Bank of America second quarter earnings top estimates on broad-based revenue growth

Bank of America Corp (NYSE:BAC) shares rose about 2% in premarket trading after the bank reported second-quarter 2026 results that exceeded Wall Street expectations, driven by growth in net interest income, investment banking, trading and wealth management.

The bank reported earnings per share of $1.21, above the consensus estimate of $1.12.

Revenue came in at $31.6 billion, topping expectations of $30.67 billion.

Net interest income rose 9% year over year to $16 billion, reflecting stronger Global Markets activity, higher loan and deposit balances and fixed-rate asset repricing, partly offset by the impact of lower interest rates.

Provision for credit losses totaled $1.4 billion, down from $1.6 billion a year earlier and broadly unchanged from the first quarter.

The bank's efficiency ratio improved to 59% from 62.6% a year earlier, while operating leverage was 6.6%.

Average deposits rose more than 2% to $2.02 trillion, marking the 12th consecutive quarter of sequential growth. Average loans and leases increased 8% to $1.22 trillion, extending sequential growth to a ninth straight quarter.

Bank of America ended the quarter with a Common Equity Tier 1 capital ratio of 11.2% and returned $8 billion to shareholders.

Within Consumer Banking, net income rose to $3.3 billion as revenue increased 5% to $11.3 billion. Combined credit and debit card spending grew 9%, while the bank added more than 160,000 net new consumer checking accounts during the quarter.

Global Wealth and Investment Management posted net income of $1.4 billion as revenue climbed 16% to $6.9 billion, supported by a 19% increase in asset management fees and higher net interest income. Client balances reached $4.9 trillion.

Global Banking generated net income of $2.0 billion, with investment banking fees rising 50% year over year to $2.1 billion.

Global Markets reported net income of $2.6 billion. Sales and trading revenue increased 33% to $7.1 billion, led by a 70% jump in equities revenue and a 9% increase in fixed income, currencies and commodities revenue.

Bank of America’s CEO Brian Moynihan said the company delivered one of its strongest quarters, with every business segment reporting double-digit net income growth.

"The team delivered one of our strongest quarters to date, with earnings per share up 34% year-over-year. Every business segment reported double digit net income growth and strong returns on equity," Moynihan said.

He added that clients continued to spend, borrow and invest amid what he described as a healthy economic backdrop.

"It was also an exceptional quarter for our markets-facing businesses, with investment banking fees up 50% year-over-year. Near-term, pipelines remain strong, and commercial borrowing has picked up."

Bank of America analysts wrote that the results were supported by stronger-than-expected performance in investment banking and sales and trading. They noted investment banking fees of $2.1 billion exceeded their $1.8 billion estimate, while sales and trading revenue of $7.1 billion was well above their $6.2 billion forecast, driven by particularly strong equities trading.

The analysts also highlighted operating leverage as a positive, noting the bank generated 660 basis points of year-over-year operating leverage and a 17.0% return on tangible common equity, above their 16.1% estimate, despite continued investment spending and higher revenue-related compensation.

They added that average loans of $1.22 trillion came in ahead of both their estimate and consensus expectations. While net interest margin of 2.08% was slightly below consensus and ending deposits of $2.03 trillion missed expectations, they pointed out that deposit costs improved by one basis point sequentially to 1.46%.

Looking ahead, the analysts wrote that while the quarter was positive, investors are likely to focus on management's earnings call for updates on the sustainability of net interest income and margins, the pace of balance sheet repricing, and any changes to the company's outlook.