BofA Cruises past Wall Street Forecasts as Interest Income and Trading Fire on All Cylinders

With input from CNBC, Bank of America, and Reuters.

Bank of America just reminded Wall Street why big banks still matter when markets get choppy.

The lender posted fourth-quarter results that edged past expectations, powered by a solid jump in net interest income and a strong showing from its equities trading desk. It wasn’t a blowout, but it was enough to beat the Street — and underline that the banking machine is still humming as 2026 approaches.

For the quarter, Bank of America reported earnings of 98 cents a share, topping the 96 cents analysts were looking for, according to LSEG. Revenue came in at $28.53 billion, also ahead of expectations of $27.94 billion.

Profit rose 12% from a year earlier to $7.6 billion, while revenue climbed 7.1%, helped by higher interest income, stronger trading results and steady asset management fees.

Despite the beats, investors weren’t impressed at first glance. Shares of the bank slid more than 3% in early trading, a reminder that after a big run, even good news can trigger some profit-taking.

The biggest driver of the quarter was net interest income — the bread-and-butter metric that tracks what a bank earns on loans and securities minus what it pays out to depositors.

BofA said net interest income jumped 9.7% from a year earlier to $15.92 billion, about $240 million more than analysts had expected. Falling interest rates late in 2025 helped ease deposit costs, while loan growth kept interest earnings flowing.

Management also sounded confident about what’s ahead. The bank said it expects net interest income to grow 5% to 7% in 2026 and projected a 7% increase in the current quarter.

Lower rates have also helped spur borrowing. Average loans and leases climbed 8% from a year earlier to $1.17 trillion, with growth spread across consumer and commercial segments.

Chief Financial Officer Alastair Borthwick said consumer borrowing picked up across categories in the fourth quarter, though much of 2025’s growth had been driven by commercial clients.

Wall Street volatility worked in Bank of America’s favor — at least in equities.

Equities trading revenue surged 23% to $2.02 billion, about $160 million more than analysts expected. Portfolio reshuffling by investors, concerns about an AI-fueled stock bubble and speculation over Federal Reserve rate cuts all helped drive activity.

Fixed income trading was less impressive. Revenue there rose just 1.5% to $2.52 billion, coming in roughly $120 million below expectations. Even so, total sales and trading revenue climbed 10% to $4.5 billion, in line with what CEO Brian Moynihan had forecast.

Investment banking was steady but unspectacular. Fees were essentially flat at $1.67 billion, landing right around what analysts had penciled in.

Another quiet boost came from credit quality.

The bank set aside $1.31 billion for loan losses in the quarter, about $190 million less than analysts expected. Stable consumer credit and a still-resilient economy have kept defaults in check, easing pressure on provisions.

“We tend to look at Bank of America as a kind of North Star for consumer health,” said David Wagner, head of equities at Aptus Capital, who said the results showed no meaningful signs of consumer weakness.

CEO Brian Moynihan struck a confident tone, pointing to resilient consumers, steady businesses and a clearer policy backdrop heading into the new year.

“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. “While any number of risks continue, we are bullish on the US economy in 2026.”

That optimism follows a strong year for the stock. Bank of America shares climbed about 25% in 2025, outpacing the broader market, though trailing some major rivals.

BofA’s results land in the middle of a busy week for Wall Street’s biggest lenders. JPMorgan Chase kicked things off with a better-than-expected quarter on the back of strong trading revenue. Citigroup and Wells Fargo are set to report next, with Goldman Sachs and Morgan Stanley following.

Volatile markets tend to favor investment banks, and so far, that trend is holding.

Still, the market’s reaction suggests expectations are high — maybe too high. As Jake Johnston, deputy chief investment officer at Advisors Asset Management, put it:

“These stocks had a strong run-up into earnings. It’s not unusual to see a little pullback as investors digest the numbers.”

For Bank of America, the message from the quarter is clear: interest income is growing, trading desks are active, credit is holding up and management sees momentum carrying into 2026 — even if Wall Street wants a little more proof before pushing the stock higher again.