Bank of America’s massive low-cost deposit base and better-than-expected first-quarter results are key factors for investors to consider as the stock trades at record levels. The bank holds the leading U.S. market share in retail consumer deposits, with $951 billion in its consumer banking segment as of March 31, and 91% of checking accounts are customers’ primary accounts, making the funding sticky and cheap. First-quarter net revenue rose 7% year over year and diluted earnings per share climbed 25%, beating analyst forecasts, while net interest income increased 9% to $15.7 billion and investment banking fees surged 21%. The efficiency ratio improved to 61% from 63% a year earlier, and the return on tangible common equity reached 16%. With a price-to-book ratio of 1.5 and consensus estimates projecting diluted EPS to grow at a 14.6% compound annual rate from 2025 to 2028, the valuation appears reasonable, and the stock also offers a nearly 2% dividend yield.
Bank of America CorpBank of America reported better-than-expected Q1 results with revenue up 7%, EPS up 25%, and improved efficiency ratio.
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