Bank of America Corp. · 10-Q · Item 2 MD&A

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Bank of America Corporation (the Corporation) and its management may make certain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as “anticipates,” “targets,” “expects,” “hopes,” “estimates,” “intends,” “plans,” “goals,” “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 business segments’ 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.

T1These statements are not guarantees of future results or performance and involve certain known and unknown risks, uncertainties and assumptions that are difficult to predict and are often beyond the Corporation’s control. Actual outcomes and results may differ materially from those expressed in, or implied by, any of these forward-looking statements.

You should not place undue reliance on any forward-looking statement and should consider the following uncertainties and risks, as well as the risks and uncertainties more fully discussed under Item 1A. Risk Factors of the Corporation’s 2025 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 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 a deterioration in private credit markets, 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, commodity prices, 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, 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

Bank of America 2

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 and the ability to achieve expected or potential benefits, such as increased productivity and cost savings; 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, including partial 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 and economic consequences), civil unrest, terrorism or other geopolitical events; and other matters.

Forward-looking statements speak only as of the date they are made, and the Corporation undertakes no obligation to update any forward-looking statement to reflect the impact of circumstances or events that arise after the date the forward-looking statement was made.

Notes to the Consolidated Financial Statements referred to in Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) are incorporated by reference into the MD&A. 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 June 30, 2026, the Corporation had $3.5 trillion in assets and a headcount of approximately 211,000 employees. As of June 30, 2026, 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 more than 69 million consumer and small business clients with approximately 3,500 retail financial centers, approximately 15,000 automated teller machines (ATMs), and leading digital banking platforms (www.bankofamerica.com) with approximately 50 million active users, including approximately 42 million active mobile users.

We offer industry-leading support to approximately four million small business households. Our GWIM businesses, with client balances of approximately $4.9 trillion, provide tailored solutions to meet client needs through a full set of investment management, brokerage, banking, trust and retirement products. We are a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world.

The Corporation’s website is www.bankofamerica.com, and the Investor Relations portion of our website is https://investor.bankofamerica.com. We use our website to distribute company information, including as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. We routinely post and make accessible financial and other information regarding the Corporation on our website. Investors should monitor our website, including the Investor Relations portion, in addition to our press releases, SEC filings, public conference calls and webcasts. Notwithstanding the foregoing, the information contained on our website as referenced in this paragraph is not incorporated by reference into this Quarterly Report on Form 10-Q.

Recent Developments

Capital Management

T2On July 23, 2026, the Corporation’s Board of Directors (Board) declared a quarterly common stock dividend of $0.32 per share, an increase of 14 percent compared to the prior quarterly dividend, payable on September 25, 2026 to shareholders of record as of September 4, 2026.

For more information on our capital resources, see Capital Management beginning on page 19.

3 Bank of America

Financial Highlights

Table 1

Summary Income Statement and Selected Financial Data

Three Months Ended June 30

Six Months Ended June 30

(Dollars in millions, except per share information)

Income statement

Net interest income

$

$

$

$

Noninterest income

Total revenue, net of interest expense

Provision for credit losses

Noninterest expense

Income before income taxes

Income tax expense

Net income

Preferred stock dividends and other

Net income applicable to common shareholders

$

$

$

$

Per common share information

Earnings

$

$

$

$

Diluted earnings

Dividends paid

Performance ratios

Return on average assets (1)

%

%

%

%

Return on average common shareholders’ equity (1)

Return on average tangible common shareholders’ equity (2)

Efficiency ratio (1)

Balance sheet

Total loans and leases

$

$

Total assets

Total deposits

Total liabilities

Total common shareholders’ equity

Total shareholders’ equity

(1)For definitions, see Key Metrics on page 101.

(2)Return on average tangible common shareholders’ equity is a non-GAAP financial measure. For more information and a corresponding reconciliation to the most directly comparable financial measures defined by accounting principles generally accepted in the United States of America (GAAP), see Non-GAAP Reconciliations on page 46.

Net income was $9.1 billion and $17.7 billion, or $1.21 and $2.31 per diluted share, for the three and six months ended June 30, 2026 compared to $7.2 billion and $14.5 billion, or $0.90 and $1.79 per diluted share, for the same periods in 2025. The increase in net income was due to higher noninterest income and net interest income, as well as lower provision for credit losses, partially offset by higher noninterest expense.

Total assets increased $87.5 billion from December 31, 2025 to $3.5 trillion primarily driven by higher securities borrowed or purchased under agreements to resell and higher customer and other receivables to support Global Markets client activity, as well as higher loans and leases due to growth in commercial loans, partially offset by lower debt securities primarily due to maturities and paydowns.

Total liabilities increased $89.6 billion from December 31, 2025 to $3.2 trillion primarily driven by higher customer trade payables and trading account liabilities to support Global Markets client activity, as well as higher long-term debt issuances and short-term borrowings for liquidity positioning.

Shareholders’ equity decreased $2.1 billion from December 31, 2025 primarily due to returns of capital to shareholders through common stock repurchases and common and preferred stock dividends, a decrease in accumulated other comprehensive income (OCI) and a preferred stock redemption, partially offset by net income.

Net Interest Income

T3Net interest income increased $1.3 billion to $16.0 billion, and $2.6 billion to $31.7 billion for the three and six months ended June 30, 2026 compared to the same periods in 2025. Net interest yield on a fully taxable-equivalent (FTE) basis increased 14 basis points (bps) and 12 bps to 2.08 percent for both the three and six months ended June 30, 2026 compared to the same periods in 2025. The increases were primarily driven by higher net interest income related to Global Markets activity, deposit and loan growth, and fixed-asset repricing, partially offset by the impact of lower interest rates. For more information on net interest yield and FTE basis, see Supplemental Financial Data on page 6, and for more information on interest rate risk management, see Interest Rate Risk Management for the Banking Book on page 43.

Bank of America 4

Noninterest Income

Table 2

Noninterest Income

Three Months Ended June 30

Six Months Ended June 30

(Dollars in millions)

Fees and commissions:

Card income

$

$

$

$

Service charges

Investment and brokerage services

Investment banking fees

Total fees and commissions

Market making and similar activities

Other income (loss)

Total noninterest income

$

$

$

$

T4Noninterest income increased $2.8 billion to $15.6 billion and increased $3.5 billion to $30.1 billion for the three and six months ended June 30, 2026 compared to the same periods in 2025. The following highlights the significant changes.

● Service charges increased $91 million and $204 million primarily due to higher treasury service charges.

● Investment and brokerage services increased $873 million and $1.6 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 transactional volume.

● T5Investment banking fees increased $710 million for the three-month period due to higher debt issuance, advisory and equity issuance fees. The increase of $1.0 billion in the six-month period was driven by higher advisory, debt issuance and equity issuance fees.

● Market making and similar activities increased $1.0 billion and $1.1 billion primarily driven by higher trading revenue in Equities, partially offset by lower income from foreign currency risk management activities.

● Other income increased $153 million for the three-month period primarily due to relatively higher equity investment expenses recognized in the prior year related to certain tax-related equity investments placed in service during that period. The decrease of $311 million in the six-month period was primarily due to gains recorded on leveraged finance activities in the prior-year period, partially offset by relatively higher equity investment expenses recognized in the prior year related to certain tax-related equity investments placed in service during that period.

Provision for Credit Losses

T6The provision for credit losses decreased $226 million to $1.4 billion and $369 million to $2.7 billion for the three and six months ended June 30, 2026 compared to the same periods in 2025. For more information on the provision for credit losses, see Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses to the Consolidated Financial Statements.

Noninterest Expense

Table 3

Noninterest Expense

Three Months Ended June 30

Six Months Ended June 30

(Dollars in millions)

Compensation and benefits

$

$

$

$

Information processing and communications

Occupancy and equipment

Product delivery and transaction related

Professional fees

Marketing

Other general operating

Total noninterest expense

$

$

$

$

T7Noninterest expense increased $1.4 billion to $18.6 billion and $2.2 billion to $37.2 billion for the three and six months ended June 30, 2026 compared to the same periods in 2025. The increases were primarily driven by higher revenue-related expenses during both periods, as well as continued investments in the business, including people, marketing and technology for the three-month period, and continued investments in people, technology and marketing for the six-month period.

5 Bank of America

Income Tax Expense

Table 4

Income Tax Expense

Three Months Ended June 30

Six Months Ended June 30

(Dollars in millions)

Income before income taxes

$

$

$

$

Income tax expense

Effective tax rate

%

%

%

%

The effective tax rate increased for the three and six months ended June 30, 2026 compared to the same periods in 2025 driven by lower tax preference items, primarily related to lower renewable energy tax credits on certain tax-related equity investment activity and lower discrete tax benefits relative to pretax earnings.

Supplemental Financial Data

Non-GAAP Financial Measures

In this Quarterly Report on Form 10-Q, we present certain non-GAAP financial measures. Non-GAAP financial measures exclude certain items or otherwise include components that differ from the most directly comparable measures calculated in accordance with GAAP. Non-GAAP financial measures are provided as additional useful information to assess our financial condition, results of operations (including period-to-period operating performance) or compliance with prospective regulatory requirements. These non-GAAP financial measures are not intended as a substitute for GAAP financial measures and may not be defined or calculated the same way as non-GAAP financial measures used by other companies.

When presented on a consolidated basis, we view net interest income on an FTE basis as a non-GAAP financial measure. To derive the FTE basis, net interest income is adjusted to reflect tax-exempt income on an equivalent before-tax basis with a corresponding increase in income tax expense. For purposes of this calculation, we use the federal statutory tax rate of 21 percent and a representative state tax rate. Net interest yield, which measures the basis points we earn over the cost of funds, utilizes net interest income on an FTE basis. We believe that presentation of these items on an FTE basis allows for comparison of amounts from both taxable and tax-exempt sources and is consistent with industry practices.

We may present certain key performance indicators and ratios excluding certain items (e.g., debit valuation adjustment (DVA) gains (losses)), which result in non-GAAP financial measures. We believe that the presentation of measures that exclude these items is useful because such measures provide additional information to assess the underlying operational performance and trends of our businesses and to allow better comparison of period-to-period operating performance.

We also evaluate our business based on certain ratios that utilize tangible equity, a non-GAAP financial measure. Tangible equity represents shareholders’ equity or common shareholders’ equity reduced by goodwill and intangible assets (excluding mortgage servicing rights (MSRs)), net of related deferred tax liabilities (“adjusted” shareholders’ equity or common shareholders’ equity). These measures are used to evaluate our use of equity. In addition, profitability, relationship and investment models use both return on average tangible

common shareholders’ equity and return on average tangible shareholders’ equity as key measures to support our overall growth objectives. These ratios are:

● Return on average tangible common shareholders’ equity measures our net income applicable to common shareholders as a percentage of adjusted average common shareholders’ equity. The tangible common equity ratio represents adjusted ending common shareholders’ equity divided by total tangible assets.

● Return on average tangible shareholders’ equity measures our net income as a percentage of adjusted average total shareholders’ equity. The tangible equity ratio represents adjusted ending shareholders’ equity divided by total tangible assets.

● Tangible book value per common share represents adjusted ending common shareholders’ equity divided by ending common shares outstanding.

We believe ratios utilizing tangible equity provide additional useful information because they present measures of those assets that can generate income. Tangible book value per common share provides additional useful information about the level of tangible assets in relation to outstanding shares of common stock.

The aforementioned supplemental data and performance measures are presented in Table 5 on page 7.

For more information on the reconciliation of these non-GAAP financial measures to the corresponding GAAP financial measures, see Non-GAAP Reconciliations on page 46.

Key Performance Indicators

We present certain key financial and nonfinancial performance indicators (key performance indicators) that management uses when assessing our consolidated and/or segment results. We believe they are useful to investors because they provide additional information about our underlying operational performance and trends. These key performance indicators (KPIs) may not be defined or calculated in the same way as similar KPIs used by other companies. For information on how these metrics are defined, see Key Metrics on page 101.

Our consolidated key performance indicators, which include various equity and credit metrics, are presented in Table 1 on page 4, and Table 5 on page 7.

For information on key segment performance metrics, see Business Segment Operations on page 10.

Bank of America 6

Table 5

Selected Financial Data

Six Months Ended June 30

(In millions, except per share information)

Second

First

Fourth

Third

Second

Income statement

Net interest income

$

$

$

$

$

$

$

Noninterest income

Total revenue, net of interest expense

Provision for credit losses

Noninterest expense

Income before income taxes

Income tax expense

Net income

Net income applicable to common shareholders

Average common shares issued and outstanding

Average diluted common shares issued and outstanding

Performance ratios

Return on average assets (1)

%

%

%

%

%

%

%

Four-quarter trailing return on average assets (2)

n/a

n/a

Return on average common shareholders’ equity (1)

Return on average tangible common shareholders’ equity (3)

Return on average shareholders’ equity (1)

Return on average tangible shareholders’ equity (3)

Total ending equity to total ending assets

Common equity ratio (1)

Total average equity to total average assets

Dividend payout (1)

Per common share data

Earnings

$

$

$

$

$

$

$

Diluted earnings

Dividends paid

Book value (1)

Tangible book value (3)

Market capitalization

$

$

$

$

$

$

$

Average balance sheet

Total loans and leases

$

$

$

$

$

Total assets

Total deposits

Long-term debt

Common shareholders’ equity

Total shareholders’ equity

Asset quality

Allowance for credit losses (4)

$

$

$

$

$

Nonperforming loans, leases and foreclosed properties (5)

Allowance for loan and lease losses as a percentage of total loans and leases outstanding (5)

%

%

%

%

%

Allowance for loan and lease losses as a percentage of total nonperforming loans and leases (5)

Net charge-offs

$

$

$

$

$

Annualized net charge-offs as a percentage of average loans and leases outstanding (5)

%

%

%

%

%

Capital ratios at period end (6)

Common equity tier 1 capital

%

%

%

%

%

Tier 1 capital

Total capital

Tier 1 leverage

Supplementary leverage ratio

Tangible equity (3)

Tangible common equity (3)

Total loss-absorbing capacity and long-term debt metrics

Total loss-absorbing capacity to risk-weighted assets

%

%

%

%

%

Total loss-absorbing capacity to supplementary leverage exposure

Eligible long-term debt to risk-weighted assets

Eligible long-term debt to supplementary leverage exposure

(1)For definitions, see Key Metrics on page 101.

(2)Calculated as total net income for four consecutive quarters divided by annualized average assets for four consecutive quarters.

(3)Tangible equity ratios and tangible book value per share of common stock are non-GAAP financial measures. For more information on these ratios and corresponding reconciliations to GAAP financial measures, see Supplemental Financial Data on page 6 and Non-GAAP Reconciliations on page 46.

(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 32 and corresponding Table 25 and Commercial Portfolio Credit Risk Management – Nonperforming Commercial Loans, Leases and Foreclosed Properties Activity on page 36 and corresponding Table 31.

(6)For more information, including which approach is used to assess capital adequacy, see Capital Management on page 19.

n/a = not applicable

7 Bank of America

Table 6

Quarterly Average Balances and Interest Rates - FTE Basis

Average

Balance

Interest

Income/

Expense (1)

Yield/

Rate

Average

Balance

Interest

Income/

Expense (1)

Yield/

Rate

(Dollars in millions)

Earning assets

Interest-bearing deposits with the Federal Reserve, non-U.S. central

banks and other banks

$

$

%

$

$

%

Time deposits placed and other short-term investments

Federal funds sold and securities borrowed or purchased under

agreements to resell

Trading account assets

Debt securities

Loans and leases (2)

Residential mortgage

Home equity

Credit card

Direct/Indirect and other consumer

Total consumer

U.S. commercial

Non-U.S. commercial

Commercial real estate (3)

Commercial lease financing

Total commercial

Total loans and leases

Other earning assets

Total earning assets

Cash and due from banks

Other assets, less allowance for loan and lease losses

Total assets

$

$

Interest-bearing liabilities

U.S. interest-bearing deposits

Demand and money market deposits

$

$

%

$

$

%

Time and savings deposits

Total U.S. interest-bearing deposits

Non-U.S. interest-bearing deposits

Total interest-bearing deposits

Federal funds purchased and securities loaned or sold under agreements

to repurchase

Short-term borrowings and other interest-bearing liabilities

Trading account liabilities

Long-term debt

Total interest-bearing liabilities

Noninterest-bearing sources

Noninterest-bearing deposits

Other liabilities (4)

Shareholders’ equity

Total liabilities and shareholders’ equity

$

$

Net interest spread

%

%

Impact of noninterest-bearing sources

Net interest income/yield on earning assets (5)

$

%

$

%

(1)Includes the impact of interest rate risk management contracts. For more information, see Interest Rate Risk Management for the Banking Book on page 43.

(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 $65.0 billion and $59.9 billion, and non-U.S. commercial real estate loans of $5.3 billion and $5.9 billion for the second quarter of 2026 and 2025.

(4)Includes $84.6 billion and $58.8 billion of structured notes and liabilities for the second quarter of 2026 and 2025.

(5)Net interest income includes FTE adjustments of $163 million and $145 million for the second quarter of 2026 and 2025.

Bank of America 8

Table 7

Year-to-Date Average Balances and Interest Rates - FTE Basis

Average

Balance

Interest

Income/

Expense (1)

Yield/

Rate

Average

Balance

Interest

Income/

Expense (1)

Yield/

Rate

Six Months Ended June 30

(Dollars in millions)

Earning assets

Interest-bearing deposits with the Federal Reserve, non-U.S. central

banks and other banks

$

$

%

$

$

%

Time deposits placed and other short-term investments

Federal funds sold and securities borrowed or purchased under

agreements to resell

Trading account assets

Debt securities

Loans and leases (2)

Residential mortgage

Home equity

Credit card

Direct/Indirect and other consumer

Total consumer

U.S. commercial

Non-U.S. commercial

Commercial real estate (3)

Commercial lease financing

Total commercial

Total loans and leases

Other earning assets

Total earning assets

Cash and due from banks

Other assets, less allowance for loan and lease losses

Total assets

$

$

Interest-bearing liabilities

U.S. interest-bearing deposits

Demand and money market deposits

$

$

%

$

$

%

Time and savings deposits

Total U.S. interest-bearing deposits

Non-U.S. interest-bearing deposits

Total interest-bearing deposits

Federal funds purchased and securities loaned or sold under agreements

to repurchase

Short-term borrowings and other interest-bearing liabilities

Trading account liabilities

Long-term debt

Total interest-bearing liabilities

Noninterest-bearing sources

Noninterest-bearing deposits

Other liabilities (4)

Shareholders’ equity

Total liabilities and shareholders’ equity

$

$

Net interest spread

%

%

Impact of noninterest-bearing sources

Net interest income/yield on earning assets (5)

$

%

$

%

(1)Includes the impact of interest rate risk management contracts. For more information, see Interest Rate Risk Management for the Banking Book on page 43.

(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 $64.0 billion and $59.9 billion, and non-U.S. commercial real estate loans of $5.5 billion and $5.9 billion for the six months ended June 30, 2026 and 2025.

(4)Includes $81.0 billion and $56.3 billion of structured notes and liabilities for the six months ended June 30, 2026 and 2025.

(5)Net interest income includes FTE adjustments of $325 million and $290 million for the six months ended June 30, 2026 and 2025.

9 Bank of America

Business Segment Operations

Segment Description and Basis of Presentation

We report our results of operations through four business segments: Consumer Banking, GWIM, Global Banking and Global Markets, with the remaining operations recorded in All Other. We manage our segments and report their results on an FTE basis. For more information, see Business Segment Operations in the MD&A of the Corporation’s 2025 Annual Report on Form 10-K.

We periodically review capital allocated to our businesses and allocate capital annually during the strategic and capital planning processes. We utilize a methodology that considers the effect of regulatory capital requirements in addition to internal risk-based capital models. The capital allocated to the business segments is referred to as allocated capital. Allocated equity in the reporting units is comprised of allocated capital plus capital

for the portion of goodwill and intangibles specifically assigned to the reporting unit. For more information, including the definition of a reporting unit, see Note 7 – Goodwill and Intangible Assets to the Consolidated Financial Statements.

For more information on our presentation of financial information on an FTE basis, see Supplemental Financial Data on page 6, and for reconciliations to consolidated total revenue, net income and period--end total assets, see Note 17 – Business Segment Information to the Consolidated Financial Statements.

Key Performance Indicators

We present certain key financial and nonfinancial performance indicators that management uses when evaluating segment results. We believe they are useful to investors because they provide additional information about our segments’ operational performance, client trends and business growth.

Consumer Banking

Three Months Ended June 30

Six Months Ended June 30

(Dollars in millions)

% Change

% Change

Net interest income

$

$

6

%

$

$

6

%

Noninterest income:

Card income

(5)

(3)

Service charges

2

3

All other income

n/m

Total noninterest income

2

3

Total revenue, net of interest expense

5

5

Provision for credit losses

Noninterest expense

4

2

Income before income taxes

Income tax expense

Net income

$

$

$

$

Effective tax rate

%

%

%

%

Net interest yield

Efficiency ratio

Return on average allocated capital

Balance Sheet

Three Months Ended June 30

Six Months Ended June 30

Average

% Change

% Change

Total loans and leases

$

$

1

%

$

$

1

%

Total earning assets

1

1

Total assets

1

1

Total deposits

1

—

Allocated capital

3

3

Period end

% Change

Total loans and leases

$

$

(1)

%

Total earning assets

—

Total assets

—

Total deposits

—

n/m = not meaningful

Consumer Banking offers a diversified range of lending, deposit and investment products and services to consumers and small businesses. For more information about Consumer Banking, see Business Segment Operations in the MD&A of the Corporation’s 2025 Annual Report on Form 10-K.

Consumer Banking Results

Three-Month Comparison

Net income for Consumer Banking increased $308 million to $3.3 billion due to higher revenue and lower provision for credit

losses, partially offset by higher noninterest expense. Net interest income increased $480 million to $9.2 billion primarily driven by higher deposit spreads, as well as loan and deposit balances. Noninterest income was $2.1 billion, relatively unchanged from the same period a year ago.

The provision for credit losses decreased $122 million to $1.2 billion primarily due to improved asset quality in credit card. Noninterest expense increased $234 million to $5.8 billion primarily driven by continued investments in the business, including technology and marketing.

Bank of America 10

Average loans and leases increased $1.9 billion to $321.1 billion primarily due to growth in credit card balances.

Average deposits increased $5.0 billion to $957.0 billion primarily due to net inflows of $11.5 billion in checking and $3.8 billion in time deposits, partially offset by net outflows of $10.4 billion in money market and other savings.

Six-Month Comparison

Net income for Consumer Banking increased $837 million to $6.3 billion due to higher revenue and lower provision for credit losses, partially offset by higher noninterest expense. Net interest income increased $968 million to $18.2 billion due to the same factors as described in the three-month discussion. Noninterest income increased $111 million to $4.2 billion, primarily due to a higher amount of allocated asset and liability management (ALM) activities.

The provision for credit losses decreased $282 million to $2.3 billion primarily due to the same factor as described in the three-month discussion. Noninterest expense increased $245

million to $11.6 billion primarily due to the same factors as described in the three-month discussion.

Average loans and leases increased $4.5 billion to $321.6 billion due to the same factor as described in the three-month discussion.

Average deposits increased $4.1 billion to $953.9 billion primarily due to net inflows of $10.3 billion in checking and $5.9 billion in time deposits, partially offset by net outflows of $12.1 billion in money market and other savings.

Consumer investment assets increased $99.8 billion to $639.5 billion driven by higher market valuations and positive net client flows.

Key Statistics

The table below provides key performance indicators for deposit spreads, other period-end information, credit and debit card and loan production activities.

Key Statistics

Three Months Ended June 30

Six Months Ended June 30

(Dollars in millions)

Deposit Spreads

Total deposit spreads (excludes noninterest costs)

Period end

Consumer investment assets (in millions) (1)

$

$

Active digital banking users (in thousands) (2)

Active mobile banking users (in thousands) (3)

Financial centers

ATMs

Credit and Debit Card

Total credit card (4)

Gross interest yield (5)

%

%

%

%

Risk-adjusted margin (6)

New accounts (in thousands)

Purchase volumes

$

$

$

$

Debit card purchase volumes

Loan Production (7)

Consumer Banking:

First mortgage

$

$

$

$

Home equity

Total (8):

First mortgage

$

$

$

$

Home equity

(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.

11 Bank of America

Since June 30, 2025, 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 134 financial centers and an increase of 35 ATMs as we continued to optimize our consumer banking network.

During the three months ended June 30, 2026, the total risk-adjusted margin decreased 60 bps primarily driven by lower card-related fee income and lower net interest margin due to loan balance mix, partially offset by lower net charge-offs. During the six months ended June 30, 2026, the total risk-adjusted margin decreased 30 bps due to the same factors as described in the three-month discussion. During the three and six months ended June 30, 2026, total credit card purchase volumes

increased $7.1 billion and $11.8 billion, and debit card purchase volumes increased $14.9 billion and $26.6 billion, reflecting higher levels of consumer spending.

During the three and six months ended June 30, 2026, first mortgage loan originations for Consumer Banking increased $445 million and $1.7 billion, and first mortgage loan originations for the total Corporation increased $1.7 billion and $3.6 billion for the same periods, primarily driven by higher demand.

During the three and six months ended June 30, 2026, home equity production in Consumer Banking increased $163 million and $329 million, and home equity production for the total Corporation increased $133 million and $381 million for the same periods, primarily driven by higher demand.

Global Wealth & Investment Management

Three Months Ended June 30

Six Months Ended June 30

(Dollars in millions)

% Change

% Change

Net interest income

$

$

7

%

$

$

6

%

Noninterest income:

Investment and brokerage services

All other income

Total noninterest income

Total revenue, net of interest expense

Provision for credit losses

Noninterest expense

8

7

Income before income taxes

Income tax expense

Net income

$

$

$

$

Effective tax rate

%

%

%

%

Net interest yield

Efficiency ratio

Return on average allocated capital

Balance Sheet

Three Months Ended June 30

Six Months Ended June 30

Average

% Change

% Change

Total loans and leases

$

$

%

$

$

%

Total earning assets

2

1

Total assets

3

2

Total deposits

2

1

Allocated capital

Period end

% Change

Total loans and leases

$

$

6

%

Total earning assets

(3)

Total assets

(2)

Total deposits

(4)

GWIM consists of two primary businesses: Merrill Wealth Management and Bank of America Private Bank. For more information on GWIM, see Business Segment Operations in the MD&A of the Corporation’s 2025 Annual Report on Form 10-K.

Three-Month Comparison

Net income for GWIM increased $420 million to $1.4 billion primarily due to higher revenue, partially offset by higher noninterest expense. The operating margin was 27 percent compared to 22 percent a year ago.

Net interest income increased $126 million to $1.9 billion primarily driven by loan and deposit growth.

Noninterest income, which primarily includes investment and brokerage services income, increased $808 million to $5.0 billion. The increase was primarily driven by higher asset

management fees, which increased 19 percent to $4.4 billion, reflecting higher market valuations and the impact of positive AUM flows, as well as higher brokerage fees due to increased transactional volume.

Noninterest expense increased $383 million to $5.0 billion primarily due to higher revenue-related incentives.

Average loans and leases increased $32.9 billion to $270.3 billion primarily driven by custom lending, securities-based lending and residential mortgage. Average deposits increased $4.8 billion to $281.6 billion, with growth in banking balances largely offset by a decline in brokerage deposits due to clients moving balances to higher yielding cash alternatives.

Merrill Wealth Management revenue of $5.7 billion increased 16 percent primarily driven by higher asset management fees

Bank of America 12

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 $1.2 billion increased 17 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.

Six-Month Comparison

Net income for GWIM increased $742 million to $2.7 billion primarily due to higher revenue, partially offset by higher noninterest expense. The operating margin was 27 percent compared to 22 percent a year ago.

Net interest income increased $223 million to $3.8 billion due to the same factors as described in the three-month discussion.

Noninterest income, which primarily includes investment and brokerage services income, increased $1.4 billion to $9.8 billion due to the same factors as described in the three-month discussion.

Noninterest expense increased $662 million to $9.9 billion due to the same factor as described in the three-month discussion.

Average loans increased $31.4 billion to $266.2 billion due to the same factors as described in the three-month discussion. Average deposits increased $2.5 billion to $284.1 billion due to the same factors as described in the three-month discussion.

Merrill Wealth Management revenue of $11.3 billion increased 13 percent, and Bank of America Private Bank revenue of $2.3 billion increased 15 percent primarily driven by the same factors as described in the three-month discussion.

Key Indicators and Metrics

Three Months Ended June 30

Six Months Ended June 30

(Dollars in millions)

Revenue by Business

Merrill Wealth Management

$

$

$

$

Bank of America Private Bank

Total revenue, net of interest expense

$

$

$

$

Client Balances by Business, at period end

Merrill Wealth Management

$

$

Bank of America Private Bank

Total client balances

$

$

Client Balances by Type, at period end

Assets under management

$

$

Brokerage and other assets

Deposits

Loans and leases (1)

Less: Managed deposits in assets under management

Total client balances

$

$

Assets Under Management Rollforward

Assets under management, beginning of period

$

$

$

$

Net client flows