Bank of America (BAC) turned in Q4 earnings and revenue that topped Wall Street expectations, as both net interest income and noninterest income climbed past consensus estimates, reflecting a resilient consumer and businesses. Both its Global Banking and Global Wealth and Investment Management units saw revenue grow from the prior quarter and the year-ago period.
Bank of America (BAC) expects 2026 net interest income on a fully taxable equivalent basis to grow 5%-7% from 2025’s $60.7B. That implies a range of $63.7B-$65.0B, compared with the Visible Alpha consensus of $64.4B.
For Q1, the company expects NII (FTE) growth of ~7% Y/Y.
The bank expects to deliver ~200 basis points of operating leverage in 2026, and in Q1 expects operating leverage with noninterest expense up ~4% Y/Y.
For the year, its effective tax rate is expected to be ~20%.
“With solid revenue growth, positive operating leverage and a lower efficiency ratio, we improved returns year-over-year for both the full year and the quarter,” Chairman and CEO Brian Moynihan said. “With consumers and businesses proving resilient, as well as the regulatory environment and tax and trade policies coming into sharper focus, we expect further economic growth in the year ahead.”
Q4 EPS of $0.98, beating the average analyst estimate of $0.95, fell from $1.06 in Q3 and rose from $0.83 in Q4 2024.
Net interest income (FTE basis) of $15.9B, topping the $15.7B Visible Alpha estimate, increased from $15.4B in the prior quarter and $14.5B a year ago.
Noninterest income of $12.6B vs. the $11.9B Visible Alpha consensus dropped from $12.9B in the prior quarter and increased from $12.1B a year ago.
Q4 provision for credit losses edged up to $1.31B from $1.30B in Q3 and fell from $1.45B in the prior year’s Q4.
Q4 noninterest expense of $17.4B increased from $17.3B in the previous quarter and $16.8B a year ago.
Bank of America’s (BAC) return on average tangible common shareholders’ equity was 13.97% vs. 15.29% in the previous quarter and 13.02% a year ago.
Average deposits totaled $2.01T, up from $1.99T in Q3.
Average loans of $1.17T climbed/dipped from $1.15T in the prior quarter.
“BAC beat slightly on the diluted EPS (by just 2 cents), but the total revenues came in with a beat of 2.38%, which I think was very solid,” said Danil Sereda, Investing Group Leader for Beyond the Wall Investing. “Provision for credit losses were lower than expected, and it’s great because the bank’s credit quality is holding up better than most analysts feared (the difference of over 11% suggests there was a massive underestimation of the credit quality at BofA). I liked to see their return on average share equity above 10%. The CEO’s notes sound bullish overall. With that said, the stock is adding 1-2% premarket for a reason, and I’d leave my Buy on BAC without changes.”
In Q4, Consumer Banking revenue of $11.2B was essentially flat with Q3 and climbed from $10.6B in the year-ago Q4. Average deposits fell to $945.4B from $947.4B in Q3. Combined credit/debit card spending of $255B increased 6% Y/Y.
Global Wealth and Investment Management revenue of $6.62B climbed from $6.31B in the prior quarter and $6.00B a year ago. Net income of $1.41B vs. $1.27B in Q3 and $1.17B in Q4 2024. Client balances of $4.75T rose 12% Y/Y, driven by higher market valuations and positive net client flows.
Global Banking revenue of $6.24B increased from $6.19B in the prior quarter and $6.10B a year ago. Net income of $2.09B was roughly unchanged from Q3 and declined from $2.14B in Q4 2024. Average deposits of $656.1B rose 13% Y/Y, and average loans and leases were $386.3B vs. $388.5B in the previous quarter.
Global Markets revenue (ex-net DVA) of $5.32B shrank from $6.21B in Q3 and climbed from $4.86B in Q4 2024. Net income (ex-DVA) was $997M vs. $1.64B in the prior quarter and $939M a year ago. Sales and trading revenue, excluding net DVA, of $4.5B increased 10% Y/Y.
Bank of America (BAC) stock, which had spiked higher earlier, fell 0.2% at 7:56 AM ET in premarket trading.
Conference call at 8:30 AM ET.
Earlier, Bank of America GAAP EPS of $0.98 beats by $0.02, revenue of $28.4B beats by $660M