BAC's Q4 Earnings Top as Trading & NII Shine, Stock Slides on Weak IB

Bank of America’s BAC fourth-quarter 2025 earnings of 98 cents per share surpassed the Zacks Consensus Estimate of 95 cents. The bottom line also grew 18% year over year.BAC shares lost more than 2% in pre-market trading in response to weak investment banking (IB) performance.Behind BAC’s Q4 Headline NumbersBank of America recorded an improvement in trading numbers for the 15th straight quarter. Sales and trading revenues, excluding net DVA, grew 10% year over year to $4.53 billion. Fixed-income trading fees increased 1%, while equity trading income soared 23%. BAC’s IB performance was subdued this time. IB fees (in the Global Banking division) of $973 million declined 1% year over year. Equity underwriting income plunged 26%, while debt underwriting income was relatively stable. Advisory revenues grew 5%.Improvement in trading and advisory fees, along with higher net interest income (NII), drove Bank of America’s total revenues. NII rose on a year-over-year basis on higher interest income related to Global Markets activity, fixed-rate asset repricing and higher deposit and loan balances, partially offset by the impact of lower interest rates.While provisions declined in the quarter on a year-over-year basis, non-interest expenses increased, which hurt the results to some extent.The company’s net income applicable to common shareholders grew 12% from the prior-year quarter to $7.32 billion.BAC’s Revenues Improve, Expenses RiseNet revenues were $28.37 billion, which surpassed the Zacks Consensus Estimate of $27.49 billion. The top line was up 8% from the prior-year quarter.NII (fully taxable-equivalent basis) grew 10% year over year to $15.92 billion. Net interest yield expanded 11 basis points (bps) to 2.08%. Non-interest income rose 4% to $12.62 billion. This was driven by higher total fees and commissions and other income.Non-interest expenses were $17.44 billion, up 4%. The rise was due increase in all cost components except professional fees. The efficiency ratio was 61.11%, down from 63.04% in the year-ago quarter. A fall in the efficiency ratio indicates an improvement in profitability.Bank of America’s Credit Quality ImprovesProvision for credit losses was $1.31 billion, down 10% from the prior-year quarter. Net charge-offs declined 12% to $1.29 billion. As of Dec. 31, 2025, non-performing loans and leases as a percentage of total loans were 0.49%, down 6 bps from the prior-year period.BAC’s Capital Position StrongBook value per share as of Dec. 31, 2025, was $38.44 compared with $36.147 a year ago. Tangible book value per share was $28.73, up from $26.37 a year ago.At the end of December 2025, the common equity tier 1 capital ratio (advanced approach) was 12.8% compared with 13.5% as of Dec. 31, 2024.BAC’s Share Repurchase UpdateIn the reported quarter, the company repurchased shares worth $6.3 billion.Our Take on Bank of AmericaBank of America’s focus on digitizing and expanding operations, decent loan growth and stabilizing deposit/funding costs are likely to keep supporting growth. However, elevated expenses and a challenging operating backdrop pose major headwinds. Bank of America Corporation Price, Consensus and EPS Surprise Bank of America Corporation price-consensus-eps-surprise-chart | Bank of America Corporation QuoteCurrently, BAC carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Performance & Earnings Date of BAC’s PeersSimilar to BAC, solid trading performance and higher NII drove JPMorgan’s JPM fourth-quarter 2025 adjusted earnings of $5.23 per share. The bottom line handily surpassed the Zacks Consensus Estimate of $5.01.JPM’s markets revenues exceeded management's expectations and grew 17% year over year. Further, the company recorded an increase in NII, driven by higher yields and 11% year-over-year jump in total loans. However, weak IB performance and higher operating expenses and provisions weighed on the results.PNC Financial PNC is slated to announce fourth-quarter and full-year 2025 results on Jan. 16.Over the past seven days, the Zacks Consensus Estimate for PNC Financial’s quarterly earnings has been revised marginally upward to $4.23. This implies 12.2% growth from the prior-year quarter.Just Released: Zacks Top 10 Stocks for 2026Hurry – you can still get in early on our 10 top tickers for 2026. Handpicked by Zacks Director of Research Sheraz Mian, this portfolio has been stunningly and consistently successful.From inception in 2012 through November, 2025, the Zacks Top 10 Stocks gained +2,530.8%, more than QUADRUPLING the S&P 500’s +570.3%.Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2026. You can still be among the first to see these just-released stocks with enormous potential.See New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Bank of America Corporation (BAC): Free Stock Analysis Report JPMorgan Chase & Co. (JPM): Free Stock Analysis Report The PNC Financial Services Group, Inc (PNC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks