Bank of America's stock reverses premarket decline in wake of blockbuster earnings report

Nora Redmond and Philip van Doorn

Investors appeared to be 'selling the news' after the bank handily beat Wall Street's expectations

Bank of America reported a 15% jump in revenue versus the year-earlier quarter.

Shares of Bank of America edged upward at the opening bell, after having declined during premarket trading, after the second-largest bank in the U.S. reported a jump in earnings per share.

Bank of America's (BAC) second-quarter earnings per share came in at $1.21, up 36% compared with the same quarter a year before and surpassing the Wall Street consensus of $1.13, per LSEG.

Its EPS rose faster than the 27% increase in net profit due to stock buybacks, which were partly offset by employee stock awards.

The banking giant said its quarterly revenue rose to $31.6 billion, a 15% year-on-year increase, representing a beat of just over 2.5% compared with the consensus estimate.

CEO Brian Moynihan called the quarter one of the strongest to date. "Against a healthy economic backdrop, resilient consumers and businesses are turning to Bank of America to spend, borrow and invest," he said in a statement.

Bank of America reported a second-quarter provision for credit losses of $1.4 billion, up slightly from $1.3 billion during the first quarter but down from $1.6 billion from the second quarter of 2025.

The Charlotte, N.C.-headquartered bank reported that net interest income rose 9% year-on-year to $16.2 billion, helping to boost revenue.

Bank of America's second-quarter return on average tangible common equity (ROTCE) came in at 17.03%, which beat the consensus estimate among analysts polled by LSEG of 15.8%. The bank's ROTCE improved from 16% during the first quarter and 13.61% during the second quarter of 2025. The bank's ROTCE target is a range of 16% to 18%, set during its Investor Day in November.

The bank's second-quarter efficiency ratio (noninterest expenses as a percentage of total revenue) improved to 58.72% during the second quarter from 60.89% the previous quarter and 62.28% during the year-earlier quarter.

Oppenheimer analyst Christ Kotowski wrote in an early note to clients that with the bank's revenue rising 14.6% and expenses just 8.4% "all was good on the efficiency front."

When asked during the bank's earnings call with analysts about updates to the bank's guidance on expenses, Bank of America CFO Alastair Borthwick said that "the best core measurement" of efficiency "is head count," which was "flat to slightly down. The bank reported having 211,304 employees as of June 30, down slightly from the previous quarter and down 1% from a year earlier.

When asked during an earlier call with journalists whether the bank was taking commercial-lending market share in light of problems among private-credit lenders, Borthwick said loan growth had been spread "across the board from each of our big segments that help companies," while acknowledging that, "obviously, we compete with private credit."

Heading into earnings season, Macrae Sykes, the portfolio manager of the Gabelli Financial Services Opportunities ETF GABF told MarketWatch that bank executives had hinted at rising expenses during recent industry conferences.

In Bank of America's earnings press release Moynihan attributed improving profit margins in part to "disciplined expense management."

The results come on a big day for Wall Street, with rivals JPMorgan Chase (JPM), Goldman Sachs (GS), Wells Fargo (WFC) and Citigroup (C) all also reporting earnings before the opening bell.

The State Street Financial Select Sector SPDR exchange-traded fund XLF declined about 0.2% in premarket trading.

-Nora Redmond -Philip van Doorn

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07-14-26 0952ET