Bank of America reported third-quarter results on Wednesday morning, October 14. Net income was $6.9 billion, or $0.91 per share - down 17% and 12.5% from the same quarter a year ago. In the background is an unusual charge of $1.2 billion for a regulatory settlement, which took 17 cents off earnings per share. Without it, diluted EPS would have been $1.08.
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What Was Reported
| Q3 2026 | Q3 2025 | Change | |
|---|---|---|---|
| Net revenue | 29,958 | 29,040 | +3% |
| Net interest income | 16,449 | 15,233 | +8% |
| Noninterest revenue | 13,509 | 13,807 | -2% |
| Noninterest expense | 19,722 | 17,337 | +14% |
| Provision for credit losses | 1,269 | 1,295 | -2% |
| Net income | 6,933 | 8,332 | -17% |
| Diluted EPS ($) | 0.91 | 1.04 | -12.5% |
| Adjusted diluted EPS ($) | 1.08 | 1.04 | +3.8% |
| Return on tangible common equity | 12.6% | 15.3% | -2.7 pts |
| Common equity tier 1 (CET1) ratio | 10.9% | 11.6% | -0.7 pts |
In millions of dollars, except per-share figures and ratios. Year-ago figures are as presented in the current release; the release notes an accounting-method change applied retrospectively. Source: the bank's earnings release, presentation and financial supplement, October 14, 2026.
Net revenue came to $29.96 billion. Against the second quarter the comparison is sharper: revenue fell 5.1% from $31.56 billion, and net income fell 24% from $9.07 billion ($1.21 per share). For the first nine months of the year, revenue rose 8.3% to $91.79 billion, net income rose 7.6% to $24.59 billion, and diluted EPS rose 13.7% to $3.23.
Revenue: Interest and Wealth Up, Trading and Investment Banking Down
Net interest income rose 8% to $16.45 billion, and the net interest yield was 2.16%, 15 basis points higher than a year ago. Pulling the other way, noninterest revenue fell 2.2% to $13.51 billion, and against the second quarter, when it stood at $15.56 billion, the drop is 13.2%.
In the Global Markets segment, revenue fell 6% to $5.87 billion, and segment net income fell to $1,235 million from $1,648 million. Sales and trading revenue came to $5.08 billion, down 5% from a year ago and 28.5% from $7.10 billion in the second quarter. Inside trading the gap between the two sides is sharp: fixed income, currencies and commodities (FICC) trading fell 17% to $2.57 billion, while equities trading rose 11% to $2.51 billion.
Investment banking fees, for the whole corporation and excluding self-led deals, fell 11% to $1.80 billion, from $2.01 billion. Year to date they are still up 16%, at $5.78 billion versus $4.96 billion. In its presentation the bank says its investment banking pipeline remains strong.
The wealth management segment (GWIM) grew at a double-digit pace: revenue rose 13% to $7.12 billion, and net income rose to $1,540 million from $1,265 million. Consolidated asset management fees rose 17% to $4.63 billion, and client balances reached $5.1 trillion, up 9%.
Expenses and the Regulatory Charge
Noninterest expense rose 14% to $19.72 billion. Excluding the regulatory charge, expense was $18.5 billion, up 7%, against a 3% rise in revenue. The efficiency ratio was 66%, versus 60% a year ago, and 62% excluding the charge.
The charge is $1.2 billion, booked as an expense that is not tax-deductible. It covers civil money penalties under consent orders from the OCC, the US banking regulator, and from FinCEN, the Treasury's financial crimes unit, concerning compliance with the Bank Secrecy Act, anti-money-laundering rules and sanctions. The orders were announced on October 13. The release states only the amount of the accrual, so $1.2 billion is the only figure that can be cited.
The effective tax rate was about 23%, versus about 20% excluding the charge, and the All Other segment lost $1.4 billion, including the charge. Adjusted net income was about $8.1 billion, against $8.3 billion in the year-ago quarter; adjusted EPS was $1.08, versus $1.04, and adjusted return on tangible common equity was 14.9%, against 12.6% reported.
Credit, Capital and Returns
The provision for credit losses fell 2% to $1.27 billion. Net charge-offs came to $1.35 billion, down 1.3%, a ratio of 0.44% versus 0.47% a year ago. The bank had a net reserve release of $80 million, versus a release of $72 million in the year-ago quarter.
The CET1 ratio fell to 10.9%, from 11.2% in the prior quarter and 11.6% a year ago; under the advanced approaches it was 12.0%. The bank returned $8.3 billion to shareholders: $2.2 billion in dividends and $6.0 billion in buybacks (the release rounds the components separately). The dividend paid was $0.32 per share, versus $0.28 a year ago, and the number of shares outstanding fell 5.6%, to 6.92 billion.
Brian Moynihan, chair and CEO, said in the release: "The team delivered organic growth, deepening client relationships and adding new ones." According to the release, commercial lending grew in every client segment, and growth in deposits, wealth flows and consumer activity offset weaker investment banking and trading revenue.
Outlook
The written materials - the release, the presentation and the supplement - contain no numeric guidance for interest income or expenses. What exists comes from the earnings call and, according to its transcript (a secondary source): net interest income is expected to improve in the fourth quarter versus the third, to grow about 8% in 2026 as a whole and by 8% or more in 2027, and management expects a return to operating leverage in the fourth quarter. According to the transcript, no buyback guidance was given.
Against Expectations, and the Stock
According to CNBC, citing LSEG data, analysts expected earnings of $1.10 per share and revenue of $30.69 billion. Both reported EPS, $0.91, and adjusted EPS, $1.08, came in below expectations, and revenue on a taxable-equivalent (FTE) basis, $30.12 billion, was about $570 million short. Net interest income on the same basis, $16.6 billion, was slightly above the StreetAccount estimate of $16.53 billion. According to CNBC, the gap against estimates in bond and equity trading totaled about $750 million.
According to Yahoo Finance data, the stock opened on report day at $49.83, about 7.7% below the previous day's close ($53.96), and narrowed part of the gap: it closed at $51.42, down 4.7%, on volume of 105.5 million shares, versus 45.0 million the day before. Year to date the stock is down about 6.5%, compared with about 1.9% before the report, based on a 2025 year-end close of $55.00.
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דעה אישית של אילן אברמוב - לא ייעוץ ולא המלצה
It is easy to read this quarter through the regulatory charge, and to me that looks like a partial reading. Even without it, EPS of $1.08 stayed below the $1.10 that was expected. And the gap in trading against estimates, which CNBC put at about $750 million, is larger than the gap in revenue as a whole.
There are two ways to read it. One: the core engines - net interest income up 8% and wealth up 13% - are working, and trading is volatile by nature; against $7.10 billion in the second quarter, a fall to $5.08 billion could be a single quarter and not a trend. The other: adjusted expense is growing at more than twice the pace of revenue, management itself talks (according to the transcript) about a return to operating leverage only in the fourth quarter, and the capital ratio fell to 10.9% while the bank returned $8.3 billion to shareholders. Both readings fit the same numbers, and the market, which opened 7.7% below the prior close and narrowed part of the drop during the day, looks like it is weighing both.
(To be clear: this is my personal opinion only. Nothing here is a recommendation to take any action, and there is no forecast here of the price of any security.)
Ilan Abramov, the author, or anyone on his behalf may hold some of the securities or funds mentioned in this article.
