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Bank of America Q2 Earnings Beat on NII, Trading & IB Strength
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Key Takeaways
Bank of America beat Q2 earnings estimates as revenues rose y/y on higher NII, trading and IB.
BAC posted its 17th straight quarter of trading growth, with equity trading revenues jumping 69.9%.
Bank of America cut credit loss provisions & repurchased $6B of shares, but expenses increased y/y.
Bank of America’s (BAC - Free Report) second-quarter 2026 earnings of $1.21 per share handily surpassed the Zacks Consensus Estimate of $1.13. The bottom line grew 34.4% year over year.
Behind Bank of America’s Q2 Headline Numbers
The company recorded an improvement in trading numbers for the 17th straight quarter. Sales and trading revenues, excluding net DVA, grew 33% year over year to $7.16 billion. Fixed-income trading fees increased 8.8%, while equity trading income soared 69.9%.
Similar to the previous quarter, the company’s investment banking (IB) performance was solid this time as well. IB fees (in the Global Banking division) of $1.15 billion increased 50.5% year over year. Equity underwriting income increased 69.2%, while debt underwriting income rose 20.5% year over year. Advisory revenues grew 77.7%.
Robust improvement in the trading and IB business, 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, higher loan and deposit balances, and fixed-rate asset repricing, 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 27.2% from the prior-year quarter to $8.75 billion.
BAC’s Revenues Improve, Expenses Rise
Net revenues were $31.56 billion, which surpassed the Zacks Consensus Estimate of $30.62 billion. The top line rose 15% from the prior-year quarter.
NII (fully taxable-equivalent basis) grew 9.1% year over year to $16.16 billion. Net interest yield expanded 14 basis points (bps) to 2.08%.
Non-interest income rose 21.8% year over year to $15.56 billion. The rise was driven by higher total fees and commissions, market making and similar activities, and other income.
Non-interest expenses were $18.63 billion, up 8.4% year over year. The rise was due to an increase in all cost components, except for professional fees.
The efficiency ratio was 59.02%, down from 62.61% in the year-ago quarter. A fall in the efficiency ratio indicates an improvement in profitability.
Bank of America’s Credit Quality Improves
Provision for credit losses was $1.37 billion, down 14.2% from the prior-year quarter.
Net charge-offs declined 7.4% year over year to $1.41 billion. As of June 30, 2026, non-performing loans and leases as a percentage of total loans were 0.47%, down 5 bps from the prior-year period.
BAC’s Capital Position Strong
Book value per share as of June 30, 2026, was $39.34 compared with $36.92 a year ago. Tangible book value per share was $29.37, up from $27.49 a year ago.
At the end of June 2026, the common equity tier 1 capital ratio (advanced approach) was 12.5% compared with 13% as of June 30, 2025.
BAC’s Share Repurchase Update
In the reported quarter, the company repurchased shares worth $6 billion.
Our Take on Bank of America
BAC’s focus on digitizing and expanding operations, along with solid loan growth and stabilizing deposit/funding costs, is 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
State Street (STT - Free Report) is slated to announce second-quarter 2026 results on July 16.
Over the past seven days, the Zacks Consensus Estimate for STT’s quarterly earnings has been revised higher to $3.30. The figure implies 30.4% growth from the prior-year quarter’s actual.
KeyCorp (KEY - Free Report) is slated to announce second-quarter 2026 results on July 21.
Over the past seven days, the Zacks Consensus Estimate for KEY’s quarterly earnings has been revised lower to 42 cents. The figure implies 20% growth from the prior-year quarter’s actual.
View the Zacks #1 Rank List
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Bank of America Q2 Earnings Beat on NII, Trading & IB Strength
Key Takeaways
Bank of America’s (BAC - Free Report) second-quarter 2026 earnings of $1.21 per share handily surpassed the Zacks Consensus Estimate of $1.13. The bottom line grew 34.4% year over year.
Behind Bank of America’s Q2 Headline Numbers
The company recorded an improvement in trading numbers for the 17th straight quarter. Sales and trading revenues, excluding net DVA, grew 33% year over year to $7.16 billion. Fixed-income trading fees increased 8.8%, while equity trading income soared 69.9%.
Similar to the previous quarter, the company’s investment banking (IB) performance was solid this time as well. IB fees (in the Global Banking division) of $1.15 billion increased 50.5% year over year. Equity underwriting income increased 69.2%, while debt underwriting income rose 20.5% year over year. Advisory revenues grew 77.7%.
Robust improvement in the trading and IB business, 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, higher loan and deposit balances, and fixed-rate asset repricing, 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 27.2% from the prior-year quarter to $8.75 billion.
BAC’s Revenues Improve, Expenses Rise
Net revenues were $31.56 billion, which surpassed the Zacks Consensus Estimate of $30.62 billion. The top line rose 15% from the prior-year quarter.
NII (fully taxable-equivalent basis) grew 9.1% year over year to $16.16 billion. Net interest yield expanded 14 basis points (bps) to 2.08%.
Non-interest income rose 21.8% year over year to $15.56 billion. The rise was driven by higher total fees and commissions, market making and similar activities, and other income.
Non-interest expenses were $18.63 billion, up 8.4% year over year. The rise was due to an increase in all cost components, except for professional fees.
The efficiency ratio was 59.02%, down from 62.61% in the year-ago quarter. A fall in the efficiency ratio indicates an improvement in profitability.
Bank of America’s Credit Quality Improves
Provision for credit losses was $1.37 billion, down 14.2% from the prior-year quarter.
Net charge-offs declined 7.4% year over year to $1.41 billion. As of June 30, 2026, non-performing loans and leases as a percentage of total loans were 0.47%, down 5 bps from the prior-year period.
BAC’s Capital Position Strong
Book value per share as of June 30, 2026, was $39.34 compared with $36.92 a year ago. Tangible book value per share was $29.37, up from $27.49 a year ago.
At the end of June 2026, the common equity tier 1 capital ratio (advanced approach) was 12.5% compared with 13% as of June 30, 2025.
BAC’s Share Repurchase Update
In the reported quarter, the company repurchased shares worth $6 billion.
Our Take on Bank of America
BAC’s focus on digitizing and expanding operations, along with solid loan growth and stabilizing deposit/funding costs, is 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 Quote
Currently, Bank of America carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Release Dates of BAC’s Peers
State Street (STT - Free Report) is slated to announce second-quarter 2026 results on July 16.
Over the past seven days, the Zacks Consensus Estimate for STT’s quarterly earnings has been revised higher to $3.30. The figure implies 30.4% growth from the prior-year quarter’s actual.
KeyCorp (KEY - Free Report) is slated to announce second-quarter 2026 results on July 21.
Over the past seven days, the Zacks Consensus Estimate for KEY’s quarterly earnings has been revised lower to 42 cents. The figure implies 20% growth from the prior-year quarter’s actual.