BAC Q3 Earnings Beat on Solid Trading & IB Performance, Stock Gains

Core Insights - Bank of America (BAC) reported third-quarter 2025 earnings of $1.06 per share, exceeding the Zacks Consensus Estimate of 94 cents and up from 81 cents in the prior-year quarter [1][10] - The stock gained 4.9% in early trading following the positive earnings report [1] Revenue and Earnings Performance - Total revenues for BAC were $28.09 billion, surpassing the Zacks Consensus Estimate of $27.28 billion and increasing 10.8% year over year [6] - Net interest income (NII) grew 9% year over year to $15.39 billion, exceeding the estimate of $15.29 billion [6] - Non-interest income rose 13% from the prior-year quarter to $12.86 billion, driven by higher fees and commissions [7] Trading and Investment Banking - BAC experienced a 14th consecutive quarter of improvement in trading revenues, which grew 8.3% year over year to $5.35 billion [2] - Investment banking fees in the Global Banking division increased 47.5% year over year to $1.16 billion, with equity and debt underwriting income rising 47% and 42.2%, respectively [3] Expenses and Efficiency - Non-interest expenses increased 5.2% year over year to $17.34 billion, attributed to rising costs across most components [7] - The efficiency ratio improved to 61.39%, down from 64.64% in the year-ago quarter, indicating enhanced profitability [8] Credit Quality - Provision for credit losses was $1.30 billion, down 16% from the prior-year quarter, indicating improved credit quality [9] - Net charge-offs declined 10.9% year over year to $1.37 billion, with non-performing loans as a percentage of total loans decreasing to 0.46% from 0.53% [11] Capital Position and Share Repurchase - Book value per share increased to $37.95 from $35.37 a year ago, while tangible book value per share rose to $28.39 from $26.25 [12] - The company repurchased shares worth $5.3 billion during the reported quarter [13] Strategic Outlook - BAC's focus on digitization, loan growth, and relatively higher interest rates is expected to support future growth, although elevated expenses and a challenging operating environment present headwinds [14]