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On Tuesday, Bank of America Corp (NYSE:BAC) reported a first-quarter fiscal 2025 net income of $7.4 billion (versus $6.7 billion a year ago) and EPS of $0.90, beating the analyst consensus estimate of $0.81.
Revenue, net of interest expense, increased 6.0% year over year to $27.37 billion, beating the analyst consensus estimate of $26.99 billion. This was driven by noninterest income growth across all segments and higher net interest income (NII).
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Segment Net income: Consumer Banking clocked $2.53 billion versus $2.66 billion Y/Y, Global Wealth and Investment Management was $1.007 billion versus $1.005 billion Y/Y, Global Banking was $1.91 billion versus $1.99 billion Y/Y, and Global Markets was $1.94 billion versus $1.79 billion Y/Y.
Investment banking fees declined by 3% to $1.5 billion.
Net interest income was $14.44 billion (+3.0% Y/Y), driven by Global Markets activity and fixed-rate asset repricing.
Noninterest income was $12.92 billion (+9.6% Y/Y). Provision for credit losses grew 12.2 Y/Y to $1.48 billion.
The efficiency ratio for the quarter was 64.59%, compared to 66.36% Y/Y. The bank reported a CET1 ratio of 11.8%, compared to 11.9% a year ago. The book value per share of $36.39 improved by 8%.
The average loan and lease balance was $1.09 trillion (+4.0% Y/Y). Average deposits are up 3% Y/Y to $1.96 trillion. Bank of America added ~1.0 million credit card accounts during the quarter.
Outlook: Bank of America reiterated a fourth-quarter net interest income of ~$15.5 billion—$15.7 billion.
Bank of America stock lost over 17% year-to-date. At least five Wall Street firms reduced their price targets on the stock in March.
Last week, the U.S. financial sector got some relief after President Donald Trump announced a 90-day suspension of tariffs on countries that have not retaliated against U.S. trade actions. The financial sector is a high beta, as it tends to outperform when markets are bullish and underperform during risk-off conditions.
However, Ray Dalio of Bridgewater Associates expressed concerns about a potential recession despite Trump pausing reciprocal tariffs.
Price Action: BAC stock is up 2.13% at $37.45 premarket at the last check Tuesday.
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