Bank Of America Beats Q3 Expectations, Driven By Strong Fees, NII, Operational Efficiency: Analyst

Bank of America (NYSE:BAC) topped expectations in third-quarter of 2025, reporting EPS of $1.06 and core Pre-Provision Net Revenue (PPNR) of $10.9 billion.

BAC raised its fourth-quarter of 2025 net interest income (NII) guidance to $15.6–15.7 billion. This reflects robust NII growth, improved trading and investment banking fees, and continued operational leverage heading into the fourth quarter.

Goldman Sachs analyst Richard Ramsden maintained a Buy rating on BAC with a price forecast of $59.

Also Read: Bank Of America Sees Strong Q3 Investment Banking Fees, Net Interest Income Growth

Ramsden said BAC exceeded expectations in third-quarter of 2025. He added:

• EPS of $1.06 versus the consensus of $0.95 and core EPS of $1.06 compared with Street estimates of $0.97–$1.00, after adjusting for a $14 million Credit Valuation Adjustment (CVA)/Debit Valuation Adjustment (DVA) gain, a $72 million reserve release, and normalizing the tax rate.
• BAC’s core PPNR of $10.9 billion came in 6% above the Street on stronger core fees, slightly higher NII, and improved core operating efficiency, resulting in a core Return on Tangible Common Equity (ROTCE) of 15.4%, roughly 130 basis points above expectations.
• BAC’s NII exceeded the Street by 1%, driven by a 3-basis-point higher net interest margin (NIM), partially offset by lower ending loan balances, deposits, and average earning assets.
• Core fee revenue rose 4% above expectations, supported by stronger trading and investment banking fees. However, the consumer fees lagged slightly. The core efficiency ratio came in at 61.4%, about 140 basis points better than the Street, and provisions fell 18% below estimates due to a $72 million reserve release.
• Ramsden expects investors to watch factors including contributors to the stronger 2025 NII outlook, capital returns after $5.3 billion in share repurchases, and the sustainability of trading and investment banking revenue, which rose 43% year-over-year. The analyst also highlighted efficiency, expense management, credit normalization, reserve builds, and messaging ahead of the 2025 investor day as key drivers of future performance.
• BAC’s CET1 ratio reached 11.6%, 160 basis points above its 10% minimum, with a supplemental leverage ratio of 5.8%.

Despite $5.3 billion in share repurchases, the bank grew Common Equity Tier 1 (CET1) by $1.7 billion, partially offset by $4.6 billion higher Risk-Weighted Assets (RWAs), Ramsden noted.

Ramsden projected fiscal 2025 revenue of $109.43 billion and EPS of $3.71.

Price Action: BAC stock is trading higher by 4.35% to $52.28 at last check on Wednesday.

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