Bank of America's Q4 Loan Growth Snapshot: The Mix Matters

Bank of America’s BAC loan book expanded again in the fourth quarter of 2025, and the composition is telling. Commercial balances drove most of the growth, while consumer lending was more selective.

As of Dec. 31, 2025, average total loans and leases rose 8% year over year to $1.17 trillion. 

Average Total Loans and Leases by Portfolio ($B)
 

Commercial loans accounted for the majority of quarterly momentum, up 12% from the prior-year period. Growth was split between U.S. and non-U.S. commercial exposures, suggesting demand is not concentrated in a single geography. That mix matters because commercial lending tends to be more rate- and cycle-sensitive than prime consumer categories, supportive for revenues in a steady macro backdrop, but more exposed if business activity cools.

Consumer balances increased a modest 4% year over year, with credit cards and direct/indirect consumer lending doing most of the work. The subdued pace points to cautious household borrowing appetite, even with resilient growth, as uncertainty around policy and inflation-sensitive expenses keeps big-ticket borrowing in check.

Looking ahead, faster rate cuts could compress Bank of America’s net interest income (NII) even as they revive refinancing and stimulate loan demand. Credit is another swing factor: rising delinquencies could prompt tighter underwriting or slower growth. Sustaining commercial momentum depends on business confidence (capex and working-capital needs) along with clarity on the macro and policy path.

The next few quarters will hinge on whether commercial demand stays firm as rates move lower and whether credit costs remain contained. If loan growth holds without a meaningful uptick in delinquencies or reserve builds, BAC’s mix will likely support earnings even in a softer NII backdrop.

Where Do BAC’s Peers Stand in Terms of Loan Composition?

The two closest peers of BAC are JPMorgan JPM and Citigroup C. 

As of Dec. 31, 2025, JPMorgan’s loan mix leaned toward wholesale. Total loans were $1.49 trillion, with wholesale loans at $843 billion (up 17% year over year) versus $650 billion in consumer loans (up 4%). Like BAC, JPMorgan’s consumer loan book leaned toward credit cards. On the whole, the company’s loan growth was clearly led by wholesale lending.

Citigroup ended the fourth quarter of 2025 with $752 billion of loans, comprising $409 billion in consumer and $344 billion in corporate portfolio. Specifically, corporate loans grew faster (14% year over year), led by Markets and Services, while Banking corporate loans declined. On the other hand, Citigroup’s consumer loan portfolio increased 4%, with U.S. Personal Banking rising 5% and All Others jumping 12%.

Bank of America’s Price Performance, Valuation & Estimates

Shares of Bank of America have risen 7.9% over the past six months.

Six-Month Price Performance
 

From a valuation standpoint, Bank of America trades at a 12-month trailing price-to-tangible book (P/TB) of 1.89X, below the industry. 

P/TB Ratio
 

The Zacks Consensus Estimate for Bank of America’s 2026 and 2027 earnings implies year-over-year growth of 13.1% and 14.4%, respectively. In the past month, earnings estimates for 2026 and 2027 have been revised lower.

Earnings Estimates
 

Bank of America currently 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).

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