BANK OF AMERICA CORP /DE/ 8-K

What Happened

• Bank of America Corporation filed a Form 8‑K on January 6, 2026 announcing that it changed accounting methods for certain tax‑related equity investments: affordable housing and eligible wind projects will move from the equity method to the proportional amortization method (PAM), and solar investment tax credits (ITCs) will be recognized over the productive life of the facilities (instead of at placed-in-service). The company applied the changes retrospectively.
• The change primarily reclassifies amounts between line items: noninterest income increases while income tax expense increases. The company says the changes have an insignificant annualized impact on net income but reduced retained earnings and affected reported tax expense and regulatory capital metrics on a retrospective basis.

Key Details

• Filing date: January 6, 2026 (Form 8‑K, Item 7.01).
• Retained earnings: decreased by $1.7 billion as of September 30, 2025 (cumulative retrospective adjustment).
• Regulatory capital: would have reduced Common Equity Tier 1 (CET1) capital by an estimated $2.1 billion (about 13 basis points) as of Sept 30, 2025; the bank will not revise previously filed regulatory capital ratios.
• Income statement reclassifications (examples): full‑year 2024 noninterest income revised up by ~$3.97 billion to $49.80 billion; 2024 income tax expense revised up by ~$4.13 billion to $6.25 billion. Q3 2025 effective tax rate would have been ~20.0% vs 10.4% previously reported.

Why It Matters

• For investors, this is chiefly an accounting and presentation change that reclassifies revenue and tax expense rather than changing the underlying economics of the investments. Net income impact is reported as insignificant on an annualized basis, but retained earnings and tax expense timing have shifted and will reverse over the remaining life of the investments.
• The revised presentation affects comparability of prior quarters/years (higher noninterest income and higher tax expense historically). Watch reported tax rates, noninterest income line items, and any disclosures about future timing reversals when evaluating period‑to‑period performance.