Bank of America heads into Q2 earnings with 27% EPS growth expected

Bank of America is expected to report a 27% jump in second-quarter earnings per share on July 14, driven by higher net interest income and strong trading revenue.

"The higher-for-longer rate environment continues to benefit large deposit-funded lenders like Bank of America," said Sarah Lin, equity analyst at Edgen. "The key number to watch Tuesday is whether management raises NII guidance again."

BAC raised its full-year 2026 net interest income growth guidance to 6% to 8% after a strong first quarter, when it added a record 38.5 million consumer checking accounts. The Federal Reserve has held its benchmark rate at 3.5% to 3.75% and signaled cuts are unlikely this year, a backdrop that should keep NII working in the lender's favor. For the Finance sector as a whole, Q2 earnings are expected to increase 12.6% from a year ago on 8.4% higher revenue, according to Zacks.

The results will offer an early read on consumer credit health and loan demand across the US banking system. Investors will watch the provision for credit losses — a rising number would signal management expects more strain on borrowers.

Bank of America is among the most deposit-funded US lenders, resting on a large base of low-cost checking and savings accounts. That structure makes it especially sensitive to interest rates: when they stay elevated, the spread it earns on that money widens. The bank ended the first quarter with a record 38.5 million consumer checking accounts, and management has projected NII to build through the year.

JPMorgan Chase, Wells Fargo and Citigroup also report Tuesday, giving the market a broad view of the banking sector's health. Aggregate industry data suggests the four money-center banks will post their best loan growth numbers in almost three years, according to Zacks.

The Q2 earnings season includes almost 70 S&P 500 companies reporting this week, with 29 index members on deck. Through July 10, the 18 S&P 500 members that have already reported showed total earnings up 143.3% from a year ago, with 88.9% beating EPS estimates.

The guidance raise from the first quarter signals management expects lending margins to hold as the Fed keeps rates elevated. Investors will watch Tuesday's call for updated segment-level detail on consumer banking and wealth management revenue.

This article is for informational purposes only and does not constitute investment advice.