Bank of America Third-Quarter Earnings Unexpectedly Decline Amid $1.2 Billion Treasury Fine

09:01 AM EDT, 10/14/2026 (MT Newswires) -- Bank of America (BAC) reported an unexpected year-over-year decline in third-quarter earnings on Wednesday as a regulatory settlement charge weighed on its results, while revenue fell short of market estimates amid lower investment banking fees and trading revenue. The banking giant posted net income of $0.91 a share for the September quarter, down from $1.04 the year before, compared with the consensus on FactSet for an increase to $1.10. The result included a regulatory settlement charge of $1.2 billion, or $0.17 a share, according to Bank of America. On Tuesday, the US Treasury Department announced more than $1.21 billion in penalties against the bank for violations of anti-money laundering and sanctions laws. The department said the bank failed to timely report more than $5 billion in suspicious transactions, including over $1 billion involving national security and other illicit finance risks. "When a bank of this size fails to meet its anti-money laundering and sanctions obligations, the consequences extend far beyond its own walls, exposing the entire US financial system to significant illicit finance risks," Treasury Secretary Scott Bessent said in a statement. "Even the biggest financial institutions are not above the law." Earlier this month, Oppenheimer said in a client note that Bank of America was among the major US banks likely to fall short of Wall Street's third-quarter earnings expectations. Excluding the regulatory charge, Bank of America's adjusted EPS came in at $1.08, but still fell short of the Street's $1.10 view. Total revenue, comprising net interest and noninterest income, increased 3% to $29.96 billion, but missed the average analyst estimate of $30.58 billion. The lender's shares dropped 4.6% in the most recent premarket activity, bringing its year-to-date loss to nearly 2%. Revenue in the global banking division increased to $6.21 billion from $6.19 billion in the prior-year quarter, despite an 11% drop in investment banking fees. Global markets revenue fell 6% as sales and trading revenue slipped 5% to $5.1 billion. "While investment banking and sales and trading revenues were lower, commercial lending grew in every client segment," Chief Executive Brian Moynihan said in the earnings release. Revenue in the global wealth and investment management segment climbed 13% to $7.12 billion, buoyed by a 16% gain in asset management fees that reflected higher market valuations and robust assets under management flows. Consumer banking revenue advanced 4% to $11.57 billion. "We saw healthy activity from our consumer, wealth management, business and commercial clients," according to Chief Financial Officer Alastair Borthwick. "Organic growth helped drive higher revenue and solid earnings." On Tuesday, JPMorgan Chase (JPM) reported weaker-than-expected third-quarter results, while Wells Fargo's (WFC) revenue fell short of market estimates. Goldman Sachs (GS) and Citigroup (C) topped Wall Street projections.