The bank said net interest income increased 6 percent to $10.3 billion in the fourth quarter, while loan balances climbed by $19 billion to $915.9 billion.
Net charge-offs, a measure of costs for bad debt, declined to $880 million from $1.1 billion. Bank of America's net charge-off ratio improved to a historic low of 0.39 percent, the release said.
Provision for credit losses declined to $774 million from $810 million a year ago.
Marty Mosby, director of bank and equity strategies at broker-dealer Vining Sparks, said the decline in net charge-offs and provisions was "one of the reasons that Bank of America actually beat expectations on the market."
Along with the encouraging forecast for net interest income and an acceleration in capital deployment, "those are the three really primary catalysts for last year and are continuing into 2017," Mosby said on CNBC's "Squawk Box." His firm has an "outperform" rating on the stock.
Bank of America reported a 12 percent rise in fixed income trading revenue. It reported a 7 percent rise in equities trading revenue, "reflecting increased market activity post U.S. election." Excluding net debit valuation, total sales and trading revenue rose 11 percent.
The only negative Mosby gleaned from the report "is we didn't see investment banking and capital markets activity react positively in the fourth quarter," he said.
The bank also said it repurchased $5.1 billion in common stock and paid $2.6 billion in common stock dividends in 2016. Planned repurchases for the first half of this year increased from $2.5 billion to $4.3 billion.
In consumer banking, total mortgage production rose 29 percent from the same period last year to $21.9 billion. The bank said it issued more than 1.13 million U.S. consumer credit cards.
The financial sector is up 17 percent since the U.S. presidential election as the best performer in the S&P 500. Bank of America shares have climbed nearly 35 percent over that time.
Correction: The headline was corrected to reflect that analysts had forecast Bank of America's fourth-quarter earnings would be 38 cents per share.