- Net Income & EPS Growth: Q4 2025 net income rose 12% to $7.6 billion, with EPS up 18% to $0.98/share, driven by 7% revenue growth.
- Capital Distribution: $30.3 billion returned to shareholders in 2025 (41% increase), including $6.3 billion in Q4 share repurchases and $2.1 billion in dividends.
- Operating Leverage: 300+ basis points of operating leverage in 2025, with expenses up <4% YoY despite $100 million higher noninterest costs in Q3.
- Loan & Deposit Growth: Loans grew 8% YoY to $1.17T, average deposits rose 3%, and small business lending expanded for 12th straight quarter.
Revenue Growth and Profitability
The bank's return on tangible common equity improved 128 basis points, and return on assets was 89 basis points. The net interest yield improved 7 basis points to 208 basis points, driven by higher-yielding loan balances. For 2026, Bank of America expects 5-7% growth in net interest income compared to 2025. The bank reported a 12th straight quarter of year-over-year lending growth in small business and its consumer investment totals reached $600 billion.
Capital Return and CET1 Ratio
In 2025, Bank of America distributed 41% more capital to shareholders, totaling over $30 billion, with $8.4 billion returned in the fourth quarter through $2.1 billion in common dividends and $6.3 billion in share repurchases. The bank's CET1 ratio decreased to 11.4%, still well above the 10% regulatory required minimum.
Valuation and Dividend Yield
With a current P/TBV ratio of 1.27, the market is pricing in a moderate growth expectation. The dividend yield stands at 2.06%, indicating an attractive return for income-seeking investors. Bank of America's guidance for 2026 suggests continued growth in net interest income and fee income, supporting a stable outlook.
Business Segment Performance
Consumer Banking generated $44 billion in revenue and $12 billion in net income for the full year. Wealth Management revenue grew 9% to $25 billion, and net income grew 10% to nearly $4.7 billion. Global Banking generated $7.8 billion in earnings, and Global Markets produced a record year of revenue, with $24 billion in revenue and $6.1 billion in earnings.
Outlook and Guidance
For 2026, the company expects to generate about 200 basis points of operating leverage. The effective tax rate is expected to be around 20%. The company targets an efficiency ratio of 55-59% and aims to drive organic growth and keep expense discipline to achieve operating leverage. Loan growth is expected to be in the mid-single digits, driven by commercial and consumer growth.