Bank of America’s fourth quarter results were marked by robust revenue growth and higher earnings per share versus Wall Street expectations, but the market responded negatively. Management attributed the quarter’s performance to strong loan and deposit growth, increased net interest income, and disciplined expense management. CEO Brian Moynihan described the period as one that "delivered 7% year-over-year revenue growth," highlighting the impact of operating leverage and ongoing investments in technology and digital capabilities. However, challenges around expense growth and the impact of an accounting method change drew analyst attention during the call.
Is now the time to buy BAC? Find out in our full research report (it’s free for active Edge members).
Bank of America (BAC) Q4 CY2025 Highlights:
- Revenue: $28.55 billion vs analyst estimates of $27.59 billion (7.1% year-on-year growth, 3.5% beat)
- Adjusted EPS: $0.98 vs analyst estimates of $0.95 (2.7% beat)
- Adjusted Operating Income: $9.80 billion vs analyst estimates of $10.33 billion (34.3% margin, 5.1% miss)
- Market Capitalization: $375.8 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Bank of America’s Q4 Earnings Call
- Betsy Graseck (Morgan Stanley) pressed for clarification on whether the efficiency ratio target should be lowered due to the accounting change. CFO Alastair Borthwick replied that prior periods were recast, making the new targets comparable, and any future adjustments would be considered as performance improves.
- Kenneth Usdin (Autonomous Research) inquired about the pace of expense growth and the path to higher operating leverage. Borthwick and Moynihan emphasized that operating leverage would come from organic growth and expense discipline, especially through headcount control and technology investments.
- Michael Mayo (Wells Fargo Securities) questioned the magnitude and expected outcomes of technology and AI spending. Moynihan detailed that AI investments have driven notable productivity gains, including reduced coding needs and staff reductions in support areas, with ongoing expansion of use cases.
- Matthew O'Connor (Deutsche Bank) asked about the sustainability of loan growth and the outlook for consumer cards. Borthwick said mid-single-digit loan growth is expected to continue, with renewed investment in credit card offerings and rewards to drive future acceleration.
- Glenn Schorr (Evercore) sought insight on sluggish deposit trends despite a favorable macro backdrop. Moynihan attributed this to shifts in consumer behavior and off-balance-sheet alternatives, but expressed optimism that deposit growth in consumer and wealth management is turning positive.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will focus on (1) the pace of adoption and efficiency gains from AI and digital investments, (2) whether deposit growth in consumer and wealth management segments accelerates as expected, and (3) management’s ability to maintain operating leverage in the face of rising compensation and technology costs. Progress on loan growth and successful navigation of regulatory changes will also be important markers.
Bank of America currently trades at $52.09, down from $54.38 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).
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