percent, from December 31, 2022 primarily due to clients in GWIM moving deposits into higher yielding investment alternatives. Period-end deposits for Consumer Banking and Global Banking were relatively stable at March 31, 2023 compared to December 31, 2022.
Long-term Debt
During the three months ended March 31, 2023, we issued $14.3 billion of long-term debt consisting of $3.8 billion of notes issued by Bank of America Corporation, which were largely TLAC compliant, $4.4 billion of notes issued by Bank of America, N.A. and $6.1 billion of other debt.
During the three months ended March 31, 2023, we had total long-term debt maturities and redemptions in the aggregate of $11.3 billion consisting of $8.9 billion for Bank of America Corporation, $500 million for Bank of America, N.A. and $1.9 billion of other debt. Table 14 presents the carrying value of aggregate annual contractual maturities of long-term debt at March 31, 2023.

Table 14Long-term Debt by Maturity
(Dollars in millions)Remainder of 20232024202520262027ThereafterTotal
Bank of America Corporation
Senior notes (1)
$3,702 $18,207 $24,909 $24,274 $19,248 $113,206 $203,546 
Senior structured notes763 562 573 956 628 9,575 13,057 
Subordinated notes— 3,160 5,163 4,926 2,148 10,341 25,738 
Junior subordinated notes— — — — 188 556 744 
Total Bank of America Corporation4,465 21,929 30,645 30,156 22,212 133,678 243,085 
Bank of America, N.A.
Senior notes— 5,970 — — — — 5,970 
Subordinated notes— — — — — 1,514 1,514 
Advances from Federal Home Loan Banks100 1,000 14 9 4 52 1,179 
Securitizations and other Bank VIEs (2)
999 999 2,248 — — 52 4,298 
Other219 719 71 33 70 — 1,112 
Total Bank of America, N.A.1,318 8,688 2,333 42 74 1,618 14,073 
Other debt
Structured Liabilities3,999 3,203 2,519 3,272 2,002 11,137 26,132 
Nonbank VIEs (2)
— — — — — 583 583 
Total other debt3,999 3,203 2,519 3,272 2,002 11,720 26,715 
Total long-term debt$9,782 $33,820 $35,497 $33,470 $24,288 $147,016 $283,873 
(1)Total includes $180.8 billion of outstanding notes that are both TLAC eligible and callable one year before their stated maturities, including $12.2 billion during the remainder of 2023, and $21.6 billion, $21.6 billion, $19.2 billion and $24.8 billion during each year of 2024 through 2027, respectively, and $81.4 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 2022 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 increased $7.9 billion to $283.9 billion during the three months ended March 31, 2023 primarily due to debt issuances and valuation adjustments, partially offset by debt maturities and redemptions. 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 three months ended March 31, 2023, we issued $4.0 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
23 Bank of America


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 2022 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 40.
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 15 presents the Corporation’s current long-term/short-term senior debt ratings and outlooks expressed by the rating agencies.
The ratings and outlooks from Fitch Ratings for the Corporation and its subsidiaries have not changed from those disclosed in the Corporation's 2022 Annual Report on Form 10-K.
On March 31, 2023, Standard & Poor’s Global Ratings (S&P) affirmed the current ratings of the Corporation and its subsidiaries, while at the same time revising its rating outlook to Stable from Positive. S&P concurrently changed its outlooks on three other large U.S. bank holding companies to Stable from Positive, noting that the agency has reduced its upside expectations for bank ratings in the near term.
On January 23, 2023, Moody’s Investors Service (Moody’s) placed the long-term rating of the Corporation as well as the long-term rating of its rated subsidiaries, including BANA, on review for upgrade. The agency cited the Corporation’s strengthened capital ratios, improved earnings profile and continued commitment to maintaining a restrained risk appetite as drivers of the review. Moody’s concurrently affirmed all Prime-1 short-term ratings of the Corporation and rated subsidiaries. A review for upgrade indicates that those ratings are under consideration for a change in the near term and typically concludes within 90 days. As of May 1, 2023, Moody’s had not yet announced the completion of its review of the long-term ratings.
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 2022 Annual Report on Form 10-K.
Table 15Senior Debt Ratings
Moody’s Investors ServiceStandard & Poor’s Global RatingsFitch Ratings
Long-termShort-termOutlookLong-termShort-termOutlookLong-termShort-termOutlook
Bank of America CorporationA2P-1Review for UpgradeA-A-2StableAA-F1+Stable
Bank of America, N.A.Aa2P-1Review for UpgradeA+A-1StableAAF1+Stable
Bank of America Europe Designated Activity CompanyNRNRNRA+A-1StableAAF1+Stable
Merrill Lynch, Pierce, Fenner & Smith IncorporatedNRNRNRA+A-1StableAAF1+Stable
BofA Securities, Inc.NRNRNRA+A-1StableAAF1+Stable
Merrill Lynch InternationalNRNRNRA+A-1StableAAF1+Stable
BofA Securities Europe SANRNRNRA+A-1StableAAF1+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 March 31, 2023. 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 2022 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 2022 Annual Report on Form 10-K.
Bank of America 24

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 29, Non-U.S. Portfolio on page 35, Allowance for Credit Losses on page 36, and Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses to the Consolidated Financial Statements. For information on the Corporation’s loan modification programs, see Note 1 – Summary of Significant Accounting Principles and Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses to the Consolidated Financial Statements.
During the three months ended March 31, 2023, our asset quality remained relatively healthy. Our net charge-off ratio increased primarily driven by credit card loans, as delinquency trends continue to slowly increase off of historic lows; however, they remain below pre-pandemic levels. Nonperforming loans increased modestly compared to December 31, 2022 driven by office, while commercial reservable criticized exposure increased driven by both office as well as other industries that have been impacted by the current environment. Uncertainty remains regarding broader economic impacts as a result of inflationary pressures, rising rates and the current geopolitical environment 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 three months ended March 31, 2023, the U.S. unemployment rate remained relatively stable and home prices continued to decline modestly. During the three months ended March 31, 2023, net charge-offs increased $313 million to $653 million compared to the same period in 2022, as late-stage delinquent credit card loans were charged off.
The consumer allowance for loan and lease losses increased $124 million during the three months ended March 31, 2023 to $7.4 billion. For more information, see Allowance for Credit Losses on page 36.
For more information on our accounting policies regarding delinquencies, nonperforming status, charge-offs and loan modifications for the consumer portfolio, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2022 Annual Report on Form 10-K and Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses to the Consolidated Financial Statements.
Table 16 presents our outstanding consumer loans and leases, consumer nonperforming loans and accruing consumer loans past due 90 days or more.
Table 16Consumer Credit Quality
 OutstandingsNonperformingAccruing Past Due
90 Days or More
(Dollars in millions)March 31
2023		December 31
2022		March 31
2023		December 31
2022		March 31
2023		December 31
2022
Residential mortgage (1)
$228,827 $229,670 $2,125 $2,167 $338 $368 
Home equity 25,868 26,563 488 510 — — 
Credit card92,469 93,421 n/an/a828 717 
Direct/Indirect consumer (2)
104,540 106,236 101 77 2 2 
Other consumer120 156 — — — — 
Consumer loans excluding loans accounted for under the fair value option
$451,824 $456,046 $2,714 $2,754 $1,168 $1,087 
Loans accounted for under the fair value option (3)
334 339 
Total consumer loans and leases $452,158 $456,385 
Percentage of outstanding consumer loans and leases (4)
n/an/a0.60 %0.60 %0.26 %0.24 %
Percentage of outstanding consumer loans and leases, excluding fully-insured loan portfolios (4)
n/an/a0.62 0.62 0.19 0.16 
(1)Residential mortgage loans accruing past due 90 days or more are fully-insured loans. At March 31, 2023 and December 31 2022, residential mortgage included $232 million and $260 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 $108 million of loans on which interest was still accruing.
(2)Outstandings primarily includes auto and specialty lending loans and leases of $52.7 billion and $51.8 billion, U.S. securities-based lending loans of $48.1 billion and $50.4 billion at March 31, 2023 and December 31 2022, and non-U.S. consumer loans of $2.8 billion and $3.0 billion at March 31, 2023 and December 31 2022.
(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 both March 31, 2023 and December 31 2022, $7 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
25 Bank of America


Table 17 presents net charge-offs and related ratios for consumer loans and leases.
Table 17Consumer Net Charge-offs and Related Ratios
Net Charge-offs
Net Charge-off Ratios (1)
Three Months Ended March 31
(Dollars in millions)2023202220232022
Residential mortgage$1 $(10)— %(0.02)%
Home equity(12)(30)(0.18)(0.44)
Credit card501 297 2.21 1.53 
Direct/Indirect consumer1 4 — 0.02 
Other consumer162 79 n/mn/m
Total$653 $340 0.58 0.32 
(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 March 31, 2023. Approximately 51 percent of the residential mortgage portfolio was in
Consumer Banking, 45 percent was in GWIM and the remaining portion was in All Other.
Outstanding balances in the residential mortgage portfolio decreased $843 million during the three months ended March 31, 2023, as paydowns outpaced new originations.
At March 31, 2023 and December 31, 2022, the residential mortgage portfolio included $11.4 billion and $11.7 billion of outstanding fully-insured loans, of which $2.1 billion and $2.2 billion had FHA insurance, with the remainder protected by Fannie Mae long-term standby agreements.
Table 18 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.
Table 18Residential Mortgage – Key Credit Statistics
Reported Basis (1)
Excluding Fully-insured Loans (1)
(Dollars in millions)March 31
2023		December 31
2022		March 31
2023		December 31
2022
Outstandings$228,827 $229,670 $217,445 $217,976 
Accruing past due 30 days or more1,304 1,471 724 844 
Accruing past due 90 days or more338 368 — — 
Nonperforming loans (2)
2,125 2,167 2,125 2,167 
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 1 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 that have not yet demonstrated a sustained period of payment performance following a modification.
Nonperforming outstanding balances in the residential mortgage portfolio decreased $42 million during the three months ended March 31, 2023 primarily due to returns to performing and paydowns outpacing new additions. Of the nonperforming residential mortgage loans at March 31, 2023, $1.3 billion, or 63 percent, were current on contractual payments. Loans accruing past due 30 days or more decreased $120 million.
Of the $217.4 billion in total residential mortgage loans outstanding at March 31, 2023, 28 percent were originated as interest-only loans. The outstanding balance of interest-only residential mortgage loans that had entered the amortization period was $3.4 billion, or six percent, at March 31, 2023. Residential mortgage loans that have entered the amortization period generally experience a higher rate of early stage delinquencies and nonperforming status compared to the residential mortgage portfolio as a whole. At March 31, 2023, $64 million, or two percent, of outstanding interest-only residential mortgages that had entered the amortization period were accruing past due 30 days or more compared to $724 million, or less than one percent, for the entire residential
mortgage portfolio. In addition, at March 31, 2023, $185 million, or five percent, of outstanding interest-only residential mortgage loans that had entered the amortization period were nonperforming, of which $67 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 3 to 10 years. Approximately 96 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 19 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 of outstandings at both March 31, 2023 and December 31, 2022. In the New York area, the New York-Northern New Jersey-Long Island MSA made up 15 percent of outstandings at both March 31, 2023 and December 31, 2022.

Bank of America 26

Table 19Residential Mortgage State Concentrations
Outstandings (1)
Nonperforming (1)
Net Charge-offs
March 31
2023		December 31
2022		March 31
2023		December 31
2022		Three Months Ended March 31
(Dollars in millions)20232022
California$80,629 $80,878 $649 $656 $— $(3)
New York26,191 26,228 329 328 2 — 
Florida15,241 15,225 136 145 (2)(1)
Texas9,399 9,399 84 88 — — 
New Jersey8,772 8,810 94 96 — — 
Other77,213 77,436 833 854 1 (6)
Residential mortgage loans$217,445 $217,976 $2,125 $2,167 $1 $(10)
Fully-insured loan portfolio11,382 11,694   
Total residential mortgage loan portfolio
$228,827 $229,670   
(1)Outstandings and nonperforming loans exclude loans accounted for under the fair value option.
Home Equity
At March 31, 2023, 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 March 31, 2023, 82 percent of the home equity portfolio was in Consumer Banking, eight percent was in All Other and the remainder of the portfolio was primarily in GWIM. Outstanding balances in the home equity portfolio decreased $695 million during the three months ended March 31, 2023 primarily due to paydowns outpacing draws on existing lines and new
originations. Of the total home equity portfolio at March 31, 2023 and December 31, 2022, $10.7 billion and $11.1 billion, or 41 percent and 42 percent, were in first-lien positions. At March 31, 2023, 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 $4.4 billion, or 17 percent of our total home equity portfolio.
Unused HELOCs totaled $44.0 billion and $42.4 billion at March 31, 2023 and December 31, 2022. The HELOC utilization rate was 36 percent and 38 percent at March 31, 2023 and December 31, 2022.
Table 20 presents certain home equity portfolio key credit statistics.
Table 20
Home Equity – Key Credit Statistics (1)
(Dollars in millions)March 31
2023		December 31
2022
Outstandings$25,868 $26,563 
Accruing past due 30 days or more93 96 
Nonperforming loans (2)
488 510 
Percent of portfolio
Refreshed CLTV greater than 90 but less than or equal to 100— %— %
Refreshed CLTV greater than 100— — 
Refreshed FICO below 6202 2 
(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 that have not yet demonstrated a sustained period of payment performance following a modification.
Nonperforming outstanding balances in the home equity portfolio decreased $22 million to $488 million at March 31, 2023, primarily driven by returns to performing status and paydowns outpacing new additions. Of the nonperforming home equity loans at March 31, 2023, $265 million, or 54 percent, were current on contractual payments, and $144 million, or 29 percent, 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 remained relatively unchanged during the three months ended March 31, 2023.
Net recoveries decreased $18 million to $12 million during the three months ended March 31, 2023 compared to the same period in 2022.
Of the $25.9 billion in total home equity portfolio outstandings at March 31, 2023, as shown in Table 20, 12 percent require interest-only payments. The outstanding balance of HELOCs that had reached the end of their draw period and
entered the amortization period was $4.9 billion at March 31, 2023. 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 March 31, 2023, $50 million, or one percent, of outstanding HELOCs that had entered the amortization period were accruing past due 30 days or more. In addition, at March 31, 2023, $329 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 March 31, 2023, 23 percent of these customers with an outstanding balance did not pay any principal on their HELOCs.
27 Bank of America


Table 21 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 12 percent of the outstanding home equity portfolio at both March 31, 2023 and
December 31, 2022. The Los Angeles-Long Beach-Santa Ana MSA within California made up 11 percent of the outstanding home equity portfolio at both March 31, 2023 and December 31, 2022.
Table 21Home Equity State Concentrations
Outstandings (1)
Nonperforming (1)
Net Charge-Offs
March 31
2023		December 31
2022		March 31
2023		December 31
2022		Three Months Ended March 31
(Dollars in millions)20232022
California$7,208 $7,406 $113 $119 $(1)$(6)
Florida2,667 2,743 60 63 (3)(7)
New Jersey1,964 2,047 50 53 — (2)
New York1,733 1,806 77 80 (2)(2)
Massachusetts1,293 1,347 15 23 — (1)
Other11,003 11,214 173 172 (6)(12)
Total home equity loan portfolio$25,868 $26,563 $488 $510 $(12)$(30)
(1)Outstandings and nonperforming loans exclude loans accounted for under the fair value option.
Credit Card
At March 31, 2023, 97 percent of the credit card portfolio was managed in Consumer Banking with the remainder in GWIM. Outstandings in the credit card portfolio decreased $952 million during the three months ended March 31, 2023 to $92.5 billion primarily driven by a seasonal decline in purchase volumes. Net charge-offs increased $204 million to $501 million during the three months ended March 31, 2023 compared to the same period in 2022, as late-stage credit card delinquencies were
charged off. Credit card loans 30 days or more past due and still accruing interest increased $169 million, and 90 days or more past due and still accruing interest increased $111 million.
Unused lines of credit for credit card increased to $381.1 billion at March 31, 2023 from $370.1 billion at December 31, 2022.
Table 22 presents certain state concentrations for the credit card portfolio.
Table 22Credit Card State Concentrations
OutstandingsAccruing Past Due
90 Days or More		Net Charge-offs
March 31
2023		December 31
2022		March 31
2023		December 31
2022		Three Months Ended March 31
(Dollars in millions)20232022
California$15,235 $15,363 $145 $126 $88 $50 
Florida9,504 9,512 110 100 69 42 
Texas8,124 8,125 81 72 48 27 
New York5,339 5,381 71 56 39 22 
Washington4,777 4,844 26 21 14 7 
Other49,490 50,196 395 342 243 149 
Total credit card portfolio$92,469 $93,421 $828 $717 $501 $297 
Direct/Indirect Consumer
At March 31, 2023, 51 percent of the direct/indirect portfolio was included in Consumer Banking (consumer auto and recreational vehicle lending) and 49 percent was included in GWIM (principally securities-based lending loans). Outstandings in the direct/indirect portfolio decreased $1.7 billion during the
three months ended March 31, 2023 to $104.5 billion driven by declines in securities-based lending stemming from higher paydown activity due to higher interest rates, partially offset by growth in our auto portfolio.
Table 23 presents certain state concentrations for the direct/indirect consumer loan portfolio.
Table 23Direct/Indirect State Concentrations
OutstandingsNonperformingNet Charge-offs
March 31
2023		December 31
2022		March 31
2023		December 31
2022		Three Months Ended March 31
(Dollars in millions)20232022
California$15,438 $15,516 $16 $12 $2 $1 
Florida13,420 13,783 12 10 — 1 
Texas9,818 9,837 11 9 — 1 
New York7,548 7,891 7 5 — — 
New Jersey4,378 4,456 3 3 — — 
Other53,938 54,753 52 38 (1)1 
Total direct/indirect loan portfolio$104,540 $106,236 $101 $77 $1 $4 
Other Consumer
Other consumer primarily consists of deposit overdraft balances. Net charge-offs increased $83 million to $162 million
during the three months ended March 31, 2023 compared to the same period in 2022, primarily driven by higher overdraft losses due to industry-wide check fraud activity.
Bank of America 28

Nonperforming Consumer Loans, Leases and Foreclosed Properties Activity
Table 24 presents nonperforming consumer loans, leases and foreclosed properties activity for the three months ended March 31, 2023 and 2022. During the three months ended March 31, 2023, nonperforming consumer loans decreased $40 million to $2.7 billion primarily due to returns to performing status and paydowns outpacing new additions during the first quarter of 2023.
At March 31, 2023, $550 million, or 20 percent, of nonperforming loans were 180 days or more past due and had been written down to their estimated property value less costs 7to sell. In addition, at March 31, 2023, $1.6 billion, or 60 percent, of nonperforming consumer loans were current and classified as nonperforming loans in accordance with applicable policies.
Foreclosed properties decreased $4 million during the three months ended March 31, 2023 to $117 million.
Table 24Nonperforming Consumer Loans, Leases and Foreclosed Properties Activity
Three Months Ended March 31
(Dollars in millions)20232022
Nonperforming loans and leases, January 1$2,754 $2,989 
Additions 253 644 
Reductions:
Paydowns and payoffs(103)(175)
Sales(2)(131)
Returns to performing status (1)
(170)(202)
Charge-offs(12)(15)
Transfers to foreclosed properties (6)(6)
Total net additions/(reductions) to nonperforming loans and leases(40)115 
Total nonperforming loans and leases, March 31
2,714 3,104 
Foreclosed properties, March 31
117 118 
Nonperforming consumer loans, leases and foreclosed properties, March 31
$2,831 $3,222 
Nonperforming consumer loans and leases as a percentage of outstanding consumer loans and leases (2)
0.60 %0.71 %
Nonperforming consumer loans, leases and foreclosed properties as a percentage of outstanding consumer loans, leases and foreclosed properties (2)
0.63 0.74 
(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)Outstanding consumer loans and leases exclude loans accounted for under the fair value option.
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 29, 31 and 34 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 31 and Commercial Portfolio Credit Risk Management – Industry Concentrations on page 33.
For more information on our accounting policies regarding delinquencies, nonperforming status, net charge-offs and loan modifications for the commercial portfolio, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2022 Annual Report on Form 10-K and Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses to the Consolidated Financial Statements.
Commercial Credit Portfolio
Outstanding commercial loans and leases increased $4.9 billion during the three months ended March 31, 2023 due to growth in commercial real estate and our U.S. commercial and industrial portfolio, primarily in Global Banking. During the three months ended March 31, 2023, commercial credit quality deteriorated and nonperforming commercial loans and reservable criticized utilized exposure increased; however, the
commercial net charge off ratio of 0.11 percent for the three months ended March 31, 2023 remained low. For more information, see Commercial Real Estate on page 31.
With the exception of the office property type, which is further discussed in the Commercial Real Estate section herein, credit quality of commercial real estate borrowers has remained relatively stable since December 31, 2022; however, we are closely monitoring borrower performance in the increased rate environment and emerging trends. Many commercial real estate markets are still experiencing disruptions in demand, supply chain challenges, tenant difficulties and challenging capital markets. Recent demand for office space has been stagnant, and future 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 decreased $292 million during the three months ended March 31, 2023 to $5.2 billion, primarily driven by certain improved macroeconomic conditions. For more information, see Allowance for Credit Losses on page 36.
Total commercial utilized credit exposure decreased $4.2 billion during the three months ended March 31, 2023 to $700.7 billion primarily driven by lower derivative assets, partially offset by higher loans and leases. The utilization rate for loans and leases, standby letters of credit (SBLCs) and financial guarantees, and commercial letters of credit, in the aggregate, was 56 percent at both March 31, 2023 and at December 31, 2022.
29 Bank of America


Table 25 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 25Commercial Credit Exposure by Type
 
Commercial Utilized (1)
Commercial Unfunded (2, 3, 4)
Total Commercial Committed
(Dollars in millions)March 31 2023December 31 2022March 31 2023December 31 2022March 31 2023December 31 2022
Loans and leases$594,248 $589,362 $487,291 $487,772 $1,081,539 $1,077,134 
Derivative assets (5)
40,947 48,642 — — 40,947 48,642 
Standby letters of credit and financial guarantees32,952 33,376 1,513 1,266 34,465 34,642 
Debt securities and other investments19,378 20,195 2,872 2,551 22,250 22,746 
Loans held-for-sale5,895 6,112 3,953 3,729 9,848 9,841 
Operating leases5,474 5,509 — — 5,474 5,509 
Commercial letters of credit1,020 973 43 28 1,063 1,001 
Other800 698 — — 800 698 
Total$700,714 $704,867 $495,672 $495,346 $1,196,386 $1,200,213 
(1)Commercial utilized exposure includes loans of $4.1 billion and $5.4 billion accounted for under the fair value option at March 31, 2023 and December 31, 2022.
(2)Commercial unfunded exposure includes commitments accounted for under the fair value option with a notional amount of $3.1 billion and $3.0 billion at March 31, 2023 and December 31, 2022.
(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 $10.1 billion and $10.4 billion at March 31, 2023 and December 31, 2022.
(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 $29.0 billion and $33.8 billion at March 31, 2023 and December 31, 2022. Not reflected in utilized and committed exposure is additional non-cash derivative collateral held of $51.0 billion and $51.6 billion at March 31, 2023 and December 31, 2022, which consists primarily of other marketable securities.
Nonperforming commercial loans increased $150 million primarily in commercial real estate, partially offset by non-U.S. commercial. Table 26 presents our commercial loans and leases portfolio and related credit quality information at March 31, 2023 and December 31, 2022.
Table 26Commercial Credit Quality
OutstandingsNonperforming Accruing Past Due
90 Days or More
(Dollars in millions)March 31 2023December 31 2022March 31 2023December 31 2022March 31 2023December 31 2022
Commercial and industrial:
U.S. commercial$360,655 $358,481 $559 $553 $112 $190 
Non-U.S. commercial124,827 124,479 125 212 92 25 
Total commercial and industrial485,482 482,960 684 765 204 215 
Commercial real estate73,051 69,766 502 271 35 46 
Commercial lease financing13,448 13,644 4 4 6 8 
571,981 566,370 1,190 1,040 245 269 
U.S. small business commercial (1)
18,204 17,560 14 14 261 355 
Commercial loans excluding loans accounted for under the fair value option$590,185 $583,930 $1,204 $1,054 $506 $624 
Loans accounted for under the fair value option (2)
4,063 5,432 
Total commercial loans and leases$594,248 $589,362 
(1)Includes card-related products.
(2)Commercial loans accounted for under the fair value option includes U.S. commercial of $2.2 billion and $2.9 billion and non-U.S. commercial of $1.9 billion and $2.5 billion at March 31, 2023 and December 31, 2022. For more information on the fair value option, see Note 15 – Fair Value Option to the Consolidated Financial Statements.
Bank of America 30

Table 27 presents net charge-offs and related ratios for our commercial loans and leases for the three months ended March 31, 2023 and 2022.
Table 27Commercial Net Charge-offs and Related Ratios
Net Charge-offs
Net Charge-off Ratios (1)
Three Months Ended March 31
(Dollars in millions)2023202220232022
Commercial and industrial:
U.S. commercial$47 $(14)0.05 %(0.02 %)
Non-U.S. commercial20 1 0.07 — 
Total commercial and industrial67 (13)0.06 (0.01)
Commercial real estate22 23 0.12 0.15 
Commercial lease financing(1)— (0.01)— 
88 10 0.06 0.01 
U.S. small business commercial66 42 1.48 0.94 
Total commercial$154 $52 0.11 0.04 
(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 28 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 increased $515 million during the
three months ended March 31, 2023 driven by U.S. commercial and commercial real estate office, partially offset by non-U.S. commercial. At March 31, 2023 and December 31, 2022, 87 percent and 88 percent of commercial reservable criticized utilized exposure was secured.
Table 28
Commercial Reservable Criticized Utilized Exposure (1, 2)
(Dollars in millions)March 31, 2023December 31, 2022
Commercial and industrial:
U.S. commercial$11,132 2.87 %$10,724 2.78 %
Non-U.S. commercial2,363 1.81 2,665 2.04 
Total commercial and industrial13,495 2.60 13,389 2.59 
Commercial real estate5,579 7.49 5,201 7.30 
Commercial lease financing222 1.65 240 1.76 
19,296 3.18 18,830 3.13 
U.S. small business commercial493 2.17 444 2.53 
Total commercial reservable criticized utilized exposure$19,789 3.17 $19,274 3.12 
(1)Total commercial reservable criticized utilized exposure includes loans and leases of $19.0 billion and $18.5 billion and commercial letters of credit of $820 million and $817 million at March 31, 2023 and December 31, 2022.
(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 March 31, 2023, 64 percent of the U.S. commercial loan portfolio, excluding small business, was managed in Global Banking, 21 percent in Global Markets, 14 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 $2.2 billion, or one percent, during the three months ended March 31, 2023 primarily driven by Global Markets. Reservable criticized utilized exposure increased $408 million, or four percent, driven by increases across a broad range of industries.
Non-U.S. Commercial
At March 31, 2023, 65 percent of the non-U.S. commercial loan portfolio was managed in Global Banking, 34 percent in Global Markets and the remainder in GWIM. Non-U.S. commercial loans remained relatively unchanged during the three months ended March 31, 2023. Reservable criticized utilized exposure decreased $302 million, or 11 percent, primarily due to paydowns and sales of Russian exposure. For information on the non-U.S. commercial portfolio, see Non-U.S. Portfolio on page 35.
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 $3.3 billion, or five percent, during the three months ended March 31, 2023 to $73.1 billion with increases across multiple property types. The commercial real estate portfolio is primarily managed in Global Banking and consists of loans made primarily to public and private developers, and commercial real estate firms. The portfolio remains diversified across property types and geographic regions. California represented the largest state concentration at 19 percent of the commercial real estate portfolio at both March 31, 2023 and December 31, 2022.
Reservable criticized utilized exposure increased $378 million, or seven percent, primarily driven by office loans. Office loans represented the largest property type concentration, at 26 percent of the commercial real estate portfolio at March 31, 2023, but only represented approximately two percent of total loans for the Corporation. This property type is roughly 75 percent Class A and has origination loan-to-value of approximately 55 percent. Reservable criticized exposure for the office property type was $3.7 billion at March 31, 2023 and approximately $9.8 billion of office loans are scheduled to mature by the end of 2024. Although we have seen collateral value declines in this property type, these loans remain well secured as of March 31, 2023.
31 Bank of America


During the three months ended March 31, 2023, we continued to see low default rates. 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 29 presents outstanding commercial real estate loans by geographic region, based on the geographic location of the collateral, and by property type.
Table 29Outstanding Commercial Real Estate Loans
(Dollars in millions)March 31 2023December 31 2022
By Geographic Region   
Northeast$16,281 $15,601 
California13,824 13,360 
Southwest9,051 8,723 
Southeast8,436 7,713 
Florida5,345 5,374 
Illinois3,606 3,327 
Midwest3,394 3,419 
Midsouth2,752 2,716 
Northwest1,992 1,959 
Non-U.S. 5,815 5,518 
Other 2,555 2,056 
Total outstanding commercial real estate loans
$73,051 $69,766 
By Property Type  
Non-residential
Office$18,682 $18,230 
Industrial / Warehouse14,178 13,775 
Multi-family rental10,883 10,412 
Shopping centers /Retail6,018 5,830 
Hotel / Motels5,732 5,696 
Multi-use2,720 2,403 
Other13,511 12,241 
Total non-residential71,724 68,587 
Residential1,327 1,179 
Total outstanding commercial real estate loans
$73,051 $69,766 
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 $749 million and $1.0 billion of PPP loans outstanding at March 31, 2023 and December 31, 2022. The decline of $259 million in PPP loans during the three months ended March 31, 2023 was primarily due to repayment of the loans by the Small Business Administration (SBA) under the terms of the program. Excluding PPP, credit card-related products were 55 percent and 53 percent of the U.S. small business commercial portfolio at March 31, 2023 and December 31, 2022 and represented 99 percent of the net charge-offs for the three months ended March 31, 2023 compared to 100 percent for the three months ended March 31, 2022. The increase of $94 million in accruing past due 90 days or more for the three months ended March 31, 2023 was driven by PPP loans, which are fully guaranteed by the SBA.
Nonperforming Commercial Loans, Leases and Foreclosed Properties Activity
Table 30 presents the nonperforming commercial loans, leases and foreclosed properties activity during the three months ended March 31, 2023 and 2022. Nonperforming loans do not include loans accounted for under the fair value option. During the three months ended March 31, 2023, nonperforming commercial loans and leases increased $150 million to $1.2 billion. At March 31, 2023, 97 percent of commercial nonperforming loans, leases and foreclosed properties were secured, and 58 percent were contractually current. Commercial nonperforming loans were carried at 84 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 32

Table 30
Nonperforming Commercial Loans, Leases and Foreclosed Properties Activity (1, 2)
Three Months Ended March 31
(Dollars in millions)20232022
Nonperforming loans and leases, January 1$1,054 $1,578 
Additions419 183 
Reductions: 
Paydowns(72)(159)
Sales— (25)
Returns to performing status (3)
(52)(5)
Charge-offs(88)(12)
Transfers to loans held-for-sale(57)(39)
Total net reductions to nonperforming loans and leases150 (57)
Total nonperforming loans and leases, March 311,204 1,521 
Foreclosed properties, March 3148 35 
Nonperforming commercial loans, leases and foreclosed properties, March 31$1,252 $1,556 
Nonperforming commercial loans and leases as a percentage of outstanding commercial loans and leases (4)
0.20 %0.28 %
Nonperforming commercial loans, leases and foreclosed properties as a percentage of outstanding commercial loans, leases and foreclosed properties (4)
0.21 0.28 
(1)Balances do not include nonperforming loans held-for-sale of $250 million and $336 million at March 31, 2023 and 2022.
(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, when the loan otherwise becomes well-secured and is in the process of collection, or when a modified loan demonstrates a sustained period of payment performance.
(4)Outstanding commercial loans exclude loans accounted for under the fair value option.
Industry Concentrations
Table 31 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.
Commercial credit exposure is diversified across a broad range of industries. Total commercial committed exposure decreased $3.8 billion during the three months ended March 31, 2023 to $1.2 trillion and was primarily driven by derivative asset activity.
For information on industry limits, see Commercial Portfolio Credit Risk Management – Industry Concentrations in the MD&A of the Corporation’s 2022 Annual Report on Form 10-K.
Asset managers and funds, our largest industry concentration with committed exposure of $164.5 billion, decreased $607 million during the three months ended March 31, 2023.
Real estate, our second largest industry concentration with committed exposure of $101.1 billion, increased $1.4 billion, or
one percent, during the three months ended March 31, 2023. For more information on the commercial real estate and related portfolios, see Commercial Portfolio Credit Risk Management – Commercial Real Estate on page 31.
Capital goods, our third largest industry concentration with committed exposure of $88.1 billion, increased $746 million, or one percent, during the three months ended March 31, 2023. The increase in committed exposure occurred primarily as a result of increases in Trading companies and distributors and Aerospace and defense, partially offset by a decrease in Electric equipment.
There is uncertainty in the U.S. and global economies due to various macroeconomic challenges including geopolitical, inflationary pressures and elevated interest rates, 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.
33 Bank of America


Table 31
Commercial Credit Exposure by Industry (1)
Commercial
Utilized
Total Commercial
Committed (2)
(Dollars in millions)March 31 2023December 31 2022March 31 2023December 31 2022
Asset managers & funds$102,345 $106,842 $164,480 $165,087 
Real estate (3)
73,515 72,180 101,072 99,722 
Capital goods48,146 45,580 88,060 87,314 
Finance companies58,226 55,248 81,811 79,546 
Healthcare equipment and services34,245 33,554 59,280 58,761 
Materials27,224 26,304 56,244 55,589 
Retailing26,021 24,785 54,127 53,714 
Consumer services27,475 26,980 48,491 47,372 
Government & public education33,443 34,861 46,931 48,134 
Food, beverage and tobacco24,307 23,232 46,838 47,486 
Individuals and trusts31,874 34,897 43,488 45,572 
Commercial services and supplies24,136 23,628 41,711 41,596 
Utilities19,118 20,292 39,209 40,164 
Energy13,667 15,132 34,923 36,043 
Transportation22,051 22,273 33,846 33,858 
Technology hardware and equipment10,500 11,441 29,807 29,825 
Global commercial banks26,910 27,217 29,047 29,293 
Media15,102 14,781 29,006 28,216 
Software and services11,678 12,961 25,300 25,633 
Consumer durables and apparel10,167 10,009 21,784 21,389 
Pharmaceuticals and biotechnology6,581 7,547 21,419 26,208 
Vehicle dealers13,281 12,909 21,237 20,638 
Insurance10,007 10,224 19,109 19,444 
Telecommunication services9,646 9,679 17,666 17,349 
Automobiles and components8,163 8,774 15,910 16,911 
Food and staples retailing7,331 7,157 12,507 11,908 
Financial markets infrastructure (clearinghouses)3,013 3,913 8,526 8,752 
Religious and social organizations2,542 2,467 4,557 4,689 
Total commercial credit exposure by industry$700,714 $704,867 $1,196,386 $1,200,213 
(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 $10.1 billion and $10.4 billion at March 31, 2023 and December 31, 2022.
(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 March 31, 2023 and December 31, 2022, 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 $9.8 billion and $9.0 billion. We recorded net losses of $77 million for the three months ended March 31, 2023 compared to net losses of $9 million for the three months ended March 31, 2022. 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 37. For more information, see Trading Risk Management on page 38.
Tables 32 and 33 present the maturity profiles and the credit exposure debt ratings of the net credit default protection portfolio at March 31, 2023 and December 31, 2022.
Table 32Net Credit Default Protection by Maturity
March 31 2023December 31 2022
Less than or equal to one year10 %14 %
Greater than one year and less than or equal to five years
87 85 
Greater than five years3 1 
Total net credit default protection100 %100 %
Table 33Net Credit Default Protection by Credit Exposure Debt Rating
Net
Notional (1)
Percent of
Total
Net
Notional (1)
Percent of
Total
(Dollars in millions)March 31, 2023December 31, 2022
Ratings (2, 3)
    
AAA$(479)4.9 %$(379)4.0 %
AA(870)8.9 (867)10.0 
A(4,269)43.6 (3,257)36.0 
BBB(2,216)22.6 (2,476)28.0 
BB(894)9.1 (1,049)12.0 
B(852)8.7 (676)7.0 
CCC and below(120)1.2 (93)1.0 
NR (4)
(99)1.0 (182)2.0 
Total net credit
default protection
$(9,799)100.0 %$(8,979)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 34

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 2022 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 2022 Annual Report on Form 10-K. For more information on risks related to our non-U.S. portfolio, see the Geopolitical section within Item 1A. Risk Factors of the Corporation’s 2022 Annual Report on Form 10-K.
Table 34 presents our 20 largest non-U.S. country exposures at March 31, 2023. These exposures accounted for 89 percent of our total non-U.S. exposure at both March 31, 2023 and December 31, 2022. Net country exposure for these 20 countries decreased $23.7 billion in 2023 primarily driven by decreases in Germany, Japan and France.
Table 34Top 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 March 31
2023		Hedges and Credit Default ProtectionNet Country Exposure at March 31
2023		Increase (Decrease) from December 31
2022
United Kingdom$27,566 $16,909 $11,117 $1,629 $57,221 $(2,376)$54,845 $(500)
Germany26,231 9,029 1,487 1,561 38,308 (2,197)36,111 (9,615)
Canada11,289 9,558 1,459 3,461 25,767 (415)25,352 (221)
France14,459 7,975 1,366 1,414 25,214 (2,163)23,051 (3,542)
Australia14,128 4,080 673 2,120 21,001 (241)20,760 543 
Japan13,834 1,768 1,246 1,258 18,106 (787)17,319 (5,768)
Brazil8,554 1,293 691 4,192 14,730 (84)14,646 2,146 
India7,374 484 466 3,620 11,944 (76)11,868 1,099 
China6,118 289 568 2,604 9,579 (261)9,318 (1,490)
South Korea6,300 737 633 1,676 9,346 (61)9,285 159 
Switzerland5,610 3,223 318 230 9,381 (832)8,549 (2,139)
Ireland6,855 1,240 105 282 8,482 (31)8,451 (639)
Singapore3,908 681 45 3,851 8,485 (36)8,449 (1,158)
Netherlands2,893 4,756 716 1,097 9,462 (1,365)8,097 (1,186)
Mexico4,102 1,745 439 1,601 7,887 (65)7,822 430 
Hong Kong4,392 344 443 1,105 6,284 (17)6,267 (1,004)
Spain2,604 1,866 278 1,257 6,005 (445)5,560 (281)
Italy3,613 1,729 233 255 5,830 (1,472)4,358 (1,310)
Belgium1,397 1,491 1,102 415 4,405 (178)4,227 364 
Sweden1,207 1,804 111 232 3,354 (380)2,974 370 
Total top 20 non-U.S. countries exposure
$172,434 $71,001 $23,496 $33,860 $300,791 $(13,482)$287,309 $(23,742)
Our largest non-U.S. country exposure at March 31, 2023 was the United Kingdom with net exposure of $54.8 billion, which represents a decrease of $500 million from December 31, 2022. The decline was driven by decreased exposure across a mix of clients offset by increased net
counterparty exposure with central clearing counterparties. Our second largest non-U.S. country exposure was Germany with net exposure of $36.1 billion at March 31, 2023, a decrease of $9.6 billion from December 31, 2022. The decrease was primarily driven by lower deposits with the central bank.
35 Bank of America


Allowance for Credit Losses
The allowance for credit losses decreased $271 million from December 31, 2022 to $14.0 billion at March 31, 2023, which included a $123 million reserve increase related to the consumer portfolio and a $394 million reserve decrease related to the commercial portfolio. The decrease in the allowance reflected a reserve release in our commercial portfolio primarily driven by certain improved macroeconomic conditions, partially offset by a reserve build in our consumer portfolio primarily due to higher-than-expected credit card balances during the three
months ended March 31, 2023. The decrease in allowance also includes the impact of the accounting change to remove the recognition and measurement guidance on TDRs, which reduced the allowance for credit losses by $243 million. For more information on this change in accounting guidance, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements.
Table 35 presents an allocation of the allowance for credit losses by product type at March 31, 2023 and December 31, 2022.
Table 35Allocation 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)March 31, 2023December 31, 2022
Allowance for loan and lease losses      
Residential mortgage$305 2.44 %0.13 %$328 2.59 %0.14 %
Home equity98 0.78 0.38 92 0.73 0.35 
Credit card6,220 49.70 6.73 6,136 48.38 6.57 
Direct/Indirect consumer628 5.02 0.60 585 4.61 0.55 
Other consumer110 0.88 n/m96 0.76 n/m
Total consumer7,361 58.82 1.63 7,237 57.07 1.59 
U.S. commercial (2)
2,835 22.66 0.75 3,007 23.71 0.80 
Non-U.S. commercial1,019 8.14 0.82 1,194 9.41 0.96 
Commercial real estate1,253 10.01 1.72 1,192 9.40 1.71 
Commercial lease financing46 0.37 0.34 52 0.41 0.38 
Total commercial5,153 41.18 0.87 5,445 42.93 0.93 
Allowance for loan and lease losses12,514 100.00 %1.20 12,682 100.00 %1.22 
Reserve for unfunded lending commitments1,437 1,540  
Allowance for credit losses$13,951 $14,222 
(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 $844 million at March 31, 2023 and December 31, 2022.
n/m = not meaningful
Net charge-offs for the three months ended March 31, 2023 were $807 million and increased $415 million, or 106 percent, compared to $392 million for the same period in 2022 primarily driven by credit card losses increasing off of historic lows and higher overdraft losses due to an increase in industry-wide check fraud activity. The provision for credit losses increased $901 million to $931 million for the three months ended March 31, 2023 compared to the same period in 2022. The provision for credit losses for the three months ended March 31, 2023 was driven by our consumer portfolio primarily due to higher-than-expected credit card balances during the first quarter of 2023. This was partially offset by certain improved macroeconomic conditions that primarily benefited our commercial portfolio. The provision for credit losses for the consumer portfolio, including unfunded lending commitments, increased $932 million to $946 million for the three months
ended March 31, 2023 compared to the same period in 2022. The provision for credit losses for the commercial portfolio, including unfunded lending commitments, decreased $165 million to $149 million for the three months ended March 31, 2023 compared to the same period in 2022.
Table 36 presents a rollforward of the allowance for credit losses, including certain loan and allowance ratios for the three months ended March 31, 2023 and 2022. 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 2022 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 36

Table 36Allowance for Credit Losses
Three Months Ended March 31
(Dollars in millions)20232022
Allowance for loan and lease losses, December 31$12,682 $12,387 
January 1, 2023 adoption of credit loss standard(243)— 
Allowance for loan and lease losses, January 112,439 12,387 
Loans and leases charged off
Residential mortgage(8)(10)
Home equity(6)(13)
Credit card(650)(473)
Direct/Indirect consumer(40)(62)
Other consumer(171)(84)
Total consumer charge-offs(875)(642)
U.S. commercial (1)
(134)(67)
Non-U.S. commercial(23)(2)
Commercial real estate(24)(23)
Total commercial charge-offs(181)(92)
Total loans and leases charged off(1,056)(734)
Recoveries of loans and leases previously charged off
Residential mortgage7 20 
Home equity18 43 
Credit card149 176 
Direct/Indirect consumer39 58 
Other consumer9 5 
Total consumer recoveries222 302 
U.S. commercial (2)
21 39 
Non-U.S. commercial3 1 
Commercial real estate2 — 
Commercial lease financing1 — 
Total commercial recoveries27 40 
Total recoveries of loans and leases previously charged off249 342 
Net charge-offs (807)(392)
Provision for loan and lease losses900 108 
Other(18)1 
Allowance for loan and lease losses, March 31
12,514 12,104 
Reserve for unfunded lending commitments, January 11,540 1,456 
Provision for unfunded lending commitments(103)(78)
Other — 1 
Reserve for unfunded lending commitments, March 31
1,437 1,379 
Allowance for credit losses, March 31
$13,951 $13,483 
Loan and allowance ratios (3) :
Loans and leases outstanding at March 31
$1,042,009 $986,034 
Allowance for loan and lease losses as a percentage of total loans and leases outstanding at March 31
1.20 %1.23 %
Consumer allowance for loan and lease losses as a percentage of total consumer loans and leases outstanding at March 31
1.63 1.53 
Commercial allowance for loan and lease losses as a percentage of total commercial loans and leases outstanding at March 31
0.87 0.98 
Average loans and leases outstanding$1,036,337 $970,491 
Net charge-offs as a percentage of average loans and leases outstanding0.32 %0.16 %
Allowance for loan and lease losses as a percentage of total nonperforming loans and leases at March 31
319 262 
Ratio of the allowance for loan and lease losses at March 31 to annualized net charge-offs
3.83 7.62 
Amounts included in allowance for loan and lease losses for loans and leases that are excluded from nonperforming loans and leases at March 31 (4)
$7,122 $6,646 
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 March 31 (4)
138 %118 %
(1)Includes U.S. small business commercial charge-offs of $75 million and $56 million for the three months ended March 31, 2023 and 2022.
(2)Includes U.S. small business commercial recoveries of $9 million and $14 million for the three months ended March 31, 2023 and 2022.
(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.
37 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 2022 Annual Report on Form 10-K. For more information on market risks, see the Market section within Item 1A. Risk Factors of the Corporation’s 2022 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 37 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 2022 Annual Report on Form 10-K.
The total market-based portfolio VaR results in Table 37 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 37 presents period-end, average, high and low daily trading VaR for the three months ended March 31, 2023, December 31, 2022 and March 31, 2022 using a 99 percent confidence level. The amounts disclosed in Table 37 and Table 38 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 March 31, 2023 compared to the prior quarter slightly decreased due to reductions in market making inventory across FICC and improved diversification across asset classes.
Table 37Market Risk VaR for Trading Activities
Three Months Ended
March 31, 2023December 31, 2022March 31, 2022
(Dollars in millions)Period
End		Average
High (1)
Low (1)
Period
End		Average
High (1)
Low (1)
Period
End		Average
High (1)
Low (1)
Foreign exchange$39 $32 $42 $17 $38 $30 $39 $20 $20 $18 $24 $13 
Interest rate43 43 56 32 36 36 $52 28 49 36 56 25 
Credit52 84 108 52 76 79 92 66 55 64 71 52 
Equity19 19 25 14 18 18 23 14 23 23 28 19 
Commodities11 11 14 8 8 11 15 7 13 10 18 7 
Portfolio diversification(103)(122)n/an/a(81)(98)n/an/a(99)(95)n/an/a
Total covered positions portfolio61 67 92 54 95 76 103 56 61 56 69 48 
Impact from less liquid exposures (2)
14 42 n/an/a35 41 n/an/a17 23 n/an/a
Total covered positions and less liquid trading positions portfolio
75 109 149 69 130 117 152 81 78 79 135 61 
Fair value option loans15 41 49 15 48 46 60 40 63 54 63 45 
Fair value option hedges14 16 17 14 16 16 18 14 22 18 22 16 
Fair value option portfolio diversification(19)(32)n/an/a(38)(36)n/an/a(51)(35)n/an/a
Total fair value option portfolio10 25 30 10 26 26 34 24 34 37 41 31 
Portfolio diversification(7)(10)n/an/a9 (7)n/an/a(18)(19)n/an/a
Total market-based portfolio$78 $124 173 73 $165 $136 197 90 $94 $97 153 70 
(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

Bank of America 38

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 37.
VaR Chart - Q1 2023 Final.jpg
Additional VaR statistics produced within our single VaR model are provided in Table 38 at the same level of detail as in Table 37. 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 38 presents average trading VaR statistics at 99 percent and 95 percent confidence levels for the three months ended March 31, 2023, December 31, 2022 and March 31, 2022.
Table 38Average Market Risk VaR for Trading Activities – 99 percent and 95 percent VaR Statistics
Three Months Ended
March 31, 2023December 31, 2022March 31, 2022
(Dollars in millions)99 percent95 percent99 percent95 percent99 percent95 percent
Foreign exchange$32 $20 $30 $17 $18 $12 
Interest rate43 22 36 18 36 16 
Credit84 31 79 33 64 27 
Equity19 8 18 9 23 13 
Commodities11 6 11 6 10 6 
Portfolio diversification(122)(53)(98)(49)(95)(47)
Total covered positions portfolio67 34 76 34 56 27 
Impact from less liquid exposures42 8 41 9 23 3 
Total covered positions and less liquid trading positions portfolio
109 42 117 43 79 30 
Fair value option loans41 14 46 13 54 14 
Fair value option hedges16 10 16 10 18 10 
Fair value option portfolio diversification(32)(14)(36)(12)(35)(12)
Total fair value option portfolio25 10 26 11 37 12 
Portfolio diversification(10)(7)(7)(8)(19)(8)
Total market-based portfolio$124 $45 $136 $46 $97 $34 
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 2022 Annual Report on Form 10-K.
During the three months ended March 31, 2023, there were no days 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 2022 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 March 31, 2023 compared to the three months ended December 31, 2022. During the three months ended March 31, 2023, positive trading-related revenue was recorded for 100 percent of the trading days, of which 98 percent were daily trading gains of over $25 million. This compares to the three months ended December 31, 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.


39 Bank of America


1Q'23 Trading Related Revenue (004).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 2022 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 2022 Annual Report on Form 10-K.
Table 39 presents the spot and 12-month forward rates used in our baseline forecasts at March 31, 2023 and December 31, 2022.
Table 39Forward Rates
March 31, 2023
 Federal
Funds

SOFR (1)
10-Year
Swap
Spot rates5.00 %4.87 %3.46 %
12-month forward rates4.00 4.07 3.31 
December 31, 2022
Federal
Funds		Three-month
LIBOR		10-Year
Swap
Spot rates4.50 %4.77 %3.84 %
12-month forward rates4.75 4.78 3.62 
(1) The Corporation uses SOFR in its baseline forecast as one of the primary ARRs used as a result of the planned cessation of LIBOR in 2023. For more information on the transition from LIBOR to ARRs, see Executive Summary – Recent Developments – LIBOR and Other Benchmark Rates on page 3.
Table 40 shows the pretax impact to forecasted net interest income over the next 12 months from March 31, 2023 and December 31, 2022 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.
During the three months ended March 31, 2023, the overall decrease in asset sensitivity of our balance sheet to higher and lower rate scenarios was primarily due to changes in deposit product mix and risk management activities performed in our ALM portfolio to respond to changing market conditions. 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 17.
Table 40Estimated Banking Book Net Interest Income Sensitivity to Curve Changes
Short
Rate (bps)		Long
Rate (bps)
(Dollars in millions)March 31,
2023		December 31,
2022
Parallel Shifts
+100 bps
instantaneous shift
+100+100$3,251 $3,829 
 -100 bps
  instantaneous shift		-100-100(3,593)(4,591)
Flatteners  
Short-end
instantaneous change
+100— 3,134 3,698 
Long-end
instantaneous change
— -100(152)(157)
Steepeners  
Short-end
instantaneous change
-100 — (3,445)(4,420)
Long-end
instantaneous change
— +100122 131 
The sensitivity analysis in Table 40 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.
Bank of America 40

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 40 assumes no change in deposit portfolio size or mix from the baseline forecast in alternate rate environments. In higher rate scenarios, the increase in net interest income would be impacted by any customer activity resulting in the replacement of low-cost or noninterest-bearing deposits with higher yielding deposits or market-based funding as our benefit in those scenarios would be reduced. Conversely, in lower-rate scenarios, any customer activity that results in the replacement of higher yielding deposits or market-based funding with low-cost or noninterest-bearing deposits would reduce our exposure in those scenarios.
For interest rate scenarios larger than 100 bps shifts, it is expected that the interest rate sensitivity will illustrate non-linear behaviors as there are numerous estimates and assumptions, which require a high degree of judgment and are often interrelated, that could impact the outcome. Pertaining to the mortgage-backed securities and residential mortgage portfolio, if long-end interest rates were to significantly decrease over the next twelve months, for example over 200 bps, there would generally be an increase in customer prepayment behaviors with an incremental reduction to net interest income, noting that the extent of changes in customer prepayment activity can be impacted by multiple factors and is not necessarily limited to long-end interest rates. Conversely, if long-end interest rates were to significantly increase over the next twelve months, for example, over 200 bps, customer prepayments would likely modestly decrease and result in an incremental increase to net interest income. In addition, deposit pricing will have non-linear impacts to larger short-end rate movements. In decreasing interest rate scenarios, and particularly where interest rates have decreased to small amounts, the ability to further reduce rates paid is reduced as customer rates near zero. In higher short-end rate scenarios, deposit pricing will likely increase at a faster rate, leading to incremental interest expense and reducing asset sensitivity. While the impact related to the above assumptions used in the asset sensitivity analysis can provide directional analysis on how net interest income will be impacted in changing environments, the ultimate impact is dependent upon the interrelationship of the assumptions and factors, which vary in different macroeconomic 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 40. 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 2022 Annual Report on Form 10-K.
There were no significant gains or losses related to the change in fair value of MSRs, IRLCs and LHFS, net of gains and losses on the hedge portfolio, for the three months ended March 31, 2023 and 2022. 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 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, and (2) risks related to the transition to a low-carbon economy, which may entail extensive policy, legal, technology and market changes. These changes and events may have broad impacts on operations, supply chains, distribution networks, customers and markets and are otherwise referred to, respectively, as physical risk and transition risk. These risks may impact both financial and nonfinancial risk types. Physical climate events may lead to increased credit risk by diminishing borrowers’ repayment capacity or collateral value, or increased operational risk by impacting the Corporation’s facilities, employees, customers or vendors. Climate-related transition changes in policy, technology or the market may amplify credit risk through financial impacts to the Corporation or its customers or counterparties or increase market risk, including through sudden price adjustments. In addition, reputational risk may arise, including from our climate-related practices, disclosures and commitments.
41 Bank of America


As climate risk spans all key risk types, we have developed and continue to enhance processes to embed climate risk considerations into our Risk Framework and risk management programs established for each of our seven key types of risk.
We publicly announced our commitment to achieve net zero emissions in our financing activities, operations, and supply chain before 2050 (Net Zero Goal). In connection with our Net Zero Goal, we set certain 2030 targets, including reducing emissions associated with our operations and financing activities, related to auto manufacturing, energy and power generation, and for our supply chain, including that a certain proportion of our global suppliers set their own climate targets (2030 Targets). We disclosed our 2019 and 2020 financed emission and emission intensity metrics for the above referenced sectors in our 2022 Task Force on Climate-related Financial Disclosures (TCFD) Report, with 2019 serving as the baseline for our financed emissions targets.
We plan to disclose the financed emissions for additional portions of our business loan portfolio in 2023, and we plan to set financing activity emission reduction targets for other key sectors by April 2024.
Achieving our climate-related goals and targets, including our Net Zero Goal and 2030 Targets, may require technological advances, clearly defined roadmaps for industry sectors, new standards and public policies, including those that improve the cost of capital for the transition to a low-carbon economy 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 position in the relevant periods presented herein.

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 2022 Annual Report on Form 10-K. For more information on climate risk, see Item 1A. Risk Factors – Other of the Corporation’s 2022 Annual Report on Form 10-K. For more information on climate-related matters and the Corporation’s climate-related goals and commitments, including our plans to achieve our Net Zero Goal and 2030 Targets and progress on our sustainable finance goals, see the Corporation’s website, including our 2022 TCFD Report and the 2022 Annual Report to shareholders available on the Investor Relations portion of our website. The contents of the Corporation’s website, including the 2022 TCFD Report and 2022 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 2022 TCFD Report and 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 2022 Annual Report on Form 10-K and Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2022 Annual Report on Form 10-K.
Bank of America 42

Non-GAAP Reconciliations
Table 41 provides reconciliations of certain non-GAAP financial measures to the most closely related GAAP financial measures.
Table 41
Average and Period-end Supplemental Financial Data and Reconciliations to GAAP Financial Measures (1)
2023 Quarter2022 Quarters
(Dollars in millions)FirstFourthThirdSecondFirst
Reconciliation of average shareholders’ equity to average tangible shareholders’ equity and average tangible common shareholders’ equity
Shareholders’ equity$277,252 $272,629 $271,017 $268,197 $269,309 
Goodwill(69,022)(69,022)(69,022)(69,022)(69,022)
Intangible assets (excluding MSRs)(2,068)(2,088)(2,107)(2,127)(2,146)
Related deferred tax liabilities899 914 920 926 929 
Tangible shareholders’ equity$207,061 $202,433 $200,808 $197,974 $199,070 
Preferred stock(28,397)(28,982)(29,134)(28,674)(26,444)
Tangible common shareholders’ equity$178,664 $173,451 $171,674 $169,300 $172,626 
Reconciliation of period-end shareholders’ equity to period-end tangible shareholders’ equity and period-end tangible common shareholders’ equity
Shareholders’ equity$280,196 $273,197 $269,524 $269,118 $266,617 
Goodwill(69,022)(69,022)(69,022)(69,022)(69,022)
Intangible assets (excluding MSRs)(2,055)(2,075)(2,094)(2,114)(2,133)
Related deferred tax liabilities895 899915 920 926 
Tangible shareholders’ equity$210,014 $202,999 $199,323 $198,902 $196,388 
Preferred stock(28,397)(28,397)(29,134)(29,134)(27,137)
Tangible common shareholders’ equity$181,617 $174,602 $170,189 $169,768 $169,251 
Reconciliation of period-end assets to period-end tangible assets
Assets$3,194,657 $3,051,375 $3,072,953 $3,111,606 $3,238,223 
Goodwill(69,022)(69,022)(69,022)(69,022)(69,022)
Intangible assets (excluding MSRs)(2,055)(2,075)(2,094)(2,114)(2,133)
Related deferred tax liabilities 895 899915 920 926 
Tangible assets$3,124,475 $2,981,177 $3,002,752 $3,041,390 $3,167,994 
(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 6.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
See Market Risk Management on page 38 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 March 31, 2023, that have materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.
43 Bank of America


Part I. Financial Information
Item 1. Financial Statements
Bank of America Corporation and Subsidiaries
Consolidated Statement of Income
Three Months Ended March 31
(In millions, except per share information)20232022
Net interest income
Interest income$28,655 $12,894 
Interest expense14,207 1,322 
Net interest income14,448 11,572 
Noninterest income
Fees and commissions7,894 8,985 
Market making and similar activities4,712 3,238 
Other income(796)(567)
Total noninterest income11,810 11,656 
Total revenue, net of interest expense26,258 23,228 
Provision for credit losses931 30 
Noninterest expense
Compensation and benefits9,918 9,482 
Occupancy and equipment1,799 1,760 
Information processing and communications1,697 1,540 
Product delivery and transaction related890 933 
Professional fees537 450 
Marketing458 397 
Other general operating939 757 
Total noninterest expense16,238 15,319 
Income before income taxes9,089 7,879 
Income tax expense928 812 
Net income$8,161 $7,067 
Preferred stock dividends505 467 
Net income applicable to common shareholders$7,656 $6,600 
Per common share information
Earnings$0.95 $0.81 
Diluted earnings0.94 0.80 
Average common shares issued and outstanding8,065.9 8,136.8 
Average diluted common shares issued and outstanding8,182.3 8,202.1 
Consolidated Statement of Comprehensive Income
Three Months Ended March 31
(Dollars in millions)20232022
Net income$8,161 $7,067 
Other comprehensive income (loss), net-of-tax:
Net change in debt securities555 (3,447)
Net change in debit valuation adjustments10 261 
Net change in derivatives2,042 (5,179)
Employee benefit plan adjustments10 24 
Net change in foreign currency translation adjustments12 28 
Other comprehensive income (loss)2,629 (8,313)
Comprehensive income (loss)$10,790 $(1,246)












See accompanying Notes to Consolidated Financial Statements.
Bank of America 44

Bank of America Corporation and Subsidiaries
Consolidated Balance Sheet
March 31
2023		December 31
2022
(Dollars in millions)
Assets
Cash and due from banks$29,327 $30,334 
Interest-bearing deposits with the Federal Reserve, non-U.S. central banks and other banks346,891 199,869 
Cash and cash equivalents376,218 230,203 
Time deposits placed and other short-term investments11,637 7,259 
Federal funds sold and securities borrowed or purchased under agreements to resell
   (includes $163,505 and $146,999 measured at fair value)
298,078 267,574 
Trading account assets (includes $141,314 and $115,505 pledged as collateral)
314,978 296,108 
Derivative assets40,947 48,642 
Debt securities: 
Carried at fair value172,510 229,994 
Held-to-maturity, at cost (fair value – $525,452 and $524,267)
624,495 632,825 
Total debt securities797,005 862,819 
Loans and leases (includes $4,397 and $5,771 measured at fair value)
1,046,406 1,045,747 
Allowance for loan and lease losses(12,514)(12,682)
Loans and leases, net of allowance1,033,892 1,033,065 
Premises and equipment, net11,708 11,510 
Goodwill69,022 69,022 
Loans held-for-sale (includes $1,386 and $1,115 measured at fair value)
6,809 6,871 
Customer and other receivables79,902 67,543 
Other assets (includes $12,551 and $9,594 measured at fair value)
154,461 150,759 
Total assets$3,194,657 $3,051,375 
Liabilities  
Deposits in U.S. offices:  
Noninterest-bearing$617,922 $640,745 
Interest-bearing (includes $378 and $311 measured at fair value)
1,183,106 1,182,590 
Deposits in non-U.S. offices:
Noninterest-bearing17,686 20,480 
Interest-bearing91,688 86,526 
Total deposits1,910,402 1,930,341 
Federal funds purchased and securities loaned or sold under agreements to repurchase
   (includes $234,338 and $151,708 measured at fair value)
314,380 195,635 
Trading account liabilities92,452 80,399 
Derivative liabilities40,169 44,816 
Short-term borrowings (includes $1,805 and $832 measured at fair value)
56,564 26,932 
Accrued expenses and other liabilities (includes $13,659 and $9,752 measured at fair value
   and $1,437 and $1,540 of reserve for unfunded lending commitments)
216,621 224,073 
Long-term debt (includes $39,413 and $33,070 measured at fair value)
283,873 275,982 
Total liabilities2,914,461 2,778,178 
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 – 4,088,099 and 4,088,101 shares
28,397 28,397 
Common stock and additional paid-in capital, $0.01  par value; authorized – 12,800,000,000 shares;
   issued and outstanding – 7,972,438,148 and 7,996,777,943 shares
57,264 58,953 
Retained earnings213,062 207,003 
Accumulated other comprehensive income (loss)(18,527)(21,156)
Total shareholders’ equity280,196 273,197 
Total liabilities and shareholders’ equity$3,194,657 $3,051,375 
Assets of consolidated variable interest entities included in total assets above (isolated to settle the liabilities of the variable interest entities)
Trading account assets$4,276 $2,816 
Loans and leases15,754 16,738 
Allowance for loan and lease losses(797)(797)
Loans and leases, net of allowance14,957 15,941 
All other assets129 116 
Total assets of consolidated variable interest entities$19,362 $18,873 
Liabilities of consolidated variable interest entities included in total liabilities above  
Short-term borrowings (includes $22 and $42 of non-recourse short-term borrowings)
$1,339 $42 
Long-term debt (includes $4,883 and $4,581 of non-recourse debt)
4,883 4,581 
All other liabilities (includes $7 and $13 of non-recourse liabilities)
7 12 
Total liabilities of consolidated variable interest entities$6,229 $4,635 
See accompanying Notes to Consolidated Financial Statements.
45 Bank of America


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, December 31, 2021$24,708 8,077.8 $62,398 $188,064 $(5,104)$270,066 
Net income7,067 7,067 
Net change in debt securities(3,447)(3,447)
Net change in debit valuation adjustments261 261 
Net change in derivatives(5,179)(5,179)
Employee benefit plan adjustments24 24 
Net change in foreign currency translation adjustments28 28 
Dividends declared:
Common(1,706)(1,706)
Preferred(467)(467)
Issuance of preferred stock2,429 2,429 
Common stock issued under employee plans, net, and other41.7 220 (29)191 
Common stock repurchased(57.4)(2,650)(2,650)
Balance, March 31, 2022$27,137 8,062.1 $59,968 $192,929 $(13,417)$266,617 
Balance, December 31, 2022$28,397 7,996.8 $58,953 $207,003 $(21,156)$273,197 
Cumulative adjustment for adoption of credit loss accounting standard184 184 
Net income8,161 8,161 
Net change in debt securities555 555 
Net change in debit valuation adjustments10 10 
Net change in derivatives2,042 2,042 
Employee benefit plan adjustments10 10 
Net change in foreign currency translation adjustments12 12 
Dividends declared:
Common(1,774)(1,774)
Preferred(505)(505)
Common stock issued under employee plans, net, and other42.4 526 (7)519 
Common stock repurchased(66.8)(2,215)(2,215)
Balance, March 31, 2023$28,397 7,972.4 $57,264 $213,062 $(18,527)$280,196 
































See accompanying Notes to Consolidated Financial Statements.
Bank of America 46

Bank of America Corporation and Subsidiaries
Consolidated Statement of Cash Flows
Three Months Ended March 31
(Dollars in millions)20232022
Operating activities
Net income$8,161 $7,067 
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses931 30 
(Gains) losses on sales of debt securities210 (7)
Depreciation and amortization503 494 
Net amortization of premium/discount on debt securities34 905 
Deferred income taxes(169)47 
Stock-based compensation794 739 
Loans held-for-sale:
Originations and purchases(2,285)(6,832)
Proceeds from sales and paydowns of loans originally classified as held for sale and instruments
from related securitization activities
2,378 12,934 
Net change in:
Trading and derivative assets/liabilities(725)(64,939)
Other assets(16,078)(14,876)
Accrued expenses and other liabilities(7,066)19,820 
Other operating activities, net2,012 (812)
Net cash used in operating activities(11,300)(45,430)
Investing activities
Net change in:
Time deposits placed and other short-term investments(4,512)1,499 
Federal funds sold and securities borrowed or purchased under agreements to resell(30,504)(51,388)
Debt securities carried at fair value:
Proceeds from sales61,493 2,341 
Proceeds from paydowns and maturities19,085 29,654 
Purchases(19,104)(35,661)
Held-to-maturity debt securities:
Proceeds from paydowns and maturities8,042 21,496 
Purchases(38)(19,599)
Loans and leases:
Proceeds from sales of loans originally classified as held for investment and instruments
from related securitization activities
2,168 2,042 
Purchases(1,510)(1,624)
Other changes in loans and leases, net(2,319)(16,193)
Other investing activities, net(1,955)(975)
Net cash provided by (used in) investing activities30,846 (68,408)
Financing activities
Net change in:
Deposits(19,939)7,878 
Federal funds purchased and securities loaned or sold under agreements to repurchase118,745 22,356 
Short-term borrowings29,632 1,036 
Long-term debt:
Proceeds from issuance14,319 21,123 
Retirement(11,341)(8,241)
Preferred stock:
Proceeds from issuance— 2,429 
Common stock repurchased(2,215)(2,650)
Cash dividends paid(2,352)(2,222)
Other financing activities, net(728)(823)
Net cash provided by financing activities126,121 40,886 
Effect of exchange rate changes on cash and cash equivalents348 (1,335)
Net increase (decrease) in cash and cash equivalents146,015 (74,287)
Cash and cash equivalents at January 1230,203 348,221 
Cash and cash equivalents at March 31$376,218 $273,934 
See accompanying Notes to Consolidated Financial Statements.
47 Bank of America


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 2022 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.
New Accounting Standard Issued
Investments – Equity Method and Joint Ventures
The FASB updated its guidance on the accounting for tax credit investments, which permits entities to make an accounting policy election to apply the proportional amortization method
when certain conditions are met. The new accounting guidance is effective on a retrospective or modified retrospective basis beginning on January 1, 2024, with early adoption permitted. If adopted, the Corporation does not expect the guidance to have a material impact on its consolidated financial position or results of operations.
New Accounting Standard Adopted
Financial Instruments – Credit Losses
On January 1, 2023, the Corporation adopted the new accounting and disclosure requirements for expected credit losses (ECL) that removed the recognition and measurement guidance on troubled debt restructurings (TDRs) and added disclosures on the financial effect and subsequent performance of certain types of modifications made to borrowers experiencing financial difficulties.
Upon adoption of the standard, the Corporation recorded a reduction of $243 million in the allowance for credit losses for the impact of changes in the methodology used to estimate the allowance for credit losses for non-collateral dependent consumer and commercial TDRs. There was no impact to the valuation of loans previously classified as collateral-dependent TDRs. After adjusting for deferred taxes, the Corporation recorded an increase of $184 million in retained earnings through a cumulative-effect adjustment.
The additional disclosures are included in Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses on a prospective basis and include loan modifications where the contractual payment terms of the borrower’s loan agreement were modified through a refinancing or restructuring. Modifications that do not impact the contractual payment terms, such as covenant waivers, insignificant payment deferrals, and any modifications made to loans carried at fair value, loans held-for-sale (LHFS) and leases are not included in the disclosures.
The Corporation uses various indicators to identify borrowers in financial difficulty. Consumer loan borrowers that are delinquent and commercial loan borrowers that are rated substandard or worse are the primary criteria used to identify borrowers who are experiencing financial difficulty.
If a borrower is current at the time of modification, the loan generally remains a performing loan as long as there is demonstrated performance prior to the modification, and payment in full under the modified terms is expected. Otherwise, the loan is placed on nonaccrual status and reported as nonperforming, excluding fully-insured consumer real estate loans, until there is sustained repayment performance for a reasonable period.
The allowance for loan and lease losses for modified loans is determined in a manner consistent with the methodology for the respective class and credit rating of the financing receivable as described in Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2022 Annual Report on Form 10-K.

Bank of America 48

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 months ended March 31, 2023 and 2022. For more information, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2022 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 March 31
(Dollars in millions)20232022
Net interest income
Interest income
Loans and leases$13,097 $7,352 
Debt securities5,460 3,823 
Federal funds sold and securities borrowed or purchased under agreements to resell (1)
3,712 (7)
Trading account assets2,028 1,081 
Other interest income4,358 645 
Total interest income28,655 12,894 
Interest expense
Deposits4,314 164 
Short-term borrowings (1)
6,180 (112)
Trading account liabilities504 364 
Long-term debt3,209 906 
Total interest expense14,207 1,322 
Net interest income$14,448 $11,572 
Noninterest income
Fees and commissions
Card income
Interchange fees (2)
$956 $935 
Other card income513 468 
Total card income1,469 1,403 
Service charges
Deposit-related fees1,097 1,530 
Lending-related fees313 303 
Total service charges1,410 1,833 
Investment and brokerage services
Asset management fees2,918 3,286 
Brokerage fees934 1,006 
Total investment and brokerage services 3,852 4,292 
Investment banking fees
Underwriting income569 672 
Syndication fees231 312 
Financial advisory services363 473 
Total investment banking fees1,163 1,457 
Total fees and commissions7,894 8,985 
Market making and similar activities4,712 3,238 
Other income (loss)(796)(567)
Total noninterest income$11,810 $11,656 
(1)For more information on negative interest, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2022 Annual Report on Form 10-K.
(2)Gross interchange fees and merchant income were $3.2 billion and $2.9 billion for the three months ended March 31, 2023 and 2022 and are presented net of $2.2 billion and $2.0 billion of expenses for rewards and partner payments as well as certain other card costs for the same periods.
49 Bank of America


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 2022 Annual Report on Form 10-K. The following tables present derivative instruments included on the Consolidated Balance Sheet in derivative assets and liabilities at March 31, 2023 and December 31, 2022. 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.
March 31, 2023
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 $22,832.3 $149.7 $8.8 $158.5 $129.0 $28.1 $157.1 
Futures and forwards4,314.7 7.8 — 7.8 8.0 — 8.0 
Written options (2)
1,869.5 — — — 34.9 — 34.9 
Purchased options (3)
1,751.5 36.5 — 36.5 — — — 
Foreign exchange contracts 
Swaps1,636.0 36.5 1.1 37.6 33.7 1.1 34.8 
Spot, futures and forwards4,876.0 39.3 0.1 39.4 39.5 0.4 39.9 
Written options (2)
444.1 — — — 6.6 — 6.6 
Purchased options (3)
402.4 6.7 — 6.7 — — — 
Equity contracts 
Swaps423.9 12.7 — 12.7 13.9 — 13.9 
Futures and forwards140.6 2.4 — 2.4 1.2 — 1.2 
Written options (2)
884.7 — — — 46.4 — 46.4 
Purchased options (3)
767.8 39.2 — 39.2 — — — 
Commodity contracts  
Swaps59.3 4.0 — 4.0 5.0 — 5.0 
Futures and forwards196.8 4.3 — 4.3 4.0 0.2 4.2 
Written options (2)
70.8 — — — 3.9 — 3.9 
Purchased options (3)
79.1 3.4 — 3.4 — — — 
Credit derivatives (4)
   
Purchased credit derivatives:   
Credit default swaps 386.9 2.8 — 2.8 1.9 — 1.9 
Total return swaps/options133.3 0.7 — 0.7 2.9 — 2.9 
Written credit derivatives:  
Credit default swaps358.7 1.4 — 1.4 2.4 — 2.4 
Total return swaps/options124.4 3.3 — 3.3 0.8 — 0.8 
Gross derivative assets/liabilities$350.7 $10.0 $360.7 $334.1 $29.8 $363.9 
Less: Legally enforceable master netting agreements   (290.8)  (290.8)
Less: Cash collateral received/paid    (29.0)  (32.9)
Total derivative assets/liabilities    $40.9   $40.2 
(1)Represents the total contract/notional amount of derivative assets and liabilities outstanding.
(2)Includes certain out-of-the-money purchased options that have a liability amount primarily due to the deferral of option premiums to the end of the contract.
(3)Includes certain out-of-the-money written options that have an asset amount primarily due to the deferral of option premiums to the end of the contract.
(4)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 $(1.0) billion and $336.3 billion at March 31, 2023.
Bank of America 50

December 31, 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 $18,285.9 $138.2 $20.7 $158.9 $120.3 $36.7 $157.0 
Futures and forwards 2,796.3 8.6 — 8.6 7.8 — 7.8 
Written options (2)
1,657.9 — — — 41.4 — 41.4 
Purchased options (3)
1,594.7 42.4 — 42.4 — — — 
Foreign exchange contracts      
Swaps1,509.0 44.0 0.3 44.3 43.3 0.4 43.7 
Spot, futures and forwards4,159.3 59.9 0.1 60.0 62.1 0.6 62.7 
Written options (2)
392.2 — — — 8.1 — 8.1 
Purchased options (3)
362.6 8.3 — 8.3 — — — 
Equity contracts       
Swaps394.0 10.8 — 10.8 12.2 — 12.2 
Futures and forwards114.6 3.3 — 3.3 1.0 — 1.0 
Written options (2)
746.8 — — — 45.0 — 45.0 
Purchased options (3)
671.6 40.9 — 40.9 — — — 
Commodity contracts       
Swaps56.0 5.1 — 5.1 5.3 — 5.3 
Futures and forwards157.3 3.0 — 3.0 2.3 0.8 3.1 
Written options (2)
59.5 — — — 3.3 — 3.3 
Purchased options (3)
61.8 3.6 — 3.6 — — — 
Credit derivatives (4)
       
Purchased credit derivatives:       
Credit default swaps 319.9 2.8 — 2.8 1.6 — 1.6 
Total return swaps/options71.5 0.7 — 0.7 3.0 — 3.0 
Written credit derivatives:      
Credit default swaps295.2 1.2 — 1.2 2.4 — 2.4 
Total return swaps/options85.3 4.4 — 4.4 0.9 — 0.9 
Gross derivative assets/liabilities $377.2 $21.1 $398.3 $360.0 $38.5 $398.5 
Less: Legally enforceable master netting agreements    (315.9)  (315.9)
Less: Cash collateral received/paid   (33.8)  (37.8)
Total derivative assets/liabilities   $48.6   $44.8 
(1)Represents the total contract/notional amount of derivative assets and liabilities outstanding.
(2)Includes certain out-of-the-money purchased options that have a liability amount primarily due to the deferral of option premiums to the end of the contract.
(3)Includes certain out-of-the-money written options that have an asset amount primarily due to the deferral of option premiums to the end of the contract.
(4)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 $(1.2) billion and $276.9 billion at December 31, 2022.
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 2022 Annual Report on Form 10-K.
The following table presents derivative instruments included in derivative assets and liabilities on the Consolidated Balance Sheet at March 31, 2023 and December 31, 2022 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.
51 Bank of America


Offsetting of Derivatives (1)
Derivative
Assets		Derivative
 Liabilities		Derivative
Assets		Derivative
 Liabilities
(Dollars in billions)March 31, 2023December 31, 2022
Interest rate contracts    
Over-the-counter$130.0 $125.0 $138.4 $132.3 
Exchange-traded 0.3 0.2 0.4 0.1 
Over-the-counter cleared73.8 72.8 71.4 71.1 
Foreign exchange contracts
Over-the-counter81.8 79.2 109.7 110.6 
Over-the-counter cleared0.9 0.9 1.3 1.2 
Equity contracts
Over-the-counter23.8 27.3 21.5 22.6 
Exchange-traded 29.9 31.9 33.0 33.8 
Commodity contracts
Over-the-counter8.2 10.3 8.3 9.3 
Exchange-traded 2.5 2.3 2.4 1.9 
Over-the-counter cleared0.2 0.3 0.3 0.3 
Credit derivatives
Over-the-counter8.1 7.6 8.9 7.5 
Over-the-counter cleared— — — — 
Total gross derivative assets/liabilities, before netting
Over-the-counter251.9 249.4 286.8 282.3 
Exchange-traded 32.7 34.4 35.8 35.8 
Over-the-counter cleared74.9 74.0 73.0 72.6 
Less: Legally enforceable master netting agreements and cash collateral received/paid
Over-the-counter(214.4)(218.2)(243.8)(248.2)
Exchange-traded (31.7)(31.7)(33.5)(33.5)
Over-the-counter cleared(73.7)(73.8)(72.4)(72.0)
Derivative assets/liabilities, after netting39.7 34.1 45.9 37.0 
Other gross derivative assets/liabilities (2)
1.2 6.1 2.7 7.8 
Total derivative assets/liabilities 40.9 40.2 48.6 44.8 
Less: Financial instruments collateral (3)
(15.8)(8.8)(18.5)(7.4)
Total net derivative assets/liabilities$25.1 $31.4 $30.1 $37.4 
(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 foreign 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 months ended March 31, 2023 and 2022.
Gains and Losses on Derivatives Designated as Fair Value Hedges
Three Months Ended March 31
20232022
(Dollars in millions)DerivativeHedged ItemDerivativeHedged Item
Interest rate risk on long-term debt (1)
$3,308 $(3,305)$(11,034)$11,219 
Interest rate and foreign currency risk on long-term debt (2)
8 (8)(9)8 
Interest rate risk on available-for-sale securities (3)
(3,027)3,016 9,817 (9,905)
Price risk on commodity inventory (4)
(519)519 (232)237 
Total$(230)$222 $(1,458)$1,559 
(1)Amounts are recorded in interest expense in the Consolidated Statement of Income.
(2)For the three months ended March 31, 2023 and 2022, the derivative amount includes gains (losses) of $8 million and $(21) million in interest expense, $1 million and $14 million in market making and similar activities, and $(1) million and $(2) million in accumulated other comprehensive income (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.
(4)Amounts are recorded in market making and similar activities in the Consolidated Statement of Income.

Bank of America 52

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
March 31, 2023December 31, 2022
(Dollars in millions)Carrying Value
Cumulative
Fair Value
Adjustments (1)
Carrying Value
Cumulative
Fair Value
Adjustments (1)
Long-term debt (2)
$187,097 $(12,629)$187,402 $(21,372)
Available-for-sale debt securities (2, 3, 4)
107,422 (4,283)167,518 (18,190)
Trading account assets (5)
8,295 487 16,119 146 
(1)Increase (decrease) to carrying value.
(2)At March 31, 2023 and December 31, 2022, 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 $4.6 billion and an increase of $137 million in the related liability and a decrease in the related asset of $8.3 billion and $4.9 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 financial assets in closed portfolios used to designate hedging relationships in which the hedged item is a stated layer that is expected to be remaining at the end of the hedging relationship (i.e. portfolio layer hedging relationship). At March 31, 2023 and December 31, 2022, the amortized cost of the closed portfolios used in these hedging relationships was $21.1 billion and $21.4 billion, of which $9.3 billion and $9.2 billion were designated in a portfolio layer hedging relationship. At March 31, 2023 and December 31, 2022, the cumulative adjustment associated with these hedging relationships was a decrease of $329 million and $451 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 months ended March 31, 2023 and 2022. Of the $9.9 billion after-tax net loss ($13.2 billion pretax) on derivatives in accumulated OCI at March 31, 2023, losses of $4.4 billion after-tax ($5.9 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
Three Months Ended March 31
20232022
(Dollars in millions, amounts pretax)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
Cash flow hedges
Interest rate risk on variable-rate portfolios (1)
$2,550 $(160)$(6,774)$(8)
Price risk on forecasted MBS purchases (1)
2 — (90)3 
Price risk on certain compensation plans (2)
17 5 (27)12 
Total$2,569 $(155)$(6,891)$7 
Net investment hedges  
Foreign exchange risk (3)
$(377)$— $219 $— 
(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 months ended March 31, 2023 and 2022, amounts excluded from effectiveness testing and recognized in market making and similar activities were gains (losses) of $33 million and $(74) million.

53 Bank of America


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 months ended March 31, 2023 and 2022. 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 March 31
(Dollars in millions)20232022
Interest rate risk on mortgage activities (1, 2)
$26 $(147)
Credit risk on loans (2)
(28)(3)
Interest rate and foreign currency risk on asset and liability management activities (3)
(122)1,310 
Price risk on certain compensation plans (4)
195 (335)
(1)Includes hedges of interest rate risk on mortgage servicing rights (MSRs) 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 March 31, 2023 and December 31, 2022, the Corporation had transferred $4.8 billion of 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 at the transfer dates. At both March 31, 2023 and December 31, 2022, the fair value of the transferred securities was $4.7 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 2022 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 months ended March 31, 2023 and 2022. 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)
Total
(Dollars in millions)Three Months Ended March 31, 2023
Interest rate risk$1,244 $99 $86 $1,429 
Foreign exchange risk402 49 24 475 
Equity risk2,000 (838)460 1,622 
Credit risk480 666 115 1,261 
Other risk (2)
272 (78)(4)190 
Total sales and trading revenue
$4,398 $(102)$681 $4,977 
Three Months Ended March 31, 2022
Interest rate risk$589 $452 $69 $1,110 
Foreign exchange risk507 (17)1 491 
Equity risk1,564 (60)501 2,005 
Credit risk239 476 14 729 
Other risk (2)
291 (33)33 291 
Total sales and trading revenue
$3,190 $818 $618 $4,626 
(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 $529 million and $531 million for the three months ended March 31, 2023 and 2022.
(2)Includes commodity risk.
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 2022 Annual Report on Form 10-K.

Bank of America 54

Credit derivative instruments where the Corporation is the seller of credit protection and their expiration at March 31, 2023 and December 31, 2022 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
March 31, 2023
(Dollars in millions)Carrying Value
Credit default swaps:     
Investment grade$6 $32 $105 $42 $185 
Non-investment grade54 395 919 863 2,231 
Total60 427 1,024 905 2,416 
Total return swaps/options:     
Investment grade85 282 — — 367 
Non-investment grade269 8 109 10 396 
Total354 290 109 10 763 
Total credit derivatives$414 $717 $1,133 $915 $3,179 
Credit-related notes:     
Investment grade$— $— $2 $824 $826 
Non-investment grade— 3 4 1,032 1,039 
Total credit-related notes$— $3 $6 $1,856 $1,865 
 Maximum Payout/Notional
Credit default swaps:     
Investment grade$32,823 $67,196 $123,896 $37,078 $260,993 
Non-investment grade17,361 30,171 36,112 14,108 97,752 
Total50,184 97,367 160,008 51,186 358,745 
Total return swaps/options:     
Investment grade73,449 11,240 — — 84,689 
Non-investment grade35,946 783 2,088 906 39,723 
Total109,395 12,023 2,088 906 124,412 
Total credit derivatives$159,579 $109,390 $162,096 $52,092 $483,157 
December 31, 2022
Carrying Value
Credit default swaps:
Investment grade$2 $25 $133 $34 $194 
Non-investment grade120 516 870 697 2,203 
Total122 541 1,003 731 2,397 
Total return swaps/options:     
Investment grade55 336 — — 391 
Non-investment grade332 9 132 10 483 
Total387 345 132 10 874 
Total credit derivatives$509 $886 $1,135 $741 $3,271 
Credit-related notes:     
Investment grade$— $— $19 $1,017 $1,036 
Non-investment grade— 7 6 1,035 1,048 
Total credit-related notes$— $7 $25 $2,052 $2,084 
 Maximum Payout/Notional
Credit default swaps:
Investment grade$34,670 $66,170 $93,237 $18,677 $212,754 
Non-investment grade15,229 29,629 30,891 6,662 82,411 
Total49,899 95,799 124,128 25,339 295,165 
Total return swaps/options:     
Investment grade38,722 10,407 — — 49,129 
Non-investment grade32,764 500 2,054 897 36,215 
Total71,486 10,907 2,054 897 85,344 
Total credit derivatives$121,385 $106,706 $126,182 $26,236 $380,509 
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 table above include investments in securities issued by collateralized debt obligation (CDO), collateralized loan obligation (CLO) 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.

55 Bank of America


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 March 31, 2023 and December 31, 2022, the Corporation held cash and securities collateral of $95.5 billion and $101.3 billion and posted cash and securities collateral of $83.1 billion and $81.2 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 2022 Annual Report on Form 10-K.
At March 31, 2023, 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 $3.2 billion, including $2.2 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 March 31, 2023 and December 31, 2022, the liability recorded for these derivative contracts was not significant.
The following table presents the amount of additional collateral that would have been contractually required by derivative contracts and other trading agreements at March 31, 2023 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 March 31, 2023
(Dollars in millions)One
Incremental
 Notch		Second
Incremental
 Notch
Additional collateral required to be posted upon downgrade
Bank of America Corporation$162 $908 
Bank of America, N.A. and subsidiaries (1)
70 647 
Derivative liabilities subject to unilateral termination upon downgrade
Derivative liabilities$79 $600 
Collateral posted60 306 
(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 months ended March 31, 2023 and 2022. For more information on the valuation adjustments on derivatives, see Note 3 – Derivatives to the Consolidated Financial Statements of the Corporation’s 2022 Annual Report on Form 10-K.
Valuation Adjustments Gains (Losses) on Derivatives (1)
Three Months Ended March 31
(Dollars in millions)20232022
Derivative assets (CVA)$12 $(59)
Derivative assets/liabilities (FVA)
(43)35 
Derivative liabilities (DVA)2 121 
(1)At March 31, 2023 and December 31, 2022, cumulative CVA reduced the derivative assets balance by $506 million and $518 million, cumulative FVA reduced the net derivative balance by $97 million and $54 million, and cumulative DVA reduced the derivative liabilities balance by $508 million and $506 million.
Bank of America 56

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 March 31, 2023 and December 31, 2022.
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)March 31, 2023December 31, 2022
Available-for-sale debt securities
Mortgage-backed securities:
Agency$24,726 $5 $(1,479)$23,252 $25,204 $5 $(1,767)$23,442 
Agency-collateralized mortgage obligations2,235 — (200)2,035 2,452 — (231)2,221 
Commercial6,890 31 (481)6,440 6,894 28 (515)6,407 
Non-agency residential (1)
459 3 (55)407 461 15 (90)386 
Total mortgage-backed securities34,310 39 (2,215)32,134 35,011 48 (2,603)32,456 
U.S. Treasury and government agencies102,943 2 (1,438)101,507 160,773 18 (1,769)159,022 
Non-U.S. securities13,161 5 (46)13,120 13,455 4 (52)13,407 
Other taxable securities4,830 1 (85)4,746 4,728 1 (84)4,645 
Tax-exempt securities11,105 25 (227)10,903 11,518 19 (279)11,258 
Total available-for-sale debt securities166,349 72 (4,011)162,410 225,485 90 (4,787)220,788 
Other debt securities carried at fair value (2)
10,081 63 (44)10,100 8,986 376 (156)9,206 
Total debt securities carried at fair value176,430 135 (4,055)172,510 234,471 466 (4,943)229,994 
Held-to-maturity debt securities
Agency mortgage-backed securities494,998 — (80,664)414,334 503,233 — (87,319)415,914 
U.S. Treasury and government agencies121,609 — (17,511)104,098 121,597 — (20,259)101,338 
Other taxable securities7,921 — (901)7,020 8,033 — (1,018)7,015 
Total held-to-maturity debt securities624,528 — (99,076)525,452 632,863 — (108,596)524,267 
Total debt securities (3,4)
$800,958 $135 $(103,131)$697,962 $867,334 $466 $(113,539)$754,261 
(1)At both March 31, 2023 and December 31, 2022, the underlying collateral type included approximately 17 percent prime and 83 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 $174.4 billion and $104.5 billion at March 31, 2023 and December 31, 2022.
(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 $285.7 billion and $174.0 billion, and a fair value of $238.6 billion and $144.2 billion at March 31, 2023, and an amortized cost of $290.5 billion and $176.7 billion, and a fair value of $239.6 billion and $144.6 billion at December 31, 2022.
At March 31, 2023, 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 $2.9 billion, net of the related income tax benefit of $985 million. At March 31, 2023 and December 31, 2022, nonperforming AFS debt securities held by the Corporation were not significant.
At March 31, 2023 and December 31, 2022, $759.7 billion and $826.5 billion of AFS and HTM debt securities, which were largely U.S. agency and U.S. Treasury securities, have a zero credit loss assumption. The ECL on the remaining $31.2 billion and $31.8 billion of AFS and HTM debt securities were insignificant. 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 2022 Annual Report on Form 10-K.
At March 31, 2023 and December 31, 2022, the Corporation held equity securities at an aggregate fair value of $574 million and $581 million and other equity securities, as
valued under the measurement alternative, at a carrying value of $354 million and $340 million, both of which are included in other assets. At March 31, 2023 and December 31, 2022, the Corporation also held money market investments at a fair value of $921 million and $868 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 months ended March 31, 2023 and 2022 are presented in the table below.
Gains and Losses on Sales of AFS Debt Securities
Three Months Ended March 31
(Dollars in millions)20232022
Gross gains$96 $37 
Gross losses(306)(30)
   Net gains (losses) on sales of AFS debt securities$(210)$7 
Income tax expense (benefit) attributable to realized net gains (losses) on sales of AFS debt securities$(53)$2 
57 Bank of America


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 March 31, 2023 and December 31, 2022.
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)March 31, 2023
Continuously unrealized loss-positioned AFS debt securities
Mortgage-backed securities:   
Agency$10,106 $(323)$12,900 $(1,156)$23,006 $(1,479)
Agency-collateralized mortgage obligations130 (7)1,873 (193)2,003 (200)
Commercial1,411 (40)3,741 (441)5,152 (481)
Non-agency residential60 (6)334 (49)394 (55)
Total mortgage-backed securities11,707 (376)18,848 (1,839)30,555 (2,215)
U.S. Treasury and government agencies2,230 (74)99,047 (1,364)101,277 (1,438)
Non-U.S. securities5,159 (28)646 (18)5,805 (46)
Other taxable securities2,265 (29)2,037 (56)4,302 (85)
Tax-exempt securities783 (13)2,302 (214)3,085 (227)
Total AFS debt securities in a continuous
   unrealized loss position		$22,144 $(520)$122,880 $(3,491)$145,024 $(4,011)
December 31, 2022
Continuously unrealized loss-positioned AFS debt securities
Mortgage-backed securities:
Agency$18,759 $(1,118)$4,437 $(649)$23,196 $(1,767)
Agency-collateralized mortgage obligations1,165 (96)1,022 (135)2,187 (231)
Commercial3,273 (150)2,258 (365)5,531 (515)
Non-agency residential264 (65)97 (25)361 (90)
Total mortgage-backed securities23,461 (1,429)7,814 (1,174)31,275 (2,603)
U.S. Treasury and government agencies36,730 (308)118,636 (1,461)155,366 (1,769)
Non-U.S. securities9,399 (34)756 (18)10,155 (52)
Other taxable securities2,036 (16)1,580 (68)3,616 (84)
Tax-exempt securities607 (28)2,849 (251)3,456 (279)
Total AFS debt securities in a continuous
   unrealized loss position		$72,233 $(1,815)$131,635 $(2,972)$203,868 $(4,787)

Bank of America 58

The remaining contractual maturity distribution and yields of the Corporation’s debt securities carried at fair value and HTM debt securities at March 31, 2023 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$— — %$3 5.67 %$54 4.91 %$24,669 3.36 %$24,726 3.36 %
Agency-collateralized mortgage obligations— — 6 2.67 — — 2,229 2.77 2,235 2.77 
Commercial14 1.93 789 3.07 4,555 2.22 1,545 2.24 6,903 2.32 
Non-agency residential— — — — — — 741 9.63 741 9.63 
Total mortgage-backed securities14 1.93 798 3.08 4,609 2.25 29,184 3.41 34,605 3.25 
U.S. Treasury and government agencies1,914 3.36 57,616 2.93 44,698 2.36 38 3.63 104,266 2.69 
Non-U.S. securities18,460 3.20 2,905 4.79 71 7.57 188 7.31 21,624 3.47 
Other taxable securities1,341 5.16 2,829 5.44 453 3.72 207 4.39 4,830 5.16 
Tax-exempt securities670 3.07 4,679 3.67 1,919 3.83 3,837 4.16 11,105 3.83 
Total amortized cost of debt securities carried at fair value
$22,399 3.33 $68,827 3.17 $51,750 2.42 $33,454 3.53 $176,430 3.04 
Amortized cost of HTM debt securities
Agency mortgage-backed securities$— — %$— — %$13 2.77 %$494,985 2.12 %$494,998 2.12 %
U.S. Treasury and government agencies— — 4,548 1.80 117,061 1.37 — — 121,609 1.39 
Other taxable securities39 9.16 1,289 2.43 273 3.28 6,320 2.48 7,921 2.53 
Total amortized cost of HTM debt securities$39 9.16 $5,837 1.94 $117,347 1.37 $501,305 2.12 $624,528 1.98 
Debt securities carried at fair value          
Mortgage-backed securities:          
Agency$—  $3  $54  $23,195  $23,252  
Agency-collateralized mortgage obligations—  6  —  2,029  2,035  
Commercial14  770  4,334  1,334  6,452  
Non-agency residential—  2  —  705  707  
Total mortgage-backed securities14 781 4,388 27,263 32,446 
U.S. Treasury and government agencies1,911 56,952 43,932 35 102,830 
Non-U.S. securities18,457  2,869  71  185  21,582  
Other taxable securities1,337  2,795  418  199  4,749  
Tax-exempt securities669  4,661  1,907  3,666  10,903  
Total debt securities carried at fair value$22,388  $68,058  $50,716  $31,348  $172,510  
Fair value of HTM debt securities
Agency mortgage-backed securities$— $— $12 $414,322 $414,334 
U.S. Treasury and government agencies— 4,235 99,863 — 104,098 
Other taxable securities38 1,217 261 5,504 7,020 
Total fair value of HTM debt securities$38 $5,452 $100,136 $419,826 $525,452 
(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.
59 Bank of America


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 March 31, 2023 and December 31, 2022.
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)March 31, 2023
Consumer real estate      
Residential mortgage$938 $255 $894 $2,087 $226,740 $228,827 
Home equity93 34 189 316 25,552 25,868 
Credit card and other consumer
Credit card500 346 828 1,674 90,795 92,469 
Direct/Indirect consumer (2)
206 78 61 345 104,195 104,540 
Other consumer— — — — 120 120 
Total consumer1,737 713 1,972 4,422 447,402 451,824 
Consumer loans accounted for under the fair value option (3)
$334 334 
Total consumer loans and leases1,737 713 1,972 4,422 447,402 334 452,158 
Commercial
U.S. commercial892 156 281 1,329 359,326 360,655 
Non-U.S. commercial124 33 133 290 124,537 124,827 
Commercial real estate (4)
257 15 114 386 72,665 73,051 
Commercial lease financing46 12 9 67 13,381 13,448 
U.S. small business commercial (5)
109 68 262 439 17,765 18,204 
Total commercial1,428 284 799 2,511 587,674 590,185 
Commercial loans accounted for under the fair value option (3)
4,063 4,063 
Total commercial loans and leases1,428 284 799 2,511 587,674 4,063 594,248 
Total loans and leases (6)
$3,165 $997 $2,771 $6,933 $1,035,076 $4,397 $1,046,406 
Percentage of outstandings 0.30 %0.10 %0.26 %0.66 %98.92 %0.42 %100.00 %
(1)Consumer real estate loans 30-59 days past due includes fully-insured loans of $172 million and nonperforming loans of $157 million. Consumer real estate loans 60-89 days past due includes fully-insured loans of $69 million and nonperforming loans of $103 million. Consumer real estate loans 90 days or more past due includes fully-insured loans of $338 million and nonperforming loans of $745 million. Consumer real estate loans current or less than 30 days past due includes $1.6 billion, and direct/indirect consumer includes $29 million of nonperforming loans.
(2)Total outstandings primarily includes auto and specialty lending loans and leases of $52.7 billion, U.S. securities-based lending loans of $48.1 billion and non-U.S. consumer loans of $2.8 billion.
(3)Consumer loans accounted for under the fair value option includes residential mortgage loans of $72 million and home equity loans of $262 million. Commercial loans accounted for under the fair value option includes U.S. commercial loans of $2.2 billion and non-U.S. commercial loans of $1.9 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 $67.2 billion and non-U.S. commercial real estate loans of $5.8 billion.
(5)Includes Paycheck Protection Program loans.
(6)Total outstandings includes loans and leases pledged as collateral of $43.5 billion. The Corporation also pledged $243.8 billion of loans with no related outstanding borrowings to secure potential borrowing capacity with the Federal Reserve Bank and Federal Home Loan Bank.
Bank of America 60

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, 2022
Consumer real estate      
Residential mortgage$1,077 $245 $945 $2,267 $227,403 $229,670 
Home equity88 32 211 331 26,232 26,563 
Credit card and other consumer     
Credit card466 322 717 1,505 91,916  93,421 
Direct/Indirect consumer (2)
204 59 45 308 105,928  106,236 
Other consumer — — — — 156  156 
Total consumer1,835 658 1,918 4,411 451,635 456,046 
Consumer loans accounted for under the fair value option (3)
$339 339 
Total consumer loans and leases1,835 658 1,918 4,411 451,635 339 456,385 
Commercial       
U.S. commercial827 288 330 1,445 357,036  358,481 
Non-U.S. commercial317 59 144 520 123,959  124,479 
Commercial real estate (4)
409 81 77 567 69,199  69,766 
Commercial lease financing49 9 11 69 13,575  13,644 
U.S. small business commercial (5)
107 63 356 526 17,034  17,560 
Total commercial1,709 500 918 3,127 580,803  583,930 
Commercial loans accounted for under the fair value option (3)
5,432 5,432 
Total commercial loans and leases
1,709 500 918 3,127 580,803 5,432 589,362 
Total loans and leases (6)
$3,544 $1,158 $2,836 $7,538 $1,032,438 $5,771 $1,045,747 
Percentage of outstandings 0.34 %0.11 %0.27 %0.72 %98.73 %0.55 %100.00 %
(1)Consumer real estate loans 30-59 days past due includes fully-insured loans of $184 million and nonperforming loans of $155 million. Consumer real estate loans 60-89 days past due includes fully-insured loans of $75 million and nonperforming loans of $88 million. Consumer real estate loans 90 days or more past due includes fully-insured loans of $368 million and nonperforming loans of $788 million. Consumer real estate loans current or less than 30 days past due includes $1.6 billion, and direct/indirect consumer includes $27 million of nonperforming loans.
(2)Total outstandings primarily includes auto and specialty lending loans and leases of $51.8 billion, U.S. securities-based lending loans of $50.4 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 $71 million and home equity loans of $268 million. Commercial loans accounted for under the fair value option includes U.S. commercial loans of $2.9 billion and non-U.S. commercial loans of $2.5 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 $64.9 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 $18.5 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.
The Corporation has entered into long-term credit protection agreements with FNMA and FHLMC on loans totaling $9.3 billion and $9.5 billion at March 31, 2023 and December 31, 2022, 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 increased to $1.2 billion at March 31, 2023 from $1.1 billion at December 31, 2022, driven by the commercial real estate office property type. Consumer nonperforming loans decreased to $2.7 billion at March 31, 2023 from $2.8 billion at December 31, 2022
primarily due to decreases from consumer real estate loans as returns to performing status and paydowns more than offset new additions.
The following table presents the Corporation’s nonperforming loans and leases and loans accruing past due 90 days or more at March 31, 2023 and December 31, 2022. Nonperforming 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 2022 Annual Report on Form 10-K.
61 Bank of America


Credit Quality
Nonperforming Loans
and Leases		Accruing Past Due
90 Days or More
(Dollars in millions)March 31
2023		December 31
2022		March 31
2023		December 31
2022
Residential mortgage (1)
$2,125 $2,167 $338 $368 
With no related allowance (2)
1,935 1,973 — — 
Home equity (1)
488 510 — — 
With no related allowance (2)
396 393 — — 
Credit Card                     n/a                    n/a828 717 
Direct/indirect consumer101 77 2 2 
Total consumer2,714 2,754 1,168 1,087 
U.S. commercial559 553 112 190 
Non-U.S. commercial125 212 92 25 
Commercial real estate502 271 35 46 
Commercial lease financing4 4 6 8 
U.S. small business commercial14 14 261 355 
Total commercial1,204 1,054 506 624 
Total nonperforming loans$3,918 $3,808 $1,674 $1,711 
Percentage of outstanding loans and leases
0.38 %0.37 %0.16 %0.16 %
(1)Residential mortgage loans accruing past due 90 days or more are fully-insured loans. At March 31, 2023 and December 31, 2022 residential mortgage included $232 million and $260 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 $108 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 2022 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 and gross charge-offs for the Corporation's Consumer Real Estate, Credit Card and Other Consumer, and Commercial portfolio segments by year of origination, except for revolving loans and revolving loans that were modified into term loans, which are shown on an aggregate basis at March 31, 2023.
Bank of America 62

Residential Mortgage – Credit Quality Indicators By Vintage
Term Loans by Origination Year
(Dollars in millions)Total as of
March 31,
 2023		20232022202120202019Prior
Residential Mortgage
Refreshed LTV
   
Less than or equal to 90 percent$214,159 $3,115 $39,127 $79,059 $37,281 $18,552 $37,025 
Greater than 90 percent but less than or equal to 100 percent
2,352 196 1,404 612 96 19 25 
Greater than 100 percent
934 105 479 240 46 16 48 
Fully-insured loans
11,382 44 464 3,624 3,033 924 3,293 
Total Residential Mortgage$228,827 $3,460 $41,474 $83,535 $40,456 $19,511 $40,391 
Residential Mortgage
Refreshed FICO score
Less than 620$2,112 $21 $385 $519 $357 $109 $721 
Greater than or equal to 620 and less than 680
4,885 68 1,082 1,266 818 327 1,324 
Greater than or equal to 680 and less than 740
23,704 309 5,033 7,482 4,046 2,033 4,801 
Greater than or equal to 740
186,744 3,018 34,510 70,644 32,202 16,118 30,252 
Fully-insured loans
11,382 44 464 3,624 3,033 924 3,293 
Total Residential Mortgage$228,827 $3,460 $41,474 $83,535 $40,456 $19,511 $40,391 
Gross charge-offs$8 $— $3 $1 $1 $— $3 
Home Equity - Credit Quality Indicators
Total
Home Equity Loans and Reverse Mortgages (1)
Revolving LoansRevolving Loans Converted to Term Loans
(Dollars in millions)March 31, 2023
Home Equity
Refreshed LTV
   
Less than or equal to 90 percent$25,692 $1,238 $19,627 $4,827 
Greater than 90 percent but less than or equal to 100 percent
72 21 35 16 
Greater than 100 percent
104 36 38 30 
Total Home Equity$25,868 $1,295 $19,700 $4,873 
Home Equity
Refreshed FICO score
Less than 620$677 $167 $197 $313 
Greater than or equal to 620 and less than 680
1,138 144 504 490 
Greater than or equal to 680 and less than 740
4,186 292 2,728 1,166 
Greater than or equal to 740
19,867 692 16,271 2,904 
Total Home Equity$25,868 $1,295 $19,700 $4,873 
Gross charge-offs$6 $1 $3 $2 
(1)Includes reverse mortgages of $893 million and home equity loans of $402 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 March 31,
2023		Revolving Loans20232022202120202019PriorTotal Credit Card as of March 31,
2023		Revolving Loans
Revolving Loans Converted to Term Loans (1)
Refreshed FICO score  
Less than 620$940 $12 $32 $308 $318 $113 $76 $81 $4,268 $4,052 $216 
Greater than or equal to 620 and less than 6802,463 11 245 1,022 707 225 121 132 10,732 10,526 206 
Greater than or equal to 680 and less than 740
8,693 49 1,059 3,563 2,375 821 422 404 31,858 31,673 185 
Greater than or equal to 74040,766 77 5,101 15,273 10,501 4,837 2,527 2,450 45,611 45,566 45 
Other internal credit
   metrics (2,3)
51,678 50,942 52 181 191 63 59 190 — — — 
Total credit card and other
   consumer		$104,540 $51,091 $6,489 $20,347 $14,092 $6,059 $3,205 $3,257 $92,469 $91,817 $652 
Gross charge-offs$40 $1 $— $17 $11 $4 $2 $5 $650 $633 $17 
(1)Represents loans that were modified into term loans.
(2)Other internal credit metrics may include delinquency status, geography or other factors.
(3)Direct/indirect consumer includes $50.9 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 March 31, 2023.

63 Bank of America


Commercial – Credit Quality Indicators By Vintage (1)
Term Loans
Amortized Cost Basis by Origination Year
(Dollars in millions)Total as of
March 31,
2023		20232022202120202019PriorRevolving Loans
U.S. Commercial
Risk ratings    
Pass rated$350,224 $9,255 $55,496 $33,787 $17,310 $15,264 $37,296 $181,816 
Reservable criticized10,431 49 605 803 582 885 1,925 5,582 
Total U.S. Commercial
$360,655 $9,304 $56,101 $34,590 $17,892 $16,149 $39,221 $187,398 
Gross charge-offs$59 $— $3 $18 $— $— $5 $33 
Non-U.S. Commercial
Risk ratings
Pass rated$122,545 $4,204 $19,937 $18,102 $4,634 $3,736 $6,585 $65,347 
Reservable criticized2,282 81 144 321 277 254 225 980 
Total Non-U.S. Commercial
$124,827 $4,285 $20,081 $18,423 $4,911 $3,990 $6,810 $66,327 
Gross charge-offs$23 $— $— $8 $7 $1 $— $7 
Commercial Real Estate
Risk ratings
Pass rated$67,512 $1,856 $16,836 $13,350 $5,281 $8,861 $12,414 $8,914 
Reservable criticized5,539 — 11 829 538 1,737 2,217 207 
Total Commercial Real Estate
$73,051 $1,856 $16,847 $14,179 $5,819 $10,598 $14,631 $9,121 
Gross charge-offs$24 $— $— $— $— $13 $11 $— 
Commercial Lease Financing
Risk ratings
Pass rated$13,227 $613 $3,208 $2,576 $1,775 $1,428 $3,627 $— 
Reservable criticized221 — 20 43 17 36 105 — 
Total Commercial Lease Financing
$13,448 $613 $3,228 $2,619 $1,792 $1,464 $3,732 $— 
Gross charge-offs$— $— $— $— $— $— $— $— 
U.S. Small Business Commercial (2)
Risk ratings
Pass rated$8,653 $453 $1,806 $1,833 $1,209 $826 $2,401 $125 
Reservable criticized352 — 22 52 52 72 151 3 
Total U.S. Small Business Commercial
$9,005 $453 $1,828 $1,885 $1,261 $898 $2,552 $128 
Gross charge-offs$13 $— $— $— $8 $1 $1 $3 
Total$580,986 $16,511 $98,085 $71,696 $31,675 $33,099 $66,946 $262,974 
Total gross charge-offs$119 $— $3 $26 $15 $15 $17 $43 
(1) Excludes $4.1 billion of loans accounted for under the fair value option at March 31, 2023.
(2)     Excludes U.S. Small Business Card loans of $9.2 billion. Refreshed FICO scores for this portfolio are $360 million for less than 620; $931 million for greater than or equal to 620 and less than 680; $2.5 billion for greater than or equal to 680 and less than 740; and $5.4 billion greater than or equal to 740. Excludes U.S. Small Business Card loans gross charge-offs of $62 million.

Bank of America 64

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 year of origination, except for revolving loans and revolving loans that were modified into term loans, which are shown on an aggregate basis at December 31, 2022.
Residential Mortgage – Credit Quality Indicators By Vintage
Term Loans by Origination Year
(Dollars in millions)Total as of
 December 31,
 2022		20222021202020192018Prior
Residential Mortgage
Refreshed LTV
Less than or equal to 90 percent$215,713 $39,625 $81,437 $37,228 $18,980 $5,734 $32,709 
Greater than 90 percent but less than or equal to 100 percent
1,615 950 530 93 15 8 19 
Greater than 100 percent
648 374 169 43 15 8 39 
Fully-insured loans
11,694 580 3,667 3,102 949 156 3,240 
Total Residential Mortgage$229,670 $41,529 $85,803 $40,466 $19,959 $5,906 $36,007 
Residential Mortgage
Refreshed FICO score
Less than 620$2,156 $377 $518 $373 $124 $84 $680 
Greater than or equal to 620 and less than 680
4,978 1,011 1,382 840 329 233 1,183 
Greater than or equal to 680 and less than 740
25,444 5,411 8,290 4,369 2,187 830 4,357 
Greater than or equal to 740185,398 34,150 71,946 31,782 16,370 4,603 26,547 
Fully-insured loans
11,694 580 3,667 3,102 949 156 3,240 
Total Residential Mortgage$229,670 $41,529 $85,803 $40,466 $19,959 $5,906 $36,007 
Gross charge-offs$161 $— $6 $5 $6 $1 $143 
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, 2022
Home Equity
Refreshed LTV
Less than or equal to 90 percent$26,395 $1,304 $19,960 $5,131 
Greater than 90 percent but less than or equal to 100 percent
62 20 24 18 
Greater than 100 percent
106 37 35 34 
Total Home Equity$26,563 $1,361 $20,019 $5,183 
Home Equity
Refreshed FICO score
Less than 620$683 $166 $189 $328 
Greater than or equal to 620 and less than 680
1,190 152 507 531 
Greater than or equal to 680 and less than 740
4,321 312 2,747 1,262 
Greater than or equal to 740
20,369 731 16,576 3,062 
Total Home Equity$26,563 $1,361 $20,019 $5,183 
Gross charge-offs$45 $5 $24 $16 
(1)Includes reverse mortgages of $937 million and home equity loans of $424 million, which are no longer originated.
65 Bank of America


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, 2022Revolving Loans20222021202020192018PriorTotal Credit Card as of December 31, 2022Revolving Loans
Revolving Loans Converted to Term Loans (1)
Refreshed FICO score
Less than 620$847 $12 $237 $301 $113 $84 $43 $57 $4,056 $3,866 $190 
Greater than or equal to 620 and less than 680
2,521 12 1,108 816 269 150 69 97 10,994 10,805 189 
Greater than or equal to 680 and less than 740
8,895 52 4,091 2,730 992 520 214 296 32,186 32,017 169 
Greater than or equal to 74039,679 83 16,663 11,392 5,630 2,992 1,236 1,683 46,185 46,142 43 
Other internal credit
   metrics (2, 3)
54,294 53,404 259 305 70 57 40 159 — — — 
Total credit card and other
   consumer		$106,236 $53,563 $22,358 $15,544 $7,074 $3,803 $1,602 $2,292 $93,421 $92,830 $591 
Gross charge-offs$232 $7 $31 $79 $34 $27 $14 $40 $1,985 $1,909 $76 
(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 $53.4 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, 2022.

Commercial – Credit Quality Indicators By Vintage (1)
Term Loans
Amortized Cost Basis by Origination Year
(Dollars in millions)Total as of December 31, 202220222021202020192018PriorRevolving Loans
U.S. Commercial
Risk ratings    
Pass rated$348,447 $61,200 $39,717 $18,609 $16,566 $8,749 $30,282 $173,324 
Reservable criticized10,034 278 794 697 884 1,202 856 5,323 
Total U.S. Commercial
$358,481 $61,478 $40,511 $19,306 $17,450 $9,951 $31,138 $178,647 
Gross charge-offs$151 $2 $24 $24 $9 $6 $13 $73 
Non-U.S. Commercial
Risk ratings
Pass rated$121,890 $24,839 $19,098 $5,183 $3,882 $2,423 $4,697 $61,768 
Reservable criticized2,589 45 395 331 325 98 475 920 
Total Non-U.S. Commercial
$124,479 $24,884 $19,493 $5,514 $4,207 $2,521 $5,172 $62,688 
Gross charge-offs$41 $— $3 $1 $— $37 $— $— 
Commercial Real Estate
Risk ratings
Pass rated$64,619 $15,290 $13,089 $5,756 $9,013 $4,384 $8,606 $8,481 
Reservable criticized5,147 11 837 545 1,501 1,151 1,017 85 
Total Commercial Real Estate
$69,766 $15,301 $13,926 $6,301 $10,514 $5,535 $9,623 $8,566 
Gross charge-offs$75 $— $— $6 $— $26 $43 $— 
Commercial Lease Financing
Risk ratings
Pass rated$13,404 $3,255 $2,757 $1,955 $1,578 $1,301 $2,558 $— 
Reservable criticized240 9 35 12 71 50 63 — 
Total Commercial Lease Financing
$13,644 $3,264 $2,792 $1,967 $1,649 $1,351 $2,621 $— 
Gross charge-offs$8 $— $4 $— $4 $— $— $— 
U.S. Small Business Commercial (2)
Risk ratings
Pass rated$8,726 $1,825 $1,953 $1,408 $864 $624 $1,925 $127 
Reservable criticized329 11 35 48 76 51 105 3 
Total U.S. Small Business Commercial
$9,055 $1,836 $1,988 $1,456 $940 $675 $2,030 $130 
Gross charge-offs$31 $— $1 $11 $4 $1 $6 $8 
 Total $575,425 $106,763 $78,710 $34,544 $34,760 $20,033 $50,584 $250,031 
Total gross charge-offs$306 $2 $32 $42 $17 $70 $62 $81 
(1) Excludes $5.4 billion of loans accounted for under the fair value option at December 31, 2022.
(2) Excludes U.S. Small Business Card loans of $8.5 billion. Refreshed FICO scores for this portfolio are $297 million for less than 620; $859 million for greater than or equal to 620 and less than 680; $2.4 billion for greater than or equal to 680 and less than 740; and $5.0 billion greater than or equal to 740. Excludes U.S. Small Business Card loans gross charge-offs of $172 million.

Bank of America 66

During the three months ended March 31, 2023, commercial reservable criticized utilized exposure increased to $19.8 billion at March 31, 2023 from $19.3 billion (to 3.17 percent from 3.12 percent of total commercial reservable utilized exposure) at December 31, 2022, primarily driven by our U.S. commercial and industrial portfolio as well as commercial real estate.
Loan Modifications to Borrowers in Financial Difficulty
As part of its credit risk management, the Corporation may modify a loan agreement with a borrower experiencing financial difficulties through a refinancing or restructuring of the borrower’s loan agreement (modification programs).
Consumer Real Estate
The following modification programs are offered for consumer real estate loans to borrowers experiencing financial difficulties. These modifications represented 0.09 percent and 0.15 percent of outstanding residential mortgage and home equity loans at March 31, 2023.
Forbearance and Other Payment Plans: Forbearance plans generally consist of the Corporation suspending the borrower’s payments for a defined period with those payments then due at the conclusion of the forbearance period. The aging status of a loan is generally frozen when it enters into a forbearance plan. Alternatively, the Corporation may offer the borrower a payment plan, which allows the borrower to repay past due amounts through payments over a defined period. At March 31, 2023, the amortized cost of residential mortgage and home equity loans that were modified through these plans during the three months ended March 31, 2023 was $158 million and $30 million. The weighted-average duration of these modifications was 8.2 months and 8.9 months. The total forborne payments for these modifications was $7 million and $3 million for residential mortgage and home equity loans. If a borrower is unable to fulfill their obligations under the forbearance plans, they may be offered a trial or permanent modification.
Trial Modifications: Trial modification plans generally consist of the Corporation offering a borrower modified loan terms that reduce their contractual payments temporarily over a three-to-four-month trial period. If the customer successfully makes the modified payments during the trial period and formally accepts the modified terms, the modified loan terms become permanent. At March 31, 2023, the amortized cost of residential mortgage and home equity loans entering trial modifications during the three months ended March 31, 2023 was $21 million and $9 million.
Permanent Modifications: Permanent modifications include borrowers that have completed a trial modification and have had their contractual payment terms permanently modified, as well as borrowers that proceed directly to a permanent modification without a trial period. In a permanent modification, the borrower’s payment terms are typically modified in more than one manner but generally include a term extension and an interest rate reduction. At times, the permanent modification may also include principal forgiveness and/or a deferral of past due principal and interest amounts to the end of the loan term. The combinations utilized are based on modifying the terms that give the borrower an improved ability to meet the contractual obligations. At March 31, 2023, the amortized cost of residential mortgage and home equity loans that were granted a permanent modification during the three months ended March 31, 2023 was $47 million and $10 million. The term extensions granted for residential mortgage and home equity permanent modifications vary widely and can be up to 30 years, but are mostly in the range of 1 to 10 years and 1 to 15 years. The weighted-average term extension of permanent modifications for residential mortgage and home equity loans was 7.7 years and 12.1 years, while the weighted-average interest rate reduction was 1.50 percent and 2.37 percent. Principal forgiveness and payment deferrals were insignificant for the three months ended March 31, 2023.
For consumer real estate borrowers in financial difficulty that received a forbearance, trial or permanent modification, there were no commitments to lend additional funds at March 31, 2023. Borrowers with a home equity line of credit that received a forbearance plan could have all or a portion of their lines reinstated in the future if they cure their payment default and meet certain Bank conditions.
Chapter 7 Discharges: If a borrower’s consumer real estate obligation is discharged in a Chapter 7 bankruptcy proceeding, the contractual payment terms of the loan are not modified, although they can no longer be enforced against the individual borrower. The Corporation’s ability to collect amounts due on the loan is limited to enforcement against the property through the foreclosure and sale of the collateral. The Corporation will only pursue foreclosure upon default by the borrower, and otherwise will recover pursuant to the loan terms or at the time of a sale. Residential mortgage and home equity loans that were granted a Chapter 7 discharge were insignificant for the three months ended March 31, 2023.
The Corporation tracks the performance of modified loans to assess effectiveness of modification programs. Defaults of modified consumer real estate loans since January 1, 2023 were insignificant during the three months ended March 31, 2023. The table below provides aging information as of March 31, 2023 for consumer real estate loans modified since January 1, 2023.
Consumer Real Estate - Payment Status of Modifications to Borrowers in Financial Difficulty (1)
Current30–89 Days
Past Due		90+ Days
Past Due		Total
(Dollars in millions)March 31, 2023
Residential mortgage$126 $49 $30 $205
Home equity23 7 10 40
Total$149 $56 $40 $245
(1)Excludes trial modifications and Chapter 7 discharges.
67 Bank of America



Consumer real estate foreclosed properties totaled $117 million and $121 million at March 31, 2023 and December 31, 2022. The carrying value of consumer real estate loans, including fully-insured loans, for which formal foreclosure proceedings were in process at March 31, 2023 and December 31, 2022 was $819 million and $871 million. During the three months ended March 31, 2023 and 2022, the Corporation reclassified $37 million and $56 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.
Credit Card and Other Consumer
Credit card and other consumer loans are primarily modified by placing the customer on a fixed payment plan with a fixed interest rate. As of March 31, 2023, substantially all payment plans provided to customers had a 60-month term. In certain circumstances, the Corporation will forgive a portion of the outstanding balance if the borrower makes payments up to a set amount. The Corporation makes modifications directly with borrowers for loans held by the Corporation (internal programs) as well as through third-party renegotiation agencies that provide solutions to customers’ entire unsecured debt structures (external programs). The March 31, 2023 amortized cost of credit card and other consumer loans that were modified through these programs during the three months ended March 31, 2023 was $157 million. The financial effect of modifications resulted in a weighted-average interest rate reduction of 18.65 percent and principal forgiveness of $11 million.
The Corporation tracks the performance of modified loans to assess the effectiveness of modification programs. Defaults of modified credit card and other consumer loans since January 1, 2023 were insignificant during the three months ended March 31, 2023. Of the $157 million in modified credit card and other consumer loans to borrowers experiencing financial difficulty as of March 31, 2023, $109 million were current, $24 million were 30-89 days past due, and $24 million were greater than 90 days past due. These modifications represented 0.08 percent of outstanding credit card and other consumer loans at March 31, 2023.
Commercial Loans
Modifications of loans to commercial borrowers experiencing financial difficulty are designed to reduce the Corporation’s loss exposure while providing borrowers with an opportunity to work through financial difficulties, often to avoid foreclosure or bankruptcy. Each modification is unique, reflects the borrower’s individual circumstances and is designed to benefit the borrower while mitigating the Corporation’s risk exposure. Commercial modifications are primarily term extensions and payment forbearances. Payment forbearances involve the Bank forbearing its contractual right to collect certain payments or payment in
full (maturity forbearance) for a defined period of time. Reductions in interest rates and principal forgiveness occur infrequently for commercial borrowers. Principal forgiveness may occur in connection with foreclosure, short sales or other settlement agreements, leading to termination or sale of the loan.
As of March 31, 2023, the amortized cost basis of modified commercial loans that were entered into during the three months ended March 31, 2023 was $822 million, including term extensions of $700 million, forbearances of $102 million and other miscellaneous modifications of $20 million. Term extensions granted during the three months ended March 31, 2023 increased the weighted-average life of the impacted loans by 1.3 years. The weighted-average duration of loan payments deferred under the Corporation’s commercial loan forbearance program was 15 months, substantially all of which were deferred over a range of 12 to 24 months. Of the $822 million in modified Commercial loans to borrowers experiencing financial difficulty as of March 31, 2023, $775 million were current, $5 million were 30-89 days past due, and $42 million were greater than 90 days past due. These modifications represented 0.14 percent of outstanding commercial loans at March 31, 2023. Defaults of modified commercial loans since January 1, 2023 were insignificant during the three months ended March 31, 2023. For the three months ended March 31, 2023, the Corporation had commitments to lend $534 million to commercial borrowers experiencing financial difficulty whose loans were modified during the period.
Prior-period Troubled Debt Restructuring Disclosures
Prior to adopting the new accounting standard on loan modifications, the Corporation accounted for modifications of loans to borrowers experiencing financial difficulty as TDRs, when the modification resulted in a concession. The following discussion reflects loans that were considered TDRs prior to January 1, 2023. For more information on TDR accounting policies, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2022 Annual Report on Form 10-K.
Consumer Real Estate
The following table presents the March 31, 2022 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 months ended March 31, 2022. 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. 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.
At December 31, 2022, remaining commitments to lend additional funds to debtors whose terms have been modified in a consumer real estate TDR were not significant.
Bank of America 68

Consumer Real Estate – TDRs Entered into During the Three Months Ended March 31, 2022
Unpaid Principal BalanceCarrying
Value		Pre-Modification Interest Rate
Post-Modification Interest Rate (1)
(Dollars in millions)March 31, 2022
Residential mortgage$585 $539 3.50 %3.33 %
Home equity92 75 3.62 3.63 
Total $677 $614 3.52 3.37 
(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 March 31, 2022 carrying value for consumer real estate loans that were modified in a TDR during the three months ended March 31, 2022, by type of modification.
Consumer Real Estate – Modification Programs
(Dollars in millions)TDRs Entered into During the
Three Months Ended March 31, 2022
Modifications under proprietary programs 552 
Loans discharged in Chapter 7 bankruptcy (1)
5 
Trial modifications57 
Total modifications$614 
(1)Includes loans discharged in Chapter 7 bankruptcy with no change in repayment terms that are classified as TDRs.
The table below presents the carrying value of consumer real estate loans that entered into payment default during the three months ended March 31, 2022 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.
Consumer Real Estate – TDRs Entering Payment Default that were Modified During the Preceding 12 Months
(Dollars in millions)Three Months Ended March 31, 2022
Modifications under proprietary programs40 
Loans discharged in Chapter 7 bankruptcy (1)
1 
Trial modifications (2)
4 
Total modifications$45 
(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 table below provides information on the Corporation’s Credit Card and Other Consumer TDR portfolio including the March 31, 2022 unpaid principal balance, carrying value, and average pre- and post-modification interest rates of loans that were modified in TDRs during the three months ended March 31, 2022.
Credit Card and Other Consumer – TDRs Entered into During the Three Months Ended March 31, 2022
 Unpaid Principal Balance
Carrying
Value (1)
Pre-Modification Interest RatePost-Modification Interest Rate
(Dollars in millions)March 31, 2022
Credit card$69 $73 18.67 %3.69 %
Direct/Indirect consumer4 3 5.75 5.75 
Total $73 $76 18.03 3.77 
(1)Includes accrued interest and fees.

69 Bank of America


The table below presents the March 31, 2022 carrying value for Credit Card and Other Consumer loans that were modified in a TDR during the three months ended March 31, 2022 by program type.
Credit Card and Other Consumer – TDRs by Program Type (1)
(Dollars in millions)
TDRs Entered into During the
Three Months Ended March 31, 2022
Internal programs$63 
External programs
10 
Other
3 
Total$76 
(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 10 percent of new credit card TDRs and 17 percent of new direct/indirect consumer TDRs may be in payment default within 12 months after modification.
Commercial Loans
During the three months ended March 31, 2022, the carrying value of the Corporation’s commercial loans that were modified as TDRs was $848 million. At December 31, 2022, the Corporation had commitments to lend $358 million to commercial borrowers whose loans were classified as TDRs. The balance of commercial TDRs in payment default was $105 million at December 31, 2022.
Loans Held-for-sale
The Corporation had LHFS of $6.8 billion and $6.9 billion at March 31, 2023 and December 31, 2022. Cash and non-cash proceeds from sales and paydowns of loans originally classified as LHFS were $2.4 billion and $13.3 billion for the three months ended March 31, 2023 and 2022. Cash used for originations and purchases of LHFS totaled $2.3 billion and $6.8 billion for the three months ended March 31, 2023 and 2022. Also included were non-cash net transfers into LHFS of $459 million and $1.5 billion for the three months ended March 31, 2023 and 2022.
Accrued Interest Receivable
Accrued interest receivable for loans and leases and loans held-for-sale at March 31, 2023 and December 31, 2022 was $4.0 billion and $3.8 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 months ended March 31, 2023 and 2022, the Corporation reversed $118 million and $131 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.
For the outstanding residential mortgage, home equity, direct/indirect consumer and commercial loan balances classified as nonperforming during the three months ended March 31, 2023 and 2022, 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 2022 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 2022 Annual Report on Form 10-K.
The March 31, 2023 estimate for allowance for credit losses was based on various economic scenarios, including a baseline scenario derived from consensus estimates, an adverse scenario reflecting an extended moderate recession, a downside scenario reflecting persistent inflation and interest rates above the baseline scenario, a tail risk scenario similar to the severely adverse scenario used in stress testing and an upside scenario that considers the potential for improvement above the baseline scenario. The overall economic outlook is weighted 95 percent towards a mild recessionary environment in 2023. The weighted economic outlook assumes that the U.S. average unemployment rate will be above five percent by the fourth quarter of 2023 and will remain near this level through the fourth quarter of 2024. Additionally, in this economic outlook, U.S. real gross domestic product is forecasted to contract at 0.5 percent and grow at 1.4 percent year-over-year in the fourth quarters of 2023 and 2024. For comparison, as of December 31, 2022, the weighted economic outlook for the U.S. average unemployment rate was forecasted to be just above five and a half percent by the fourth quarter of 2023 and slowly decline to five percent by the fourth quarter of 2024 and U.S. real gross domestic product was forecasted to contract at 0.4 percent and grow at 1.2 percent year-over-year in the fourth
Bank of America 70

quarters of 2023 and 2024, respectively. In addition, as of March 31, 2023, the latest estimate of the year-over-year real gross domestic product growth in the fourth quarter of 2022 was 0.9 percent. For comparison, as of December 31, 2022, the year-over-year baseline real gross domestic product growth in the fourth quarter of 2022 was forecasted at 0.4 percent.
The allowance for credit losses decreased $271 million from December 31, 2022 to $14.0 billion at March 31, 2023, which included a $123 million reserve increase related to the consumer portfolio and a $394 million reserve decrease related to the commercial portfolio. The decrease in the allowance reflected a reserve release in our commercial portfolio primarily driven by certain improved macroeconomic conditions, partially offset by a reserve build in our consumer portfolio primarily due to higher-than-expected credit card balances during the three months ended March 31, 2023. The decrease in allowance also includes the impact of the accounting change to remove the recognition and measurement guidance on TDRs, which reduced the allowance for credit losses by $243 million. The change in the allowance for credit losses was comprised of a net decrease of $168 million in the allowance for loan and lease losses and a decrease of $103 million in the reserve for unfunded lending commitments. The decrease in the allowance for credit losses
was attributed to decreases in the commercial portfolio of $394 million and the consumer real estate portfolio of $18 million, partially offset by an increase in the credit card and other consumer portfolios of $141 million. The provision for credit losses increased $901 million to $931 million for the three months ended March 31, 2023 compared to the same period in 2022. The provision for credit losses for the three months ended March 31, 2023 was driven by our consumer portfolio primarily due to higher-than-expected credit card balances during the first quarter of 2023. This was partially offset by certain improved macroeconomic conditions that primarily benefited our commercial portfolio.
Outstanding loans and leases excluding loans accounted for under the fair value option increased $2.0 billion during the three months ended March 31, 2023 primarily driven by commercial loans, which increased $6.3 billion driven by broad-based growth, and consumer loans, which decreased $4.2 billion primarily driven by securities-based lending 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 March 31, 2023
Allowance for loan and lease losses, December 31$420 $6,817 $5,445 $12,682 
January 1, 2023 adoption of credit loss standard(67)(109)(67)(243)
Allowance for loan and lease losses, January 1353 6,708 5,378 12,439 
Loans and leases charged off(14)(861)(181)(1,056)
Recoveries of loans and leases previously charged off25 197 27 249 
Net charge-offs11 (664)(154)(807)
Provision for loan and lease losses34 913 (47)900 
Other 5 1 (24)(18)
Allowance for loan and lease losses, March 31
403 6,958 5,153 12,514 
Reserve for unfunded lending commitments, January 194 — 1,446 1,540 
Provision for unfunded lending commitments(1)— (102)(103)
Reserve for unfunded lending commitments, March 31
93 — 1,344 1,437 
Allowance for credit losses, March 31
$496 $6,958 $6,497 $13,951 
Three Months Ended March 31, 2022
Allowance for loan and lease losses, January 1$557 $6,476 $5,354 $12,387 
Loans and leases charged off(23)(619)(92)(734)
Recoveries of loans and leases previously charged off63 239 40 342 
Net charge-offs40 (380)(52)(392)
Provision for loan and lease losses(126)146 88 108 
Other2 — (1)1 
Allowance for loan and lease losses, March 31
473 6,242 5,389 12,104 
Reserve for unfunded lending commitments, January 196 — 1,360 1,456 
Provision for unfunded lending commitments(6)— (72)(78)
Other1 — — 1 
Reserve for unfunded lending commitments, March 31
91 — 1,288 1,379 
Allowance for credit losses, March 31
$564 $6,242 $6,677 $13,483 
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 March 31, 2023 and December 31, 2022 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 March 31, 2023 and December 31, 2022 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 2022 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.
71 Bank of America


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 months ended March 31, 2023 or the year ended December 31, 2022 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 $975 million and $978 million at March 31, 2023 and December 31, 2022.
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 months ended March 31, 2023 and 2022.
First-lien Mortgage Securitizations
 
Residential Mortgage - AgencyCommercial Mortgage
Three Months Ended March 31
(Dollars in millions)2023202220232022
Proceeds from loan sales (1)
$1,347 $2,322 $142 $2,428 
Gains on securitizations (2)
(5)8 3 13 
Repurchases from securitization trusts (3)
9 32 — — 
(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 $10 million and $20 million net of hedges, during the three months ended March 31, 2023 and 2022, 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 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 $98.3 billion and $110.4 billion at March 31, 2023 and 2022. Servicing fee and ancillary fee income on serviced loans was $69 million and $70 million during the three months ended March 31, 2023 and 2022. Servicing advances on serviced loans, including loans serviced for others and loans held for investment, were $1.5 billion and $1.6 billion at March 31,
2023 and December 31, 2022. For more information on MSRs,
see Note 14 – Fair Value Measurements.
During the three months ended March 31, 2023 and 2022, the Corporation deconsolidated agency residential mortgage securitization trusts with total assets of $328 million and $527 million.
The following table summarizes select information related to first-lien mortgage securitization trusts in which the Corporation held a variable interest at March 31, 2023 and December 31, 2022.
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First-lien Mortgage VIEs
Residential Mortgage  
   Non-agency  
 AgencyPrimeSubprimeAlt-ACommercial Mortgage
(Dollars in millions)March 31
2023		December 31
2022		March 31
2023		December 31
2022		March 31
2023		December 31
2022		March 31
2023		December 31
2022		March 31
2023		December 31
2022
Unconsolidated VIEs          
Maximum loss exposure (1)
$8,848 $9,112 $90 $91 $683 $735 $8 $28 $1,490 $1,594 
On-balance sheet assets
          
Senior securities:
          
Trading account assets
$197 $232 $3 $3 $26 $25 $6 $26 $32 $91 
Debt securities carried at fair value
2,893 3,027 — — 361 410 — — — — 
Held-to-maturity securities
5,758 5,853 — — — — — — 1,272 1,268 
All other assets— — 3 3 22 25 2 2 59 101 
Total retained positions
$8,848 $9,112 $6 $6 $409 $460 $8 $28 $1,363 $1,460 
Principal balance outstanding (2)
$80,077 $81,644 $3,872 $3,973 $4,929 $5,034 $11,259 $11,568 $80,157 $85,101 
Consolidated VIEs          
Maximum loss exposure (1)
$1,886 $1,735 $— $— $— $78 $— $— $— $— 
On-balance sheet assets
          
Trading account assets
$1,886 $1,735 $— $— $— $78 $— $— $— $— 
Loans and leases, net— — — — — — — — — — 
Total assets$1,886 $1,735 $— $— $— $78 $— $— $— $— 
Total liabilities$— $— $— $— $— $— $— $— $— $— 
(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 March 31, 2023 and December 31, 2022.
Home Equity Loan, Credit Card and Other Asset-backed VIEs
 
Home Equity (1)
Credit Card (2)
Resecuritization TrustsMunicipal Bond Trusts
(Dollars in millions)March 31
2023		December 31
2022		March 31
2023		December 31
2022		March 31
2023		December 31
2022		March 31
2023		December 31
2022
Unconsolidated VIEs      
Maximum loss exposure$8 $119 $— $— $4,473 $4,243 $2,530 $2,537 
On-balance sheet assets      
Securities (3):
      
Trading account assets$— $— $— $— $910 $456 $— $— 
Debt securities carried at fair value
— 1 — — 1,105 1,259 — — 
Held-to-maturity securities— — — — 2,458 2,528 — — 
Total retained positions$— $1 $— $— $4,473 $4,243 $— $— 
Total assets of VIEs $301 $326 $— $— $13,802 $12,255 $3,032 $3,016 
Consolidated VIEs      
Maximum loss exposure$29 $32 $8,994 $9,555 $277 $551 $1,390 $— 
On-balance sheet assets      
Trading account assets$— $— $— $— $656 $650 $1,390 $— 
Loans and leases99 97 13,989 14,555 — — — — 
Allowance for loan and lease losses
11 12 (807)(808)— — — — 
All other assets2 2 67 68 — — — — 
Total assets$112 $111 $13,249 $13,815 $656 $650 $1,390 $— 
On-balance sheet liabilities      
Short-term borrowings
$— $— $— $— $— $— $1,317 $— 
Long-term debt83 79 4,248 4,247 379 99 — — 
All other liabilities— — 7 13 — — — — 
Total liabilities$83 $79 $4,255 $4,260 $379 $99 $1,317 $— 
(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 March 31, 2023 and December 31, 2022, loans and leases in the consolidated credit card trust included $4.7 billion and $3.3 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).
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
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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.
No new senior debt securities were issued to third-party investors from the credit card securitization trust during the three months ended March 31, 2023 and 2022.
At March 31, 2023 and December 31, 2022, the Corporation held subordinate securities issued by the credit card securitization trust with a notional principal amount of $4.7 billion and $6.7 billion. These securities serve as a form of credit enhancement to the senior debt securities and have a stated interest rate of zero percent. No subordinate securities were issued by the credit card securitization trust during the three months ended March 31, 2023 and 2022.
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 $1.6 billion and $9.5 billion of securities during the three months ended March 31, 2023 and
2022. 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 months ended March 31, 2023 and 2022, resecuritization proceeds included securities with an initial fair value of $586 million and $699 million, of which substantially all of the securities were classified as trading account assets for both periods. Substantially all of the trading account securities carried at fair value were 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 $2.5 billion at both March 31, 2023 and December 31, 2022. The weighted-average remaining life of bonds held in the trusts at March 31, 2023 was 11.0 years. There were no significant write-downs or downgrades of assets or issuers during the three months ended March 31, 2023 and 2022.
Other Variable Interest Entities
The table below summarizes select information related to other VIEs in which the Corporation held a variable interest at March 31, 2023 and December 31, 2022.
Other VIEs
ConsolidatedUnconsolidatedTotalConsolidated
Unconsolidated (1)
Total (1)
(Dollars in millions)March 31, 2023December 31, 2022
Maximum loss exposure $1,874 $48,061 $49,935 $2,286 $47,477 $49,763 
On-balance sheet assets      
Trading account assets $344 $2,126 $2,470 $353 $2,187 $2,540 
Debt securities carried at fair value — 247 247 — 473 473 
Loans and leases 1,666 14,536 16,202 2,086 14,243 16,329 
Allowance for loan and lease losses (1)(98)(99)(1)(99)(100)
All other assets 60 30,717 30,777 46 30,221 30,267 
Total$2,069 $47,528 $49,597 $2,484 $47,025 $49,509 
On-balance sheet liabilities      
Short-term borrowings$22 $— $22 $42 $— $42 
Long-term debt173 — 173 156 — 156 
All other liabilities — 7,357 7,357 — 7,318 7,318 
Total $195 $7,357 $7,552 $198 $7,318 $7,516 
(1)Prior period has been revised to include unconsolidated CLOs.
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 involvement in the VIE is limited to its loss exposure. The Corporation’s maximum loss exposure to consolidated and unconsolidated customer VIEs totaled $1.0 billion and $914 million at March 31, 2023 and December 31, 2022, 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. Total assets of the consolidated and unconsolidated VIEs were $1.5 billion at both March 31, 2023 and December 31, 2022.
CDO and CLO VIEs
The Corporation holds investments in unconsolidated CDO and CLO VIEs, that hold diversified pools of fixed-income securities, typically corporate debt, ABS or non-investment grade corporate loans, which are funded by multiple tranches of debt instruments and equity securities issued by the VIEs. The VIEs are managed by third-party portfolio managers. The Corporation holds $16.3 billion of loans and securities issued by CDO and CLO VIEs at both March 31, 2023 and December 31, 2022. The Corporation’s loss exposure is limited to its loan and debt security holdings and the notional amount of any derivatives to which the Corporation is a counterparty. The Corporation’s maximum loss exposure to consolidated and unconsolidated CDOs and CLOs totaled $16.3 billion at both March 31, 2023 and December 31, 2022, which is insignificant to the total assets of the VIEs.
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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 March 31, 2023 and December 31, 2022, the Corporation’s consolidated investment VIEs had total assets of $454 million and $854 million. The Corporation also held investments in unconsolidated VIEs with total assets of $15.1 billion and $12.2 billion at March 31, 2023 and December 31, 2022. The Corporation’s maximum loss exposure associated with both consolidated and unconsolidated investment VIEs totaled $2.2 billion and $2.4 billion at March 31, 2023 and December 31, 2022 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 $1.2 billion at both March 31, 2023 and December 31, 2022. 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 equity investments in unconsolidated limited partnerships and similar entities that construct, own and operate affordable housing, renewable energy and certain other projects. The total assets of these unconsolidated tax credit VIEs were $76.0 billion and $74.8 billion as of March 31, 2023 and December 31, 2022. An unrelated third party is typically the general partner or managing member and has control over the significant activities of the VIE. As an investor, tax credits associated with the investments in these entities are allocated to the Corporation, as provided by the U.S. Internal Revenue Code and related regulations, and are recognized as income tax benefits in the Corporation’s Consolidated Statement of Income in the year they are earned, which varies based on the type of investments. Tax credits from environmental, social and governance (ESG) investments in affordable housing are recognized ratably over a term of up to 10 years, and tax credits from renewable energy investments are recognized either at inception for transactions electing Investment Tax Credits (ITCs) or as energy is produced for transactions electing Production Tax Credits (PTCs), which is generally up to a 10-year time period. The volume and types of investments held by the Corporation will influence the amount of tax credits recognized each period.
The Corporation’s equity investments in affordable housing and other projects totaled $14.7 billion at both March 31, 2023 and December 31, 2022, which included unfunded capital contributions of $7.0 billion and $6.9 billion and are probable to be paid over the next five years. 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. During the three months ended March 31, 2023 and 2022, the Corporation recognized tax credits and other tax benefits related to affordable housing and other tax credit equity investments of $527 million and $419 million and reported pretax losses in other income of
$372 million and $337 million. The Corporation’s equity investments in renewable energy totaled $14.1 billion and $13.9 billion at March 31, 2023 and December 31, 2022. In addition, the Corporation had unfunded capital contributions for renewable energy investments of $5.6 billion and $1.9 billion at March 31, 2023 and December 31, 2022, which are contingent on various conditions precedent to funding over the next two years. The Corporation’s risk of loss is generally mitigated by policies requiring the project to qualify for the expected tax credits prior to making its investment. During the three months ended March 31, 2023 and 2022, the Corporation recognized tax credits and other tax benefits related to renewable energy equity investments of $996 million and $865 million and reported pretax losses in other income of $561 million and $530 million. The Corporation may also enter into power purchase agreements with renewable energy tax credit entities. The maximum loss exposure for tax credit VIEs was $28.8 billion at both March 31, 2023 and December 31, 2022.
NOTE 7 Goodwill and Intangible Assets
Goodwill
The table below presents goodwill balances by business segment at March 31, 2023 and December 31, 2022. The reporting units utilized for goodwill impairment testing are the operating segments or one level below.
Goodwill
(Dollars in millions)March 31 2023December 31 2022
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 both March 31, 2023 and December 31, 2022, the net carrying value of intangible assets was $2.1 billion. At both March 31, 2023 and December 31, 2022, 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 for both the three months ended March 31, 2023 and 2022.
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 2022 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 following table presents the net investment in sales-type and direct financing leases at March 31, 2023 and December 31, 2022.
75 Bank of America


Net Investment (1)
(Dollars in millions)March 31 2023December 31 2022
Lease receivables$14,895 $15,123 
Unguaranteed residuals2,116 2,143 
   Total net investment in sales-type and direct
      financing leases		$17,011 $17,266 
(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 $6.4 billion and $6.5 billion at March 31, 2023 and December 31, 2022.
The table below presents lease income for the three months ended March 31, 2023 and 2022.
Lease Income
Three Months Ended March 31
(Dollars in millions)20232022
Sales-type and direct financing leases$172 $142 
Operating leases238 232 
   Total lease income$410 $374 
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 March 31, 2023 and December 31, 2022.
Lessee Arrangements
(Dollars in millions)March 31 2023December 31 2022
Right-of-use asset$9,527 $9,755 
Lease liabilities10,137 10,359 
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 March 31, 2023 and December 31, 2022. 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, Collateral and Restricted Cash to the Consolidated Financial Statements of the Corporation’s 2022 Annual Report on Form 10-K.
Bank of America 76

Securities Financing Agreements
Gross Assets/Liabilities (1)
Amounts OffsetNet Balance Sheet Amount
Financial Instruments (2)
Net Assets/Liabilities
(Dollars in millions)March 31, 2023
Securities borrowed or purchased under agreements to resell (3)
$633,124 $(335,046)$298,078 $(268,791)$29,287 
Securities loaned or sold under agreements to repurchase$649,426 $(335,046)$314,380 $(287,074)$27,306 
Other (4)
11,993 — 11,993 (11,993)— 
Total$661,419 $(335,046)$326,373 $(299,067)$27,306 
December 31, 2022
Securities borrowed or purchased under agreements to resell (3)
$597,847 $(330,273)$267,574 $(240,120)$27,454 
Securities loaned or sold under agreements to repurchase$525,908 $(330,273)$195,635 $(183,265)$12,370 
Other (4)
8,427 — 8,427 (8,427)— 
Total$534,335 $(330,273)$204,062 $(191,692)$12,370 
(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 $9.9 billion and $8.7 billion reported in loans and leases on the Consolidated Balance Sheet at March 31, 2023 and December 31, 2022.
(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.
Remaining Contractual Maturity
Overnight and Continuous30 Days or LessAfter 30 Days Through 90 Days
Greater than
90 Days (1)
Total
(Dollars in millions)March 31, 2023
Securities sold under agreements to repurchase$262,304 $226,589 $44,524 $46,041 $579,458 
Securities loaned64,599 604 654 4,111 69,968 
Other11,993 — — — 11,993 
Total$338,896 $227,193 $45,178 $50,152 $661,419 
December 31, 2022
Securities sold under agreements to repurchase$200,087 $181,632 $41,666 $30,107 $453,492 
Securities loaned66,909 288 1,139 4,080 72,416 
Other8,427 — — — 8,427 
Total$275,423 $181,920 $42,805 $34,187 $534,335 
(1)No agreements have maturities greater than four years.
Class of Collateral Pledged
Securities Sold Under Agreements to RepurchaseSecurities
Loaned		OtherTotal
(Dollars in millions)March 31, 2023
U.S. government and agency securities$313,725 $— $— $313,725 
Corporate securities, trading loans and other17,056 2,319 323 19,698 
Equity securities11,543 67,574 11,665 90,782 
Non-U.S. sovereign debt233,043 75 5 233,123 
Mortgage trading loans and ABS4,091 — — 4,091 
Total$579,458 $69,968 $11,993 $661,419 
December 31, 2022
U.S. government and agency securities$193,005 $18 $— $193,023 
Corporate securities, trading loans and other14,345 2,896 317 17,558 
Equity securities10,249 69,432 8,110 87,791 
Non-U.S. sovereign debt232,171 70 — 232,241 
Mortgage trading loans and ABS3,722 — — 3,722 
Total$453,492 $72,416 $8,427 $534,335 
77 Bank of America


Collateral
The Corporation accepts securities and loans as collateral that it is permitted by contract or practice to sell or repledge. At March 31, 2023 and December 31, 2022, the fair value of this collateral was $891.0 billion and $827.6 billion, of which $878.4 billion and $764.1 billion was 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 10 – Securities Financing Agreements, Short-term Borrowings, Collateral and Restricted Cash to the Consolidated Financial Statements of the Corporation’s 2022 Annual Report on Form 10-K.
Restricted Cash
At March 31, 2023 and December 31, 2022, the Corporation held restricted cash included within cash and cash equivalents on the Consolidated Balance Sheet of $6.5 billion and $7.6 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 2022 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 $10.1 billion and $10.4 billion at March 31, 2023 and December 31, 2022. The carrying value of the Corporation’s credit extension commitments at March 31, 2023 and December 31, 2022, excluding commitments accounted for under the fair value option, was $1.5 billion and $1.6 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 table below includes the notional amount of commitments of $3.1 billion and $3.0 billion at March 31, 2023 and December 31, 2022 that are accounted for under the fair value option. However, the table excludes the cumulative net fair value for these commitments of $122 million and $110 million at March 31, 2023 and December 31, 2022, 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.
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)March 31, 2023
Notional amount of credit extension commitments     
Loan commitments (1)
$117,267 $160,450 $219,304 $15,920 $512,941 
Home equity lines of credit1,667 7,986 11,652 22,660 43,965 
Standby letters of credit and financial guarantees (2)
22,417 9,328 2,755 528 35,028 
Letters of credit963 32 42 26 1,063 
Other commitments (3)
3 68 137 1,059 1,267 
Legally binding commitments142,317 177,864 233,890 40,193 594,264 
Credit card lines (4)
429,384 — — — 429,384 
Total credit extension commitments$571,701 $177,864 $233,890 $40,193 $1,023,648 
 December 31, 2022
Notional amount of credit extension commitments     
Loan commitments (1)
$113,962 $162,890 $221,374 $13,667 $511,893 
Home equity lines of credit1,479 7,230 11,578 22,154 42,441 
Standby letters of credit and financial guarantees (2)
22,565 9,237 2,787 628 35,217 
Letters of credit853 46 52 49 1,000 
Other commitments (3)
5 93 71 1,103 1,272 
Legally binding commitments138,864 179,496 235,862 37,601 591,823 
Credit card lines (4)
419,144 — — — 419,144 
Total credit extension commitments$558,008 $179,496 $235,862 $37,601 $1,010,967 
(1)     At March 31, 2023 and December 31, 2022, $2.9 billion and $2.6 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 $25.0 billion and $9.4 billion at March 31, 2023, and $25.1 billion and $9.5 billion at December 31, 2022. Amounts in the table include consumer SBLCs of $563 million and $575 million at March 31, 2023 and December 31, 2022.
(3)     Primarily includes second-loss positions on lease-end residual value guarantees.
(4)     Includes business card unused lines of credit.
Other Commitments
At March 31, 2023 and December 31, 2022, the Corporation had commitments to purchase loans (e.g., residential mortgage and commercial real estate) of $749 million and $636 million,
which upon settlement will be included in trading account assets, loans or LHFS, and commitments to purchase commercial loans of $226 million and $294 million, which upon settlement will be included in trading account assets.
Bank of America 78

At March 31, 2023 and December 31, 2022, the Corporation had commitments to enter into resale and forward-dated resale and securities borrowing agreements of $116.5 billion and $92.0 billion, and commitments to enter into forward-dated repurchase and securities lending agreements of $90.1 billion and $57.8 billion. These commitments generally expire within the next 12 months.
At March 31, 2023 and December 31, 2022, the Corporation had a commitment to originate or purchase up to $4.1 billion and $3.7 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 March 31, 2023 and December 31, 2022, the Corporation had unfunded equity investment commitments of $534 million and $571 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 both March 31, 2023 and December 31, 2022, the notional amount of these guarantees totaled $4.3 billion. At March 31, 2023 and December 31, 2022, the Corporation’s maximum exposure related to these guarantees totaled $633 million and $632 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 $470 billion, is an estimate of the Corporation’s maximum potential exposure as of March 31, 2023. 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 Statements of the Corporation’s 2022 Annual Report on Form 10-K.
The reserve for representations and warranties obligations and corporate guarantees was $622 million and $612 million at March 31, 2023 and December 31, 2022 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 $46.7 billion and $59.6 billion at March 31, 2023 and December 31, 2022.
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 2022 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
79 Bank of America


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 disclosed below and 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 and regulatory investigation-related expense of $89 million and $106 million was recognized for the three months ended March 31, 2023 and 2022.
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 $0.8 billion in excess of the accrued liability, if any, as of March 31, 2023.
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.
Deposit Insurance Assessment
On April 10, 2023, the magistrate judge issued a report and recommendation (the Report) for resolving the parties’ pending summary judgment motions. The Report recommends granting the Federal Deposit Insurance Corporation’s (FDIC) motion for summary judgment on BANA’s statutory liability for the unpaid assessments, subject to BANA’s statute of limitations defenses to assessments for the quarters ended March 31, 2012 through March 31, 2013, on which the Report recommends that relevant issues should be resolved at trial. The Report also recommends denying BANA’s counterclaims challenging the adoption of the relevant assessment regulations and granting BANA’s motion for summary judgment on the FDIC’s claims for unjust enrichment and disgorgement. The Report will be submitted to the district court judge for consideration, and the parties have the opportunity to file objections to the recommendations in the Report.
NOTE 11 Shareholders’ Equity
Common Stock
Declared Quarterly Cash Dividends on Common Stock (1)
Declaration DateRecord DatePayment DateDividend Per Share
April 26, 2023June 2, 2023June 30, 2023$0.22 
February 1, 2023March 3, 2023March 31, 20230.22 
(1) In 2023, and through May 1, 2023.
During the three months ended March 31, 2023, the Corporation repurchased and retired 67 million shares of common stock, which reduced shareholders’ equity by $2.2 billion.
During the three months ended March 31, 2023, in connection with employee stock plans, the Corporation issued 68 million shares of its common stock and, to satisfy tax withholding obligations, repurchased 26 million shares of its common stock. At March 31, 2023, the Corporation had reserved 425 million unissued shares of common stock for future issuances under employee stock plans, convertible notes and preferred stock.
On April 26, 2023, the Board of Directors declared a quarterly common stock dividend of $0.22 per share.
Preferred Stock
During the three months ended March 31, 2023, the Corporation declared $505 million of cash dividends on preferred stock. 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 2022 Annual Report on Form 10-K.


Bank of America 80

NOTE 12 Accumulated Other Comprehensive Income (Loss)
The table below presents the changes in accumulated OCI after-tax for the three months ended March 31, 2023 and 2022.
(Dollars in millions)Debt Securities Debit Valuation AdjustmentsDerivatives
Employee
Benefit Plans
Foreign
Currency
Total
Balance, December 31, 2021$3,045 $(1,636)$(1,880)$(3,642)$(991)$(5,104)
Net change(3,447)261 (5,179)24 28 (8,313)
Balance, March 31, 2022$(402)$(1,375)$(7,059)$(3,618)$(963)$(13,417)
Balance, December 31, 2022$(2,983)$(881)$(11,935)$(4,309)$(1,048)$(21,156)
Net change555 10 2,042 10 12 2,629 
Balance, March 31, 2023$(2,428)$(871)$(9,893)$(4,299)$(1,036)$(18,527)
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 three months ended March 31, 2023 and 2022.
PretaxTax
effect		After-
tax		PretaxTax
effect		After-
tax
Three Months Ended March 31
(Dollars in millions)20232022
Debt securities:
Net increase (decrease) in fair value$521 $(123)$398 $(4,565)$1,123 $(3,442)
Net realized (gains) losses reclassified into earnings (1)
210 (53)157 (7)2 (5)
Net change731 (176)555 (4,572)1,125 (3,447)
Debit valuation adjustments:
Net increase (decrease) in fair value9 (2)7 343 (83)260 
Net realized (gains) losses reclassified into earnings (1)
4 (1)3 1 — 1 
Net change13 (3)10 344 (83)261 
Derivatives:
Net increase (decrease) in fair value2,568 (643)1,925 (6,893)1,719 (5,174)
Reclassifications into earnings:
Net interest income161 (40)121 6 (2)4 
Compensation and benefits expense(5)1 (4)(12)3 (9)
Net realized (gains) losses reclassified into earnings156 (39)117 (6)1 (5)
Net change2,724 (682)2,042 (6,899)1,720 (5,179)
Employee benefit plans:
Net actuarial losses and other reclassified into earnings (2)
13 (3)10 42 (18)24 
Net change13 (3)10 42 (18)24 
Foreign currency:
Net increase (decrease) in fair value(77)89 12 80 (52)28 
Net change(77)89 12 80 (52)28 
Total other comprehensive income (loss)$3,404 $(775)$2,629 $(11,005)$2,692 $(8,313)
(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.

81 Bank of America


NOTE 13 Earnings Per Common Share
The calculation of earnings per common share (EPS) and diluted EPS for the three months ended March 31, 2023 and 2022 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 2022 Annual Report on Form 10-K.
Three Months Ended March 31
(In millions, except per share information)20232022
Earnings per common share  
Net income$8,161 $7,067 
Preferred stock dividends(505)(467)
Net income applicable to common shareholders$7,656 $6,600 
Average common shares issued and outstanding8,065.9 8,136.8 
Earnings per common share$0.95 $0.81 
Diluted earnings per common share  
Net income applicable to common shareholders$7,656 $6,600 
Add preferred stock dividends due to assumed conversions56 — 
Net income allocated to common shareholders$7,712 $6,600 
Average common shares issued and outstanding8,065.9 8,136.8 
Dilutive potential common shares (1)
116.4 65.3 
Total diluted average common shares issued and outstanding8,182.3 8,202.1 
Diluted earnings per common share$0.94 $0.80 
(1)Includes incremental dilutive shares from preferred stock, restricted stock units, restricted stock and warrants.
For the three months ended March 31, 2023, 62 million average dilutive potential common shares associated with the Series L preferred stock were included in the diluted share count under the “if-converted” method, whereas they were antidilutive for the three months ended March 31, 2022.
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 three months ended March 31, 2023, there were no changes to valuation approaches or techniques that had, or are expected to have, a material impact 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 2022 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
March 31, 2023 and December 31, 2022, including financial instruments that the Corporation accounts for under the fair value option, are summarized in the following tables.
Bank of America 82

March 31, 2023
 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
$921 $— $— $— $921 
Federal funds sold and securities borrowed or purchased under agreements to resell
— 163,505 — — 163,505 
Trading account assets:     
U.S. Treasury and government agencies63,966 8 — — 63,974 
Corporate securities, trading loans and other— 41,121 2,322 — 43,443 
Equity securities90,424 37,493 212 — 128,129 
Non-U.S. sovereign debt9,180 28,892 541 — 38,613 
Mortgage trading loans, MBS and ABS:
U.S. government-sponsored agency guaranteed— 30,959 11 — 30,970 
Mortgage trading loans, ABS and other MBS— 8,560 1,289 — 9,849 
Total trading account assets (2)
163,570 147,033 4,375 — 314,978 
Derivative assets14,626 342,584 3,555 (319,818)40,947 
AFS debt securities:     
U.S. Treasury and government agencies100,579 928 — — 101,507 
Mortgage-backed securities:     
Agency— 23,252 — — 23,252 
Agency-collateralized mortgage obligations— 2,035 — — 2,035 
Non-agency residential— 114 293 — 407 
Commercial— 6,440 — — 6,440 
Non-U.S. securities— 12,933 187 — 13,120 
Other taxable securities— 4,746 — — 4,746 
Tax-exempt securities— 10,852 51 — 10,903 
Total AFS debt securities100,579 61,300 531 — 162,410 
Other debt securities carried at fair value:
U.S. Treasury and government agencies1,323 — — — 1,323 
Non-agency residential MBS— 206 94 — 300 
Non-U.S. and other securities
2,989 5,488 — — 8,477 
Total other debt securities carried at fair value4,312 5,694 94 — 10,100 
Loans and leases— 4,154 243 — 4,397 
Loans held-for-sale— 1,180 206 — 1,386 
Other assets (3)
9,905 877 1,769 — 12,551 
Total assets (4)
$293,913 $726,327 $10,773 $(319,818)$711,195 
Liabilities     
Interest-bearing deposits in U.S. offices$— $378 $— $— $378 
Federal funds purchased and securities loaned or sold under agreements to repurchase
— 234,338 — — 234,338 
Trading account liabilities:    
U.S. Treasury and government agencies13,886 5 — — 13,891 
Equity securities44,410 5,528 — — 49,938 
Non-U.S. sovereign debt12,659 8,165 — — 20,824 
Corporate securities and other— 7,735 64 — 7,799 
Total trading account liabilities70,955 21,433 64 — 92,452 
Derivative liabilities15,976 341,556 6,334 (323,697)40,169 
Short-term borrowings— 1,796 9 — 1,805 
Accrued expenses and other liabilities11,042 2,597 20 — 13,659 
Long-term debt— 38,641 772 — 39,413 
Total liabilities (4)
$97,973 $640,739 $7,199 $(323,697)$422,214 
(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 $18.2 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 $91 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, which are classified as Level 3 assets, of $986 million.
(4)Total recurring Level 3 assets were 0.34 percent of total consolidated assets, and total recurring Level 3 liabilities were 0.25 percent of total consolidated liabilities.
83 Bank of America


December 31, 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
$868 $— $— $— $868 
Federal funds sold and securities borrowed or purchased under agreements to resell
— 146,999 — — 146,999 
Trading account assets:     
U.S. Treasury and government agencies58,894 212 — — 59,106 
Corporate securities, trading loans and other— 46,897 2,384 — 49,281 
Equity securities77,868 35,065 145 — 113,078 
Non-U.S. sovereign debt7,392 26,306 518 — 34,216 
Mortgage trading loans, MBS and ABS:
U.S. government-sponsored agency guaranteed— 28,563 34 — 28,597 
Mortgage trading loans, ABS and other MBS— 10,312 1,518 — 11,830 
Total trading account assets (2)
144,154 147,355 4,599 — 296,108 
Derivative assets14,775 380,380 3,213 (349,726)48,642 
AFS debt securities:     
U.S. Treasury and government agencies158,102 920 — — 159,022 
Mortgage-backed securities:     
Agency— 23,442 — — 23,442 
Agency-collateralized mortgage obligations— 2,221 — — 2,221 
Non-agency residential— 128 258 — 386 
Commercial— 6,407 — — 6,407 
Non-U.S. securities— 13,212 195 — 13,407 
Other taxable securities— 4,645 — — 4,645 
Tax-exempt securities— 11,207 51 — 11,258 
Total AFS debt securities158,102 62,182 504 — 220,788 
Other debt securities carried at fair value:
U.S. Treasury and government agencies561 — — — 561 
Non-agency residential MBS— 248 119 — 367 
Non-U.S. and other securities3,027 5,251 — — 8,278 
Total other debt securities carried at fair value3,588 5,499 119 — 9,206 
Loans and leases— 5,518 253 — 5,771 
Loans held-for-sale— 883 232 — 1,115 
Other assets (3)
6,898 897 1,799 — 9,594 
Total assets (4)
$328,385 $749,713 $10,719 $(349,726)$739,091 
Liabilities     
Interest-bearing deposits in U.S. offices$— $311 $— $— $311 
Federal funds purchased and securities loaned or sold under agreements to repurchase
— 151,708 — — 151,708 
Trading account liabilities:    
U.S. Treasury and government agencies13,906 181 — — 14,087 
Equity securities36,937 4,825 — — 41,762 
Non-U.S. sovereign debt9,636 8,228 — — 17,864 
Corporate securities and other— 6,628 58 — 6,686 
Total trading account liabilities60,479 19,862 58 — 80,399 
Derivative liabilities15,431 376,979 6,106 (353,700)44,816 
Short-term borrowings— 818 14 — 832 
Accrued expenses and other liabilities7,458 2,262 32 — 9,752 
Long-term debt— 32,208 862 — 33,070 
Total liabilities (4)
$83,368 $584,148 $7,072 $(353,700)$320,888 
(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 $16.6 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 $40 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, which are classified as Level 3 assets, of $1.0 billion.
(4)Total recurring Level 3 assets were 0.35 percent of total consolidated assets, and total recurring Level 3 liabilities were 0.25 percent of total consolidated liabilities.

Bank of America 84

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 months ended March 31, 2023 and 2022, 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 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 March 31
Change in Unrealized Gains (Losses) in Net Income Related to Financial Instruments Still Held (2)
(Dollars in millions)PurchasesSalesIssuancesSettlements
Three Months Ended March 31, 2023
Trading account assets:       
Corporate securities, trading loans and other
$2,384 $27 $1 $126 $(120)$14 $(144)$148 $(114)$2,322 $3 
Equity securities145 (4)— 6 (12)— — 77 — 212 (4)
Non-U.S. sovereign debt518 26 16 3 (6)— (16)— — 541 26 
Mortgage trading loans, MBS and ABS1,552 (9)— 74 (150)— (116)87 (138)1,300 (25)
Total trading account assets4,599 40 17 209 (288)14 (276)312 (252)4,375 — 
Net derivative assets (liabilities) (4)
(2,893)69 — 249 (268)— (315)321 58 (2,779)154 
AFS debt securities:          
Non-agency residential MBS258 3 34 — — — (2)— — 293 3 
Non-U.S. and other taxable securities195 — 3 — — — (8)— (3)187 — 
Tax-exempt securities51 — — — — — — — — 51 — 
Total AFS debt securities504 3 37 — — — (10)— (3)531 3 
Other debt securities carried at fair value – Non-agency residential MBS
119 (2)— — (19)— (2)— (2)94 (2)
Loans and leases (5)
253 2 — 9 — — (37)16 — 243 2 
Loans held-for-sale (5)
232 12 2 — (16)— (24)— — 206 12 
Other assets (6,7)
1,799 10 1 6 — 27 (76)2 — 1,769 (17)
Trading account liabilities – Corporate securities
   and other
(58)— — — (2)(1)— (4)1 (64)— 
Short-term borrowings (5)
(14)— — — (3)(1)9 — — (9)— 
Accrued expenses and other liabilities (5)
(32)24 — (12)— — — — — (20)24 
Long-term debt (5)
(862)87 (6)(9)— — 11 — 7 (772)87 
Three Months Ended March 31, 2022
Trading account assets:
Corporate securities, trading loans and other
$2,110 $(2)$— $12 $(153)$— $(18)$368 $(128)$2,189 $(21)
Equity securities190 16 — 16 (6)— (4)8 (37)183 13 
Non-U.S. sovereign debt396 20 53 2 — — (15)45 (5)496 17 
Mortgage trading loans, MBS and ABS1,527 (92)— 129 (155)— (21)251 (24)1,615 (47)
Total trading account assets4,223 (58)53 159 (314)— (58)672 (194)4,483 (38)
Net derivative assets (liabilities) (4)
(2,662)617 — 58 (185)— 107 (143)74 (2,134)643 
AFS debt securities:       
Non-agency residential MBS316 4 (24)— (8)— (44)— — 244 5 
Non-U.S. and other taxable securities71 — (1)— — — — 87 (2)155 — 
Tax-exempt securities52 — — — — — — — — 52 — 
Total AFS debt securities439 4 (25)— (8)— (44)87 (2)451 5 
Other debt securities carried at fair value – Non-agency residential MBS
242 (39)— — — — (65)— — 138 (39)
Loans and leases (5)
748 (30)— — (1)— (27)— — 690 (30)
Loans held-for-sale (5)
317 7 12 104 — — (58)— — 382 5 
Other assets (6,7)
1,572 144 3 — 1 40 (69)4 — 1,695 132 
Trading account liabilities – Corporate securities
   and other
(11)— — — — — — — — (11)1 
Accrued expenses and other liabilities (5)
— (50)— — — — — — — (50)(31)
Long-term debt (5)
(1,075)(109)33 — — — 4 (6)276 (877)(111)
(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 - primarily 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 - market making and similar activities and 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 of $50 million and $81 million related to financial instruments still held at March 31, 2023 and 2022.
(4)Net derivative assets (liabilities) include derivative assets of $3.6 billion and $3.7 billion and derivative liabilities of $6.3 billion and $5.9 billion at March 31, 2023 and 2022.
(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.
85 Bank of America


The following tables present information about significant unobservable inputs related to the Corporation’s material categories of Level 3 financial assets and liabilities at March 31, 2023 and December 31, 2022.
Quantitative Information about Level 3 Fair Value Measurements at March 31, 2023
(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$763 Discounted cash flow, Market comparables Yield
0% to 25%
10 %
Trading account assets – Mortgage trading loans, MBS and ABS230 Prepayment speed
0% to 37% CPR
12% CPR
Loans and leases146 Default rate
0% to 3% CDR
1% CDR
AFS debt securities – Non-agency residential293 Price
$0 to $113
$26
Other debt securities carried at fair value – Non-agency residential94 Loss severity
0% to 100%
23 %
Instruments backed by commercial real estate assets$384 Discounted cash
flow		Yield
0% to 25%
11 %
Trading account assets – Corporate securities, trading loans and other325 Price
$0 to $100
$78
Trading account assets – Mortgage trading loans, MBS and ABS59 
Commercial loans, debt securities and other$4,090 Discounted cash flow, Market comparablesYield
6% to 45%
19 %
Trading account assets – Corporate securities, trading loans and other
1,997 Prepayment speed
10% to 20%
15 %
Trading account assets – Non-U.S. sovereign debt541 Default rate
3% to 4%
4 %
Trading account assets – Mortgage trading loans, MBS and ABS1,011 Loss severity
35% to 40%
38 %
AFS debt securities – Tax-exempt securities51 Price
$0 to $157
$75
AFS debt securities – Non-U.S. and other taxable securities187 
Loans and leases97 
Loans held-for-sale206 
Other assets, primarily auction rate securities$783 Discounted cash flow, Market comparablesPrice
$10 to $97
$94

Discount rate11 %n/a
MSRs$986 Discounted cash
flow
Weighted-average life, fixed rate (5)
0 to 13 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 $(772)
Discounted cash flow, Market comparables, Industry standard derivative pricing (3)
Yield
32% to 45%
33 %
Equity correlation
1% to 96%
89 %
Price
$0 to $122
$92
Natural gas forward price
$3/MMBtu to $8/MMBtu
$4 /MMBtu
Net derivative assets (liabilities)
Credit derivatives$4 Discounted cash flow, Stochastic recovery correlation modelCredit spreads
4 to 78 bps
62 bps
Prepayment speed
15% CPR
n/a
Default rate
2% CDR
n/a
Credit correlation
21% to 57%
50 %
Price
$0 to $151
$95
Equity derivatives$(1,403)
Industry standard derivative pricing (3)
Equity correlation
0% to 100%
62 %
Long-dated equity volatilities
4% to 111%
43 %
Commodity derivatives$(495)
Discounted cash flow, Industry standard derivative pricing (3)
Natural gas forward price
$3/MMBtu to $8/MMBtu
$4 /MMBtu
Power forward price
$5 to $105
$40
Interest rate derivatives$(885)
Industry standard derivative pricing (4)
Correlation (IR/IR)
(35)% to 89%
66 %
Correlation (FX/IR)
11% to 58%
43 %
Long-dated inflation rates
 0% to 48%
0 %
Long-dated inflation volatilities
1% to 5%
2 %
Interest rate volatilities
0% to 2%
1 %
Total net derivative assets (liabilities)$(2,779)
(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 83: Trading account assets – Corporate securities, trading loans and other of $2.3 billion, Trading account assets – Non-U.S. sovereign debt of $541 million, Trading account assets – Mortgage trading loans, MBS and ABS of $1.3 billion, AFS debt securities of $531 million, Other debt securities carried at fair value - Non-agency residential of $94 million, Other assets, including MSRs, of $1.8 billion, Loans and leases of $243 million and LHFS of $206 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
Bank of America 86

Quantitative Information about Level 3 Fair Value Measurements at December 31, 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$852 Discounted cash
flow, Market comparables		Yield
0% to 25%
10 %
Trading account assets – Mortgage trading loans, MBS and ABS338 
Prepayment speed
0% to 29% CPR
12% CPR
Loans and leases137 Default rate
0% to 3% CDR
1% CDR
AFS debt securities - Non-agency residential258 Price
$0 to $111
$26
Other debt securities carried at fair value - Non-agency residential119 Loss severity
0% to 100%
24 %
Instruments backed by commercial real estate assets$362 Discounted cash
flow		Yield
0% to 25%
10 %
Trading account assets – Corporate securities, trading loans and other292 Price
$0 to $100
$75
Trading account assets – Mortgage trading loans, MBS and ABS66 
Loans held-for-sale4 
Commercial loans, debt securities and other$4,348 Discounted cash flow, Market comparablesYield
 5% to 43%
15 %
Trading account assets – Corporate securities, trading loans and other
2,092 
Prepayment speed
10% to 20%
15 %
Trading account assets – Non-U.S. sovereign debt518 Default rate
3% to 4%
4 %
Trading account assets – Mortgage trading loans, MBS and ABS1,148 Loss severity
35% to 40%
38 %
AFS debt securities – Tax-exempt securities51 Price
 $0 to $157
$75
AFS debt securities – Non-U.S. and other taxable securities195 
Loans and leases116 
Loans held-for-sale228 
Other assets, primarily auction rate securities$779 Discounted cash flow, Market comparables
Price
$10 to $97
$94

Discount rate
11%
n/a
MSRs$1,020 Discounted cash
flow
Weighted-average life, fixed rate (5)
0 to 14 years
6 years
Weighted-average life, variable rate (5)
0 to 12 years
4 years
Option-adjusted spread, fixed rate
7% to 14%
9 %
Option-adjusted spread, variable rate
9% to 15%
12 %
Structured liabilities
Long-term debt $(862)
Discounted cash flow, Market comparables, Industry standard derivative pricing (3)
Yield
 22% to 43%
23 %
Equity correlation
 0% to 95%
69 %
Price
$0 to $119
$90
Natural gas forward price
$3/MMBtu to $13/MMBtu
$9/MMBtu
Net derivative assets (liabilities)
Credit derivatives
$(44)Discounted cash flow, Stochastic recovery correlation modelCredit spreads
3 to 63 bps
22 bps
Upfront points
0 to 100 points
 83 points
Prepayment speed
15% CPR
n/a
Default rate
2% CDR
n/a
Credit correlation
18% to 53%
44 %
Price
$0 to $151
$63
Equity derivatives
$(1,534)
Industry standard derivative pricing (3)
Equity correlation
0% to 100%
73 %
Long-dated equity volatilities
4% to 101%
44 %
Commodity derivatives
$(291)
Discounted cash flow, Industry standard derivative pricing (3)
Natural gas forward price
$3/MMBtu to $13/MMBtu
$8/MMBtu
Power forward price
$9 to $123
$43
Interest rate derivatives
$(1,024)
Industry standard derivative pricing (4)
Correlation (IR/IR)
(35)% to 89%
67 %
Correlation (FX/IR)
11% to 58%
43 %
Long-dated inflation rates
G0% to 39%
1 %
Long-dated inflation volatilities
0% to 5%
2 %
Interest rates volatilities
0% to 2%
1 %
Total net derivative assets (liabilities)$(2,893)
(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 84: Trading account assets – Corporate securities, trading loans and other of $2.4 billion, Trading account assets – Non-U.S. sovereign debt of $518 million, Trading account assets – Mortgage trading loans, MBS and ABS of $1.6 billion, AFS debt securities of $504 million, Other debt securities carried at fair value - Non-agency residential of $119 million, Other assets, including MSRs, of $1.8 billion, Loans and leases of $253 million and LHFS of $232 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 2022 Annual Report on Form 10-K.
87 Bank of America


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 months ended March 31, 2023 and 2022.
Assets Measured at Fair Value on a Nonrecurring Basis
March 31, 2023Three Months Ended March 31, 2023
(Dollars in millions)Level 2Level 3Gains (Losses)
Assets  
Loans held-for-sale$715 $3,428 $(34)
Loans and leases (1)
— 57 (11)
Foreclosed properties (2, 3)
— 4 (1)
Other assets— 30 (6)
 March 31, 2022Three Months Ended March 31, 2022
Assets  
Loans held-for-sale$31 $543 $(1)
Loans and leases (1)
— 68 (15)
Foreclosed properties (2, 3)
— 1 — 
Other assets— 50 (18)
(1)Includes $3 million and $6 million of losses on loans that were written down to a collateral value of zero during the three months ended March 31, 2023 and 2022.
(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 $60 million and $61 million of properties acquired upon foreclosure of certain government-guaranteed loans (principally FHA-insured loans) at March 31, 2023 and 2022.
The table below presents information about significant unobservable inputs utilized in the Corporation's nonrecurring Level 3 fair value measurements during the three months ended March 31, 2023 and the year ended December 31, 2022.
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)Three Months Ended March 31, 2023
Loans held-for-sale$3,428 Pricing modelImplied yield
12% to 26%
n/a
Loans and leases (2)
57 Market comparablesOREO discount
10% to 66%
26 %
Costs to sell
8% to 24%
9 %
Year Ended December 31, 2022
Loans held-for-sale$3,079 Pricing modelImplied yield
9% to 24%
n/a
Loans and leases (2)
166 Market comparablesOREO discount
10% to 66%
26 %
Costs to sell
8% to 24%
9 %
Other assets (3)
165Discounted cash flowDiscount rate7 %n/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.
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 2022 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 March 31, 2023 and December 31, 2022, 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 months ended March 31, 2023 and 2022.
Bank of America 88

Fair Value Option Elections
March 31, 2023December 31, 2022
(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
$163,505 $163,392 $113 $146,999 $147,158 $(159)
Loans reported as trading account assets (1)
10,296 17,946 (7,650)10,143 17,682 (7,539)
Trading inventory – other22,423 n/an/a20,770 n/an/a
Consumer and commercial loans4,397 4,571 (174)5,771 5,897 (126)
Loans held-for-sale (1)
1,386 2,240 (854)1,115 1,873 (758)
Other assets633 n/an/a620 n/an/a
Long-term deposits378 432 (54)311 381 (70)
Federal funds purchased and securities loaned or sold under agreements to repurchase
234,338 234,496 (158)151,708 151,885 (177)
Short-term borrowings1,805 1,820 (15)832 833 (1)
Unfunded loan commitments122 n/an/a110 n/an/a
Accrued expenses and other liabilities1,544 1,523 21 1,217 1,161 56 
Long-term debt39,413 43,379 (3,966)33,070 36,830 (3,760)
(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 March 31
20232022
(Dollars in millions)Market making
 and similar
 activities		Other
Income		TotalMarket making
 and similar
 activities		Other
Income		Total
Loans reported as trading account assets$57 $— $57 $4 $— $4 
Trading inventory – other (1)
1,728 — 1,728 460 — 460 
Consumer and commercial loans(123)30 (93)(22)(13)(35)
Loans held-for-sale (2)
— 20 20 — (132)(132)
Short-term borrowings5 — 5 559 — 559 
Long-term debt (3)
(918)(16)(934)1,124 (11)1,113 
Other (4)
29 (33)(4)(5)10 5 
Total$778 $1 $779 $2,120 $(146)$1,974 
(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 2022 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, federal funds purchased and securities loaned or sold under agreements to repurchase, accrued expenses and other liabilities and unfunded loan commitments.

Gains (Losses) Related to Borrower-specific Credit Risk for Assets and Liabilities Accounted for Under the Fair Value Option
Three Months Ended March 31
(Dollars in millions)20232022
Loans reported as trading account assets$40 $(31)
Consumer and commercial loans24 (20)
Loans held-for-sale2 (11)
Unfunded loan commitments(24)(7)
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 2022 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 March 31, 2023 and December 31, 2022 are presented in the following table.
89 Bank of America


Fair Value of Financial Instruments
Fair Value
Carrying ValueLevel 2Level 3Total
(Dollars in millions)March 31, 2023
Financial assets
Loans
$1,015,672 $48,940 $944,580 $993,520 
Loans held-for-sale6,809 3,073 3,736 6,809 
Financial liabilities
Deposits (1)
1,910,402 1,910,537 — 1,910,537 
Long-term debt283,873 280,599 997 281,596 
Commercial unfunded lending commitments (2)
1,559 101 5,912 6,013 
December 31, 2022
Financial assets
Loans
$1,014,593 $50,194 $935,282 $985,476 
Loans held-for-sale6,871 3,417 3,455 6,872 
Financial liabilities
Deposits (1)
1,930,341 1,930,165 — 1,930,165 
Long-term debt275,982 271,993 1,136 273,129 
Commercial unfunded lending commitments (2)
1,650 77 6,596 6,673 
(1)    Includes demand deposits of $924.8 billion and $918.9 billion with no stated maturities at March 31, 2023 and December 31, 2022.
(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
2022 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 months ended March 31, 2023 and 2022, and total assets at March 31, 2023 and 2022 for each business segment, as well as All Other.
Results of Business Segments and All Other
At and for the three months ended March 31
Total Corporation (1)
Consumer BankingGlobal Wealth & Investment Management
(Dollars in millions)202320222023202220232022
Net interest income$14,582 $11,678 $8,593 $6,680 $1,876 $1,668 
Noninterest income11,810 11,656 2,113 2,133 3,439 3,808 
Total revenue, net of interest expense26,392 23,334 10,706 8,813 5,315 5,476 
Provision for credit losses931 30 1,089 (52)25 (41)
Noninterest expense16,238 15,319 5,473 4,921 4,067 4,015 
Income before income taxes9,223 7,985 4,144 3,944 1,223 1,502 
Income tax expense1,062 918 1,036 966 306 368 
Net income$8,161 $7,067 $3,108 $2,978 $917 $1,134 
Period-end total assets$3,194,657 $3,238,223 $1,124,438 $1,166,443 $349,888 $433,122 
 Global BankingGlobal MarketsAll Other
 202320222023202220232022
Net interest income$3,907 $2,344 $109 $993 $97 $(7)
Noninterest income2,296 2,850 5,517 4,299 (1,555)(1,434)
Total revenue, net of interest expense6,203 5,194 5,626 5,292 (1,458)(1,441)
Provision for credit losses(237)165 (53)5 107 (47)
Noninterest expense2,940 2,683 3,351 3,117 407 583 
Income before income taxes3,500 2,346 2,328 2,170 (1,972)(1,977)
Income tax expense945 622 640 575 (1,865)(1,613)
Net income$2,555 $1,724 $1,688 $1,595 $(107)$(364)
Period-end total assets$591,231 $623,168 $861,477 $883,304 $267,623 $132,186 
(1)There were no material intersegment revenues.


Bank of America 90

The table below presents noninterest income and the associated components for the three months ended March 31, 2023 and 2022 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 March 31
(Dollars in millions)202320222023202220232022
Fees and commissions:
Card income
Interchange fees $956 $935 $753 $743 $— $7 
Other card income 513 468 521 442 12 11 
Total card income1,469 1,403 1,274 1,185 12 18 
Service charges
Deposit-related fees1,097 1,530 599 844 11 19 
Lending-related fees313 303 — — 8 — 
Total service charges1,410 1,833 599 844 19 19 
Investment and brokerage services
Asset management fees2,918 3,286 47 52 2,873 3,234 
Brokerage fees934 1,006 27 31 365 420 
Total investment and brokerage services
3,852 4,292 74 83 3,238 3,654 
Investment banking fees
Underwriting income569 672 — — 39 66 
Syndication fees231 312 — — — — 
Financial advisory services363 473 — — — — 
Total investment banking fees1,163 1,457 — — 39 66 
Total fees and commissions 7,894 8,985 1,947 2,112 3,308 3,757 
Market making and similar activities4,712 3,238 5 — 34 13 
Other income (loss)(796)(567)161 21 97 38 
Total noninterest income$11,810 $11,656 $2,113 $2,133 $3,439 $3,808 
Global BankingGlobal Markets
All Other (1)
Three Months Ended March 31
202320222023202220232022
Fees and commissions:
Card income
Interchange fees $187 $175 $16 $14 $— $(4)
Other card income 3 1 — — (23)14 
Total card income190 176 16 14 (23)10 
Service charges
Deposit-related fees467 637 20 28 — 2 
Lending-related fees247 249 58 54 — — 
Total service charges714 886 78 82 — 2 
Investment and brokerage services
Asset management fees— — — — (2)— 
Brokerage fees9 12 533 545 — (2)
Total investment and brokerage services
9 12 533 545 (2)(2)
Investment banking fees
Underwriting income229 275 314 402 (13)(71)
Syndication fees126 166 105 146 — — 
Financial advisory services313 439 50 34 — — 
Total investment banking fees668 880 469 582 (13)(71)
Total fees and commissions 1,581 1,954 1,096 1,223 (38)(61)
Market making and similar activities45 49 4,398 3,190 230 (14)
Other income (loss)670 847 23 (114)(1,747)(1,359)
Total noninterest income$2,296 $2,850 $5,517 $4,299 $(1,555)$(1,434)
(1)All Other includes eliminations of intercompany transactions.


91 Bank of America


Business Segment Reconciliations
Three Months Ended March 31
(Dollars in millions)20232022
Segments’ total revenue, net of interest expense$27,850 $24,775 
Adjustments (1):
  
Asset and liability management activities(225)(67)
Liquidating businesses, eliminations and other(1,233)(1,374)
FTE basis adjustment(134)(106)
Consolidated revenue, net of interest expense$26,258 $23,228 
Segments’ total net income8,268 7,431 
Adjustments, net-of-tax (1):
 
Asset and liability management activities(174)(58)
Liquidating businesses, eliminations and other67 (306)
Consolidated net income$8,161 $7,067 
March 31
20232022
Segments’ total assets$2,927,034 $3,106,037 
Adjustments (1):
Asset and liability management activities, including securities portfolio1,229,425 1,281,639 
Elimination of segment asset allocations to match liabilities(1,024,196)(1,216,401)
Other62,394 66,948 
Consolidated total assets$3,194,657 $3,238,223 
(1)Adjustments include consolidated income, expense and asset amounts not specifically allocated to individual business segments.
Bank of America 92

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 Right (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.


93 Bank of America


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.
Bank of America 94

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
CLOCollateralized loan obligation
CLTVCombined loan-to-value
CVACredit valuation adjustment
DVADebit valuation adjustment
ECLExpected credit losses
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
GLSGlobal Liquidity Sources
GNMAGovernment National Mortgage Association
GWIM
Global Wealth & Investment Management
HELOCHome equity line of credit
HQLAHigh Quality Liquid Assets
HTMHeld-to-maturity
IBOR
Interbank Offered Rates
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
OCIOther comprehensive income
OREOOther real estate owned
PCAPrompt Corrective Action
PPPPaycheck Protection Program
RMBSResidential mortgage-backed securities
RSURestricted stock unit
RWARisk-weighted assets
SBASmall Business Administration
SBLCStandby letter of credit
SCBStress capital buffer
SECSecurities and Exchange Commission
SLRSupplementary leverage ratio
SOFRSecured Overnight Financing Rate
TDRTroubled debt restructuring
TLACTotal loss-absorbing capacity
VaRValue-at-Risk
VIEVariable interest entity
95 Bank of America


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 2022 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 2022 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 March 31, 2023. 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)
January 1 - 31, 202311,828 $34.56 9,568 $15,529 
February 1 - 28, 202343,057 35.58 23,341 14,886 
March 1 - 31, 202337,564 31.44 33,881 14,101 
Three months ended March 31, 202392,449 33.77 66,790  
(1)Includes 26 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)In October 2021, the Corporation’s Board of Directors (Board) authorized the repurchase of up to $25 billion of common stock over time (October 2021 Authorization). Additionally, the Board authorized repurchases to offset shares awarded under equity-based compensation plans. During the three months ended March 31, 2023, pursuant to the Board’s authorizations, the Corporation repurchased 67 million shares, or $2.2 billion, of its common stock, including repurchases to offset shares awarded under equity-based compensation plans. For more information, see Capital Management - CCAR and Capital Planning in the MD&A on page 17 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 March 31, 2023.
Bank of America 96

Item 6. Exhibits
Incorporated by Reference
Exhibit No.DescriptionNotesFormExhibitFiling DateFile No.
3.110-Q3.14/29/221-6523
3.210-K3.22/22/231-6523
10.1210-Q10(c)4/26/191-6523
2210-K222/22/231-6523
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:May 1, 2023 /s/ Rudolf A. Bless 
Rudolf A. Bless 
Chief Accounting Officer

97 Bank of America