Live: Will Bank of America (NYSE: BAC) Soar After Earnings?

This banking earnings season has been dominated by how banks are guiding net interest income, and Bank of America guided to $15.5B to $15.7B in Q4. That will likely be a number that analysts focus on in the company’s conference call which starts shortly.

Bank of America just delivered $.89 in adjusted EPS versus estimates of $.86. Revenue came in at $26.5 billion, which is slightly below expectations of $26.73 billion in revenue.

Shares are initially up 1.45% in premarket trading. 

We’ll continue digging through the numbers but here are the main highlights.

Bank of America Q2’25 Earnings Highlights

• Adj. EPS: $0.89 ✅; UP +7% YoY
• Revenue: $26.5B ✅; UP +4% YoY
• Adj. Gross Margin: 55.4% ✅; UP +20 bps YoY
• Net Income: $7.1B ✅; UP +3% YoY
• Provision for Credit Losses: $1.6B; UP +7% YoY
• Noninterest Expense: $17.2B; UP +5% YoY
• Average Deposits: $1.97T; UP +3% YoY
• Average Loans and Leases: $1.13T; UP +7% YoY
• Return on Average Common Shareholders’ Equity: 10.0%
• Book Value per Common Share: $37.13; UP +8% YoY
• Tangible Book Value per Common Share: $27.71; UP +9% YoY

Outlook:
• Revenue: $27.0B ±2%
– The outlook reflects continued growth in net interest income driven by deposit growth and loan demand, despite potential headwinds from lower interest rates.
– Management expects to maintain strong asset quality and capitalize on market opportunities in investment banking and trading.

**Q2 Segment Performance:**
• Consumer Banking Revenue: $10.8B ✅; UP +6% YoY
• Global Wealth and Investment Management Revenue: $5.9B ✅; UP +7% YoY
• Global Banking Revenue: $5.7B ✅; DOWN -6% YoY
• Global Markets Revenue: $6.0B ✅; UP +10% YoY

**Other Key Q2 Metrics:**
• Adj. Operating Income: $9.3B; UP +2% YoY
• Adj. Operating Expenses: $17.2B; UP +5% YoY
• Effective Tax Rate: 7% (vs. 9% YoY)
• Total Assets: $3.44T; UP +6% YoY
• Total Deposits: $2.01T; UP +5% YoY
• Total Loans and Leases: $1.15T; UP +9% YoY

**CEO Commentary:**
– Brian Moynihan: “We delivered another solid quarter, with earnings per share up seven percent from last year. Net interest income grew for the fourth straight quarter, reflecting eight consecutive quarters of deposit growth and seven percent year-over-year loan growth. Consumers remained resilient, with healthy spending and asset quality, and commercial borrower utilization rates rose. In addition, we saw good momentum in our markets businesses. So far this year, we have supplied more capital to our businesses and returned 40 percent more capital to shareholders in the first half of this year than last year.”

**CFO Commentary:**
– Alastair Borthwick: “We believe our second quarter results underscore the strength of our balance sheet and help demonstrate that we are well-positioned to support the broader economy. Asset quality remained strong, with net charge-offs at $1.5 billion for the sixth consecutive quarter. Consumer delinquencies have been stabilizing, while card net charge-offs improved year-over-year and commercial nonperforming loans declined sequentially. In addition, we delivered strong loan and deposit growth and maintained our disciplined pricing.”

**Strategic Updates:**
– Continued investment in technology and digital platforms to enhance customer experience and operational efficiency. The bank aims to leverage its digital capabilities to drive growth in consumer and small business segments.

Before Bank of America reports its second-quarter earnings, let’s look back at how they fared in the prior quarter.

Bank of America Q1’25 Earnings Highlights:

• Adj. EPS: $0.90 ✅; UP +18% YoY
• Revenue: $27.5B ✅; UP +6% YoY
• Net Income: $7.4B ✅; UP +11% YoY
• Return on Assets: 0.89%; UP +3 bps YoY
• Return on Tangible Common Equity: 14%; UP +100 bps YoY
• Deposits: Nearly $2 trillion; UP +8% from mid-2023 low

Outlook:
– Expectation for continued growth in net interest income (NII) driven by fixed-rate asset repricing and loan growth.
– Anticipate stable deposit growth despite potential economic headwinds.

Q1 Segment Performance:
• Consumer Banking Revenue: $10.5B ✅; UP +3% YoY
• Wealth Management Revenue: $6B ✅; UP +8% YoY
• Global Banking Revenue: $6B ✅; Flat YoY
• Global Markets Revenue: $5.6B ✅; UP +9% YoY

Other Key Q1 Metrics:

• Adj. Operating Expenses: $17.8B; UP +3% YoY
• Effective Tax Rate: 9% (vs. 9% YoY)
• Net Charge-Offs: $1.45B; Charge-Off Ratio: 54 bps
• Provision Expense: $1.5B; Matches net charge-offs
• Tangible Book Value per Share: $27.12; UP +9% YoY
• Share Repurchases: $4.5B; Common Dividends: $2B

CEO Commentary:
– Brian Moynihan: “Given the recent events, we want to provide a clear picture of how well the fundamentals of the company performed to produce another good quarter of earnings in the first quarter of 2025. We saw good organic client activity, good growth in revenue and earnings, and we continue to invest in the future growth of our company.”

CFO Commentary:
– Alastair M. Borthwick: “We generated $7.4 billion in net income or $0.90 per diluted share this quarter, and that represents good growth over both last quarter and the year earlier period. Noninterest expense was $17.8 billion, up from the fourth quarter, driven by seasonally elevated payroll taxes and markets revenue-related costs of processing and incentives.”

Strategic Updates:
– Continued investment in commercial banking and wealth management to drive organic growth.
– Focus on enhancing digital capabilities and customer engagement, with significant growth in digital interactions and sales.