✦ The Future BetsNarrow moat

Bank of America (BAC) — the future bets

Bank of America's future bets are aimed at the fee businesses where it trails JPMorgan, not at the deposits where it leads.

Bank of America's plan for the next five years was laid out at an investor day in November 20251. The targets are deposit growth of 4% or more a year, loan growth of 5% or more, net interest income growth of 5% to 7% a year, earnings per share growth of 12% or more, and a return on tangible common equity of 15% in the near term rising to 16% to 18%2.

Investor day targets (% a year)4%+Deposit growth5%+Loan growth5-7%NII growth12%+EPS growthYahoo/Investing.com on the November 2025 investor day
A plan built on double-digit earnings growth.

The bets that support those numbers are specific. The bank is entering six new markets, including Alabama, Louisiana and Ohio, with access to over $222 billion in deposits3. It wants to raise its trading share from 7.6% to 9%4, and it reported international markets revenue up 38% in the second quarter of 20265. And it launched BofA Rewards on 27 May 2026, with 13.3 million clients enrolled6.

None of these changes the moat by itself. Together they are an attempt to grow the fee businesses where Bank of America trails JPMorgan while adding deposits where it already leads.

The bets are being funded out of earnings rather than capital. The bank guided in January to about 200 basis points of operating leverage in 2026 and an effective tax rate of about 20%7, and it had exceeded 450 basis points in the first half8. That margin is what pays for new branches in new states without cutting the buybacks.

The early numbers are good: return on tangible common equity was 16.52% in the first half of 20269, inside the medium-term range. The test is whether it stays there when trading and rates are less kind; a full year below 15% would put the plan behind schedule.

Moat trajectory: Widening

H1 2026 ROTCE 16.52%, inside the 16-18% target.

The number that tests this moat
Reported
Earnings per share growth, latest quarter
+34% to $1.21 (Q2 2026)

Against the 12%-plus target; growth falling below 12% for a full year would mean the plan was slipping.

Source: Bank of America Q2 2026 earnings release ↗
✦ Future bets — beyond today's moat
✦ FUTURE BET 01
Six New Markets and $222 Billion of Deposits
Bank of America is taking its deposit franchise into six new states while closing branches in the old ones.
✦ FUTURE BET 02
Twelve Percent a Year, the Investor Day Promise
Bank of America met a ten-year plan of 10-12% EPS growth and has now promised 12% or more.
✦ FUTURE BET 03
Global Markets Abroad
Bank of America is growing its markets business abroad, where it has none of the deposit advantages it enjoys at home.
✦ FUTURE BET 04
BofA Rewards and the Primary Account
BofA Rewards signed up 13.3 million clients in its first month, a way to pay depositors that does not show in the deposit rate.
References
  1. Third-party estimateBank of America's plan for the next five years was laid out at an investor day in November 2025.
    Kitco (Reuters), Bank of America raises return target at its investor day - ROTCE 16-18%, trading share 7.6% against a 9% target, six new markets. — November 2025 · publ. 5 November 2025 · source ↗
  2. Third-party estimateThe targets are deposit growth of 4% or more a year, loan growth of 5% or more, net interest income growth of 5% to 7% a year, earnings per share growth of 12% or more, and a return on tangible common equity of 15% in the near term rising to 16% to 18%.
    Yahoo Finance (Investing.com), Bank of America investor day targets and peer comparisons. — November 2025 · publ. 5 November 2025 · source ↗
  3. Third-party estimateThe bank is entering six new markets, including Alabama, Louisiana and Ohio, with access to over $222 billion in deposits.
    Kitco (Reuters), Bank of America raises return target at its investor day - ROTCE 16-18%, trading share 7.6% against a 9% target, six new markets. — November 2025 · publ. 5 November 2025 · source ↗
  4. Third-party estimateIt wants to raise its trading share from 7.6% to 9%, and it reported international markets revenue up 38% in the second quarter of 2026.
    Kitco (Reuters), Bank of America raises return target at its investor day - ROTCE 16-18%, trading share 7.6% against a 9% target, six new markets. — November 2025 · publ. 5 November 2025 · source ↗
  5. ReportedIt wants to raise its trading share from 7.6% to 9%, and it reported international markets revenue up 38% in the second quarter of 2026.
    Bank of America second-quarter 2026 earnings release, Form 8-K exhibit 99.1 - segment results, returns on allocated capital and business highlights. — Q2 2026 · publ. 14 July 2026 · source ↗
  6. ReportedAnd it launched BofA Rewards on 27 May 2026, with 13.3 million clients enrolled.
    Bank of America second-quarter 2026 earnings release, Form 8-K exhibit 99.1 - consumer and digital highlights: checking accounts, Zelle, Erica, BofA Rewards, financial centers. — Q2 2026 · publ. 14 July 2026 · source ↗
  7. ReportedThe bank guided in January to about 200 basis points of operating leverage in 2026 and an effective tax rate of about 20%, and it had exceeded 450 basis points in the first half.
    Bank of America fourth-quarter 2025 earnings presentation, Form 8-K exhibit 99.2 - the 2026 outlook. — Q4 2025 · publ. 14 January 2026 · source ↗
  8. ReportedThe bank guided in January to about 200 basis points of operating leverage in 2026 and an effective tax rate of about 20%, and it had exceeded 450 basis points in the first half.
    Bank of America second-quarter 2026 earnings call transcript. — Q2 2026 · publ. 14 July 2026 · source ↗
  9. ReportedThe early numbers are good: return on tangible common equity was 16.52% in the first half of 2026, inside the medium-term range.
    Bank of America second-quarter 2026 supplemental information, Form 8-K exhibit 99.3 - quarterly and half-year financial highlights and ROTCE. — Q2 2026 · publ. 14 July 2026 · source ↗
Sources
Generated September 25, 2026