Bank of America dials up outlook slightly after solid Q3

• Key Insight: Bank of America’s revised-up guidance for net interest income comes partly thanks to an improving macroeconomic environment.
• Supporting Data: BofA’s NII guidance for the fourth quarter is now $15.6 billion to $15.7 billion, up from $15.5 billion to $15.7 billion.
• Expert Quote: “As we’ve seen more certainty now around trade and tariffs … it’s allowed our client base to make longer-term decisions, and that’s reflected in our investment banking activity,” said CFO Alastair Borthwick.

UPDATE: This article now contains quotes from Bank of America’s earnings call and commentary from analysts.

After a quarter that beat Wall Street’s expectations, Bank of America set its near-term sights for net interest income slightly higher.

In the quarter that ended on Sept. 30, America’s second-largest bank saw its NII reach $15.2 billion, a 9% climb from the same period in 2024. BofA expects that growth to continue — enough so that it revised its guidance modestly upward.

“Given this performance, we expect fourth-quarter NII between $15.6 and $15.7 billion, at the higher end of our previously shared guidance earlier in the year,” Alastair Borthwick, the bank’s chief financial officer, said during a call with reporters on Wednesday. The previous guidance range had set the lower end at $15.5 billion.

The revision comes on the heels of a solid quarter for BofA. From July through September, the Charlotte, North Carolina-based bank reported a 23% jump in net income to $8.5 billion — well above analysts’ consensus estimate of $7.08 billion, according to S&P. Earnings per share came out to $1.06, beating forecasts of $0.95.

“Bank of America delivered a strong third quarter with good growth, both in the top line revenue and bottom line EPS, all driven by strong operating leverage,” CEO Brian Moynihan said during a call with analysts.

BofA attributed the NII improvement to a number of factors, including higher loan and deposit balances. Average loans reached $1.15 trillion in the third quarter, up 9% from the prior year, while average deposits rose to $1.99 trillion, a 9% year-over-year increase.

Another contributor: Over the course of the quarter, some of the uncertainty around U.S. trade policy died down, BofA’s executives said. This allowed more of the bank’s commercial clients to resume investing for the future, opening up more lending opportunities for BofA.

“As we’ve seen more certainty now around trade and tariffs, and around taxes as well, it’s allowed our client base to make longer-term decisions, and that’s reflected in our investment banking activity,” Borthwick said. “So we feel good about the pipeline and the way it’s developing.”

A number of analysts praised the bank’s third-quarter performance as steady and reliable, if unspectacular. Glenn Schorr of Evercore ISI called it a “clean” print. Steven Alexopoulos of TD Cowen called it “a solid across-the-board quarter.”

Total revenue rose to $28.1 billion in the quarter, surpassing analysts’ forecasts of $27.46 billion and marking an 11% increase from the same period last year.

One contributor to the higher revenue was rising fee income. Investment banking fees rose to $2.01 billion, up 43% from the same period in 2024. And asset management fees swelled to $3.97 billion, up 12% from the prior year.

“This quarter’s results provide good momentum as we finish 2025 and head into 2026,” Moynihan said. “We have been demonstrating consistent organic growth for many quarters.”

Organic growth has been an important part of BofA’s business strategy over the past decade. Since 2016, the bank has spent more than $5 billion on its 3,600-plus branch network, opening locations in new markets and renovating offices in existing markets.

The company has pledged to open 165 new branches by the end of 2026, including 40 expected to open this year. BofA said Wednesday that it has opened 22 new branches so far in 2025, and is still “on track” to reach its goals for this year and next year.

“We’re investing in renovations and we’re investing in openings,” Borthwick said. “The team goes through it month by month, quarter by quarter, local market by local market, making sure that we position our financial center assets where we think they’ll be best deployed for our customers.”

There are legal reasons for this focus on branch openings. Like other big banks, the $2.4 trillion-asset BofA is constrained by a law that bars it from making bank acquisitions once it already controls more than 10% of the nation’s total deposits. So it’s been opening branches in certain U.S. markets, such as Atlanta, Milwaukee, Nashville and Boise, Idaho, as a way to grow its deposit base.

“Organic growth is the reality,” Moynihan said during BofA’s second quarter earnings call in July. “We’re continuing that push — the ‘expansion markets,’ we call them — and we’re seeing success there.”