BAC Bank of America 10-Q 2026-09-30 section summaries

Bank of America Corporation — Form 10-Q cover and forward-looking statements

Reporting period: Quarter ended September 30, 2026
Common shares outstanding: 6,900,209,006 as of October 29, 2026

Material regulatory and legal risks

Bank of America cites October 2026 consent orders concerning the adequacy of its anti-money-laundering and economic-sanctions compliance programs. The company warns that the matters could result in significant judgments, penalties, fines, settlements, and reputational harm; their outcomes are uncertain, and any liabilities could exceed recorded estimates.

Other litigation and conduct exposures include unemployment-benefit processing for California and other states; automatic credit-card payment features; electronic-payment processing, including the Zelle network and related fraud; and possible changes to Visa and Mastercard rules and U.S. merchant interchange fees.

Economic, credit, capital, and funding risks

Changing interest rates, inflation, tariffs and trade barriers, geopolitical instability, economic weakness, and banking-industry stress—including deterioration in private-credit markets—could affect net interest income, deposits, borrowing costs, asset values, credit quality, and results. The company also identifies credit concentration risk and cautions that future credit losses could exceed current expectations.

Potential adverse credit-rating changes or impaired access to capital markets could add pressure. Other uncertainties include deposit retention and funding costs; capital and liquidity requirements, stress capital buffers, total loss-absorbing capacity, and global systemically important bank surcharges; Federal Reserve actions affecting capital plans; FDIC assessments; and recovery-and-resolution requirements.

Operational, technology, climate, and policy risks

Operational disruptions or cybersecurity breaches affecting Bank of America or third parties could adversely affect the company. The company also identifies risks in developing and using AI and other emerging technologies, including not achieving anticipated productivity or cost benefits. Climate impacts and the achievement of environmental or human-capital goals remain uncertain.

Changes in tax rules—including effects from the 2025 Budget Reconciliation Act—and shifts in fiscal, monetary, trade, or regulatory policy could also affect the company.

Business and franchise overview

Bank of America is a bank and financial holding company operating through Consumer Banking, Global Wealth & Investment Management (GWIM), Global Banking, Global Markets, and All Other. As of September 30, 2026, it had $3.4 trillion in assets and approximately 210,000 employees, serving clients across the U.S. and more than 35 countries and jurisdictions.

Customer reach and digital platform

The U.S. retail network serves more than 69 million consumer and small-business clients through approximately 3,500 financial centers and 15,000 ATMs. Digital platforms have approximately 50 million active users, including 43 million active mobile users. The company also serves approximately four million small-business households.

Wealth management and global businesses

GWIM client balances were approximately $5.1 trillion. Global Banking and Global Markets provide corporate and investment banking and trading services to corporations, governments, institutions, and individuals across asset classes.

Recent developments

• Regulatory penalties and remediation: In Q3 2026, Bank of America recorded a $1.2 billion non-tax-deductible charge in noninterest expense for civil money penalties under regulatory resolutions announced October 13 by the OCC, FinCEN and OFAC. The resolutions concern aspects of the bank’s U.S. Bank Secrecy Act, anti-money-laundering and economic-sanctions compliance programs.
• Ongoing requirements and risk: FinCEN’s consent order and the OCC’s December 2024 consent order require remediation, including independent reviews of historical transactions and improvements to customer and foreign correspondent due diligence and BSA/AML data governance. The bank said it has completed significant steps under the 2024 OCC order. Since late 2023, it has increased dedicated staffing and invested in technology and other remediation and compliance resources. It does not expect ongoing operating costs from this work to significantly affect consolidated noninterest expense in future periods; however, the penalties and continuing remediation requirements reflect regulatory and operational risk.
• Dividend: On October 21, 2026, the Board declared a quarterly common dividend of $0.32 per share, payable December 24, 2026, to shareholders of record December 4, 2026.

Bank of America (BAC) — Q3 and nine months ended September 30, 2026

Earnings and consolidated results

Q3 revenue increased 3.2% year over year, but net income fell 16.8%, as higher expenses and lower noninterest income more than offset stronger net interest income. The $1.2B regulatory settlement charge was the main expense driver; it was non-tax-deductible. Higher revenue-related costs and continued investment in technology, marketing and people also contributed. For the first nine months, revenue grew 8.3% and net income rose 7.6%, reflecting higher net interest and noninterest income and a lower credit-loss provision, partly offset by higher expenses.

Revenue detail

Net interest income rose 8.0% in Q3 and 8.7% for the nine months. Fully taxable-equivalent net interest yield increased 15 basis points to 2.16% in Q3 and 12 basis points to 2.10% for the nine months. Loan and deposit growth, Global Markets activity and fixed-asset repricing supported the increase; lower interest rates were a partial offset.

Noninterest income declined 2.2% in Q3 but increased 8.0% year to date. Service-charge growth primarily reflected treasury services; investment and brokerage growth reflected higher market valuations and positive AUM flows. Q3 investment-banking weakness reflected lower debt issuance and advisory fees, while nine-month growth benefited from higher equity issuance, advisory and debt issuance fees. Q3 market-making revenue fell mainly due to lower FICC credit trading revenue and foreign-currency risk-management income; nine-month growth was primarily driven by Equities trading. The nine-month comparison in other income was affected by leveraged-finance gains in the prior year.

Expenses, taxes and returns

The higher effective tax rates reflected the discrete non-deductible settlement charge and, for the nine-month period, lower tax-preference benefits relative to pretax earnings. Q3 efficiency and return measures weakened, while nine-month returns improved modestly.

Balance sheet

Asset growth reflected commercial loan growth, higher Global Markets-related reverse-repo and derivative assets, and higher cash, partly offset by lower debt securities and trading assets. Liability growth included deposits, derivatives, customer trade payables, trading liabilities and short-term borrowings, partly offset by lower securities-lending and repo balances. Shareholders’ equity declined by $6.5B, primarily due to common and preferred dividends, share repurchases, lower accumulated OCI and preferred-stock redemption, partly offset by net income.

Bank of America — Q3 2026 supplemental financial data

Consolidated results

Q3 revenue increased 3.2% year over year, while nine-month revenue rose 8.3%. Net income declined in Q3 but increased for the first nine months. Sequentially, Q3 revenue fell 5.1% from Q2’s $31.558B, primarily reflecting lower noninterest income, which was $13.509B versus $15.561B in Q2.

Net interest income and average balances

FTE net interest income is a non-GAAP measure that grosses up tax-exempt income. Higher FTE net interest income and wider spread reflected lower funding costs, even as yields on earning assets and loans declined. Average loans grew year over year alongside a smaller increase in average deposits.

Credit quality

Credit performance was mixed: net charge-offs and their annualized rate improved, while nonperforming loans, leases and foreclosed properties increased.

Capital, returns and shareholder measures

Q3 return on average tangible common shareholders’ equity was 12.60%, down from 15.29% a year earlier. Capital ratios and TLAC relative to risk-weighted assets declined year over year, while tangible book value per common share increased. The company identifies tangible-equity measures as non-GAAP.

Consumer Banking — Q3 and first nine months of 2026

Q3 results

Revenue grew 3.6% year over year: higher net interest income, supported mainly by wider deposit spreads and higher loan and deposit balances, more than offset lower noninterest income. Expense growth primarily reflected continued technology and marketing investment. Net income increased 2.4%.

First nine months

Total revenue rose 4.6% to $33,957 million from $32,472 million. Net interest income increased 5.4% to $27,630 million from $26,219 million. Noninterest income grew 1.2% to $6,327 million from $6,253 million: card income declined to $3,951 million from $4,115 million, service charges rose to $1,918 million from $1,890 million, and all other income increased to $458 million from $248 million, primarily reflecting risk-management activities and investment and brokerage services, partly offset by lower card income.

The provision for credit losses fell 6.9% to $3,337 million from $3,583 million, driven by improved credit-card asset quality. Noninterest expense increased 3.0% to $17,471 million from $16,968 million, primarily due to business investment. Net income rose 10.3% to $9,862 million from $8,941 million; pretax income was $13,149 million versus $11,921 million. The effective tax rate was 25.0% in both periods. Net interest yield increased to 3.70% from 3.53%, the efficiency ratio improved to 51.45% from 52.25%, and return on average allocated capital rose to 29% from 27%.

Balances and funding

Average loans and leases for the first nine months increased 1.0% to $321,387 million from $318,178 million, primarily from credit-card growth; average deposits rose 0.3% to $952,126 million from $948,983 million. Q3 loan growth in credit cards was partly offset by lower vehicle lending. Deposit flows reflected checking and time-deposit inflows partly offset by money-market and other savings outflows: $7.7 billion and $2.2 billion of inflows versus $8.5 billion of outflows in Q3; for the nine months, $9.4 billion and $4.6 billion of inflows versus $10.9 billion of outflows.

At September 30, 2026, loans and leases were $321,968 million, down 1% from $325,871 million at December 31, 2025; deposits were $949,142 million, down 1% from $956,265 million. Total assets were $1,034,324 million versus $1,039,346 million, and earning assets were $994,547 million versus $998,969 million.

Customer, card and channel trends

For the first nine months, deposit spread increased to 3.08% from 2.90%; credit-card gross interest yield declined to 11.49% from 12.12%; and risk-adjusted margin fell 45 basis points to 6.63% from 7.08%. The margin decline reflected lower card-related fee income and lower net interest margin from loan-balance mix, partly offset by lower net charge-offs. Nine-month credit-card purchase volume rose to $295,727 million from $278,138 million; debit-card volume increased to $480,902 million from $439,533 million, reflecting higher consumer spending; and new credit-card accounts rose to 2.899 million from 2.676 million.

Consumer investment assets reached $664,439 million at September 30, up $84.0 billion year over year from $580,391 million, reflecting higher market valuations and positive net client flows. Active digital banking users increased to 50.381 million from 49.198 million, including 42.596 million active mobile users versus 41.258 million. The network had 3,531 financial centers, down 118 year over year, and 14,965 ATMs, up 45, as the bank continued to optimize its network.

Loan production

Consumer Banking first-mortgage originations declined $325 million in Q3 amid higher interest rates and lower demand, but increased to $9.290 billion for the first nine months from $7.961 billion as demand improved. Consumer Banking home-equity production rose to $6.857 billion from $6.401 billion for the nine months. Total Corporation first-mortgage production was $21.544 billion versus $17.863 billion for the nine months, with growth primarily driven by GWIM; total Corporation home-equity production was $8.335 billion versus $7.780 billion. Mortgage production is measured at unpaid principal balance; home-equity production is measured at principal amount.

Global Wealth and Investment Management (GWIM)

GWIM’s revenue and earnings grew in Q3 and the first nine months of 2026, supported by higher asset management fees, positive client flows and market appreciation. Net interest income also increased, reflecting loan growth and lower rates on average deposits. Higher revenue-related incentives contributed to expense growth, while profitability improved.

Consolidated results

Q3 revenue increased 13% year over year and net income rose 22%; for 9M, revenue grew 13% and net income 31%. Investment and brokerage income growth primarily reflected asset management fees, which rose 16% to $4.5 billion in Q3.

Business revenue

Merrill’s growth reflected higher asset management fees, positive AUM flows, stronger market valuations and higher net interest income. Private Bank growth was supported by loan and deposit growth and higher asset management fees.

Selected operating and client metrics

Client balances increased 9%, or $416.0 billion, year over year, primarily due to higher market valuations and positive net flows. AUM market valuation/other contributed $139.115 billion in 9M 2026, down from $165.947 billion in 9M 2025; net client flows were $54.025 billion versus $61.788 billion. The smaller market contribution was especially pronounced in Q3.

Average loans grew 13%, driven mainly by custom lending, securities-based lending and residential mortgages. Average deposits rose 1%; growth in banking balances was partly offset by brokerage clients shifting balances to higher-yielding cash alternatives. At September 30, 2026, loans and leases were $283.377 billion versus $261.303 billion at December 31, 2025, while deposits were $279.723 billion versus $289.854 billion. Period-end total assets were $328.816 billion versus $335.495 billion at year end.

At September 30, 2026, Merrill client balances were $4.241 trillion and Private Bank balances were $816.186 billion. Client assets included $2.371 trillion of AUM, $2.164 trillion of brokerage and other assets, $279.723 billion of deposits, and $286.092 billion of loans and leases, including margin receivables. Managed deposits included in AUM, and deducted in the client-asset presentation, were $44.282 billion.

Global Banking

Global Banking revenue was essentially flat in Q3 2026, as higher net interest income and service charges were offset by lower investment banking fees. Net income declined 5%, with higher noninterest expense contributing to the decrease. For the first nine months, revenue and net income increased, supported by growth in net interest and noninterest income and a lower credit-loss provision.

Results

Q3 net interest income grew 4% on higher average deposit and loan balances, partly offset by lower loan rates; net interest yield declined to 1.83% from 1.87%. Noninterest income fell 3%, principally reflecting the decrease in investment banking fees. The credit-loss provision declined 22%, primarily due to improved commercial real estate (CRE) asset quality. Noninterest expense rose 7% as the company continued investing in people and technology. The effective tax rate was 27.5% in both Q3 periods.

For 9M, noninterest income increased 6%; higher service charges and investment banking fees more than offset a 2% decline in all other income. The credit-loss provision fell 13% as CRE asset quality improved, partly offset by commercial and industrial loan growth and a qualitative reserve build for uncertainty related to ongoing Middle East conflicts. Noninterest expense increased 4%.

Business-line revenue

The combined figures exclude certain investment banking and other activities. Lending revenue was pressured by lower loan rates, partly offset by higher average balances and tax-related equity investment income. Transaction-services growth reflected higher average deposits, lower deposit rates paid and higher treasury service charges.

For 9M, combined Global Corporate, Global Commercial and Business Banking revenue rose to $15.362B from $14.618B: Global Corporate Banking was $7.220B versus $6.884B, Global Commercial Banking $6.772B versus $6.478B, and Business Banking $1.370B versus $1.256B. Business Lending was $6.517B versus $6.550B, while Global Transaction Services increased to $8.845B from $8.068B, driven by deposit balances and treasury charges.

Average balances and period-end position

For 9M, average loans and leases were $409.825B versus $385.062B, and average deposits were $656.090B versus $603.591B. Growth reflected client demand, deposit growth from existing clients and new clients.

Q3 average loans and deposits by business were, respectively: Global Corporate Banking, $193.425B and $356.295B (prior year $176.378B and $357.835B); Global Commercial Banking, $212.486B and $249.067B (prior year $200.201B and $219.345B); and Business Banking, $12.950B and $63.224B (prior year $11.844B and $54.378B).

Investment banking fees

Global Banking investment banking fees declined in Q3 but increased for 9M, as shown above. Across the Corporation, excluding self-led deals, investment banking fees were $1.799B in Q3 versus $2.013B, down 11% due to lower debt issuance and advisory fees; for 9M they were $5.778B versus $4.964B, up 16% on higher equity issuance, advisory and debt issuance fees. Corporation-wide fees primarily reflect activity in Global Banking and Global Markets.

Global Markets

Global Markets’ Q3 revenue declined as weaker trading and higher expenses more than offset stronger net interest income. For the first nine months, revenue and net income increased, supported by higher sales and trading revenue and investment banking fees. The 9M comparison was partly offset by higher expenses and prior-year gains on sales of certain leveraged-finance positions.

Consolidated results

Q3 revenue fell 5.8% year over year, while 9M revenue rose 11.7%. Q3 net income declined 25.1%; 9M net income increased 14.5%. Q3 noninterest expense rose primarily because of higher revenue-related costs and continued investment in people and technology.

Sales and trading

Reported sales and trading revenue includes net DVA. These figures are substantially attributable to Global Markets, with the remainder in Global Banking.

Reported sales and trading revenue fell 5.4% in Q3 but rose 13.5% for 9M. Q3 FICC weakness reflected lower mortgage, municipal and credit trading. Equities benefited from increased client financing, particularly in Asia and the U.S., partly offset by weaker derivatives and cash trading. For 9M, Equities’ increase of about $2.4 billion reflected more client financing and stronger derivatives and cash trading, while FICC remained lower.

Profitability

For 9M, the efficiency ratio was 62.15%, compared with 61.26% in 9M 2025; return on average allocated capital was 15%, compared with 14%.

Balance sheet and activity

Higher financing activity and loan growth drove the increase in Q3 average assets; 9M average assets also reflected higher inventory. Period-end asset growth was driven by loan growth and higher inventory.

All Other

Consolidated results

Amounts in millions, except net loss and pretax loss shown in billions where appropriate.

The sharp increase in expense and net loss was primarily driven by a $1.2B non-tax-deductible regulatory settlement charge. The tax benefit was lower year over year, primarily because of reduced tax preference items. Despite the higher losses, noninterest loss improved in both the quarter and nine-month period; total revenue remained negative.

Average and period-end balances

All Other primarily comprises asset and liability management (ALM), liquidating businesses, certain expenses not allocated to segments, and tax-related adjustments. ALM manages interest-rate and foreign-currency risks, with substantially all of its results allocated to business segments. All Other asset balances also reflect the allocation of assets to deposit-taking segments when their liabilities and allocated equity exceed their assets.

Period-end allocated assets were $981.7B at September 30, 2026, compared with $1.0T at December 31, 2025. The settlement charge underscores regulatory and compliance exposure; the company’s enterprise risk framework and board-approved risk appetite cover strategic, credit, market, liquidity, compliance, operational, and reputational risks.

Capital management — Q3 2026

Capital distributions and issuance

Under its $40B common-stock repurchase authorization, effective August 1, 2025, Bank of America repurchased $6.0B of common stock and paid $2.2B in common dividends during Q3 2026. On October 23, 2026, it issued 80,000 Series WW preferred shares for $2.0B. The shares carry a 7.200% fixed-rate reset dividend and a $25,000-per-share liquidation preference; quarterly dividends begin in January 2027.

BAC capital and exposures

The Standardized approach was binding: its total capital ratio was 14.2%, compared with a 13.5% minimum. The CET1 minimum was 10.0% under both capital approaches. CET1 capital declined mainly because of capital distributions and accumulated other comprehensive income (OCI), partly offset by earnings. Higher RWA also weighed on the CET1 ratio. Standardized RWA growth was driven primarily by Global Markets and Global Banking, partly offset by GWIM; higher supplementary leverage exposure reflected mainly Global Markets activity and loan growth.

Loss-absorbing capacity

Subsidiary capital

BANA remained well-capitalized under Prompt Corrective Action (PCA).

Major broker-dealer subsidiaries also remained above their stated capital requirements:

Regulatory requirements and outlook

Effective January 1, 2026, a final modified enhanced SLR rule reduced the minimum, including the leverage buffer, to 3.75% for BAC and insured depository institutions, from 5.0% for BAC and 6.0% for insured banks. BAC’s 5.5% SLR and BANA’s 5.8% SLR exceeded the revised minimum.

The current 2.5% stress capital buffer (SCB) remains in effect through December 31, 2027. Beginning January 1, 2027, the G-SIB surcharge rises by 50 basis points under both methods—to 2.0% under Method 1 and 3.5% under Method 2—raising the minimum CET1 requirement by 50 basis points under both capital approaches. Beginning January 1, 2029, the SCB will be based on the average of the two most recent annual supervisory stress tests; its effective date shifts to January 1 beginning in 2028. New stress-test disclosure and public-input requirements may make future model changes consequential to stress-test outcomes. Pending proposals on stress-test fee-income modeling, large-bank risk-based capital and G-SIB surcharge calculations could further affect requirements; their impact remains under evaluation.

Investor takeaway: Capital remained above stated regulatory minimums, but distributions and exposure growth reduced capital ratios from year-end 2025 levels. The scheduled G-SIB surcharge increase and continued RWA growth are pressures on capital headroom, while pending regulatory changes add uncertainty.

Liquidity and regulatory position

Average Global Liquidity Sources (GLS)—cash and high-quality, liquid, unencumbered securities available to the Parent and selected subsidiaries—declined by $61B in Q3 2026, principally due to lower Treasury holdings. Legal, regulatory, tax and other restrictions can limit transfers among entities.

Average consolidated HQLA, net of regulatory deductions and exclusions, rose to $696B from $667B, while the average consolidated LCR increased to 113% from 112%. The Corporation and its insured depository institutions complied with U.S. NSFR requirements at September 30, 2026. Bank subsidiaries’ borrowing capacity against specifically identified eligible loans and securities was $354B at September 30, 2026, compared with $343B at December 31, 2025. Eligibility is subject to lender and regulatory guidelines; bank liquidity generally funds bank-entity obligations, and transfers may require regulatory approval.

Deposits and funding

Deposits totaled $2.04T at September 30, 2026, up $20.0B from December 31, 2025, primarily reflecting Global Banking growth, partly offset by declines in GWIM and Consumer Banking. Reported deposit mix was 47% Consumer Banking, 14% GWIM and 34% Global Banking.

The company describes a substantial portion of deposits as stable, low-cost funding: approximately 70% of consumer and small-business deposits and 83% of U.S. Global Banking deposits were held by clients whose accounts were at least 10 years old.

During 9M 2026, the Corporation issued $92.5B of long-term debt: $24.3B of Parent notes, substantially all TLAC-compliant; $29.0B of Bank of America, N.A. notes; and $39.2B of other debt, primarily structured notes. Maturities and redemptions totaled $83.1B: $29.4B Parent, $24.8B Bank of America, N.A. and $28.9B other debt. Long-term debt carrying value increased $871M during 9M to $318.687B, primarily due to issuance, partly offset by maturities and valuation adjustments.

At September 30, 2026, total debt comprised $218.092B issued by the Parent, $34.784B by Bank of America, N.A. and $65.811B of other debt. Parent outstanding senior notes included $162.4B that were both TLAC-eligible and callable one year before stated maturity. The Corporation issued $45.3B of structured notes during 9M 2026, typically to meet client demand; their returns are linked to securities, indices, currencies or commodities and are generally economically hedged. Some may require cash or securities settlement before maturity, which is incorporated into liquidity planning.

Contingencies and credit conditions

Substantially all senior and subordinated debt has no provisions that trigger early repayment or additional collateral requirements following adverse changes in ratings or financial metrics. Downgrades could nevertheless lead to additional collateral or termination payments, a contingent liquidity risk. Ratings and outlooks for the Corporation were unchanged from its 2025 Form 10-K; on August 27, 2026, Moody’s assigned BofAS and BofASE Aa2 long-term and Prime-1 short-term issuer ratings, both with stable outlooks.

The Parent transferred, and agreed to transfer, additional assets not needed for anticipated near-term expenses to NB Holdings in support of the preferred single-point-of-entry resolution strategy. The Parent is expected to retain access to cash flows needed to service debt, pay dividends and meet obligations.

Credit indicators improved during 9M 2026: the net charge-off ratio declined year over year, mainly due to lower commercial real estate office and credit card charge-offs; commercial criticized exposure fell $4.8B and nonperforming loans declined $260M from December 31, 2025, both principally reflecting commercial real estate. The company cautions that geopolitical tensions, including Middle East conflicts, and persistent inflation could weigh on the outlook and contribute to future credit-quality deterioration.

Consumer credit risk management

Bank of America manages consumer credit risk using statistical models and judgment across underwriting, pricing, credit limits, collections, portfolio management and loss provisioning. Management reported relatively stable U.S. unemployment and home prices during the first nine months of 2026.

Portfolio-wide credit quality

The allowance declined $210M from year-end 2025. Excluding fully insured loans, the 90+-day-past-due ratio fell to 0.25% from 0.29%, while the nonperforming loan ratio was 0.54%, unchanged. Of September 30 nonperforming loans, $1.5B (56%) were contractually current; $481M (18%) were 180+ days past due and written down to estimated property value less selling costs.

Nine-month consumer net charge-offs decreased $60M, primarily reflecting improvement in credit cards.

Consumer portfolios

Residential mortgage. This largest consumer category represents 48% of consumer loans and leases and was broadly unchanged. Excluding fully insured loans, 30+-day accruing delinquencies increased $111M to $1.270B; nonperforming loans rose to $2.076B from $2.008B, with 57% contractually current. Of ex-insured balances, $66.9B (29%) were originated as interest-only loans. Of these, $3.9B had entered amortization, including $182M that were nonperforming. Most interest-only loans not yet amortizing are wealth-client loans, and substantially all are scheduled to begin fully amortizing in 2028 or later. California accounted for $83.539B of ex-insured balances; the New York-area and Los Angeles-area MSAs each represented about 14% of the reported portfolio.

Home equity. Balances grew $594M as draws and new originations exceeded paydowns. Nonperforming loans declined $26M to $366M; 64% were current, while $66M (18%) were 180+ days delinquent and written down to collateral value less selling costs. Unused HELOCs were $42.1B versus $43.1B at year-end, and utilization increased to 39% from 38%. A $3.1B portion of HELOCs had entered amortization, where early-stage delinquency and nonperforming rates are higher than for the broader HELOC portfolio. Among customers with balances in the serviced revolving interest-only HELOC portfolio, 23% paid no principal during 9M 2026. The company no longer originates home equity loans or reverse mortgages.

Credit card. Balances increased $1.3B as purchase volume and card transfers more than offset payments.

Balances 30+ days past due fell $116M to $2.5B, and balances 90+ days past due fell $140M to $1.2B. Unused credit-card lines increased to $436.5B from $417.6B at year-end.

Direct/indirect consumer. Balances rose $5.226B, driven by securities-based lending. The portfolio was 57% GWIM, principally securities-based loans, and 43% Consumer Banking, including auto and recreational-vehicle lending.

Other consumer and nonperforming loan activity. Other consumer, primarily deposit overdrafts, had net charge-offs of $82M versus $55M in Q3 and $215M versus $181M in 9M, primarily because of higher overdraft losses. Nine-month nonperforming loan additions were $991M versus $759M; net additions were $34M compared with a $116M net reduction in 9M 2025. Foreclosed properties declined $4M to $86M.

Commercial portfolio growth and credit quality

Commercial loans and leases grew $58.2B during the nine months ended September 30, 2026, with growth in U.S. and non-U.S. lending, primarily through Global Banking and GWIM. Overall commercial exposure and utilization increased:

Reservable criticized utilized exposure improved, declining $4.842B (20%); its share of utilized exposure fell to 2.49% from 3.37%. 87% of criticized exposure was secured at both dates.

Charge-offs and nonperforming assets

Commercial net charge-offs and their ratio were lower year over year in both Q3 and the first nine months of 2026. CRE charge-offs fell sharply year to date, partly offset by higher C&I charge-offs.

Nonperforming commercial loans and leases declined $294M during 9M 2026. Including foreclosed properties, nonperforming assets were $2.953B. At September 30, 92% of nonperforming commercial loans were secured and 47% were contractually current. The loans were carried at 79% of unpaid principal balance, reflecting reductions for estimated collateral value less costs to sell.

CRE, office and industry exposures

CRE loans grew $6.474B (9%). The portfolio remained diversified; California was the largest state concentration at 20%, and industrial/warehouse the largest property type at 19%. Office loans—less than 1% of Bank of America’s total loans—declined, as did criticized office exposure. Approximately $1.8B of office loans mature by year-end 2026. The company uses independent special asset officers, restructurings and asset sales to manage potential deterioration.

Largest committed industry exposures increased, with asset-manager growth primarily investment-grade and finance-company growth driven by consumer finance. Real estate committed exposure also rose.

U.S. small-business commercial loans were $23.945B, compared with $22.500B at year-end 2025. Card-related products made up 50% of that portfolio but generated 97% of its net charge-offs in both the three- and nine-month 2026 periods. Management cited Middle East conflicts, elevated energy prices and persistent inflation as sources of uncertainty and potential borrower stress.

Credit protection and risk management

Commercial credit risk is managed through exposure limits and diversification, syndications, loan sales, hedging and other mitigation. Net notional credit-default protection purchased (reported as negative net notional) declined to $11.992B from $14.525B.

The portfolio remained predominantly investment grade, though its share declined and unrated exposure increased. Ratings are refreshed quarterly; unrated exposure includes index positions and unrated names. Credit-default protection instruments recorded net losses of $6M in Q3 2026 and $40M in 9M 2026, versus losses of $39M and $95M, respectively, in 2025; the 2025 losses were largely offset by gains on related exposures. VaR for these exposures is included in fair-value-option portfolio information.

Non-U.S. country exposure

At September 30, 2026, the 20 largest non-U.S. country exposures totaled $388.593B before $13.309B of hedges and credit-default protection, resulting in $375.284B of net exposure, up $25.731B from December 31, 2025. These countries represented 91% of total non-U.S. exposure, compared with 88% at year-end 2025.

The largest increase was in the United Kingdom, primarily reflecting higher net counterparty exposure. Germany’s increase mainly reflected higher corporate exposures. Other notable increases included Australia, India, France and Brazil; the largest decreases were in the Netherlands and Japan.

Country-risk exposures may be affected by adverse economic or political conditions, currency movements, social instability and policy changes. The company also has indirect country exposure, including through collateral on secured financing and client-clearing activities, managed through credit, market and operational risk governance. It continues to monitor Middle East conflicts and potential effects on its portfolio and borrowers, including elevated energy prices, market volatility, supply-chain disruptions and related macroeconomic impacts.

Allowance for credit losses

At September 30, 2026, Bank of America’s allowance for credit losses (ACL) was $14.184B, down $196M from December 31, 2025 and $177M from September 30, 2025. The decrease from year-end reflected a $200M decline in consumer reserves, partly offset by a $4M increase in commercial reserves.

Credit cards remained the largest reserve category: the $7.012B allowance represented 53.90% of the loan-loss allowance and 6.53% of related loans, compared with 54.51% and 6.79%, respectively, at year-end.

Credit performance and provisions

Net charge-offs and loan-loss provisions declined year over year in both Q3 and the first nine months of 2026. Consumer charge-offs increased, however, while commercial charge-offs fell.

Loan balances and credit metrics

Loans and leases outstanding increased to $1.248T at September 30, 2026, from $1.159T a year earlier. The allowance for loan and lease losses declined relative to loans, while annualized net charge-offs and allowance coverage also eased year over year.

Market-risk exposure is concentrated primarily in Global Markets, with additional exposure through asset-liability management; the filing cautions that market stress could materially affect results.

Trading risk management

Bank of America measures trading market risk using one-day Value-at-Risk (VaR) at a 99% confidence level. VaR is an estimate of potential loss, not a loss limit; actual losses can exceed it. The company supplements VaR with scenario-based stress testing because VaR uses a limited historical window and may not capture abnormal market movements.

VaR measures

Q3 average VaR for trading positions included interest rate risk of $40M, credit risk of $37M, equity risk of $29M, mortgage risk of $23M, foreign exchange risk of $13M and commodities risk of $12M. Diversification reduced the sum of these component VaR amounts by $103M.

Backtesting and trading revenue

Trading revenue losses exceeded total covered portfolio VaR on 4 days in Q3 2026 and 7 days in 9M 2026.

Trading-related revenue was positive on 98% of Q3 2026 trading days, and daily gains exceeded $25M on 94% of days. This was less consistent than in the first half of the year:

The trading-related revenue measure excludes brokerage fees and CVA, DVA and funding valuation adjustment gains or losses, and includes net interest income from Global Markets trading activities.

Interest-rate risk management

Banking-book rate assumptions

Estimated next-12-month pretax banking-book NII sensitivity

These estimates reflect instantaneous interest-rate curve shocks, dynamic deposit sensitivities, and no management response.

BAC remains asset-sensitive to parallel rate moves, with most modeled NII effects driven by the short end. Relative to December 2025, modeled benefits from upward parallel shocks increased, while the modeled loss under a −200 bps shock also grew.

Risk measurement, assumptions and management

Higher rates can reduce the fair value of available-for-sale debt securities, pressuring accumulated other comprehensive income and Basel 3 capital. Banking-book NII benefits are expected to offset that capital pressure over time. Economic value of equity (EVE) analysis assesses longer-term changes in the present value of banking-book assets and liabilities and the resulting effect on Tier 1 capital. Longer-duration investment securities, residential mortgages and deposits are key EVE drivers; because deposits generally lack stated maturities, their duration is estimated.

Sensitivity estimates rely on interrelated assumptions and may be nonlinear in larger shocks. Higher-rate scenarios assume some low-cost or noninterest-bearing deposits migrate to higher-cost deposits or market funding; if deposit pricing rises faster—particularly with large short-end increases—asset sensitivity could diminish. In falling-rate scenarios, deposit rates approach a floor near zero, limiting further reductions in funding costs. A significant long-end rate decline, such as more than 200 bps, could increase mortgage prepayments and further reduce NII; a significant increase could modestly reduce prepayments and add to NII. Actual results depend on customer behavior and macroeconomic conditions.

Asset-liability management uses securities, certain residential mortgages, and interest-rate and foreign-exchange derivatives; designated accounting hedges are included in the NII sensitivity analysis. Derivatives hedge substantially all foreign-exchange risk of foreign operations and substantially eliminate FX exposure in cash flows of non-trading foreign-currency financial instruments; related market-risk exposure is characterized as not significant.

Mortgage origination, funding and servicing expose BAC to credit, liquidity and interest-rate risks. Loans are designated for investment or sale at commitment, and some are sold or securitized. Interest-rate lock commitments, mortgage loans held for sale and mortgage servicing rights are managed together as an economic hedge portfolio.

Accounting development

New FASB guidance on internal-use software costs, including a “probable to complete” threshold for capitalization, is effective for annual and interim periods beginning after December 15, 2027; early adoption is permitted. BAC is evaluating adoption and does not expect a material effect on its consolidated financial statements.

Tangible common equity and assets

Bank of America’s non-GAAP tangible common shareholders’ equity measure deducts goodwill and intangible assets (excluding mortgage servicing rights, or MSRs) from common shareholders’ equity, with related deferred tax liabilities included in the reconciliation.

At September 30, 2026, compared with June 30, 2026, total assets declined from $3,499.191B to $3,427.704B, and tangible assets fell from $3,429.183B to $3,357.711B. Common shareholders’ equity decreased from $276.098B to $271.753B, while tangible common shareholders’ equity declined from $206.090B to $201.760B.

Average equity

Controls and disclosures

Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of September 30, 2026. No changes to internal control over financial reporting during Q3 2026 materially affected, or were reasonably likely to materially affect, those controls. Market-risk disclosures are cross-referenced to the MD&A.

Bank of America — Financial Statements

Consolidated results

Q3 revenue rose 3.2%, while 9M revenue increased 8.3%. Higher net interest income—up 8.0% in Q3—reflected lower interest expense, which more than offset lower interest income. Noninterest income declined in Q3 as stronger fees and commissions were outweighed by lower market-making income. Q3 noninterest expense rose 13.8%, faster than revenue; higher compensation, information processing, and product delivery costs contributed, while other general operating expense increased to $2.333B from $0.912B. Q3 net income fell 16.8%. For 9M, provision expense declined while noninterest expense increased, and net income rose.

Balance sheet and funding

Held-to-maturity securities’ fair value was substantially below their amortized cost at both reporting dates. Total shareholders’ equity declined from year-end.

Cash flow and capital allocation

Operating cash flow included a $31.621B net cash-flow adjustment from trading and derivative assets and liabilities, compared with $4.687B in 9M 2025. Cash and cash equivalents were $249.643B at September 30, 2026, versus $231.845B at January 1. During 9M, the company issued $97.107B of long-term debt and retired $83.733B.

Cash dividends paid during 9M were $7.573B. Q3 other comprehensive loss was $3.237B, versus income of $0.759B a year earlier, including net-of-tax losses of $1.871B on debt securities and $1.496B on derivatives. For 9M, other comprehensive loss was $4.744B, compared with income of $3.540B. Comprehensive income was $3.696B in Q3 and $19.847B for 9M, versus $9.091B and $26.402B, respectively, in 2025.

Note 1 — Summary of Significant Accounting Principles

Bank of America’s consolidated financial statements include the Corporation, its majority-owned subsidiaries, and variable interest entities (VIEs) for which it is the primary beneficiary. Intercompany balances and transactions are eliminated. Assets held in an agency or fiduciary capacity are excluded from the consolidated statements.

Investments accounted for under the equity method—including investments in affordable-housing and renewable-energy partnerships—are recorded in other assets and tested for impairment. The Corporation’s share of income or loss from these investments is included in other income.

Reported amounts rely on management’s estimates and assumptions, and actual results may differ materially. Interim financial statements are unaudited, include normal recurring adjustments, and should be read together with the 2025 Form 10-K; interim results are not necessarily indicative of full-year results. Management evaluates subsequent events through the date the financial statements are filed with the SEC.

Net interest income

Net interest income increased in Q3 and for the first nine months of 2026 even though total interest income declined: lower interest expense more than offset the decline. Lower deposit and borrowing costs were the largest contributors to the expense reduction; trading-account liability expense increased.

Amounts in $ millions.

Interest income on deposits with the Federal Reserve, non-U.S. central banks and other banks, included in other interest income, was $2.1 billion versus $2.7 billion in Q3 and $6.4 billion versus $8.4 billion for 9M.

Noninterest income

Noninterest income declined slightly in Q3 but increased for 9M. Fee and commission income grew in both periods; the Q3 decline chiefly reflected weaker market-making income and lower investment banking fees. Growth for 9M was led by investment and brokerage services and investment banking.

Amounts in $ millions.

Gross interchange fees and merchant income were $3.6 billion versus $3.4 billion in Q3 and $10.7 billion versus $10.2 billion for 9M. Reported card income is net of rewards, partner payments and certain other card costs: $2.7 billion versus $2.5 billion in Q3 and $8.0 billion versus $7.3 billion for 9M.

Derivatives and sales and trading

Sales and trading revenue

Sales and trading revenue includes derivatives and non-derivative cash instruments and is not presented on an FTE basis. Equity was the main source of nine-month growth; Q3 declines in interest-rate and credit revenue were partly offset by equity and foreign-exchange gains.

Derivative balance-sheet exposure and collateral

Gross derivative balances increased from year-end 2025. Netting and cash collateral substantially reduce the recognized balances; separately presented financial-instrument collateral reduces them further.

The netting and collateral reconciliation includes $4.9B of other gross assets and $6.9B of other gross liabilities for which enforceability is uncertain in some jurisdictions or industries. Before netting, OTC derivative assets/liabilities were $278.1B/$273.0B, exchange-traded $71.9B/$71.4B and OTC-cleared $18.9B/$20.4B. Substantially all counterparties are covered by ISDA master netting or similar agreements.

Under derivative agreements, the Corporation held $137.2B of cash and securities collateral and posted $100.0B at September 30, 2026, versus $119.7B held and $97.8B posted at year-end. Existing contract terms could have required another $4.6B to be posted, including $2.1B for BANA. A one-notch downgrade would trigger $122M of additional collateral for Bank of America Corporation and $40M for BANA and subsidiaries (included in the Corporation amount); at a second incremental notch, the amounts would be $1.505B and $1.394B, respectively. Derivative liabilities subject to unilateral termination were $8M for a one-notch downgrade and $89M for a second incremental notch; related collateral posted was $1M and $75M. Recorded liabilities for downgrade-related termination or other actions were not significant.

Hedge accounting and other derivative results

Fair-value hedge derivative results were largely offset by gains or losses on the hedged items:

At September 30, 2026, hedged long-term debt had a $180.932B carrying value and a $9.573B decrease from cumulative fair-value adjustments (year-end: $175.694B and a $792M decrease). Hedged available-for-sale debt securities, at amortized cost, were $197.018B with a $7.125B decrease from adjustments (year-end: $236.303B with a $146M increase). While hedges remain open, these adjustments generally do not affect earnings; adjustments on de-designated hedges are amortized or accreted over the remaining contractual lives.

Cash-flow hedges are a prospective net-interest-income headwind: accumulated OCI included a $4.9B after-tax ($6.4B pretax) net derivative loss, of which $2.4B after tax ($3.2B pretax) was expected to be reclassified into earnings over the next 12 months, primarily reducing NII. Pretax cash-flow hedge losses recognized in OCI were $4.817B in 9M 2026, versus gains of $3.096B in 9M 2025; amounts reclassified from OCI were losses of $1.048B and $1.143B, respectively. The maximum hedge horizon for open forecast transactions is about three years; recognition of terminated hedges extends about four years, with amounts beyond that insignificant. Net-investment hedge OCI was a $757M gain in 9M 2026 versus a $2.878B loss in 9M 2025.

Asset/liability-management hedges recorded a Q3 2026 loss of $597M versus a $623M gain in Q3 2025; nine-month losses were $875M versus $1.863B. These results are largely offset by income or expense on hedged items. Compensation-plan hedges recorded a $315M 9M gain versus $445M; mortgage-activity hedges recorded a $52M loss versus a $58M gain.

Credit derivatives and valuation adjustments

Written credit derivatives with purchased protection on identical reference names had $551.0B of notional and a $1.3B net derivative asset/(liability) at September 30, 2026, versus $421.3B and $1.0B at year-end 2025. Separately, total credit-derivative carrying value and maximum payout/notional increased:

Non-investment-grade instruments accounted for $3.510B of current total-return-swap/option carrying value. Credit-related notes, principally involving CDO, CLO and credit-linked-note vehicles, are primarily trading securities; their carrying value equals maximum exposure to loss, and the Corporation has no obligation to pay the issuing entities. Notional is not a reliable measure of exposure because it does not reflect the probability of occurrence; the company manages exposure through risk limits and a broader framework.

Derivative valuation adjustments, excluding related hedges, were:

At September 30, 2026, cumulative adjustments reduced derivative assets by $399M for CVA, reduced the net derivative balance by $130M for FVA, and reduced derivative liabilities by $340M for DVA; the corresponding year-end 2025 amounts were $336M, $116M and $270M.

Bank of America also retained economic exposure through derivatives to transferred non-U.S. government-guaranteed MBS: $4.2B transferred and $4.0B fair value at September 30, 2026, compared with $3.9B and $3.8B at year-end.

Note 4 — Securities

Dollars in billions, except where noted.

Debt securities

Across the total portfolio, gross unrealized losses were $109.150 billion at September 30, 2026, versus $82.949 billion at year-end 2025; gross unrealized gains were $324 million versus $992 million. The widening fair-value shortfall was concentrated in HTM securities. HTM gross unrealized losses increased to $103.914 billion from $80.257 billion. AFS gross unrealized losses rose to $5.063 billion from $2.603 billion, while AFS gross unrealized gains declined to $250 million from $790 million.

AFS securities in an unrealized-loss position

At September 30, 2026, securities in a loss position for 12 months or longer had fair value of $65.225 billion and gross losses of $2.862 billion; those in a loss position for less than 12 months had fair value of $156.965 billion and gross losses of $2.201 billion. Substantially all unrealized losses related to securities with a zero credit-loss assumption.

Expected credit losses on AFS and HTM securities were not significant relative to amortized cost of $830.1 billion, compared with $911.3 billion at December 31, 2025. Most of that amount—$769.1 billion at September 30, 2026 and $863.7 billion at year-end 2025—was predominantly U.S. agency and Treasury securities with a zero credit-loss assumption. Nonperforming AFS securities were not significant.

HTM valuation and portfolio concentration

Agency mortgage-backed securities (MBS) were a major source of HTM valuation exposure: at September 30, 2026, they had amortized cost of $370.073 billion, fair value of $282.676 billion and gross unrealized losses of $87.397 billion. HTM securities with maturities beyond ten years totaled $374.554 billion of the $496.426 billion portfolio, including $370.030 billion of agency MBS.

The HTM portfolio’s weighted-average yield was 1.91% (2.12% for agency MBS), compared with 3.97% for fair-value securities. The filing cautions that actual duration and yields may differ because of MBS and ABS prepayments.

Fannie Mae (FNMA) and Freddie Mac (FHLMC) securities each exceeded 10% of shareholders’ equity:

Securities pledged as collateral declined to $110.3 billion from $153.8 billion.

AFS sales and other holdings

Other holdings were: equity securities at fair value of $230 million at September 30, 2026 versus $253 million at December 31, 2025; equity securities under the measurement alternative with carrying value of $547 million versus $479 million; and money-market investments of $1.4 billion versus $1.2 billion.

Outstanding loans and leases

BAC’s loans and leases grew 5.5% from year-end 2025 to $1.25126 trillion at September 30, 2026, with growth concentrated in commercial lending. Amounts below are outstanding balances; FVO loans are included in the total.

Within direct/indirect consumer, auto and specialty lending declined to $50.9B from $55.3B, while U.S. securities-based lending rose to $64.3B from $55.0B. The company says these securities-based loans are generally collateralized by highly liquid assets with market value at least equal to the loan balance, limiting credit risk.

Credit quality and losses

Delinquency and nonperforming-loan measures improved overall from year-end, although U.S. commercial nonperformers increased. Residential mortgage nonperformers included $1.830B with no related allowance, primarily because estimated collateral value less selling costs exceeded amortized cost.

Credit-card loans 90+ days past due declined to $1.211B from $1.351B. Residential mortgage 90+ day past dues included $218M of fully insured loans. Mortgage credit indicators included $197.683B with refreshed FICO scores of at least 740 and $3.149B below 620; $3.454B had refreshed loan-to-value ratios above 90%. Home equity balances with refreshed LTV of 90% or less were $27.280B of $27.417B total.

Commercial reservable criticized exposure declined to $19.9B, or 2.49% of total commercial reservable utilized exposure, from $24.7B, or 3.37%, at year-end. The improvement was primarily in CRE and U.S. commercial. Reservable criticized balances fell in U.S. commercial to $10.244B from $11.534B, non-U.S. commercial to $2.379B from $2.681B, and CRE to $5.026B from $8.313B. CRE criticized exposure included $2.956B originated before 2022.

*Comparative total provision is derived from the loan-and-lease provision and unfunded-commitment provision/benefit figures.

The Q3 total provision declined $26M year over year: a $90M lower commercial provision, reflecting improved asset quality, was partly offset by a $64M increase in consumer provision, mainly credit card. The 9M decline reflected lower consumer and commercial provisions, primarily from improvement in credit card and CRE, partly offset by loan growth and a qualitative reserve build for uncertainty related to Middle East conflicts. The company’s weighted economic outlook remained moderately weaker than consensus and tilted to the downside, assuming U.S. unemployment near 5% from Q4 2027 through Q4 2028.

At September 30, 2026, the allowance for credit losses (ACL) was $14.184B, down from $14.361B a year earlier and down $196M from December 31, 2025. The September 2026 balance comprised a $13.005B loan and lease allowance and a $1.179B reserve for unfunded commitments; year-over-year comparatives were $13.252B and $1.109B, respectively. By portfolio, total ACL was $513M consumer, $7.729B commercial, and $5.942B CRE, versus $472M, $8.044B, and $5.845B a year earlier.

Modifications and funding capacity

Commercial loan modifications were $1.480B in Q3 2026 versus $1.466B in Q3 2025, and $3.287B for 9M versus $3.247B. Modified commercial loans 90+ days past due increased to $549M from $173M, including $392M of CRE; defaults within 12 months of modification were $243M versus not significant a year earlier. Commitments to financially troubled commercial borrowers whose loans were modified rose to $2.2B for 9M from $658M. Consumer real estate modifications were $170M in Q3 versus $43M; modified balances from the prior 12 months that were 90+ days past due rose to $128M from $43M. Credit-card and other consumer modifications were $265M in Q3 versus $235M; modifications reduced interest rates by a weighted average of about 18 percentage points.

Loans held for sale increased to $8.1B from $5.2B at year-end. For 9M, cash and non-cash proceeds from sales and paydowns were $27.0B, unchanged year over year, while cash used for originations and purchases increased to $29.9B from $23.4B. Loans pledged to the FHLB were $48.1B, up from $39.5B; another $359.6B was pledged without related borrowings to support potential FRB and FHLB borrowing capacity.

Note 6 — Securitizations and other variable interest entities

Bank of America uses VIEs for securitizations, funding, customer transactions and investments. It provided no support beyond contractual obligations to consolidated or unconsolidated VIEs in Q3 or 9M 2026, or FY 2025, and does not intend to provide such support. Liquidity commitments to certain unconsolidated VIEs, including written puts and collateral-value guarantees, increased to $1.4B at September 30, 2026 from $1.1B at December 31, 2025. Maximum-loss estimates assume the VIE assets become worthless, include specified off-balance-sheet commitments, and exclude losses already recognized through write-downs.

Mortgage securitizations

The residential gains before securitization are excluded from the securitization gains/(losses) above. Residential mortgage and home-equity loans serviced for investors had $75.4B UPB at September 30, 2026, down from $80.2B at September 30, 2025. Servicing and ancillary fee income was $48M in Q3 and $148M in 9M 2026, versus $54M and $164M in the comparable 2025 periods. Servicing advances were $787M, versus $894M at December 31, 2025.

Home-equity trusts may require subordinate funding during rapid amortization; any resulting charge depends on available lines, loan performance, subsequent draws and cash-flow timing. Standard representations and warranties generally are the only recourse to mortgage securitization trusts, subject to other disclosed commitments.

Credit-card, auto and other asset-backed VIEs

Receivables are transferred non-recourse to consolidated trusts, while BAC retains servicing and subordinated interests, including seller’s interests.

BAC resecuritized $10.4B in Q3 and $32.7B in 9M 2026, compared with $6.6B and $25.1B in 2025. Securities included in proceeds had initial fair values of $682M in Q3 and $1.8B in 9M 2026, versus $1.4B and $4.2B in 2025. No gain or loss is recorded on resecuritizations because the transferred securities are measured at fair value before transfer. Deconsolidated resecuritization trusts were not significant in 2026; their total assets were $85M in Q3 and $580M in 9M 2025.

Other VIEs and tax-related investments

Unconsolidated municipal-bond trust liquidity commitments were $3.3B, versus $3.0B. The bonds had an 8.9-year weighted-average remaining life; there were no significant asset or issuer write-downs or downgrades in 9M 2026 or 9M 2025. Maximum exposure to consolidated and unconsolidated CDOs was $54M, versus $60M. Unconsolidated investment VIEs had $37.4B of total assets and $3.6B maximum exposure, compared with $30.0B and $2.8B. The exposure was primarily on-balance-sheet assets less non-recourse liabilities. Consolidated leveraged-lease-trust net investment, also the stated maximum loss exposure, was $794M, versus $850M; trust debt is non-recourse to BAC.

Additional commitments are conditional on specified requirements and expected to be funded over the next 10 years. Tax credits and other benefits, and proportional-amortization investment expense, were:

BAC says project qualification requirements generally mitigate tax-credit risk. It reported no significant modifications or events changing the nature of its investments or its relationship with underlying projects under the proportional-amortization method; it may also enter into power purchase agreements with renewable-energy tax-credit entities.

Note 7 — Goodwill and intangible assets

Intangible assets’ net carrying value was $1.8B at both dates, including $1.5B of trade-name intangibles, substantially all indefinite-lived and not amortized.

Lease income

Q3 lease income increased modestly as higher operating lease income more than offset lower sales-type and direct financing lease income. For the first nine months, growth in operating lease income drove the increase in total lease income.

Lessor net investment

Third-party residual-value insurance covered at least part of leased assets with carrying values of $9.1B at September 30, 2026, compared with $9.4B at year-end 2025.

Lessee balances and related-party lease

The Corporation’s leases are predominantly operating leases for premises and equipment; financing leases are not significant. The increase in lessee balances was driven in large part by the related-party lease for the Corporation’s principal New York office. Related-party right-of-use assets were $3.1B, versus $393M at year-end 2025, and related-party lease liabilities were $3.2B, versus $440M. The lease was extended in Q1 2026 through 2049. Bank of America owns a 49.99% equity interest in the property, while a third party owns 50.01%.

Securities financing activities

Bank of America uses matched-book securities financing transactions to serve customers, cover short positions and finance inventory. Balances below are at period end.

The resale activity figures exclude $22.0B at September 30, 2026 and $19.6B at December 31, 2025 of repurchase activity reported in loans and leases.

“Other” liabilities were fully offset by financial instruments.

Secured borrowings, maturities and collateral

Maturities remained predominantly short-term; there were no agreements with maturities greater than four years.

The collateral mix shifted: U.S. government and agency collateral declined, while non-U.S. sovereign debt increased. Separately, the fair value of securities and loans accepted as collateral that the Corporation may sell or repledge rose to $1.3T from $1.1T; $1.2T and $1.0T, respectively, had been sold or repledged. Resale transactions are the primary source of this collateral.

Restricted cash included in cash and cash equivalents was $7.2B at September 30, 2026, compared with $6.5B at December 31, 2025. It predominantly reflected cash segregated under securities regulations and deposits with central banks for reserve requirements.

Some master netting agreements may not be enforceable under bankruptcy laws in certain countries or industries. Collateral associated with agreements whose enforceability is uncertain is excluded from the offsetting presentation.

Commitments and contingencies

Unfunded credit commitments

At September 30, 2026, total unfunded commitment notional, net of amounts syndicated or participated to other institutions, was $1.235613T, up from $1.193176T at December 31, 2025. The carrying value of commitments, excluding fair-value-option commitments, was $1.2B at both dates, predominantly reflecting the reserve for unfunded lending commitments.

Of September’s $44.712B in standby letters of credit and financial guarantees, $33.3B was investment-grade and $10.3B non-investment-grade, compared with $26.8B and $10.4B, respectively, at year-end. Certain commitments include adverse-change clauses.

Fair-value-option commitments had $3.8B of notional and $116M of cumulative net fair value at September 30, compared with $2.4B and $67M at year-end; these fair values are excluded from the commitment table.

Other funding, trading and purchase commitments

A significant portion of resale, borrowing, repurchase and securities-lending commitments expire within 12 months. The auto-loan and lease arrangement extends through November 2030 and is terminable on 12 months’ notice.

Guarantees and contingent exposures

In the FICC sponsored-member repo program, maximum exposure before related collateral was $270.5B, down from $339.1B. The bank says cash or high-quality securities collateral makes significant losses remote. Merchant-processing transactions subject to reversal over the preceding six months represented approximately $183B of estimated maximum potential exposure; certain merchants provide collateral, and related reserves and losses were not significant.

The bank-owned life-insurance guarantees had $2.4B of notional, insignificant fair value and an estimated maturity in 2034. Estimated possible losses on representations-and-warranties and corporate guarantees above the reserve were not significant. The remaining $5.4B Federal Reserve stock subscription is subject to a further call that management considers remote.

Litigation and regulatory matters

Litigation and regulatory investigation expense, excluding internal and external legal-service-provider costs, increased sharply, principally because of a $1.2B non-tax-deductible Q3 charge for civil money penalties. The penalties followed resolutions on October 13, 2026, with the OCC, FinCEN and OFAC concerning aspects of BANA’s BSA/AML and economic-sanctions compliance programs. BANA had been working with regulators on program changes since late 2023 and had previously completed significant steps under a December 2024 OCC consent order.

For matters with losses considered reasonably possible and estimable, the aggregate estimated range was $0–$200M above accrued liabilities, if any, as of September 30. Management does not expect pending matters to materially affect consolidated financial condition or liquidity, though adverse outcomes could materially affect a particular period’s results or cause reputational harm. A separate FDIC assessment lawsuit concluded in BANA’s favor in June 2026, and pledged security was released. An unemployment prepaid-card class action remained active, with a motion to decertify pending and the case proceeding toward trial.

Capital returns and equity actions (Note 11 excerpt)

BAC repurchased and retired 97M common shares for $6.0B in Q3 2026 and 349M shares for $19.3B in 9M 2026, including excise taxes. Employee stock plans issued 95M shares and repurchased 36M shares for tax withholding during 9M; 529M shares were reserved for future employee-plan, convertible-note and preferred-stock issuance.

The common dividend rose from $0.28 per share in Q1 and Q2 2026 to $0.32 in Q3; the board declared another $0.32 dividend in October. Preferred dividends totaled $1.1B in 9M 2026—$392M in Q3, $326M in Q2 and $425M in Q1. Series DD preferred stock was fully redeemed for $1.0B in Q1.

Note 12 — Accumulated Other Comprehensive Income

Nine-month OCI

The 9M 2026 pretax OCI loss of $6,115 was partly offset by a $1,371 tax benefit. In 9M 2025, pretax OCI income of $4,144 was reduced by $604 of tax expense. The reversal chiefly reflects adverse fair-value movements in derivatives and debt securities, which reversed the prior-year gains.

Derivative reclassifications into earnings principally affected net interest income: $809 after tax in 9M 2026 versus $880 in 9M 2025. These were partly offset by compensation and benefits expense, with after-tax losses of $11 and $13, respectively. The note also identifies debt-security, debit-valuation and foreign-currency reclassifications as recorded in other income.

Accumulated OCI balance

The comparable September 30, 2025 accumulated loss was $11,745. The 9M 2026 after-tax OCI loss increased the accumulated loss, reversing the $3,540 after-tax OCI gain recorded in 9M 2025.

Earnings per common share

Q3 net income declined 16.8% year over year, and net income applicable to common shareholders fell 17.2%; the decrease in average common shares partly cushioned the basic EPS decline of 12.3%. In contrast, 9M net income increased 7.6%, with basic EPS up 14.3%, supported in part by fewer average common shares.

Diluted net income allocated to common shareholders includes Series L preferred dividends assumed converted: $56M in each quarter and $167M in each nine-month period. Series L was dilutive in all periods, and its assumed conversion contributed 62M common shares to diluted share counts.

Recurring fair-value measurements

At September 30, 2026, Bank of America’s recurring fair-value assets were lower than at year-end 2025, largely reflecting a decline in available-for-sale (AFS) debt securities. Recurring fair-value liabilities were broadly stable. Hierarchy totals below are after the stated netting adjustments, which reflect legally enforceable master netting agreements and cash collateral.

Level 3 assets represented 0.33% of consolidated assets at September 30, 2026, compared with 0.29% at December 31, 2025; Level 3 liabilities were 0.24% of consolidated liabilities, versus 0.19%. Although small relative to consolidated totals, Level 3 valuations depend on unobservable assumptions and can be sensitive to model inputs.

Level 3 exposures and valuation

At September 30, 2026, recurring Level 3 exposures included $4.313B of trading account assets and $2.136B of other assets, including $1.0B of mortgage servicing rights (MSRs). Trading account liabilities were $99M, and net derivative liabilities were $1.945B, up from $1.313B at January 1, 2026. For the nine months ended September 30, 2026, Level 3 derivatives recorded $545M of net-income losses, although instruments still held at period-end had $127M of gains. Level 3 trading assets recorded $181M of nine-month net-income gains and other assets recorded $56M of gains; long-term debt and accrued expenses and other liabilities recorded losses of $129M and $148M, respectively.

Significant September 30, 2026 Level 3 assumptions included yields of 0%–25% (weighted average 9%) for residential-backed instruments, 0%–20% (9%) for commercial-real-estate-backed instruments, and 6%–25% (12%) for commercial loans, debt securities and other. Structured long-term debt used yields of 17%–25% (23%). Equity derivatives used assumed equity correlation of 0%–100% (60%) and long-dated equity volatility of 0%–112% (46%); commodity derivatives used natural-gas forward prices of $1–$7/MMBtu (weighted average $3/MMBtu).

At December 31, 2025, Level 3 exposures included $327M of residential real-estate-backed instruments, $373M of commercial real-estate-backed instruments, $3.006B of commercial loans, debt securities and other instruments, and $2.118B of other assets, primarily MSRs and tax-related equity investments. Assumptions included weighted-average yields of 8% for residential-backed instruments, 2% for commercial-real-estate-backed instruments and 13% for commercial loans and related assets. Level 3 net derivative liabilities were $1.313B, including $1.018B of equity-derivative liabilities and $664M of commodity-derivative liabilities, partly offset by $372M of interest-rate-derivative assets. Changes in input observability can cause transfers between hierarchy levels; transfers are particularly regular for long-term debt as unobservable inputs’ relative effect on embedded derivatives changes. No valuation approach or technique changes during the nine months ended September 30, 2026 had, or were expected to have, a material impact on consolidated financial position or results.

Nonrecurring fair-value measurements

The emergence of a material Level 3 LHFS balance and the shift to losses in 2026 contrast with the prior-year comparison. The 2026 Level 3 LHFS valuations used market comparables, with a price input of $17–$90 (weighted average $68). No significant Level 3 instruments had nonrecurring fair-value measurements for the year ended December 31, 2025.

Fair-value-option positions

Amounts in $M. Carrying amounts are fair value at September 30, 2026 and December 31, 2025; principal and the difference between fair value and unpaid principal are shown where applicable.

The fair-value discount on long-term debt widened by $1,080M. Trading-account loans and loans held-for-sale include significant distressed-loan positions purchased at deep discounts to par; the remaining loans are generally carried at fair value near contractual principal. Fair values of fair-value-option consumer and commercial loans that were at least 90 days past due and/or on nonaccrual were not significant.

Fair-value-option gains and losses

Amounts in $M.

The Q3 swing was led by long-term debt, whose fair-value result primarily reflects embedded derivatives in structured liabilities and is typically offset by gains or losses on hedging derivatives and securities. Market-making gains and losses on trading-account assets are also primarily offset by trading liabilities that hedge those assets. Long-term-debt results include changes in Bank of America’s own credit spreads; cumulative effects and amounts recognized in AOCI are disclosed elsewhere in the filing.

Borrower-specific credit-risk fair-value changes

Amounts in $M; parentheses indicate losses.

Fair value of financial instruments

At September 30, 2026, the Corporation reported carrying and estimated fair values for financial instruments not fully carried at fair value on the balance sheet. Amounts are in U.S. dollars.

The fair-value shortfall on loans widened from $12.654B at December 31, 2025 to $25.400B at September 30, 2026. Deposits’ fair value modestly exceeded carrying value at both dates; demand deposits without stated maturities were $1.2T at September 30, 2026, compared with $1.1T at December 31, 2025.

Valuations of loans and commercial unfunded lending commitments rely predominantly on Level 3 inputs, indicating substantial use of unobservable assumptions. The carrying value of commercial unfunded lending commitments is included in accrued expenses and other liabilities. The Corporation does not estimate fair value for consumer unfunded lending commitments because it can often reduce or cancel them with notice to borrowers.

Bank of America — Note 17: Business Segment Information

Dollars in billions unless stated. Segment and total results are presented on a fully taxable-equivalent (FTE) basis.

Consolidated results

Q3 revenue increased 3.2%, but net income declined 16.8%, as higher net interest income was more than offset by lower noninterest income and substantially higher expenses. For the first nine months, revenue rose 8.3% and net income increased 7.6%. The FTE adjustment for tax-exempt securities was $161 million in Q3 2026 versus $154 million in Q3 2025, and $486 million in 9M 2026 versus $444 million in 9M 2025.

Segment results

Year-to-date results showed a stronger trend in some segments than Q3 alone:

Global Wealth & Investment Management growth was led by investment and brokerage services, particularly asset-management fees. Global Banking revenue was nearly unchanged in Q3 but higher year to date. Global Markets weakened in Q3, while its 9M revenue and net income remained above the prior-year period. All Other’s larger Q3 net loss reflected other noninterest expense of $1.396 billion versus $201 million.

Revenue drivers

The Q3 decline in consolidated noninterest income was largely associated with weaker Global Markets noninterest income and market-making results. Over 9M, higher fees and commissions—including Global Wealth asset-management fees—supported increased Corporation noninterest income.

Period-end segment assets

Assets increased notably in Global Markets and Global Banking, while All Other assets declined. Intersegment revenues were not material.

Glossary and key-metric definitions

The section defines banking, lending, risk, and performance terms; it reports no period-specific financial results, changes, or quantified risks.

• Client assets and digital use: Assets under management (AUM) are discretionary or advisory assets that generate asset-management fees. Brokerage and other assets are nondiscretionary assets held in brokerage or safekeeping accounts. Active digital and active mobile users are users active online and on mobile, respectively, during the past 90 days.
• Credit and lending: Committed credit exposure includes funded amounts and legally binding unfunded commitments. Loan-to-value (LTV) is loan carrying value divided by estimated collateral property value. Nonperforming loans and leases include nonaccrual loans and leases, as well as certain concessionary restructurings for financially troubled borrowers. The company uses “subprime” for specific offerings to higher-risk borrowers and notes that there is no standard industry definition. Alt-A mortgages are generally riskier than prime mortgages but less risky than subprime. Interest-rate lock commitments (IRLCs) guarantee proposed loan terms for a designated period, subject to credit approval. Letters of credit substitute the bank’s credit for a customer’s, subject to specified document presentation.
• Market, funding, and valuation risks: Value at Risk (VaR) estimates potential trading-portfolio losses at a stated confidence level using historical data and hypothetical scenarios. Credit valuation adjustment (CVA) reflects derivative counterparty credit risk in fair value; debit valuation adjustment (DVA) reflects the Corporation’s own credit risk in the fair value of derivatives or structured liabilities; and funding valuation adjustment (FVA) reflects funding costs for certain derivatives. Credit derivatives provide protection against specified credit events. The banking book comprises on- and off-balance-sheet instruments other than trading positions. Macro products include currencies, interest rates, and commodities.
• Other banking activities: Margin receivables are credit secured by eligible securities in brokerage accounts. A matched book consists of similar-sized and/or similarly dated repo/resale or securities-borrowing/lending positions, generally customer-driven and earning an interest spread. Mortgage servicing rights (MSRs) are rights to service sold or securitized mortgages, including collecting and remitting borrower payments.
• Regulatory capital: Prompt Corrective Action (PCA) categorizes insured banks from well capitalized to critically undercapitalized. Falling below specified capital levels can restrict distributions, compensation, asset growth, and other activities.

Financial measure definitions

• Book value is ending common equity per ending common share. The common equity ratio is ending common equity divided by ending assets.
• Deposit spread is annualized net interest income over average deposits; gross interest yield is the effective annual percentage rate over average loans; and net interest yield is net interest income over average interest-earning assets.
• The efficiency ratio is noninterest expense divided by revenue net of interest expense. Operating margin is pretax income divided by that same revenue measure.
• The dividend payout ratio is common dividends declared divided by net income applicable to common shareholders.
• Return measures use the specified net income numerator and the relevant average assets, equity, common equity, or allocated capital denominator.
• Tangible common equity and its return measure exclude goodwill and intangible assets; MSRs are excluded from intangible deductions, and related deferred tax liabilities are netted.
• Risk-adjusted margin is revenue net of interest expense less net charge-offs, divided by average loans.

Acronyms, Legal Matters and Risk Factors

The section defines banking, capital, liquidity, credit, securities and regulatory acronyms, including CET1, RWA, SCB, G-SIB, HQLA, LCR, NSFR, SLR and TLAC.

For legal proceedings, the filing refers readers to “Litigation and Regulatory Matters” in Note 10—Commitments and Contingencies, which supplements the disclosure in the 2025 Form 10-K. Bank of America reports no material changes to the risk factors disclosed in its 2025 Form 10-K.

Common-stock repurchases and unregistered issuance — Q3 2026

Under BAC’s $40 billion 2025 Repurchase Program, authorized and announced July 23, 2025, effective August 1, 2025, BAC repurchased 97.751 million common shares during the quarter at a weighted-average price of $62.15 per share. Of these, 96.634 million shares were purchased under publicly announced programs. The prior repurchase program expired August 1, 2025.

Total repurchases included approximately 1 million shares acquired for tax withholding on vested restricted stock and units, certain award forfeitures and employment terminations, and potential reissuance to employees under equity plans.

The parent company’s primary source of cash for shareholder distributions is dividends from its banking subsidiaries. Those subsidiaries must maintain capital above regulatory minimums and satisfy other dividend requirements; outstanding preferred stock has priority over common stock dividends.

On September 25, 2026, a holder converted 28 shares of BAC’s 7.25% Non-Cumulative Perpetual Convertible Preferred Stock, Series L, into 560 common shares at the contractual rate of 20 common shares per preferred share. BAC issued the common shares without Securities Act registration, relying on the existing-holder exchange exemption under Section 3(a)(9).

Other Information — Q3 2026

• Insider trading plans: No Bank of America directors or covered officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter.
• Sanctions-related transaction: Under Exchange Act Section 13(r), BANA processed one OFAC-authorized $30,000 wire payment from a non-sanctioned party for legal services provided by a U.S. law firm to a sanctioned individual. The transaction generated no measurable gross revenue or net profit for the Corporation, apart from nominal processing fees. Bank of America said it may conduct other client transactions in the future where permitted by U.S. law.
• Filing signature: The filing was signed on October 30, 2026, by Johnbull E. Okpara, Chief Accounting Officer.