Item 7. Bank of America Corporation and Subsidiaries
Table of Contents
Page
Executive Summary 27
Recent Developments 27
Financial Highlights 27
Balance Sheet Overview 29
Supplemental Financial Data 31
Business Segment Operations 36
Consumer Banking 37
Global Wealth & Investment Management 39
Global Banking 41
Global Markets 43
All Other 44
Managing Risk 45
Strategic Risk Management 48
Capital Management 48
Liquidity Risk 54
Credit Risk Management 59
Consumer Portfolio Credit Risk Management 59
Commercial Portfolio Credit Risk Management 64
Non-U.S. Portfolio 70
Loan and Lease Contractual Maturities 72
Allowance for Credit Losses 73
Market Risk Management 75
Trading Risk Management 76
Interest Rate Risk Management for the Banking Book 79
Mortgage Banking Risk Management 81
Compliance and Operational Risk Management 81
Reputational Risk Management 83
Critical Accounting Estimates 83
Non-GAAP Reconciliations 86
25 Bank of America
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,” “outlook,” “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 or its lines of business future results, which may include, among other measures, revenue, liquidity, net interest income, other income, provision for credit losses, expenses, operating leverage, effective tax rate, efficiency ratio, capital measures, deposits and assets, as well as strategy, 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 U.S. Securities and Exchange Commission (SEC) 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 inquiries, demands, requests, 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; in connection with ongoing litigation, the impact of certain changes to Visa’s and Mastercard’s respective card payment network rules and reductions in interchange fees for U.S.-based merchants; 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 impact of U.S. and global interest rates (including the potential for ongoing fluctuations in interest rates), inflation, currency exchange rates, economic conditions, trade policies and tensions, including changes in, or the imposition of, tariffs and/or trade barriers and the economic impacts, volatility and uncertainty resulting therefrom, which may have varying effects across industries and geographies, and geopolitical instability; 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 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, including due to changes in economic assumptions, which may include unemployment rates, real estate prices, gross domestic product levels and corporate bond spreads, customer behavior, adverse developments with respect to U.S. or global economic conditions and other uncertainties, such as the impact of trade policies, 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 (including noninterest expense) and expectations regarding revenue, net interest income, operating leverage, other income, provision for credit losses, net charge-offs, effective tax rate, loan or deposit growth or other projections and targets; 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, including impacts from the 2025 Budget Reconciliation Act; 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 various third parties, including regulators and federal and state governments, such as from cybersecurity incidents; the risks related to the development, implementation, use and management of emerging technologies, including artificial intelligence; the risks related to the transition and physical impacts of climate change; our ability to achieve environmental goals or the impact of any changes in the Corporation’s sustainability or human capital management strategy or goals; the impact of uncertain or changing political conditions, federal government shutdowns and uncertainty regarding the federal government’s debt limit or changes in fiscal, monetary, trade 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), civil unrest, terrorism or other geopolitical events; and other matters.
Bank of America 26
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 that 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, 2025, the Corporation had $3.4 trillion in assets and a headcount of approximately 213,000 employees. As of December 31, 2025, we served clients through operations across the U.S., its territories and more than 35 countries and/or jurisdictions. 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 3,600 retail financial centers, approximately 15,000 automated teller machines (ATMs), and leading digital banking platforms (www.bankofamerica.com) with approximately 49 million active users, including approximately 41 million active mobile users. We offer industry-leading support to approximately four million small business households. Our GWIM businesses, with client balances of $4.8 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
Capital Management
On February 3, 2026, the Board of Directors (Board) declared a quarterly common stock dividend of $0.28 per share, payable on March 27, 2026 to shareholders of record as of March 6, 2026.
For more information on our capital resources and regulatory developments, see Capital Management beginning on page 48.
Financial Highlights
Effective in the fourth quarter of 2025, the Corporation elected to change accounting methods for its tax-related affordable housing, eligible wind renewable energy and solar renewable energy equity investments, which were applied on a retrospective basis. The Corporation determined that the new accounting methods are preferable, as they better align the financial statement presentation with the economic impact of these equity investments. The primary impact of the accounting changes is a reclassification between income statement line items that nets income tax credits and benefits against the investment expense. Certain prior-period information presented herein has been revised to reflect the accounting method changes. For more information, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements and Exhibit 18 to this Annual Report on Form 10-K.
Table 1 Summary Income Statement and Selected Financial Data
(Dollars in millions, except per share information) 2025 2024
Income statement
Preferred stock dividends and other 1,454 1,629
Net income applicable to common shareholders $ 29,055 $ 25,344
Per common share information
Performance ratios
Return on average assets (1) 0.89 % 0.82 %
Return on average common shareholders’ equity (1) 10.59 9.53
Return on average tangible common shareholders’ equity (2) 14.22 12.94
Balance sheet at year end
(1)For definitions, see Key Metrics on page 172.
(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 86.
Net income was $30.5 billion, or $3.81 per diluted share, in 2025 compared to $27.0 billion, or $3.19 per diluted share, in 2024. The increase in net income was due to higher net interest income and noninterest income, and lower provision for credit losses, partially offset by higher noninterest expense.
For discussion and analysis of our consolidated and business segment results of operations for 2024 compared to 2023, see the Financial Highlights and Business Segment Operations sections in the MD&A of the Corporation’s 2024 Annual Report on Form 10-K.
27 Bank of America
Net Interest Income
Net interest income increased $4.0 billion to $60.1 billion in 2025 compared to 2024. Net interest yield on a fully taxable-equivalent (FTE) basis increased six basis points (bps) to 2.01 percent for 2025. The increases were primarily driven by higher net interest income related to Global Markets activity, fixed-asset repricing, and deposit and loan growth, partially offset by the impact of lower interest rates and one less day of interest accrual. For more information on net interest yield and FTE basis, see Supplemental Financial Data on page 31, and for more information on interest rate risk management, see Interest Rate Risk Management for the Banking Book on page 79.
Noninterest Income
Table 2 Noninterest Income
Fees and commissions:
Noninterest income increased $3.2 billion to $53.0 billion in 2025 compared to 2024. The following highlights the significant changes.
● Service charges increased $402 million primarily due to higher treasury service charges.
● Investment and brokerage services increased $2.2 billion primarily driven by higher asset management fees reflecting higher market valuations and the impact of positive assets under management (AUM) flows, as well as higher brokerage fees due to increased client activity.
● Investment banking fees increased $444 million driven by higher debt issuance and advisory fees, partially offset by lower equity issuance fees.
● Market making and similar activities decreased $953 million primarily driven by lower trading revenue from credit products in Fixed Income, Currencies and Commodities (FICC) and lower income from derivatives used in foreign currency risk management activities.
●Other income increased $1.0 billion primarily due to gains on leveraged finance positions.
Provision for Credit Losses
The provision for credit losses decreased $146 million to $5.7 billion for 2025 compared to 2024. For more information on the provision for credit losses, see Allowance for Credit Losses on page 73.
Noninterest Expense
Table 3 Noninterest Expense
Information processing and communications 7,453 7,231
Product delivery and transaction related 3,924 3,494
Noninterest expense increased $2.9 billion to $69.7 billion in 2025 compared to 2024. The increase was primarily driven by continued investments in the business, including people, technology and marketing, as well as higher revenue-related expenses, partially offset by a reduction in the Corporation’s accrual in 2025 for the Federal Deposit Insurance Corporation (FDIC) special assessment compared to an increase in the accrual in 2024.
Income Tax Expense
Table 4 Income Tax Expense
Effective tax rate 19.1 % 18.8 %
The effective tax rates (ETR) for 2025 and 2024 were driven by pretax income and changes in the mix of income and expenses subject to U.S. federal and state and local taxes, as well as our recurring tax preference benefits, which mainly consisted of tax credits from investments in affordable housing and renewable energy. For more information, see Note 19 – Income Taxes to the Consolidated Financial Statements.
Bank of America 28
Balance Sheet Overview
Table 5 Selected Balance Sheet Data
December 31
(Dollars in millions) 2025 2024 $ Change % Change
Assets
Liabilities
Assets
At December 31, 2025, total assets were approximately $3.4 trillion, up $150.4 billion from December 31, 2024. The increase in assets was primarily due to higher loans and leases, trading account assets, and federal funds sold and securities borrowed or purchased under agreements to resell, partially offset by lower cash and cash equivalents.
Cash and Cash Equivalents
Cash and cash equivalents decreased $58.3 billion primarily driven by loan growth and activity within Global Markets.
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 increased $41.9 billion primarily due to activity within Global Markets.
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 $52.5 billion primarily due to 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 $8.4 billion primarily due to investment of excess cash from higher deposits and long-term debt. For more information on debt securities, see Note 4 – Securities to the Consolidated Financial Statements.
Loans and Leases
Loans and leases increased $89.9 billion primarily driven by growth in commercial loans and a residential mortgage loan portfolio acquisition in the first quarter of 2025. For more information on the loan portfolio, see Credit Risk Management on page 59.
29 Bank of America
Allowance for Loan and Lease Losses
The allowance for loan and lease losses decreased $37 million primarily due to reserve releases in credit card and commercial real estate as asset quality improved. For more information, see Allowance for Credit Losses on page 73.
All Other Assets
All other assets increased $16.1 billion primarily driven by activity within Global Markets.
Liabilities
At December 31, 2025, total liabilities were approximately $3.1 trillion, up $141.2 billion from December 31, 2024, primarily due to higher deposits, long-term debt, all other liabilities, trading account liabilities and federal funds purchased and securities loaned or sold under agreements to repurchase.
Deposits
Deposits increased $53.3 billion primarily driven by growth in commercial client balances.
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 $13.0 billion primarily driven by activity within Global Markets.
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 increased $13.5 billion primarily due to activity 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, commercial paper, notes payable and various other borrowings that generally have maturities of one year or less. Short-term borrowings increased $4.7 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 increased $34.5 billion primarily due to debt issuances and valuation adjustments, partially offset by maturities and redemptions. For more information on long-term debt, see Note 11 – Long-term Debt to the Consolidated Financial Statements.
All Other Liabilities
All other liabilities increased $22.3 billion primarily driven by activity within Global Markets.
Shareholders’ Equity
Shareholders’ equity increased $9.3 billion primarily due to net income, preferred stock issuances and an increase in accumulated other comprehensive income (OCI), 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.
Bank of America 30
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 Table 6 on page 32 and Table 7 on page 33.
For more information on the reconciliation of these non-GAAP financial measures to the corresponding GAAP financial measures, see Non-GAAP Reconciliations on page 86.
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 172.
Our consolidated key performance indicators, which include various equity and credit metrics, are presented in Table 1 on page 27, Table 6 on page 32 and Table 7 on page 33.
For information on key segment performance metrics, see Business Segment Operations on page 36.
31 Bank of America
Table 6 Selected Annual Financial Data
Income statement
Average diluted common shares issued and outstanding 7,680.9 7,935.8 8,080.5
Performance ratios
Return on average common shareholders’ equity (1) 10.59 9.53 9.73
Return on average tangible common shareholders’ equity (2) 14.22 12.94 13.45
Return on average shareholders’ equity (1) 10.22 9.22 9.33
Return on average tangible shareholders’ equity (2) 13.36 12.13 12.43
Total ending equity to total ending assets 8.89 9.01 9.12
Total average equity to total average assets 8.75 8.91 8.94
Per common share data
Average balance sheet
Asset quality
Nonperforming loans, leases and foreclosed properties (4) 5,905 6,120 5,630
Capital ratios at year end (5)
Supplementary leverage ratio 5.7 5.9 6.1
Tangible common equity (2) 6.2 6.3 6.2
(1)For definition, see Key Metrics on page 172.
(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 31 and Non-GAAP Reconciliations on page 86.
(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 63 and corresponding Table 28 and Commercial Portfolio Credit Risk Management – Nonperforming Commercial Loans, Leases and Foreclosed Properties Activity on page 67 and corresponding Table 34.
(5)For more information, including which approach is used to assess capital adequacy, see Capital Management on page 48.
Bank of America 32
Table 7 Selected Quarterly Financial Data
Income statement
Performance ratios
Per common share data
Average balance sheet
Asset quality
Capital ratios at period end (6)
Total loss-absorbing capacity and long-term debt metrics
(1)For definitions, see Key Metrics on page 172.
(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 31 and Non-GAAP Reconciliations on page 86.
(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 28 and Commercial Portfolio Credit Risk Management – Nonperforming Commercial Loans, Leases and Foreclosed Properties Activity on page 68 and corresponding Table 34.
(6)For more information, including which approach is used to assess capital adequacy, see Capital Management on page 48.
33 Bank of America
Table 8 Average Balances and Interest Rates - FTE Basis
Earning assets
Loans and leases (2)
Interest-bearing liabilities
U.S. interest-bearing deposits
Noninterest-bearing sources
Impact of noninterest-bearing sources 0.78 0.94 0.90
(1)Includes the impact of interest rate risk management contracts. For more information, see Interest Rate Risk Management for the Banking Book on page 79.
(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 $60.4 billion, $63.8 billion and $67.2 billion, and non-U.S. commercial real estate loans of $5.9 billion, $6.1 billion and $5.8 billion for 2025, 2024 and 2023, respectively.
(4)Includes $62.9 billion, $48.4 billion and $40.2 billion of structured notes and liabilities for 2025, 2024 and 2023, respectively.
(5)Net interest income includes FTE adjustments of $609 million, $619 million and $567 million for 2025, 2024 and 2023, respectively.
Bank of America 34
Table 9 Analysis of Changes in Net Interest Income - FTE Basis
Due to Change in (1) Net Change Due to Change in (1) Net Change
Volume Rate Volume Rate
Increase (decrease) in interest income
Time deposits placed and other short-term investments (9) (96) (105) 19 (25) (6)
Loans and leases
Net increase (decrease) in interest income $ (8,051) $ 16,397
Increase (decrease) in interest expense
U.S. interest-bearing deposits
Total U.S. interest-bearing deposits (3,285) 11,132
Total interest-bearing deposits (3,929) 12,279
Net increase (decrease) in interest expense (12,077) 17,216
Net increase (decrease) in net interest income (2) $ 4,026 $ (819)
(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 changes in FTE basis adjustments of a $10 million decrease from 2024 to 2025 and a $52 million increase from 2023 to 2024.
35 Bank of America
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.
For more information on our presentation of financial information on an FTE basis, see Supplemental Financial Data on page 31, 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. These KPIs may not be defined or calculated in the same way as similar KPIs used by other companies.
Bank of America 36
Consumer Banking
Noninterest income:
Effective tax rate 25.0 % 25.0 %
Return on average allocated capital 28 25
Balance Sheet
Average
Year End
Consumer Banking offers a diversified range of lending, deposit and investment products and services to consumers and small businesses. Consumer Banking includes the net impact of migrating customers and their related deposit, brokerage asset and loan balances between Consumer Banking 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 38 states and the District of Columbia. As of December 31, 2025, our network includes approximately 3,600 financial centers, approximately 15,000 ATMs, nationwide call centers and leading digital banking platforms with approximately 49 million active users, including approximately 41 million active mobile users.
Consumer Banking Results
Net income for Consumer Banking increased $1.5 billion to $12.2 billion primarily due to higher revenue and lower provision for credit losses, partially offset by higher noninterest expense. Net interest income increased $2.2 billion to $35.3 billion primarily driven by higher deposit spreads, as well as loan and deposit balances. Noninterest income was $8.4 billion, relatively unchanged from the same period a year ago.
The provision for credit losses decreased $338 million to $4.6 billion primarily due to improved asset quality in credit card. Noninterest expense increased $593 million to $22.7 billion primarily driven by investments in the business, including people and marketing.
The return on average allocated capital was 28 percent, up from 25 percent, due to higher net income, partially offset by an increase in allocated capital. For information on capital allocated to the business segments, see Business Segment Operations on page 36.
Average loans and leases increased $5.5 billion to $319.3 billion due to growth across all products.
Average deposits increased $2.5 billion to $948.1 billion primarily due to growth in time deposits of $16.5 billion and net inflows of $7.2 billion in checking, partially offset by net outflows of $21.1 billion in money market and other savings.
Consumer investment assets increased $81.3 billion to $599.1 billion driven by higher market valuations and positive net client flows.
Key Statistics
The following table provides key performance indicators for deposit spreads, other period-end information, credit and debit card and loan production activities.
37 Bank of America
Key Statistics
Deposit Spreads
Total deposit spreads (excludes noninterest costs) 2.92% 2.77%
Year end
Active digital banking users (in thousands) (2) 49,323 48,150
Active mobile banking users (in thousands) (3) 41,427 39,958
Credit and Debit Card
Total credit card (4)
Loan Production (7)
Consumer Banking:
Total (8):
(1)Includes client brokerage assets, deposit sweep balances, brokered CDs and AUM in Consumer Banking.
(2)Represents mobile and/or online active users over the past 90 days.
(3)Represents mobile active users over the past 90 days.
(4)Includes consumer credit card portfolios in Consumer Banking and GWIM.
(5)Calculated as the effective annual percentage rate divided by average loans.
(6)Calculated as the difference between total revenue, net of interest expense, and net charge-offs divided by average loans.
(7)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.
(8)In addition to loan production in Consumer Banking, there is also first mortgage and home equity loan production in GWIM.
Active mobile banking users increased by more than one million, reflecting client growth and continuing changes in our clients’ banking preferences. We had a net decrease of 72 financial centers and an increase of 16 ATMs as we continued to optimize our consumer banking network.
During 2025, the total risk-adjusted margin increased eight bps primarily driven by higher net interest margin and lower net charge-offs, partially offset by lower fee income. Total credit card purchase volumes increased $8.9 billion, and debit card purchase volumes increased $37.6 billion, reflecting higher levels of consumer spending.
During 2025, first mortgage loan originations for Consumer Banking increased $1.9 billion, and first mortgage loan originations for the total Corporation increased$5.2 billion, primarily driven by higher demand.
During 2025, home equity production in Consumer Banking increased $1.1 billion, and home equity production for the total Corporation increased $1.5 billion, primarily driven by higher demand.
Bank of America 38
Global Wealth & Investment Management
Noninterest income:
Provision for credit losses 35 4 n/m
Effective tax rate 25.0 % 25.0 %
Return on average allocated capital 24 23
Balance Sheet
Average
Year end
n/m = not meaningful
GWIM consists of two primary businesses: Merrill Wealth Management andBank of America Private Bank.
Merrill Wealth Management’s advisory business provides a high-touch client experience through a network of financial advisors focused on clients with over $250,000 in total investable assets. Merrill Wealth Management provides tailored solutions to meet clients’ needs through a full set of investment management, brokerage, banking and retirement products.
Bank of America Private Bank, together with Merrill Wealth Management’s Private Wealth Management business, provides comprehensive wealth management solutions targeted to high net worth and ultra high net worth clients, as well as customized solutions to meet clients’ wealth structuring, investment management, trust and banking needs, including specialty asset management services.
Net income for GWIM increased $407 million to $4.7 billion primarily due to higher revenue, partially offset by higher noninterest expense. The operating margin was 25 percent in both 2025 and 2024.
Net interest income increased $228 million to $7.2 billion primarily driven by loan growth.
Noninterest income, which primarily includes investment and brokerage services income, increased $1.7 billion to $17.7 billion. The increase was primarily driven by higher asset management fees, which increased 12 percent to $15.4 billion, reflecting higher market valuations and the impact of positive AUM flows as well as higher brokerage fees due to increased transactional volume, partially offset by the impact of lower AUM pricing.
Noninterest expense increased $1.4 billion to $18.6 billion primarily due to higher revenue-related incentives and investments in the business, including people and technology.
The return on average allocated capital was 24 percent, up from 23 percent, due to higher net income, partially offset by an increase in allocated capital. For information on capital allocated to the business segments, see Business Segment Operations on page 36.
Average loans and leases increased $19.2 billion to $243.1 billion primarily driven by custom lending, securities-based lending and residential mortgage. Average deposits decreased $7.7 billion to $279.8 billion primarily driven by clients moving deposits to higher yielding investment cash alternatives, including offerings on our investment and brokerage platforms, as well as a higher level of client tax payments.
Merrill Wealth Management revenue of $20.7 billion increased nine percent primarily driven by higher asset management fees reflecting higher market valuations and the impact of positive AUM flows, as well as higher brokerage fees due to increased transactional volume.
Bank of America Private Bank revenue of $4.2 billion increased eight percent primarily driven by higher net interest income from loan and deposit growth, as well as higher asset management fees reflecting higher market valuations and the impact of positive AUM flows.
39 Bank of America
Key Indicators and Metrics
Revenue by Business
Total revenue, net of interest expense $ 24,883 $ 22,929
Client Balances by Business, at year end
Client Balances by Type, at year end
Less: Managed deposits in assets under management (47,924) (44,925)
Assets Under Management Rollforward
(1)Includes margin receivables, which are classified in customer and other receivables on the Consolidated Balance Sheet.
Client Balances
Client balances managed under advisory and/or discretion of GWIM are AUM and are typically held in diversified portfolios. Fees earned on AUM are calculated as a percentage of clients’ AUM balances. The asset management fees charged to clients per year depend on various factors but are commonly driven by the breadth of the client’s relationship. The net client AUM flows
represent the net change in clients’ AUM balances over a specified period of time, excluding market appreciation/depreciation and other adjustments.
Client balances increased $499.3 billion, or 12 percent, to $4.8 trillion at December 31, 2025 compared to December 31, 2024. The increase in client balances was driven by higher market valuations and positive net client flows.
Bank of America 40
Global Banking
Noninterest income:
Provision for credit losses 943 883 7
Effective tax rate 27.5 % 27.5 %
Return on average allocated capital 15 16
Balance Sheet
Average
Year end
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 global offices and client relationship teams. Our lending products and services include commercial loans, leases, commitment facilities, trade finance, commercial real estate lending and asset-based lending. Our treasury solutions business includes deposits, treasury management, corporate credit card, merchant services, foreign exchange and short-term investment products. We also provide investment banking services to our clients such as debt and equity underwriting and distribution, and merger-related and other advisory services. Underwriting debt and equity issuances, fixed-income and equity research, and certain market-based activities are executed through our global broker-dealer affiliates, which are our primary dealers in several countries. Within Global Banking, Global Corporate Banking clients generally include large global corporations, financial institutions and leasing clients. Global Commercial Banking clients generally include middle-market companies, commercial real estate firms and not-for-profit companies. Business Banking clients include mid-sized U.S.-based businesses requiring customized and integrated financial advice and solutions.
Net income for Global Banking decreased $191 million to $7.8 billion driven by higher noninterest expense and provision for credit losses, partially offset by higher revenue.
Net interest income decreased $624 million to $12.6 billion primarily due to the impact of lower interest rates, partially offset by the benefit of higher average deposit and loan balances.
Noninterest income increased $984 million to $11.5 billion primarily due to sales of certain leveraged finance positions, higher investment banking fees and higher treasury service charges.
The provision for credit losses increased $60 million to $943 million driven by the commercial and industrial portfolio, partially offset by improvement within the commercial real estate portfolio.
Noninterest expense increased $563 million to $12.4 billion primarily due to continued investments in the business, including people, technology and operations, as well as higher regulatory costs.
The return on average allocated capital was 15 percent, down from 16 percent, due to lower net income and an increase in allocated capital. For information on capital allocated to the business segments, see Business Segment Operations on page 36.
41 Bank of America
Global Corporate, Global Commercial and Business Banking
Global Corporate, Global Commercial and Business Banking each include Business Lending and Global Transaction Services activities. Business Lending includes various lending-related products and services, and related hedging activities, including commercial loans, leases, commitment facilities, trade finance,
commercial real estate lending and asset-based lending. Global Transaction Services includes deposits, treasury management, corporate credit card, merchant services, foreign exchange and short-term investment products. The table below and discussion present a summary of the results, which exclude certain investment banking and other activities in Global Banking.
Global Corporate, Global Commercial and Business Banking
Global Corporate Banking Global Commercial Banking Business Banking Total
Revenue
Balance Sheet
Average
Year end
Business Lending revenue decreased $698 million in 2025 compared to 2024primarily driven by lower net interest income.
Global Transaction Services revenue increased $506 million in 2025 compared to 2024 primarily driven by the benefit of higher average deposit balances and higher treasury service charges, partially offset by the impact of lower interest rates.
Average loans and leases of $385.3 billion increased three percent in 2025 compared to 2024 due to client demand. Average deposits of $616.8 billion increased 13 percent in 2025 compared to 2024 due to growth in deposit balances from existing clients and the addition of new clients.
Global Investment Banking
Client teams and product specialists underwrite and distribute debt, equity and loan products, and provide advisory services and tailored risk management solutions. The economics of certain investment banking and underwriting activities are shared primarily between Global Banking and Global Markets under an internal revenue-sharing arrangement. Global Banking originates certain deal-related transactions with our corporate and commercial clients that are executed and distributed by Global Markets. To provide a complete discussion of our
consolidated investment banking fees, the table below presents total Corporation investment banking fees and the portion attributable to Global Banking.
Investment Banking Fees
Global Banking Total Corporation
Products
Total Corporation investment banking fees, which exclude self-led deals and are primarily included within Global Banking and Global Markets, increased seven percent to $6.6 billion compared to the same period in 2024 primarily due to higher debt issuance and advisory fees, partially offset by lower equity issuance fees.
Bank of America 42
Global Markets
Noninterest income:
Provision for credit losses 71 (32) n/m
Effective tax rate 29.0 % 29.0 %
Return on average allocated capital 13 12
Balance Sheet
Average
Trading-related assets:
Year end
n/m = not meaningful
Global Markets offers sales and trading services and research services to institutional clients across fixed-income, credit, currency, commodity and equity businesses. Global Markets product coverage includes securities and derivative products in both the primary and secondary markets. Global Markets provides market-making, financing, securities clearing, settlement and custody services globally to our institutional investor clients in support of their investing and trading activities. We also work with our commercial and corporate clients to provide risk management products using interest rate, equity, credit, currency and commodity derivatives, foreign exchange, fixed-income and mortgage-related products. As a result of our market-making activities in these products, we may be required to manage risk in a broad range of financial products including government securities, equity and equity-linked securities, high-grade and high-yield corporate debt securities, syndicated loans, MBS, commodities and asset-backed securities. The economics of certain investment banking and underwriting activities are shared primarily between Global Markets and Global Banking under an internal revenue-sharing arrangement. Global Banking originates certain deal-related transactions with our corporate and commercial clients that are executed and distributed by Global Markets. For information on
investment banking fees on a consolidated basis, see page 42.
The following explanations for year-over-year changes in results for Global Markets, including those disclosed under Sales and Trading Revenue, are the same for amounts including and excluding net DVA. Amounts excluding net DVA are a non-GAAP financial measure. For more information on net DVA, see Supplemental Financial Data on page 31.
Net income for Global Markets increased $489 million to $6.1 billion. Net DVA losses were $35 million compared to $113 million in 2024. Excluding net DVA, net income increased $430 million to $6.1 billion. These increases were primarily driven by higher revenue, partially offset by higher noninterest expense.
Revenue increased $2.3 billion to $24.1 billion primarily due to higher sales and trading revenue, sales of certain leveraged finance positions and higher investment banking fees. Sales and trading revenue increased $2.1 billion, and excluding net DVA, increased $2.0 billion. These increases were driven by higher revenue in Equities and FICC. Noninterest expense increased $1.5 billion to $15.4 billion primarily driven by higher revenue-related expenses and continued investments in the business, including people and technology.
43 Bank of America
Average total assets increased $99.2 billion to $1.0 trillion, driven by loan growth, higher levels of inventory and increased financing activity. Year-end total assets increased $156.3 billion to $1.0 trillion driven by the same factors as average total assets.
The return on average allocated capital was 13 percent, up from 12 percent, due to an increase in net income, partially offset by higher allocated capital. For information on capital allocated to the business segments, see Business Segment Operations on page 36.
Sales and Trading Revenue
Sales and trading revenue includes unrealized and realized gains and losses on trading and other assets that are included in market making and similar activities, net interest income, and fees primarily from commissions on equity securities. Sales and trading revenue is segregated into fixed-income (government debt obligations, investment and non-investment grade corporate debt obligations, commercial MBS, residential mortgage-backed securities, collateralized loan obligations, interest rate and credit derivative contracts), currencies (interest rate and foreign exchange contracts), commodities (primarily futures, forwards, swaps and options) and equities (equity-linked derivatives and cash equity activity). The following table and related discussion present sales and trading revenue, substantially all of which is in Global Markets, with the remainder in Global Banking. In addition, the following table and related discussion also present sales and trading revenue,
excluding net DVA, which is a non-GAAP financial measure. For more information on net DVA, see Supplemental Financial Data on page 31.
Sales and Trading Revenue (1, 2, 3)
Sales and trading revenue (2)
Fixed-income, currencies and commodities $ 12,267 $ 11,371
Sales and trading revenue, excluding net DVA (4)
Fixed-income, currencies and commodities $ 12,308 $ 11,468
Total sales and trading revenue, excluding net DVA $ 20,906 $ 18,920
(1)For more information on sales and trading revenue, see Note 3 – Derivatives to the Consolidated Financial Statements.
(2)Includes FTE adjustments of $708 million and $890 million for 2025 and 2024.
(3)Includes Global Banking sales and trading revenue of $530 million and $677 million for 2025 and 2024.
(4)FICC and Equities sales and trading revenue, excluding net DVA, is a non-GAAP financial measure. FICC net DVA losses were $41 million and $97 million for 2025 and 2024. Equities net DVA gains (losses) were $6 million and $(16) million for 2025 and 2024.
Including and excluding net DVA, FICC revenue increased $896 million and $840 million driven by improved trading performance in macro products. Including and excluding net DVA, Equities revenue increased $1.2 billion and $1.1 billion driven by increased client activity.
All Other
Net interest income $ (102) $ 22 n/m
Total revenue, net of interest expense (3,054) (3,450) (11)
Provision for credit losses (23) (21) 10
Balance Sheet
Average
Year end
(1)In segments where the total of liabilities and equity exceeds assets, which are generally deposit-taking segments, we allocate assets from All Other to those segments to match liabilities (i.e., deposits) and allocated shareholders’ equity. Average allocated assets were $990.6 billion and $956.5 billion for 2025 and 2024 and year-end allocated assets were $1.0 trillion and $980.4 billion at December 31, 2025 and 2024.
n/m = not meaningful
All Other primarily consists of asset and liability management (ALM) activities, liquidating businesses and certain expenses not otherwise allocated to a business segment, and adjustments to allocate income tax benefits from tax-related equity investments to noninterest income to present Global Banking and Global Markets on an FTE basis. For more information, see Note 23 – Business Segment Informationto the Consolidated Financial Statements.
The net loss in All Other decreased $1.3 billion to $310 million primarily due to lower noninterest expense and a lower loss in noninterest income, partially offset by a lower income tax benefit.
The loss in noninterest income decreased $520 million primarily due to a reduction in the volume of tax-related equity investments and lower valuation losses on certain derivatives.
Noninterest expense decreased $1.1 billion to $575 million primarily due to a reduction in the Corporation’s accrual in 2025 for the FDIC special assessment compared to an increase in the accrual in 2024, and lower expenses related to a liquidating business activity.
The income tax benefit decreased $166 million primarily due to a lower pretax loss.
Bank of America 44
Managing Risk
Risk is inherent in all our business activities. Sound risk management enables us to serve our customers and deliver for our shareholders. If not managed well, risk can result in financial loss, regulatory sanctions and penalties, litigation, and damage to our reputation, each of which may adversely impact our ability to execute our business strategies. We take a comprehensive approach to risk management with a defined Risk Framework and an articulated Risk Appetite Statement, which are approved annually by the Board’s Enterprise Risk Committee (ERC) and the Board.
The seven key types of risk faced by the Corporation are strategic, credit, market, liquidity, compliance, operational and reputational.
● Strategic risk is the risk to current or projected financial condition arising from incorrect assumptions about external or internal factors, inappropriate business plans, ineffective business strategy execution or failure to respond in a timely manner to changes in the regulatory, macroeconomic or competitive environments in the geographic locations in which we operate.
● Credit risk is the risk of loss arising from the inability or failure of a borrower or counterparty to meet its obligations.
● Market risk is the risk that changes in market conditions adversely impact the value of assets or liabilities or otherwise negatively impact earnings. Market risk is composed of price risk and interest rate risk.
● Liquidity risk is the risk of the inability to meet expected or unexpected cash flow and collateral needs while continuing to support our businesses and customers under a range of economic conditions.
● Compliance risk is the risk of legal action or regulatory sanctions, material financial loss or damage to the reputation of the Corporation arising from the failure of the Corporation to comply with the requirements of applicable laws, rules and regulations (LRRs) and our internal policies and procedures.
● Operational risk is the risk of loss resulting from inadequate or failed internal processes or systems, people or external events.
● Reputational risk is the risk that negative perception of the Corporation may materially impact its financial condition.
The following sections address in more detail the specific procedures, measures and analyses of the major categories of risk.
As set forth in our Risk Framework, a culture of managing risk well is fundamental to our values and our purpose, and how we drive Responsible Growth. It requires us to focus on risk in all activities and encourages the necessary mindset and behavior to enable effective risk management and promote sound risk-taking within our risk appetite. Sustaining a culture of managing risk well throughout the organization is critical to the success of the Corporation and is a clear expectation of our executive management team and the Board.
Our Risk Framework serves as the foundation for the consistent and effective management of risks facing the Corporation. The Risk Framework sets forth roles and responsibilities for the management of risk and provides a blueprint for how the Board, through delegation of authority to committees and executive officers, establishes risk appetite and associated limits for our activities.
Executive management assesses, with Board oversight, the risk-adjusted returns of each business. Management reviews and approves the strategic and financial operating plans, as well as the capital plan and Risk Appetite Statement, and recommends them annually to the Board for approval. Our strategic plan takes into consideration return objectives and financial resources, which must align with risk capacity and risk appetite. Management sets financial objectives for each business by allocating capital and setting a target for return on capital for each business. Capital allocations are regularly evaluated as part of our overall governance processes as the businesses and the economic environment in which we operate continue to evolve. For more information regarding capital allocations, see Business Segment Operations on page 36.
The Corporation’s risk appetite indicates the amount of capital, earnings or liquidity we are willing to put at risk to achieve our strategic objectives and business plans, consistent with applicable regulatory requirements. It also provides a common framework that includes a set of measures to assist senior management and the Board in assessing the Corporation’s risk profile across all risk types against our risk appetite and risk capacity. Our risk appetite is formally articulated in the Risk Appetite Statement, which includes both qualitative statements and quantitative limits.
Our overall capacity to take risk is limited. Accordingly, we prioritize the risks we take in order to maintain a strong and flexible financial position so we can weather challenging economic times and take advantage of organic growth opportunities while complying with all applicable regulatory requirements. Therefore, we set objectives and targets for capital and liquidity that permit us to continue to operate in a safe and sound manner at all times, including during periods of stress. We also maintain strong operational risk management and operational resiliency capabilities so we can meet the expectations of our customers and clients through a range of operating conditions.
Our lines of business operate with risk limits that align with the Corporation’s risk appetite. Management is responsible for tracking and reporting performance measurements as well as any breaches or exceptions to risk appetite limits. The Board, and its committees when appropriate, oversee financial performance, execution of the strategic and financial operating plans, adherence to risk appetite limits and the adequacy of internal controls.
For a more detailed discussion of our risk management activities, see the discussion below and pages 48 through 83.
Risk Management Governance
The Risk Framework describes delegations of authority whereby the Board and its committees may delegate authority to management-level committees or executive officers. Such delegations may authorize certain decision-making and approval functions, which may be evidenced in documents such as committee charters, job descriptions, meeting minutes and resolutions.
The chart below illustrates the interrelationship among the Board, Board committees and management committees that have the majority of risk oversight responsibilities for the Corporation.
45 Bank of America
Board of Directors and Board Committees
The Board is composed of 14 directors, all but one of whom are independent. The Board oversees management’s establishment of an effective Risk Framework and oversees compliance with safe and sound banking practices. In addition, the Board and its committees make inquiries of, and receive reports from senior management on, risk-related matters to assess scope or resource limitations that could impede the ability of Global Risk Management (GRM) and/or Corporate Audit to execute their responsibilities. The Audit and Enterprise Risk Committees discussed below have the principal responsibility for enterprise-wide oversight of our risk management activities. Through these responsibilities, the Board and applicable committees are provided with information on our risk profile and oversee senior management addressing key risks we face. Other Board committees, as described below, provide additional oversight of specific risks.
The Audit and Enterprise Risk Committees regularly report to the Board on risk-related matters within the committees’ responsibilities, which are intended to collectively provide the Board with integrated insight about the Corporation’s risk profile and our management of enterprise-wide risks.
Audit Committee
The Audit Committee provides risk assessment and management oversight for compliance risk pursuant to New York Stock Exchange listing standards and regularly receives updates from management on compliance risk-related matters. In addition, the Audit Committee oversees the qualifications, performance and independence of the Independent Registered Public Accounting Firm, the performance of our Corporate Audit function, the integrity of our consolidated financial statements, our compliance with legal and regulatory requirements, and makes inquiries of the Chief Audit Executive (CAE) or other senior management to determine whether there are scope or resource limitations that impede the ability of Corporate Audit to execute its responsibilities.
Enterprise Risk Committee
The ERC oversees the Corporation’s Risk Framework, risk appetite and senior management’s identification, measurement, monitoring and control of key risks facing the Corporation. The
ERC regularly receives risk management updates from management on key risks and selected risk topics, including emerging risks. The ERC also periodically reviews the adequacy of the resources of the Corporation’s independent GRM function. The ERC may consult with other Board committees on risk-related matters such as the Audit Committee for compliance risks.
Other Board Committees
Our Corporate Governance Committee oversees corporate governance matters, including periodically reviewing and making recommendations to the Board on Board succession planning and composition matters, conducting an annual review of the Board’s performance and leading itself and the Board’s other committees in an annual assessment of their performance. The committee also oversees sustainability matters (other than human capital matters), including the Corporation’s public policy engagement, sustainability initiatives, charitable contributions, and community reinvestment activities and performance.
Our Compensation and Human Capital Committee oversees establishing, maintaining and administering our compensation programs and employee benefit plans, including approving and recommending our Chief Executive Officer’s (CEO) compensation to our Board for further approval by all independent directors; reviewing and approving our executive officers’ compensation, as well as compensation for non-management directors; and reviewing certain other human capital management topics.
Management Committees
Management committees receive their authority from the Board, a Board committee, or another management committee. Our primary management risk committee is the MRC. Subject to Board oversight, the MRC is responsible for management oversight of key risks facing the Corporation, including an integrated evaluation of risk, earnings, capital and liquidity.
Executive Officers
Executive officers lead various functions representing the functional roles. Authority for functional roles may be delegated to executive officers from the Board, Board committees or management-level committees. Executive officers, in turn, may further delegate responsibilities, as appropriate, to management-level committees, management routines or
Bank of America 46
individuals. Executive officers review our activities for consistency with our Risk Framework, risk appetite, and applicable strategic, capital and financial operating plans, as well as applicable policies and standards. Executive officers and other employees make decisions individually on a day-to-day basis, consistent with the authority they have been delegated. Executive officers and other employees may also serve on committees and participate in committee decisions.
Lines of Defense
We have clear ownership and accountability for managing risk across three lines of defense: Front Line Units (FLUs), GRM and Corporate Audit. We also have control functions outside of FLUs and GRM (e.g., Legal and Public Policy, and Chief People Organization). The three lines of defense are integrated into our management-level governance structure. Each of these functional roles is further described in this section.
Front Line Units and Control Functions
FLUs, which include the business segments and underlying businesses, as well as the organizations that support technology and operations for the Corporation, are responsible for appropriately assessing and effectively managing all of the risks associated with their activities. Control functions provide guidance and subject matter expertise on day-to-day activities affecting the Corporation, as well as by overseeing and managing risks that emanate from their own respective activities.
Global Risk Management
GRM is part of our control functions and operates as our independent risk management function. GRM, led by the Chief Risk Officer (CRO), is responsible for independently assessing and overseeing risks within FLUs and other control functions. GRM establishes written enterprise policies and procedures outlining how aggregate risks are identified, measured, monitored and controlled.
The CRO has the stature, authority and independence needed to develop and implement a meaningful risk management framework and practices to guide the Corporation in managing risk. The CRO has unrestricted access to the Board and reports directly to both the ERC and the CEO. GRM is organized into horizontal risk teams that cover a specific risk area and vertical CRO teams that cover a particular FLU or control function. These teams work collaboratively in executing their respective duties.
Corporate Audit
Corporate Audit and the CAE maintain their independence from the FLUs, GRM and other control functions by reporting directly to the Audit Committee. The CAE administratively reports to the CEO. Corporate Audit provides independent assessment and validation through testing of key processes and controls across the Corporation. Corporate Audit includes Credit Review, which provides an independent assessment of credit lending decisions and the effectiveness of credit processes across the Corporation’s credit platform through examinations and monitoring.
Risk Management Processes
The Risk Framework requires that strong risk management practices are integrated in key strategic, capital and financial planning processes and in day-to-day business processes across the Corporation, thereby ensuring risks are appropriately considered, evaluated and responded to in a timely manner. We employ an effective risk management process, referred to as
Identify, Measure, Monitor and Control, as part of our daily activities.
Identify– To be effectively managed, risks must be proactively identified and well understood. Proper risk identification focuses on recognizing and understanding key risks inherent in our business activities or key risks that may arise from external factors. Each employee is expected to identify and escalate risks promptly. Risk identification is an ongoing process that incorporates input from FLUs and control functions. It is designed to be forward-looking and to capture relevant risk factors across all of our lines of business.
Measure– Once a risk is identified, it must be prioritized and accurately measured through a systematic process including qualitative statements and quantitative limits. Risk is measured at various levels, including, but not limited to, risk type, FLU and legal entity, and also on an aggregate basis. This risk measurement process helps to capture changes in our risk profile due to changes in strategic direction, concentrations, portfolio quality and the overall economic environment. Senior management considers how risk exposures might evolve under a variety of stress scenarios.
Monitor– We monitor risk levels regularly to track adherence to risk appetite, policies and standards. We also regularly update risk assessments and review risk exposures. Through our monitoring, we know our level of risk relative to limits and can take action in a timely manner. We also know when risk limits are breached and have processes to appropriately report and escalate exceptions. This includes timely requests for approval to managers and alerts to executive management, management-level committees or the Board (directly or through an appropriate committee).
Control – We establish and communicate risk limits and controls through policies, standards, procedures and processes. The limits and controls can be adjusted by senior management or the Board when conditions or risk tolerances warrant. These limits may be absolute (e.g., loan amount, trading volume, operational loss) or relative (e.g., percentage of loan book in higher-risk categories). Our FLUs are held accountable for performing within the established limits.
The formal processes used to manage risk represent a part of our overall risk management process. We instill a strong and comprehensive culture of managing risk well through communications, training, policies, procedures and organizational roles and responsibilities. Establishing a culture reflective of our purpose to help make our customers’ financial lives better and delivering on Responsible Growth is also critical to effective risk management. We are committed to the highest principles of ethical and professional conduct. Conduct risk is the risk of improper actions, behaviors or practices by the Corporation, its employees or representatives that are illegal, unethical and/or contrary to our core values that could result in harm to the Corporation, our shareholders or our customers, damage the integrity of the financial markets, or negatively impact our reputation. We have established protocols and structures so that conduct risk is governed and reported across the Corporation appropriately. All employees are held accountable for adhering to the Code of Conduct, operating within our risk appetite and managing risk in their daily business activities. In addition, our performance management and compensation practices encourage responsible risk-taking that is consistent with our Risk Framework and risk appetite.
47 Bank of America
Corporation-wide Stress Testing
Integral to our Capital Planning, Financial Planning and Strategic Planning processes, we conduct capital scenario management and stress forecasting on a regular basis to better understand balance sheet, earnings and capital sensitivities to a wide range of economic and business scenarios, including economic and market conditions that are more severe than anticipated. These stress forecasts provide an understanding of the potential impacts from our risk profile on the balance sheet, earnings and capital, and serve as a key component of our capital and risk management practices. The intent of stress testing is to develop a comprehensive understanding of potential impacts of on- and off-balance sheet risks at the Corporation and certain subsidiaries and how they impact financial resiliency, which provides confidence to management, regulators and our investors.
Contingency Planning
We have developed and maintain comprehensive contingency plans that are designed to prepare us in advance to respond in the event of potential adverse economic, operational, financial or market stress conditions. These contingency plans include our Financial Contingency and Recovery Plan, which provides monitoring, escalation, actions and routines designed to enable us to increase capital and/or liquidity, access funding sources and reduce risk through consideration of potential options that include asset sales, business sales, capital or debt issuances, and other risk reducing strategies at various levels of capital or liquidity depletion during a period of stress. We also maintain a Resolution Plan to limit adverse systemic impacts that could be associated with a potential resolution of Bank of America.
Strategic Risk Management
Strategic risk is embedded in every business and is one of the major risk categories along with credit, market, liquidity, compliance, operational and reputational risks. This risk results from incorrect assumptions about external or internal factors, inappropriate business plans, ineffective business strategy execution, or failure to respond in a timely manner to changes in the regulatory, macroeconomic or competitive environments in the geographic locations in which we operate (e.g., competitor actions, changing customer preferences, product obsolescence and technology developments).
An aspect of strategic risk is the risk that the Corporation’s capital levels are not adequate to meet minimum regulatory requirements and support execution of business activities or absorb losses from risks during normal or adverse economic and market conditions. As such, capital risk is managed in parallel to strategic risk.
We manage strategic risk through the Strategic Risk Enterprise Policy and integration into the strategic planning process, among other activities. Our strategic plan is consistent with our risk appetite, capital plan and liquidity requirements, and specifically addresses strategic risks impacting each business.
On an annual basis, the Board reviews and approves the strategic plan, capital plan, financial operating plan and Risk Appetite Statement. With oversight by the Board, senior management directs the lines of business to execute our strategic plan consistent with our core operating principles and risk appetite. The executive management team monitors business performance throughout the year and provides the Board with regular progress reports on whether strategic objectives and timelines are being met, including reports on strategic risks and if additional or alternative actions need to be
considered or implemented. The regular executive reviews focus on assessing forecasted earnings and returns on capital, the current risk profile, current capital and liquidity positions and related requirements, staffing levels and changes required to support the strategic plan, stress testing results, and other qualitative factors such as market growth rates and peer analysis.
Significant strategic actions, such as capital actions, material acquisitions or divestitures, and resolution plans are reviewed and approved by the Board or delegate. At the business level, processes are in place to discuss the strategic risk implications of new, expanded or modified businesses, products or services, regulatory change and other strategic initiatives, and to provide formal review and approval where required. With oversight by the Board and the ERC, executive management performs similar analyses throughout the year, and evaluates changes to the financial forecast or the risk, capital or liquidity positions as deemed appropriate to balance and optimize achieving the targeted risk appetite, shareholder returns and maintaining the targeted financial strength. Proprietary models are used to measure the capital requirements for credit, country, market, operational and strategic risks. The allocated capital assigned to each business is based on its unique risk profile. With oversight by the Board, executive management assesses the risk-adjusted returns of each business in approving strategic and financial operating plans. The businesses use allocated capital to define business strategies, and price products and transactions.
Capital Management
The Corporation manages its capital position so that its capital is more than adequate to support its business activities and aligns with risk, risk appetite and strategic planning. Additionally, we seek to maintain safety and soundness at all times, even under adverse scenarios, take advantage of organic growth opportunities, meet obligations to creditors and counterparties, maintain ready access to financial markets, continue to serve as a credit intermediary, remain a source of strength for our subsidiaries, and satisfy current and future regulatory capital requirements. Capital management is integrated into our risk and governance processes, as capital is a key consideration in the development of our strategic plan, risk appetite and risk limits.
We conduct an Internal Capital Adequacy Assessment Process (ICAAP) on a periodic basis. The ICAAP is a forward-looking assessment of our projected capital needs and resources, incorporating earnings, balance sheet and risk forecasts under baseline and adverse economic and market conditions. We utilize periodic stress tests to assess the potential impacts to our balance sheet, earnings, regulatory capital and liquidity under a variety of stress scenarios. We perform qualitative risk assessments to identify and assess material risks not fully captured in our forecasts or stress tests. We assess the potential capital impacts of proposed changes to regulatory capital requirements. Management assesses ICAAP results and provides documented quarterly assessments of the adequacy of our capital guidelines and capital position to the Board or its committees.
We periodically review capital allocated to our businesses and allocate capital annually during the strategic and capital planning processes. For more information, see Business Segment Operations on page 36.
Bank of America 48
CCAR and Capital Planning
The Board of Governors of the Federal Reserve System (Federal Reserve) requires large BHCs to submit a capital plan and planned capital actions on an annual basis, consistent with the rules governing capital planning and the stress capital buffer (SCB) requirement, which include supervisory stress testing by the Federal Reserve. Based on the results of our 2025 Comprehensive Capital Analysis and Review (CCAR) stress test under the current regulatory framework, our SCB is 2.5 percent, resulting in a Common equity tier 1 (CET1) minimum requirement of 10.0 percent, effective October 1, 2025. At December 31, 2025, the Corporation’s CET1 capital ratio was 11.4 percent under the Standardized approach. As part of the Federal Reserve’s release of 2026 hypothetical stress test scenarios, the Federal Reserve announced the Corporation’s SCB will remain 2.5 percent through September 30, 2027. For more information, see Regulatory Developments in this section.
On July 24, 2024, the Corporation announced the Board’s authorization of a $25 billion common stock repurchase program, effective August 1, 2024 (2024 Repurchase Program), which replaced the Corporation’s previous repurchase program that expired on August 1, 2024. In addition, on July 23, 2025, the Corporation announced the Board’s authorization of a $40 billion common stock repurchase program, effective August 1, 2025, which replaced the 2024 Repurchase Program that expired on the same date. Pursuant to these Board-authorized repurchase programs, during 2025, the Corporation repurchased $21.4 billion of common stock. For more information, see Part II, Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities on page 24.
The timing and amount of common stock repurchases are subject to various factors, including the Corporation’s capital position, liquidity, financial performance and alternative uses of capital, stock trading price, regulatory requirements and general market conditions, and may be suspended or discontinued at any time. Such repurchases may be effected through open market purchases or privately negotiated transactions, including repurchase plans that satisfy the conditions of Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (Exchange Act).
Further, as part of our planned capital actions, during 2025, the Corporation paid common stock dividends of $8.1 billion.
Regulatory Capital
As a BHC, we are subject to regulatory capital rules, including Basel 3, issued by U.S. banking regulators. Basel 3 established minimum capital ratios and buffer requirements and outlined two methods of calculating risk-weighted assets (RWA), the Standardized approach and the Advanced approaches. The Standardized approach relies primarily on supervisory risk weights based on exposure type, and the Advanced approaches determine risk weights based on internal models.
The Corporation's depository institution subsidiaries are also subject to the Prompt Corrective Action (PCA) framework. The Corporation and its primary affiliated banking entity, BANA, are Advanced approaches institutions under Basel 3 and are required to report regulatory risk-based capital ratios and RWA under both the Standardized and Advanced approaches. The lower of the capital ratios under Standardized or Advanced approaches compared to their respective regulatory capital ratio requirements is used to assess capital adequacy, including under the PCA framework. As of December 31, 2025, the Corporation’s binding ratio was the Total capital ratio under the Standardized approach.
Minimum Capital Requirements
In order to avoid restrictions on capital distributions and discretionary bonus payments to executive officers, the Corporation must meet risk-based capital ratio requirements that include a capital conservation buffer of 2.5 percent (under the Advanced approaches only), an SCB (under the Standardized approach only), plus any applicable countercyclical capital buffer and a global systemically important bank (G-SIB) surcharge. The buffers and surcharge must be comprised solely of CET1 capital. For the period from October 1, 2024 through September 30, 2025, the Corporation’s minimum CET1 ratio requirements were 10.7 percent under the Standardized approach and 10.0 percent under the Advanced approaches. Effective October 1, 2025, the Corporation’s minimum CET1 requirement was 10.0 percent under both the Standardized approach and the Advanced approaches.
The Corporation is required to calculate its G-SIB surcharge on an annual basis under two methods and is subject to the higher of the resulting two surcharges. Method 1 is consistent with the approach prescribed by the Basel Committee on Banking Supervision’s assessment methodology and is calculated using specified indicators of systemic importance. Method 2 modifies the Method 1 approach for various factors. The Corporation’s Method 1 G-SIB surcharge is 1.5 percent, and its Method 2 G-SIB surcharge is 3.0 percent. On January 1, 2027, the Corporation’s G-SIB surcharge will increase by 50 bps to 2.0 percent under Method 1 and to 3.5 percent under Method 2, which will increase the Corporation’s minimum capital ratio requirements. At December 31, 2025, the Corporation’s CET1 capital ratio of 11.4 percent under the Standardized approach exceeded its minimum CET1 capital ratio requirement of 10.0 percent.
At December 31, 2025, the Corporation was also required to maintain a minimum supplementary leverage ratio (SLR) of 3.0 percent plus a leverage buffer of 2.0 percent in order to avoid certain restrictions on capital distributions and discretionary bonus payments to executive officers. Our insured depository institution subsidiaries were required to maintain a minimum SLR of 6.0 percent to be considered well capitalized under the PCA framework. At December 31, 2025, both the Corporation and its insured depository institution subsidiaries exceeded their minimum supplementary leverage requirements. Effective January 1, 2026, the minimum SLR requirement for the Corporation and its insured depository institutions is 3.75 percent. For more information, see Regulatory Developments in this section. The numerator of the SLR is quarter-end Basel 3 Tier 1 capital. The denominator is total leverage exposure based on the daily average of the sum of on-balance sheet exposures less permitted deductions and the simple average of certain off-balance sheet exposures, as of the end of each month in a quarter.
Capital Composition and Ratios
Effective in the fourth quarter of 2025, the Corporation elected to change its accounting methods related to certain tax-related equity investments and applied those changes retrospectively through a cumulative adjustment to retained earnings. For more information, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements. Under applicable bank regulatory rules, the Corporation is not required to, and accordingly, did not revise regulatory capital information as of December 31, 2024.
49 Bank of America
Table 10 presents Bank of America Corporation’s capital ratios and related information in accordance with Basel 3 Standardized and Advanced approaches as measured at December 31, 2025 and 2024. For the periods presented herein, the Corporation met the definition of well capitalized under current regulatory requirements.
Table 10 Bank of America Corporation Regulatory Capital under Basel 3
StandardizedApproach (1, 2) AdvancedApproaches (1, 2) RegulatoryMinimum (3)
(Dollars in millions, except as noted) December 31, 2025
Risk-based capital metrics:
Risk-weighted assets (in billions) 1,773 1,570
Common equity tier 1 capital ratio 11.4 % 12.8 % 10.0 %
Leverage-based metrics:
Adjusted quarterly average assets (in billions) (5) $ 3,348 $ 3,348
Tier 1 leverage ratio 6.8 % 6.8 % 4.0
Supplementary leverage exposure (in billions) $ 3,986
Supplementary leverage ratio 5.7 % 5.0
Risk-based capital metrics:
Risk-weighted assets (in billions) 1,696 1,490
Common equity tier 1 capital ratio 11.9 % 13.5 % 10.7 %
Leverage-based metrics:
Adjusted quarterly average assets (in billions) (5) $ 3,240 $ 3,240
Tier 1 leverage ratio 6.9 % 6.9 % 4.0
Supplementary leverage exposure (in billions) $ 3,818
Supplementary leverage ratio 5.9 % 5.0
(1)As of January 1, 2025, current expected credit losses (CECL) transition provision’s impact was fully phased-in. Capital ratios as of December 31, 2024 were calculated using the regulatory capital rule that allowed a five-year transition period related to the adoption of the CECL accounting standard on January 1, 2020.
(2)Effective in the fourth quarter of 2025, the Corporation elected to change its accounting methods for certain tax-related equity investments and applied those changes retrospectively through cumulative adjustment to retained earnings. Under applicable bank regulatory rules, the Corporation is not required to revise previously-filed regulatory capital ratios and, accordingly, did not revise regulatory capital information as of December 31, 2024.
(3)The CET1 capital regulatory minimum is the sum of the CET1 capital ratio minimum of 4.5 percent, our G-SIB surcharge of 3.0 percent, and SCB (under the Standardized approach) of 2.5 percent at December 31, 2025 and 3.2 percent at December 31, 2024. The countercyclical capital buffer was zero for both periods. The SLR regulatory minimum includes a leverage buffer of 2.0 percent.
(4)Total capital under the Advanced approaches differs from the Standardized approach due to differences in the amount permitted in Tier 2 capital related to the qualifying allowance for credit losses.
(5)Reflects total average assets adjusted for certain Tier 1 capital deductions.
At December 31, 2025, CET1 capital was $201.4 billion, an increase of $327 million from December 31, 2024, primarily due to earnings, largely offset by capital distributions and, to a lesser extent, the impact of the tax-related equity investments accounting changes. Tier 1 capital increased $3.9 billion driven by the same factors as CET1 capital as well as preferred stock issuances. Total capital under the Standardized approach increased $5.9 billion driven by the same factors as Tier 1
capital, as well as subordinated debt issuances and an increase in the adjusted allowance for credit losses included in Tier 2 capital. RWA under the Standardized approach, which drove the lower CET1 capital ratio at December 31, 2025, increased $77.2 billion during 2025 to $1,773 billion primarily driven by lending activity in GWIM, Global Banking and Global Markets. Supplementary leverage exposure at December 31, 2025 increased $167.7 billion primarily driven by increased activity in Global Markets.
Bank of America 50
Table 11 shows the capital composition at December 31, 2025 and 2024.
Table 11 Capital Composition under Basel 3
December 31
Impact of change in accounting method (1) — 1,596
CECL transitional amount (2) — 627
Goodwill, net of related deferred tax liabilities (68,651) (68,649)
Defined benefit pension plan net assets (868) (786)
Accumulated net (gain) loss on certain cash flow hedges (3) 2,020 5,629
Qualifying preferred stock, net of issuance cost 25,991 22,391
Qualifying allowance for credit losses (2) 14,431 13,558
Total capital under the Standardized approach 261,232 255,363
Total capital under the Advanced approaches $ 250,347 $ 244,809
(1)Represents the decrease in retained earnings due to the Corporation’s election to change its accounting methods for certain tax-related equity investments in the fourth quarter of 2025. Under applicable bank regulatory rules, the Corporation is not required to revise previously-filed regulatory capital ratios and, accordingly, did not revise regulatory capital information as of December 31, 2024.
(2)The qualifying allowance for credit losses under the Standardized approach and under the Advanced approaches include the impact of transition provisions related to the CECL accounting standard. As of January 1, 2025, CECL transition provision’s impact was fully phased-in. December 31, 2024 includes 25 percent of the CECL transition provision’s impact as of December 31, 2021.
(3)Includes amounts in accumulated OCI related to the hedging of items that are not recognized at fair value on the Consolidated Balance Sheet.
Table 12 shows the components of RWA as measured under Basel 3 at December 31, 2025 and 2024.
Table 12 Risk-weighted Assets under Basel 3
December 31
Operational risk n/a 357 n/a 359
Risks related to credit valuation adjustments n/a 47 n/a 43
(1)Effective October 1, 2025, the Corporation elected to change its accounting methods for certain tax-related equity investments and applied those changes retrospectively. Under applicable bank regulatory rules, the Corporation is not required to revise previously-filed regulatory capital ratios and, accordingly, did not revise regulatory capital information as of December 31, 2024.
n/a = not applicable
51 Bank of America
Bank of America, N.A. Regulatory Capital
Table 13 presents regulatory capital information for BANA in accordance with Basel 3 Standardized and Advanced approaches as measured at December 31, 2025 and 2024. BANA met the definition of well capitalized under the PCA framework for both periods.
Table 13 Bank of America, N.A. Regulatory Capital under Basel 3
StandardizedApproach (1, 2) AdvancedApproaches (1, 2) RegulatoryMinimum (3)
(Dollars in millions, except as noted) December 31, 2025
Risk-based capital metrics:
Risk-weighted assets (in billions) 1,530 1,227
Common equity tier 1 capital ratio 12.5 % 15.6 % 7.0 %
Leverage-based metrics:
Adjusted quarterly average assets (in billions) (5) $ 2,592 $ 2,592
Tier 1 leverage ratio 7.4 % 7.4 % 5.0
Supplementary leverage exposure (in billions) $ 3,101
Supplementary leverage ratio 6.2 % 6.0
Risk-based capital metrics:
Risk-weighted assets (in billions) 1,444 1,151
Common equity tier 1 capital ratio 13.5 % 16.9 % 7.0 %
Leverage-based metrics:
Adjusted quarterly average assets (in billions) (5) $ 2,546 $ 2,546
Tier 1 leverage ratio 7.6 % 7.6 % 5.0
Supplementary leverage exposure (in billions) $ 3,015
Supplementary leverage ratio 6.4 % 6.0
(1)As of January 1, 2025, CECL transition provision’s impact was fully phased-in. Capital ratios as of December 31, 2024 were calculated using the regulatory capital rule that allowed a five-year transition period related to the adoption of the CECL accounting standard on January 1, 2020.
(2)Effective in the fourth quarter of 2025, the Corporation elected to change its accounting methods for certain tax-related equity investments and applied those changes retrospectively through cumulative adjustment to retained earnings. Under applicable bank regulatory rules, the Corporation is not required to revise previously-filed regulatory capital ratios and, accordingly, did not revise regulatory capital information as of December 31, 2024.
(3)Risk-based capital regulatory minimums at both December 31, 2025 and 2024 are the minimum ratios under Basel 3 including a capital conservation buffer of 2.5 percent. The regulatory minimums for the leverage ratios as of both period ends are the percent required to be considered well capitalized under the PCA framework.
(4)Total capital under the Advanced approaches differs from the Standardized approach due to differences in the amount permitted in Tier 2 capital related to the qualifying allowance for credit losses.
(5)Reflects total average assets adjusted for certain Tier 1 capital deductions.
Total Loss-Absorbing Capacity Requirements
Total loss-absorbing capacity (TLAC) consists of the Corporation’s Tier 1 capital and eligible long-term debt issued directly by the Corporation. Eligible long-term debt for TLAC ratios is comprised of unsecured debt that has a remaining maturity of at least one year and satisfies additional requirements as prescribed in the TLAC final rule. As with the
risk-based capital ratios and SLR, the Corporation is required to maintain TLAC ratios in excess of minimum requirements plus applicable buffers to avoid restrictions on capital distributions and discretionary bonus payments to executive officers. Table 14 presents the Corporation's TLAC and long-term debt ratios and related information as of December 31, 2025 and 2024.
Bank of America 52
TLAC (1) Regulatory Minimum (2) Long-term Debt Regulatory Minimum (3)
(Dollars in millions) December 31, 2025
Percentage of risk-weighted assets (4) 26.3 % 22.0 % 12.7 % 9.0 %
Percentage of supplementary leverage exposure 11.7 9.5 5.7 4.5
Percentage of risk-weighted assets (4) 27.1 % 22.0 % 13.0 % 9.0 %
Percentage of supplementary leverage exposure 12.0 9.5 5.8 4.5
(1)As of January 1, 2025, CECL transition provision’s impact was fully phased-in. TLAC ratios as of December 31, 2024 were calculated using the regulatory capital rule that allowed a five-year transition period related to the adoption of the CECL accounting standard on January 1, 2020.
(2)The TLAC RWA regulatory minimum consists of 18.0 percent plus a TLAC RWA buffer comprised of 2.5 percent plus the Method 1 G-SIB surcharge of 1.5 percent. The countercyclical buffer is zero for both periods. The TLAC supplementary leverage exposure regulatory minimum consists of 7.5 percent plus a 2.0 percent TLAC leverage buffer. The TLAC RWA and leverage buffers must be comprised solely of CET1 capital and Tier 1 capital, respectively.
(3)The long-term debt RWA regulatory minimum is comprised of 6.0 percent plus the Corporation’s Method 2 G-SIB surcharge of 3.0 percent. The long-term debt leverage exposure regulatory minimum is 4.5 percent.
(4)The approach that yields the higher RWA is used to calculate TLAC and long-term debt ratios, which was the Standardized approach as of December 31, 2025 and 2024.
Regulatory Developments
On November 25, 2025, the Federal Reserve, Office of the Comptroller of the Currency and FDIC issued a final rule that modified enhanced SLR requirements for bank holding companies and their insured depository institution subsidiaries, with corresponding revisions to TLAC and long-term debt requirements. Under the final rule, static buffer requirements have been replaced with a dynamic buffer requirement equal to 50 percent of the G-SIB’s Method 1 surcharge, with the buffer capped at one percent for insured depository institutions. The Corporation elected to early adopt the final rule as of January 1, 2026, which decreased the regulatory minimum SLR requirement to 3.75 percent from 5.0 percent for the Corporation, and to 3.75 percent from 6.0 percent for BANA as of the same date. For more information on the Corporation’s Method 1 and Method 2 G-SIB surcharge, see Minimum Capital Requirements in this section.
On October 24, 2025, the Federal Reserve issued two notices of proposed rulemaking (NPRs) related to its annual stress test. The first NPR requested comment on the hypothetical scenarios that will be used in the 2026 supervisory stress test. The Federal Reserve released these scenarios on February 4, 2026. The second NPR requests comment on the models the Federal Reserve uses to conduct the supervisory stress test. This NPR also outlines proposed changes to the broader stress testing framework and codifies an enhanced disclosure process under which the Federal Reserve would annually publish and invite public comment on stress test scenarios, models and material changes to those models.
On April 17, 2025, the Federal Reserve issued an NPR to modify the capital plan rule and SCB requirements. Under this NPR, results from the two most recent annual supervisory stress tests would be averaged to determine the Corporation’s SCB requirement. In addition, the annual effective date of the SCB requirement would change from October 1st of the current year to January 1st of the following year, providing banks with additional time to comply with their new capital requirements.
Regulatory Capital and Securities Regulation
The Corporation’s principal U.S. broker-dealer subsidiaries are BofA Securities, Inc. (BofAS) and Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S). The Corporation's principal European subsidiaries undertaking broker-dealer activities are Merrill Lynch International (MLI) and BofA Securities Europe SA (BofASE).
The U.S. broker-dealer subsidiaries are subject to the net capital requirements of Rule 15c3-1 under the Exchange Act. BofAS computes its capital requirements as an alternative net capital broker-dealer under Rule 15c3-1(a)(7) and Rule 15c3-1e, which permit the use of SEC-approved models, and MLPF&S computes its capital requirements in accordance with the alternative standard under Rule 15c3-1. BofAS is registered as a futures commission merchant and is subject to Commodity Futures Trading Commission (CFTC) Regulation 1.17. The U.S. broker-dealer subsidiaries are also registered with the Financial Industry Regulatory Authority, Inc. (FINRA). Pursuant to FINRA Rule 4110, FINRA may impose higher net capital requirements than Rule 15c3-1 under the Exchange Act with respect to each of the broker-dealers.
BofAS provides institutional services, and in accordance with the alternative net capital requirements, is required to regularly maintain tentative net capital in excess of $5.0 billion and net capital in excess of the greater of $1.0 billion or a certain percentage of its reserve requirement in addition to a certain percentage of securities-based swap risk margin. BofAS must also notify the SEC in the event its tentative net capital is less than $6.0 billion. BofAS is also required to hold a certain percentage of its customers' and affiliates' risk-based margin in order to meet its CFTC minimum net capital requirement. At December 31, 2025, BofAS had tentative net capital of $28.2 billion. BofAS also had regulatory net capital of $23.0 billion, which exceeded the minimum requirement of $5.1 billion.
MLPF&S provides retail services and is required to maintain net capital that is the greater of $250,000 or two percent of a certain component of its reserve calculation. At December 31, 2025, MLPF&S' regulatory net capital was $8.1 billion, which exceeded the minimum requirement of $175 million.
Our European broker-dealers are subject to requirements from U.S. and non-U.S. regulators. MLI, a U.K. investment firm, is regulated by the Prudential Regulation Authority and the Financial Conduct Authority and is subject to certain regulatory capital requirements. At December 31, 2025, MLI’s capital resources were $33.4 billion, which exceeded the minimum Pillar 1 requirement of $13.2 billion.
BofASE, an authorized credit institution with its head office located in France, is regulated by the Autorité de Contrôle Prudentiel et de Résolution and the Autorité des Marchés Financiers, and supervised under the Single Supervisory Mechanism by the European Central Bank. At December 31, 2025, BofASE's capital resources were $11.8 billion, which exceeded the minimum Pillar 1 requirement of $4.0 billion.
53 Bank of America
In addition, MLI and BofASE remained conditionally registered with the SEC as security-based swap dealers, and maintained net liquid assets at December 31, 2025 that exceeded the applicable minimum requirements under the Exchange Act. The entities are also registered as swap dealers with the CFTC and met applicable capital requirements at December 31, 2025.
Liquidity Risk
Funding and Liquidity Risk Management
Our primary liquidity risk management objective is to meet expected or unexpected cash flow and collateral requirements, including payments under long-term debt agreements, commitments to extend credit and customer deposit withdrawals, while continuing to support our businesses and customers under a range of economic conditions. To achieve that objective, we analyze and monitor our liquidity risk under expected and stressed conditions, maintain liquidity and access to diverse funding sources, including our stable deposit base, and seek to align liquidity-related incentives and risks. These liquidity risk management practices have allowed us to effectively manage market fluctuations from the elevated interest rate environment, inflationary pressures and changes in the macroeconomic environment.
We define liquidity as readily available assets, limited to cash and high-quality, liquid, unencumbered securities that we can use to meet our contractual and contingent financial obligations as they arise. We manage our liquidity position through line of business and ALM activities, as well as through our legal entity funding strategy, on both a forward and current (including intraday) basis under both expected and stressed conditions. We believe that a centralized approach to funding and liquidity management enhances our ability to monitor liquidity requirements, maximizes access to funding sources, minimizes borrowing costs and facilitates timely responses to liquidity events.
We provide centralized funding and liquidity management through a variety of activities, including monitoring of established limits, assessing exposures under both normal and stressed conditions and reviewing liquidity risk management processes and controls. GRM provides oversight of liquidity management across the Corporation, including FLUs and legal entities. GRM oversees the liquidity risk management governance structure, establishes liquidity risk policies, and provides independent review and challenge of the Corporation's liquidity risk management processes.
The Board, its risk committee and various management committees oversee the Corporation’s liquidity activities and risk governance. The Board and/or ERC approve our liquidity risk policy, Financial Contingency and Recovery Plan and liquidity risk appetite limits. Management committees responsible for liquidity governance include the Corporation’s Management Risk Committee, Asset and Liability Governance Committee, Liquidity Risk Committee and Asset and Liability Management Investment Committee. For more information, see Managing Risk on page 88. Under this governance framework, we developed certain funding and liquidity risk management practices which include: maintaining liquidity at Bank of America Corporation (Parent) and selected subsidiaries, including our bank subsidiaries and
other regulated entities; determining what amounts of liquidity are appropriate for these entities based on analysis of debt maturities and other potential cash outflows, including those that we may experience during stressed market conditions; diversifying funding sources, considering our asset profile and legal entity structure; and performing contingency planning.
NB Holdings Corporation
Bank of America Corporation, as the parent company (the Parent), which is a separate and distinct legal entity from our bank and nonbank subsidiaries, has an intercompany arrangement with our wholly-owned holding company subsidiary, NB Holdings Corporation (NB Holdings). We have transferred, and agreed to transfer, additional Parent assets not required to satisfy anticipated near-term expenditures to NB Holdings. The Parent is expected to continue to have access to the same flow of dividends, interest and other amounts of cash necessary to service its debt, pay dividends and perform other obligations as it would have had it not entered into these arrangements and transferred any assets. These arrangements support our preferred single point of entry resolution strategy, under which only the Parent would be resolved under the U.S. Bankruptcy Code.
In consideration for the transfer of assets, NB Holdings issued a subordinated note to the Parent in a principal amount equal to the value of the transferred assets. The aggregate principal amount of the note will increase by the amount of any future asset transfers. NB Holdings also provided the Parent with a committed line of credit that allows the Parent to draw funds necessary to service near-term cash needs. These arrangements support our preferred single point of entry resolution strategy, under which only the Parent would be resolved under the U.S. Bankruptcy Code. These arrangements include provisions to terminate the line of credit, forgive the subordinated note and require the Parent to transfer its remaining financial assets to NB Holdings if our projected liquidity resources deteriorate so severely that resolution of the Parent becomes imminent.
Global Liquidity Sources and Other Unencumbered Assets
We maintain liquidity available to the Corporation, including the Parent and selected subsidiaries, in the form of cash and high- quality, liquid, unencumbered securities. Our liquidity buffer, referred to as Global Liquidity Sources (GLS), is comprised of assets that are readily available to the Parent and selected subsidiaries, including holding company, bank and broker-dealer subsidiaries, even during stressed market conditions. Our cash is primarily on deposit with the Federal Reserve Bank and, to a lesser extent, central banks outside of the U.S. We limit the composition of high-quality, liquid, unencumbered securities to U.S. government securities, U.S. agency securities, U.S. agency mortgage-backed securities and other investment-grade securities, and a select group of non-U.S. government securities. We can obtain cash for these securities, even in stressed conditions, through repurchase agreements or outright sales. We hold our GLS in legal entities that allow us to meet the liquidity requirements of our global businesses, and we consider the impact of potential regulatory, tax, legal and other restrictions that could limit the transferability of funds among entities.
Bank of America 54
Table 15 presents average GLS for the three months ended December 31, 2025 and 2024.
Table 15 Average Global Liquidity Sources
Three Months EndedDecember 31
Nonbank and other entities (1) 186 176
Total Average Global Liquidity Sources $ 975 $ 953
(1) Nonbank includes Parent, NB Holdings and other regulated entities.
Our bank subsidiaries’ liquidity is primarily driven by deposit and lending activity, as well as securities valuation and net debt activity. Bank subsidiaries can also generate incremental liquidity by pledging a range of unencumbered loans and securities to certain FHLBs and the Federal Reserve Discount Window. The cash we could have obtained by borrowing against this pool of specifically-identified eligible assets was $343 billion and $328 billion at December 31, 2025 and 2024. We have established operational procedures to enable us to borrow against these assets, including regularly monitoring our total pool of eligible loans and securities collateral. Eligibility is defined in guidelines from the FHLBs and the Federal Reserve and is subject to change at their discretion. Due to regulatory restrictions, liquidity generated by the bank subsidiaries can generally be used only to fund obligations within the bank subsidiaries, and transfers to the Parent or nonbank subsidiaries may be subject to prior regulatory approval.
Liquidity is also held in nonbank entities, including the Parent, NB Holdings and other regulated entities. The Parent and NB Holdings liquidity is typically in the form of cash deposited at BANA, which is excluded from the liquidity at bank subsidiaries, and high-quality, liquid, unencumbered securities. Liquidity held in other regulated entities, comprised primarily of broker-dealer subsidiaries, is primarily available to meet the obligations of that entity, and transfers to the Parent or to any other subsidiary may be subject to prior regulatory approval due to regulatory restrictions and minimum requirements. Our other regulated entities also hold unencumbered investment-grade securities and equities that we believe could be used to generate additional liquidity.
Table 16 presents the composition of average GLS for the three months ended December 31, 2025 and 2024.
Table 16 Average Global Liquidity Sources Composition
Three Months EndedDecember 31
U.S. Treasury securities 371 313
Non-U.S. government securities 41 29