Fees, net interest income fuel Bank of America earnings beat

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Bank of America outpaced Wall Street's expectations in the third quarter, propelled by rising fees and net interest income.

In the three months that ended on Sept. 30, earnings per share for the nation's second-largest bank came out to $1.06, beating analysts' average estimate of $0.95, according to S&P.

"Bank of America's business is growing as we improve client experiences and we gain market share across our segments," Alastair Borthwick, BofA's chief financial officer and now executive vice president, said during a call with reporters on Wednesday. "[CEO] Brian [Moynihan], our management team and I feel confident we have the right opportunities to keep up that momentum."

Net income for the bank rose to $8.5 billion, a 23% jump from last year's third quarter and above analysts' estimates of $7.08 billion.

Total revenue for the Charlotte, North Carolina-based bank rose to $28.1 billion, surpassing analysts' forecasts of $27.46 billion and marking an 11% increase from the same period last year.

One major reason for that growth was BofA's net interest income, which reached $15.2 billion in the third quarter — a 9% climb from the prior year.

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

"With continued organic growth, every line of business reported top and bottom-line improvements," CEO Brian Moynihan said in a prepared statement. "I thank our teammates for a strong quarter."

Organic growth has been an important part of BofA's business strategy over the past decade.

Since 2016, BofA has spent more than $5 billion on its 3,600-plus branch network, opening new 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 had opened 22 new branches so far this year, and is still "on track" to reach those numbers.

"We're investing in renovations and we're investing in openings," the CFO 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 prevents it from controlling more than 10% of the nation's total deposits, and can't buy a medium-size or larger bank without exceeding that limit. 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."