Bank of America’s BAC net interest income (NII) has maintained strong momentum so far in 2026, with the metric rising 9% year over year in the first half to $31.7 billion. Particularly, in the second quarter, NII touched a record $16 billion.
The improvement has been supported by healthy balance-sheet growth and favorable asset repricing, helping the company counter the adverse impact of relatively lower average short-term interest rates.
A key driver has been solid loan and deposit growth. In the first six months of this year, average loans and leases climbed 8.3% year over year to $1.20 trillion, with commercial lending remaining particularly strong. Meanwhile, average deposits rose 2.7% to $2.02 trillion. The expansion of lower-cost deposits, including non-interest-bearing balances, has helped support funding costs and NII.
The continued repricing of fixed-rate assets at higher yields has provided a meaningful tailwind. As lower-yielding securities and loans originated in earlier years mature, they are being replaced with assets carrying relatively better yields. These factors also helped Bank of America’s net interest yield improve to 2.08% in the second quarter from 1.94% a year earlier despite lower average short-term rates weighing on variable-rate asset yields.
The uptrend in NII is likely to continue through the remainder of 2026, although the year-over-year growth rate could moderate somewhat because of tougher comparisons in the second half. Management expects 2026 NII growth to be near the upper end of its 6-8% guidance. The outlook assumes modest loan and deposit growth during the second half and continued benefits from fixed-rate asset repricing and balance-sheet optimization.
NII Trajectory of BAC’s Peers
Let us examine the NII trend of two of BAC’s closest peers, JPMorgan JPM and Citigroup C, over the past few years.
JPMorgan continues to benefit from an asset-sensitive balance sheet, broad loan growth and a durable deposit base. Though the company’s NII declined in 2021 due to near-zero interest rates, the metric posted a five-year (2020-2025) compound annual growth rate (CAGR) of 11.8%. This was largely driven by the acquisition of First Republic Bank in 2023 and the high-interest-rate regime since 2022. This upward momentum persisted in the first half of 2026.
With interest rates less likely to move lower in the near term and a rate hike in the cards later in the year, these are likely to be positive catalysts for JPMorgan. Management raised its 2026 NII outlook to $105.5 billion from the previous target of $103 billion.
Likewise, Citigroup's spread income remains a core support for revenue growth, backed by higher loan balances and stable deposit trends. NII witnessed a three-year (ended 2025) CAGR of 6.2%, with the uptrend continuing in the first half of 2026. Citigroup expects NII, excluding Markets, to increase 5-6% in 2026, supported by loan growth and stabilizing funding dynamics.
Bank of America’s Price Performance, Valuation & Estimates
In the past six months, BAC shares have gained 25.1% compared with the industry’s 19.4% growth.
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From a valuation standpoint, Bank of America trades at a 12-month trailing price-to-tangible book (P/TB) of 2.20X, below the industry average of 3.34.
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The Zacks Consensus Estimate for BAC’s 2026 and 2027 earnings implies year-over-year growth of 22.8% and 12.6%, respectively. In the past 30 days, earnings estimates for both years have been unchanged.
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Currently, Bank of America carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).