Financial services giant Bank of America (NYSE: BAC) beat Wall Street’s revenue expectations in Q3 CY2025, with sales up 10.8% year on year to $28.09 billion. Its GAAP profit of $1.06 per share was 12% above analysts’ consensus estimates.
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Bank of America (BAC) Q3 CY2025 Highlights:
- Net Interest Income: $15.23 billion vs analyst estimates of $15.21 billion (9.1% year-on-year growth, in line)
- Revenue: $28.09 billion vs analyst estimates of $27.58 billion (10.8% year-on-year growth, 1.8% beat)
- Efficiency Ratio: 61.7% vs analyst estimates of 62.8% (103.7 basis point beat)
- EPS (GAAP): $1.06 vs analyst estimates of $0.95 (12% beat)
- Tangible Book Value per Share: $28.39 vs analyst estimates of $28.12 (7.6% year-on-year growth, 1% beat)
- Market Capitalization: $371 billion
Company Overview
Tracing its roots back to 1784 and now serving approximately 67 million consumer and small business clients, Bank of America (NYSE: BAC) is a global financial institution that provides banking, investing, asset management, and risk management products and services to individuals, businesses, and governments.
Sales Growth
Two primary revenue streams drive bank earnings. While net interest income, which is earned by charging higher rates on loans than paid on deposits, forms the foundation, fee-based services across banking, credit, wealth management, and trading operations provide additional income. Regrettably, Bank of America’s revenue grew at a mediocre 4.1% compounded annual growth rate over the last five years. This fell short of our benchmark for the banking sector and is a tough starting point for our analysis.
Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Bank of America’s recent performance shows its demand has slowed as its annualized revenue growth of 3% over the last two years was below its five-year trend. 
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, Bank of America reported year-on-year revenue growth of 10.8%, and its $28.09 billion of revenue exceeded Wall Street’s estimates by 1.8%.
Net interest income made up 53.9% of the company’s total revenue during the last five years, meaning Bank of America’s growth drivers strike a balance between lending and non-lending activities.
Markets consistently prioritize net interest income growth over fee-based revenue, recognizing its superior quality and recurring nature compared to the more unpredictable non-interest income streams.
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Tangible Book Value Per Share (TBVPS)
Banks operate as balance sheet businesses, with profits generated through borrowing and lending activities. Valuations reflect this reality, emphasizing balance sheet strength and long-term book value compounding ability.
When analyzing banks, tangible book value per share (TBVPS) takes precedence over many other metrics. This measure isolates genuine per-share value by removing intangible assets of debatable liquidation worth. On the other hand, EPS is often distorted by mergers and flexible loan loss accounting. TBVPS provides clearer performance insights.
Bank of America’s TBVPS grew at a solid 6.9% annual clip over the last five years. TBVPS growth has also accelerated recently, growing by 8.9% annually over the last two years from $23.94 to $28.39 per share.
Over the next 12 months, Consensus estimates call for Bank of America’s TBVPS to grow by 5.3% to $29.89, mediocre growth rate.
Key Takeaways from Bank of America’s Q3 Results
It was good to see Bank of America beat analysts’ EPS expectations this quarter. We were also happy its revenue outperformed Wall Street’s estimates. Overall, this print had some key positives. The stock traded up 4.9% to $52.51 immediately after reporting.
Indeed, Bank of America had a rock-solid quarterly earnings result, but is this stock a good investment here? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.
