2 Bank Stocks to Buy That Expect Faster Interest-Income Growth in 2027

Bank stocks have been on a bit of a roller-coaster ride this year. At times, investors have rotated into them and out of artificial intelligence (AI), although more recently, there have been concerns that AI could displace banks in various ways.

Regardless, banks tend to perform better in a rising interest rate environment, particularly if the yield curve remains steep, with yields on shorter-term bonds lower than those on longer-dated bonds. That’s because banks tend to borrow money at short-term rates and lend it out at longer-term interest rates.

In a rising interest rate environment, net interest income (NII), the spread revenue banks make between the interest they pay on liabilities such as interest-bearing deposits and what they earn on interest-earning assets such as loans, tends to benefit.

Here are two bank stocks expected to have faster NII growth in 2027.

JPMorgan Chase

In its third-quarter earnings report, JPMorgan Chase (JPM -0.02%), the largest U.S. bank with over $5 trillion in assets under management, said it expects $25.5 billion in NII excluding NII from its market business in the fourth quarter, bringing total NII in 2026 to roughly $97.2 billion.

JPMorgan also provided an early central case for 2027, guiding for NII exclusive of markets of $107 billion, representing annual growth of 10%.

“So if you start with what we have given you as the NII ex-Markets guide for fourth quarter, which is 25.5, and you annualize that, you get something like $102 billion,” JPMorgan CFO Jeremy Barnum told analysts on the conference call following earnings. “So we are essentially … guiding to $5 billion of growth from that to the $107. That $5 billion, probably about a quarter of that, I would say, is related to the yield curve.”

JPMorgan’s balance sheet is asset-sensitive, meaning more of its interest-earning assets are expected to reprice higher faster than its liabilities, such as deposits.

JPM – JPMorgan Chase

$335.19-$0.07 (-0.02%)

NYSE · As of 4:00 PM ET 10/21/26

A portion of any bank’s deposits is typically non-interest-bearing, meaning they don’t pay interest and are typically won through strong relationships with clients, making them less sensitive to interest rates.

But it’s also dependent on how many times the Federal Reserve hikes interest rates, which is still a relative unknown. Currently, the market is pricing in three rate hikes between now and June 2027.

But that could change quickly, depending on the Iran war and what happens with inflation.

Part of banking is not only predicting where rates could go, but also preparing the balance sheet for a range of scenarios, because you don’t want to get caught flat-footed should rates move unexpectedly. Banks also want to take advantage of higher rates and a steep yield curve, so it’s a balancing act.

Bank of America

Bank of America (BAC +0.28%), the second-largest bank in the country, is also a major beneficiary of rising interest rates amid a steep yield curve. Bank of America began the year expecting annual NII growth of 5% to 7%. However, as the rate picture has shifted to a higher-for-longer environment this year, the bank has revised its NII guidance upward numerous times and now expects to achieve roughly 8% growth.

Next year, Bank of America expects at least another 8% annual growth.

BAC – Bank of America

$50.78+$0.14 (+0.28%)

NYSE · As of 4:00 PM ET 10/21/26

“Rates are obviously a small component of that. But same drivers as this year,” Bank of America CFO Alastair Borthwick said on the company’s third-quarter earnings call.

We’ve seen a little more normal deposit growth this year, and particularly where we’ve seen it is in non-interest-bearing. So if you look at the non-interest-bearing in consumer or you look at the non-interest bearing in global banking, that’s returned to something a little more normal. We’d always thought deposit growth should be in kind of the 4% to 5% [range] in a normal type economy.

At the end of the third quarter, roughly 26% of Bank of America’s total deposits were non-interest-bearing, so those won’t reprice higher when the Fed raises rates, although there can be attrition if clients have the ability to move them into higher-yielding products.

Bank of America also has a strong commercial lending franchise, and a majority of its loans will reprice higher as rates rise, leading to more NII.