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    BAC
    Earnings call· Jun 2025(Q2 FY25)

    BANK OF AMERICA CORP /DE/ Q2 FY25 earnings call BAC

    Jul 16, 2025 Source

    Executive summary

    Bank of America Q2 FY25 — Record NII and Strong Organic Growth Drive Earnings

    Bank of America delivered a solid second quarter, driven by record Net Interest Income and robust organic growth across all business segments. The company continues to leverage technology and AI for efficiency gains, while also returning significant capital to shareholders. While investment banking fees faced headwinds and CRE office charge-offs remained elevated, overall credit quality improved, and the bank maintains a strong capital position.

    Highlights

    5

    • Revenue grew 4% year-over-year to $26.6 billion FTE.

    • Net income of $7.1 billion and EPS of $0.89, up 7% year-over-year.

    • Net Interest Income (NII) reached a record $14.8 billion, growing 7% from Q2 FY24.

    • Total capital returned to shareholders in H1 FY25 was $13.7 billion, 40% higher than H1 FY24.

    • Sales and trading revenue grew 15% year-over-year to $5.4 billion, marking the 13th consecutive quarter of growth.

    Concerns

    3

    • Investment Banking fees were down 9% from Q2 FY24, led by declines in M&A and leverage finance.

    • Elevated commercial real estate (CRE) office charge-offs contributed to $1.5 billion in net charge-offs.

    • Noninterest expense was up over 5% year-over-year to $17.2 billion, reflecting inflation and investments.

    Guidance & targets

    4
    CategoryTargetConfidence
    Net Interest Income (FTE)
    $15.5 billion to $15.7 billion
    high materiality
    High
    Full-year Net Interest Income Improvement
    6% to 7%
    high materiality
    High
    Common Quarterly Dividend Increase
    8%
    high materiality
    High
    Noninterest Expense
    flatten out and potentially move a touch lower
    medium materiality
    Medium

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Consumer Banking
    Strong results driven by low-cost deposit franchise, innovation, and Preferred Rewards program. Achieved 400 bps operating leverage. Digital adoption and engagement improved.
    Net Income Growth YoY: 15%Efficiency Ratio: 51% (improved >200 bps in last 12 months)NII Growth: 7%Investment Balances: $540 billion (up 13%)Full Year Flows: $19 billionCredit Card Net Loss Rate: 3.82% (down 23 bps)
    		$10.8 billion6%—$3 billion net income
    Wealth Management
    Solid quarter with new households and deepened relationships. Revenue growth led by asset management fees, but offset by higher revenue-related costs and investments. Strong growth in custom lending, securities-based lending, and mortgage. Digital momentum continued.
    Net Income Change YoY: modest declineAUM Growth: 5% (from $82 billion flows in past year)Average Loans Growth YoY: 7%Client Balances: $4.4 trillionAUM Flows: $82 billion (past year)Net New Relationships: 7,100Clients with Banking Products: nearly 63%NII as % of Revenue: ~30%Asset Management Fees Growth: 9%Expense Growth: 9%
    		$5.9 billionnearly 7%—$1 billion net income
    Global Banking
    Solid business activity with strong deposit and loan growth, but NII declined year-over-year due to lower rates on variable loans and higher funding costs. Noninterest income impacted by lower investment banking fees and solar/wind investment activity. Increased investment in relationship managers, technology, and marketing. Maintained #3 investment banking fee position year-to-date.
    Net Income Change YoY: fellInvestment Banking Fees: $1.4 billion (down 9% YoY)
    		———$1.7 billion net income
    Global Markets
    Continued strong revenue and earnings performance, achieving operating leverage. FICC led growth, benefiting from macro volatility. Equities also strong from trading and financing. Both FICC and Equities benefited from international franchise investments.
    Net Income Growth YoY: 11%Revenue (ex-DVA) Growth YoY: 10%Sales and Trading Revenue (ex-DVA): $5.4 billion (grew 15% YoY)FICC Revenue Growth YoY: 19%Equities Revenue Growth YoY: 10%Expense Growth YoY: 9%
    		———$1.6 billion net income

    Operational metrics

    61
    Net Income
    $7.1 billion
    Q2 FY25

    After tax.

    Earnings Per Share
    $0.89up 7% YoY
    Q2 FY25

    On a year-over-year basis, grew earnings per share of 7%.

    Return on Assets
    83 bps
    Q2 FY25

    Produced a return on assets of 83 basis points.

    Total Capital Returned
    $13.7 billion40% higher than H1 FY24
    H1 FY25

    In the first half of 2025, we have returned $13.7 billion in total capital.

    Shares Repurchased
    $5.3 billion
    Q2 FY25

    In the second quarter, we repurchased $5.3 billion in shares.

    Dividends Paid
    $2 billion
    Q2 FY25

    And paid $2 billion in dividends.

    Total Assets
    $3.44 trillionup $92 billion from Q1
    Q2 FY25

    Total assets ended the quarter at $3.44 trillion.

    Shareholders' Equity
    $300 billionup $4 billion from last year
    Q2 FY25

    Shareholders' equity at $300 billion was up $4 billion from last year as we issued $3 billion of preferred stock this quarter to replace redemptions from last quarter.

    Preferred Stock Issued
    $3 billion
    Q2 FY25

    Issued this quarter to replace redemptions from last quarter.

    Outstanding Shares Reduction
    almost 4%YoY
    Q2 FY25

    Reduced our outstanding shares by almost 4% from the second quarter of last year.

    Supplemental Leverage Ratio (SLR)
    5.7%vs minimum requirement of 5%
    Q2 FY25

    Leaves plenty of capacity for balance sheet growth.

    Total Loss-Absorbing Capital (TLAC)
    $473 billion
    Q2 FY25

    TLAC ratio remains comfortably above requirements.

    Rate Paid on Consumer Deposits
    58 bps
    Q2 FY25

    The rate paid on $952 billion of consumer deposits was 58 basis points in the second quarter.

    Rate Paid on Total Deposits
    declined 3 bps
    Q2 FY25

    Overall, rate paid on total deposits declined 3 basis points led by a 3 basis point decline in consumer.

    Net Interest Yield (NIY) Decline
    5 bps
    Q2 FY25

    Reflecting a roughly $80 billion increase in earning assets driven by Global Markets activity.

    Interest Rate Sensitivity (100 bps decline)
    $2.3 billion decrease in NII
    next 12 months

    If rates went down by 100 basis points, NII would decrease over the next 12 months by $2.3 billion.

    Interest Rate Sensitivity (100 bps increase)
    $1 billion benefit in NII
    next 12 months

    If rates went up by 100 basis points, net interest income would benefit roughly $1 billion.

    Tax Rate
    7.4%lower than last quarter
    Q2 FY25

    Driven by $180 million of discrete items. Excluding these and tax credits, the effective tax rate would be approximately 24%.

    Tax Benefit from Clean Energy Deals
    $900 millionup from $300 million pre-pandemic
    Q2 FY25

    This contributes to a 200 basis points difference in the efficiency ratio compared to pre-pandemic levels, as it hurts revenue but is made up in the tax line.

    Commercial Losses
    $466 millionup from Q1
    Q2 FY25

    Driven primarily by office exposures and their associated sales.

    Commercial Loan Net Charge-off Ratio
    29 bps
    Q2 FY25

    Remained low for total commercial loans.

    C&I Loan Book
    $564 billion
    Q2 FY25

    Excludes small business and CRE loans.

    C&I Loan Loss Rate
    9 bpsaveraged 8 bps from 2013 until now
    Q2 FY25

    Loss on this book was 9 basis points this quarter.

    Global Markets RWA
    $600 billion or $700 billion to $1 trillion
    over time

    The balance sheet in markets has grown, and they've done a good job returning on it.

    G-SIB Buffer Growth
    20%
    last 3-4 years

    You've had a basically a 20% growth in the capital requirement, just by methodologies of G-SIB creeped and RWA calculations behind the scenes.

    Wind and Solar Investment Timeline
    between now and 2027
    FY25-FY27

    Anticipating a period where clients will still want to install wind and solar, but these things will begin to slow and then stop.

    Wind and Solar Portfolio Burn Down
    2028-2033
    FY28-FY33

    The portfolio will burn down gradually over time after 2027.

    Revenue Growth
    4%YoY
    Q2 FY25

    On an FTE basis, grew 4% year-over-year.

    Company Deposit Growth (Pre-Pandemic to Now)
    39%vs industry 37%, vs large banks 32%
    Pre-pandemic to Q2 FY25

    Grew our deposits as a company faster than the industry.

    Average Deposits Growth
    8 consecutive quarters
    Q2 FY25

    Average deposits have now grown for 8 consecutive quarters.

    Deposits (End-of-Period) Growth
    up $22 billionfrom Q1
    Q2 FY25

    Deposits were up $22 billion on an end-of-period basis from Q1 and up a little more than $100 billion from the year ago period.

    Deposits (End-of-Period) Growth
    up $100 billionfrom year ago
    Q2 FY25

    Deposits were up $22 billion on an end-of-period basis from Q1 and up a little more than $100 billion from the year ago period.

    Average Deposits (First Week of July)
    $2 trillion
    first week of July

    Momentum continued as we averaged $2 trillion for the first week of July.

    Deposits Growth from Bottom
    9% higherfrom May 2023 bottom
    Q2 FY25

    Deposits are now 9% higher than their bottom in May of 2023.

    Average Consumer Deposits Growth
    $4 billionfrom Q1
    Q2 FY25

    Concentrated in noninterest-bearing.

    Global Banking Deposits Growth
    $28 billion5% from Q1
    Q2 FY25

    Included some shorter-term deposits from deal-related activity.

    Small Business Banking Loan Growth
    mid-single digits or higherYoY
    Q2 FY25

    Small business generally, which is a much larger portfolio, is growing mid-single digits or higher year-over-year.

    Checks Written Decline
    8%-10%
    YoY

    Checks written by consumers are going down 8%-10% year-over-year and are half the checks written that they were 4 or 5 years ago.

    Average Funded Balance (Investment Clients)
    $130,000
    Q2 FY25

    Our clients carry an average funded balance of more than $130,000, strong when compared to the industry.

    Teammates Utilizing Erica for Employees
    90%
    Q2 FY25

    90% of our more than 210,000 teammates have now utilized Erica for employees to complete such tasks as password updates, equipment refreshes, et cetera.

    Headcount (15 years ago)
    300,000
    15 years ago

    15 years ago, the company had a head count of 300,000. Today, we have 212,000.

    Headcount (Current)
    212,000
    Q2 FY25

    Today, we have 212,000. We did that with a relentless application of scalable, secure, resilient technologies.

    AI Patents
    1,400
    Q2 FY25

    Overall, we have 1,400 AI patents and have created over 250 AI and machine learning models in the company.

    AI and Machine Learning Models Created
    250
    Q2 FY25

    Overall, we have 1,400 AI patents and have created over 250 AI and machine learning models in the company.

    Erica Interactions Per Month
    58 million
    per month

    Erica, our AI assistant, averages over 58 million interactions per month today.

    Programmers Using AI Coding Technology
    17,000
    Q2 FY25

    We have 17,000 programmers using AI coding technology today, saving 10% to 15% in code generation costs.

    Code Generation Cost Savings (AI Coding)
    10% to 15%
    Q2 FY25

    Saving 10% to 15% in code generation costs, and we expect that to continue to rise.

    Consumer Banking Headcount (15 years ago)
    100,000
    15 years ago

    15 years ago, we had 100,000 people in our Consumer Business. Today, we have 53,000.

    Consumer Banking Headcount (Current)
    53,000
    Q2 FY25

    Today, we have 53,000. The deposits, I think, at the time, were say $400 billion, now they're $900 billion plus.

    Consumer Banking Deposits (15 years ago)
    $400 billion
    15 years ago

    The deposits, I think, at the time, were say $400 billion, now they're $900 billion plus.

    Consumer Banking Deposits (Current)
    $900 billion+
    Q2 FY25

    The deposits, I think, at the time, were say $400 billion, now they're $900 billion plus.

    Consumer Banking Cost Structure Reduction
    $1 billion per quarter
    over time

    The cost structure went down $1 billion a quarter in consumer over the time frame.

    Average Checking Account Balance (Current)
    $9,200up from $6,000-$7,000 pre-pandemic
    Q2 FY25

    The average checking account balance is at $9,200. It went into pandemic at about $6,000 or $7,000.

    Average Deposit Size Per Branch
    $500 millionvs next best $400 million, vs third best $300 million
    Q2 FY25

    Our average deposit size per branch is $500 million versus the next best at $400 million, and the one behind that at $300 million.

    Small Business Loan Portfolio
    $13 billion
    Q2 FY25

    It's a small portfolio of $13 billion.

    Commercial Line Usage
    3 or 4 percentage points of usage
    Q2 FY25

    Line usage moving to where it was more traditionally is 3 or 4 percentage points of usage, which is 1% or 2% of loan growth on top of it.

    Digital Money Movement
    99%
    Q2 FY25

    Everything else in our company is mostly digital.

    Headcount Reduction (YTD FY25)
    1,500
    YTD FY25

    Our headcount, excluding those summer additions, has fallen 1,500 from the beginning of the year.

    Interns Welcomed
    1,700
    Q2 FY25

    This quarter, we welcomed more than 1,700 interns.

    Campus Graduates (Next Quarter)
    2,000
    Q3 FY25

    Next quarter, we'll bring on more than 2,000 campus graduates to begin their careers.

    CET1 Buffer Target
    50 bps
    long-term

    We believe an appropriate buffer is 50 basis points, and that's what we are running down to.

    Industry KPIs

    13
    MetricValueDetails
    Loans$1.13 trillionUSD
    Deposits$2 trillionUSD
    Rotce ROE13.4%%
    Cet1 ratio11.5%%
    Capital returns$5.3 billionUSD
    Fee income lines$1.4 billionUSD
    Allowance reserves—
    Net interest income$14.8 billionUSD
    Net interest margin—
    Net charge offs npls$1.5 billionUSD
    Total operating expenses$17.2 billionUSD
    Provision for credit losses$1.6 billionUSD
    Efficiency ratio operating leverage51%%

    Risks & headwinds

    5
    Elevated Commercial Real Estate (CRE) Office Charge-offsQ2 FY25

    $466 million in commercial losses

    Mitigation: Most Q2 charge-offs were previously reserved, limiting profitability impact. Expect reduction in NPLs in Q3 as credits close.

    Uncertainty from Tariffs and Interest Rate VolatilityRest of 2025

    good amount of uncertainty

    Mitigation: NII guidance for Q4 FY25 remains unchanged, incorporating current interest rate curve impacts.

    Inflationary CostsQ2 FY25 and ongoing

    up a little more than 5% (for total expense YoY)

    Mitigation: Headcount discipline, flattening out of overall inflation rate, and expected operating leverage from NII growth in H2 FY25.

    Regulatory Capital Impacts (G-SIB Calibration)Ongoing, until G-SIB is re-indexed

    20% growth in the capital requirement

    Mitigation: Management is working to address the G-SIB issue and expects to work down excess capital.

    Wind and Solar Investment FadeNear-term to long-term

    slow and stop between now and 2027, portfolio burning down from 2028-2033

    Mitigation: Low-income housing tax credits are not impacted; housing investments may grow but not fully offset the gap.

    What to watch in Q3 FY25

    5

    NII Exit Rate for Q4 FY25

    Q4 FY25
    Current$14.8 billion (Q2 FY25 FTE NII)
    Target$15.5 billion to $15.7 billion

    Why it matters

    NII growth is a primary driver of operating leverage and overall profitability, with management expecting acceleration in H2.

    Bottom line is our range of NII expectations for the fourth quarter of this year remains unchanged at $15.5 billion to $15.7 billion, and that would result in record NII and a full year NII improvement of 6% to 7%.

    Q&A highlights

    5

    How does BAC measure and assess its progress in growing retail deposit share, and what are its ambitions?

    Brian Moynihan highlighted strong consumer deposit growth (from $700B to $950B pre-pandemic to now), faster than industry growth (39% vs 37% industry, 32% large banks). He noted 8 consecutive quarters of average deposit growth, 5 million net new checking accounts in 6 years, and average checking account balances of $9,200 (up from $6,000-$7,000 pre-pandemic). He emphasized the efficiency of the consumer business with low deposit costs and high customer satisfaction.

    “at the end of the day, we're growing deposits faster in the industry and 92% of core checking of the checking accounts, consumer satisfaction is the highest it's ever been. So we feel very good about it.”

    asked by John McDonald · answered by Brian Moynihan

    2 min read6 chapters

    Detailed Narrative

    01

    Strong Organic Growth Across Businesses

    The company reported strong organic growth across Consumer, Wealth, Commercial, and Markets businesses. This included adding new clients, deepening existing relationships, and expanding capabilities. Consumer Banking grew primary checking accounts and average consumer deposits for the third consecutive quarter, with balances up year-over-year for the first time since 2022. Wealth Management saw strong AUM flows and loan demand, adding 7,100 net new relationships. Global Banking added over 1,000 net new clients, primarily driven by payments capabilities.

    02

    Technology and AI-Driven Efficiency

    Bank of America continues to invest heavily in technology, digitization, machine learning, and AI. The company highlighted its AI assistant, Erica, which handles over 58 million interactions per month, and its "Erica for Employees" tool utilized by 90% of teammates. AI is also being used in wealth management for personalized client pitches, in operations for trade reconciliation, and by 17,000 programmers for code generation, saving 10% to 15% in costs. These investments are expected to drive future efficiency and operating leverage.

    03

    Capital Management and Shareholder Returns

    The bank returned $7.3 billion of capital to shareholders in Q2 FY25, including $5.3 billion in share repurchases and $2 billion in dividends. Total capital returned in H1 FY25 was $13.7 billion, up 40% year-over-year. The CET1 ratio remained stable at 11.5%, well above regulatory minimums, and the company plans an 8% increase in its common quarterly dividend starting in September. Management aims to utilize excess capital for business growth and expects the CET1 buffer to move towards 50 basis points.

    04

    Credit Quality and CRE Office Exposure

    Overall asset quality remains sound, with net charge-offs at $1.5 billion for the sixth consecutive quarter. Consumer net charge-offs were down modestly linked quarter, with the credit card net loss rate declining year-over-year for the first time since early 2016 (excluding the pandemic). However, commercial losses of $466 million were up from Q1, primarily driven by elevated CRE office charge-offs. Most of these Q2 charge-offs were previously reserved, limiting the impact on profitability.

    05

    NII Trajectory and Interest Rate Sensitivity

    Net Interest Income (NII) reached a record $14.8 billion (FTE) in Q2 FY25, up 7% year-over-year and $227 million from Q1. This growth was driven by higher loan and deposit balances, an additional day of interest, and fixed-rate asset repricing. The company maintains its Q4 FY25 NII exit rate expectation of $15.5 billion to $15.7 billion, projecting a full-year NII improvement of 6% to 7%. A 100 basis point decline in rates would decrease NII by $2.3 billion over 12 months, while a 100 basis point increase would benefit NII by $1 billion.

    06

    Digital Assets and Stablecoins

    Management discussed stablecoins as a potential new payment rail, noting that if clients wish to use them, the bank will facilitate it. They emphasized the need for legal clarity and the ongoing assessment of client demand and business cases for stablecoins. The bank views its approach as adaptive, similar to its response to Zelle, and expects a mix of individual bank applications and network-based solutions.

    AI-generated summary of the company’s earnings call. Not investment advice.