Bank of America Corp Q2 2025 Earnings Call Summary

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

Question: John McDonald - Truist Securities - Analyst : I wanted to ask about retail deposit progress. There's been a lot of talk about different ways to measure retail deposit share, and I know you may take issue with some of the methodologies out there, but Brian, taking a step back, how do you look at and measure the team's progress in growing retail deposit share, and what your report card and how you've done and what your ambitions are on that front?

Question: John McDonald - Truist Securities - Analyst : Okay. Thanks, Brian. Alastair, I wanted to follow up on your expense commentary. Can you elaborate on the outlook for the second half? I think your prior outlook implied some improvement in the second half, and I think you just said you may or may not see that depending on the strength of the market's business.

Question: John McDonald - Truist Securities - Analyst : Okay. Thanks.

Question: Ken Houston - Autonomous Research - Analyst : Alastair, thanks for the update on that trajectory for the second half of the year. I'm just wondering, as we move a step forward, if you can kind of just make sure we're still tracking right on that the split between the loan securities and swap repricing, and whether that step up in that bucket is linear in the third and fourth, or kind of just builds up as we get towards the end of the year. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 16, 2025 / 12:00PM, BAC.N - Q2 2025 Bank of America Corp Earnings Call

Question: Ken Houston - Autonomous Research - Analyst : Okay, and then just on the -- I think we know that the securities and mortgage loans, but you can you kind of just dig in a little bit on the on the cash flow hedges and what you're seeing in that? Are you still moving forward with the same strategy, the off and on and how much you're picking up on those?

Question: Ken Houston - Autonomous Research - Analyst : So still in that plus 150 or so range that you said last quarter?

Question: Ken Houston - Autonomous Research - Analyst : Okay, great. Thanks a lot, Alastair.

Question: Matthew O'Connor - Deutsche Bank - Analyst : Just want to follow up on the expenses. I guess if you kind of flatline it or flat it just down a little bit, that'll put you up, call it, 3.5% or so on a full year basis, and I think the prior guide was up 2% to 3% or the high end of 2% to 3%. Can you just kind of circle back to the cost versus what you were thinking previously, and maybe talk about some of the regulatory costs that I think are keeping a little bit higher. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 16, 2025 / 12:00PM, BAC.N - Q2 2025 Bank of America Corp Earnings Call

Question: Matthew O'Connor - Deutsche Bank - Analyst : Okay, so it does seem like the costs are coming a little bit higher, but I appreciate the kind of higher fees. I guess, as we think about like more sustainable expense growth, like I know there's no official guidance for next year, but just kind of talk about do you get back into that kind of just a couple percent growth or how should we --

Question: Matthew O'Connor - Deutsche Bank - Analyst : Okay, thank you.

Question: Gerard Cassidy - RBC Capital Markets - Analyst : You guys have had real success in having the digital adoption in your lines of businesses, and you pointed that out in the appendix slides that you referenced. What -- do you think you could ever get the efficiency ratio back down to the pre-pandemic levels of just under 60% or is the business changed so much since the pandemic that, over time 59%, let's call it, may be tough to achieve, not near term but over time.

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Great, Brian. And then as a follow up, just a broader question for you, obviously there's been a lot of talk about stablecoins. Can you give us your view of where you see the adoption of stablecoins going forward and what that might have in terms of impact on payments revenues or deposit trends for Bank of America, and possibly the industry?

Question: Gerard Cassidy - RBC Capital Markets - Analyst : And just quickly, Brian, do you think there'd be a consortium like Zelle on stablecoins where the industry defends itself and moves forward, or will the banks go individually?

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Thank you for those insights. Appreciate it.

Question: Mike Mayo - Wells Fargo Securities - Analyst : I feel like you served up a good meal here. I mean, the main course we don't lose sight of $2 trillion of deposits where you pay 1.76%. And that's certainly down quarter over quarter, year over year. The side dishes certainly look good with the NII going to escape velocity, I guess from [14.8] you said to [15.5] to [15.7] by the end of the year, but I'm still left hungry, I guess I need my dessert or something. I'm just wondering why even with all that improved performance, the [NII] guide isn't even higher given the pace of loan growth. You certainly see the expectations as Alastair said, every segment of commercial lending is doing well. You seem very optimistic about that. You're also asset sensitive and there's less rate cuts, so I guess I'm whining for some dessert, some extra. I'm left hungry. Why not more?

Question: Mike Mayo - Wells Fargo Securities - Analyst : All right, so when I go for my next meal, next year or the year after. Any kind of foreshadowing of what you're preliminarily thinking about for next year?

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

Question: Steven Alexopoulos - TD Cowen - Analyst : I want to start the conversation first. I love this AI slide for, I might frame it actually, but to start the conversation there, as we've spoken to the banks, there seems to be a fairly wide range of how banks are thinking about AI. Some are using it really to boost productivity. Others are more fully embracing it to leverage your digital workers. You seem to be in the second camp. I don't know if you guys saw the JPM Investor Day where [Mary] Anne like put that slide up looking at head count coming down about 10% or so in the consumer bank over the next five years. Wherever that number ends up being, how should we think about your company as you leverage these tools? Should we think about you as leading fast forward to whatever JP Morgan does? I'd love to hear you unpack this for us.

Question: Steven Alexopoulos - TD Cowen - Analyst : Okay, that's great color. For my follow up, just going back to your response, Brian, to Gerard's question on digital assets. As I've studied BofA, I think you were the first bank out there with a mobile app. You're the first one out there with Erica, right, the digital agent. But it seems like the way you're thinking about stablecoins is your -- it's a little wait and see, right? JPM has a tokenized deposit. Citi has a tokenized deposit. I haven't seen any announcement from you guys. You don't have a large cross-border business right now relative to others, so you could be the disrupter in this new ecosystem, same way you were with mobile, same way you were with digital agent. Are you just skeptical on what this could mean long term? Like why not the same way you have with these others?

Question: Steven Alexopoulos - TD Cowen - Analyst : Got it. Okay, thanks for the color.

Question: Erika Najarian - UBS - Analyst : Wanted to just refocus the conversation, and just ask Brian with the deregulatory momentum that seems to be taking place, how do you feel about when is the appropriate time to address that 130 basis point buffer? So granted the stress test has been quite volatile in the SEB result. But clearly, there's reform to address that. I'm wondering if 130 basis points would still be an appropriate buffer and what you need to see to rethink that buffer.

Question: Erika Najarian - UBS - Analyst : And just my follow up question here, Brian, is are there businesses that you're prioritizing in terms of redeploying that capital to that perhaps -- where the profitability looks better under this regime and the $5.3 billion of stock that you bought back this quarter, would that be indicative of your appetite for the rest of the year?

Question: Erika Najarian - UBS - Analyst : All right. Thank you.

Question: Betsy Graseck - Morgan Stanley - Analyst : Two questions. I want to follow up on what you were just talking about. I was wondering with relation to markets RWA. I thought in the past there had been no kind of ceiling on that, but now it's gone. So can you talk to how much RWA are you willing to allocate to the Markets business?

Question: Betsy Graseck - Morgan Stanley - Analyst : Okay, great. And then follow-up question is just on the -- question on how you are approaching your wind and solar investments with the tax plan that is going through? How are you thinking about that business and how should we be anticipating how that will roll through your P&L?

Question: Betsy Graseck - Morgan Stanley - Analyst : And then the housing, does the housing investments increased to offset that wind and solar fade?

Question: Betsy Graseck - Morgan Stanley - Analyst : Okay. Excellent, thank you.

Question: Chris McGratty - Keefe, Bruyette & Woods, Inc. - Analyst : Brian, you've talked a lot about this responsible growth and the credit's been tremendous over the years. In terms of the journey on the growth portion, I'm interested in your assessment of where you are versus where you desire to be. And then maybe secondarily, a little bit more comments or color on the loan growth in the quarter of the conversations that you're having with borrowers a degree of confidence.

Question: Chris McGratty - Keefe, Bruyette & Woods, Inc. - Analyst : Great. Thanks for that, Brian. And then secondarily, some of your peers have talked about the willingness to look externally for uses of capital. I may have missed this in your earlier remarks, but is there any -- aside from funding the balance sheet and some of your growth initiatives, is there anything within the franchise that you would be looking to perhaps allocate more capital externally?

Question: Chris McGratty - Keefe, Bruyette & Woods, Inc. - Analyst : Right, yeah, I was definitely referring to non-bank, so appreciate the color. Thanks, Brian.

Question: Jim Mitchell - Seaport Global - Analyst : Alastair, I know you don't want to give a hard target for NII for next year. Appreciate that, but with the high jumping off point and then you have a little more puts and takes the most, I guess you have potential headwinds from this (inaudible) accretion rolling off. You got rate cuts embedded in the forward curve. But loan growth and deposit growth are picking up, cash flow hedges are rolling off, asset repricing. How does it all -- in your mind, how does it all fit together next year? Do you -- can you grow off that 4Q jumping off point in your mind, or just any thoughts would be great? And the answer is yes.

Question: Jim Mitchell - Seaport Global - Analyst : Okay, that's great. And maybe just you had highlighted that balance sheet mix has changed a little bit, and you're focused more on NII growth than NIM. I know you had historically or previously talked about a [220 to 230] longer term target. Is that different now or how do you think about that longer term target?

Question: Jim Mitchell - Seaport Global - Analyst : Oka, great. Thanks for taking my questions.