CNBC Television
BofA CEO Brian Moynihan: Our commercial credit quality got better in the third quarter
11/5/2025, 4:51:10 PM
Economic Summary
- Bank of America (BAC) reported $8.5 billion in earnings last quarter and presented detailed 300+ pages of data to show how ongoing business growth should convert into shareholder returns.
- Management expects net interest income (NII) growth of roughly 5–7% this year, driven by loan and deposit growth plus balance-sheet repricing, versus an industry growth rate closer to 2–3%.
- They disclosed that fixed-rate asset repricing from held-to-maturity positions is expected to contribute roughly $450–490 billion to the bottom line between 2026 and 2031, implying substantial future cash flow timing benefits.
- Company guidance includes return on tangible common equity (ROTCE) of 16–18% (recently achieved 15%), with the firm expecting to reach the lower end in about eight quarters and the medium-to-high end over roughly three years, aided by 200–300 basis points of operating leverage improvement.
- Bank runs a very large liquidity/investment book (hundreds of billions in cash and overnight securities, cited as ~$700–800B) and a $950B core consumer deposit base, which management plans to invest along the curve to extract deposit franchise value.
Bullish
- NII growth of 5–7% projected, outpacing industry 2–3%.
- Reported 31% year-over-year EPS growth.
- ROTCE target raised to 16–18%, with pathway to achieve within quarters/years.
- Large core consumer deposit base ($950B) and tech-driven operating leverage.
Bearish
- Stock fell ~2.8–3% despite raised guidance, signaling investor skepticism.
- Has underperformed the other large Wall Street banks over 1-year and 5-year periods.
- Large held-to-maturity/fixed-rate asset position creates repricing and timing risk.
Bullish tickers
BAC
Bearish tickers
BAC
BAC
Bullish
Management points to 5–7% NII growth (well above industry), 31% EPS growth year-over-year, a $950B core consumer deposit franchise, and a plan to hit 16–18% ROTCE—backed by technology-driven operating leverage and substantial invested liquidity.
Bearish
The stock dropped despite stronger guidance; investors may be focused on relative underperformance versus peer banks, sensitivity to held-to-maturity and fixed-rate asset repricing, and near-term market noise that could mute enthusiasm.
People mentioned
DavidBrianJim DeMarMatthew Coder