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1. Company Snapshot

1.a. Company Description

Bank of America Corporation, through its subsidiaries, provides banking and financial products and services for individual consumers, small and middle-market businesses, institutional investors, large corporations, and governments worldwide.Its Consumer Banking segment offers traditional and money market savings accounts, certificates of deposit and IRAs, noninterest-and interest-bearing checking accounts, and investment accounts and products; and credit and debit cards, residential mortgages, and home equity loans, as well as direct and indirect loans, such as automotive, recreational vehicle, and consumer personal loans.The company's Global Wealth & Investment Management segment offers investment management, brokerage, banking, and trust and retirement products and services; and wealth management solutions, as well as customized solutions, including specialty asset management services.


Its Global Banking segment provides lending products and services, including commercial loans, leases, commitment facilities, trade finance, and commercial real estate and asset-based lending; treasury solutions, such as treasury management, foreign exchange, and short-term investing options and merchant services; working capital management solutions; and debt and equity underwriting and distribution, and merger-related and other advisory services.The company's Global Markets segment offers market-making, financing, securities clearing, settlement, and custody services, as well as risk management products using interest rate, equity, credit, currency and commodity derivatives, foreign exchange, fixed-income, and mortgage-related products.As of December 31, 2021, it served approximately 67 million consumer and small business clients with approximately 4,200 retail financial centers; approximately 16,000 ATMs; and digital banking platforms with approximately 41 million active users.


The company was founded in 1784 and is based in Charlotte, North Carolina.

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1.b. Last Insights on BAC

Bank of America's recent performance has been driven by several positive factors. The company's robust Q2 2025 earnings, driven by strong lending, trading, and a 7% year-over-year increase in net interest income, have been a significant contributor. Additionally, the company's $40 billion share repurchase plan and 8% dividend increase have been viewed positively by investors. The bank's diversified, digitally enabled business model and structural deposit advantage have driven resilient earnings and support aggressive capital returns. Furthermore, regulatory improvements and robust capital strength have underpinned management's confidence and enabled sustained shareholder payouts. (Source: 24/7 Wall St.)

1.c. Company Highlights

2. Bank of America Posts Strong Q4 2025 Earnings

Bank of America reported a net income of $7.6 billion for the fourth quarter of 2025, up 12% from the same quarter in 2024, with EPS of $0.98 per share, an 18% increase, beating analyst estimates of $0.958. The bank achieved 7% year-over-year revenue growth, driven by a 10% improvement in net interest income to $15.9 billion. For the full year 2025, revenue was over $113 billion, up 7%, with net income growing 13% to $31.5 billion and EPS increasing 19% to $3.81.

Publication Date: Jan -15

📋 Highlights
  • 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.

3. NewsRoom

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Bank of America Corporation (BAC) Presents at Bank of America Financial Services Conference 2026 Transcript

Feb -10

Source: seekingalpha.com

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Bank Of America Preferreds Offer Interest Rate Protection

Feb -10

Source: seekingalpha.com

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Bank of America CEO Brian Moynihan: The consumer is spending and all cohorts are growing

Feb -10

Source: youtube.com

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BAC Trades at a Discount to Industry: Right Time to Buy the Stock?

Feb -10

Source: zacks.com

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AdvisorShares Investments LLC Acquires New Holdings in Bank of America Corporation $BAC

Feb -09

Source: defenseworld.net

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New York Life Investment Management LLC Raises Stock Holdings in Bank of America Corporation $BAC

Feb -09

Source: defenseworld.net

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Blume Capital Management Inc. Trims Holdings in Bank of America Corporation $BAC

Feb -09

Source: defenseworld.net

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Bank of America Corporation $BAC Shares Acquired by Cardinal Point Capital Management ULC

Feb -09

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.20%)

6. Segments

Consumer Banking - Deposits

Expected Growth: 4.8%

The growth in this segment is slightly lower than the global average due to the competitive nature of deposit products and potential fluctuations in interest rates, which can affect the revenue generated from deposits. However, the steady demand for banking services supports a relatively stable growth.

Global Banking

Expected Growth: 5.5%

The expected growth is slightly higher than the global average due to the increasing demand for corporate banking services driven by global economic growth and the need for businesses to access capital markets. This segment is poised to benefit from the global economic expansion.

Consumer Banking - Consumer Lending

Expected Growth: 5.0%

The growth in consumer lending is expected to be near the global average, driven by steady consumer demand for credit products. However, it is slightly tempered by potential regulatory changes and economic uncertainty that could affect consumer creditworthiness.

Global Wealth & Investment Management (GWIM)

Expected Growth: 5.8%

GWIM is expected to grow faster than the global average, driven by the increasing demand for wealth management services among high net-worth individuals and the potential for strong market performance, which can boost investment income and fees.

All Other

Expected Growth: 0.0%

The growth in this category is expected to be neutral as it encompasses a wide range of non-core activities and one-off items that are difficult to predict and may not follow the overall growth trend of the bank's core business segments.

Global Markets

Expected Growth: 6.0%

The expected growth is higher than the global average, driven by the potential for increased market activity and the demand for financial products and services from institutional clients. This segment is sensitive to market conditions and can benefit from volatility and increased trading activity.

Unallocated Fully Taxable-Equivalent Adjustment

Expected Growth: 0.0%

The growth in this adjustment is expected to be neutral as it is not related to the operational performance of the bank's business segments but rather to accounting and tax adjustments.

7. Detailed Products

Consumer Banking

Provides checking and savings accounts, credit cards, home loans, and personal loans to individuals.

Global Wealth and Investment Management

Offers investment and wealth management services, including brokerage, investment advisory, and retirement services.

Global Banking

Provides corporate and investment banking services, including lending, treasury services, and investment banking.

Global Markets

Provides sales, trading, and research services for institutional clients across various asset classes.

Merrill Edge

Offers self-directed online brokerage services and investment advice for individuals.

U.S. Trust

Provides wealth management and investment services to high net worth individuals and families.

Business Banking

Offers financial solutions, including credit, cash management, and investment services, to small and medium-sized businesses.

8. Bank of America Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Bank of America Corporation operates in a highly competitive industry, and customers have various alternatives to choose from. However, the switching costs are relatively high, which reduces the threat of substitutes.

Bargaining Power Of Customers

Bank of America Corporation has a large customer base, which reduces the bargaining power of individual customers. Additionally, the bank offers a wide range of financial products and services, making it difficult for customers to negotiate better terms.

Bargaining Power Of Suppliers

Bank of America Corporation has a diverse supplier base, which reduces the bargaining power of individual suppliers. The bank's large scale of operations also gives it significant negotiating power over its suppliers.

Threat Of New Entrants

The banking industry has significant barriers to entry, including regulatory hurdles and high capital requirements. This reduces the threat of new entrants and allows established players like Bank of America Corporation to maintain their market share.

Intensity Of Rivalry

The banking industry is highly competitive, with many established players competing for market share. Bank of America Corporation faces intense competition from other major banks, which can lead to pricing pressures and reduced profitability.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 53.41%
Debt Cost 10.82%
Equity Weight 46.59%
Equity Cost 10.82%
WACC 10.82%
Leverage 114.63%

11. Quality Control: Bank of America Corporation passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Bank of America

A-Score: 6.0/10

Value: 5.4

Growth: 5.2

Quality: 4.9

Yield: 4.0

Momentum: 7.5

Volatility: 9.0

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A-Score: 5.7/10

Value: 4.7

Growth: 2.8

Quality: 5.7

Yield: 8.0

Momentum: 5.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

55.39$

Current Price

55.39$

Potential

-0.00%

Expected Cash-Flows