Bank of America Q3 Earnings Hit by Penalty

Bank of America’s third-quarter earnings were weighed down by weaker-than-expected trading revenue and a regulatory charge tied to coordinated enforcement actions by the U.S. Treasury and the Office of the Comptroller of the Currency (OCC) announced on October 13, 2026. These factors reduced reported profitability for the quarter.

Q3 Results and Trading Revenue Miss

Bank of America reported net income of $6.9 billion for the quarter ended September 30, 2026, a 17.0% decline year over year, with diluted earnings per share of $0.91. Revenue on a fully taxable-equivalent basis rose 3.2% to $30.1 billion but fell about $570 million short of a cited consensus estimate. Excluding the regulatory charge, the company said earnings per share would have been roughly $1.08.

The revenue shortfall stemmed mainly from capital-markets activity. Fixed-income trading revenue dropped 17.0% to $2.6 billion, hurt by weakness in mortgages, municipals, and credit. Equities trading revenue rose 10.0% to $2.5 billion but still missed expectations, contributing to a combined trading revenue shortfall of about $750 million versus the cited consensus.

Net interest income increased 7.9% to $16.6 billion, slightly above the cited estimate. Investment-banking revenue declined 11.0% to $1.8 billion, roughly in line with prior company guidance.

Regulatory Penalty and Enforcement Actions

On October 13, 2026, the U.S. Treasury announced coordinated enforcement actions against Bank of America, including a $1.2 billion penalty from the Financial Crimes Enforcement Network (FinCEN) and a $750 million penalty from the OCC. The OCC’s penalty will be paid to the U.S. Treasury and credited against the FinCEN assessment.

The enforcement actions addressed failures to mitigate and report priority national-security risks, including activity linked to alleged Chinese money-laundering networks and illicit finance along the southwest border. Treasury reported the bank failed to timely report more than $5 billion in suspicious transactions, including over $1 billion involving priority illicit-finance risks. A separate Office of Foreign Assets Control (OFAC) settlement of about $12 million was also included.

The OCC described Bank of America’s Bank Secrecy Act and anti-money-laundering compliance program as “deficient and ineffective,” noting the bank had not corrected certain deficiencies identified in a 2024 cease-and-desist order. The bank recorded the regulatory charge as a non-tax-deductible item in the quarter, reducing net income by about $0.17 per share. It said personnel and resources had already been dedicated to remediation, with those costs included in current expenses.