BANK OF AMERICA CORP DE

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

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

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

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

27 Bank of America

Net Interest Income

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

Noninterest Income

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

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

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

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

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

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

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

Provision for Credit Losses

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

Noninterest Expense

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

Income Tax Expense

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