Bank of America Q3 2026: $6.9B profit, a $1.2B AML penalty, CET1 10.9%

Bank of America’s third-quarter 2026 earnings came in at $6.9 billion, or $0.91 per diluted share, on revenue of $30.0 billion, up 3%. The number that pulled the headline down was not in the businesses: the results include a $1.2 billion regulatory settlement charge for civil money penalties under anti-money-laundering consent orders announced the day before. Excluding it, the bank (NYSE: BAC) reports adjusted net income of $8.1 billion and adjusted EPS of $1.08.

The more informative line is what Bank of America did with its capital while taking that charge. It returned $8.3 billion to shareholders, including $6.0 billion of share repurchases, more than the $6.5 billion of net income it earned for common shareholders in the quarter, and its main capital ratio fell three-tenths of a point. Bank-specific terms are defined as they come up.

Bank of America Q3 2026 results at a glance

	3Q26	2Q26	3Q25
Total revenue, net of interest expense	$29,958M	$31,558M	$29,040M
Net interest income	$16,449M	$15,997M	$15,233M
Noninterest income	$13,509M	$15,561M	$13,807M
Noninterest expense	$19,722M	$18,627M	$17,337M
Provision for credit losses	$1,269M	$1,366M	$1,295M
Net charge-offs	$1,349M	$1,412M	$1,367M
Net income	$6,933M	$9,074M	$8,332M
Diluted EPS	$0.91	$1.21	$1.04
ROTCE	12.60%	17.03%	15.29%
Efficiency ratio	65.83%	59.02%	59.70%
CET1 ratio (Standardized)	10.9%	11.2%	11.6%

ROTCE — return on average tangible common shareholders’ equity — measures profit against the equity base after stripping out goodwill and intangibles; the company reports it as a non-GAAP measure. The efficiency ratio is noninterest expense divided by revenue — lower is more efficient.

Against the year-ago quarter, revenue rose $0.9 billion, but reported expense rose $2.4 billion, so net income fell 17% and EPS 13% (our arithmetic). Half of the expense increase is the settlement charge; even excluding it, the release puts adjusted noninterest expense at $18.5 billion, up 7%, against revenue growth of 3%. On the adjusted figures, net income of $8.1 billion was still slightly below the $8.3 billion of a year ago, yet adjusted EPS of $1.08 was above the year-ago $1.04, because the average diluted share count fell about 5%, from 7,627.1 million to 7,222.2 million (our arithmetic).

For the first nine months of 2026, net income was $24,591 million against $22,862 million a year earlier, up about 8% (our arithmetic), and diluted EPS was $3.23 against $2.84.

Did Bank of America issue guidance for Q3 2026?

No — Bank of America issued no quarterly revenue or earnings guidance for the third quarter in the results release (Exhibit 99.1) or presentation (Exhibit 99.2) it filed with its July 14, 2026 8-K, so the quarter can be judged only against the year-ago quarter. On that basis revenue rose 3% to $29,958 million, while net income fell 17% to $6,933 million and diluted EPS fell 13% to $0.91 (our arithmetic), with the $1.2 billion settlement charge accounting for $0.17 of EPS.

What was the $1.2 billion charge?

Per the release, on October 13, 2026 the Office of the Comptroller of the Currency (OCC) and the Financial Crimes Enforcement Network (FinCEN) announced that Bank of America had consented to orders “related to certain aspects of its U.S. Bank Secrecy Act and Anti-Money Laundering and Economic Sanctions Compliance Programs.” The Bank Secrecy Act is the US law that requires banks to monitor and report suspicious transactions; a consent order is an enforcement action the bank agrees to without a trial.

The bank recorded $1.2 billion of noninterest expense to accrue for the civil money penalties resulting from those orders. Two details matter for reading the quarter:

• It is not tax-deductible. The full $1.2 billion came straight off net income, which is why the effective tax rate was about 23% rather than the adjusted 20%. It reduced EPS by $0.17, ROE by 1.73 points and ROTCE by 2.31 points, per the release’s reconciliation.
• It sits in All Other, the unit that holds asset-liability management and expenses not allocated to a segment. All Other’s net loss was $1,353 million; excluding the charge, the adjusted net loss was $153 million. In the supplement, the “other general operating” expense line roughly doubled from the second quarter, to $2,333 million from $1,166 million.

The release’s risk factors list the consent orders among the matters that could bring “potential judgments, orders, settlements, penalties, fines and reputational damage.” The filing does not quantify any further cost of complying with the orders.

Net interest income: up 8%, with the yield rising

Net interest income (NII) — interest earned on loans and securities minus interest paid on deposits and borrowings — was $16.4 billion, up 8% from a year ago and up $452 million from the second quarter. The company attributes the year-over-year rise primarily to higher loan and deposit balances, higher NII related to Global Markets activity and fixed-rate asset repricing — older, lower-yielding loans and securities maturing and being replaced at higher rates. The sequential rise was driven primarily by one additional day of interest accrual, fixed-rate asset repricing, higher Global Markets NII and loan growth.

Net interest yield — NII as a share of average earning assets, on a fully taxable-equivalent (FTE) basis — rose to 2.16%, up 15 basis points from a year ago and 8 from June. FTE grosses up tax-exempt income to a taxable equivalent; it added $161 million this quarter, taking NII to $16.6 billion on that basis.

As at JPMorgan, the trading desk is now a meaningful piece of the NII story. The presentation splits it out: Global Markets NII was $2.0 billion against $1.5 billion a year ago, and NII excluding Global Markets was $14.6 billion against $13.9 billion on a fully taxable-equivalent basis — roughly 5% growth on the core banking book (our arithmetic), a slower pace than the 8% headline. Excluding Global Markets, the net interest yield was 2.65%, up 17 basis points.

The balance sheet behind it:

• Loans grew; deposits barely moved. Average loans and leases were $1.23 trillion, up 6%, and period-end loans reached $1,251.3 billion, up $34 billion, or 3%, in the quarter. Average deposits were $2.02 trillion, up 2% from a year ago and flat sequentially.
• The growth is commercial. Average commercial loans were $738 billion against $680 billion a year ago, while consumer loans were $488 billion against $473 billion. Moynihan’s statement: “While investment banking and sales and trading revenues were lower, commercial lending grew in every client segment.”
• Rate sensitivity. The presentation estimates that a parallel shift of the September 30 forward curve 100 basis points higher would add about $1.4 billion of NII over the next 12 months, and 100 basis points lower would reduce it by about $1.9 billion.

Unlike JPMorgan’s presentation, the materials Bank of America filed with the SEC do not include a numeric NII forecast for the fourth quarter.

Fees: wealth up, Wall Street down

Noninterest income fell 2% to $13.5 billion, and the mix moved in opposite directions:

• Asset management fees rose to $4,630 million from $3,972 million a year ago. Chief financial officer Alastair Borthwick said in the release that asset management fees “rose 17%.”
• Investment banking fees fell 11% to $1,799 million from $2,013 million, and from $2,138 million in the second quarter. The presentation says investment banking pipelines “remain robust”; year-to-date fees of $5.8 billion are up 16%.
• Sales and trading revenue fell 5% to $5,075 million. FICC — fixed income, currencies and commodities — fell 17% to $2,565 million, driven primarily by mortgages, municipals and credit, per the company. Equities rose 11% to $2,510 million on increased client financing activity, particularly in Asia and the US, a record third quarter for the business. Year-to-date sales and trading revenue of $18.6 billion is a record, per the presentation.

Against the second quarter, sales and trading revenue fell about $2.0 billion from $7,098 million, close to the $2.1 billion sequential drop in noninterest income (our arithmetic); part of trading revenue is booked as NII, so the two are not a one-for-one match.

Credit: charge-offs down, a small reserve release

A net charge-off (NCO) is a loan written off as uncollectible, less recoveries; a reserve release means the bank reduced the allowance it holds for expected future losses. This quarter’s $1,269 million provision was $1,349 million of charge-offs minus an $80 million net reserve release.

• Realized losses edged lower. The NCO ratio was 0.44%, down from 0.47% in both the year-ago and the second quarter. The credit card charge-off rate was 3.22%, against 3.46% a year ago and 3.55% in June, and both early- and late-stage card delinquency rates improved year over year for the sixth consecutive quarter.
• Commercial risk is shrinking. Commercial net charge-offs were $352 million, down $37 million from a year ago. Reservable criticized utilized exposure — drawn commercial loans the bank has internally flagged as weaker — fell to $19.9 billion from $26.3 billion a year ago; the presentation says the 2.49% rate is the lowest since the fourth quarter of 2019.
• The allowance kept drifting down. The allowance for loan and lease losses was $13.0 billion, or 1.04% of loans, against 1.14% a year ago. Nonperforming loans were $5.5 billion, up $197 million from a year ago and down $207 million from June.

On these figures, credit is not a stress story (our reading). The contrast with JPMorgan, which built Wholesale reserves this quarter, is worth noting, but the two banks’ loan books and reserve methods differ.

The capital story: $8.3 billion out, CET1 down to 10.9%

CET1 — common equity Tier 1 — is the regulators’ core measure of a bank’s loss-absorbing capital, expressed as a share of risk-weighted assets (RWA), which weight each exposure by its riskiness.

The Standardized CET1 ratio was 10.9% at September 30 (preliminary), down from 11.2% in June — about 37 basis points on the unrounded capital and RWA figures (our arithmetic) — and against 11.6% a year ago; the Advanced approaches ratio was 12.0%. Both sides of the ratio moved against it in the quarter:

• The numerator fell. CET1 capital declined $3.2 billion, to $198.4 billion from $201.6 billion.
• The denominator grew. Standardized RWA rose $32 billion, to $1,824 billion, as loans grew.

What came out of capital:

• $6.0 billion of common stock repurchases and $2.2 billion of common dividends, $8.3 billion in total per the release. Against net income applicable to common shareholders of $6,541 million, that is a payout of roughly 127% for the quarter (our arithmetic, on the rounded totals). Even against adjusted net income applicable to common of $7.7 billion, distributions exceeded earnings.
• The dividend rose to $0.32 a share from $0.28 in the second quarter, about 14% higher (our arithmetic).
• The share count kept falling. Common shares outstanding were 6,922.7 million at September 30, against 7,018.0 million in June and 7,329.4 million a year earlier — about 1.4% fewer in the quarter and about 5.5% fewer in a year (our arithmetic).

AOCI — accumulated other comprehensive income, the equity account that captures unrealized gains and losses on certain securities and hedges — moved too: it went to a $15,270 million loss from $12,033 million in June, a $3.2 billion decline (our arithmetic). Not all of it reaches CET1. The supplement’s capital composition table adds back accumulated losses on certain cash flow hedges, and that add-back grew to $4,894 million from $3,413 million. The filing does not provide a quarter-on-quarter CET1 walk, so we do not attribute the decline among earnings, distributions, AOCI and RWA.

Book value per common share was $39.26, up 4% from a year ago but slightly below $39.34 in June; tangible book value per share was $29.14, against $29.37 in June. Borthwick’s summary, quoted from the release: “Asset quality continued to improve and liquidity and capital remained strong. This helped enable us to invest for growth and return $8.3 billion to shareholders through common stock dividends and share repurchases.”

The release notes that the bank’s binding constraint at September 30 was the Total capital ratio under the Standardized approach (14.2%), not CET1, and calls the CET1 ratio “well above the regulatory minimum.” The supplementary leverage ratio was 5.5%, unchanged from June.

The contrast with yesterday’s JPMorgan report is the clearest read-across. JPMorgan cut net buybacks to $664 million (gross repurchases of $1,057 million) as its CET1 ratio fell to 13.9%; Bank of America kept repurchasing at $6.0 billion gross with its CET1 ratio at 10.9% (see our JPMorgan Chase Q3 2026 analysis). The two ratios are not directly comparable — each bank’s regulatory requirement differs — but the two banks made opposite choices on pace in the same quarter (our reading).

The segments: where the earnings came from

All four segments are reported on an FTE basis; the settlement charge sits outside them.

Consumer Banking earned $3.5 billion, up 2% (our arithmetic), on revenue of $11.6 billion, up 4%, driven primarily by higher NII, for a 31% return on average allocated capital. Average deposits were $949 billion, roughly flat; average credit card loans were $106 billion, up 5%; and combined credit and debit card spend was $266 billion, up 8%. The bank added more than 200,000 net new consumer checking accounts. The rate paid on Consumer deposits was 0.51%, against 0.58% a year ago.

Global Wealth and Investment Management (GWIM) — Merrill and the Private Bank — earned $1.5 billion, up about 22% (our arithmetic), on revenue of $7.1 billion, up 13%. Client balances reached $5.1 trillion, up 9%, AUM flows were $20 billion in the quarter, and average loans rose 13% to $279 billion. Pretax margin improved to 29%.

Global Banking earned $2.0 billion, down from $2.1 billion, on flat revenue of $6.2 billion: higher NII and a 10% rise in treasury service charges offset lower investment banking fees. Average deposits rose 6% to $669 billion and average loans 8% to $419 billion.

Global Markets earned $1.2 billion, down from $1.6 billion, on revenue of $5.9 billion, down 6%. Expense rose 8%, so the segment’s efficiency ratio was 72% and its return on allocated capital 9%, against 13% a year ago.

On these figures, the two segments that grew profit — Consumer and wealth management — are the ones driven by deposits, card spending and market valuations, while the two that shrank depend on deal and trading activity (our reading).

What to watch in Q4

• Capital pace. Distributions exceeded common earnings this quarter and the CET1 ratio fell to 10.9% from 11.2%. Whether $6 billion-a-quarter repurchases continue depends on earnings, RWA growth and AOCI.
• Consent-order follow-through. The $1.2 billion accrual covers the civil money penalties. The filing does not quantify remediation or compliance costs, and the risk factors keep the orders on the list of open matters.
• Core NII. NII excluding Global Markets grew about 5%, slower than the 8% headline. The sequential gain included one extra day of interest.
• Operating leverage. Adjusted expense grew 7% against 3% revenue growth. A quarter with stronger fees, or slower expense growth, would show whether that gap closes.
• Card credit. The card charge-off rate fell to 3.22% as delinquencies improved for a sixth quarter; the next print shows whether the improvement holds into year-end.

Quick answers

How much did Bank of America earn in Q3 2026?

Net income was $6.9 billion, or $0.91 per diluted share, against $8.3 billion and $1.04 a year earlier. Excluding the $1.2 billion non-tax-deductible regulatory settlement charge, adjusted net income was $8.1 billion and adjusted EPS $1.08.

What was Bank of America’s regulatory settlement charge?

A $1.2 billion accrual for civil money penalties after the bank consented to OCC and FinCEN orders related to its Bank Secrecy Act, anti-money-laundering and economic sanctions compliance programs, announced on October 13, 2026. It is not tax-deductible and reduced EPS by $0.17.

How much stock did Bank of America buy back in Q3 2026?

$6.0 billion of common stock, alongside $2.2 billion of dividends, for $8.3 billion returned in total. The Standardized CET1 ratio fell to 10.9% from 11.2% in June.

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Sources and method. Company figures — the income statement and per-share data, the regulatory settlement charge and the adjusted (non-GAAP) figures with their reconciliation, NII on GAAP and FTE bases, net interest yield, fee and trading revenue, expense, credit metrics and allowances, balance-sheet and share-count data, regulatory capital ratios and RWA, AOCI and the capital composition table, distributions, book and tangible book value, segment results, and the Moynihan and Borthwick quotations — are Bank of America’s own disclosures in Exhibit 99.1 (press release), Exhibit 99.2 (presentation materials) and Exhibit 99.3 (supplemental information) to the Form 8-K filed 2026-10-14 (accession 0000070858-26-000481) for the quarter ended 2026-09-30, read directly from SEC EDGAR and linked above. NII excluding Global Markets, the rate-sensitivity estimates, the criticized-exposure rate and the record-revenue statements come from Exhibit 99.2. The current-period capital ratios are labelled preliminary by the company. JPMorgan figures cited for comparison come from JPMorgan’s own October 13 filing, as described in our linked analysis.

No consensus estimate is included. Whether the quarter beat or missed is judged only against the year-ago quarter, because Bank of America issued no quarterly guidance (its July 14, 2026 Form 8-K release and presentation, linked above, contain none). This piece makes no claim about the share-price reaction.

Our arithmetic, labelled as such: the ~37-basis-point CET1 decline computed from unrounded CET1 capital and RWA; the 17% and 13% year-over-year declines in net income and EPS; the ~5% decline in the average diluted share count; the ~8% nine-month net income growth; the ~5% growth in NII excluding Global Markets; the ~$2.0 billion sequential decline in sales and trading revenue; the ~127% quarterly payout on rounded totals; the ~14% dividend increase; the ~1.4% and ~5.5% declines in shares outstanding; the $3.2 billion AOCI decline; and the 2% and ~22% profit growth in Consumer Banking and GWIM. These are approximations built on the disclosed figures, not reported numbers. The interpretation — that the quarter’s most informative signal is capital return relative to earnings, that credit does not read as a stress story, and that the segment split reflects deposit- and valuation-driven businesses outgrowing deal- and trading-driven ones — is our analysis, not a company statement, and is not a forecast.

Related: Morgan Stanley Q3 2026, BlackRock Q3 2026 and Progressive Q3 2026, also reported that day, and yesterday’s JPMorgan Chase Q3 2026 and Goldman Sachs Q3 2026 for the peer-bank comparison.

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