Bank of America profits jump 25% as higher rates, consumer deposits drive growth

Bank of America (NYSE:BAC) reported a significant surge in profitability for the first quarter of 2026, with net income rising 17% year-over-year to $8.6 billion.

Diluted earnings per share reached $1.11, a 25% increase compared to the $0.89 reported in the same period last year.

Total revenue, net of interest expense, climbed 7% to $30.3 billion, underpinned by expansion across net interest income (NII), sales and trading, and investment banking fees.

The bank's performance was largely anchored by its Consumer Banking segment, which contributed $3.1 billion in net income.

Consumer revenue grew 5% to $11 billion, supported by an average deposit base that has surged 32% above pre-pandemic levels to $951 billion.

Lending activity also remained steady, with average loans and leases rising to $322 billion.

Notably, the bank maintained its position as the top small business lender for the 19th consecutive quarter, with average small business loans growing 5% during the period.

On the risk and expense front, Bank of America showed signs of stabilizing credit trends.

The provision for credit losses decreased to $1.3 billion from $1.5 billion in the first quarter of 2025.

Noninterest expense rose 4% to $18.5 billion, a shift driven primarily by higher revenue-related costs and continued investments in personnel and technological infrastructure.

With positive operating leverage of 2.9%, the firm demonstrated efficient scale as it capitalized on higher NII related to Global Markets activity and fixed-rate asset repricing, partially offset by the broader impact of fluctuating interest rates.