Period for payment default after modification

  


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| Consumer Real Estate – TDRs Entering Payment Default that were Modified During the Preceding 12 Months |  |  |  |  |  |
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|  | Three Months Ended September 30 |  | Nine Months Ended September 30 |  |  |  |  |  |  |
| (Dollars in millions) | 2022 |  | 2021 |  | 2022 |  | 2021 |  |  |  |  |  |  |  |  |  |  |
| Modifications under government programs | $ | —  |  |  | $ | 1  |  |  | $ | —  |  |  | $ | 3  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Modifications under proprietary programs | 63  |  |  | 35  |  |  | 135  |  |  | 80  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Loans discharged in Chapter 7 bankruptcy (1) | 1  |  |  | 1  |  |  | 2  |  |  | 6  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Trial modifications (2) | 8  |  |  | 3  |  |  | 19  |  |  | 15  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Total modifications | $ | 72  |  |  | $ | 40  |  |  | $ | 156  |  |  | $ | 104  |  |  |  |  |  |  |  |  |  |  |  |  |  |
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(1)Includes loans discharged in Chapter 7 bankruptcy with no change in repayment terms that are classified as TDRs. (2)Includes trial modification offers to which the customer did not respond.Credit Card and Other ConsumerThe Corporation seeks to assist customers who are experiencing financial difficulty by modifying loans while ensuring compliance with federal and local laws and guidelines. Credit card and other consumer loan modifications generally involve reducing the interest rate on the account, placing the customer on a fixed payment plan not exceeding 60 months and canceling the customer’s available line of credit, all of which are considered TDRs. The Corporation makes loan modifications directly with borrowers for debt held only by the Corporation (internal programs). Additionally, the Corporation makes loan modifications for borrowers working with third-party renegotiation agencies that provide solutions to customers’ entire unsecured debt structures (external programs). The Corporation classifies other secured consumer loans that have been discharged in Chapter 7 bankruptcy as TDRs, which are written down to collateral value and placed on nonaccrual status no later than the time of discharge. The table below provides information on the Corporation’s Credit Card and Other Consumer TDR portfolio including the September 30, 2022 and 2021 unpaid principal balance, carrying value, and average pre- and post-modification interest rates of loans that were modified in TDRs during the three and nine months ended September 30, 2022 and 2021.

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| Credit Card and Other Consumer – TDRs Entered into During the Three and Nine Months Ended September 30, 2022 and 2021 |
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|   | Unpaid Principal Balance |  | Carrying Value (1) |  | Pre-Modification Interest Rate |  | Post-Modification Interest Rate |  | Unpaid Principal Balance |  | Carrying Value (1) |  | Pre-Modification Interest Rate |  | Post-Modification Interest Rate |  |  |  |  |  |
| (Dollars in millions) | Three Months Ended September 30, 2022 |  | Nine Months Ended September 30, 2022 |  |  |  |  |
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| Credit card | $ | 86  |  |  | $ | 90  |  |  | 21.17  | % |  | 3.80  | % |  | $ | 198  |  |  | $ | 206  |  |  | 21.02  | % |  | 3.82  | % |  |  |  |  |  |
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| Direct/Indirect consumer | 2  |  |  | 2  |  |  | 5.65  |  |  | 5.65  |  |  | 5  |  |  | 4  |  |  | 5.48  |  |  | 5.48  |  |  |  |  |  |  |
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| Total  | $ | 88  |  |  | $ | 92  |  |  | 20.87  |  |  | 3.83  |  |  | $ | 203  |  |  | $ | 210  |  |  | 20.69  |  |  | 3.86  |  |  |  |  |  |  |
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|  | Three Months Ended September 30, 2021 |  | Nine Months Ended September 30, 2021 |  |  |  |  |  |
| Credit card | $ | 66  |  |  | $ | 71  |  |  | 18.48  | % |  | 3.71  | % |  | $ | 189  |  |  | $ | 200  |  |  | 18.47  | % |  | 4.26  | % |  |  |  |  |  |
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| Direct/Indirect consumer | 4  |  |  | 2  |  |  | 5.20  |  |  | 5.20  |  |  | 13  |  |  | 8  |  |  | 5.53  |  |  | 5.53  |  |  |  |  |  |  |
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| Total  | $ | 70  |  |  | $ | 73  |  |  | 18.06  |  |  | 3.76  |  |  | $ | 202  |  |  | $ | 208  |  |  | 17.99  |  |  | 4.31  |  |  |  |  |  |  |
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(1)Includes accrued interest and fees.The table below presents the September 30, 2022 and 2021 carrying value for Credit Card and Other Consumer loans that were modified in a TDR during the three and nine months ended September 30, 2022 and 2021 by program type. 

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| Credit Card and Other Consumer – TDRs by Program Type (1) |
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|  | TDRs Entered into During the Three Months Ended September 30 |  | TDRs Entered into During the Nine Months Ended September 30 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions) | 2022 |  | 2021 |  | 2022 |  | 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Internal programs | $ | 77  |  |  | $ | 60  |  |  | $ | 174  |  |  | $ | 166  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| External programs | 13  |  |  | 11  |  |  | 32  |  |  | 37  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Other | 2  |  |  | 2  |  |  | 4  |  |  | 5  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Total | $ | 92  |  |  | $ | 73  |  |  | $ | 210  |  |  | $ | 208  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
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(1) Includes accrued interest and fees.Credit card and other consumer loans are deemed to be in payment default during the quarter in which a borrower misses the second of two consecutive payments. Payment defaults are one of the factors considered when projecting future cash flows in the calculation of the allowance for loan and lease losses for credit card and other consumer. Based on historical experience, the Corporation estimates that 12 percent of new credit card TDRs and 20 percent of new direct/indirect consumer TDRs may be in payment default within 12 months after modification. Commercial Loans Modifications of loans to commercial borrowers that are experiencing financial difficulty are designed to reduce the Corporation’s loss exposure while providing the borrower with an opportunity to work through financial difficulties, often to avoid foreclosure or bankruptcy. Each modification is unique and reflects the individual circumstances of the borrower. Modifications that result in a TDR may include extensions of maturity at a concessionary (below market) rate of interest, payment forbearances or other actions designed to benefit the borrower while mitigating the Corporation’s risk exposure. Reductions in interest rates are rare. Instead, the interest rates are typically increased, although the increased rate may not represent a market rate of interest. Infrequently, concessions may also include principal forgiveness in connection with foreclosure, short sale or other settlement agreements leading to termination or sale of the loan.

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| 73 Bank of America |  |  |


