Bank of America reported fourth-quarter net income of $7.6 billion, a 12% year-over-year increase, on revenue of $28.4 billion, up 7%. Net interest income rose 10% to $15.9 billion on a fully taxable equivalent basis, driven by loan and deposit growth, asset repricing and a shift in trading revenue into interest income. Net interest yield improved seven basis points sequentially to 2.08%. Sales and trading, investment banking and asset management fees contributed $10.4 billion, reflecting 10% year-over-year growth in market-facing activities. Earnings per share were $0.98, up 18% from the prior year, buoyed by disciplined expense management and share repurchases that reduced the diluted share count by 4%.

Expenses for the quarter totaled $17.4 billion, an increase of less than 4%, enabling more than 300 basis points of operating leverage. Incentive compensation tied to revenue growth and higher client-reimbursed transaction costs were the primary drivers of cost increases. Headcount remained flat at approximately 213,000 employees, while productivity gains from digitalization and AI allowed the bank to redeploy client-facing associates and eliminate redundant support roles. Management expects technology spending to rise 5%–7%, with total planned investment of over $17 billion in initiatives. AI projects, supported by some 18,000 internal practitioners, have already achieved 30% coding efficiency gains, reducing staffing needs by roughly 2,000 positions.

Total assets at quarter end were $3.4 trillion, unchanged from the prior quarter, as modest reductions in securities and cash were offset by loan growth. Deposits increased by $17 billion sequentially, allowing for reduced wholesale funding. Average global liquidity sources stood at $975 billion. The bank returned $8.4 billion of capital to shareholders, including $6.3 billion in share repurchases and $2.1 billion in dividends, lifting tangible book value per share to $28.73, a 9% year-over-year increase. The common equity tier 1 ratio remained robust at 11.4%. Credit quality was stable: net charge-offs totaled $1.3 billion (44 basis points), down 10 basis points year-over-year, while average loans rose 8% to $1.17 trillion, led by 12% commercial growth and 4% consumer growth.

Management has guided to net interest income growth of 5%–7% in 2026 versus 2025, assuming two rate cuts, and expects approximately 200 basis points of operating leverage next year. The effective tax rate is forecast at roughly 20%. Shares remain attractively valued at a 37% premium to tangible book, reflecting a favorable risk profile supported by strong earnings momentum, disciplined expense management and sustained loan portfolio expansion.