BANK OF AMERICA CORP DE
For the period ended Dec 31, 2024. Filed Feb 25, 2025.
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FY2024 · Filed Feb 25, 2025
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Allowance for Credit Losses
The allowance for credit losses decreased $215 million from December 31, 2023 to $14.3 billion at December 31, 2024, which included a $25 million reserve increase and a
$240 million reserve decrease related to the consumer and commercial portfolios, respectively.
Table 39 presents an allocation of the allowance for credit losses by product type at December 31, 2024 and 2023.
| Table 39 | 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) · December 31, 2024 · December 31, 2023 | ||||||||||
| Allowance for loan and lease losses | ||||||||||
| Residential mortgage | $264 | 1.99% | 0.12% | $339 | 2.54% | 0.15% | ||||
| Home equity | 29 | 0.22 | 0.11 | 47 | 0.35 | 0.19 | ||||
| Credit card | 7,515 | 56.76 | 7.26 | 7,346 | 55.06 | 7.19 | ||||
| Direct/Indirect consumer | 700 | 5.29 | 0.65 | 715 | 5.36 | 0.69 | ||||
| Other consumer | 62 | 0.47 | n/m | 73 | 0.55 | n/m | ||||
| Total consumer | 8,570 | 64.73 | 1.84 | 8,520 | 63.86 | 1.85 | ||||
| U.S. commercial (2) | 2,637 | 19.91 | 0.65 | 2,600 | 19.49 | 0.69 | ||||
| Non-U.S. commercial | 778 | 5.88 | 0.57 | 842 | 6.31 | 0.68 | ||||
| Commercial real estate | 1,219 | 9.21 | 1.85 | 1,342 | 10.06 | 1.84 | ||||
| Commercial lease financing | 36 | 0.27 | 0.23 | 38 | 0.28 | 0.26 | ||||
| Total commercial | 4,670 | 35.27 | 0.75 | 4,822 | 36.14 | 0.82 | ||||
| Allowance for loan and lease losses | 13,240 | 100.00% | 1.21 | 13,342 | 100.00% | 1.27 | ||||
| Reserve for unfunded lending commitments | 1,096 | 1,209 | ||||||||
| Allowance for credit losses | $14,336 | $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 December 31, 2024 and 2023.
Net charge-offs for 2024 were $6.0 billion compared to $3.8 billion in 2023 primarily due to credit card loans and the commercial real estate office portfolio. The provision for credit losses increased $1.4 billion to $5.8 billion during 2024 compared to 2023. The provision for credit losses in 2024 was primarily driven by credit card as well as small business loan growth, and asset quality deterioration in the commercial real estate office and credit card portfolios. The provision for credit losses for the consumer portfolio, including unfunded lending commitments, decreased $267 million to $4.3 billion during 2024 compared to 2023. The provision for credit losses for the
commercial portfolio, including unfunded lending commitments, increased $1.7 billion to $1.6 billion during 2024 compared to 2023.
Table 40 presents a rollforward of the allowance for credit losses, including certain loan and allowance ratios for 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 Principles and Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses to the Consolidated Financial Statements.
| Table 40 · Allowance for Credit Losses | ||
|---|---|---|
| (Dollars in millions) | 2024 | 2023 |
| Allowance for loan and lease losses, December 31 | $13,342 | $12,682 |
| January 1, 2023 adoption of credit loss standard | n/a | (243) |
| Allowance for loan and lease losses, January 1 | $13,342 | $12,439 |
| Loans and leases charged off | ||
| Residential mortgage | (21) | (67) |
| Home equity | (21) | (36) |
| Credit card | (4,365) | (3,133) |
| Direct/Indirect consumer | (399) | (233) |
| Other consumer | (313) | (504) |
| Total consumer charge-offs | (5,119) | (3,973) |
| U.S. commercial (1) | (958) | (551) |
| Non-U.S. commercial | (81) | (37) |
| Commercial real estate | (894) | (254) |
| Commercial lease financing | (2) | (2) |
| Total commercial charge-offs | (1,935) | (844) |
| Total loans and leases charged off | (7,054) | (4,817) |
| Recoveries of loans and leases previously charged off | ||
| Residential mortgage | 21 | 51 |
| Home equity | 62 | 95 |
| Credit card | 620 | 572 |
| Direct/Indirect consumer | 160 | 141 |
| Other consumer | 18 | 24 |
| Total consumer recoveries | 881 | 883 |
| U.S. commercial (2) | 97 | 108 |
| Non-U.S. commercial | 14 | 18 |
| Commercial real estate | 30 | 9 |
| Commercial lease financing | 1 | — |
| Total commercial recoveries | 142 | 135 |
| Total recoveries of loans and leases previously charged off | 1,023 | 1,018 |
| Net charge-offs | (6,031) | (3,799) |
| Provision for loan and lease losses | 5,935 | 4,725 |
| Other | (6) | (23) |
| Allowance for loan and lease losses, December 31 | 13,240 | 13,342 |
| Reserve for unfunded lending commitments, January 1 | 1,209 | 1,540 |
| Provision for unfunded lending commitments | (114) | (331) |
| Other | 1 | — |
| Reserve for unfunded lending commitments, December 31 | 1,096 | 1,209 |
| Allowance for credit losses, December 31 | $14,336 | $14,551 |
| Loan and allowance ratios (3): | ||
| Loans and leases outstanding at December 31 | $1,091,586 | $1,050,163 |
| Allowance for loan and lease losses as a percentage of total loans and leases outstanding at December 31 | 1.21% | 1.27% |
| Consumer allowance for loan and lease losses as a percentage of total consumer loans and leases outstanding at December 31 | 1.84 | 1.85 |
| Commercial allowance for loan and lease losses as a percentage of total commercial loans and leases outstanding at December 31 | 0.75 | 0.82 |
| Average loans and leases outstanding | $1,056,507 | $1,041,824 |
| Net charge-offs as a percentage of average loans and leases outstanding | 0.57% | 0.36% |
| Allowance for loan and lease losses as a percentage of total nonperforming loans and leases at December 31 | 222 | 243 |
| Ratio of the allowance for loan and lease losses at December 31 to net charge-offs | 2.20 | 3.51 |
| Amounts included in allowance for loan and lease losses for loans and leases that are excluded from nonperforming loans and leases at December 31 (4) | $8,689 | $8,357 |
| 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 December 31 (4) | 76% | 91% |
(1)Includes U.S. small business commercial charge-offs of $519 million in 2024 compared to $360 million in 2023.
(2)Includes U.S. small business commercial recoveries of $46 million in 2024 compared to $41 million 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.
73 Bank of America
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