Sign in

BANK OF AMERICA CORP /DE/ (BAC) Q3 2025 Earnings Summary

Executive Summary

  • BAC delivered a strong quarter: EPS of $1.06 and net income of $8.5B, with revenue up 11% YoY to $28.1B and record net interest income; operating leverage improved and the efficiency ratio fell to 61.7% .
  • EPS beat Wall Street consensus by ~$0.11 ($1.06 vs. $0.95*) and revenue exceeded consensus by ~$0.6B ($28.1B vs. $27.46B*); strength came from NII growth, investment banking fees, and sales & trading (14th consecutive YoY growth) .
  • Management guided Q4 NII to the high end of its range (“$15.6B+” FTE), expects Q4 expenses to be flattish vs. Q3, and signaled deposit rate paid should decline with cuts flowing through wealth/global banking pricing .
  • Capital and credit remained solid: CET1 11.6% (Standardized) and net charge-offs fell sequentially; common dividend raised to $0.28 for Q4 2025 .

Values with * are from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Record NII and strong operating leverage: NII rose to $15.2B (GAAP) / $15.4B (FTE), driving 11% YoY revenue growth and an efficiency ratio of 61.7% .
  • Market-facing businesses performed: investment banking fees topped $2.0B (+43% YoY) and sales & trading revenue grew again YoY (FICC +5%, Equities +14% excl. DVA) .
  • Clear forward guideposts from management: “We believe fourth quarter NII will be at the higher end of the range ($15.6B+ FTE)” and “expenses flattish in Q4,” reinforcing momentum into year-end .

What Went Wrong

  • Expense growth continued: noninterest expense rose 5% YoY to $17.3B, reflecting revenue-related incentives and investments in people/technology (though operating leverage offset) .
  • Global Banking NII remains pressured: management noted lower NII in banking offset by fee strength; deposit rate paid dynamics require disciplined pass-through in rate-cut environment .
  • Commercial real estate remains a headwind: while improving, CRE still contributed to losses earlier in the year; management addressed ongoing resolution of office exposures and careful credit posture .

Financial Results

Consolidated Performance vs. Prior Year and Prior Quarter

MetricQ3 2024Q2 2025Q3 2025
Total revenue, net of interest expense ($MM)$25,345 $26,463 $28,088
Net interest income ($MM)$13,967 $14,670 $15,233
Noninterest expense ($MM)$16,479 $17,183 $17,337
Provision for credit losses ($MM)$1,542 $1,592 $1,295
Net income ($MM)$6,896 $7,116 $8,469
Diluted EPS ($)$0.81 $0.89 $1.06
Efficiency ratio (%)65.02 64.93 61.73
Return on avg assets (%)0.83 0.83 0.98
ROTCE (%)12.76 13.40 15.43

Segment Revenue and Net Income

SegmentQ3 2024 Revenue ($MM)Q2 2025 Revenue ($MM)Q3 2025 Revenue ($MM)Q3 2024 Net Income ($MM)Q2 2025 Net Income ($MM)Q3 2025 Net Income ($MM)
Consumer Banking$10,418 $10,813 $11,166 $2,687 $2,973 $3,437
Global Wealth & Investment Mgmt$5,762 $5,937 $6,312 $1,061 $993 $1,265
Global Banking$5,834 $5,690 $6,245 $1,895 $1,699 $2,126
Global Markets$5,630 $5,980 $6,224 $1,548 $1,528 $1,647
All Other$(2,152) $(1,812) $(1,705) $(295) $(77) $(6)

Key Performance Indicators

KPIQ3 2024Q2 2025Q3 2025
NII (FTE, $MM)$14,114 $14,815 $15,387
Net interest yield (%)1.92 1.94 2.01
CET1 ratio (Standardized, %)11.8 11.5 11.6
SLR (%)5.9 5.7 5.8
Avg deposits ($MM)$1,920,748 $1,973,761 $1,991,434
Avg loans & leases ($MM)$1,059,728 $1,128,453 $1,153,035
Credit card net charge-off rate (%)3.70 3.82 3.46

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Interest Income (FTE)Q4 2025$15.5–$15.7B FTE (reiterated in Q1/Q2) “Higher end” of range; $15.6B+ FTE Maintained, narrowed to high end
Noninterest ExpenseQ4 2025“Flatten out / potentially lower” in H2 (Q2 commentary) Flattish vs. Q3 Maintained (clarified)
Deposit Pricing/BetaQ4 2025Pass-through cuts disciplined in wealth/GB (prior framework) Expect pass-through of rate cuts; rate paid should improve next quarter Maintained, execution update
Effective Tax RateFY 202511–13% excluding unusual (Q1) Q3 ETR ~10%; adjusted ETR ~23% excluding credits/discretes Updated actual; adjusted framework reiterated
DividendsQ4 2025Prior common dividend $0.26 (Q2) Common dividend declared $0.28/share (pay 12/26/25) Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
AI/technology initiativesDeepening AI deployment (Erica, coders; cost leverage) Continued emphasis on applied AI across consumer and institutional channels; efficiency and revenue scaling Strengthening, more scale and cross-business usage
Supply chain/tariffs/macroTariff uncertainty weighing on IB timing; clients “waiting” “More certainty around trade/tariffs and taxes” aided IB pipelines; double-digit pipeline growth Improving visibility, supportive for IB activity
Deposit betas/pricingRate paid declines with discipline; consumer rate paid ~58–61 bps Expect pass-through of cuts in wealth/GB; deposit rate paid to improve with lower rates Ongoing disciplined execution in a cutting cycle
Investment banking & marketsMomentum building; #3 fee ranking; global markets growth (Europe/Asia) IB fees +43% YoY firm-wide; 14th straight S&T YoY growth; FICC +5%, Equities +14% ex-DVA Broad-based strength, durable momentum
Regulatory/deregulatoryPotential deregulatory momentum; GSIB/SLR calibration watch Capital buffer target 50bps over minimum; continue buybacks while monitoring rule finalization Focused capital discipline alongside policy shifts

Management Commentary

  • “We reported revenue of $28 billion up 11% year over year. EPS was $1.06 up 31% year over year… Net interest income on an FTE basis reached a record $15.4 billion… Investment banking fees exceeded $2.0 billion up 43% year over year” — CEO Brian Moynihan .
  • “Provision expense improved… with net charge-offs declining 10% and we had a modest reserve release… Average diluted share count declined… disciplined expense growth versus revenue” — CFO Alastair Borthwick .
  • “We believe fourth quarter NII will be in the higher end of that range ($15.6B+ FTE)… expenses to remain roughly in line with Q3” — CFO Alastair Borthwick .

Q&A Highlights

  • AI efficiency and margin impact: management emphasized applied AI at scale (Erica interactions, coding productivity), enabling more revenue with a stable expense base; broader update planned at Investor Day .
  • Deposit betas: pass-through of rate cuts expected in wealth/global banking; consumer rate paid dynamics remain disciplined; September cut effects to be visible in Q4 .
  • Capital management: target ~50bps buffer over minimum CET1; continue to “grow into capital” and support buybacks; rule finalization will inform exact buffer .
  • Markets and IB pipeline: constructive environment persists; pipelines up double-digit; usual Q4 seasonality acknowledged, but off to a “good start” .
  • Credit tone: portfolios performing well; consumer delinquencies stable-to-improving; CRE exposures being resolved; NCOs expected broadly stable near term .

Estimates Context

Metric vs. ConsensusConsensus (Q3 2025)Reported (Q3 2025)Surprise
Primary EPS$0.9513*$1.06 +$0.11 (beat)
Revenue ($)$27,458,238,240*$28,088,000,000 +$629,761,760 (beat)
EPS – # of estimates18*——
Revenue – # of estimates7*——

Values with * are from S&P Global.

Key Takeaways for Investors

  • Earnings power is accelerating: record NII and firm-wide fee strength drove EPS and efficiency gains; momentum likely carries into Q4 with NII guided to the high end .
  • Market-facing breadth is a differentiator: IB fees and S&T delivered another strong quarter; diversification across FICC and Equities continues to underpin resilience .
  • Expense discipline remains credible: despite investment-related growth in comp/tech, operating leverage improved materially; Q4 expenses guided flattish .
  • Capital return remains robust within a prudent buffer: CET1 at 11.6% (Std.), ongoing buybacks, dividend raised to $0.28; management targets ~50bps buffer over minimum .
  • Credit normalization manageable: consumer card NCOs improved to 3.46%; CRE resolution ongoing; reserve position and criticized metrics trending better .
  • Deposit pricing lever under cuts: pass-through discipline in wealth/GB should lower rate paid, supporting NII trajectory in a declining rate environment .
  • Near-term setup: usual Q4 markets seasonality acknowledged, but pipelines strong and deposit/NII tailwinds intact; watch Investor Day for AI efficiency roadmap and 2026 trajectory .
Disclaimer: Estimates marked with * are retrieved from S&P Global.

Best AI for Equity Research

Performance on expert-authored financial analysis tasks

Fintool-v490%
Claude Sonnet 4.555.3%
o348.3%
GPT 546.9%
Grok 440.3%
Qwen 3 Max32.7%