Bank of America : 1 report for December 31, 2023

Pillar 3 Regulatory Capital Disclosure

Advanced Approaches

For the quarter ended December 31, 2023

TABLE OF CONTENTS
DISCLOSURE MAP	3
SCOPE OF APPLICATION	4
CAPITAL STRUCTURE	6
CAPITAL ADEQUACY	7
RISK MANAGEMENT ORGANIZATIONAL STRUCTURE AND RESPONSIBILITIES	12
CREDIT RISK	13
RETAIL CREDIT RISK	15
WHOLESALE CREDIT RISK	17
COUNTERPARTY CREDIT RISK	19
CREDIT RISK MITIGATION	21
SECURITIZATION	22
MARKET RISK OVERVIEW	25
EQUITY EXPOSURES IN THE BANKING BOOK	29
OPERATIONAL RISK OVERVIEW	29
INTEREST RATE RISK MANAGEMENT FOR THE BANKING BOOK	31
SUPPLEMENTARY LEVERAGE RATIO	32
MODEL RISK MANAGEMENT	33
APPENDIX: REFERENCES	34

2

DISCLOSURE MAP

	Pillar 3 Requ iremen t	Description	Pillar 3 Report	2023 Form 10-K
	Page Referen ce	Page Referen ce
	Scope of	Corporate Overview	4	2
	Principles of Consolidation and Basis of Presentation	4	94
	Application
	Basel 3 Regulatory Capital Standards and Disclosures	4	48, 144
	Capital Structure	Capital Structure	6	141, 143
		Capital Adequacy	7	48
	Capital Adequacy	Regulatory Capital Ratios	8	145
	Bank Subsidiary Distributions	10	145
		Risk-Weighted Assets	10	50
	Risk Management
	Organizational Structure and Risk Management Organizational Structure and Responsibilities	12	44
	Responsibilities
		Credit Risk	13	10, 57
	Credit Risk	Credit Risk Exposures	13	58, 64, 115
		Retail Credit Risk	15	58, 115
	Retail Credit Risk	Retail Risk Rating System	15
	Determining Retail Risk Parameters	15	115
		Retail Credit Exposures	16
		Wholesale Credit Risk	17	62
	Wholesale Credit Risk	Wholesale Risk Rating System	17
	Determining Wholesale Risk Parameters	17	62
		Wholesale Credit Exposures	18
		Counterparty Credit Risk	19	104
		Valuation Adjustments	19	104, 152
		Credit Limits	19
	Counterparty Credit Risk	Economic Capital	19
		Collateral Valuation	19	94
		Counterparty Credit Exposures	20
		Wrong-Way Risk	20
	Credit Risk Mitigation	Credit Risk Mitigation	21	57, 94
		Securitization	22	129
	Securitization	Risk Management	22
	Due Diligence	23
		Securitization Exposures	23	129
		Market Risk Overview	25	73
		Trading Book	25
		Trading Risk Management	25	74
		Regulatory VaR	26
	Market Risk	VaR Backtesting	26	76
		Regulatory Stressed VaR	27
		Incremental Risk Charge	27
		Comprehensive Risk Measure	27
		Trading Portfolio Stress Testing	28	77
	Equity Exposures in Banking	Equity Exposures in Banking Book	29	94
	Book	Accounting and Valuation	29
	Equity Exposures	29
	Operational Risk Overview	Operational Risk Overview	30	79
	Advanced Measurement Approach	30
	Interest Rate Risk	Interest Rate Risk Management for the Banking Book	31
	Management for the	Risk Measurement	31	77
	Banking Book
	Supplementary Leverage	Supplementary Leverage Ratio	32
	Ratio
	Model Risk Management	Model Risk Management	33	21

3

SCOPE OF APPLICATION

Corporate Overview

Bank of America Corporation (together, with its consolidated subsidiaries, Bank of America, we, us or our) is a Delaware corporation, a bank holding company (BHC) and a financial holding company. When used in this report, "Bank of America", "the Corporation" may refer to Bank of America Corporation individually, Bank of America Corporation and its subsidiaries or certain of Bank of America Corporation's subsidiaries or affiliates. 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. Our principal executive offices are located in the Bank of America Corporate Center, 100 North Tryon Street, Charlotte, North Carolina 28255.

Principles of Consolidation and Basis of Presentation

The Consolidated Financial Statements include the accounts of the Corporation and its majority-owned subsidiaries and those variable interest entities (VIEs) where the Corporation is the primary beneficiary. Intercompany accounts and transactions have been eliminated. Results of operations of acquired companies are included from the dates of acquisition, and for VIEs, from the dates that the Corporation became the primary beneficiary. Assets held in an agency or fiduciary capacity are not included in the Consolidated Financial Statements. The Corporation accounts for investments in companies for which it owns a voting interest and for which it has the ability to exercise significant influence over operating and financing decisions using the equity method of accounting. These investments, which include the Corporation's interests in affordable housing and renewable energy partnerships, are recorded in other assets. Equity method investments are subject to impairment testing, and the Corporation's proportionate share of income or loss is included in other income.

The preparation of the Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could materially differ from those estimates and assumptions. For additional information, refer to Note 1 - Summary of Significant Accounting Principles in the December 31, 2023 Form 10-K.

These disclosures are required by regulatory capital rules set out by the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (Federal Reserve) and the Federal Deposit Insurance Corporation (collectively, U.S. banking regulators) in alignment with the Basel 3 regulatory capital framework. These disclosures provide qualitative and quantitative information about regulatory capital and risk-weighted assets (RWA) for the Advanced approaches, and should be read in conjunction with our Form 10-K for the year ended December 31, 2023, and the Consolidated Financial Statements for Bank Holding Companies - FR Y-9C, the Market Risk Regulatory Report for Institutions Subject to the Market Risk Capital Rule - FFIEC 102 and the Regulatory Capital Reporting for Institutions Subject to the Advanced Capital Adequacy Framework ― FFIEC 101 for the period ended December 31, 2023.

The Corporation's Pillar 3 disclosures may include some financial information that has not been prepared under GAAP. Certain

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information contained in the Pillar 3 disclosures is prepared pursuant to instructions in the U.S. Basel 3 Final Rule (Basel 3).

U.S. banking regulators permit certain Pillar 3 disclosure requirements to be addressed by their inclusion in the Consolidated Financial Statements of the Corporation. In such instances, incorporation into this report is made by reference to the relevant section(s) of the most recent Form 10-K filed with the United States Securities and Exchange Commission (SEC). This Pillar 3 report should be read in conjunction with the aforementioned reports as information regarding regulatory capital and risk management is largely contained in those filings. The table on the previous page indicates the location of such disclosures.

Basel 3 Regulatory Capital Standards and Disclosures

As a financial holding company, the Corporation is subject to regulatory capital rules, including Basel 3, issued by the U.S. banking regulators. Basel 3 is a regulatory capital framework composed of three parts, or pillars. Pillar 1 addresses capital adequacy and provides minimum capital requirements. Pillar 2 requires supervisory review of capital adequacy assessments and strategies. Pillar 3 promotes market discipline through prescribed regulatory public disclosures on capital structure, capital adequacy and RWA.

The Corporation and its primary banking subsidiaries, Bank of America, National Association (BANA) and Bank of America California, National Association (BACANA), are Advanced approaches institutions under Basel 3. Basel 3 requires the Corporation and its banking subsidiaries to meet minimum regulatory capital ratios and buffers in order to avoid certain restrictions, including restrictions on capital distributions. The Corporation was subject to a capital conservation buffer under the Advanced approaches only, a stress capital buffer (SCB) under the Standardized approach only, a countercyclical capital buffer (if any) and a global systemically important bank (G-SIB) surcharge. The buffers and surcharge must be comprised solely of Common equity tier 1 (CET1) capital. In addition, banking entities are required to meet adequately capitalized requirements under the Prompt Corrective Action (PCA) framework. The PCA framework establishes categories of capitalization including well capitalized, based on the Basel 3 regulatory capital ratio requirements. U.S. banking regulators are required to take certain mandatory actions depending on the category of capitalization, with no mandatory actions required for well capitalized banking organizations.

Basel 3 provides two methods of calculating RWA, the Standardized approach and the Advanced approaches. As an Advanced approaches institution, the Corporation is required to report regulatory risk-based capital ratios and RWA under both the Standardized and Advanced approaches. The approach that yields the lower ratio is used to assess capital adequacy including under the PCA framework.

Based on the final 2023 Comprehensive Capital Analysis and Review (CCAR) results, effective October 1, 2023, our stress capital buffer (SCB) declined to 2.5 percent from 3.4 percent, resulting in a Common equity tier 1 (CET1) minimum requirement of 9.5 percent under the Standardized approach. As of December 31, 2023, the CET1, Tier 1 capital and Total capital ratios for the Corporation were lower under the Standardized approach. The Corporation's minimum CET1 capital ratio requirements were 9.5 percent under both the Standardized and Advanced approaches.

The Corporation is required to calculate its G-SIB surcharge on an annual basis under two methods and is subject to the higher of

the resulting two surcharges. Method 1 is consistent with the approach prescribed by the Basel Committee's assessment methodology and is calculated using specified indicators of systemic importance. Method 2 modifies the Method 1 approach by, among other factors, including a measure of the Corporation's reliance on short-term wholesale funding. Effective January 1, 2024 the Corporation's G-SIB surcharge, which is higher under Method 2, increased 50bps, resulting in an increase in our minimum CET1 capital ratio requirement to 10.0 percent from 9.5 percent. At December 31, 2023, the Corporation's CET1 capital ratio of 11.8 percent under the Standardized approach exceeded its CET1 capital ratio requirement as well as the new minimum requirement in place as of January 1, 2024.

The Corporation is also required to maintain a minimum supplementary leverage ratio (SLR) of 3.0 percent plus a leverage buffer of 2.0 percent in order to avoid certain restrictions on capital distributions and discretionary bonus payments to executive officers. At December 31, 2023, our insured depository institution subsidiaries exceeded their requirement to maintain a minimum 6.0 percent SLR to be considered well capitalized under the PCA framework.

The Corporation is subject to the Federal Reserve's final rule requiring G-SIBs to maintain minimum levels of total loss-absorbing capacity (TLAC) and long-term debt. TLAC consists of the Corporation's Tier 1 capital and eligible long-term debt issued directly by the Corporation. Eligible long-term debt for TLAC ratios is comprised of unsecured debt that has a remaining maturity of at least one year and satisfies additional requirements as prescribed in the TLAC final rule. As with the risk-based capital ratios and SLR, the Corporation is required to maintain TLAC ratios in excess of minimum requirements plus applicable buffers to avoid restrictions on capital distributions and discretionary bonus payments to executive officers.

On November 16, 2023, the Federal Deposit Insurance Corporation (FDIC) issued its final rule to impose a special assessment to recover the loss to the Deposit Insurance Fund resulting from the closure of Silicon Valley Bank and Signature Bank. Accordingly, in the fourth quarter of 2023, the corporation recorded noninterest expense of $2.1 billion for its estimated assessment amount. For additional information on the FDIC Special Assessment, refer to Note 12 - Commitments and Contingencies in the December 31, 2023 Form 10- K.

In the fourth quarter of 2023, the Corporation recognized a net non-cash, pretax charge of approximately $1.6 billion in market making and similar activities as a result of the announcement of Bloomberg Short-Term Bank Yield Index's (BSBY) future cessation. For additional information on the BSBY's future cessation, refer to Executive Summary - Recent Developments - Capital Management section within the Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) in the December 31, 2023 Form 10-K.

On July 27, 2023, U.S. banking regulators issued proposed rules that would update future U.S. regulatory capital requirements. Under the capital proposal, the Advanced approaches would be replaced with a new standardized approach, referred to as the expanded risk- based approach, which would be phased in over a three-year period beginning July 1, 2025. U.S. banking regulators also issued proposed rules to revise the risk-based capital surcharge for GSIBs, which would be effective two calendar quarters after finalization. On August 29, 2023, U.S. banking regulators issued proposed rules that would change the criteria for debt instruments included in the Corporation's eligible long-term debt and TLAC. Any final rules issued are subject to

change from the current proposals. The Corporation is evaluating the potential impact of the proposed rules on its regulatory capital, eligible long-term debt and TLAC requirements. For additional information on Basel 3 and management of the Corporation's regulatory capital and pending or proposed capital changes, refer to Regulatory Developments - Capital Management section within the Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) in the December 31, 2023 Form 10-K, as well as Note 16 - Regulatory Requirements and Restrictions in the December 31, 2023 Form 10-K.

Information contained in this report is presented in accordance with the Basel 3 rules for RWA and capital measurement under the Advanced approaches, and follows the Pillar 3 disclosure requirements for the quantitative and qualitative presentation of data. Information presented herein may differ from similar information presented in the Consolidated Financial Statements and other publicly available disclosures. Unless specified otherwise, all amounts and information are presented in conformity with the definitions, rules and requirements of Basel 3.

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CAPITAL STRUCTURE

Under Basel 3, Total capital consists of two tiers of capital, Tier 1 and Tier 2. Tier 1 capital is further composed of CET1 capital and additional Tier 1 capital. CET1 capital primarily includes common stock, retained earnings and Accumulated Other Comprehensive Income (AOCI). Goodwill, disallowed intangible assets and certain deferred tax assets are excluded from CET1 capital. Additional Tier 1 capital primarily includes qualifying non-cumulative preferred stock. Tier 2 capital primarily consists of qualifying subordinated debt and a limited portion of eligible credit reserves. The Corporation's Total capital is the sum of Tier 1 capital and Tier 2 capital.

The following table presents the capital composition as of December 31, 2023. Results below reflect the impact of transition provisions related to the Corporation's adoption of the current expected credit losses (CECL) accounting standard, as well as information reflecting the full impact of CECL adoption.

	Basel 3 CECL	Basel 3 CECL
Table 1 - Capital Composition	Transitional	Fully Phased-In
December 31, 2023 (Dollars in millions)
Total common shareholders' equity	$	263,249	$	263,249
CECL transitional amount1		1,254		-
Goodwill, net of related deferred tax liabilities		(68,648)		(68,648)
Deferred tax assets arising from net operating loss
and tax credit carryforwards		(7,912)		(7,912)
Intangibles, other than mortgage servicing rights and
goodwill, net of related deferred tax liabilities		(1,496)		(1,496)
Defined benefit pension plan net assets		(764)		(764)
Cumulative unrealized net (gain) loss related to
changes in fair value of financial liabilities
attributable to own creditworthiness, net-of-tax		1,342		1,342
Accumulated net (gains) loss on certain cash flow
hedges2		8,025		8,025
Other		(122)		(122)
Common equity tier 1 capital	$	194,928	$	193,674
Qualifying preferred stock, net of issuance cost		28,396		28,396
Other		(1)		(1)
Tier 1 capital	$	223,323	$	222,069
Tier 2 capital instruments		15,340		15,340
Qualifying allowance for credit losses3		12,920		14,625
Other		(184)		(184)
Total capital under the Standardized approach	$	251,399	$	251,850
Adjustment in qualifying allowance for credit losses
under the Advanced approaches3		(9,950)		(10,001)
Total capital under the Advanced approaches	$	241,449	$	241,849

1. December 31, 2023 includes 50 percent of the CECL transition provision's impact as of December 31, 2021.
2. Includes amounts in accumulated other comprehensive income related to the hedging of items that are not recognized at fair value on the Consolidated Balance Sheet.
3. Basel 3 CECL Transitional includes the impact of transition provisions related to the CECL accounting standard.

For additional information on the components of common shareholders' equity, refer to Schedule A "Advanced Approaches Regulatory Capital" in Bank of America's December 31, 2023 Regulatory Capital Reporting for Institutions Subject to the Advanced Capital Adequacy Framework ― FFIEC 101. For the related breakdown of AOCI, refer to Note 14 - Accumulated Other Comprehensive Income (Loss) in the December 31, 2023 Form 10-K. For additional information on goodwill and intangibles, refer to Note 7 - Goodwill and Intangible Assets in the December 31, 2023 Form 10-K. For terms and conditions of common stock and preferred stock, refer to Note 13

• Shareholders' Equity in the December 31, 2023 Form 10-K. For additional information on Tier 2 capital instruments, refer to Note 11
• Long-termDebt in the December 31, 2023 Form 10-K.

6

CAPITAL ADEQUACY

The Corporation manages its capital position so that its capital is more than adequate to support its business activities and aligns with risk, risk appetite and strategic planning. Additionally, we seek to maintain safety and soundness at all times, even under adverse scenarios, take advantage of organic growth opportunities, meet obligations to creditors and counterparties, maintain ready access to financial markets, continue to serve as a credit intermediary, remain a source of strength for our subsidiaries and satisfy current and future regulatory capital requirements. Capital management is integrated into our risk and governance processes, as capital is a key consideration in the development of our strategic plan, risk appetite and risk limits.

The Federal Reserve requires BHCs to submit a capital plan and planned capital actions on an annual basis, consistent with the rules governing the CCAR capital plan. Based on 2023 stress test results, our SCB is 2.5 percent effective October 1, 2023 through September 30, 2024. We conduct an Internal Capital Adequacy Assessment Process (ICAAP) on a periodic basis. The ICAAP is a forward-looking assessment of our projected capital needs and resources, incorporating earnings, balance sheet and risk forecasts under baseline and adverse economic and market conditions. We utilize periodic stress tests to assess the potential impacts to our balance sheet, earnings, regulatory capital and liquidity under a variety of stress scenarios. We perform qualitative risk assessments to identify and assess material risks not fully captured in our forecasts or stress tests. We assess the potential capital impacts of proposed changes to regulatory capital requirements. Management assesses ICAAP results and provides documented quarterly assessments of the adequacy of our capital guidelines and capital position to the Board of Directors (the Board) or its committees.

In October 2021, the Board authorized the Corporation's $25 billion common stock repurchase program (October 2021 Authorization). Additionally, the Board authorized common stock repurchases to offset shares awarded under the Corporation's equity- based compensation plans. In September 2023, the Board modified the October 2021 Authorization, effective October 1, 2023, to include repurchases to offset shares awarded under equity-based compensation plans when determining the remaining repurchase authority. Pursuant to the Board's authorizations, during the fourth quarter of 2023, we repurchased $0.8 billion of common stock, including repurchases to offset shares awarded under equity-based compensation plans. As of December 31, 2023, the remaining repurchase authority was approximately $12.7 billion (including repurchases to offset shares awarded under equity-based compensation plans). For more information on our capital resources, see Capital Management within the MD&A section in the December 31, 2023 Form 10-K.

The timing and amount of common stock repurchases are subject to various factors, including the Corporation's capital position, liquidity, financial performance and alternative uses of capital, stock trading price, regulatory requirements and general market conditions, and may be suspended at any time. Such repurchases may be effected through open market purchases or privately negotiated transactions, including repurchase plans that satisfy the conditions of Rule 10b5-1 of the Securities Exchange Act of 1934, as amended.

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Regulatory Capital Ratios

December 31, 2023 Key Capital Metrics - Bank of America Corporation

1. As of December 31, 2023, the CET1 capital ratio for the Corporation was lower under the Standardized approach.

The following tables present capital ratios and related information as well as the regulatory minimum and well capitalized ratio requirements under Basel 3 Advanced and Basel 3 Standardized for the Corporation and its major national bank subsidiaries: BANA and BACANA as of December 31, 2023. For the Corporation and BANA, the results below include information that reflects the impact of transition provisions related to the adoption of the CECL accounting standard, as well as information reflecting the full impact of CECL adoption. BACANA did not elect to apply the transition provisions.

Table 2 - Regulatory Capital - Bank of America Corporation								December 31, 2023
				Bank of America Corporation
		Basel 3 Standardized		Basel 3 Standardized	Basel 3 Advanced CECL	Basel 3 Advanced CECL
(Dollars in millions, except ratios)		CECL Transitional1		CECL Fully Phased-In		Transitional1		Fully Phased-In
Regulatory Capital
Common equity tier 1 capital	$	194,928	$	193,674	$	194,928	$	193,674
Tier 1 capital		223,323		222,069		223,323		222,069
Total capital2		251,399		251,850		241,449		241,849
Assets
Risk-weighted assets	$	1,651,232	$	1,651,615	$	1,458,746	$	1,459,152
Adjusted quarterly average assets3		3,135,468		3,134,215		3,135,468		3,134,215
Supplementary Leverage Exposure						3,676,365		3,675,111
Capital Ratios
Common equity tier 1 capital		11.8%		11.7%		13.4%		13.3%
Tier 1 capital		13.5		13.4		15.3		15.2
Total capital		15.2		15.2		16.6		16.6
Tier 1 leverage		7.1		7.1		7.1		7.1
Supplementary Leverage Ratio						6.1		6.0
Table 2 - Regulatory Capital - Bank of America, N.A.								December 31, 2023
				Bank of America, N.A.
		Basel 3 Standardized		Basel 3 Standardized	Basel 3 Advanced CECL	Basel 3 Advanced CECL
(Dollars in millions, except ratios)		CECL Transitional1		CECL Fully Phased-In		Transitional1		Fully Phased-In
Regulatory Capital
Common equity tier 1 capital	$	187,621	$	186,372	$	187,621	$	186,372
Tier 1 capital		187,621		186,372		187,621		186,372
Total capital2		201,932		202,374		192,175		192,572
Assets
Risk-weighted assets	$	1,394,763	$	1,394,763	$	1,114,090	$	1,114,090
Adjusted quarterly average assets3		2,471,196		2,469,947		2,471,196		2,469,947
Supplementary Leverage Exposure						2,909,746		2,908,497
Capital Ratios
Common equity tier 1 capital		13.5%		13.4%		16.8%		16.7%
Tier 1 capital		13.5		13.4		16.8		16.7
Total capital		14.5		14.5		17.2		17.3
Tier 1 leverage		7.6		7.5		7.6		7.5
Supplementary Leverage Ratio						6.4		6.4

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Table 2 - Regulatory Capital - Bank of America California, N.A.	December 31, 2023
		Bank of America California, N.A.

(Dollars in millions, except ratios)

Regulatory Capital

Common equity tier 1 capital Tier 1 capital

Total capital2

Assets Risk-weighted assets

Adjusted quarterly average assets3 Supplementary Leverage Exposure

Capital Ratios

Common equity tier 1 capital Tier 1 capital

Total capital Tier 1 leverage Supplementary Leverage Ratio

	Basel 3 Standardized		Basel 3 Advanced
$	2,233	$	2,233
	2,233		2,233
	2,246		2,236
$	6,264	$	3,316
	15,421		15,421
			15,421
	35.6%		67.3%
	35.6		67.3
	35.9		67.4
	14.5		14.5
			14.5

	Bank Holding Company	Insured Depository Institutions
	Regulatory	Regulatory
	Minimum4	Minimum5
Capital Ratios
Common equity tier 1 capital	9.5%	7.0%
Tier 1 capital	11.00	8.5
Total capital	13.00	10.5
Tier 1 leverage	4.00	5.0
Supplementary leverage ratio	5.00	6.0

1. As of December 31, 2023, capital ratios are calculated using the regulatory capital rule that allows a five-year transition period related to the adoption of CECL.
2. Total capital under the Advanced approaches differs from the Standardized approach due to differences in the amount permitted in Tier 2 capital related to the qualifying allowance for credit losses.
3. Reflects total average assets adjusted for certain Tier 1 capital deductions.
4. The CET1 capital regulatory minimum is the sum of the CET1 capital ratio minimum of 4.5 percent, our G-SIB surcharge of 2.5 percent and our capital conservation buffer (under the Advanced approaches) or the SCB (under the Standardized approach) of 2.5 percent at December 31, 2023. The countercyclical capital buffer was zero. The SLR regulatory minimum includes a leverage buffer of 2.0 percent.
5. Risk-basedcapital regulatory minimums at December 31, 2023 are the minimum ratios under Basel 3 including a capital conservation buffer of 2.5 percent. The regulatory minimums for leverage ratios as of December 31, 2023 are the percent required to be considered well capitalized under the PCA framework.

As of December 31, 2023 Bank of America Corporation and its regulated banking subsidiaries were in excess of their respective minimum total capital requirements and our regulated principal broker-dealer subsidiaries were in compliance with their net capital requirements.

The Corporation's capital conservation buffer of 7.22 percent and leverage buffer of 3.07 percent are above the capital conservation buffer (including the G-SIB surcharge) requirement of 5.0 percent and the leverage buffer requirement of 2.0 percent, respectively.

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Total Loss-Absorbing Capacity

The following table presents the Corporation's TLAC and long-term debt ratios and related information as of December 31, 2023. Results below reflect the election of CECL transition.

Total Loss-Absorbing Capacity and Long-Term Debt under CECL Transitional						December 31, 2023
			Regulatory		Long-term	Regulatory
(Dollars in millions)		TLAC1	Minimum2		Debt	Minimum3
Regulatory Capital
Total eligible balance	$	479,156		$	239,892
Percentage of risk-weighted assets4		29.0%	22.0%		14.5%	8.5%
Percentage of total supplementary leverage exposure		13.0%	9.5%		6.5%	4.5%

1. As of December 31, 2023, TLAC ratios are calculated using the regulatory capital rule that allows a five-year transition period related to the adoption of CECL.
2. The TLAC RWA regulatory minimum consists of 18.0 percent plus a TLAC RWA buffer comprised of 2.5 percent plus the Method 1 G-SIB surcharge of 1.5 percent. The countercyclical buffer is zero for this period. The TLAC supplementary leverage exposure regulatory minimum consists of 7.5 percent plus a 2.0 percent TLAC leverage buffer. The TLAC RWA and leverage buffers must be comprised solely of CET1 capital and Tier 1 capital, respectively.
3. The long-term debt RWA regulatory minimum is comprised of 6.0 percent plus an additional 2.5 percent requirement based on the Corporation's Method 2 G-SIB surcharge. The long-term debt leverage exposure regulatory minimum is 4.5 percent. Effective January 1, 2024, the Corporation's G-SIB surcharge, which is higher under Method 2, increased 50 bps, resulting in an increase in our long-term debt RWA regulatory minimum requirement to 9.0 percent from 8.5 percent.
4. The approach that yields the higher RWA is used to calculate TLAC and long-term debt ratios, which was the Standardized approach as of December 31, 2023.

Bank of America is not subject to payout ratio limitations, including limitations on capital distributions and discretionary bonus payments to executive officers, under Basel 3 requirements. For additional information on regulatory capital, capital ratios, capital conservation and countercyclical capital buffers for the Corporation, refer to Capital Management within the MD&A section in the December 31, 2023 Form 10-K, Schedule A "Advanced Approaches Regulatory Capital" in Bank of America's December 31, 2023 Regulatory Capital Reporting for Institutions Subject to the Advanced Capital Adequacy Framework ― FFIEC 101 and Schedule HC-R "Regulatory Capital" in Bank of America's December 31, 2023 Consolidated Financial Statements for Bank Holding Companies - FR Y-9C. For information on eligible retained income, refer to Schedule HC-R "Regulatory Capital" in Bank of America's December 31, 2023 Consolidated Financial Statements for Bank Holding Companies - FR Y-9C.

Bank Subsidiary Distributions

The amount of dividends that a subsidiary bank may declare in

1. calendar year without OCC approval is the subsidiary bank's net profits for that year combined with its retained net profits for the preceding two years. Retained net profits, as defined by the OCC, consist of net income less dividends declared during the period. For additional information, refer to Note 16 - Regulatory Requirements and Restrictions in the December 31, 2023 Form 10-K.

Risk-Weighted Assets

For securitization exposures, institutions are permitted to use the Supervisory Formula Approach (SFA) and would use the Simplified Supervisory Formula Approach (SSFA) if the SFA is unavailable for a particular exposure.

Credit risk exposures are measured using internal ratings-based models to determine the applicable risk weight by estimating the probability of default (PD), loss-given default (LGD) and, in certain instances, EAD. The internal analytical models primarily rely on internal historical default and loss experience.

Operational risk is measured using internal analytical models which rely on both internal and external operational loss experience and data. The calculations require management to make estimates, assumptions and interpretations, including with respect to the probability of future events based on historical experience.

Actual results could differ from those estimates and assumptions. Under the Federal Reserve's reservation of authority, they may require us to hold an amount of capital greater than otherwise required under the capital rules if they determine that our risk-based capital requirement using our internal analytical models is not commensurate with our credit, market, operational or other risks.

Basel 3 Advanced approaches include measures of credit risk, market risk, operational risk and risks related to the credit valuation adjustment (CVA) for over-the-counter (OTC) derivative exposures. The Advanced approaches rely on internal analytical models to measure risk weights for credit risk exposures and allow the use of models to estimate the exposure at default (EAD) for certain exposure types. Market risk applies to covered positions which include trading assets and liabilities, foreign exchange exposures and commodity exposures.

Market risk capital is modeled for general market risk as well as specific risk for products where specific risk regulatory approval has been granted; in the absence of specific risk model approval, 10 standard specific risk charges apply.