Good morning. Bank of America’s latest earnings results offer insight into the sentiment of U.S. businesses on M&A in the coming year.

“The consumers are still spending, and our business clients are profitable and increasingly optimistic,” Bank of America CFO Alastair Borthwick said during a media call on Thursday preceding the Q4 earnings call. “Coupled with our fourth quarter return to operating leverage, we're entering 2025 with good momentum.”

The Federal Reserve’s interest rate cuts in September, November, and December of last year seemingly created more of an appetite for dealmaking. In Q4 2024, Bank of America’s investment-banking fees outperformed the market, growing 44% from last year to reach $1.7 billion, Borthwick said. This was led by M&A, while the bank also saw strength across debt and equity capital markets, he said.

The year ahead for M&A is a “very challenging area to forecast or predict,” Borthwick said. However, he sees some encouraging signs. Borthwick added that discussions with Bank of America's corporate client base combined with the pickup in M&A activity in Q4 reflect a couple of things:

“The interest rate structure is settling in here, and valuations are becoming clearer to people on both the buy side and the sell side,” he explained. “And there appears to be more CEO confidence that deals can get done in the future environment.”

“That's what's giving our M&A team some optimism, and that's the reason that our pipeline continues to build,” he added.

Bank of America's net income for Q4 2024 was $6.7 billion with earnings per share of 82 cents, compared to $3.1 billion with earnings per share of 35 cents, the same time last year. For the full year of 2024, Bank of America reported net income of $27.1 billion and earnings per share of $3.21.

"Every source of revenue increased, and we saw better than industry growth in deposits and loans," Bank of America CEO Brian Moynihan said in a statement.

In Q4, Bank of America's loans reached $1.1 trillion and deposits grew 3% to almost $2 trillion, beating estimates.

“We ended the year with $3.3 trillion of assets,” Borthwick said. The bank has focused on assisting clients as they grow, and strengthening its balance sheet, “while investing in the right technology, operations, and people,” he said.

At the beginning of the earnings call on Thursday, Moynihan expressed concern for the communities, clients, and teammates impacted by the California wildfires. Bank of America has activated its client assistance program, donated $1 million in disaster relief to the American Red Cross, along with contributions to the LA Food Bank and the LA Chamber of Commerce Small Business efforts, he said.

“We have teams on the ground, assisting in any way we can, and are monitoring the situation to extend support and resources,” Moynihan said.

Have a good weekend.

Sheryl Estrada
sheryl.estrada@fortune.com

This story was originally featured on Fortune.com