BANK OF AMERICA CORP DE

The allowance for credit losses increased $329 million from December 31, 2022 to $14.6 billion at December 31, 2023, which included a $1.3 billion reserve increase related to the consumer portfolio and a $942 million reserve decrease related to the commercial portfolio. The increase in the allowance reflected a reserve build in our consumer portfolio primarily due to credit card loan growth and asset quality, partially offset by a reserve release in our commercial portfolio primarily driven by improved macroeconomic conditions applicable to the

commercial portfolio. The allowance also includes the impact of the accounting change to remove the recognition and measurement guidance on troubled debt restructurings, which reduced the allowance for credit losses by $243 million on January 1, 2023. For more information on this change in accounting guidance, see Note 1 – Summary of Significant Accounting Principlesto the Consolidated Financial Statements.

Table 39 presents an allocation of the allowance for credit losses by product type at December 31, 2023 and 2022.

(1)Ratios are calculated as allowance for loan and lease losses as a percentage of loans and leases outstanding excluding loans accounted for under the fair value option.

(2)Includes allowance for loan and lease losses for U.S. small business commercial loans of $1.0 billion and $844 million at December 31, 2023 and 2022.

Net charge-offs for 2023 were $3.8 billion compared to $2.2 billion in 2022 primarily due to late-stage delinquent credit card loans that were charged off. The provision for credit losses increased $1.9 billion to $4.4 billion during 2023 compared to 2022. The provision for credit losses in 2023 was driven by our consumer portfolio primarily due to credit card loan growth and asset quality, partially offset by improved macroeconomic conditions that primarily benefited our commercial portfolio. The provision for credit losses for the consumer portfolio, including unfunded lending commitments, increased $2.5 billion to $4.5 billion during 2023 compared to 2022. The provision for credit losses for the commercial portfolio, including unfunded lending

commitments, decreased $628 million to a $133 million benefit for 2023 compared to 2022. The decline was due primarily to an improved macroeconomic outlook.

Table 40 presents a rollforward of the allowance for credit losses, including certain loan and allowance ratios for 2023 and 2022. For more information on the Corporation’s credit loss accounting policies and activity related to the allowance for credit losses, see Note 1 – Summary of Significant Accounting Principles and Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses to the Consolidated Financial Statements.

71 Bank of America

(1)Includes U.S. small business commercial charge-offs of $360 million in 2023 compared to $203 million in 2022.

(2)Includes U.S. small business commercial recoveries of $41 million in 2023 compared to $49 million in 2022.

(3)Ratios are calculated as allowance for loan and lease losses as a percentage of loans and leases outstanding excluding loans accounted for under the fair value option.

(4)Primarily includes amounts related to credit card and unsecured consumer lending portfolios in Consumer Banking.