Bank of America reported third-quarter profits that fell below analyst expectations on Wednesday, Oct. 14, 2026. The lender disclosed a $1.2 billion charge related to a regulatory penalty over failures to detect potential money-laundering activity and reported weakness in its trading division. Following the announcement, shares of the bank dropped more than 8%, reaching their lowest price since May.
The financial results follow a period of increased regulatory oversight for the bank. Since late 2023, Bank of America has worked with U.S. regulators to update its anti-money laundering safeguards. Late Tuesday, Oct. 13, 2026, the U.S. government unveiled the $1.2 billion fine, which stems from the bank's failure to report more than $5 billion in suspicious activity. The bank previously received a 2024 consent order from the Office of the Comptroller of the Currency (OCC) to address these issues.
The bank's third-quarter profit was $6.9 billion, or 91 cents per share, down from $8.3 billion, or $1.04 per share, during the same period last year. Excluding the regulatory charge, earnings were $1.08 per share, missing the $1.10 per share estimated by analysts surveyed by LSEG. Revenue from sales and trading fell 5% to $5.1 billion, with fixed income, currency, and commodities (FICC) trading revenue declining 17% due to shifting interest rates and reduced client activity.
The $1.2 billion penalty, described as the third-largest in U.S. Treasury history, reflects failures to monitor $5 billion in suspicious transactions. While Chief Financial Officer Alastair Borthwick stated the fine would not "crowd out" other activities, analysts noted the penalty may increase concerns regarding the bank's expenses and the duration of regulatory oversight.
For the bank’s operations, the settlement includes a consent order that requires Bank of America to hire a third party to identify previously undetected suspicious transactions. Borthwick reported that the bank has already added thousands of employees to its anti-money laundering teams. The bank also reported that unrealized losses on its bond portfolio grew to $109 billion at the end of September, up from $85 billion in June, as bond yields rose.
Looking ahead, Bank of America anticipates that its net interest income (NII) will improve sequentially in the fourth quarter of 2026. The bank is forecasting NII growth of 8% or more for the full year of 2027. Regarding leadership, CEO Brian Moynihan stated that his succession remains a decision for the board of directors. The bank continues to work under the terms of the consent order to overhaul its internal safeguards.