New York, Jan 6, 2026, 20:14 EST — Market closed
- Bank said accounting method shift would have lowered its CET1 ratio by 13 basis points as of Sept. 30, 2025
- Shares closed up 0.63% at $57.25 on Tuesday, about 0.5% below the 52-week high
- Next catalysts include U.S. jobs data on Jan. 9 and Bank of America earnings on Jan. 14
Bank of America Corp said it changed accounting methods for certain tax-related equity investments, an adjustment that would have cut its common equity tier 1 (CET1) ratio — a key measure of bank capital — by 13 basis points as of Sept. 30, 2025, on a pro forma basis. Applied retrospectively, retained earnings as of Sept. 30 fell $1.7 billion and CET1 capital would have decreased about $2.1 billion, it said; it also estimated its third-quarter effective tax rate would have been about 20% versus 10.4% previously reported. The lender said the new methods are preferable because they “better align the financial statement presentation with the economic impact” of the investments. SEC
The tweak lands ahead of a busy stretch for big banks, when investors and regulators scrutinize capital buffers that underpin dividends and share buybacks. A basis point is one-hundredth of a percentage point.
The shift also changes where tax benefits from those investments show up in the income statement, moving amounts between noninterest income and income tax expense. That can blur quarter-to-quarter comparisons even if cash flow does not change, raising the bar for clear disclosures as earnings season begins.
Bank of America shares rose 0.63% to close at $57.25 on Tuesday, after touching a 52-week high of $57.55 a day earlier. The 52-week low was $33.06, FinanceCharts data show.
Other large U.S. banks were mixed, with JPMorgan Chase up 0.62% and Wells Fargo little changed while Citigroup slipped 0.65%, MarketWatch data showed. The S&P 500 gained 0.62% and the Dow industrials rose 0.99%.
On the Street, Barclays analyst Jason Goldberg raised his price target on Bank of America to $71 from $59 and maintained an “Overweight” rating on Jan. 5, according to GuruFocus. The same report put the average one-year target price from 25 analysts at $58.54, with estimates ranging from $45 to $68. GuruFocus
The next major catalyst is Jan. 14, when Bank of America is scheduled to report fourth-quarter results, releasing numbers around 6:45 a.m. ET and holding a conference call at 8:30 a.m., the bank has said. Investors typically focus on net interest income — what the bank earns on loans minus what it pays on deposits — as well as credit costs and expenses.
Macro data could also steer bank shares through Treasury yields: the U.S. jobs report is due on Jan. 9 and the CPI inflation report for December is set for Jan. 13, according to the Labor Department’s statistics agency calendar. The Federal Reserve’s next policy meeting is scheduled for Jan. 27-28.
But investors may treat any perceived hit to capital headroom cautiously, especially if the accounting shift complicates trendlines in revenue, tax rate and capital going into earnings. A sharper downturn in consumer credit or a fast drop in long-term rates would also pressure profit expectations for large lenders.
Traders will look to Bank of America’s Jan. 14 results for updated guidance and for
