A Bank That Now Wants a Rate HikeNarrow moat

Bank of America (BAC) — moat facet

The bank that lost $108 billion on paper when rates rose now earns an extra billion dollars for every point they go up.

For most of 2022 and 2023 rising rates hurt Bank of America. Today the bank benefits from them. It says it continues to be "asset sensitive to a parallel move in interest rates"1, and its sensitivity table in June 2026 showed a 100 basis point instantaneous rise adding about $1.0 billion to banking-book net interest income, and a 200 basis point rise about $1.9 billion2.

Twelve-month NII change from a +100bp shock ($bn)+1.1Dec 2024+0.7Dec 2025+1.0Jun 2026Bank of America Form 10-K FY2025 and Q2 2026 10-Q
A billion dollars a point, upward.

The sensitivity has moved with the balance sheet. At the end of 2025 the same +100 basis point shock was worth $0.7 billion, and at the end of 2024 $1.1 billion34. The bank says the majority of the impact comes from the short end of the yield curve5.

The change from victim to beneficiary is the repricing described on the previous page, seen from the other direction. With the long-dated securities running off and more assets tied to short rates, the balance sheet now earns more when rates rise.

The market context has turned in that direction: the forward curve cited on the July call included a hike in September6.

The same table measures the effect of larger moves. A 200 basis point rise was worth about $2.0 billion at the end of 2024, $0.8 billion at the end of 2025 and $1.9 billion in June 202678. The swings in those numbers show how quickly the bank repositions its balance sheet.

The quarterly sensitivity table is where this shows. A +100 basis point figure falling back toward zero would mean the balance sheet had been repositioned to lock in current rates, which would reduce the upside and the downside together.

Moat trajectory: Holding steady

+100bp worth $1.0bn in June 2026, $0.7bn at end-2025.

The number that tests this moat
Reported
NII sensitivity to +100bp, latest quarter
+$1.0bn (June 2026) vs +$0.7bn (end-2025)

How much a rate rise helps; a move toward zero would mean the bank has locked in current rates.

Source: Bank of America Form 10-Q, Q2 2026 ↗
⚠ Threats to the moat
⚠ THREAT 01
Falling Rates Cost Twice as Much
A two-point fall in rates would cost Bank of America nearly three times what a two-point rise would earn it.
References
  1. ReportedIt says it continues to be "asset sensitive to a parallel move in interest rates", and its sensitivity table in June 2026 showed a 100 basis point instantaneous rise adding about $1.0 billion to banking-book net interest income, and a 200 basis point rise about $1.9 billion.
    Bank of America Form 10-Q for the quarter ended 30 June 2026 - held-to-maturity securities, interest-rate sensitivity, capital requirements and the OCC consent order. — Q2 2026 · publ. 31 July 2026 · source ↗
  2. ReportedIt says it continues to be "asset sensitive to a parallel move in interest rates", and its sensitivity table in June 2026 showed a 100 basis point instantaneous rise adding about $1.0 billion to banking-book net interest income, and a 200 basis point rise about $1.9 billion.
    Bank of America Form 10-Q for the quarter ended 30 June 2026 - held-to-maturity securities, interest-rate sensitivity, capital requirements and the OCC consent order. — Q2 2026 · publ. 31 July 2026 · source ↗
  3. ReportedAt the end of 2025 the same +100 basis point shock was worth $0.7 billion, and at the end of 2024 $1.1 billion.
    Bank of America Form 10-Q for the quarter ended 30 June 2026 - held-to-maturity securities, interest-rate sensitivity, capital requirements and the OCC consent order. — Q2 2026 · publ. 31 July 2026 · source ↗
  4. ReportedAt the end of 2025 the same +100 basis point shock was worth $0.7 billion, and at the end of 2024 $1.1 billion.
    Bank of America Form 10-K for fiscal 2025 - average balance sheet, deposits, net interest income and rate sensitivity. — FY2025 · publ. 25 February 2026 · source ↗
  5. ReportedThe bank says the majority of the impact comes from the short end of the yield curve.
    Bank of America Form 10-Q for the quarter ended 30 June 2026 - held-to-maturity securities, interest-rate sensitivity, capital requirements and the OCC consent order. — Q2 2026 · publ. 31 July 2026 · source ↗
  6. ReportedThe market context has turned in that direction: the forward curve cited on the July call included a hike in September.
    Bank of America second-quarter 2026 earnings call transcript. — Q2 2026 · publ. 14 July 2026 · source ↗
  7. ReportedA 200 basis point rise was worth about $2.0 billion at the end of 2024, $0.8 billion at the end of 2025 and $1.9 billion in June 2026.
    Bank of America Form 10-K for fiscal 2025 - average balance sheet, deposits, net interest income and rate sensitivity. — FY2025 · publ. 25 February 2026 · source ↗
  8. ReportedA 200 basis point rise was worth about $2.0 billion at the end of 2024, $0.8 billion at the end of 2025 and $1.9 billion in June 2026.
    Bank of America Form 10-Q for the quarter ended 30 June 2026 - held-to-maturity securities, interest-rate sensitivity, capital requirements and the OCC consent order. — Q2 2026 · publ. 31 July 2026 · source ↗
Sources
Generated September 25, 2026