Key Moments:
- Bank of America reported fourth-quarter net income of $7.6 billion, or 98 cents per share, surpassing analysts’ expectations of 96 cents per share.
- Net interest income rose 9.7% year-over-year to a record $15.75 billion, with the bank projecting 7% NII growth in the current quarter.
- Sales and trading revenue increased 10% to $4.5 billion, supported by heightened market volatility and portfolio repositioning by investors.
Trading Strength and Record Interest Income Drive Earnings Beat
Bank of America beat Wall Street forecasts for fourth-quarter profit as its trading operations benefited from volatile markets and its interest income reached a record level.
The bank said it expects net interest income (NII) – the spread between what it earns on loans and what it pays on deposits – to grow 7% in the current quarter. It also maintained its forecast for NII growth of 5% to 7% for fiscal year 2026.
During the fourth quarter, softening U.S. labor demand, political uncertainty and worries over a potential AI-driven equity bubble unsettled markets. Investors reshuffled portfolios, and speculation about possible Federal Reserve rate cuts further energized trading activity.
Bank of America’s sales and trading revenue rose 10% to $4.5 billion in the quarter, in line with the guidance given by CEO Brian Moynihan the prior month.
“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,” Moynihan said in a statement.
“While any number of risks continue, we are bullish on the U.S. economy in 2026.”
Share Performance and Market Reaction
The latest results concluded what the bank described as a positive year. Its shares advanced more than 25% in 2025, outperforming the broader S&P 500 index, although trailing peers JPMorgan Chase and Wells Fargo.
Despite the quarterly beat, Bank of America shares were down nearly 1% in premarket trading.
“Banks have been very strong to start the year, and as these numbers come in, markets are taking a little time to digest,” said Jake Johnston, deputy chief investment officer at Advisors Asset Management.
“We’re seeing slight misses on some of the estimates, but these stocks had a strong run up into these reports, and it’s not unusual to see a little bit of a pullback.”
JPMorgan also reported a fourth-quarter profit that exceeded Wall Street expectations, helped by stronger trading performance.
Periods of heightened volatility tend to support investment banks, as trading desks see greater client activity and higher revenue.
Interest Income and Loan Growth Underpin Core Banking
U.S. banks have been supported by the repricing of fixed-rate assets and securities over time into higher-yielding instruments.
The Federal Reserve’s rate cuts in late 2025 also allowed banks to reduce deposit costs, which in turn supported earnings.
Lower rates have encouraged borrowing as consumers sought to lock in loans at what they viewed as favorable terms.
Average loans and leases at Bank of America increased 8% year-over-year to $1.17 trillion, with growth across every business segment.
“Interestingly…we’ve seen growth in all of the consumer borrowing categories. So that’s helped us in the fourth quarter, but generally, the story in 2025 was more of a commercial borrowing story,” Chief Financial Officer Alastair Borthwick said on a media call.
The bank’s net interest income rose 9.7% from a year earlier to $15.75 billion in the quarter.
“We tend to look at Bank of America as the North Star to reconcile the health of the consumer, especially as the market has witnessed some cracks in the labor market,” said David Wagner, head of equities at Aptus Capital.
The bank’s performance, he added, shows no indication “that the consumer is weakening whatsoever.”
Wealth Management Gains From Asset Inflows
Stronger markets lifted asset prices and supported steady inflows into assets under management at Bank of America during the quarter.
The bank’s global wealth and investment management division reported revenue of $6.6 billion, up 10% from the prior year, driven by higher asset management fees.
Quarterly Financial Highlights
Net income for the three months ended December 31 rose to $7.6 billion, or 98 cents per share, from $6.8 billion, or 83 cents per share, a year earlier. Analysts had projected earnings of 96 cents per share, based on estimates compiled by LSEG.
Revenue on a fully taxable equivalent basis was $28.5 billion, slightly above Wall Street’s consensus estimate of $27.94 billion.
| Metric | Current Quarter | Year-Ago Quarter | Notes |
|---|---|---|---|
| Net income | $7.6 billion | $6.8 billion | EPS rose from 83 cents to 98 cents |
| EPS vs estimates | 98 cents | 96 cents (estimate) | Beat LSEG consensus |
| Net interest income | $15.75 billion | Not stated | Up 9.7% year-over-year |
| Sales and trading revenue | $4.5 billion | Not stated | Up 10% year-over-year |
| Wealth & investment management revenue | $6.6 billion | Not stated | Up 10% year-over-year |
| Average loans and leases | $1.17 trillion | Not stated | Up 8% year-over-year |
| Total revenue (fully taxable equivalent) | $28.5 billion | Not stated | Above consensus of $27.94 billion |
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