PROVIDENCE – Bank of America Corp. reported third-quarter profit of $8.47 billion on Wednesday, an increase of 23% from a year ago driven by stronger earnings across its business segments and lower-than-expected expenses.
The Charlotte-based bank also reported earnings of $1.06 per diluted share, an increase from 82 cents per diluted share a year prior and beating Wall Street expectations. The average estimate of 10 analysts surveyed by Zacks Investment Research was 94 cents per share.
Revenue net of interest expense totaled $28.09 billion, also topping forecasts. Five Zacks analysts had projected $27.28 billion.
"Strong net income growth drove third quarter diluted earnings per share up 31% from last year. This in turn drove strong improvement in our returns on assets and equity," said BofA CEO and Chairman Brian Moynihan. "Revenue grew 11% year-over-year. Strong loan and deposit growth, coupled with effective balance sheet positioning, resulted in record net interest income. We also saw strong fee performance from our market-facing businesses. As revenues grew at a much faster rate than expenses, we drove good operating leverage and an efficiency ratio below 62%. With continued organic growth, every line of business reported top and bottom-line improvements. I thank our teammates for a strong quarter."
Net interest income rose 9% year over year to $15.4 billion, up from $14.1 billion in 2024, driven by strong Global Markets activity, fixed-rate asset repricing and higher deposit and loan balances.
It marked Bank of America's fifth consecutive quarter of sequential NII growth, despite pressure from lower interest rates, according to the bank.
Meanwhile, it set aside $1.3 billion this quarter to cover potential loan losses, or money it might lose if borrowers can't repay their loans. That’s 13.3% less than the $1.5 billion it set aside in the same quarter last year.
Noninterest expense rose 5% year over year to $17.3 billion, up from $16.5 billion, driven by higher revenue-linked costs and continued investments in talent, branding and technology.
Despite the rise in expenses, Bank of America’s efficiency ratio – a key measure of cost management – improved by 329 basis points to 62%, showing the company is generating more revenue for each dollar spent.
"This quarter’s performance demonstrated the earnings power of our diversified model," said Executive Vice President and Chief Financial Officer Alastair Borthwick. "We believe our investments in technology, talent and client experiences aided in an improved efficiency ratio as well as operating leverage. Our strong capital position enabled us to support clients, growing average loans by $25 billion from the second quarter, and to return $7.4 billion to shareholders through dividends and share repurchases. Liquidity and capital improved and our asset quality included a decline in net charge-offs, positioning us to be well-prepared to grow with clients and deliver for shareholders."
Bank of America shares have risen 14% since the beginning of the year, while the S&P's 500 index has climbed 13%. The stock has risen 19% in the last 12 months.
Material from The Associated Press was used in this report.
Matthew McNulty is a PBN staff writer. He can be reached at McNulty@PBN.com or on X at @MattMcNultyNYC.
