Bank of America Updates Accounting for Tax Equity Investments

Bank of America ( (BAC) ) has issued an announcement.

Bank of America has retrospectively changed its accounting methods for tax-related equity investments in affordable housing and wind and solar renewable energy, moving affordable housing and eligible wind investments from the equity method to the proportional amortization method and spreading solar investment tax credits and related costs over the productive life of the facilities rather than recognizing them upfront. The revisions primarily reclassify amounts between noninterest income and income tax expense with an insignificant impact on annual net income, but they reduced retained earnings by $1.7 billion and would have lowered common equity tier 1 capital by an estimated $2.1 billion, equating to a 13-basis-point hit to the CET1 ratio as of September 30, 2025, and raised the third-quarter 2025 effective tax rate to about 20%, offering investors a presentation that better aligns reported results with the economic profile of these investments without requiring restatement of regulatory capital ratios.

The most recent analyst rating on (BAC) stock is a Buy with a $64.00 price target. To see the full list of analyst forecasts on Bank of America stock, see the BAC Stock Forecast page.

Spark’s Take on BAC Stock

According to Spark, TipRanks’ AI Analyst, BAC is a Outperform.

Bank of America’s overall stock score reflects strong earnings performance and positive technical indicators. While financial performance shows stable profitability, challenges in cash flow and high leverage are concerns. The valuation is fair, and recent corporate events and earnings call sentiment are positive, supporting a favorable outlook.

To see Spark’s full report on BAC stock, click here.

More about Bank of America

Bank of America is one of the largest U.S.-based global financial institutions, providing a broad range of banking, investing and other financial and risk management services to consumers, companies and institutional clients. The corporation is a major player in corporate and investment banking and has significant exposure to tax-advantaged investments, including affordable housing and renewable energy projects, which are important to both its capital management and its positioning in ESG-related financing.

Average Trading Volume: 36,059,298

Technical Sentiment Signal: Buy

Current Market Cap: $415.4B

For a thorough assessment of BAC stock, go to TipRanks’ Stock Analysis page.