⚠ A Target Above Anything It Has Earned RecentlyModerate threat

Bank of America (BAC) — threat to the moat

Bank of America met its last ten-year plan and has set a new target above anything it earned between 2022 and 2025.

Bank of America's medium-term ROTCE target of 16% to 18%1 is above every full-year figure it has reported since 2022. ROTCE was 15.15% in 2022 as originally reported2, 13.45% in 2023, 12.94% in 2024 and 14.22% in 202534.

ROTCE (%)15.15202213.45202312.94202414.22202516.52H1 2026Bank of America 10-Ks FY2023, FY2025; January 2026 8-K; Q2 2026 supplement
The target sits above the recent record.

The previous plan, which ran from 2015 to 2024, targeted 12% to 15% ROTCE and 10% to 12% earnings per share growth5. The bank met it: diluted earnings per share rose from $1.31 in 2015 to $3.81 in 20256, about 11.3% a year7. The new plan raises the bar on both, with earnings per share growth of 12% or more8.

The first half of 2026, at 16.52%9, is inside the new range, helped by record trading revenue and a steep yield curve.

The target was set when the bank was earning less. Its return on tangible common equity was 15.4% in the third quarter of 2025, the quarter before the investor day, while JPMorgan's was 20%10. The first half of 2026 was the first stretch at the new level.

A full year of 16% or more is the test. A 2026 result that fell below 15% would say the target depended on conditions that did not last.

References
  1. Third-party estimateBank of America's medium-term ROTCE target of 16% to 18% is above every full-year figure it has reported since 2022.
    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. ReportedROTCE was 15.15% in 2022 as originally reported, 13.45% in 2023, 12.94% in 2024 and 14.22% in 2025.
    Bank of America Form 10-K for fiscal 2023 - held-to-maturity securities at end-2022 and end-2023, average deposit balances for 2021-2023 and segment figures for 2021. — FY2023 · publ. February 2024 · source ↗
  3. ReportedROTCE was 15.15% in 2022 as originally reported, 13.45% in 2023, 12.94% in 2024 and 14.22% in 2025.
    Bank of America Form 8-K exhibit 99.1, revised supplemental information for the change in accounting for tax-related equity investments - restated 2023 and 2024 results. — FY2023-FY2024 · publ. 6 January 2026 · source ↗
  4. ReportedROTCE was 15.15% in 2022 as originally reported, 13.45% in 2023, 12.94% in 2024 and 14.22% in 2025.
    Bank of America Form 10-K for fiscal 2025 - financial highlights, income statement, capital and shareholders' equity. — FY2025 · publ. 25 February 2026 · source ↗
  5. Third-party estimateThe previous plan, which ran from 2015 to 2024, targeted 12% to 15% ROTCE and 10% to 12% earnings per share growth.
    Yahoo Finance (Investing.com), Bank of America investor day targets and peer comparisons. — November 2025 · publ. 5 November 2025 · source ↗
  6. ReportedThe bank met it: diluted earnings per share rose from $1.31 in 2015 to $3.81 in 2025, about 11.3% a year.
    SEC EDGAR XBRL company facts for Bank of America - revenue, net income, diluted EPS and average diluted shares by fiscal year, 2010-2025. — 2010-2025 · publ. 2026 · source ↗
  7. Moat Explorer calcThe bank met it: diluted earnings per share rose from $1.31 in 2015 to $3.81 in 2025, about 11.3% a year.
    Moat Explorer calculation from Bank of America's reported figures ($ millions unless stated). Deposits: cost of total deposits = interest on interest-bearing deposits / (average interest-bearing + average noninterest-bearing deposits): 2019 7,188 / 1,380,326 = 0.52%; 2021 537 / 1,914,286 = 0.03%; 2022 4,718 / 1,986,158 = 0.24%; 2023 26,163 / 1,887,541 = 1.39%; 2024 38,442 / 1,924,106 = 2.00%; 2025 34,513 / 1,984,182 = 1.74% (1,469,705 + 514,477 = 1,984,182, about $1.98 trillion). Average total deposits 2015 1,155,860; 2021 1,914,286; 2022 1,986,158 (about $1.99 trillion); 2015 to 2025 1,984,182 / 1,155,860 - 1 = 72%. Noninterest-bearing share 744,035 / 1,914,286 = 38.9% (2021); 514,477 / 1,984,182 = 25.9% (2025). Noninterest-bearing decline 751,470 - 514,477 = 236,993 (about $237 billion). JPMorgan comparison: deposit cost gap 1.80% - 1.74% = 0.06 points; 0.0006 x 1,984,182 = about 1,190 (about $1.2 billion). JPMorgan revenue per dollar of average deposits 182,447 / 2,506,565 = 7.3 cents; Bank of America 113,097 / 1,984,182 = 5.7 cents. JPMorgan year-end deposits 2,559,320 / 2,018,729 - 1 = 27%; revenue 182,447 / 113,097 - 1 = 61%; market value 935.79 / 391.80 = 2.4 times. Net income margin JPMorgan 57,048 / 182,447 = 31.3%; Bank of America 30,509 / 113,097 = 27.0%. Efficiency gap 61.65% - 52% = 9.65 points x 113,097 = about 10,914 (about $10.9 billion). Loans to deposits 1,185,700 / 2,018,729 = 58.7%. Uninsured deposits 723.0 + 134.9 = 857.9 billion; 857.9 / 2,018.7 = 42.5%; insured and other 2,018.7 - 857.9 = 1,160.8 billion. Consumer deposits per checking account 957.0 billion / 38.7 million = about $24,700. Securities: held-to-maturity unrealised loss as a share of common equity 108,596 / 244,800 = 44% (2022); 82,094 / 276,100 = 30% (June 2026). Held-to-maturity amortised cost 2021 674,591 - 2025 522,685 = 151,906 (about $152 billion); 2020 438,279 to 2021 674,591 = +236,312 (about $236 billion); 2021 fair value 665,890 - cost 674,591 = -8,701. Runoff time 505,828 / 34,794 = 14.5 years. Agency MBS share of loss 67,309 / 80,257 = 84%. Net interest income H1 31,742 / 29,113 - 1 = 9.0%. Capital: CET1 headroom (11.2% - 10.0%) x 1,792 billion = about 21.5 billion; 2027 minimum 4.5% + 3.5% + 2.5% = 10.5%. Capital returned 2025 (8.1 + 21.433) / 29.055 = 101% of net income to common. Average diluted shares 7,680.9 / 11,236.2 - 1 = -31.6%. EPS growth (3.81 / 1.31)^(1/10) - 1 = 11.3% a year. Price to tangible book 56.03 / 29.37 = 1.91. Revenue 2023 102,769 to 2025 113,097 = +10%. Compensation 42,346 / 69,727 = 61% of noninterest expense. Financial centers 3,530 / 3,664 - 1 = -3.7%. Noninterest expense Q2 2026 18,627 / 17,183 - 1 = 8.4%. Berkshire holding 483,394,015 / 1,032,852,006 - 1 = -53%. Investment banking fees Q2 2025 implied 2.1 / 1.5 = 1.4 billion. Segments (FTE, 2025): segment revenue 43,673 + 24,883 + 24,108 + 24,096 = 116,760; less All Other 3,054 = 113,706; less FTE adjustment 609 = 113,097. Shares of total FTE revenue: Consumer 43,673 / 113,706 = 38.4%; GWIM 24,883 / 113,706 = 21.9%. Shares of net income 30,509: Consumer 12,245 = 40.1%; Global Banking 7,793 = 25.5%; Global Markets 6,111 = 20.0%; GWIM 4,670 = 15.3%. Net income margins: Consumer 12,245 / 43,673 = 28.0%; GWIM 4,670 / 24,883 = 18.8% (2024 4,263 / 22,929 = 18.6%; 2023 3,947 / 21,105 = 18.7%); Global Banking 7,793 / 24,108 = 32.3%; Global Markets 6,111 / 24,096 = 25.4%. Consumer net interest income 35,309 / 43,673 = 81%; Consumer provision 4,649 / 5,675 = 82%. Growth 2023-2025: Consumer 43,673 / 42,031 - 1 = 3.9%; GWIM 24,883 / 21,105 - 1 = 17.9%; Global Markets 24,096 / 19,533 - 1 = 23.4%; Global Banking net income 7,793 / 10,072 - 1 = -23%. Consumer H1 2026 revenue 11,336 + 11,049 = 22,385. GWIM net interest income 7,197 / 24,883 = 29%. Revenue per dollar of year-end assets: Global Markets 24,096 / 1,032,858 = 2.3 cents; Consumer 43,673 / 1,039,346 = 4.2 cents. GWIM client balances 4,751,394 / 4,252,106 - 1 = 11.7%, increase 499,288; net flows 81,997 / 4,252,106 = 1.9%; consumer investment assets 639.5 / 599.1 - 1 = 6.7%. Revenue per dollar of balances: Private Bank 4,167 / 759,082 = 0.55%; Merrill 20,716 / 3,992,312 = 0.52%; Private Bank share of GWIM balances 759,082 / 4,751,394 = 16% and revenue 4,167 / 24,883 = 17%. Investment and brokerage services 19,956 / 17,766 - 1 = 12.3%. Common equity 277,251 / total assets 3,411,738 = 8.1%. AUM net flows 81,997 / 2,177,708 = 3.8%. Held-to-maturity loss 2023 97,994 / 263,249 = 37%. Share price 56.03 / 52-week high 65.23 - 1 = -14%. First half 2026 (Q1 + Q2): Consumer Banking revenue 11,049 + 11,336 = 22,385 and net income 3,060 + 3,281 = 6,341; Global Banking net income 2,087 + 2,046 = 4,133; Global Markets revenue 7,109 + 8,022 = 15,131 - capital, valuation, returns and comparisons with JPMorgan. — 2015-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Bank of America's Forms 10-K and 10-Q, earnings releases, JPMorgan's 10-K, Berkshire 13F tables and market data; operands shown in the source line.
  8. Third-party estimateThe new plan raises the bar on both, with earnings per share growth of 12% or more.
    Yahoo Finance (Investing.com), Bank of America investor day targets and peer comparisons. — November 2025 · publ. 5 November 2025 · source ↗
  9. ReportedThe first half of 2026, at 16.52%, is inside the new range, helped by record trading revenue and a steep yield curve.
    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 ↗
  10. Third-party estimateIts return on tangible common equity was 15.4% in the third quarter of 2025, the quarter before the investor day, while JPMorgan's was 20%.
    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 ↗
Sources
Generated September 25, 2026