Bank of America reported third-quarter 2026 results that fell short of Wall Street expectations, sending shares down more than 5.5% in premarket trading Wednesday.
Revenue rose 3.2% year over year to $30.12 billion, but missed the consensus estimate of $30.69 billion. Earnings per share came in at 91 cents, compared with analysts' forecast of $1.10. Net income dropped 17% to $6.93 billion, weighed down by a $1.21 billion regulatory penalty linked to anti-money laundering failures.
Excluding that charge, the bank earned $8.1 billion, or $1.08 per share, with adjusted earnings per share up 4% from a year earlier. Net interest income increased 8% to $16.4 billion, supported by global market activity and fixed-rate asset repricing. Investment banking fees declined 11% to $1.8 billion, fixed-income trading revenue fell 17% to $2.55 billion, and overall sales and trading revenue dropped 5% to $5.1 billion. Equity trading provided a partial offset, rising 11% to $2.5 billion.
The penalty followed the bank's disclosure that it failed to report more than $5 billion in suspicious activity, including $1 billion tied to national security-related concerns. U.S. Treasury Secretary Scott Bessent warned that such failures expose the entire U.S. financial system to significant illicit finance risks.
CEO Brian Moynihan emphasized commercial lending growth, client deposits, and wealth flows. Investors also questioned whether the regulatory action could pressure the bank's roughly $6 billion quarterly share buyback pace. UBS analyst Erika Najarian said the penalty would likely weigh on sentiment and raise questions about additional expenses and capital allocation.
