Bank of America Corp Q3 2025 Earnings Call Transcript

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

Question: John McDonald - Truist Securities - Analyst : Hi, good morning. You guys had good results across all your capital markets businesses, sales and trading, IB wealth. It's always hard to have an outlook here. But just wondering broadly how you're feeling about the environment pipelines and investments made in those businesses against what's usually a seasonally slower fourth quarter and coming off such a strong 3Q.

Question: John McDonald - Truist Securities - Analyst : Great. Thanks, Alastair. And just also, you mentioned deposit beta. What are you expecting for deposit beta across your various businesses if we continue to see the Fed moving rates down?

Question: John McDonald - Truist Securities - Analyst : Got it. Okay, 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. OCTOBER 15, 2025 / 12:30PM, BAC.N - Q3 2025 Bank of America Corp Earnings Call

Question: Jim Mitchell - Seaport Global Securities LLC - Analyst : Hey, good morning. Alastair, you noted you took down more expensive wholesale funding on the liability side, which kept the balance sheet relatively flat, which seems more NIM accretive than NII accretive. So the question, I guess, is how many quarters of that do you expect? And what sort of earning asset growth should we expect over the next year or so?

Question: Jim Mitchell - Seaport Global Securities LLC - Analyst : Okay. No, that's helpful. And then just maybe pivoting to capital. You guys -- as you noted, you're well above your 10% minimum. It seems like we have surcharges likely coming down and other reforms. Why not -- how do you think about the buffer where it is today? And what prevents you from taking that down a little bit? And if you have a longer-term target that would be great.

Question: Jim Mitchell - Seaport Global Securities LLC - Analyst : Okay. Fair enough, 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. OCTOBER 15, 2025 / 12:30PM, BAC.N - Q3 2025 Bank of America Corp Earnings Call

Question: Erika Najarian - UBS AG - Analyst : Hi, good morning. You reported clearly a standout quarter with a ROTCE of 15.4%. I know I'm probably jumping ahead of what you plan to say on November 5, Brian. But one of your closest peers, Wells Fargo did put out a medium-term target of 17% to 18%. JPMorgan has had a 17% ROTCE target through the cycle for a long time. Given that you've hit this target now, should we presume that this is something that you could sustain over the near term and perhaps continue to work upwards sort of closer to those pure targets?

Question: Erika Najarian - UBS AG - Analyst : Great. And on the efficiency ratio, one of your peers talked about a natural inflation rate just in labor of 3% to 4%. And clearly, you're delivering operating leverage this quarter and what you're implying for the fourth quarter as well. I guess this is a two-part question. As we think about how you're framing that ROTCE walk and 2026, do you sort of plan to move away from the 1% to 2% expense growth and talk about efficiency instead? Or is there sort of enough still identifiable inefficient expenses in the franchise that you could recycle and perhaps continue on sort of this lower sort of expense rate target?

Question: Erika Najarian - UBS AG - Analyst : Improved from the 62%?

Question: Erika Najarian - UBS AG - Analyst : Got it. Thank you so much.

Question: Mike Mayo - Wells Fargo Securities LLC - Analyst : Hey, Brian. You left me hanging with that last answer when you talked about the efficiency ratio, you expect to improve -- it was 65% last year, last quarter and 62% and improve the efficiency ratio to what -- do we have to wait until November 5? Or is that something that is kind of a guide to or -- and also in terms of -- I'm just looking for some more meat on the bone, so to speak. I mean, I guess, year-over-year headcount is down 500 and revenues are up $3 billion. So I think that's kind of what you're talking about, but where does that eventually take you to, given your business mix?

Question: Mike Mayo - Wells Fargo Securities LLC - Analyst : Could you just give us a little bit more on AI? I mean you're ranked top 10 globally as far as a bank and using AI and with your patents and everything else. And it's getting back to that first question on this call, how much savings do you have from AI? How do you measure those savings? What are some of the best initiatives you think you have? Or just help us frame how that could transform the company a little bit more, if you could?

Question: Mike Mayo - Wells Fargo Securities LLC - Analyst : All right. I'll take that as a teaser for November 5. Thank you.

Question: Christopher McGratty - Keefe Bruyette & Woods Inc - Analyst : Great, good morning. On credit, overall, really strong results. I mean under the hood, if we go at a level deep, is there anything that's given you a little bit of pause today versus maybe three to six months ago? And anywhere that you're not leaning into with the balance sheet with the growth picking up anywhere you're avoiding? Thank you.

Question: Ken Usdin - Autonomous Research - Analyst : Hi, good morning, thanks. Just a follow-on on the loan growth side. A lot of the loan growth you've been putting on in the commercial side, it looks like it's been in the market segment. And just wondering just how much full capacity you have to continue to build that part of the book, how much demand you're still seeing for it? And how do you think about like the spreads and returns on that part of the business versus kind of the banking book growth?

Question: Ken Usdin - Autonomous Research - Analyst : Got it. Okay. And on the retail side, on the consumer side, it looks like consumer deposits on average were down a little bit sequentially. Just wanted to see what you're thinking about. I know that's been something you've been looking for to get that mix going more towards retail deposit growth, and it's been a little bit more wholesale in the last couple of quarters. What are you seeing just in terms of when you expect that to inflect? And is it just people are putting money elsewhere, whether it's back in the markets or other places? Just your thoughts on retail deposit growth from here. 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. OCTOBER 15, 2025 / 12:30PM, BAC.N - Q3 2025 Bank of America Corp Earnings Call

Question: Ken Usdin - Autonomous Research - Analyst : Okay. Got it, thanks, guys.

Question: Matthew O'Connor - Deutsche Bank North America - Analyst : Hi, good morning. Can you talk about how sensitive you are to lower medium and long-term rates? We've obviously seen a decent drop here just kind of in the context of the benefits from fixed rate asset repricing and the [2.2%] NIM that you've talked about looking out a couple of years.

Question: Matthew O'Connor - Deutsche Bank North America - Analyst : Okay. And then just on this kind of more medium-term NIM outlook that you've talked about [2.2%] sometimes it's [2%] sometimes maybe a little bit higher depending on the mix of earning assets and growth. But just any updates on that as you think about the medium-term NIM outlook? Thank you.

Question: Matthew O'Connor - Deutsche Bank North America - Analyst : Okay. Thank you.

Question: Betsy Graseck - Morgan Stanley - Analyst : Hi, good morning. So Alastair and Brian, I wanted to make sure I got the guidance right here. First off, on the NII, as you're thinking about 2026, highlighting that the inputs are similar to this year. And you indicated 5% to 7% up NII '26 over '25. Is that right?

Question: Betsy Graseck - Morgan Stanley - Analyst : Okay. Great. That was what I was wondering if it's just NIM or is that NIM plus volume and it's all in holistic. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 15, 2025 / 12:30PM, BAC.N - Q3 2025 Bank of America Corp Earnings Call

Question: Betsy Graseck - Morgan Stanley - Analyst : Yes, of course. And then more near term, there was a comment you made about expenses being flat in next quarter versus this quarter.

Question: Betsy Graseck - Morgan Stanley - Analyst : The headcount would be flattish. Okay. But I wanted to get a sense as to are you thinking about -- how are you thinking about NII and fees on the back of that? Because the question that's coming up is, hey, you're guiding down for next quarter on expenses coming in flattish, not coming down. But I'm wondering what's your expectation for capital markets and other compensatory revenues? Because I think we would like to hear the whole picture, not just one piece of the income statement outlook.

Question: Betsy Graseck - Morgan Stanley - Analyst : Okay. And the capital markets backlog, how is that shaping up? And what does that look like for next quarter?

Question: Betsy Graseck - Morgan Stanley - Analyst : Sound great. Thanks so much. Appreciate it.

Question: Gerard Cassidy - RBC Capital Markets Inc - Analyst : Hi, Alastair. Hi, Brian. Alastair, you guys are talking about your consumer deposits. And when you look at your consumer deposits back in the fourth quarter of 2019 and compare it to today, obviously, they're higher. And the Fed shows the entire industry's consumer deposits household checking account deposits are significantly higher from pre-pandemic. So that pandemic surge hasn't left the banking system. Do you guys have any color on what you're seeing from that behavior from pre-pandemic to today? I know you're taking market share and you're growing why yours are growing. But any color on why we still have such elevated levels of deposits?

Question: Gerard Cassidy - RBC Capital Markets Inc - Analyst : Got it. Okay. Thank you.