Bank of America Corp (BAC) closed out 2025 with a fourth quarter that should quiet some of the worry around consumer health. The nation's second-largest bank reported earnings Wednesday that topped Wall Street forecasts, driven by solid spending patterns and improving credit metrics that suggest Americans are managing their finances better than feared.

The bank posted net income of $7.6 billion, translating to earnings per share of 98 cents. That beat the analyst consensus of 96 cents. Revenue net of interest expense jumped 7% year-over-year to $28.5 billion, comfortably above the $27.9 billion analysts expected.

Here's the interesting part: debit and credit card spending climbed 6% to $255 billion during the quarter. Even better, the credit card balances more than 90 days past due actually improved, dropping to 1.27% from 1.35% a year earlier, according to the Wall Street Journal. That's not the profile of stressed consumers teetering on the edge.

Breaking Down the Business

The Consumer Banking segment delivered $3.30 billion in net income, up from $2.82 billion the prior year. Global Wealth and Investment Management contributed $1.41 billion, climbing from $1.17 billion. Global Banking brought in $2.09 billion, slightly down from $2.14 billion year-over-year, while Global Markets added $997 million, up from $953 million.

Net interest income reached $15.9 billion, a 10% year-over-year increase. That growth came from higher activity in Global Markets, fixed-rate asset repricing, and stronger deposit and loan balances, though lower interest rates nibbled away at some of those gains. Noninterest income rose 4% to $12.6 billion. The provision for credit losses declined to $1.3 billion from $1.5 billion, another sign that credit quality is holding up. Investment banking fees ticked up 1% to $1.7 billion.

Balance Sheet Highlights

The efficiency ratio improved to 61.11% from 63.04% a year earlier, meaning the bank is doing more with less. The Common Equity Tier 1 ratio stood at 11.4%, down from 11.9% a year ago but still comfortably above regulatory requirements. Book value per share climbed 8% to $38.44.

Average loan and lease balances grew 8% year-over-year to $1.17 trillion. Average deposits increased 3% to $2.01 trillion, marking the tenth consecutive quarter of sequential growth. Tangible book value per share rose to $28.73 from $26.37 in the prior year.

The bank returned capital to shareholders with $2.1 billion in dividends and $6.3 billion in stock repurchases during the quarter.

What Management Is Saying

CEO Brian Moynihan highlighted that Bank of America closed the year with strong results, delivering more than $30 billion in net income for the full year and growing earnings per share by 19% from 2024. He emphasized that the bank improved returns by generating solid revenue growth, achieving positive operating leverage, and lowering its efficiency ratio.

Moynihan pointed to resilient consumers and businesses, along with greater clarity around regulation, taxes, and trade policy, as reasons to expect continued economic growth. While he acknowledged ongoing risks, he said the bank remains optimistic about the U.S. economy heading into 2026. That's a notably upbeat tone from someone who sees economic activity up close through millions of customer transactions every day.

Looking Ahead

For 2026, Bank of America expects net interest income growth of 5%-7% year-over-year. The bank projects first-quarter net interest income growth of around 7% compared to the prior year.

Despite the positive results, BAC shares slipped 1.54% to $53.70 in premarket trading Wednesday, perhaps a case of investors taking profits after a strong run or digesting the details beneath the headline numbers.