DBRS, Inc. (Morningstar DBRS) confirmed the credit ratings of Bank of America Corporation (BAC or the Company), including the Company's Long-Term Issuer Rating of AA (low).

At the same time, Morningstar DBRS confirmed all the credit ratings of its primary banking subsidiary, Bank of America, N.A. (the Bank). The trend for all credit ratings remains Stable. The Intrinsic Assessment (IA) for the Bank is AA, while its Support Assessment remains SA1. The Company's Support Assessment is SA3 and its Long-Term Issuer Rating is positioned one notch below the Bank's IA.

KEY CREDIT RATING CONSIDERATIONS

BAC's credit ratings reflect its fully scaled and highly diversified franchise. It also recognizes the Company's strong balance sheet fundamentals including ample levels of liquidity and capital. Furthermore, BAC is well-positioned for ongoing franchise and revenue growth given its leading positioning and strong momentum it has shown across its business lines. We view BAC's earnings as highly diversified and well-balanced between net interest and non-interest income sources, which reduces earnings volatility under various interest rate scenarios.

The credit ratings also incorporate our expectation that asset quality metrics could weaken from their current solid levels. However, we view BAC as having a strong risk management culture and expect any weakening of asset quality to be modest and in-line with the industry.

BAC's IA of AA is at the midpoint of the IA Range, as Morningstar DBRS views the Company's credit fundamentals and performance as commensurate with those of similarly rated peers.

CREDIT RATING DRIVERS

A significant and sustainable improvement in profitability metrics achieved without weakening BAC's risk profile would lead to a credit ratings upgrade. Conversely, a sustained deterioration of earnings or a significant weakening of balance sheet fundamentals would lead to a credit ratings downgrade Additionally, any indications of meaningful franchise impairment due to risk management deficiencies or operational missteps would result in a credit ratings downgrade.

CREDIT RATING RATIONALE

Franchise Combined Building Block Assessment: Very Strong

The credit ratings are underpinned by the Company's highly diverse business mix that includes consumer and wholesale banking services, wealth management and capital markets businesses, which all contribute to BAC's overall franchise strength. The Company is estimated to have the largest U.S. retail deposit market share, as well as top tier market positions in mortgage lending and servicing, small and middle market business lending, credit cards, and commercial banking. Additionally, BAC maintains strong positioning in investment banking and sales and trading, while operating one of the largest wealth management businesses globally. Furthermore, Morningstar DBRS sees the Company's scalable business model and full banking capabilities as supportive of continued growth. Overall, these large, diverse businesses allow the Company to leverage its strengths in response to changing market opportunities.

Earnings Combined Building Block Assessment: Strong / Good

Earnings are highly diversified and resilient with YTD 2025 revenues benefitting from organic growth including higher asset management fees, investment banking fees as well as increased sales and trading revenues. The Company reported net income of $23.0 billion in 9M 2025, up from 9M 2024 earnings reflecting revenue growth partially offset by higher expenses. The provision for credit losses was flat year over year. Net income for 9M 2025 resulted in an improved return on average assets of 0.90% and return on average common shareholders' equity of 10.63%. BAC's revenues are expected to benefit in 2026 from a more conducive M&A environment.

Risk Combined Building Block Assessment: Strong

Asset quality metrics remain sound. Specifically, non-performing assets remain low at 0.47% of total loans and foreclosed properties as of September 30, 2025, improved from the 0.54% of total loans and foreclosed properties reported a year ago. Meanwhile, net-charge-offs, while higher, remain manageable Q3 2025 at 0.47% of average loans and have been relatively stable over the last five quarters averaging 0.54%. While asset quality metrics could weaken in future quarters, we view BAC as well positioned to absorb higher levels of losses. While acknowledging the risks associated with BAC's sizable Global Markets businesses, Morningstar DBRS sees the Company as having effective risk management capabilities that allow it to make appropriate risk/reward decisions and ensuring the capital market balance sheet remains appropriately sized.

Funding and Liquidity Combined Building Block Assessment: Very Strong

BAC's balance sheet remains strong. The Company's funding and liquidity profile is underpinned by its $2.0 trillion consolidated deposit base. Due to the business mix and funding needs, the Company's wholesale funding reliance is sizable, but well-managed. Long-term debt is well-laddered by maturity and the Company has the capacity to issue across markets and to a diversified investor base. Global Liquidity Sources, including cash and highly liquid securities, averaged $961 billion in Q3 2025, representing a significant 28% of average assets.

Capitalization Combined Building Block Assessment: Strong

At September 30, 2025, BAC's CET1 ratio was 11.6% (standardized approach) and its supplementary leverage ratio stood at 5.8%. Both ratios remain well-above regulatory requirements and the CET1 ratio is 160 basis points above the new regulatory minimum effective on October 1, 2025 of 10.0%. BAC has historically utilized stock buybacks to manage excess capital levels, relative to its internal targets.

Further details on the Scorecard Indicators and Building Block Assessments can be found at https://dbrs.morningstar.com/research/469483.

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE CONSIDERATIONS

There were no Environmental/Social/Governance factors that had a significant or relevant effect on the credit analysis.

A description of how Morningstar DBRS considers ESG factors within the Morningstar DBRS analytical framework can be found in the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Factors in Credit Ratings (May 16, 2025) at https://dbrs.morningstar.com/research/454196.

Notes:

All figures are in U.S. dollars unless otherwise noted.

The principal methodology is the Global Methodology for Rating Banks and Banking Organisations (May 23, 2025), https://dbrs.morningstar.com/research/454637. In addition, Morningstar DBRS uses the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Factors in Credit Ratings (May 16, 2025), https://dbrs.morningstar.com/research/454196 in its consideration of ESG factors.

The credit rating methodologies used in the analysis of this transaction can be found at: https://dbrs.morningstar.com/about/methodologies.

The credit rating was not initiated at the request of the rated entity.

The rated entity or its related entities did participate in the credit rating process for this credit rating action.

Morningstar DBRS had access to the accounts, management, and other relevant internal documents of the rated entity or its related entities in connection with this credit rating action.

This is a solicited credit rating.

For more information on Morningstar DBRS' policy regarding the solicitation status of credit ratings, please refer to the Credit Ratings Global Policy, which can be found in the Morningstar DBRS Understanding Ratings section of the website: https://dbrs.morningstar.com/understanding-ratings.

The conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-month period. Morningstar DBRS' trends and credit ratings are under regular surveillance.

For more information on this credit or on this industry, visit https://dbrs.morningstar.com.

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