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BANK OF AMERICA CORP /DE/ (BAC) Q1 2025 Earnings Summary

Executive Summary

  • Bank of America delivered a clean beat: diluted EPS of $0.90 vs S&P Global consensus of $0.81* and total revenue (net of interest expense) of $27.37B vs $26.91B*, driven by stronger sales & trading, improved fee income and modest NII uplift . NII finished toward the high end of guidance and deposits grew for a seventh straight quarter .
  • Operating trends were resilient: sales & trading revenue rose 11% YoY to $5.66B (record equities; solid FICC), investment banking fees were $1.52B, and credit quality was stable with NCOs flat QoQ at 0.54% .
  • Guidance held: CFO reaffirmed 4Q25 NII exit of $15.5–$15.7B (FTE) and 2025 NII growth of 6–7%, with 2025 expense growth targeted at ~2–3% and tax rate 11–13% .
  • Capital return accelerated: BAC repurchased $4.5B of stock in 1Q and declared a $0.26 common dividend for 2Q25; CET1 (Standardized) stood at 11.8% and SLR 5.7% .
  • Potential stock catalysts: sustained NII trajectory (deposit cost declines, asset repricing), continued S&T outperformance, and stepped-up buybacks; watch headwinds from litigation expenses, card loss normalization and macro/tariff uncertainty discussed on the call .

What Went Well and What Went Wrong

  • What Went Well

    • Sales & trading delivered its 12th consecutive YoY gain: total S&T revenue $5.66B (+11% YoY), with record Equities revenue ($2.19B) and FICC strength ($3.48B) .
    • NII and deposits trended better: NII (FTE) rose to $14.59B with net interest yield at 1.99%, and deposits grew for a seventh straight quarter; CEO: “We had a good first quarter… EPS of $0.90 up from $0.76 last year” .
    • Capital return ramped: Buybacks increased to $4.5B; CFO: “we stepped up the share buyback… while investing in markets RWAs and higher loan balances” .

  • What Went Wrong

    • Expenses elevated: Noninterest expense rose to $17.77B (seasonal payroll taxes; higher litigation of ~$160M) and efficiency ratio remained mid‑60s .
    • Consumer credit normalization: Credit card loss rate was 4.05% (up from 3.79% in 4Q), with consumer NCOs at $1.12B; management framed this as normalization vs pre‑pandemic levels .
    • Slight uptick in nonperformers: NPLs and foreclosed properties increased to $6.20B, with the NPL ratio moving to ~0.55–0.56% .

Financial Results

MetricQ1 2024Q4 2024Q1 2025
Total Revenue, net of interest ($B)$25.82 $25.35 $27.37
Net Interest Income ($B)$14.03 $14.36 $14.44
Noninterest Income ($B)$11.79 $10.99 $12.92
Provision for Credit Losses ($B)$1.32 $1.45 $1.48
Noninterest Expense ($B)$17.24 $16.79 $17.77
Net Income ($B)$6.67 $6.67 $7.40
Diluted EPS ($)$0.76 $0.82 $0.90
Net Interest Yield (%)1.99% 1.97% 1.99%
Efficiency Ratio (%)66.36 65.83 64.59

Consensus vs. actual (S&P Global for estimates)

MetricS&P Global ConsensusActual
EPS (Q1 2025)$0.81 (14 est.)*$0.90
Revenue (Q1 2025)$26.91B (11 est.)*$27.37B
  • EPS beat: +$0.09; Revenue beat: +$0.46B. Drivers: stronger S&T, fee growth across segments, deposit cost declines, and fixed‑rate asset repricing; partial offsets included higher expenses and stable credit costs .

Segment Performance (revenue and net income)

SegmentQ1 2024 Revenue ($B)Q4 2024 Revenue ($B)Q1 2025 Revenue ($B)Q1 2024 NI ($B)Q4 2024 NI ($B)Q1 2025 NI ($B)
Consumer Banking10.17 10.65 10.49 2.66 2.82 2.53
GWIM5.59 6.00 6.02 1.01 1.17 1.01
Global Banking5.98 6.09 5.98 1.99 2.14 1.91
Global Markets5.88 4.84 6.58 1.72 0.94 1.95
All Other(1.64) (2.08) (1.56) (0.70) (0.41) (0.00)

Key KPIs

KPIQ1 2024Q4 2024Q1 2025
Sales & Trading Revenue ($B)$5.09 $4.11 $5.66
FICC / Equities ($B)$3.23 / $1.86 $2.46 / $1.64 $3.48 / $2.19
Total IB Fees ($B)$1.57 $1.65 $1.52
Avg Deposits ($T)$1.91 $1.96 $1.96
Avg Loans & Leases ($T)$1.05 $1.08 $1.09
CET1 (Std) / SLR (%)11.9 / 6.0 11.9 / 5.9 11.8 / 5.7
NCO Ratio (%)0.58 0.54 0.54
NPL Ratio (%)0.58 0.55 0.55
Book / Tangible Book ($)$33.71 / $24.79 $35.79 / $26.58 $36.39 / $27.12

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
NII (FTE) Exit Run-rate4Q25~$15.5–$15.7B (as of 4Q24) ~$15.5–$15.7B (unchanged) Maintained
NII GrowthFY2025Positive growth expected (4Q24 framing) ~+6–7% YoY (unchanged) Maintained
Expense GrowthFY2025~+2–3% YoY ~+2–3% YoY (toward higher end) Maintained
Effective Tax RateFY202511–13% (ex unusuals) 11–13% (ex unusuals) Maintained
Capital ReturnNear term$3.5B buybacks in 4Q24 $4.5B buybacks in 1Q25 Increased
Common Dividend2Q25$0.26/sh (run-rate) Declared $0.26/sh payable 6/27/25 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3–Q4 2024)Current Period (Q1 2025)Trend
NII trajectory4Q: Return to operating leverage; positive NII momentum 4Q25 NII exit $15.5–$15.7B reaffirmed; FY25 NII +6–7% Stable/constructive
Deposits & pricing4Q: Avg deposits +3% YoY; deposit favorability aided NII 7th consecutive quarter of deposit growth; deposit rates paid down QoQ Improving
Markets business4Q: S&T up 13% (ex-DVA +10%) 12th consecutive YoY growth; record Equities, strong FICC Strengthening
Investment banking4Q: Fees +44% YoY; #3 rank Total corp fees $1.52B; pipeline healthy, waiting for policy clarity Mixed/steady
Credit4Q: NCO ratio 0.54%; CRE pressures moderating NCO ratio 0.54%; card losses normalized; delinquency improved Stable
Macro/tariffs4Q: Solid economic environment Management watching tariff/policy uncertainty; research base case no 2025 recession; GDP lowered Cautious
Regulation4Q: Strong capital/liquidity Discussion of potential deregulation and SLR relief in Q&A Potential tailwind
Digital/AI4Q: >48M active digital users 49M active digital users; 4.0B logins; 65% sales digital Improving engagement

Management Commentary

  • CEO Brian Moynihan: “We had a good first quarter, with earnings per share of $0.90 up from $0.76 last year… sales and trading delivered its 12th consecutive quarter of year-over-year revenue growth… consumers have shown resilience” .
  • CFO Alastair Borthwick: “We finished at the higher end of our expected [NII] range… our fourth quarter exit rate expectation for NII is unchanged at $15.5–$15.7B… still expecting strong full year NII improvement this year of 6% to 7%” .
  • Capital returns: “We… stepped up the share buyback from $3.5 billion up to $4.5 billion… while investing more RWAs in Global Markets and higher loan balances” .
  • Credit & reserves: “We’re reserved closer to an unemployment rate… right around 6% in ’25, ’26… we feel like we’re pretty well reserved” .

Q&A Highlights

  • Capital management and buybacks: Management emphasized flexibility to keep buybacks elevated while growing loans and Markets RWAs, with CET1 cushion intact .
  • NII outlook and rate path: Reaffirmed 4Q25 NII exit ($15.5–$15.7B) and FY25 +6–7% despite curve shifts; 100 bps instantaneous down‑shock would reduce 12‑mo NII by ~$2.2B, up‑shock +$1B .
  • Expenses: Full‑year 2025 expense growth still 2–3% (likely toward high end), with seasonal and litigation drivers called out in 1Q .
  • Deposit costs: Broad pass‑through of lower rates to commercial/wealth interest‑bearing balances; consumer paid rates declined to ~61 bps .
  • Macro/regulatory: Management monitoring tariff/policy uncertainty; discussed potential deregulatory relief (e.g., SLR treatment of riskless assets) as a medium‑term positive .

Estimates Context

  • S&P Global consensus (Q1 2025): EPS $0.81 (14 est.)* vs actual $0.90; Revenue $26.91B (11 est.)* vs actual $27.37B, implying a broad‑based beat. Estimate revisions may bias upward for NII and Markets, while expenses (litigation/seasonality) and card loss normalization temper magnitude of upward EPS revisions .
  • Company beat appears driven by fee strength (S&T, asset management, service charges) and modest NII upside (deposit costs, asset repricing), supported by a low reported ETR (~9%) .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Broad‑based beat with quality mix (S&T, fees, deposit cost leverage) and reaffirmed NII trajectory supports the bull case into 2H25; watch the pace of rate cuts vs deposit beta .
  • Record Equities and strong FICC highlight durable Markets gains; management continues to add capacity while maintaining ROAC discipline—supporting PPNR durability .
  • Credit normalizing but stable at portfolio level; card losses at ~4% are in line with pre‑pandemic norms while CRE losses moderated QoQ .
  • Capital return stepped up ($4.5B buybacks in 1Q) with CET1 at 11.8%; continued repurchase cadence can support EPS and offset market multiple compression .
  • Expense control remains key: litigation/seasonals pushed 1Q higher; execution on 2–3% FY25 growth will be scrutinized vs revenue momentum .
  • Near‑term trading implications: Positive skew on beats plus buyback acceleration; sensitivity to macro headlines (tariffs, rate path) and Markets volatility remains elevated .
  • Medium‑term thesis: NII rebuild (asset repricing, deposit costs), fee momentum (IB pipeline, S&T share gains), and potential regulatory relief (SLR recalibration) provide optionality for ROTCE expansion .

Notes:

  • All company figures are as reported by Bank of America in 1Q25 earnings materials and supplemental information. Citations in brackets refer to document and section indices.
  • S&P Global consensus estimates marked with an asterisk (*) are sourced from S&P Global via the GetEstimates tool; Values retrieved from S&P Global.

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