Bank of America Starts 2026 Strong as NII Outlook Improves and Markets Reaccelerate
Broad-based revenue growth, firmer fee momentum and stable credit gave Bank of America a solid start to 2026, with the latest quarter showing a clear step up from late 2025 even as capital ratios edged lower.
π Key Takeaways
Bank of America reported $30.3B of revenue in the latest quarter, up 7% YoY, alongside $1.11 of EPS, $15.9B of net interest income on an FTE basis, and 16.0% ROTCE. Expenses rose 4%, but the bank still produced +290 bps of operating leverage, while the efficiency ratio improved to 61.0% from 63.0% a year earlier. Credit stayed steady, with provision expense at $1.3B and net charge-offs of $1.4B.
Against the prior quarter, the picture was mostly better. Fourth-quarter revenue was $28.4B, EPS was $0.98, and NII was also $15.9B, meaning the newest quarter delivered stronger top-line and per-share earnings performance while holding NII at an already strong base. The comparison is not uniformly stronger, however: fourth-quarter operating leverage was a bit higher at just over 300 bps, and CET1 has since moved down from 11.4% to 11.2%.
π What Drove the Quarter
The biggest swing factor was fee and trading strength layered on top of resilient core banking. Management highlighted stronger investment banking activity, a decade-best sales and trading performance, and broad loan and deposit growth. Global Markets revenue ex-DVA reached $7.0B, while sales and trading rose to $6.3B, helped by especially strong equities results. Global Banking also benefited from firmer deal activity, with investment banking fees at $1.8B, up 21% YoY.
That marks an important evolution from the prior quarter, when results were still solid but more clearly anchored by NII, deposit pricing discipline and balance-sheet repricing. In fourth quarter 2025, management emphasized that NII growth was being driven by loan and deposit growth, fixed-asset repricing and a favorable funding mix, while fee areas such as markets and wealth were improving but had not yet reached the same intensity seen in the latest quarter.
π¦ Segment Trends
Consumer Banking remained a major earnings engine, generating $3.1B of net income with 5% revenue growth, average deposits of $951B, and a record 38.5M consumer checking accounts. Wealth was another standout, with record first-quarter revenue of $6.7B, net income of $1.3B, client balances of $4.6T, and $20B of asset management flows. Global Banking posted $6.3B of revenue and $2.1B of net income, while Global Markets delivered the strongest relative acceleration.
The comparison with fourth quarter 2025 suggests a quarter mix that has become more market-sensitive but not less balanced. Late 2025 already showed healthy consumer trends, wealth momentum and improving investment banking pipelines, but the newest period looks stronger in execution, especially in equities and capital-markets activity. That leaves the latest report reading as an improvement overall rather than just a continuation.
βοΈ Capital, Risk and Balance Sheet
Credit remains one of the cleaner parts of the story. Management pointed to lower charge-offs, lower delinquencies, better criticized asset trends and a notable improvement in office CRE, including no new inflows of non-performing assets from office exposures in the quarter. That follows a prior quarter in which charge-offs were already falling and commercial real estate losses were easing, so the latest release supports the view that asset quality is stable to improving rather than merely holding flat.
The main offset is capital. Total assets ended near $3.5T, common equity was about $276B, and CET1 slipped to 11.2% from 11.4% in the prior quarter. Even so, liquidity remains ample, the bank continued returning capital through $2.0B of dividends and $7.2B of buybacks, and management continues to argue that regulatory changes could ultimately be manageable or even favorable for required capital levels.
π What Matters Next
The most important message from the quarter was guidance. Management raised 2026 NII growth guidance to +6% to +8% from +5% to +7% previously, reflecting stronger first-quarter NII performance and a rates backdrop that has shifted from expecting two cuts to expecting none. It also reiterated expectations for more than 200 bps of operating leverage for the full year.
That leaves Bank of America entering the rest of 2026 with a favorable setup: core banking trends are intact, fee businesses have reaccelerated, credit is behaving, and management is confident enough to lift its NII outlook. The only meaningful restraint in the latest print is somewhat lower capital, but the broader read-through is that earnings momentum has improved since the end of 2025.
