Bank of America NII Up 10%, EPS +20%, Preferred Yield Near 6%
Bank of America’s net interest income rose 10% year-over-year in FY2025, enhancing dividend coverage, while Series PP preferred shares yield near 6% at a 30% discount to par. Full-year EPS jumped 20% to $3.86, and shares trade at 14x trailing earnings versus a 10.5x forward multiple.
1. Net interest income and preferred shares
Bank of America reported net interest income rose 10% year-over-year in 2025, bolstering its ability to cover preferred dividends. Its Series PP preferred shares now offer a near 6% yield while trading at a 30% discount to par, presenting an attractive risk-reward profile for income investors.
2. EPS growth and valuation
The bank delivered a 20% increase in full-year EPS to $3.86, topping the upper end of its targeted range. Despite this strong profitability, shares trade at 14x trailing earnings compared to a consensus forward multiple of 10.5x, suggesting a premium valuation underpinned by robust financial performance.