Bank of America (BAC  ) shares were slightly lower following the company exceeding analysts' estimates on the top and bottom lines due to strength in loan demand and net interest income. The bank's results are consistent with performance from other banks which continue to show that the 'Main Street economy' remains resilient, while Wall Street continues to languish under the weight of higher rates.

Over the past year, Bank of America shares are down 27%. Yet, the company continues to deliver strong results in terms of earnings growth. For next year, analysts are forecasting an 11% increase in earnings per share which would give it a forward P/E of 9.8 which is significantly below the market's forward P/E of 16.6.

The company also sports a 2.6% dividend yield which should continue to get more enticing especially if long-term yields continue to decline. One material headwind for the company is the inverted yield curve as short-term Treasury yields are close to their highs due to a hawkish Federal Reserve, while longer-term yields have declined due to moderation in inflation and worsening growth expectations.

Inside the Numbers

In Q4, Bank of America reported $0.85 in earnings per share which topped analysts' estimates of $0.77 per share in earnings. Revenue also came in higher than expectations at $24.7 billion vs $24.3 billion. Overall, earnings per share were 3% lower than last year's Q4, while revenue was up 10%.

The bulk of its outperformance was due to a 29% increase in net interest income which came in at $14.7 billion. This was sufficient to offset the 50% decline in investment banking revenue which was in line with expectations at $1.1 billion. The company does see net interest income slightly lower in its upcoming quarter.

In a statement accompanying the earnings release, CEO Brian Moynihan said, "The themes in the quarter have been consistent all year as organic growth and rates helped deliver the value of our deposit franchise. That coupled with expense management helped drive operating leverage for the sixth consecutive quarter."

Like many of its peers, Bank of America continues to prepare for a recession that hasn't arrived yet. It set aside $1.1 billion for credit losses compared to last year when it was able to reduce its reserves by $500 million due to a strong economy. So far, there has been no uptick in write-offs or defaults, both of which remain under pre-pandemic levels despite an assortment of economic challenges.