BANK OF AMERICA CORP DE
For the period ended Sep 30, 2024. Filed Oct 29, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Oct 29, 2024
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Allowance for Credit Losses
The allowance for credit losses decreased $200 million from December 31, 2023 to $14.4 billion at September 30, 2024, which included a $49 million reserve increase and a
$249 million reserve decrease related to the consumer and commercial portfolios.
Table 36 presents an allocation of the allowance for credit losses by product type at September 30, 2024 and December 31, 2023.
| Table 36 | Allocation of the Allowance for Credit Losses by Product Type | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Amount · Percent ofTotal · Percent ofLoans andLeasesOutstanding (1) · Amount · Percent ofTotal · Percent ofLoans andLeasesOutstanding (1) | ||||||||||
| (Dollars in millions) · September 30, 2024 · December 31, 2023 | ||||||||||
| Allowance for loan and lease losses | ||||||||||
| Residential mortgage | $280 | 2.11% | 0.12% | $339 | 2.54% | 0.15% | ||||
| Home equity | 29 | 0.22 | 0.11 | 47 | 0.35 | 0.19 | ||||
| Credit card | 7,492 | 56.54 | 7.43 | 7,346 | 55.06 | 7.19 | ||||
| Direct/Indirect consumer | 730 | 5.51 | 0.69 | 715 | 5.36 | 0.69 | ||||
| Other consumer | 62 | 0.47 | n/m | 73 | 0.55 | n/m | ||||
| Total consumer | 8,593 | 64.85 | 1.87 | 8,520 | 63.86 | 1.85 | ||||
| U.S. commercial (2) | 2,567 | 19.37 | 0.64 | 2,600 | 19.49 | 0.69 | ||||
| Non-U.S. commercial | 766 | 5.78 | 0.60 | 842 | 6.31 | 0.68 | ||||
| Commercial real estate | 1,287 | 9.71 | 1.88 | 1,342 | 10.06 | 1.84 | ||||
| Commercial lease financing | 38 | 0.29 | 0.25 | 38 | 0.28 | 0.26 | ||||
| Total commercial | 4,658 | 35.15 | 0.76 | 4,822 | 36.14 | 0.82 | ||||
| Allowance for loan and lease losses | 13,251 | 100.00% | 1.24 | 13,342 | 100.00% | 1.27 | ||||
| Reserve for unfunded lending commitments | 1,100 | 1,209 | ||||||||
| Allowance for credit losses | $14,351 | $14,551 | ||||||||
(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 $1.2 billion and $1.0 billion at September 30, 2024 and December 31, 2023.
Net charge-offs for the three and nine months ended September 30, 2024 were $1.5 billion and $4.6 billion compared to $931 million and $2.6 billion for the same periods in 2023 primarily due to credit card loans and the commercial real estate office portfolio. The provision for credit losses increased $308 million to $1.5 billion and $1.1 billion to $4.4 billion for the three and nine months ended September 30, 2024 compared to the same periods in 2023. The provision for credit losses for the current-year periods was primarily driven by credit card loans and the commercial real estate office portfolio. The provision for credit losses for the consumer portfolio, including unfunded lending commitments, decreased $93 million to $1.1 billion and $86 million to $3.2 billion for the three and nine months ended September 30, 2024 compared to the same periods in 2023. The provision for credit losses for
the commercial portfolio, including unfunded lending commitments, increased $401 million to $417 million and $1.2 billion to $1.2 billion for the three and nine months ended September 30, 2024 compared to the same periods in 2023.
Table 37 presents a rollforward of the allowance for credit losses, including certain loan and allowance ratios for the three and nine months ended September 30, 2024 and 2023. 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 Principlesto the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K and Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses to the Consolidated Financial Statements.
41 Bank of America
| Table 37 · Allowance for Credit Losses | ||||
|---|---|---|---|---|
| Three Months Ended September 30 | Nine Months Ended September 30 | |||
| (Dollars in millions) | 2024 | 2023 | 2024 | 2023 |
| Allowance for loan and lease losses, December 31 | n/a | n/a | $13,342 | $12,682 |
| January 1, 2023 adoption of credit loss standard | n/a | n/a | n/a | (243) |
| Allowance for loan and lease losses, beginning of period | $13,238 | $12,950 | $13,342 | $12,439 |
| Loans and leases charged off | ||||
| Residential mortgage | (5) | (8) | (18) | (26) |
| Home equity | (10) | (7) | (16) | (18) |
| Credit card | (1,084) | (814) | (3,235) | (2,220) |
| Direct/Indirect consumer | (101) | (57) | (292) | (153) |
| Other consumer | (71) | (123) | (221) | (406) |
| Total consumer charge-offs | (1,271) | (1,009) | (3,782) | (2,823) |
| U.S. commercial (1) | (288) | (131) | (710) | (371) |
| Non-U.S. commercial | (60) | — | (61) | (31) |
| Commercial real estate | (180) | (44) | (762) | (139) |
| Commercial lease financing | (1) | (3) | (2) | (3) |
| Total commercial charge-offs | (529) | (178) | (1,535) | (544) |
| Total loans and leases charged off | (1,800) | (1,187) | (5,317) | (3,367) |
| Recoveries of loans and leases previously charged off | ||||
| Residential mortgage | 7 | 6 | 17 | 21 |
| Home equity | 15 | 21 | 48 | 60 |
| Credit card | 156 | 141 | 453 | 436 |
| Direct/Indirect consumer | 45 | 32 | 120 | 110 |
| Other consumer | 4 | 5 | 13 | 19 |
| Total consumer recoveries | 227 | 205 | 651 | 646 |
| U.S. commercial (2) | 29 | 44 | 72 | 92 |
| Non-U.S. commercial | — | 2 | 13 | 13 |
| Commercial real estate | 9 | 5 | 15 | 9 |
| Commercial lease financing | 1 | — | 1 | — |
| Total commercial recoveries | 39 | 51 | 101 | 114 |
| Total recoveries of loans and leases previously charged off | 266 | 256 | 752 | 760 |
| Net charge-offs | (1,534) | (931) | (4,565) | (2,607) |
| Provision for loan and lease losses | 1,547 | 1,268 | 4,479 | 3,477 |
| Other | — | — | (5) | (22) |
| Allowance for loan and lease losses, September 30 | 13,251 | 13,287 | 13,251 | 13,287 |
| Reserve for unfunded lending commitments, beginning of period | 1,104 | 1,388 | 1,209 | 1,540 |
| Provision for unfunded lending commitments | (5) | (34) | (110) | (187) |
| Other | 1 | (1) | 1 | — |
| Reserve for unfunded lending commitments, September 30 | 1,100 | 1,353 | 1,100 | 1,353 |
| Allowance for credit losses, September 30 | $14,351 | $14,640 | $14,351 | $14,640 |
| Loan and allowance ratios (3): | ||||
| Loans and leases outstanding at September 30 | $1,071,628 | $1,044,899 | $1,071,628 | $1,044,899 |
| Allowance for loan and lease losses as a percentage of total loans and leases outstanding at September 30 | 1.24% | 1.27% | 1.24% | 1.27% |
| Consumer allowance for loan and lease losses as a percentage of total consumer loans and leases outstanding at September 30 | 1.87 | 1.78 | 1.87 | 1.78 |
| Commercial allowance for loan and lease losses as a percentage of total commercial loans and leases outstanding at September 30 | 0.76 | 0.87 | 0.76 | 0.87 |
| Average loans and leases outstanding | $1,055,975 | $1,041,972 | $1,049,689 | $1,040,116 |
| Annualized net charge-offs as a percentage of average loans and leases outstanding | 0.58% | 0.35% | 0.58% | 0.34% |
| Allowance for loan and lease losses as a percentage of total nonperforming loans and leases at September 30 | 235 | 275 | 235 | 275 |
| Ratio of the allowance for loan and lease losses at September 30 to annualized net charge-offs | 2.17 | 3.60 | 2.17 | 3.81 |
| Amounts included in allowance for loan and lease losses for loans and leases that are excluded from nonperforming loans and leases at September 30 (4) | $8,640 | $5,330 | $8,640 | $5,330 |
| Allowance for loan and lease losses as a percentage of total nonperforming loans and leases, excluding the allowance for loan and lease losses for loans and leases that are excluded from nonperforming loans and leases at September 30 (4) | 82% | 165% | 82% | 165% |
(1)Includes U.S. small business commercial charge-offs of $135 million and $383 million for the three and nine months ended September 30, 2024 compared to $94 million and $254 million for the same periods in 2023.
(2)Includes U.S. small business commercial recoveries of $11 million and $33 million for the three and nine months ended September 30, 2024 compared to $12 million and $32 million for the same periods in 2023.
(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.
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