Bank of America Slides 12.9% YTD While Announcing 5–7% NII Growth and $40B Buyback
Bank of America stock has fallen 12.9% YTD, trailing the S&P 500’s 1% decline and underperforming JPMorgan and Citigroup despite stable fundamentals. The bank projects 5–7% net interest income growth in 2026, backed by a 5% loan CAGR, and supports capital returns with an 8% dividend hike and $40 billion buyback plan.
1. YTD Stock Performance
Bank of America shares have dropped 12.9% year to date, significantly underperforming the S&P 500’s 1% decline and trailing peers JPMorgan and Citigroup. External geopolitical tensions and AI-related investor caution have weighed on sentiment despite no clear fundamental issues within the bank.
2. Net Interest Income Outlook
Following three rate cuts last year, BAC expects net interest income to rise 5–7% in 2026, with first-quarter growth of about 7%. This forecast relies on a projected 5% CAGR in loans and 4% CAGR in deposits, combined with lower funding costs and easing regulatory capital requirements to fuel lending activity.
3. Capital Return Strategy
After passing the 2025 Fed stress test, Bank of America raised its quarterly dividend by 8% to $0.28 per share and launched a $40 billion share repurchase program. The bank plans to repurchase roughly $4.5 billion of stock each quarter in the near term, underscoring its capital distribution commitment.
4. Network Expansion and Liquidity
The bank operates 3,628 financial centers, having opened 300 new branches since 2019 and added $18 billion in deposits from 18 new markets. As of December 31, 2025, BAC held $975 billion in global liquidity sources and maintains investment-grade ratings of A1, A- and AA- with stable outlooks.