Bank of America Q1 Earnings Top on Robust Equity Trading, Higher NII

Core Viewpoint - Bank of America (BAC) reported first-quarter 2025 earnings of 90 cents per share, exceeding the Zacks Consensus Estimate of 81 cents and showing an increase from adjusted earnings of 83 cents in the prior-year quarter [1] Group 1: Financial Performance - BAC's net income applicable to common shareholders rose 13.8% year-over-year to $7 billion, surpassing the estimate of$6.19 billion [5] - Net revenues reached $27.37 billion, beating the Zacks Consensus Estimate of$26.86 billion and increasing 6% from the prior-year quarter [5] - Non-interest income grew 9.6% to $12.92 billion, driven by higher total fees and commissions, exceeding the projected$12 billion [6] - Non-interest expenses increased by 3.1% to $17.77 billion due to higher revenue-related expenses and investments, slightly above the estimate of$17.63 billion [7] - The efficiency ratio improved to 64.59%, down from 66.36% in the year-ago quarter, indicating enhanced profitability [7] Group 2: Revenue Drivers - Sales and trading revenues (excluding net DVA) increased by 9% to $5.65 billion, marking the highest level in a decade, with fixed-income trading fees up 4.7$14.59 billion, slightly above the estimate of $14.55 billion [3][6] - Management projects NII to grow sequentially to approximately$15.5-$15.7 billion by the end of the fourth quarter [3] Group 3: Investment Banking Performance - Investment banking fees in the Global Banking division were stable at$847 million, with a decline in equity underwriting income offset by improvements in advisory revenues and higher debt underwriting income [4] Group 4: Credit Quality - Provision for credit losses increased by 12.2% year-over-year to $1.48 billion, exceeding the estimate of$1.18 billion [8] - Net charge-offs decreased by 3.1% to $1.45 billion, while non-performing loans and leases as a percentage of total loans were 0.55$36.39, up from $33.71 a year ago, while tangible book value per share increased to$27.12 from $24.79 [10] - The common equity tier 1 capital ratio was 13.3$4.5 billion during the reported quarter [11] Group 6: Future Outlook - The company's focus on digitization, operational expansion, and decent loan growth is expected to support future growth, although elevated expenses and funding costs present challenges [12]