BANK OF AMERICA CORP /DE/ (BAC) FY 2024 MD&A

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 this 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, which are inherently difficult to predict, resulting from pending, threatened or future litigation and regulatory investigations, proceedings and enforcement actions, which the Corporation is subject to in the ordinary course of business, including matters related to our processing of unemployment benefits for California and certain other states, the features of our automatic credit card payment service, the adequacy of the Corporation’s anti-money laundering and economic sanctions programs and the processing of electronic payments, including through the Zelle network, and related fraud, which are in various stages; 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 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 (including the potential for ongoing adjustments in interest rates), inflation, currency exchange rates, economic conditions, trade policies and tensions, including increased tariffs, and 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; variances to the underlying assumptions and judgments used in estimating banking book net interest income sensitivity; 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 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 electronic payments and payment of checks, that were authorized by the customer but induced by fraud; the impact of failures or disruptions in or breaches of the Corporation’s operations or information systems, or those of third parties, including as a result of cybersecurity incidents; the risks related to the development, implementation, use and management of emerging technologies, including artificial intelligence and machine learning; the risks related to the transition and physical impacts of climate change; our ability to achieve environmental goals and targets or the impact of any changes in the Corporation’s sustainability strategy, goals or targets; the impact of uncertain or changing political conditions or any future federal government shutdown and uncertainty regarding the federal government’s debt limit or changes in fiscal, monetary or regulatory policy; the emergence of widespread health emergencies or pandemics; the impact of natural disasters, extreme weather events, military conflicts (including the Russia/Ukraine conflict, the conflicts in the Middle East, the possible expansion of such conflicts 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 the Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) are incorporated by reference into the MD&A. Certain prior-year amounts have been reclassified to conform to current-year 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 December 31, 2024, the Corporation had $3.3 trillion in assets and a headcount of approximately 213,000 employees.

As of December 31, 2024, 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 3,700 retail financial centers, approximately 15,000 ATMs, and leading digital banking platforms (www.bankofamerica.com) with approximately 48 million active users, including approximately 40 million active mobile users. We offer industry-leading support to approximately four million small business households. Our GWIM businesses, with client balances of $4.3 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.

Recent Developments

Natural Disasters

Certain Bank of America communities, clients and teammates were significantly impacted by recent wildfires in California and by hurricanes in the southeastern U.S. during the second half of 2024. In response, Bank of America activated client assistance programs, donated to disaster relief efforts and provided additional support to teammates in the affected areas. The Corporation continues to evaluate the effects of the wildfires and hurricanes on its clients and communities and does not expect these natural disasters to have a material impact on its businesses, results of operations or financial condition.

Capital Management

On January 29, 2025, the Corporation’s Board of Directors (the Board) declared a quarterly common stock dividend of $0.26 per share, payable on March 28, 2025 to shareholders of record as of March 7, 2025.

For more information on our capital resources, see Capital Management beginning on page 48.

Financial Highlights

(1)For definitions, see Key Metrics on page 170.

(2)Return on average tangible common shareholders’ equity is a non-GAAP financial measure. For more information and a corresponding reconciliation to the most directly comparable financial measures defined by accounting principles generally accepted in the United States of America (GAAP), see Non-GAAP Reconciliations on page 85.

Net income was $27.1 billion, or $3.21 per diluted share in 2024 compared to $26.5 billion, or $3.08 per diluted share in 2023. The increase in net income was due to higher noninterest income, partially offset by higher provision for credit losses, higher noninterest expense and lower net interest income.

For discussion and analysis of our consolidated and business segment results of operations for 2023 compared to 2022, see Financial Highlights and Business Segment Operations sections in the MD&A of the Corporation’s 2023 Annual Report on Form 10-K.

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Net Interest Income

Net interest income decreased $871 million to $56.1 billion in 2024 compared to 2023. Net interest yield on a fully taxable-equivalent (FTE) basis decreased 13 basis points (bps) to 1.95 percent for 2024. The decreases were primarily driven by higher deposit costs, partially offset by higher asset yields and higher net interest income related to Global Markets activity. For more information on net interest yield and FTE basis, see Supplemental Financial Data on page 30, and for more information on interest rate risk management, see Interest Rate Risk Management for the Banking Book on page 78.

Noninterest Income

Noninterest income increased $4.2 billion to $45.8 billion in 2024 compared to 2023. The following highlights the significant changes.

●    Card income increased $230 million primarily due to higher late fees, annual fees and card transfer fees.

●    Service charges increased $371 million primarily due to higher treasury service charges.

●    Investment and brokerage services increased $2.2 billion primarily driven by higher asset management fees due to higher average equity market valuations and positive assets under management (AUM) flows, as well as higher brokerage fees due to increased transactional volume, partially offset by the impact of lower AUM pricing.

●    Investment banking fees increased $1.5 billion primarily due to higher debt and equity issuance fees and higher advisory fees.

●    Market making and similar activities increased $235 million primarily driven by the net $1.6 billion charge resulting from the Bloomberg Short-Term Bank Yield Index’s (BSBY) cessation announced in 2023, partially offset by lower trading revenue from macro products in Fixed Income, Currencies and Commodities (FICC), and lower income from foreign currency risk management activities.

●    Other income decreased $340 million primarily due to higher partnership losses on tax credit investments, a charge related to Visa Inc.’s (Visa) increase in its litigation escrow account, and certain negative valuation adjustments, partially offset by lower losses on sales of available-for-sale debt securities and gains on sales of equity investments.

Provision for Credit Losses

The provision for credit losses increased $1.4 billion to $5.8 billion for 2024 compared to 2023. The provision for credit losses for 2024 was primarily driven by credit card as well as small business loan growth, and asset quality deterioration in the commercial real estate office and credit card portfolios. For the prior year, the provision for credit losses was primarily driven by credit card loan growth and asset quality deterioration, partially offset by improved macroeconomic conditions that primarily benefited the commercial portfolio. For more information on the provision for credit losses, see Allowance for Credit Losses on page 72.

Noninterest Expense

Noninterest expense increased $967 million to $66.8 billion in 2024 compared to 2023. The increase was primarily driven by higher revenue-related expenses as well as investments in people, operations and technology, partially offset by higher Federal Deposit Insurance Corporation (FDIC) expense in 2023, including $2.1 billion for the estimated special assessment amount arising from the closure of Silicon Valley Bank and Signature Bank, and lower expenses related to a liquidating business activity.

Income Tax Expense

The effective tax rates for 2024 and 2023 were primarily driven by our recurring tax preference benefits, which primarily consisted of tax credits from investments in affordable housing and renewable energy. Also included in the effective tax rate for 2023 were tax impacts related to the FDIC special assessment and BSBY’s cessation announced in 2023. For more information on our recurring tax preference benefits, see Note 19 – Income Taxes to the Consolidated Financial Statements. Absent the tax credits and discrete tax benefits, the effective tax rates would have been approximately 25 percent for both periods.

Balance Sheet Overview

Assets

At December 31, 2024, total assets were approximately $3.3 trillion, up $81.4 billion from December 31, 2023. The increase in assets was primarily due to higher debt securities, loans and leases, and trading account assets, partially offset by lower cash and cash equivalents.

Cash and Cash Equivalents

Cash and cash equivalents decreased $43.0 billion primarily driven by reinvestment of cash into debt securities.

Federal Funds Sold and Securities Borrowed or Purchased Under Agreements to Resell

Federal funds transactions involve lending reserve balances on a short-term basis. Securities borrowed or purchased under agreements to resell are collateralized lending transactions utilized to accommodate customer transactions, earn interest rate spreads and obtain securities for settlement and for collateral. Federal funds sold and securities borrowed or purchased under agreements to resell decreased $5.9 billion primarily due to increased investments in debt securities for balance sheet and liquidity positioning purposes.

Trading Account Assets

Trading account assets consist primarily of long positions in equity and fixed-income securities including U.S. government and agency securities, corporate securities and non-U.S. sovereign debt. Trading account assets increased $37.1 billion primarily due to client activity within Global Markets.

Debt Securities

Debt securities primarily include U.S. Treasury and agency securities, mortgage-backed securities (MBS), principally agency MBS, non-U.S. bonds, corporate bonds and municipal debt. We reinvest cash in the debt securities portfolio primarily to manage interest rate and liquidity risk. Debt securities increased $45.9 billion primarily due to investment of excess cash from higher deposits. For more information on debt securities, see Note 4 – Securities to the Consolidated Financial Statements.

Loans and Leases

Loans and leases increased $42.1 billion primarily driven by growth in commercial loans. For more information on the loan portfolio, see Credit Risk Management on page 58.

Allowance for Loan and Lease Losses

The allowance for loan and lease losses decreased $102 million primarily due to a reserve release in our commercial portfolio due to a favorable macroeconomic environment and reduced exposure in our commercial real estate portfolio. For more information, see Allowance for Credit Losses on page 72.

All Other Assets

All other assets increased $5.1 billion primarily driven by activity within Global Markets.

Liabilities

At December 31, 2024, total liabilities were approximately $3.0 trillion, up $77.5 billion from December 31, 2023, primarily due to higher federal funds purchased and securities loaned or sold under agreements to repurchase, deposits, and short-term borrowings, partially offset by lower long-term debt.

Deposits

Deposits increased $41.6 billion primarily driven by growth in commercial client balances and time deposits.

Federal Funds Purchased and Securities Loaned or Sold Under Agreements to Repurchase

Federal funds transactions involve borrowing reserve balances on a short-term basis. Securities loaned or sold under agreements to repurchase are collateralized borrowing transactions utilized to accommodate customer transactions, earn interest rate spreads and finance assets on the balance sheet. Federal funds purchased and securities loaned or sold under agreements to repurchase increased $47.9 billion primarily driven by client activity within Global Markets.

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Trading Account Liabilities

Trading account liabilities consist primarily of short positions in equity and fixed-income securities including U.S. Treasury and agency securities, non-U.S. sovereign debt and corporate securities. Trading account liabilities decreased $3.0 billion primarily due to lower levels of short positions within Global Markets.

Short-term Borrowings

Short-term borrowings provide an additional funding source and primarily consist of Federal Home Loan Bank (FHLB) short-term borrowings, notes payable and various other borrowings that generally have maturities of one year or less. Short-term borrowings increased $11.3 billion primarily due to higher unsecured borrowings to manage liquidity needs. For more information on short-term borrowings, see Note 10 – Securities Financing Agreements, Short-term Borrowings, Collateral and Restricted Cash to the Consolidated Financial Statements.

Long-term Debt

Long-term debt decreased $18.9 billion primarily due to maturities and redemptions, partially offset by debt issuances and valuation adjustments. For more information on long-term debt, see Note 11 – Long-term Debt to the Consolidated Financial Statements.

Shareholders’ Equity

Shareholders’ equity increased $3.9 billion primarily due to net income and market value increases on derivatives, partially offset by returns of capital to shareholders through common stock repurchases and common and preferred stock dividends, as well as preferred stock redemptions.

Cash Flows Overview

The Corporation’s operating assets and liabilities support our global markets and lending activities. We believe that cash flows from operations, available cash balances and our ability to generate cash through short- and long-term debt are sufficient to fund our operating liquidity needs. Our investing activities primarily include the debt securities portfolio and loans and leases. Our financing activities reflect cash flows primarily related to customer deposits, securities financing agreements, long-term debt and common and preferred stock.

Supplemental Financial Data

Non-GAAP Financial Measures

In this Form 10-K, 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 Tables 6 and 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 85.

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 170.

Our consolidated key performance indicators, which include various equity and credit metrics, are presented in Table 1 on page 27, Table 6 on page 31 and Table 7 on page 32.

For information on key segment performance metrics, see Business Segment Operations on page 35.

(1)For definition, see Key Metrics on page 170.

(2)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 30 and Non-GAAP Reconciliations on page 85.

(3)Includes the allowance for loan and leases losses and the reserve for unfunded lending commitments.

(4)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 62 and corresponding Table 27 and Commercial Portfolio Credit Risk Management – Nonperforming Commercial Loans, Leases and Foreclosed Properties Activity on page 66 and corresponding Table 33.

(5)For more information, including which approach is used to assess capital adequacy, see Capital Management on page 48.

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(1)For definitions, see Key Metrics on page 170.

(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 30 and Non-GAAP Reconciliations on page 85.

(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 63 and corresponding Table 27 and Commercial Portfolio Credit Risk Management – Nonperforming Commercial Loans, Leases and Foreclosed Properties Activity on page 67 and corresponding Table 33.

(6)For more information, including which approach is used to assess capital adequacy, see Capital Management on page 48.

(1)Includes the impact of interest rate risk management contracts. For more information, see Interest Rate Risk Management for the Banking Book on page 78.

(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 $63.8 billion, $67.2 billion and $61.1 billion, and non-U.S. commercial real estate loans of $6.1 billion, $5.8 billion and $4.3 billion for 2024, 2023 and 2022, respectively.

(4)Includes $48.4 billion, $40.2 billion and $30.7 billion of structured notes and liabilities for 2024, 2023 and 2022, respectively.

(5)Net interest income includes FTE adjustments of $619 million, $567 million and $438 million in 2024, 2023 and 2022, respectively.

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(1)The changes for each category of interest income and expense are divided between the portion of change attributable to the variance in volume and the portion of change attributable to the variance in rate for that category. The unallocated change in rate or volume variance is allocated between the rate and volume variances.

(2)Includes an increase in FTE basis adjustments of $52 million from 2023 to 2024 and $129 million from 2022 to 2023.

Business Segment Operations

Segment Description and Basis of Presentation

We report our results of operations through the following 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. The primary activities, products and businesses of the business segments and All Other are shown below.

We periodically review capital allocated to our businesses and allocate capital annually during the strategic and capital planning processes. We utilize a methodology that considers the effect of regulatory capital requirements in addition to internal risk-based capital models. Our internal risk-based capital models use a risk-adjusted methodology incorporating each segment’s credit, market, interest rate, business and operational risk components. For more information on the nature of these risks, see Managing Risk on page 45. 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 30, and for reconciliations to consolidated total revenue, net income and year-end total assets, see Note 23 – 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, client trends and business growth.

35 Bank of America

Consumer Banking

(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.

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. Deposits and Consumer Lending include the net impact of migrating customers and their related deposit, brokerage asset and loan balances between Deposits, Consumer Lending and GWIM, as well as other client-managed businesses. Our customers and clients have access to a coast-to-coast network including financial centers in 39 states and the District of Columbia. As of December 31, 2024, our network includes approximately 3,700 financial centers, approximately 15,000 ATMs, nationwide call centers and leading digital banking platforms with approximately 48 million active users, including approximately 40 million active mobile users.

Consumer Banking Results

Net income for Consumer Banking decreased $834 million to $10.8 billion primarily due to higher noninterest expense and lower revenue, partially offset by lower provision for credit losses. Net interest income decreased $611 million to $33.1 billion primarily driven by lower deposit balances, partially offset by higher loan balances. Noninterest income increased $16 million to $8.4 billion, relatively unchanged from the same period a year ago.

The provision for credit losses decreased $171 million to $5.0 billion primarily driven by lower overdraft losses from fraud activity. Noninterest expense increased $688 million to $22.1 billion primarily driven by investments in the business, including

operations, technology and people.

The return on average allocated capital was 25 percent, down from 28 percent, due to an increase in allocated capital and lower net income. For information on capital allocated to the business segments, see Business Segment Operations on page 35.

Deposits

Deposits includes the results of consumer deposit activities that consist of a comprehensive range of products provided to consumers and small businesses. Our deposit products include noninterest- and interest-bearing checking accounts, money market savings accounts, traditional savings accounts, CDs and IRAs, as well as investment accounts and products. Net interest income is allocated to deposit products using our funds transfer pricing process that matches assets and liabilities with similar interest rate sensitivity and maturity characteristics. Deposits generates fees such as account service fees, non-sufficient funds fees, overdraft charges and ATM fees, as well as investment and brokerage fees from Consumer Investment accounts. Consumer Investments serves investment client relationships through the Merrill Edge integrated investing and banking service platform, providing investment advice and guidance, client brokerage asset services, self-directed online investing and key banking capabilities including access to the Corporation’s network of financial centers and ATMs.

Net income for Deposits decreased $1.2 billion to $7.5 billion primarily due to lower revenue and higher noninterest

expense, partially offset by lower provision for credit losses. Net interest income decreased $1.3 billion to $21.2 billion primarily driven by lower deposit balances. Noninterest income was $2.8 billion, relatively unchanged from the same period a year ago.

The provision for credit losses decreased $188 million to $303 million primarily driven by lower overdraft losses from fraud activity. Noninterest expense increased $349 million to $13.7 billion primarily driven by investments in the business, including people, technology and operations.

Average deposits decreased $47.0 billion to $940.7 billion primarily due to net outflows of $54.6 billion in money market savings and $20.6 billion in checking, partially offset by growth in time deposits of $37.2 billion.

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.

(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 $93.4 billion to $517.8 billion driven by market performance and positive net client flows. Active mobile banking users increased approximately two million, reflecting client growth and continuing changes in our clients’ banking preferences. We had a net decrease of 145 financial centers and 275 ATMs as we continued to optimize our consumer banking network.

Consumer Lending

Consumer Lending offers products to consumers and small businesses across the U.S. The products offered include debit and credit cards, residential mortgages and home equity loans, and direct and indirect loans such as automotive, recreational vehicle and consumer personal loans. In addition to earning net interest spread revenue on its lending activities, Consumer Lending generates interchange revenue from debit and credit card transactions, late fees, cash advance fees, annual credit card fees, mortgage banking fee income and other miscellaneous fees. Consumer Lending products are available to our customers through our retail network, direct telephone, and online and mobile channels. Consumer Lending results also include the impact of servicing residential mortgages and home equity loans, including loans held on the balance sheet of Consumer Lending and loans serviced for others.

Net income for Consumer Lending increased $334 million to $3.2 billion primarily driven by higher revenue, partially offset by higher noninterest expense. Net interest income increased $717 million to $11.9 billion primarily due to the impact of higher loan balances. Noninterest income increased $85 million to $5.5 billion, primarily driven by higher card income.

The provision for credit losses was $4.7 billion, relatively unchanged from the same period a year ago. Noninterest expense increased $339 million to $8.4 billion primarily driven by investments in the business, including operations, technology and people.

Average loans increased $4.9 billion to $309.5 billion primarily driven by increases in credit card, small business and consumer vehicle loans.

The following table 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.

(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.

Total risk-adjusted margin decreased 85 bps primarily driven by higher net credit losses, partially offset by higher net interest margin and higher net fee income. Total credit card purchase volumes increased $5.7 billion to $368.9 billion, and debit card purchase volumes increased $29.9 billion to $557.0 billion, reflecting higher levels of consumer spending.

(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 increased $1.1 billion and $1.7 billion primarily driven by higher demand.

Home equity production in Consumer Banking and the total Corporation decreased $878 million and $930 million primarily driven by lower demand.

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Global Wealth & Investment Management