Bank of America Corp. (NYSE:BAC) Chief Executive Officer Brian Moynihan called the U.S. a “resilient and growing economy” navigating inflation crosscurrents and interest rate volatility.
Consumer and Commercial Health
During the company’s earnings call, Moynihan emphasized that the bank’s clients’ daily activity points to continued economic expansion. Consumer spending increased 5% year-to-date, supported by wage growth across income segments.
“The businesses closest to customers, wealth clients, and commercial clients—the Main Street businesses—showed continued strength,” Moynihan said.
The bank reported that organic growth continued across its consumer banking division, adding 200,000 net new checking accounts and expanding credit card balances by nearly 5%. Commercial loans grew 8% year-over-year, which Moynihan attributed to business clients investing and hiring selectively.
“As we always put in our results, the economic uncertainty that prevails and geopolitical instability are always present. But what our clients are actually doing is continuing to point to a resilient and growing economy in the United States. That activity has produced organic growth across our company, coupled with great credit quality,” he noted.
Impact of Rate Volatility
While the banking segments demonstrated strength, interest rate volatility created headwinds for the firm’s trading operations. Chief Financial Officer Alastair Borthwick noted that an 85-basis-point surge in interest rates during the quarter significantly affected the bank’s fixed income, currencies, and commodities businesses, including credit, mortgages, and municipals.
“We haven’t seen rates behave the same way in Q4. So you’d sort of think if that was an extreme bear market for a quarter that moderates, which it has done through the first couple weeks, we wouldn’t see the same impact in the fourth quarter,” he added.
Despite the trading slowdown, Bank of America’s net interest income rose 8% year-over-year to $16.6 billion, aided by loan and deposit growth. Total deposits climbed to over $2 trillion.
Settlement and Forward Outlook
Bank of America reported net income of $6.9 billion, or 91 cents per share. This included a $1.2 billion regulatory settlement charge related to anti-money-laundering and sanctions violations. Excluding the charge, adjusted net income was $8.1 billion, or $1.08 per share.
Moynihan assured analysts that the remediation costs associated with the settlement are already embedded in the company’s expense base and will not impede client operations.
Looking ahead, management remains optimistic about the macroeconomic environment and the bank’s lending trajectory. The company expects net interest income to increase sequentially in the fourth quarter and now expects approximately 8% growth for 2026 and 8% or more growth in 2027.
How Has BAC Performed in 2026?
The stock was 0.33% higher in overnight trading. It was higher by 2.60% over the last year, down 6.56% year-to-date, and lower by 13.59% over the last month. The stock closed down 4.76% at $51.39 on Wednesday.
Benzinga’s Edge Stock Rankings indicate that BAC maintains a weak price trend in the short, medium, and long terms, with a moderate quality score.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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