BANK OF AMERICA CORP /DE/

Bank of America is one of the world's largest financial institutions, serving individual consumers, small- and middle-market businesses, institutional investors, large corporations and governments with a full range of banking, investing, asset management and other financial and risk management products and services. The company operates in a highly competitive environment with competitors including banks, thrifts, credit unions, investment banking firms, investment advisory firms, brokerage firms, investment companies, insurance companies, mortgage banking companies, credit card issuers, mutual fund companies, hedge funds, private equity firms, and e-commerce and other internet-based companies, including merchant banks and companies providing nonbank financial services. Competition is based on factors including customer service and convenience, the pricing, quality and range of products and services offered, lending limits, the quality and delivery of technology and reputation, experience and relationships in relevant markets.

The filing names no specific competitors by name but describes a broad competitive landscape. The company's competitive positioning is supported by its scale as one of the world's largest financial institutions, its diversified range of banking and nonbank financial services and products across four business segments, and its ability to attract and retain employees while managing compensation and other costs.

Bank of America generates revenue through a diversified range of banking and nonbank financial services and products provided through four business segments: Consumer Banking, Global Wealth & Investment Management (GWIM), Global Banking and Global Markets, with remaining operations recorded in All Other. The company serves individual consumers, small- and middle-market businesses, institutional investors, large corporations and governments. Revenue is derived from both recurring income streams such as net interest income and asset management fees, and transactional income such as investment banking fees, trading revenues, and card income.

Consumer Banking provides a full range of banking, investing, and financial products and services to individual consumers and small businesses. Global Wealth & Investment Management offers wealth management, investment management, brokerage, banking, and retirement products to individuals and institutions. Global Banking provides lending, treasury management, capital markets, and investment banking services to middle-market and large corporations, as well as commercial real estate and financial institutions. Global Markets offers sales and trading services, market-making, and risk management solutions across fixed income, currencies, commodities, and equities to institutional investors and corporations.

All Other includes the remaining operations not allocated to the four business segments, which typically includes the company's asset and liability management activities, certain investment portfolios, and residual expense allocations.

During 2025, the Corporation took its final step to reach its goal of a $25 per hour minimum wage for U.S. employees by raising its U.S. minimum hourly wage from $24 to $25 per hour. The Corporation also announced in January 2026 that approximately 96 percent of employees globally will receive a Sharing Success compensation award in the first quarter of 2026. Additionally, the Corporation's stress capital buffer (SCB) decreased to 2.5 percent based on the results of its 2025 CCAR stress test, and the Corporation's G-SIB surcharge is 3.0 percent.

In fiscal year 2025, total revenue, net of interest expense, was $102.457 billion ¹, compared to $101.149 billion ² in 2024. Net income applicable to common shareholders was $24.282 billion ³, and diluted earnings per share was $2.92 ⁴, compared to $23.498 billion ⁵ and $2.82 ⁶ in the prior year. The provision for credit losses was $5.613 billion ⁷ in 2025, up from $5.475 billion ⁸ in 2024.

The Corporation continues to focus on Responsible Growth as a key growth vector, emphasizing serving clients and communities while managing risk. The filing discusses the Corporation's efforts to streamline its organizational structure and reduce complexity and costs, including reducing the number of its corporate subsidiaries through intercompany mergers. The Corporation also continues to make progress to enhance its resolvability, which includes continued improvements to preparedness and exercise capabilities to implement its resolution plan.

The Corporation's growth strategy includes investing in technology and talent to improve customer service and convenience, the pricing, quality and range of products and services offered, and the quality and delivery of technology. The filing notes that the Corporation is increasingly competing with firms offering products solely over the internet and with nonfinancial companies, including firms utilizing emerging technologies such as digital assets.

The Corporation's compensation and benefits expense was $42.3 billion ⁹ in 2025, or 61 percent of total noninterest expense, compared to $40.2 billion ¹⁰ in 2024, or 60 percent of total noninterest expense. The Corporation's efficiency ratio is not explicitly stated in the filing as a forward-looking target, but the company continues to focus on managing costs.

At both December 31, 2025 and 2024, the Corporation employed approximately 213,000 employees ¹¹, of which 77 percent and 78 percent, respectively, were located in the U.S. None of the U.S. employees are subject to a collective bargaining agreement. The Corporation delivered more than 7.6 million hours of training and development to teammates through Bank of America Academy in 2025. The Corporation's turnover among employees was stable at 8 percent ¹² in both 2025 and 2024. The Corporation's ability to pay dividends and make common stock repurchases depends in part on its ability to maintain regulatory capital levels above minimum requirements plus buffers and non-capital standards established under the FDICIA. The Corporation's stress capital buffer (SCB) decreased to 2.5 percent ¹³ based on the results of its 2025 CCAR stress test, and the Corporation's G-SIB surcharge is 3.0 percent ¹⁴.

The filing identifies several headwinds including elevated inflation and interest rate levels, monetary tightening by central banks, and geopolitical developments that could continue to adversely impact financial markets and macroeconomic conditions. The filing notes that high and rising debt levels in the U.S. and globally may contribute to interest rate volatility and constrain governments' fiscal policies. The filing also highlights that significant increases in tariff rates in the past year have generated heightened market volatility, and further increases or instability associated with tariffs could adversely impact economic conditions and/or result in higher inflation.

The filing identifies constraints including the potential for the Federal Reserve to hold the fed funds rate steady or raise rates if inflation does not continue to decline toward its target, resulting in a flat or inverted yield curve. The filing also notes that changes to international trade and investment policies by the U.S. or other countries, and the uncertainty about potential changes, could negatively impact financial markets globally. Additionally, the continuation or escalation of tensions between the U.S. and China, including tariff increases, could lead to further U.S. measures that adversely affect financial markets, disrupt world trade and commerce, and lead to trade retaliation.

Bank of America faces material credit risk from its large loan portfolio of $1.092 trillion ¹⁵ at December 31, 2025, with concentrations in consumer real estate, credit cards, and commercial real estate. The provision for credit losses was $5.613 billion ¹⁶ in 2025, and the allowance for credit losses was $13.7 billion ¹⁷ at year-end. A deterioration in economic conditions, particularly a rise in unemployment or decline in property values, could lead to higher charge-offs and provision expense. The company also faces significant market risk from its $3.260 trillion ¹⁸ balance sheet, including a large portfolio of debt securities classified as available-for-sale and held-to-maturity, where increases in interest rates or credit spreads could adversely impact accumulated other comprehensive income and regulatory capital levels. The company's liquidity is dependent on globally sourced deposits of $1.937 trillion ¹⁹ and access to capital markets; a credit rating downgrade could increase borrowing costs and trigger additional collateral requirements under derivative contracts. The company is subject to extensive regulation, including capital requirements under the standardized approach with a Common Equity Tier 1 ratio of 12.1 percent ²⁰, and the Federal Reserve's stress capital buffer of 2.5 percent ²¹ and G-SIB surcharge of 3.0 percent ²². Changes to these requirements or adverse stress test results could restrict capital distributions. The company also faces operational risks from its reliance on technology and the potential for cybersecurity incidents, though the filing does not quantify specific exposure amounts for these risks.

Management's message emphasizes the company's commitment to Responsible Growth, serving clients and communities, and maintaining a culture of caring for employees. The filing highlights that the Corporation strives to make Bank of America a great place to work by providing access to a broad range of opportunities and maintaining a culture of caring for employees and their families. Key strategic priorities include continuing to streamline the organizational structure to reduce complexity and costs, investing in technology and talent to improve customer service and convenience, and maintaining a strong capital and liquidity position. The filing notes that the Corporation's stress capital buffer (SCB) decreased to 2.5 percent ²³ based on the results of its 2025 CCAR stress test, and the Corporation's G-SIB surcharge is 3.0 percent ²⁴. Management also emphasizes the importance of the Employee Engagement Survey, which had 86 percent ²⁵ participation in 2025, and an Employee Engagement Index of 86 percent ²⁶.