NEW YORK, July 17, 2026, 18:02 EDT – Bank of America shares held onto gains after earnings, as investors turned their attention to the company’s sensitivity to interest rate changes.
- The stock ended Friday at $61.27, slipping 0.3% on the day but rising 2.7% over the week.
- Net interest income increased by 9% in the second quarter. Executives expect growth in 2026 to approach the upper end of their 6%-8% target range.
- A drop in the rate curve offers more than double the upside compared to a rise of the same size.
Bank of America Corporation NYSE:BAC closed earnings week with a 2.7% gain. The company’s rate model continues to indicate that potential downside in a lower-rate scenario is 2.2 times greater than the upside.
This is significant as net interest income accounted for about 51% of revenue in the quarter, totaling $16.0 billion, or $16.2 billion on a fully taxable-equivalent basis. Management projects growth in 2026 to be towards the high end of the 6%-8% range.
The bank ran a parallel 100-basis-point shift below the June 30 forward curve and projected a $2.2 billion reduction in net interest income over the next 12 months. A matching increase above the curve was estimated to boost NII by $1.0 billion.
| Parallel change from June 30 curve | Estimated NII effect over 12 months | Portion of annualized Q2 NII |
|---|---|---|
| 100 basis points decline | -$2.2 billion | -3.4% |
| 100 basis points increase | +$1.0 billion | +1.5% |
| Downside/upside ratio | 2.2 times | — |
Bank projections compared with its benchmark curve. Calculations are based on current-period preliminary data. The percentages shown represent straightforward annualizations and are not official company guidance.
The downside is 2.2 times greater than the upside. This is also equivalent to 4.7% of annualized pretax income for the second quarter. The rate curve’s structure is therefore a key factor for valuation.
U.S. cash markets were shut when this was published. Shares last closed on Friday at $61.27, slipping 0.3%. The S&P 500 (INDEXSP:.INX) lost 1.0%. Since the July 10 close, BofA is up 2.7%.
The stock surpassed the performance of the SPDR S&P Bank ETF (NYSEARCA:KBE), which dropped 1.5% Friday. The earnings increase remained intact.
Bank of America reported earnings of $1.21 per share, surpassing the consensus estimate of $1.13. Revenue increased 15% to $31.6 billion. Net income advanced 27%, and operating leverage was 6.6%.
Trading revenue increased by 33% to reach an all-time high of $7.1 billion. Investment-banking fees surged 50% to $2.1 billion. The earnings mix became more diversified.
Credit quality held steady during the quarter, with the net charge-off ratio dropping to 0.47% from 0.55%. Average loans increased 8%, reflecting gains across all business segments.
Chief Executive Brian Moynihan said, “Near-term, pipelines remain strong, and commercial borrowing has picked up.” The statement indicates continued loan growth, although rate risk persists. SEC
Bank of America was valued at 15.2 times earnings, according to market data. JPMorgan Chase & Co. NYSE:JPM traded at 16.9 times, while Wells Fargo & Co. NYSE:WFC was at 13.5 times earnings. BofA’s multiple sits between those of its peers.
Focus moves from bank earnings to interest rate outlooks next week. Over 80 S&P 500 firms will report results. American Express Co. NYSE:AXP gives new insight into consumer trends. The Federal Reserve is set to meet at the end of July.
Bank of America is set to report its earnings on October 14. Ahead of this announcement, yields and deposit pricing could influence its earnings multiple.
Risks: A more rapid drop in rates would weigh on NII as projected by the bank’s model. Rising deposit costs could compress spreads further. Strong trading revenue could ease following a record quarter. Oil shocks due to war may boost inflation and drive increased market volatility.
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