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    BAC
    Earnings call· Sep 2025(Q3 FY25)

    BANK OF AMERICA CORP /DE/ BAC

    Oct 15, 2025 Source

    Executive summary

    Bank of America Q3 FY25 — Strong Operating Leverage and NII Growth

    Bank of America delivered a strong third quarter, driven by robust organic growth across its diversified business model, leading to significant operating leverage and improved profitability. The company saw record net interest income and strong fee-based business performance, with continued investments in technology and client experience translating into solid financial results. Management expressed confidence in its trajectory and future opportunities.

    Highlights

    6

    • Revenue of $28 billion, up 11% year-over-year.

    • EPS of $1.06, up 31% year-over-year.

    • Operating leverage of 560 basis points.

    • Net interest income (FTE) reached a record $15.4 billion.

    • Investment banking fees exceeded $2 billion, up 43% year-over-year.

    • Return on Tangible Common Equity (ROTCE) improved to 15.4%.

    Concerns

    2

    • Interest rate and tariff uncertainties

    • Regulatory finalization of Basel III Endgame rules

    Guidance & targets

    4
    CategoryTargetConfidence
    Net Interest Income (FTE)
    $15.6 billion plus
    high materiality
    High
    Net Interest Income Growth
    5% to 7% growth
    high materiality
    Medium
    Total Operating Expenses
    roughly in line with Q3
    medium materiality
    Medium
    CET1 Ratio
    50 basis points over the regulatory minimums
    high materiality
    Medium

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    Consumer Banking
    Strong results reflecting the value of the deposit franchise, organic growth strategy, and digital banking capabilities. Innovations like family banking and preferred rewards are delivering differentiated value. NII increased 9% YoY, supported by disciplined pricing.
    Net Income growth: 28% YoYReturn on allocated capital: 31%Operating leverage: >600 bpsEfficiency ratio: <50%Net new checking accounts: 212,000Consumer investment balances: $580 billionConsumer investment balances growth: 17%Client flows (full year): $19 billionAverage balance per new account: $110,000 (up 6% YoY)Credit card loss rate: 3.4% (down from 3.82% QoQ)Risk-adjusted margin on credit card: approaching 7.5%
    		$11.2 billion7%—$3.4 billion (Net Income)
    Global Wealth and Investment Management
    Strong quarter marked by improved profitability, driven by new household growth, AUM flows, loan growth, and disciplined expense management. Merrill and Private Bank added 5,400 net new relationships, with increasing client engagement in banking products.
    Net Income growth: 19% YoYReturn on allocated capital: 26%Operating leverage: 300 bpsPretax margin: 27% (up >200 bps)Client balances: $4.6 trillionAUM flows (past year): $84 billionNet new relationships: 5,400Clients with banking products: 63%Asset management fees growth: 12% YoYAverage loans growth: 9% YoY
    		$6.3 billion10%—$1.3 billion (Net Income)
    Global Banking
    Benefited from improved investment banking activity, significant deposit growth, and solid loan performance. Maintained #3 position in investment banking market share and gained market share during the quarter. Disciplined pricing and lower rates led to a 47 bps decline in rate paid YoY.
    Net Income growth: 12% YoYReturn on allocated capital: 17%Operating leverage: 500 bpsFirm-wide investment banking fees growth: 43% YoYAdvisory fees growth: 51%Debt underwriting growth: 42%Equity underwriting growth: 34%Investment Banking market share: #3 position YTDAverage deposits growth: 15% YoYGlobal transaction services revenue growth: 6%
    		—7% (overall revenue)—$2.1 billion (Net Income)
    Global Markets
    Extended streak of strong revenue and earnings performance. FICC revenue grew driven by improved performance in credit products, while Equities trading led improvement supported by increased financing activity in Asia. Continued to benefit from lending opportunities tied to highly collateralized pools of high-quality assets.
    Net Income growth: modestly YoYReturn on allocated capital: 13%Sales & Trading revenue (ex-DVA): $5.3 billionSales & Trading revenue growth (ex-DVA): 8% YoYFICC revenue growth: 5%Equities trading revenue growth: 14%
    		—10% (revenue ex-DVA)—$1.6 billion (Net Income)
    All Other
    Reported a loss of $6 million in the third quarter.
    		———($6 million) (Loss)

    Operational metrics

    20
    Operating leverage
    560
    Q3 FY25

    Company-wide operating leverage.

    Return on assets
    98
    Q3 FY25

    Company-wide return on assets.

    Total capital returned to shareholders
    $7.4 billion
    Q3 FY25

    Total capital returned through dividends and share repurchases.

    Aggregate market-facing fees
    $11.3 billionup 15% YoY
    Q3 FY25

    Aggregated amount from sales and trading, investment banking, and asset management fees.

    Expense growth
    5%YoY
    Q3 FY25

    Company-wide expense growth year-over-year.

    Expense growth
    <1%QoQ
    Q3 FY25

    Company-wide expense growth quarter-over-quarter.

    Average diluted share count decline
    24 millionQoQ
    Q3 FY25

    Decline in average diluted share count from Q2, including dilution from convertible preferred Series L stock.

    Tangible book value per share
    $28.39up 8% YoY
    Q3 FY25

    Tangible book value per share increased from Q3 FY24.

    Supplemental leverage ratio
    5.8%
    Q3 FY25

    Supplemental leverage ratio provides capacity for balance sheet growth.

    Total loss absorbing capital (TLAC)
    $473 billion
    Q3 FY25

    TLAC ratio remains comfortably above requirements.

    Average deposits growth
    3.7%YoY
    Q3 FY25

    Average deposits growth from Q3 FY24.

    Rate paid on total deposits
    declined 32 bpsYoY
    Q3 FY25

    Reflecting lower rates and disciplined actions in Global Banking and Wealth Management.

    Rate paid on consumer deposits
    58
    Q3 FY25

    Rate paid on approximately $950 billion of consumer deposits, driven by the operating nature of the account and client base.

    Total deposit rate paid
    rose 2 bpsQoQ
    Q3 FY25

    Due to mix shift into interest-bearing deposits, with expected improvement in Q4 due to repricing after Fed funds rate cut.

    NII sensitivity (100 bps decline)
    $2.2 billion decrease
    Next 12 months

    Estimated impact on NII for an instantaneous 100 basis point decline in the interest rate curve.

    NII sensitivity (100 bps increase)
    $1 billion benefit
    Next 12 months

    Estimated impact on NII for an instantaneous 100 basis point increase in the interest rate curve.

    Headcount
    213,000down 500 YoY
    Q3 FY25

    Headcount has been managed down from a peak of 217,000, reflecting disciplined approach to efficiency and growth.

    Effective tax rate
    10.4%
    Q3 FY25

    Reported effective tax rate, with an adjusted rate closer to normal corporate tax rate.

    Average balance per new consumer checking account
    $9,000
    Q3 FY25

    Average balance for new checking accounts, reflecting the core transactional nature of these accounts.

    Coding area headcount savings
    10%
    Ongoing

    Savings in the aggregate amount of coders due to technology, with resources re-dedicated to further efficiency.

    Industry KPIs

    13
    MetricValueDetails
    Loans$1.15 trillionUSD
    Deposits$2 trillionUSD
    Rotce ROE15.4%%
    Cet1 ratio11.6%%
    Capital returns$7.4 billionUSD
    Fee income lines$11.3 billionUSD
    Allowance reserves—
    Net interest income$15.4 billionUSD
    Net interest margin2.0%%
    Net charge offs npls$1.4 billionUSD
    Total operating expenses$17.3 billionUSD
    Provision for credit losses$1.3 billionUSD
    Efficiency ratio operating leverage62%%

    Risks & headwinds

    2
    Interest rate and tariff uncertainties

    Unquantified

    Regulatory finalization of Basel III Endgame rulesH1 FY26

    Uncertainty regarding specific capital requirements (e.g., 10% vs 10.2% on averaging)

    Mitigation: Awaiting final rules to adjust capital strategy; target CET1 50 bps over minimums.

    What to watch in Q4 FY25

    5

    Net Interest Income (FTE)

    Q4 FY25
    Current$15.4 billion
    Target$15.6 billion plus

    Why it matters

    NII is a primary driver of profitability for the bank; achieving the higher end of guidance indicates strong performance in a changing rate environment.

    So if you think of that as being $15.6 billion plus on a fully taxable equivalent basis.

    Q&A highlights

    7

    Why isn't AI discussed more as a huge efficiency driver for better margins, given the bank's lead in digitizing operations?

    Brian Moynihan explained that 'Applied Technology,' including AI, has already driven significant efficiency, citing headcount reduction over time despite increased activity volumes. He emphasized the need for data accuracy and controlled environments in a regulated institution, noting that AI's impact on expenses is felt, but some savings are reinvested for growth.

    “We believe Applied Technology, which is a range of outcomes from the digitization that we show in those pages in 2022 and '24, and over the period of time and the customer adoption of technologies and interface in our company and technology always provides that.”

    asked by Glenn Schorr · answered by Brian Moynihan

    2 min read6 chapters

    Detailed Narrative

    01

    Organic Growth Strategy and Client Engagement

    Bank of America continues to demonstrate consistent organic growth across its consumer, wealth, commercial, and institutional businesses. This quarter's results highlight the strength of its deposit and lending capabilities, driven by client engagement, disciplined execution, and strategic investments. The company added 212,000 net new checking accounts, extended its small business lending leadership, and saw client balances climb to over $4.6 trillion in Global Wealth and Investment Management.

    02

    Technology and AI Adoption for Efficiency

    The company emphasizes its long-standing investment in 'Applied Technology,' including AI, which is seen as 'enhanced intelligence' rather than artificial. Brian Moynihan highlighted Erica's platform handling 2 million customer interactions daily, demonstrating the practical application and scale of AI. These technologies contribute to managing headcount effectively, allowing the company to do more with fewer people, and driving overall efficiency and productivity.

    03

    Balance Sheet Optimization and Net Interest Yield

    Total assets ended the quarter at $3.4 trillion, down $38 billion QoQ, as loan growth was offset by lower global markets assets and strategic wholesale funding reductions. This balance sheet tightening is expected to continue, benefiting the net interest yield (NIY). Deposits ended just over $2 trillion, up $72 billion YoY, with disciplined pricing contributing to a 32 basis point decline in the rate paid on total deposits YoY.

    04

    Robust Credit Quality and Risk Management

    Asset quality remains sound, with net charge-offs declining 10% QoQ to $1.4 billion, split evenly between credit card and commercial real estate. The total net charge-off ratio was 47 basis points, down 8 basis points QoQ. The company also reported a modest reserve release and a nearly 25% YoY reduction in reservable criticized exposure in commercial real estate, reflecting disciplined risk management and strong portfolio performance.

    05

    Capital Allocation and Regulatory Environment

    The CET1 ratio increased modestly to 11.6%, well above the 10% regulatory minimum. Management reiterated its long-term target of maintaining a CET1 ratio approximately 50 basis points over regulatory minimums. The company is awaiting the finalization of Basel III Endgame rules, expected in the first half of 2026, to make further adjustments to its capital strategy, aiming to grow through organic means or return excess capital to shareholders.

    06

    Financial Center Expansion

    The company continues to invest in its 'high touch' strategy alongside digital innovation. As an example of this expansion, Bank of America opened four new financial centers in Idaho over the past six months, expanding its presence and complementing existing Merrill teams to better serve clients in that region.

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