BAC posts 34% EPS growth to $1.21 on record NII

BAC reported Q2 EPS of $1.21, up 34% from a year earlier, as net interest income reached a record $16.2 billion.

"The results show organic growth, operating leverage, and efficiency ratio improvement in every business segment," Chief Executive Officer Brian Moynihan said.

Revenue rose 15% to $31.6 billion. Sales and trading revenue, excluding DVA, jumped 33% to $7.16 billion, marking the 17th consecutive quarter of growth. Investment banking fees surged 50% to more than $2.1 billion, driven by a 61% gain in advisory revenue and a 53% increase in equity underwriting. Net income climbed 27% to $9.1 billion. The efficiency ratio improved to 59% from 64% a year earlier, and the bank generated operating leverage of 660 basis points.

Shares of BAC have gained 12.8% year to date, outperforming the S&P 500's 7.5% advance. Management now expects full-year NII growth at the upper end of its 6% to 8% range, supported by continued loan and deposit growth and fixed-rate asset repricing.

Average loans rose 8% to $1.2 trillion, marking the ninth consecutive quarter of growth. Commercial lending led the increase, with average commercial loans up 11% to $733 billion. Average deposits grew 2.5% to $2.02 trillion, including a 4% rise in non-interest-bearing deposits. The bank's deposit base remains a key competitive advantage, with consumer deposits costing just 48 basis points on $957 billion in balances.

Credit quality remained stable. Net charge-offs were $1.4 billion, largely unchanged from the first quarter. The CET1 ratio stood at 11.2%, well above the 10% minimum. The bank returned $8 billion to shareholders through dividends and share repurchases in the quarter. In July 2025, it authorized a $40 billion buyback program, with $17 billion remaining as of June 30.

The bank's diversified revenue model sets it apart from peers. JPMorgan Chase shares have gained 9.6% year to date, while Citigroup has risen 13.3%. BAC trades at 2.19 times tangible book value, below the industry average of 3.4 times, suggesting room for further multiple expansion if earnings momentum continues.

The guidance raise signals management expects NII momentum to persist through year-end, driven by loan growth and balance sheet optimization. Investors will watch the trajectory of investment banking fees and deposit costs in the second half, as tougher year-over-year comparisons may moderate the pace of operating leverage gains.

This article is for informational purposes only and does not constitute investment advice.