Bank of America (BAC) Raises Dividend 14.3% to $0.32

Bank of America raised its quarterly dividend 14.3% to $0.32 per share from $0.28. The shares traded ex-dividend on September 4, 2026, and the payment is due September 25, 2026, to shareholders of record on September 4.

Why the dividend changed

Chair and Chief Executive Brian Moynihan tied the increase to stronger earnings, the franchise’s performance and management’s confidence in Bank of America’s capacity for long-term growth. He also described it as part of the bank’s commitment to return excess capital while continuing to invest in clients, communities and balance-sheet resilience. The board’s declaration followed a quarter in which the bank generated materially higher profit across each of its four business segments. Bank of America’s dividend announcement

Second-quarter net income rose to $9.1 billion from $7.2 billion a year earlier, while diluted earnings per share increased to $1.21 from $0.90. Revenue advanced to $31.6 billion, helped by higher net interest income, trading revenue, asset-management fees and investment-banking fees. Net interest income reached $16.0 billion as loan and deposit balances grew and fixed-rate assets repriced. Bank of America’s second-quarter results

Capital provided another part of the explanation. Bank of America ended the quarter with $202 billion of common equity tier 1 capital and an 11.2% standardized CET1 ratio, which it described as well above its regulatory minimum. The bank was also operating under a $40 billion share-repurchase authorization, with about $17 billion remaining at June 30, 2026. That combination of earnings and capital gave the board room to lift the cash distribution while continuing repurchases. Bank of America’s dividend announcement

Management’s latest earnings-call outlook was constructive but conditional. Chief Financial Officer Alastair Borthwick said full-year net interest income growth was expected at the upper end of the bank’s 6% to 8% range. Moynihan pointed to diversified revenue growth, stable credit costs, stronger commercial lending and consumer spending as supports for the second half. Bank of America’s quarterly earnings materials

Reuters also placed the decision in a broader banking context: several large banks announced higher dividends or new repurchase programs after the Federal Reserve released its stress-test results. Bank of America’s increase nevertheless followed its own earnings beat, including record trading activity and stronger investment-banking business. Reuters coverage

Dividend track record

The increase extends Bank of America’s dividend-growth streak to 12 consecutive years. The company’s declaration did not claim a longer consecutive annual record. The current streak follows the bank’s last annual dividend cut in 2009, when the financial crisis broke the earlier payment pattern.

The full-year totals show a regular rebuilding of the distribution. Payments totaled $0.72 per share in 2020 and $0.78 in 2021, an increase of 8.3%. The annual amount then rose 10.3% to $0.86 in 2022, 7.0% to $0.92 in 2023, 8.7% to $1.00 in 2024 and 8.0% to $1.08 in 2025. The five-year dividend growth rate was 8.4% annualized before the latest increase.

Recent quarterly payments reveal the same step-up pattern. Bank of America paid $0.26 per share through June 2025, moved to $0.28 beginning with the September 2025 payment cycle and maintained that rate for four quarters. The September 2026 cycle introduced the new $0.32 rate. The size of the latest increase is larger than any of the annual increases recorded from 2021 through 2025.

That history matters because the bank’s dividend has not moved quarter by quarter with earnings. Instead, increases have generally arrived as discrete annual steps, leaving the rate unchanged between reviews. The latest action preserves that pattern while accelerating the size of the step.

Is the dividend covered?

The dividend consumes 26% of earnings. That payout ratio indicates earnings provide a substantial cushion above the cash distribution, reducing the portion of profit committed to the dividend and leaving capacity for capital requirements, lending, business investment and repurchases.

SmarterDividends rates the dividend A with a safety score of 85. An A denotes a very safe dividend, corresponding to a score between 80 and 100. The grade reflects strong earnings coverage and a payment level that is modest relative to reported profit. It does not mean the dividend is guaranteed: the declaration states that capital distributions remain dependent in part on maintaining regulatory capital above minimum requirements. Bank of America’s dividend announcement

The second-quarter capital position supports that assessment. Credit costs were also stable sequentially, with the provision for credit losses at $1.4 billion and net charge-offs at $1.4 billion. Those measures remain important because a material deterioration in credit quality could reduce earnings available for future distributions. Bank of America’s second-quarter results

Yield and valuation

At a share price of $55.91, Bank of America’s forward dividend yield is 2.29%. That is below the 2.54% median for diversified banks and well below the 5.70% Financial Services sector median. The industry comparison is the more relevant benchmark because banks’ capital requirements and payout practices differ materially from those of insurers, asset managers and other financial companies.

The yield reflects both the new annual dividend of $1.28 and the market price. Although the dividend increased 14.3%, the forward yield remains below its industry median because yield also moves inversely with the share price.

SmarterDividends estimates fair value at $91.91 and classifies the shares as undervalued, with 59% upside to that estimate. The stock’s one-year price return was 8.0%. The fair-value assessment and dividend safety grade address different questions: valuation compares the market price with an estimated underlying value, while safety focuses on the payment’s coverage and durability.

How Bank of America compares with peers

Bank of America’s 2.29% forward yield sits above JPMorgan Chase’s 1.96% but below Mitsubishi UFJ Financial Group’s 2.36%, Royal Bank of Canada’s 2.54% and HSBC Holdings’ 3.74%. It also remains below the diversified-bank industry median of 2.54%.

JPMorgan is the closest peer on coverage and safety. It has a 26% earnings payout ratio, matching Bank of America, and an A safety grade. JPMorgan’s dividend-growth streak is 15 years, compared with Bank of America’s 12 years.

Royal Bank of Canada has a 41% payout ratio, a B safety grade and a 10-year growth streak. Mitsubishi UFJ has a 35% payout ratio, a C grade and a four-year streak. HSBC has the group’s highest yield at 3.74%, alongside a 54% payout ratio, a B grade and no current growth streak.

The comparison shows the trade-off within the peer group. Bank of America combines a below-median industry yield with one of the lowest payout ratios and one of the strongest safety grades. HSBC and Royal Bank of Canada offer higher forward yields but commit larger portions of earnings to their dividends. These comparisons describe income, coverage and consistency rather than relative investment merit.

What to watch

The immediate event is the September 25, 2026, payment. Bank of America’s dividend page shows no subsequent quarterly dividend declaration, so the next ex-dividend and payment dates have not been set. Future declarations remain at the board’s discretion. Bank of America dividend history

The next operating checkpoint is the third-quarter earnings report. Investors can compare reported net interest income with management’s expectation for full-year growth at the upper end of 6% to 8%. Credit costs, loan and deposit growth, operating expenses and the CET1 ratio will show whether the conditions supporting the increase remain intact.

Capital allocation also bears watching. The bank had about $17 billion remaining under its repurchase authorization at June 30, 2026. The pace of repurchases can change with capital levels, liquidity, financial performance, regulatory requirements, alternative uses of capital and market conditions. Those same constraints can influence the board’s latitude for subsequent dividend decisions. Bank of America’s dividend announcement

Payment details

The quarterly common dividend is $0.32 per share. The stock traded ex-dividend on September 4, 2026, which was also the record date, and the dividend is payable September 25, 2026. To qualify for this payment, shares had to be purchased before the ex-dividend date. Shares purchased on or after September 4 did not carry the right to this distribution. Bank of America’s dividend announcement

At the new quarterly rate, the annual dividend is $1.28 per share. A holding of 100 shares produces $128.00 in annual dividend income if the rate remains unchanged and all four quarterly payments are declared and paid.