BANK OF AMERICA CORP DE

(1)For definitions, see Key Metrics on page 91.

(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 42.

3 Bank of America

Net income was $6.7 billion, or $0.76 per diluted share, for the three months ended March 31, 2024 compared to $8.2 billion, or $0.94 per diluted share, for the same period in 2023. The decrease in net income was due to higher noninterest expense, lower revenue and higher provision for credit losses.

Total assets increased $93.7 billion from December 31, 2023 to $3.3 trillion primarily driven by higher trading account assets and securities borrowed or purchased under agreements to resell to support Global Markets client activity, as well as higher debt securities.

Total liabilities increased $91.7 billion from December 31, 2023 to $3.0 trillion primarily driven by higher securities loaned or sold under agreements to repurchase and trading account liabilities to support Global Markets client activity, as well as higher deposits due to time deposit growth and seasonal deposit inflows.

Shareholders’ equity increased $1.9 billion from December 31, 2023 primarily due to net income, partially offset by returns of capital to shareholders through common stock repurchases and common and preferred stock dividends.

Net Interest Income

Net interest income decreased $416 million to $14.0 billion for the three months ended March 31, 2024 compared to the same period in 2023. Net interest yield on a fully taxable-equivalent (FTE) basis decreased 21 basis points (bps) to 1.99 percent. The decreases were primarily driven by higher deposits and funding costs, partially offset by higher asset yields, higher net interest income related to Global Markets activity and modest loan growth. For more information on net interest yield and FTE basis, see Supplemental Financial Data on page 5, and for more information on interest rate risk management, see Interest Rate Risk Management for the Banking Book on page 39.

Noninterest Income

Noninterest income decreased $24 million to $11.8 billion for the three months ended March 31, 2024 compared to the same period in 2023. The following highlights the significant changes.

●Service charges increased $32 million primarily driven by higher treasury service charges.

● Investment and brokerage services increased $335 million primarily driven by higher asset management fees due to higher average equity market valuations and positive assets under management (AUM) flows, partially offset by the impact of lower AUM pricing.

● Investment banking fees increased $405 million primarily due to higher debt and equity issuance fees.

● Market making and similar activities decreased $824 million primarily driven by lower trading revenue from macro products in Fixed Income, Currencies and Commodities (FICC).

● Other income increased $34 million primarily due to losses on sales of available-for-sale (AFS) debt securities in the prior year, largely offset by higher partnership losses on tax credit investments in the current year.

Provision for Credit Losses

The provision for credit losses increased $388 million to $1.3 billion for the three months ended March 31, 2024 compared to the same period in 2023. The provision for credit losses for the current-year period was primarily driven by credit card loans and the commercial real estate office portfolio, partially offset by an improved macroeconomic outlook. For more information on the provision for credit losses, see Allowance for Credit Losses on page 35.

Noninterest Expense

Noninterest expense increased $1.0 billion to $17.2 billion for the three months ended March 31, 2024 compared to the same period in 2023. The increase was primarily driven by the additional accrual of $700 million for the FDIC special assessment, as well as higher revenue-related compensation.

Income Tax Expense

The effective tax rates for the three months ended March 31, 2024 and 2023 were primarily driven by our recurring tax preference benefits that mainly consist of tax credits from investments in affordable housing and renewable energy. Also included in the effective tax rate for the first quarter of 2024 was a discrete tax benefit from the $700 million charge recorded for the FDIC special assessment. Absent recurring tax credits and discrete tax benefits, the effective tax rates would have been approximately 26 percent for both periods.