Bank of America Q3 earnings missed Wall Street expectations on Wednesday, as the second-largest U.S. bank absorbed a $1.21 billion regulatory settlement charge tied to anti-money laundering failures. The bank reported third-quarter 2026 net income of $6.9 billion, or $0.91 per diluted share, down sharply from $8.3 billion, or $1.04 per share, a year earlier, according to the bank’s earnings release.

The charge, which is not tax deductible, reduced earnings by about $0.17 per share, the bank said. Excluding it, adjusted earnings were $1.08 per share on adjusted net income of $8.1 billion — still below what analysts had been looking for. The results landed a day after U.S. regulators announced the sweeping penalty, and investors responded by sending Bank of America shares sharply lower.

Bank of America Q3 earnings fall short on both lines

Revenue, net of interest expense, came in at $30.0 billion, up about 3% from $29.0 billion in the third quarter of 2025, but short of the roughly $30.39 billion consensus compiled by Visible Alpha, according to Investopedia. Reported diluted earnings per share of $0.91 also trailed the $1.09 analysts expected, per the same data. Seeking Alpha put adjusted EPS of $1.08 about two cents below consensus on revenue of $29.96 billion.

The top-line miss was driven in part by weakness in the bank’s markets and deal-making businesses. Noninterest income of $13.5 billion declined from $13.8 billion a year ago, reflecting lower sales and trading revenue and softer investment banking fees, the bank said.

That stood in contrast to an otherwise strong quarter for the bank’s core lending engine. Net interest income rose 8% to $16.4 billion, or $16.6 billion on a fully taxable-equivalent basis, which Bank of America attributed primarily to higher loan and deposit balances, higher NII from Global Markets activity, and fixed-rate asset repricing. Net interest yield on an FTE basis climbed to 2.16%, up 15 basis points from a year earlier.

The $1.21 billion regulatory fine: what it was for

The settlement charge was tied to consent orders announced October 13, 2026, by the Office of the Comptroller of the Currency and the Financial Crimes Enforcement Network (FinCEN), concerning aspects of the bank’s U.S. Bank Secrecy Act, anti-money laundering and economic sanctions compliance programs, according to the bank’s release.

FinCEN said its investigation uncovered what it called a “failure to mitigate and report priority national security risks,” including more than $5 billion in suspicious transactions that the bank did not properly monitor or report, Investopedia reported. More than $1 billion of those transactions were tied to national security risks.

The Treasury Department also reached a separate $11.6 million settlement with the bank over nearly 500 apparent violations of U.S. sanctions programs, including those covering Russia and Iran, according to Investopedia.

“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 U.S. financial system to significant illicit finance risks,” Treasury Secretary Scott Bessent said in the department’s announcement, as quoted by Investopedia.

A Bank of America spokesperson told Investopedia that “financial crime compliance is serious, and we are responsible for getting it right,” adding that the bank has “dedicated substantial personnel and resources to our ongoing remediation efforts.”

Net interest income a bright spot as segments diverge

Despite the penalty, several of Bank of America’s core businesses posted solid growth. Consumer Banking net income was $3.5 billion on revenue of $11.6 billion, up 4%, the bank said. The bank added 200,000 net new core checking accounts, bringing total checking customers to 39 million, and opened more than 1 million new card accounts. Combined credit and debit card spend of $266 billion rose 8%.

Global Wealth and Investment Management was another standout, with net income of $1.5 billion on revenue of $7.1 billion, up 13%. Asset management fees rose 16% to $4.5 billion, and client balances reached $5.1 trillion, up 9%, according to the release.

Global Banking net income was $2.0 billion on roughly flat revenue of $6.2 billion, as higher net interest income and treasury service charges offset lower investment banking fees. Total investment banking fees, excluding self-led deals, fell 11% to $1.8 billion.

Global Markets net income dropped to $1.2 billion from $1.6 billion a year ago, on revenue of $5.9 billion, down 6%. Sales and trading revenue fell 5% to $5.1 billion: fixed-income revenue sank 17% to $2.6 billion, weighed down by mortgages, municipals and credit, while equities revenue rose 11% to $2.5 billion on stronger client financing activity, the bank said.

Credit quality and capital remain solid

The bank’s common equity tier 1 ratio stood at 10.9%, down from 11.6% a year earlier but still comfortably above regulatory minimums. Bank of America returned $8.3 billion to shareholders during the quarter, including $2.2 billion in dividends and $6.0 billion in share repurchases, while average global liquidity sources held at $914 billion.

Bank of America stock sinks as investors punish the miss

Bank of America shares plunged as much as 8.7% on Wednesday before recovering some ground, and closed down 4.76% at $51.39, according to The Motley Fool. With Wednesday’s slide, the stock is down about 9% for the year, per Investopedia.

The weakness extended across the big-bank reporting session. Morgan Stanley shares, which had edged 0.7% higher in premarket trading ahead of its own report, slid about 2% on Wednesday, while BlackRock climbed nearly 4% after its results, Investopedia reported. The broader market was also under pressure after a hotter-than-expected September inflation report fueled fears of further Federal Reserve rate hikes — a theme explored in detail in our earlier coverage of big bank Q3 earnings, where JPMorgan missed and Goldman Sachs beat.

On the earnings call, CEO Brian Moynihan pointed to the bank’s diversified model, saying the third quarter showed “the importance of a diversified company,” with strength in the businesses closest to customers, wealth clients and commercial clients. Management also emphasized that remediation costs are already embedded in the bank’s expense run rate and that capital flexibility remains substantial.

What the Bank of America Q3 earnings mean for investors

The quarter leaves investors weighing two competing stories. On one hand, the bank’s core franchise is expanding: net interest income grew 8%, deposits are growing, credit quality is improving, and the consumer and wealth businesses are gaining share. On the other hand, the $1.21 billion penalty is a reminder of the regulatory and compliance risk that still shadows the biggest U.S. lenders — and the size of this one rattled analysts on the earnings call.

With the Federal Reserve having raised short-term interest rates in September and inflation running hot, the outlook for net interest margins — the engine of Bank of America’s profit growth — is the key variable heading into the fourth quarter. Management’s medium-term net interest yield target of 2.3% now sits 14 basis points above the 2.16% the bank just delivered.

Frequently asked questions

What were Bank of America’s Q3 2026 earnings?

Bank of America reported third-quarter 2026 net income of $6.9 billion, or $0.91 per diluted share, down from $8.3 billion and $1.04 per share a year earlier. Revenue was $30.0 billion, up about 3%. Both figures missed analyst estimates.

Why did Bank of America’s profit fall?

The bank booked a $1.21 billion non-tax-deductible regulatory settlement charge tied to consent orders from the OCC and FinCEN announced October 13, 2026, covering failures in its Bank Secrecy Act, anti-money laundering and sanctions compliance programs. Excluding the charge, adjusted net income was $8.1 billion, or $1.08 per share.

What was the $1.21 billion Bank of America fine for?

U.S. regulators said the bank failed to properly monitor and report more than $5 billion in suspicious transactions, including over $1 billion tied to national security risks. The Treasury also announced a separate $11.6 million settlement over nearly 500 apparent violations of sanctions programs involving Russia and Iran.

How did Bank of America stock react to the earnings?

Bank of America shares fell as much as 8.7% during Wednesday’s session before closing down 4.76% at $51.39. The stock is down about 9% year to date.

Sources: Bank of America 3Q26 earnings release; Reuters; Reuters; Investopedia; Bank of America Investor Relations.