BANK OF AMERICA CORP /DE/BAC
BANK OF AMERICA CORP /DE/ Leases Disclosure
Leases
The Corporation enters into both lessor and lessee arrangements. For more information on lease accounting, see Note 1 – Summary of Significant Accounting Principles and on lease financing receivables, see Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses.
Lessor Arrangements
The Corporation’s lessor arrangements primarily consist of operating, sales-type and direct financing leases for equipment. Lease agreements may include options to renew and for the lessee to purchase the leased equipment at the end of the lease term.
The table below presents the net investment in sales-type and direct financing leases at December 31, 2025 and 2024.
Net Investment (1) | |||||||||||
| December 31 | |||||||||||
| (Dollars in millions) | 2025 | 2024 | |||||||||
| Lease receivables | $ | 19,198 | $ | 18,559 | |||||||
| Unguaranteed residuals | 3,520 | 2,543 | |||||||||
| Total net investment in sales-type and direct financing leases | $ | 22,718 | $ | 21,102 | |||||||
(1)In certain cases, the Corporation obtains third-party residual value insurance to reduce its residual asset risk. The carrying value of residual assets with third-party residual value insurance for at least a portion of the asset value was $9.4 billion and $8.0 billion at December 31, 2025 and 2024.
The table below presents lease income for 2025, 2024 and 2023.
| Lease Income | |||||||||||
| (Dollars in millions) | 2025 | 2024 | 2023 | ||||||||
| Sales-type and direct financing leases | $ | 1,245 | $ | 1,082 | $ | 788 | |||||
| Operating leases | 942 | 931 | 945 | ||||||||
| Total lease income | $ | 2,187 | $ | 2,013 | $ | 1,733 | |||||
Lessee Arrangements
The Corporation's lessee arrangements predominantly consist of operating leases for premises and equipment; the Corporation's financing leases are not significant.
Lease terms may contain renewal and extension options and early termination features. Generally, these options do not impact the lease term because the Corporation is not reasonably certain that it will exercise the options.
The table below provides information on the right-of-use assets, lease liabilities and weighted-average discount rates and lease terms December 31, 2025 and 2024.
| Supplemental Information for Lessee Arrangements | ||||||||||||||
| December 31 | ||||||||||||||
| (Dollars in millions) | 2025 | 2024 | ||||||||||||
| Right-of-use assets | $ | 8,395 | $ | 8,527 | ||||||||||
| Lease liabilities | 9,086 | 9,135 | ||||||||||||
| Weighted-average discount rate used to calculate present value of future minimum lease payments | 4.29 | % | 3.93 | % | ||||||||||
| Weighted-average lease term (in years) | 8.1 | 8.0 | ||||||||||||
Right-of-use assets obtained in exchange for new operating lease liabilities (1) | $ | 222 | $ | 603 | ||||||||||
| 2025 | 2024 | 2023 | ||||||||||||
Operating cash flows from operating leases (2) | $ | 1,896 | $ | 1,972 | $ | 1,975 | ||||||||
| Lease Cost and Supplemental Information: | ||||||||||||||
| Operating lease cost | $ | 1,945 | $ | 1,971 | $ | 1,981 | ||||||||
Variable lease cost (3) | 561 | 471 | 460 | |||||||||||
Total lease cost (4) | $ | 2,506 | $ | 2,442 | $ | 2,441 | ||||||||
(1)Represents non-cash activity and, accordingly, is not reflected in the Consolidated Statement of Cash Flows.
(2)Represents cash paid for amounts included in the measurements of lease liabilities.
(3)Primarily consists of payments for common area maintenance and property taxes.
(4)Amounts are recorded in occupancy and equipment expense in the Consolidated Statement of Income.
Maturity Analysis
The maturities of lessor and lessee arrangements outstanding at December 31, 2025 are presented in the table below based on undiscounted cash flows.
| Maturities of Lessor and Lessee Arrangements | |||||||||||||||||
| Lessor | Lessee (1) | ||||||||||||||||
| Operating Leases | Sales-type and Direct Financing Leases (2) | Operating Leases | |||||||||||||||
| (Dollars in millions) | December 31, 2025 | ||||||||||||||||
| 2026 | $ | 593 | $ | 7,083 | $ | 1,739 | |||||||||||
| 2027 | 512 | 5,805 | 1,611 | ||||||||||||||
| 2028 | 425 | 5,015 | 1,371 | ||||||||||||||
| 2029 | 303 | 2,024 | 1,073 | ||||||||||||||
| 2030 | 203 | 2,167 | 891 | ||||||||||||||
| Thereafter | 216 | 2,423 | 3,709 | ||||||||||||||
Total undiscounted cash flows | $ | 2,252 | 24,517 | 10,394 | |||||||||||||
Less: Net present value adjustment | 5,319 | 1,308 | |||||||||||||||
Total (3) | $ | 19,198 | $ | 9,086 | |||||||||||||
(1)Excludes $594 million in commitments under lessee arrangements that have not yet commenced with lease terms that will begin in 2026.
(2)Includes $11.9 billion in commercial lease financing receivables and $7.3 billion in direct/indirect consumer lease financing receivables.
(3)Represents lease receivables for lessor arrangements and lease liabilities for lessee arrangements.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 20, 2024 | |
| 2022 | Feb 22, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 24, 2021 | |
| 2019 | Feb 19, 2020 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Feb 22, 2018 | |
| 2016 | Feb 23, 2017 | |
| 2015 | Feb 24, 2016 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.