01—Abstract
Summary
Summary of the 8-K filed October 14, 2026. Cited figures are marked; the original filing is the authoritative source.
Bank of America reported third-quarter 2026 net income of $6.9 billiona, or $0.91 per diluted share, versus $8.3 billion, or $1.04, a year earlier.
The results include a non-tax-deductible $1.2 billionb regulatory settlement charge ($0.17 per share) tied to consent orders with the OCC and FinCEN over Bank Secrecy Act and anti-money laundering compliance. Excluding that charge, adjusted net income was $8.1 billion and adjusted EPS was $1.08. Revenue rose 3% year over year to $30.0 billion, driven by net interest income up 8% to $16.4 billion and asset management fees up 16%, partly offset by lower sales and trading and investment banking revenue.
Adjusted noninterest expense was $18.5 billionc, and the adjusted efficiency ratio was 62% versus a reported 66%. Credit quality remained stable to improving. The provision for credit losses was $1.3 billion, flat year over year, and net charge-offs fell to $1.3 billion from $1.4 billion.
The net charge-off ratio was 0.44%, and the credit card charge-off rate improved to 3.22% from 3.46%. Average loans grew 6% sequentially and 8% year over year, and average deposits rose 2%. The CET1 ratio (Standardized) was 10.9%, down from 11.6% a year earlier, and the company returned $8.3 billiond to shareholders, including $6.0 billion in buybacks.
Book value per share rose 4% to $39.26 and tangible book value per share rose 3% to $29.14. The filing is a Form 8-K furnishing earnings materials. The main investor takeaways are the underlying strength of net interest income and wealth management, the one-time nature of the compliance charge, and the lower trading and investment banking revenue, which Global Markets management attributed partly to moderated capital markets activity.
Management also noted robust investment banking pipelines. The figures are preliminary, and regulatory capital ratios as of September 30, 2026 are subject to revision.
02—Key points
Key Highlights
- Reported net income of $6.9 billion and diluted EPS of $0.91, down from $8.3 billion and $1.04 a year earlier, due to a $1.2 billion ($0.17/share) non-tax-deductible regulatory settlement charge
- Adjusted net income of $8.1 billion and adjusted EPS of $1.08 excluding the charge; adjusted ROTCE of 14.9% and adjusted efficiency ratio of 62%
- Revenue up 3% YoY to $30.0 billion, with net interest income up 8% to $16.4 billion and net interest yield up 15 bps to 2.16%
- Asset management fees rose 16% to $4.5 billion in GWIM, and client balances reached $5.1 trillion, up 9%
- Credit quality improved: net charge-off ratio of 0.44% (down 3 bps YoY), credit card charge-off rate of 3.22%, and a net reserve release of $80 million
- Sales and trading revenue fell 5% to $5.1 billion and investment banking fees (excluding self-led) fell 11% to $1.8 billion, reflecting moderated capital markets activity
- Capital returned to shareholders totaled $8.3 billion, including $6.0 billion in buybacks; CET1 ratio was 10.9% (Standardized), down from 11.6% a year earlier
03—Questions
Frequently Asked Questions
What caused the drop in reported earnings compared with last year?
The $1.2 billion regulatory settlement charge, recorded in noninterest expense, accrued civil money penalties tied to consent orders with the OCC and FinCEN over certain aspects of the Bank Secrecy Act and anti-money laundering and sanctions compliance programs. The charge is non-tax-deductible and reduced EPS by $0.17. Excluding it, adjusted EPS was $1.08, slightly above the $1.04 reported a year earlier.
Is the regulatory settlement charge a one-time event?
The filing presents the charge as a single-period item for 3Q26 and excludes it from adjusted metrics. However, the filing does not say whether further penalties or remediation costs will follow, and the risk factors reference ongoing regulatory matters, so investors should watch for future disclosures.
How healthy is the bank's capital position after the quarter?
The CET1 ratio under the Standardized approach was 10.9%, down from 11.2% in 2Q26 and 11.6% a year earlier, and it remains well above the regulatory minimum. The decline reflects higher risk-weighted assets (up $32 billion sequentially) and heavy shareholder returns. The ratios are preliminary. The binding constraint is the Standardized total capital ratio, which was 14.2%.
Why did trading and investment banking revenue decline?
Global Markets sales and trading revenue fell 5% to $5.1 billion, with FICC down 17% on weaker mortgages, municipals and credit, while equities rose 11%. Investment banking fees excluding self-led deals fell 11% to $1.8 billion. Management said capital markets activity moderated, though it cited robust investment banking pipelines heading into the next quarter.
Are credit trends a concern for investors?
Credit trends were stable to improving. Net charge-offs fell to $1.3 billion from $1.4 billion a year earlier, nonperforming loans declined sequentially to $5.5 billion, and commercial reservable criticized exposure dropped $6.4 billion year over year. The allowance for loan and lease losses was 1.04% of loans, down from 1.14%, which means reserve coverage has thinned somewhat even as losses improved.
04—Continue