📢 Earnings Summary — BAC

Bank of America delivered a strong Q3 with double-digit revenue growth, 31% EPS growth, and improved efficiency, supported by record NII, broad-based loan and deposit growth, and robust fee performance in investment banking and markets. Asset quality improved, with lower net charge-offs and reserve releases tied to better trends in credit cards and CRE. Capital and liquidity remain solid, enabling $7.4B returned to shareholders while still building tangible book value. Management guided Q4 NII to the high end of expectations and anticipates 2026 NII growth similar to 2025, aided by continued repricing tailwinds and core growth slightly above GDP. Expense discipline and headcount management underpin expected operating leverage again in Q4. While rate path uncertainty remains a key swing factor for NII, the diversified franchise and disciplined pricing position the bank well going into 2026.

📈 Growth Highlights

• Revenue $28.2B, up 11% YoY; EPS $1.06, up 31% YoY
• Net interest income (FTE) ~$15.4B, up 9% YoY; net interest yield up 7 bps QoQ
• Loans $1.15T average, up 9% YoY (commercial +13% YoY; consumer up across all products)
• Average deposits up $71–72B (+3.7%) YoY to just over $2T (global banking +15%; consumer +1%)
• Investment banking fees >$2B, up 43% YoY; sales & trading revenue up 8% YoY (14th consecutive Y/Y growth quarter)
• Asset management fees up 12% YoY; GWIM net income ~+$19% YoY; client balances >$4.6T with $84B AUM flows past year
• Consumer Banking net income $3.4B, up 28% YoY; added 212k net new checking accounts (27th consecutive quarter)

🔨 Business Development

• Continued organic client growth across consumer, wealth, commercial, and institutional; market share gains in investment banking with leadership rankings
• Combined local market coverage model for Small Business and Business Banking to expand capacity
• GWIM opened 32k new banking accounts; deposits grew $3B QoQ; strong advisor productivity and fee-based asset growth
• Digital and AI deployment (e.g., Erika) scaled across customers and employees to improve engagement and efficiency
• Disciplined deposit pricing strategy sustained growth while lowering overall rate paid YoY
• #1 provider of small business credit in the U.S.; treasury services fees up 12% YoY

💵 Financial Performance

• Operating leverage ~560 bps YoY; efficiency ratio below 62%
• Return on tangible common equity ~15.4%; ROA 0.98%
• Expenses $17.3B (+5% YoY; <1% QoQ) driven by market-facing incentives and ongoing investments
• Provision $1.3B, roughly matching NCOs; modest reserve release on improved credit card and CRE outlook
• Net charge-offs $1.4B (NCO ratio 47 bps), down ~10% QoQ; commercial NPLs down 19% QoQ
• Tangible book value per share $28.39, up 8% YoY; tangible common equity ~$208B
• Average diluted share count down 24M QoQ despite Series L convertible preferred dilution
• Returned $7.4B to shareholders (buybacks $5.3B; common dividends $2.1B)

🏦 Capital & Funding

• CET1 capital ~$203B; CET1 ratio 11.6% vs 10% regulatory minimum
• Supplemental leverage ratio 5.8% (min 5%); TLAC $473B comfortably above requirements
• Average global liquidity sources $961B; shareholders’ equity $304B (+$4.6B QoQ)
• Issued $2.5B preferred stock; continued balance sheet tightening, reducing wholesale funding
• Deposits just over $2T; overall rate paid on deposits down 32 bps YoY; consumer deposit rate paid 58 bps in Q3
• Expect lower deposit costs next quarter due to repricing following late-September Fed cut

🧠 Operations & Strategy

• Headcount managed to ~213k (down from 217k peak; down ~500 YoY despite adding ~2k college grads)
• Ongoing investments in markets, banking, and technology targeted to high-return areas; scalable cost structure
• Balance sheet mix shift toward higher-yielding loans; reduction of lower-yielding securities and expensive wholesale funding
• Disciplined risk management driving improved asset quality and reduced criticized CRE exposure (~25% YoY decline)
• Focus on core operating accounts, primacy, and low attrition to deepen consumer relationships

🌍 Market Outlook

• Q4 2025 NII (FTE) expected at high end of prior range: $15.6B+ (~8% YoY growth vs Q4 2024)
• 2026 full-year NII growth expected broadly similar to 2025 over 2024 (approx. 5–7%), driven by core loan/deposit growth slightly above GDP and fixed-rate asset repricing
• $10–$15B per quarter of MBS and mortgage loans expected to roll off in 2026, to be reinvested at 150–200 bps higher yields
• Operating leverage expected again in Q4; expenses to remain roughly in line with Q3
• Curve implies additional 2025 rate cuts (Oct/Dec); deposit cost benefits expected from repricing
• Stable near-term NCO outlook given steady consumer delinquencies, stable C&I, and lower CRE exposures

⚠ Risks & Headwinds

• Interest rate sensitivity: 100 bps decline below the current curve would reduce next-12-month NII by ~$2.2B; +100 bps would add ~+$1B
• Macro uncertainty (rates, tariffs) could impact client activity and fee pools
• Deposit mix shifts toward interest-bearing accounts raised rate paid by 2 bps QoQ; competition for deposits could pressure funding costs
• Market-facing compensation tied to revenues can elevate expenses in strong quarters
• Commercial real estate remains a monitored exposure despite improved metrics
• Potential dilution impacts from legacy convertible preferred (Series L)

AI-generated earnings recap sourced from company results & conference call observations. Not investment advice — verify with official filings.