BAC Stock Gains as Q1 Earnings Beat on NII, Trading & IB Strength

Bank of America’s BAC  first-quarter 2026 earnings of $1.11 per share handily surpassed the Zacks Consensus Estimate of $1.00. The bottom line grew 24.7% year over year.BAC shares gained more than 1% in the pre-market trading in response to better-than-expected results. However, a full day’s trading session will depict a clearer picture.Behind BAC’s Q1 Headline NumbersBank of America recorded an improvement in trading numbers for the 16th straight quarter. Sales and trading revenues, excluding net DVA, grew 12% year over year to $6.32 billion. Fixed-income trading fees increased 1%, while equity trading income soared 29.6%. BAC’s investment banking (IB) performance was also solid this time. IB fees (in the Global Banking division) of $1.05 billion increased 23.6% year over year. Equity underwriting income increased 31.3%, while debt underwriting income rose 2.7% year over year. Advisory revenues grew 46.6%.Improvement in the trading and IB business, along with higher net interest income (NII), drove Bank of America’s total revenues. NII rose on a year-over-year basis on higher interest income related to Global Markets activity, fixed-rate asset repricing and higher deposit and loan balances, partially offset by the impact of lower interest rates.While provisions declined in the quarter on a year-over-year basis, non-interest expenses increased, which hurt the results to some extent.The company’s net income applicable to common shareholders grew 17.3% from the prior-year quarter to $8.16 billion.BAC’s Revenues Improve, Expenses RiseNet revenues were $30.27 billion, which surpassed the Zacks Consensus Estimate of $29.94 billion. The top line rose 7.2% from the prior-year quarter.NII (fully taxable-equivalent basis) grew 9% year over year to $15.91 billion. Net interest yield expanded 8 basis points (bps) to 2.07%. Non-interest income rose 5.2% to $14.53 billion. This was driven by higher total fees and commissions, and market making and similar activities.Non-interest expenses were $18.53 billion, up 4.3% year over year. The rise was due to an increase in all cost components, except for professional fees and other general operating expenses. The efficiency ratio was 61.22%, down from 62.91% in the year-ago quarter. A fall in the efficiency ratio indicates an improvement in profitability.Bank of America’s Credit Quality ImprovesProvision for credit losses was $1.34 billion, down 9.7% from the prior-year quarter. Net charge-offs declined 3% year over year to $1.41 billion. As of March 31, 2026, non-performing loans and leases as a percentage of total loans were 0.49%, down 7 bps from the prior-year period.BAC’s Capital Position StrongBook value per share as of March 31, 2026, was $38.66 compared with $36.17 a year ago. Tangible book value per share was $28.84, up from $26.90 a year ago.At the end of March 2026, the common equity tier 1 capital ratio (advanced approach) was 12.5% compared with 13.3% as of March 31, 2025.BAC’s Share Repurchase UpdateIn the reported quarter, the company repurchased shares worth $7.2 billion.Our Take on Bank of AmericaBAC’s focus on digitizing and expanding operations, along with solid loan growth and stabilizing deposit/funding costs, is likely to keep supporting growth. However, elevated expenses and a challenging operating backdrop pose major headwinds.Bank of America Corporation Price, Consensus and EPS Surprise  Bank of America Corporation price-consensus-eps-surprise-chart | Bank of America Corporation QuoteCurrently, Bank of America carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Performance & Earnings Release Date of BAC’s PeersJPMorgan JPM posted first-quarter 2026 earnings of $5.94 per share, up 17.2% from $5.07 in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate of $5.49. JPMorgan reported net revenues of $49.8 billion, which increased 10% year over year. The metric also topped the consensus mark of $48.6 billion. JPM’s quarterly results were powered by a record Markets performance, a robust IB business and higher NII. KeyCorp KEY is slated to announce first-quarter 2026 results tomorrow.Over the past seven days, the Zacks Consensus Estimate for KEY’s quarterly earnings has been unchanged at 41 cents. The figure implies 24.2% growth from the prior-year quarter’s actual.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in the coming year. While not all picks can be winners, previous recommendations have soared +112%, +171%, +209% and +232%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks