Bank of America Corp Q1 2025 Earnings Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Steven Chubak - Wolfe Research, LLC - Analyst : Hi, good morning, Brian. Good morning, Alastair. So I appreciate you guys taking my questions. Wanted to start off with one on capital management. Certainly encouraging to see the acceleration, the buyback towards that $4.5 billion level. At the same time, you're still running with more than 100 basis points of cushion. I was hoping you could speak to, given the uncertainty in the environment, what level of CET1 you're currently comfortable running with, in terms of the ratio? And whether this $4.5 billion buyback level is something that we expect to be sustained over the near to medium term. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 15, 2025 / 12:30PM, BAC.N - Q1 2025 Bank of America Corp Earnings Call

Question: Steven Chubak - Wolfe Research, LLC - Analyst : That's great. And for my follow up, just on the outlook for loan and deposit growth, you delivered better growth across both KPIs relative to peers. I was hoping you could speak to what drove the strength in 1Q beyond the portfolio purchase you alluded to earlier. And just bigger picture, the outlook for commercial loan growth as tariffs and policy uncertainty have certainly raised concerns regarding weakening loan demand, weaker CapEx, what have you?

Question: Steven Chubak - Wolfe Research, LLC - Analyst : That's great color. Thanks so much for taking my questions. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 15, 2025 / 12:30PM, BAC.N - Q1 2025 Bank of America Corp Earnings Call

Question: John McDonald - Truist Securities - Analyst : Thank you. Hi, good morning, guys. Thanks for the longer term perspective on the credit. I just wanted to follow up that on terms of the loan loss reserve, what were the dynamics of the setting of the reserve this quarter in terms of any change in weighting of scenarios for the tariffs, and was it set with a 3/31 view or early April view?

Question: John McDonald - Truist Securities - Analyst : Thanks, that's helpful. And then on expenses, you previously were looking for the full year expenses this year to be up 2% to 3% over last year. How are you feeling about that? Is that still kind of your current thinking?

Question: John McDonald - Truist Securities - Analyst : Got it thanks.

Question: Jim Mitchell - Seaport Global Securities LLC - Analyst : Great, good morning. Maybe Alastair, you're able to absorb four cuts this year in your assumptions, and maintain the 4Q and NII target, which is a good thing. As we think about the full impact of the four cuts felt in '26 and potentially a few more, does that make it a little more difficult to reach that intermediate term target? NIM of 1.3% by the end of next year or the fact that you're getting them out of the way this year is helpful? Just trying to think through that intermediate term target. Thanks.

Question: Jim Mitchell - Seaport Global Securities LLC - Analyst : Okay, yeah. It makes sense. And just as a follow up on, just sort of the near term April, we saw a big jump in volatility. Just any -- what are you seeing across your business segments? Whether you've seen deposit flight to safety flows or/and the volatility and trading has that been good volatility bad volatility? Just trying to get a little window into the near term. Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 15, 2025 / 12:30PM, BAC.N - Q1 2025 Bank of America Corp Earnings Call

Question: Jim Mitchell - Seaport Global Securities LLC - Analyst : Okay, great, thank you.

Question: Glenn Schorr - Evercore ISI Institutional Equities - Analyst : Hi, thanks very much. So another good trading quarter for you guys. But I'm curious, when you benchmark yourself, say to the top tiers, there's probably about a $3 billion difference to the biggest platforms. I'm just curious if you see those big gaps to peers, are those gaps that you're choosing to pursue? You mentioned you have the SLR room, you have a great equity franchise. I'm just curious on your approach towards -- is it a capital thing, is it a risk thing? I'm just curious on the high level thoughts. Thanks.

Question: Glenn Schorr - Evercore ISI Institutional Equities - Analyst : I very much appreciate that. And similar to what John said, we definitely like to drill down on the extra detail around the credit book and history guide. I'm curious on the -- right now when you talk about the reserving and you took now to give us the further drill down on the exposures or closer towards our higher likelihood of recession and/or have you gone through and assessed the loan book from exposures to this shifting tariffs and tax environment and that's bringing the -- I hope that the question is clear. I'm just, I'm more talking about the why now and what's driving the increased attention?

Question: Mike Mayo - Wells Fargo Securities, LLC - Analyst : Hey, Brian. I'm hearing this call and this almost sounds like it could've been the fourth quarter earnings call. Loans are growing, deposits are growing, credit's fine, consumer spending is slowing but still growing. I'm just trying to reconcile the $7 trillion of lost stock market wealth with comments from you sounds like you, you're not blinking. And by the way, I don't think you're alone. It's just teams more upbeat relative to what the stock market's done. And I'm trying to reconcile those two things. So, what am I missing or what are you seeing? Or at what point do you say, hey, wait a minute, this is really might be a bigger problem.

Question: Mike Mayo - Wells Fargo Securities, LLC - Analyst : Let me take the other side of that. I thought the idea was to make it easier to do business with deregulation, and you can see the nominations, people, and then you get the policies. If that narrative plays out, how do you think it'll be easier to do business at Bank of America and with your customers as it relates to deregulation?

Question: Mike Mayo - Wells Fargo Securities, LLC - Analyst : And short follow up, the $1.2 trillion in cash in governments, where would that be kind of in a more ideal world and the operating costs? How much that could potentially be saved even if you want to give some investment to the industry, just order magnitude?

Question: Mike Mayo - Wells Fargo Securities, LLC - Analyst : All right thank you.

Question: Erika Najarian - UBS Securities LLC - Analyst : Understanding that there's a lot of potential moving pieces in the regulatory agenda or deregulatory agenda, I did notice that at the end of the year, your G SIB score would indicate that if you didn't take down your exposure, this year you would have a higher G SIB surcharge by January 1, 2027 from what I understand, all else being equal. I'm just wondering, Brian, Alastair if your plans are to reduce this exposure or the message is, look, our ROTCE is 13.9% and improving and so, crossing is not going to be a big deal because of the PPNR and return power that we see going forward.

Question: Erika Najarian - UBS Securities LLC - Analyst : Got it. And I'll follow up offline. I just wanted to squeeze my second question in. Follow up on the net interest income, outlook for the fourth quarter. You helped us with the exit points on both balance sheet and net interest margin in the last call. If I recall, it was flat to fourth quarter levels in 2024 and I think a 205 to 10 net interest margin. Are those points still valid in terms of what's underneath the surface of that 4Q '25 exit NII? Obviously, the balance sheet is bigger because of market in the first quarter. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 15, 2025 / 12:30PM, BAC.N - Q1 2025 Bank of America Corp Earnings Call

Question: Matt O'Connor - Deutsche Bank Securities Inc. - Analyst : Good morning. I just wanted to follow up on the concept of growing into the capital, slide 8 here. And I guess I want to horn in on the RWA growth and just think about that going forward. Obviously, there's some increase in 1Q from seasonal stuff in markets but maybe won't be as much going forward and the longer it might pick up a little bit. But what I'm getting at is, it's not that clear to me that you're going to use all the capital that you're generating and the excess from organic growth. It does feel like the buybacks at some point will be a pretty robust pay. So anyway, long story, long question just to summarize, like talk about the capital consumption in a little more detail from the organic growth and the interplay of buyback. Thanks.

Question: Matt O'Connor - Deutsche Bank Securities Inc. - Analyst : That's helpful. And then just separately that all other fee line on a consolid basis was pretty close to breakeven versus normally a loss because of some of your tax credits. Is that just some lumpy items like loan sale gains or marks given some of the things that we saw in the marketplace this quarter or want to?

Question: Betsy Graseck - Morgan Stanley & Co. LLC - Analyst : Hi, good morning. Great quarter. I did have two quick questions. One was on -- Brian, earlier in the call we talked about how some of the commercial loan growth was being generated by the investments you've been making, in particular, one of the areas international. So I just wanted to -- with this tariff overhang that we have going forward, how do you think about that investment spend in the international markets? Do you step it up? Do you pull it back? Is it an opportunity? Is it a threat or risk? Just wanted to understand that angle from you. Thank you.

Question: Betsy Graseck - Morgan Stanley & Co. LLC - Analyst : Okay, thank you. And that was my second question on the small business side. Can you help us understand what you're seeing today from small business? I know you are, as you mentioned, one of the largest small business lender, and you've had significant loan growth over the past several years in small business way ahead of peers. And so you're the closest to these folks in our world, and I would love to understand how are they thinking about investing in this environment with the tariff overhang. Thanks.

Question: Ken Houston - Autonomous Research - Analyst : Thank you again for the interest income outlook slide, the waterfall. I wanted to ask, on the fixed rate asset repricing bucket, can you help us understand how much is rolling off each quarter in the HTM securities and mortgage loan books and what you're getting from that? And then also as we get closer to that second-half benefit on the cash flow hedges, what type of pick-ups are you imagining in terms of like new fixed rate versus received rate versus what's rolling off? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 15, 2025 / 12:30PM, BAC.N - Q1 2025 Bank of America Corp Earnings Call

Question: Ken Houston - Autonomous Research - Analyst : Okay. Great. And then second question, you guys did another great job getting deposit cost down 20 basis points for the second straight quarter. As you contemplate this growth that you're seeing and continuing, how do you think about just how much you can continue to reduce rates paid relative to how you're seeing just the overall cost of funding? Thanks.

Question: Gerard Cassidy - RBC Capital Markets Wealth Management - Analyst : Hey, Brian. Hi, Alistair. You guys did a very good job in giving us the details about what it looked like back in 2009 versus today on slide 22. And if we move up to slide 21, you can see the consumer loan portfolio has obviously been de-risked as you pointed out. What I'd like to ask a question about is the commercial loan portfolio, particularly the growth. Can you guys share with us some of the confidence you have that we're not going to see some issues here, particularly, you look at the dark blue, non-US commercial has grown very strongly over this time period? And what can you share with us about the risk in this portfolio relative to maybe 2009? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 15, 2025 / 12:30PM, BAC.N - Q1 2025 Bank of America Corp Earnings Call

Question: Gerard Cassidy - RBC Capital Markets Wealth Management - Analyst : Very good. Very insightful. Thank you. And then as a follow-up, Alastair, you guys mentioned that the credit card charge-off ratio, was a seasonally higher number at just over 4%. And when we go back to the first quarter of '24 and '23, obviously, the charge-off levels were lower. Can you -- and especially with the unemployment rate remaining as low as it has over the last couple of years that FICO score inflation we've read about during the pandemic, what do you guys account for the number being where it is today versus the last couple of first quarters of each of those prior years, considering that the unemployment rate, for example, has not gone up that much?

Question: Gerard Cassidy - RBC Capital Markets Wealth Management - Analyst : Got it. Thank you, Brian.