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BANK OF AMERICA CORP /DE/ - Quarter Report: 2023 September (Form 10-Q)


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

(Mark One)
☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 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 October 30, 2023, there were 7,913,732,014 shares of Bank of America Corporation Common Stock outstanding.


Bank of America Corporation and Subsidiaries
September 30, 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, net interest income, 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 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, resulting in 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 potential changes to loss allocations between financial institutions and customers, including for losses incurred from the use of our products and services, including Zelle, that were authorized by the customer but induced by fraud; the impact of failures or disruptions in or breaches of the Corporation’s operational or security systems, data or infrastructure, or those of third parties, including as a result of cyberattacks or campaigns; the risks related to the transition and physical impacts of climate change; our ability to achieve environmental, social and governance goals and commitments or the impact of any changes in the Corporation’s sustainability strategy or commitments generally; the impact of any future federal government shutdown and uncertainty regarding the federal government’s debt limit or changes in fiscal, monetary or regulatory policy; the emergence or continuation of widespread health emergencies or pandemics; the impact of natural disasters, extreme weather events, military conflicts (including the Russia/Ukraine conflict, the conflict in Israel and surrounding areas, the possible expansion of such conflicts and potential
Bank of America 2

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 September 30, 2023, the Corporation had $3.2 trillion in assets and a headcount of approximately 213,000 employees.
As of September 30, 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 69 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 46 million active users, including approximately 37 million active mobile users. We offer industry-leading support to approximately four million small business households. Our GWIM businesses, with client balances of $3.6 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
The Board of Governors of the Federal Reserve System (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. On July 27, 2023, the Federal Reserve released final 2023 CCAR supervisory stress test results for Bank of America. Based on the results, our stress capital buffer (SCB) declined to 2.5 percent from 3.4 percent, resulting in a Common equity tier 1 (CET1) minimum requirement of 9.5 percent effective October 1, 2023.
On July 27, 2023, U.S. banking regulators issued proposed rules that would update future U.S. regulatory capital requirements, including the calculation of risk-weighted assets (RWA) and the global systemically important bank (G-SIB) surcharge. In addition, on August 29, 2023, U.S. banking regulators issued proposed rules that would update future total loss-absorbing capacity (TLAC) and eligible long-term debt requirements. For more information, see Capital Management – Regulatory Developments on page 26.
On October 18, 2023, the Corporation’s Board of Directors (the Board) declared a quarterly common stock dividend of $0.24 per share, payable on December 29, 2023 to shareholders of record as of December 1, 2023.
For more information on our capital resources, see Capital Management on page 22.
FDIC Special Assessment
As previously disclosed, in May 2023, the Federal Deposit Insurance Corporation (FDIC) issued a proposed rule that would impose a special assessment to recover the loss to the Deposit Insurance Fund arising from the protection of uninsured depositors of Silicon Valley Bank and Signature Bank associated with their closures, and the systemic risk determination announced by the FDIC in March 2023. While the timing and amount of any expense recognition are unknown until the proposed rule is finalized, if the final rule is issued as proposed, the estimated impact of the special assessment on the Corporation would be a noninterest expense of approximately $1.9 billion that would be recognized upon finalization of the rule, which could occur in the fourth quarter of 2023. For more information, see Note 10 – Commitments and Contingencies to the Consolidated Financial Statements.

3 Bank of America


Financial Highlights
Table 1Summary Income Statement and Selected Financial Data
Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions, except per share information)2023202220232022
Income statement  
Net interest income$14,379 $13,765 $42,985 $37,781 
Noninterest income10,788 10,737 33,637 32,637 
Total revenue, net of interest expense25,167 24,502 76,622 70,418 
Provision for credit losses1,234 898 3,290 1,451 
Noninterest expense15,838 15,303 48,114 45,895 
Income before income taxes8,095 8,301 25,218 23,072 
Income tax expense293 1,219 1,847 2,676 
Net income7,802 7,082 23,371 20,396 
Preferred stock dividends532 503 1,343 1,285 
Net income applicable to common shareholders$7,270 $6,579 $22,028 $19,111 
Per common share information    
Earnings$0.91 $0.81 $2.74 $2.35 
Diluted earnings0.90 0.81 2.72 2.34 
Dividends paid0.24 0.22 0.68 0.64 
Performance ratios  
Return on average assets (1)
0.99 %0.90 %1.00 %0.86 %
Return on average common shareholders’ equity (1)
11.24 10.79 11.63 10.58 
Return on average tangible common shareholders’ equity (2)
15.47 15.21 16.09 14.93 
Efficiency ratio (1)
62.93 62.45 62.79 65.17 
September 30 2023December 31 2022
Balance sheet  
Total loans and leases$1,049,149 $1,045,747 
Total assets3,153,090 3,051,375 
Total deposits1,884,601 1,930,341 
Total liabilities2,866,026 2,778,178 
Total common shareholders’ equity258,667 244,800 
Total shareholders’ equity287,064 273,197 
(1)For definitions, see Key Metrics on page 106.
(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 49.
Net income was $7.8 billion and $23.4 billion, or $0.90 and $2.72 per diluted share, for the three and nine months ended September 30, 2023 compared to $7.1 billion and $20.4 billion, or $0.81 and $2.34 per diluted share, for the same periods in 2022. The increase in net income was primarily due to higher net interest income and noninterest income, partially offset by higher noninterest expense and provision for credit losses.
Total assets increased $101.7 billion from December 31, 2022 to $3.2 trillion primarily driven by higher cash and cash equivalents to support balance sheet and liquidity positioning, as well as higher securities financing activity.
Total liabilities increased $87.8 billion from December 31, 2022 to $2.9 trillion primarily driven by higher securities financing activity and higher long-term debt and short-term borrowings to support balance sheet and liquidity positioning, partially offset by lower deposits primarily due to an increase in customer spending and debt payments, customers’ movement of balances to higher yielding investment alternatives and seasonal outflows.
Shareholders’ equity increased $13.9 billion from December 31, 2022 primarily due to an increase in net income, 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 $614 million to $14.4 billion, and $5.2 billion to $43.0 billion for the three and nine months ended September 30, 2023 compared to the same periods in 2022. Net interest yield on a fully taxable-equivalent (FTE) basis increased 5 basis points (bps) to 2.11 percent and 25 bps to 2.12 percent for the three and nine months ended September 30, 2023. The increases were primarily driven by benefits from higher interest rates and loan growth, partially offset by higher funding costs, lower deposits and net interest income related to Global Markets activity. For more information on net interest yield and FTE basis, see Supplemental Financial Data on page 7, and for more information on interest rate risk management, see Interest Rate Risk Management for the Banking Book on page 46.
Bank of America 4

Noninterest Income
Table 2Noninterest Income
Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)2023202220232022
Fees and commissions:
Card income$1,520 $1,573 $4,535 $4,531 
Service charges1,464 1,466 4,238 5,016 
Investment and brokerage services3,963 3,795 11,654 12,178 
Investment banking fees1,188 1,167 3,563 3,752 
Total fees and commissions8,135 8,001 23,990 25,477 
Market making and similar activities3,325 3,068 11,734 9,023 
Other income(672)(332)(2,087)(1,863)
Total noninterest income$10,788 $10,737 $33,637 $32,637 
Noninterest income increased $51 million to $10.8 billion and $1.0 billion to $33.6 billion for the three and nine months ended September 30, 2023 compared to the same periods in 2022. The following highlights the significant changes.
●    Service charges decreased $778 million for the nine-month period primarily driven by the impact of non-sufficient funds and overdraft policy changes, as well as lower treasury service charges.
●    Investment and brokerage services increased $168 million for the three-month period primarily driven by higher asset management fees due to higher average market levels and the impact of positive assets under management (AUM) flows, partially offset by lower brokerage fees. The nine-month period decreased $524 million primarily driven by lower asset management fees and brokerage fees due to lower average equity and fixed income market levels and transactional volumes, partially offset by the impact of positive AUM flows.
●    Investment banking fees decreased $189 million for the nine-month period primarily due to lower debt issuance and advisory fees, partially offset by higher equity issuance fees.
●    Market making and similar activities increased $257 million and $2.7 billion primarily driven by improved trading in credit and mortgage products in Fixed Income, Currencies and Commodities (FICC) and by the impact of higher interest rates on client financing activities in Equities.
●    Other income decreased $340 million and $224 million primarily due to higher partnership losses on ESG investments and losses on sales of available-for-sale (AFS) debt securities in the nine-month period, partially offset by certain negative valuation adjustments in the prior-year periods.
Provision for Credit Losses
The provision for credit losses increased $336 million to $1.2 billion and $1.8 billion to $3.3 billion for the three and nine months ended September 30, 2023 compared to the same periods in 2022. The provision for credit losses for the current-year periods was driven by our consumer portfolio primarily due to credit card loan growth and asset quality, partially offset by certain improved macroeconomic conditions that primarily benefited our commercial portfolio. In addition, provision for credit losses for the three months ended September 30, 2023 benefited from commercial net paydowns. For the three-month period in the prior year, the provision for credit losses was primarily driven by loan growth and a dampened macroeconomic outlook, and the nine-month period in the prior year was driven by the same factors as well as a reserve build related to Russian exposure, partially offset by asset quality improvement and reduced COVID-19 pandemic uncertainties. For more information on the provision for credit losses, see Allowance for Credit Losses on page 42.
5 Bank of America


Noninterest Expense
Table 3Noninterest Expense
Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)2023202220232022
Compensation and benefits$9,551 $8,887 $28,870 $27,286 
Occupancy and equipment1,795 1,777 5,370 5,285 
Information processing and communications1,676 1,546 5,017 4,621 
Product delivery and transaction related880 892 2,726 2,749 
Marketing501 505 1,472 1,365 
Professional fees545 525 1,609 1,493 
Other general operating890 1,171 3,050 3,096 
Total noninterest expense$15,838 $15,303 $48,114 $45,895 
Noninterest expense increased $535 million to $15.8 billion for the three months ended September 30, 2023 compared to the same period in 2022 primarily due to higher investments in people and technology, higher FDIC expense and costs related to a liquidating business activity, partially offset by lower litigation expense. For the nine months ended September 30,
2023, noninterest expense increased $2.2 billion to $48.1 billion compared to the same period in 2022 primarily due to higher investments in people and technology and higher FDIC expense, partially offset by lower litigation expense and revenue-related compensation.
Income Tax Expense
Table 4Income Tax Expense
Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)2023202220232022
Income before income taxes$8,095 $8,301 $25,218 $23,072 
Income tax expense293 1,219 1,847 2,676 
Effective tax rate3.6 %14.7 %7.3 %11.6 %
The effective tax rates for the three and nine months ended September 30, 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. The three and nine months ended September 30, 2023 also included discrete benefits of $212 million and $422 million primarily related to certain U.S. state law changes
in the three-month period, as well as other discrete benefits primarily related to resolution of U.S. federal and state tax matters in the nine-month period. Absent the ESG tax credits and discrete tax benefits, the effective tax rates would have been 25 percent for both the three months ended September 30, 2023 and 2022, and 26 percent and 25 percent for the nine months ended September 30, 2023 and 2022.
Bank of America 6

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 8.
For more information on the reconciliation of these non-GAAP financial measures to the corresponding GAAP financial measures, see Non-GAAP Reconciliations on page 49.
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 106.
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 8.
For information on key segment performance metrics, see Business Segment Operations on page 11.
7 Bank of America


Table 5Selected Financial Data
Nine Months Ended
2023 Quarters2022 QuartersSeptember 30
(In millions, except per share information)ThirdSecondFirstFourthThird20232022
Income statement  
Net interest income$14,379 $14,158 $14,448 $14,681 $13,765 $42,985 $37,781 
Noninterest income 10,788 11,039 11,810 9,851 10,737 33,637 32,637 
Total revenue, net of interest expense25,167 25,197 26,258 24,532 24,502 76,622 70,418 
Provision for credit losses1,234 1,125 931 1,092 898 3,290 1,451 
Noninterest expense15,838 16,038 16,238 15,543 15,303 48,114 45,895 
Income before income taxes8,095 8,034 9,089 7,897 8,301 25,218 23,072 
Income tax expense 293 626 928 765 1,219 1,847 2,676 
Net income 7,802 7,408 8,161 7,132 7,082 23,371 20,396 
Net income applicable to common shareholders7,270 7,102 7,656 6,904 6,579 22,028 19,111 
Average common shares issued and outstanding
8,017.1 8,040.9 8,065.9 8,088.3 8,107.7 8,041.3 8,122.2 
Average diluted common shares issued and outstanding
8,075.9 8,080.7 8,182.3 8,155.7 8,160.8 8,153.4 8,173.3 
Performance ratios       
Return on average assets (1)
0.99 %0.94 %1.07 %0.92 %0.90 %1.00 %0.86 %
Four-quarter trailing return on average assets (2)
0.98 0.96 0.92 0.88 0.87 n/an/a
Return on average common shareholders’ equity (1)
11.24 11.21 12.48 11.24 10.79 11.63 10.58 
Return on average tangible common shareholders’ equity (3)
15.47 15.49 17.38 15.79 15.21 16.09 14.93 
Return on average shareholders’ equity (1)
10.86 10.52 11.94 10.38 10.37 11.10 10.12 
Return on average tangible shareholders’ equity (3)
14.41 14.00 15.98 13.98 13.99 14.78 13.68 
Total ending equity to total ending assets9.10 9.07 8.77 8.95 8.77 9.10 8.77 
Common equity ratio (1)
8.20 8.16 7.88 8.02 7.82 8.20 7.82 
Total average equity to total average assets9.11 8.89 8.95 8.87 8.73 8.99 8.54 
Dividend payout (1)
26.39 24.88 23.17 25.71 27.06 24.78 27.15 
Per common share data       
Earnings $0.91 $0.88 $0.95 $0.85 $0.81 $2.74 $2.35 
Diluted earnings 0.90 0.88 0.94 0.85 0.81 2.72 2.34 
Dividends paid0.24 0.22 0.22 0.22 0.22 0.68 0.64 
Book value (1)
32.65 32.05 31.58 30.61 29.96 32.65 29.96 
Tangible book value (3)
23.79 23.23 22.78 21.83 21.21 23.79 21.21 
Market capitalization$216,942 $228,188 $228,012 $264,853 $242,338 $216,942 $242,338 
Average balance sheet     
Total loans and leases$1,046,254 $1,046,608 $1,041,352 $1,039,247 $1,034,334 
Total assets3,128,466 3,175,358 3,096,058 3,074,289 3,105,546 
Total deposits1,876,153 1,875,353 1,893,649 1,925,544 1,962,775 
Long-term debt245,819 248,480 244,759 243,871 250,204 
Common shareholders’ equity256,578 254,028 248,855 243,647 241,882 
Total shareholders’ equity284,975 282,425 277,252 272,629 271,017 
Asset quality      
Allowance for credit losses (4)
$14,640 $14,338 $13,951 $14,222 $13,817 
Nonperforming loans, leases and foreclosed properties (5)
4,993 4,274 4,083 3,978 4,156 
Allowance for loan and lease losses as a percentage of total loans and leases outstanding (5)
1.27 %1.24 %1.20 %1.22 %1.20 %
Allowance for loan and lease losses as a percentage of total nonperforming loans and leases (5)
275 314 319 333 309 
Net charge-offs $931 $869 $807 $689 $520 
Annualized net charge-offs as a percentage of average loans and leases outstanding (5)
0.35 %0.33 %0.32 %0.26 %0.20 %
Capital ratios at period end (6)
     
Common equity tier 1 capital
11.9 %11.6 %11.4 %11.2 %11.0 %
Tier 1 capital
13.6 13.3 13.1 13.0 12.8 
Total capital
15.4 15.1 15.0 14.9 14.7 
Tier 1 leverage
7.3 7.1 7.1 7.0 6.8 
Supplementary leverage ratio
6.2 6.0 6.0 5.9 5.8 
Tangible equity (3)
7.0 7.0 6.7 6.8 6.6 
Tangible common equity (3)
6.1 6.1 5.8 5.9 5.7 
Total loss-absorbing capacity and long-term debt metrics
Total loss-absorbing capacity to risk-weighted assets29.3 %28.8 %28.8 %29.0 %28.9 %
Total loss-absorbing capacity to supplementary leverage exposure13.3 13.0 13.1 13.2 13.0 
Eligible long-term debt to risk-weighted assets14.8 14.6 14.8 15.2 15.2 
Eligible long-term debt to supplementary leverage exposure6.7 6.6 6.7 6.9 6.8 
(1)For definitions, see Key Metrics on page 106.
(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 7 and Non-GAAP Reconciliations on page 49.
(4)Includes the allowance for loan and lease losses and the reserve for unfunded lending commitments.
(5)Balances and ratios do not include loans accounted for under the fair value option. For additional exclusions from nonperforming loans, leases and foreclosed properties, see Consumer Portfolio Credit Risk Management – Nonperforming Consumer Loans, Leases and Foreclosed Properties Activity on page 35 and corresponding Table 25 and Commercial Portfolio Credit Risk Management – Nonperforming Commercial Loans, Leases and Foreclosed Properties Activity on page 39 and corresponding Table 31.
(6)For more information, including which approach is used to assess capital adequacy, see Capital Management on page 22.
n/a = not applicable
Bank of America 8

Table 6Quarterly Average Balances and Interest Rates - FTE Basis
Average
Balance
Interest
Income/
Expense (1)
Yield/
Rate		Average
Balance
Interest
Income/
Expense (1)
Yield/
Rate
(Dollars in millions)Third Quarter 2023Third Quarter 2022
Earning assets      
Interest-bearing deposits with the Federal Reserve, non-U.S. central
   banks and other banks
$353,183 $4,613 5.18 %$184,263 $848 1.83 %
Time deposits placed and other short-term investments8,629 113 5.20 10,352 34 1.33 
Federal funds sold and securities borrowed or purchased under
   agreements to resell
287,403 4,888 6.75 278,059 1,446 2.06 
Trading account assets191,283 2,244 4.66 163,744 1,465 3.55 
Debt securities752,569 4,685 2.47 901,654 4,259 1.88 
Loans and leases (2)
Residential mortgage229,001 1,745 3.04 228,474 1,616 2.83 
Home equity25,661 390 6.04 27,282 229 3.32 
Credit card98,049 2,727 11.03 85,009 2,187 10.20 
Direct/Indirect and other consumer104,134 1,354 5.16 108,300 923 3.38 
Total consumer456,845 6,216 5.41 449,065 4,955 4.39 
U.S. commercial377,728 5,061 5.32 377,183 3,427 3.60 
Non-U.S. commercial123,781 2,088 6.69 127,793 1,028 3.19 
Commercial real estate (3)
74,088 1,364 7.30 66,707 738 4.39 
Commercial lease financing13,812 166 4.79 13,586 124 3.65 
Total commercial589,409 8,679 5.84 585,269 5,317 3.61 
Total loans and leases 1,046,254 14,895 5.65 1,034,334 10,272 3.94 
Other earning assets99,378 2,339 9.35 98,172 1,403 5.67 
Total earning assets2,738,699 33,777 4.90 2,670,578 19,727 2.94 
Cash and due from banks25,772 27,250 
Other assets, less allowance for loan and lease losses363,995 407,718 
Total assets$3,128,466 $3,105,546 
Interest-bearing liabilities      
U.S. interest-bearing deposits      
Demand and money market deposits$942,368 $4,304 1.81 %$981,145 $832 0.34 %
Time and savings deposits271,425 2,149 3.14 164,313 193 0.47 
Total U.S. interest-bearing deposits1,213,793 6,453 2.11 1,145,458 1,025 0.35 
Non-U.S. interest-bearing deposits97,095 887 3.63 79,383 210 1.05 
Total interest-bearing deposits1,310,888 7,340 2.22 1,224,841 1,235 0.40 
Federal funds purchased and securities loaned or sold under agreements
    to repurchase
294,878 5,342 7.19 211,346 1,338 2.51 
Short-term borrowings and other interest-bearing liabilities 140,513 2,287 6.45 137,253 926 2.68 
Trading account liabilities48,084 510 4.21 46,507 383 3.27 
Long-term debt245,819 3,766 6.10 250,204 1,974 3.14 
Total interest-bearing liabilities2,040,182 19,245 3.75 1,870,151 5,856 1.24 
Noninterest-bearing sources
Noninterest-bearing deposits565,265 737,934 
Other liabilities (4)
238,044 226,444 
Shareholders’ equity284,975 271,017 
Total liabilities and shareholders’ equity$3,128,466 $3,105,546 
Net interest spread1.15 %1.70 %
Impact of noninterest-bearing sources0.96 0.36 
Net interest income/yield on earning assets (5)
$14,532 2.11 %$13,871 2.06 %
(1)Includes the impact of interest rate risk management contracts. For more information, see Interest Rate Risk Management for the Banking Book on page 46.
(2)Nonperforming loans are included in the respective average loan balances. Income on these nonperforming loans is generally recognized on a cost recovery basis.
(3)Includes U.S. commercial real estate loans of $67.9 billion and $62.5 billion, and non-U.S. commercial real estate loans of $6.2 billion and $4.2 billion for the third quarter of 2023 and 2022.
(4)Includes $41.1 billion and $29.2 billion of structured notes and liabilities for the third quarter of 2023 and 2022.
(5)Net interest income includes FTE adjustments of $153 million and $106 million for the third quarter of 2023 and 2022.
9 Bank of America


Table 7Year-to-Date Average Balances and Interest Rates - FTE Basis
Average
Balance
Interest
Income/
Expense (1)
Yield/
Rate		Average
Balance
Interest
Income/
Expense (1)
Yield/
Rate
Nine Months Ended September 30
(Dollars in millions)20232022
Earning assets      
Interest-bearing deposits with the Federal Reserve, non-U.S. central
   banks and other banks
$305,526 $10,915 4.78 %$202,293 $1,216 0.80 %
Time deposits placed and other short-term investments10,153 350 4.61 9,091 58 0.86 
Federal funds sold and securities borrowed or purchased under
   agreements to resell
289,823 13,555 6.25 293,971 1,835 0.83 
Trading account assets187,481 6,375 4.54 154,428 3,802 3.29 
Debt securities791,339 14,887 2.50 940,808 12,164 1.72 
Loans and leases (2)
      
Residential mortgage229,010 5,133 2.99 227,010 4,712 2.77 
Home equity26,041 1,060 5.44 27,492 684 3.32 
Credit card94,775 7,658 10.80 81,505 6,081 9.97 
Direct/Indirect and other consumer104,896 3,814 4.86 107,204 2,198 2.74 
Total consumer454,722 17,665 5.19 443,211 13,675 4.12 
U.S. commercial377,873 14,318 5.07 362,669 8,079 2.98 
Non-U.S. commercial125,525 5,815 6.19 124,965 2,228 2.38 
Commercial real estate (3)
72,927 3,811 6.99 64,295 1,601 3.33 
Commercial lease financing13,709 462 4.50 14,071 334 3.17 
Total commercial590,034 24,406 5.53 566,000 12,242 2.89 
Total loans and leases1,044,756 42,071 5.38 1,009,211 25,917 3.43 
Other earning assets98,857 6,902 9.33 108,968 2,813 3.45 
Total earning assets2,727,935 95,055 4.66 2,718,770 47,805 2.35 
Cash and due from banks26,544  28,116  
Other assets, less allowance for loan and lease losses378,936   409,771   
Total assets$3,133,415   $3,156,657   
Interest-bearing liabilities      
U.S. interest-bearing deposits      
Demand and money market deposits$956,165 $10,659 1.49 %$989,364 $1,101 0.15 %
Time and savings deposits233,079 4,520 2.59 161,707 275 0.23 
Total U.S. interest-bearing deposits1,189,244 15,179 1.71 1,151,071 1,376 0.16 
Non-U.S. interest-bearing deposits95,187 2,260 3.17 80,235 343 0.57 
Total interest-bearing deposits1,284,431 17,439 1.82 1,231,306 1,719 0.19 
Federal funds purchased and securities loaned or sold under agreements
    to repurchase
291,349 14,700 6.75 214,404 1,871 1.17 
Short-term borrowings and other interest-bearing liabilities
153,653 7,464 6.49 132,873 834 0.84 
Trading account liabilities45,675 1,486 4.35 54,852 1,117 2.72 
Long-term debt246,357 10,559 5.72 247,357 4,168 2.25 
Total interest-bearing liabilities2,021,465 51,648 3.41 1,880,792 9,709 0.69 
Noninterest-bearing sources      
Noninterest-bearing deposits597,224   775,278   
Other liabilities (4)
233,147   231,073   
Shareholders’ equity281,579   269,514   
Total liabilities and shareholders’ equity$3,133,415   $3,156,657   
Net interest spread  1.25 %  1.66 %
Impact of noninterest-bearing sources  0.87   0.21 
Net interest income/yield on earning assets (5)
 $43,407 2.12 % $38,096 1.87 %
(1)Includes the impact of interest rate risk management contracts. For more information, see Interest Rate Risk Management for the Banking Book on page 46.
(2)Nonperforming loans are included in the respective average loan balances. Income on these nonperforming loans is generally recognized on a cost recovery basis.
(3)Includes U.S. commercial real estate loans of $67.2 billion and $60.0 billion and non-U.S. commercial real estate loans of $5.8 billion and $4.3 billion for the nine months ended September 30, 2023 and 2022.
(4)Includes $39.5 billion and $29.7 billion of structured notes and liabilities for the nine months ended September 30, 2023 and 2022.
(5)Net interest income includes FTE adjustments of $422 million and $315 million for the nine months ended September 30, 2023 and 2022.




Bank of America 10

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 7, and for reconciliations to consolidated total revenue, net income and period-end total assets, see Note 17 – Business Segment Information to the Consolidated Financial Statements.
Key Performance Indicators
We present certain key financial and nonfinancial performance indicators that management uses when evaluating segment results. We believe they are useful to investors because they provide additional information about our segments’ operational performance, customer trends and business growth.
Consumer Banking
DepositsConsumer LendingTotal Consumer Banking
Three Months Ended September 30
(Dollars in millions)202320222023202220232022% Change
Net interest income$5,571 $5,006 $2,820 $2,778 $8,391 $7,784 8 %
Noninterest income:
Card income(11)(10)1,336 1,341 1,325 1,331 — 
Service charges605 597 — — 605 597 1 
All other income116 141 35 51 151 192 (21)
Total noninterest income710 728 1,371 1,392 2,081 2,120 (2)
Total revenue, net of interest expense
6,281 5,734 4,191 4,170 10,472 9,904 6 
Provision for credit losses128 173 1,269 565 1,397 738 89 
Noninterest expense3,240 3,141 2,016 1,956 5,256 5,097 3 
Income before income taxes2,913 2,420 906 1,649 3,819 4,069 (6)
Income tax expense729 593 226 404 955 997 (4)
Net income$2,184 $1,827 $680 $1,245 $2,864 $3,072 (7)
Effective tax rate (1)
25.0 %24.5 %
Net interest yield2.26 %1.87 %3.65 %3.76 %3.26 %2.79 %
Return on average allocated capital63 56 10 18 27 30 
Efficiency ratio51.60 54.78 48.06 46.92 50.18 51.47 
Balance Sheet
Three Months Ended September 30
Average202320222023202220232022% Change
Total loans and leases$4,139 $4,153 $306,622 $291,078 $310,761 $295,231 5 %
Total earning assets (2)
975,968 1,064,585 306,982 293,366 1,019,980 1,106,513 (8)
Total assets (2)
1,009,390 1,096,911 312,731 300,374 1,059,152 1,145,846 (8)
Total deposits974,674 1,063,075 5,377 6,018 980,051 1,069,093 (8)
Allocated capital13,700 13,000 28,300 27,000 42,000 40,000 5 
(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

11 Bank of America


DepositsConsumer LendingTotal Consumer Banking
Nine Months Ended September 30
(Dollars in millions)202320222023202220232022% Change
Net interest income$17,120 $13,535 $8,301 $8,016 $25,421 $21,551 18 %
Noninterest income:
Card income(31)(27)3,971 3,863 3,940 3,836 3 
Service charges1,727 2,118 2 2 1,729 2,120 (18)
All other income490 264 122 82 612 346 77 
Total noninterest income2,186 2,355 4,095 3,947 6,281 6,302 — 
Total revenue, net of interest expense
19,306 15,890 12,396 11,963 31,702 27,853 14 
Provision for credit losses414 388 3,339 648 3,753 1,036 n/m
Noninterest expense10,082 9,204 6,100 5,773 16,182 14,977 8 
Income before income taxes8,810 6,298 2,957 5,542 11,767 11,840 (1)
Income tax expense2,203 1,543 739 1,358 2,942 2,901 1 
Net income$6,607 $4,755 $2,218 $4,184 $8,825 $8,939 (1)
Effective tax rate (1)
25.0 %24.5 %
Net interest yield2.29 %1.70 %3.66 %3.73 %3.26 2.61 
Return on average allocated capital64 49 11 21 28 30 
Efficiency ratio52.23 57.92 49.21 48.26 51.05 53.77 
Balance Sheet
Nine Months Ended September 30
Average202320222023202220232022% Change
Total loans and leases$4,113 $4,171 $302,978 $285,501 $307,091 $289,672 6 %
Total earning assets (2)
1,000,143 1,062,668 303,266 287,422 1,043,476 1,104,653 (6)
Total assets (2)
1,033,618 1,095,830 309,435 294,193 1,083,120 1,144,587 (5)
Total deposits998,947 1,061,876 5,094 5,909 1,004,041 1,067,785 (6)
Allocated capital13,700 13,000 28,300 27,000 42,000 40,000 5 
Period endSeptember 30
2023		December 31
2022		September 30
2023		December 31
2022		September 30
2023		December 31
2022		% Change
Total loans and leases$4,165 $4,148 $309,051 $300,613 $313,216 $304,761 3 %
Total earning assets (2)
978,133 1,043,049 309,527 300,787 1,023,162 1,085,079 (6)
Total assets (2)
1,010,771 1,077,203 315,765 308,007 1,062,038 1,126,453 (6)
Total deposits976,007 1,043,194 6,295 5,605 982,302 1,048,799 (6)
See page 11 for footnotes.
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
Three-Month Comparison
Net income for Consumer Banking decreased $208 million to $2.9 billion due to an increase in provision for credit losses and higher noninterest expense, partially offset by higher revenue. Net interest income increased $607 million to $8.4 billion primarily driven by higher interest rates and loan balances. Noninterest income decreased $39 million to $2.1 billion, relatively unchanged from the same period a year ago.
The provision for credit losses increased $659 million to $1.4 billion primarily driven by credit card loan growth and asset quality.
Noninterest expense increased $159 million to $5.3 billion primarily driven by higher FDIC expense.
The return on average allocated capital was 27 percent, down from 30 percent, due to an increase in allocated capital
and lower net income. For more information on capital allocated to the business segments, see Business Segment Operations on page 11.
Nine-Month Comparison
Net income for Consumer Banking decreased $114 million to $8.8 billion due to an increase in provision for credit losses and higher noninterest expense, partially offset by higher revenue. Net interest income increased $3.9 billion to $25.4 billion primarily due to the same factors as described in the three-month discussion. Noninterest income decreased $21 million to $6.3 billion, relatively unchanged from the same period a year ago.
The provision for credit losses increased $2.7 billion to $3.8 billion primarily driven by credit card loan growth and asset quality, whereas the prior-year period benefited from reduced COVID-19 pandemic uncertainties. Noninterest expense increased $1.2 billion to $16.2 billion primarily due to continued investments in the business, including people and technology, higher litigation expense, including consumer regulatory matters, and higher FDIC expense.
The return on average allocated capital was 28 percent, down from 30 percent, primarily due an increase in allocated capital.

Bank of America 12

Deposits
Three-Month Comparison
Net income for Deposits increased $357 million to $2.2 billion primarily due to higher revenue, partially offset by higher noninterest expense. Net interest income increased $565 million to $5.6 billion primarily due to higher interest rates. Noninterest income decreased $18 million to $710 million, relatively unchanged from the same period a year ago.
Noninterest expense increased $99 million to $3.2 billion primarily driven by higher FDIC expense.
Average deposits decreased $88.4 billion to $974.7 billion primarily due to net outflows of $68.4 billion in money market savings and $36.2 billion in checking, partially offset by growth in time deposits of $25.8 billion. The change in average deposits was primarily due to higher interest rates and client activity.
Nine-Month Comparison
Net income for Deposits increased $1.9 billion to $6.6 billion primarily due to higher revenue, partially offset by higher
noninterest expense. Net interest income increased $3.6 billion to $17.1 billion primarily due to the same factor as described in the three-month discussion. Noninterest income decreased $169 million to $2.2 billion primarily due to the impact of non-sufficient funds and overdraft policy changes. Noninterest expense increased $878 million to $10.1 billion primarily driven by continued investments in the business, including people and technology, higher litigation expense, including consumer regulatory matters, and higher FDIC expense.
Average deposits decreased $62.9 billion to $998.9 billion primarily due to net outflows of $42.9 billion in money market savings and $25.9 billion in checking, partially offset by growth in time deposits of $13.7 billion. The change in average deposits was primarily driven by the same factors as described in the three-month discussion.
The table below provides key performance indicators for Deposits. Management uses these metrics, and we believe they are useful to investors because they provide additional information to evaluate our deposit profitability and digital/ mobile trends.
Key Statistics – Deposits
Three Months Ended September 30Nine Months Ended September 30
2023202220232022
Total deposit spreads (excludes noninterest costs) (1)
2.76%1.88%2.66%1.74%
Period end
Consumer investment assets (in millions) (2)
$387,467$302,413
Active digital banking users (in thousands) (3)
45,79743,496
Active mobile banking users (in thousands) (4)
37,48734,922
Financial centers3,8623,932
ATMs15,25315,572
(1)Includes deposits held in Consumer Lending.
(2)Includes client brokerage assets, deposit sweep balances, Bank of America, N.A. brokered CDs 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 increased $85.1 billion to $387.5 billion driven by client flows and market performance. Active mobile banking users increased approximately three million, reflecting continuing changes in our clients’ banking preferences. We had a net decrease of 70 financial centers and 319 ATMs as we continue to optimize our consumer banking network.
Consumer Lending
Three-Month Comparison
Net income for Consumer Lending decreased $565 million to $680 million primarily due to an increase in provision for credit losses. Net interest income increased $42 million to $2.8 billion, relatively unchanged from the same period a year ago. Noninterest income decreased $21 million to $1.4 billion, relatively unchanged from the same period a year ago.
The provision for credit losses increased $704 million to $1.3 billion primarily driven by credit card loan growth and asset quality. Noninterest expense increased $60 million to $2.0 billion, relatively unchanged from the same period a year ago.
Average loans increased $15.5 billion to $306.6 billion primarily driven by an increase in credit card loans.
Nine-Month Comparison
Net income for Consumer Lending decreased $2.0 billion to $2.2 billion primarily due to an increase in provision for credit losses. Net interest income increased $285 million to $8.3 billion primarily due to higher loan balances. Noninterest income increased $148 million to $4.1 billion primarily due to higher card income.
The provision for credit losses increased $2.7 billion to $3.3 billion primarily driven by credit card loan growth and asset quality, whereas the prior-year period benefited from reduced COVID-19 pandemic uncertainties. Noninterest expense increased $327 million to $6.1 billion primarily driven by continued investments in the business.
Average loans increased $17.5 billion to $303.0 billion primarily driven by the same factor as described in the three-month discussion.
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.

13 Bank of America


Key Statistics – Consumer Lending
Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)2023202220232022
Total credit card (1)
Gross interest yield (2)
12.03 %10.71 %11.85 %10.14 %
Risk-adjusted margin (3)
7.70 10.07 8.06 10.13 
New accounts (in thousands)1,062 1,256 3,386 3,301 
Purchase volumes$91,711 $91,064 $270,358 $263,788 
Debit card purchase volumes
$133,553 $127,135 $390,891 $373,426 
(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 and nine months ended September 30, 2023, the total risk-adjusted margin decreased 237 bps and 207 bps primarily driven by higher net credit losses, lower net interest margin and lower fee income. During the three and nine
months ended September 30, 2023 total credit card purchase volumes increased $647 million and $6.6 billion, and debit card purchase volumes increased $6.4 billion and $17.5 billion, reflecting higher levels of consumer spending.
Key Statistics – Loan Production (1)
Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)2023202220232022
Consumer Banking: 
First mortgage$2,547 $4,028 $7,392 $18,695 
Home equity2,035 1,999 6,389 5,875 
Total (2):
First mortgage$5,596 $8,724 $15,473 $39,548 
Home equity2,421 2,420 7,559 6,995 
(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 $1.5 billion and $3.1 billion during the three months ended September 30, 2023 primarily driven by higher interest rates, resulting in lower customer demand. During the nine months ended September 30, 2023, first mortgage loan originations for Consumer Banking and the total Corporation decreased $11.3 billion and $24.1 billion primarily driven by lower demand.

Home equity production in Consumer Banking and the total Corporation remained relatively unchanged during the three months ended September 30, 2023 compared to the same period a year ago. During the nine months ended September 30, 2023, Consumer Banking and the total Corporation increased $514 million and $564 million primarily driven by higher demand.
Bank of America 14

Global Wealth & Investment Management
Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)20232022% Change20232022% Change
Net interest income$1,755 $1,981 (11)%$5,436 $5,451 — %
Noninterest income:
Investment and brokerage services3,396 3,255 4 9,885 10,395 (5)
All other income170 193 (12)557 492 13 
Total noninterest income3,566 3,448 3 10,442 10,887 (4)
Total revenue, net of interest expense5,321 5,429 (2)15,878 16,338 (3)
Provision for credit losses(6)37 (116)32 29 10 
Noninterest expense3,950 3,816 4 11,942 11,706 2 
Income before income taxes1,377 1,576 (13)3,904 4,603 (15)
Income tax expense344 386 (11)976 1,128 (13)
Net income$1,033 $1,190 (13)$2,928 $3,475 (16)
Effective tax rate25.0 %24.5 %25.0 %24.5 %
Net interest yield2.16 2.12 2.19 1.84 
Return on average allocated capital22 27 21 27 
Efficiency ratio74.28 70.28 75.21 71.65 
Balance Sheet
Three Months Ended September 30Nine Months Ended September 30
Average20232022% Change20232022% Change
Total loans and leases$218,569 $223,734 (2)%$219,530 $218,030 1 %
Total earning assets322,032 370,733 (13)331,738 395,023 (16)
Total assets335,124 383,468 (13)344,709 407,819 (15)
Total deposits291,770 339,487 (14)300,308 362,611 (17)
Allocated capital18,500 17,500 6 18,500 17,500 6 
Period endSeptember 30
2023		December 31
2022		% Change
Total loans and leases$218,913 $223,910 (2)%
Total earning assets320,196 355,461 (10)
Total assets333,779 368,893 (10)
Total deposits290,732 323,899 (10)
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.
Three-Month Comparison
Net income for GWIM decreased $157 million to $1.0 billion primarily due to higher noninterest expense and lower revenue. The operating margin was 26 percent compared to 29 percent a year ago.
Net interest income decreased $226 million to $1.8 billion primarily driven by lower deposit balances and a mix shift to higher yielding deposit products.
Noninterest income, which primarily includes investment and brokerage services income, increased $118 million to $3.6 billion. The increase was primarily driven by higher asset management fees due to higher average market levels and the impact of positive AUM flows, partially offset by lower brokerage fees.
Noninterest expense increased $134 million to $4.0 billion primarily due to continued investments in the business, including strategic hiring, as well as higher FDIC expense.
The return on average allocated capital was 22 percent, down from 27 percent, due to lower net income and, to a lesser extent, a small increase in allocated capital.
Average loans decreased $5.2 billion to $218.6 billion primarily driven by securities-based lending and custom lending, partially offset by residential mortgage. Average deposits decreased $47.7 billion to $291.8 billion primarily driven by
clients moving deposits to higher yielding investment alternatives, including offerings on our investment and brokerage platforms.
Merrill Wealth Management revenue of $4.4 billion decreased three percent primarily driven by lower net interest income from lower deposit balances and a mix shift to higher yielding deposit products, as well as lower brokerage fees, partially offset by higher asset management fees from higher market levels and the impact of positive AUM flows.
Bank of America Private Bank revenue of $923 million increased two percent primarily driven by higher asset management fees from higher market levels and the impact of positive AUM flows.
Nine-Month Comparison
Net income for GWIM decreased $547 million to $2.9 billion primarily due to lower revenue and higher noninterest expense. The operating margin was 25 percent compared to 28 percent a year ago.
Net interest income was $5.4 billion, relatively unchanged from the same period a year ago.
Noninterest income, which primarily includes investment and brokerage services income, decreased $445 million to $10.4 billion primarily driven by lower asset management fees and brokerage fees due to lower average equity and fixed income market levels and transactional volumes, partially offset by the impact of positive AUM flows.
Noninterest expense increased $236 million to $11.9 billion due to continued investments in the business, including
15 Bank of America


strategic hiring, as well as higher FDIC expense, partially offset by lower revenue-related incentives.
The return on average allocated capital was 21 percent, down from 27 percent, due to lower net income and, to a lesser extent, a small increase in allocated capital.
Average loans increased $1.5 billion to $219.5 billion primarily driven by residential mortgage and custom lending, mostly offset by securities-based lending. Average deposits decreased $62.3 billion to $300.3 billion due to the same factors as described in the three-month discussion.
Merrill Wealth Management revenue of $13.1 billion decreased four percent primarily driven by lower asset management fees and brokerage fees due to lower average equity and fixed income market levels and transactional volumes, partially offset by the impact of positive AUM flows.
Bank of America Private Bank revenue of $2.7 billion increased two percent primarily driven by the same factors as described in the three-month discussion, as well as higher net interest income due to higher interest rates.
Key Indicators and Metrics
Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)2023202220232022
Revenue by Business
Merrill Wealth Management$4,398 $4,524 $13,135 $13,649 
Bank of America Private Bank923 905 2,743 2,689 
Total revenue, net of interest expense$5,321 $5,429 $15,878 $16,338 
Client Balances by Business, at period end
Merrill Wealth Management$2,978,229 $2,710,985 
Bank of America Private Bank
572,624 537,771 
Total client balances$3,550,853 $3,248,756 
Client Balances by Type, at period end
Assets under management$1,496,601 $1,329,557 
Brokerage and other assets1,578,123 1,413,946 
Deposits290,732 324,859 
Loans and leases (1)
221,684 228,129 
Less: Managed deposits in assets under management(36,287)(47,735)
Total client balances$3,550,853 $3,248,756 
Assets Under Management Rollforward
Assets under management, beginning of period$1,531,042 $1,411,344 $1,401,474 $1,638,782 
Net client flows 14,226 4,110 43,784 20,680 
Market valuation/other
(48,667)(85,897)51,343 (329,905)
Total assets under management, end of period$1,496,601 $1,329,557 $1,496,601 $1,329,557 
Total wealth advisors, at period end (2)
19,130 18,841 
(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 increased $302.1 billion, or nine percent, to $3.6 trillion at September 30, 2023 compared to September 30, 2022. The increase in client balances was primarily due to the impact of higher end-of-period market valuations and positive client flows.
Bank of America 16

Global Banking
Three Months Ended September 30Nine Months Ended September 30
(Dollars in millions)20232022% Change20232022% Change
Net interest income$3,613 $3,326 9 %$11,210 $8,304 35 %
Noninterest income:
Service charges754 771 (2)2,203 2,590 (15)
Investment banking fees743 726 2 2,129 2,298 (7)
All other income1,093 768 42 3,326 2,599 28 
Total noninterest income2,590 2,265 14 7,658 7,487 2 
Total revenue, net of interest expense 6,203 5,591 11 18,868 15,791 19 
Provision for credit losses(119)170 n/m(347)492 n/m
Noninterest expense2,804 2,651 6 8,563 8,133 5 
Income before income taxes3,518 2,770 27 10,652 7,166 49 
Income tax expense 950 734 29 2,876 1,899 51 
Net income$2,568 $2,036 26 $7,776 $5,267 48 
Effective tax rate 27.0 %26.5 %27.0 %26.5 %
Net interest yield2.68 2.53 2.84 2.05 
Return on average allocated capital21 18 21 16 
Efficiency ratio45.22 47.41 45.38 51.50 
Balance Sheet
Three Months Ended September 30Nine Months Ended September 30
Average20232022% Change20232022% Change
Total loans and leases
$376,214 $384,305 (2)%$380,076 $373,547 2 %
Total earning assets534,153 521,555 2 528,205 541,670 (2)
Total assets601,378 585,683 3 595,329 605,884 (2)
Total deposits504,432 495,154 2 498,224 514,612 (3)
Allocated capital49,250 44,500 11 49,250 44,500 11 
Period endSeptember 30
2023		December 31 2022% Change
Total loans and leases$373,351 $379,107 (2)%
Total earning assets521,423 522,539 — 
Total assets588,578 588,466 — 
Total deposits494,938 498,661 (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.
Three-Month Comparison
Net income for Global Banking increased $532 million to $2.6 billion driven by higher revenue and lower provision for credit losses, partially offset by higher noninterest expense.
Net interest income increased $287 million to $3.6 billion predominantly due to the benefit of higher interest rates.
Noninterest income increased $325 million to $2.6 billion driven by higher revenue from ESG investment activities and negative valuation adjustments on leveraged loans in the prior-year period.
The provision for credit losses improved $289 million to a benefit of $119 million primarily driven by a reserve release due to net loan paydowns and an improved macroeconomic outlook in the current-year period compared to a reserve build in the prior-year period due to a dampened macroeconomic outlook.
Noninterest expense increased $153 million to $2.8 billion, primarily due to continued investments in the business, including people, and higher FDIC expense.
The return on average allocated capital was 21 percent, up from 18 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 11.
Nine-Month Comparison
Net income for Global Banking increased $2.5 billion to $7.8 billion driven by higher revenue and lower provision for credit losses, partially offset by higher noninterest expense.
Net interest income increased $2.9 billion to $11.2 billion due to the same factor as described in the three-month discussion.
Noninterest income increased $171 million to $7.7 billion driven by higher revenue from ESG investment activities and negative valuation adjustments on leveraged loans in the prior-year period, partially offset by lower treasury service charges and lower investment banking fees.
The provision for credit losses improved $839 million to a benefit of $347 million primarily due to the same factors as described in the three-month discussion. In addition, the prior-year period was impacted by a reserve build related to Russian exposure.
Noninterest expense increased $430 million to $8.6 billion, primarily due to continued investments in the business,
17 Bank of America


including technology and strategic hiring in 2022, and higher FDIC expense, partially offset by expenses recognized for certain regulatory matters in the prior-year period.
The return on average allocated capital was 21 percent, up from 16 percent, due to higher net income, partially offset by higher allocated capital.
Global Corporate, Global Commercial and Business Banking
The following table and discussion present a summary of the results, which exclude certain investment banking and Paycheck Protection Program (PPP) activities in Global Banking.
Global Corporate, Global Commercial and Business Banking
 Global Corporate BankingGlobal Commercial BankingBusiness BankingTotal
Three Months Ended September 30
(Dollars in millions)20232022202320222023202220232022
Revenue
Business Lending$1,300 $902 $1,262 $1,111 $61 $66 $2,623 $2,079 
Global Transaction Services1,392 1,369 998 1,112 379 322 2,769 2,803 
Total revenue, net of interest expense
$2,692 $2,271 $2,260 $2,223 $440 $388 $5,392 $4,882 
Balance Sheet
Average
Total loans and leases$169,384 $177,166 $194,604 $193,828 $12,071 $12,697 $376,059 $383,691 
Total deposits272,007 241,289 182,040 198,479 50,381 55,386 504,428 495,154 
Global Corporate BankingGlobal Commercial BankingBusiness BankingTotal
Nine Months Ended September 30
(Dollars in millions)202320222023202220232022