BANK OF AMERICA CORP /DE/ (BAC) Q4 2024 Earnings Summary

Executive Summary

BAC delivered Q4 2024 net income of $6.7B and diluted EPS of $0.82, with total revenue of $25.35B; all revenue sources increased year over year as fee income (asset management, IB fees, sales & trading) and NII improved sequentially .
Operating leverage returned as noninterest expense fell 5% YoY due to absence of the 4Q23 FDIC special assessment, partly offset by higher revenue-related costs and continued investment; CET1 ratio held at 11.9% (Standardized), and $5.5B was returned to shareholders in Q4 through dividends and buybacks .
Management guided 2025 NII up 6–7% y/y, Q1 NII “modestly higher” than Q4 despite two fewer days, and Q1 expense ~$17.6B with full-year expense +2–3%; exit net interest margin targeted around ~2.10% by Q4 2025 and effective tax rate 11–13% for 2025 .
Sales & trading posted its 11th consecutive YoY growth quarter; FICC rose 19% and Equities rose 7% in Q4 (incl. DVA), while investment banking fees improved 44% YoY, reinforcing capital markets momentum into 2025 .

What Went Well and What Went Wrong

What Went Well
- “We finished 2024 with a strong fourth quarter. Every source of revenue increased… better than industry growth in deposits and loans” — Brian Moynihan, Chair & CEO .
- Fee engines accelerated: asset management fees and IB fees up; sales & trading recorded Q4 records in both FICC and equities, supporting diversified revenue strength .
- Deposits and loans grew sequentially; CET1 rose to $201.1B and ratio to 11.9%; $3.5B buybacks and $2.0B dividends returned in Q4 .
What Went Wrong
- Credit costs higher YoY: provision rose to $1.452B (vs $1.104B in 4Q23), net charge-offs increased to $1.466B; CRE office losses remained elevated albeit down vs Q3 .
- Consumer card loss rate increased to 3.79%; NPLs rose to $5.975B; allowance ratio eased to 1.21% of loans .
- Expense pressure from revenue-related incentives and compliance investments; OCC consent order remediation costs embedded in run rate .

Financial Results

Metric	Q4 2023	Q3 2024	Q4 2024
Total revenue, net of interest expense ($B)	$21.959	$25.345	$25.347
Net interest income ($B)	$13.946	$13.967	$14.359
Noninterest income ($B)	$8.013	$11.378	$10.988
Provision for credit losses ($B)	$1.104	$1.542	$1.452
Noninterest expense ($B)	$17.731	$16.479	$16.787
Net income ($B)	$3.144	$6.896	$6.665
Diluted EPS ($)	$0.35	$0.81	$0.82
Efficiency ratio (%)	80.75	65.02	66.23
Net interest yield (FTE) (%)	1.97	1.92	1.97

Segment revenue and net income:

Segment	Metric	Q4 2023	Q3 2024	Q4 2024
Consumer Banking	Revenue ($B)	$10.329	$10.418	$10.646
Consumer Banking	Net income ($B)	$2.768	$2.687	$2.821
GWIM	Revenue ($B)	$5.227	$5.762	$6.002
GWIM	Net income ($B)	$1.019	$1.061	$1.171
Global Banking	Revenue ($B)	$5.928	$5.834	$6.091
Global Banking	Net income ($B)	$2.472	$1.895	$2.139
Global Markets	Revenue ($B)	$4.088	$5.630	$4.840
Global Markets	Net income ($B)	$0.636	$1.548	$0.941

Capital & balance sheet KPIs:

KPI	Q4 2023	Q3 2024	Q4 2024
CET1 ratio (Standardized) (%)	11.8	11.8	11.9
Average deposits ($T)	$1.905	$1.921	$1.958
Average loans and leases ($T)	$1.051	$1.060	$1.081
Book value per share ($)	$33.34	$35.37	$35.79

Credit quality:

KPI	Q4 2023	Q3 2024	Q4 2024
Net charge-offs ($B)	$1.192	$1.534	$1.466
NCO ratio (%)	0.45	0.58	0.54
NPLs ($B)	$5.485	$5.629	$5.975
Allowance for loan & lease losses ($B)	$13.342	$13.251	$13.240
Allowance / loans (%)	1.27	1.24	1.21
Credit card NCO rate (%)	3.07	3.70	3.79

Markets and IB:

Metric	Q4 2023	Q3 2024	Q4 2024
FICC sales & trading ($B)	$2.079	$2.934	$2.464
Equities sales & trading ($B)	$1.540	$1.996	$1.642
Total IB fees (Corp) ($B)	$1.145	$1.403	$1.654

Consumer/digital KPIs:

KPI	Q4 2023	Q3 2024	Q4 2024
Active mobile banking users (MM)	37.927	39.638	39.958
Consumer investment assets ($B)	$424.410	$496.582	$517.835

Note on estimates: S&P Global Wall Street consensus figures for Q4 2024 EPS and revenue were unavailable due to data access limits at this time. As a result, explicit beat/miss vs consensus could not be determined.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Interest Income (FTE) growth	FY 2025	NII expected to grow from Q2 2024 trough (prior commentary)	Up 6–7% y/y; Q4 2025 NII to be at least ~$15.5–$15.7B (FTE)	Raised/Specified trajectory
Net Interest Income	Q1 2025	Not specified	Modestly higher than Q4 despite two fewer days of interest (~$250M effect)	New detail
Net Interest Margin	Exit Q4 2025	Not specified	Exit NIM around ~2.10%	New target
Noninterest Expense	Q1 2025	Not specified	~$17.6B due to seasonality (payroll taxes), then decline in Q2	New detail
Noninterest Expense	FY 2025	“Investments ongoing” (no numeric prior)	+2–3% y/y	Quantified
Effective Tax Rate	FY 2025	~6% in Q4 2024 with discrete items	11–13% for 2025, dependent on earnings and tax credits	Normalized higher
Capital Returns	Ongoing	~$3.5B quarterly buybacks in recent quarters	Expect continued buybacks at similar levels, subject to rules/earnings	Maintained
Deposit Pricing/Mix	2025	Ongoing discipline	Rate paid declining; rotation out of noninterest-bearing has slowed; noninterest-bearing balances growing again	Positive mix shift

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2–Q3 2024)	Current Period (Q4 2024)	Trend
NII trajectory	NII trough in Q2; sequential increase in Q3 driven by fixed-rate asset repricing; deposit growth resumed	Q4 NII up QoQ; 2025 NII +6–7% y/y; Q1 modestly higher than Q4 despite 2 fewer days	Improving growth path
Deposits & mix	Fifth consecutive quarter of average deposit growth by Q3; rotation into interest-bearing pressuring NII	Consumer and wealth deposits found floors; noninterest-bearing balances growing; rate paid declining	Mix favorability returning
Investment banking	Q3 fees up double-digit YoY; #3 fee ranking maintained	Q4 total IB fees up 44% YoY (ex self-led); momentum into 2025	Strengthening
Sales & trading	10th straight YoY growth quarter in Q3; Q4 records anticipated	11th straight YoY growth; Q4 records in FICC and equities	Sustained strength
Credit & CRE	Q3: consumer NCOs stable; CRE office losses elevated; reserve modest build	Q4: consumer card loss rate up; CRE losses down vs Q3; overall NCO ratio 54bps	Stabilizing with pockets of pressure
Expenses & compliance	Investment in people/tech; OCC consent order remediation started; embedded in costs	Q1 seasonal uptick; FY25 expenses +2–3% with operating leverage targeted	Controlled growth
Capital return & CET1	CET1 11.8% by Q3; $5.6B returned	CET1 11.9%; $5.5B returned; continued buybacks expected	Maintained strength
Digital & technology	Strong digital usage; sales increasingly digital	48M active digital users; 3.9B logins; continued AI-enabled CashPro	Expanding engagement

Management Commentary

Brian Moynihan: “We finished 2024 with a strong fourth quarter. Every source of revenue increased, and we saw better than industry growth in deposits and loans… strong capital and liquidity, enabling us to return $21 billion of capital to shareholders in 2024” .
Alastair Borthwick: “We believe we are on track to continue growing net interest income in the year ahead… The fourth quarter also marked a return to operating leverage. Asset quality is healthy…” .
CFO guidance: Q1 NII “modestly higher” than Q4 despite two fewer days; 2025 NII +6–7% y/y; exit NIM ~2.10% by Q4 2025; FY25 expense +2–3%; Q1 expense ~$17.6B; tax rate 11–13% .

Q&A Highlights

NII drivers: Deposit growth, loan growth, fixed-asset repricing, and cash-flow swaps accretion underpin 6–7% NII growth in 2025; $1.6B BSBY charge accretes back mainly in 2025 .
Operating leverage: Sustainable model with revenue growing faster than expenses; headcount stable (~213K) while reallocating to client coverage and tech .
Capital & buybacks: CET1 buffer ~50bps above requirement (10.7% min); continuing ~$3.5B quarterly buybacks, depending on regulatory outcomes .
Deposit pricing/mix: Rate paid moving lower; slowing rotation into interest-bearing; noninterest-bearing balances growing again, aiding NIM progression .
Small business optimism: Higher optimism and potential loan demand improvement as regulatory burdens ease; mid-market line draws expected to lift balances .

Estimates Context

S&P Global consensus for Q4 2024 EPS and revenue were unavailable at time of analysis due to access limits. Consequently, explicit beat/miss vs consensus cannot be stated.

Key Takeaways for Investors

Sequential NII momentum and explicit 2025 guidance (+6–7% y/y) provide a clearer earnings growth path; exit NIM ~2.10% targeted by Q4 2025 supports ROTCE progression .
Diversified fee strength (IB fees +44% YoY, record FICC/equities) reduces reliance on rate-sensitive NII and positions BAC well for continued capital markets activity .
Deposit mix tailwinds (noninterest-bearing stabilizing/growing; lower rate paid) and asset repricing should sustain margin improvement even with a flatter short-end path .
Credit is manageable but watch consumer card losses (3.79%) and CRE office exposures; overall NCO ratio trending ~50–60bps in 2025 per management .
Expense discipline with FY25 +2–3% and Q1 seasonality indicates focus on operating leverage while investing in compliance, technology, and brand .
Strong capital (CET1 11.9%) and ongoing buybacks/dividends remain a supportive shareholder return backdrop, pending final regulatory capital rules .
Near-term catalysts: confirmation of Q1 NII growth vs Q4 despite day-count headwinds, continued fee momentum in IB and trading, and signs of mid-market loan demand pickup .