Bank of America's net interest income grew by about the size of its $1.2 billion fine
Bank of America's third-quarter net income fell 17% to $6.93 billion after a $1.2 billion anti-money-laundering penalty. Excluding the fine, earnings per share rose 4% to $1.08, while net interest income grew by about $1.2 billion.
The Investor · Invest desk
Key figures: Bank of America's Q3 net interest income was $16.4 billion, against about $15.2 billion a year earlier. Q3 net income excluding the penalty was $8.1 billion; reported Q3 net income was $6.93 billion.
| Figure | Value | Note | Claim |
|---|---|---|---|
| Net interest income, Q3 | $16.4 billion | 6 | |
| NII a year earlier, about | $15.2 billion | 22 | |
| Q3 net income ex-penalty | $8.1 billion | 5 | |
| Q3 net income, reported | $6.93 billion | 2 |
What happened
- Revenue rose 3% to $30 billion, short of the roughly $30.6 billion analysts expected.
- Investment banking fees fell 11% to $1.8 billion, though that figure still beat analyst forecasts.
- The Comptroller of the Currency separately assessed a $750 million civil money penalty, the largest in the agency's history, credited inside a $1.21 billion total.
- Regulators said the bank failed to report in time more than $5 billion in suspicious transactions, over $1 billion of it tied to national security concerns.
Why it matters
- What it costs cost Treasury ordered outside parties to examine undetected suspicious transactions and independent assessments of monitoring and due-diligence programs, and the bank did not say what that work will cost beyond the fine.
- Who has to decide decision Treasury said the bank put revenue first while compliance resources stayed constrained, so the next budget shows whether the added interest income funds remediation or growth.
- Who's exposed exposure Yahoo Finance ties the lending income to sharply rising borrowing costs, so a reversal in rates is the first risk to the line that offset the penalty.
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Bank of America's $1.21 billion fine gives crypto critics a comparison with Zhao's four months in prisonConfirmed4 publishers
Net interest income grew by about as much as the fine cost. It rose 8% to $16.4 billion on higher loan and deposit balances [6], so the year-earlier figure was near $15.2 billion and the gain about $1.2 billion [22]. The FinCEN penalty, the third-largest in Treasury history, was $1.2 billion [10].
"While investment banking and sales and trading revenues were lower, commercial lending grew in every client segment," Bank of America CEO Brian Moynihan said in a statement with the release [9]. Add up the weaker lines and the drop is small next to the lending gain. Investment banking fees plus fixed income and equities trading came to $6.9 billion, against about $7.4 billion a year earlier once the reported percentage changes are backed out [23]. The decline is roughly $0.5 billion.
The 4% per-share gain is thinner than it looks. Net income excluding the penalty was $8.1 billion [5], about 2% below the $8.3 billion of a year earlier [21], yet earnings per share went from $1.04 [3] to $1.08 [5]. Dividing through gives roughly 7.5 billion shares now against about 8.0 billion then, a fall of 5% to 6% on rounded figures [25].
Against expectations, $1.08 is two cents under the $1.10 analysts expected [24]. Regulators announced the penalties on Tuesday afternoon and the bank reported on Wednesday [17], so that consensus may predate the fine. Shares fell roughly 2% after hours on Tuesday when Treasury released the enforcement actions [15] and more than 3% in premarket trading on Wednesday [14].
The penalty may not end the matter. Regulators said the bank had been under a December 2024 cease-and-desist order and that significant problems persisted [19], and the bank said it has devoted significant resources to compliance and intends to see remediation through to completion [13]. Still, we think the fine is the smaller number in these results, since one year of added interest income covers it and the weaker lines give back about 42% of that income [26]. We would be wrong if net interest income stops growing from $16.4 billion before the remediation bill is known, or if the outside examination turns up suspicious activity regulators have not yet cited.
What to watch
- Bank of America's next quarterly report: any disclosed remediation cost, set against the roughly $1.2 billion of added net interest income.
- Findings from the outside examination of undetected suspicious transactions and the independent assessments Treasury required.
- Net interest income against the $16.4 billion base, and whether investment banking fees recover from $1.8 billion.
Information, not investment advice. This story is general information about companies and markets, drawn from cited reporting. It is not a recommendation to buy, sell or hold any security; check the cited sources before acting.
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- [1]
Revenue rose 3% to $30 billion, compared with expectations of roughly $30.6 billion.
- [2]
Bank of America reported Q3 net income of $6.93 billion, or $0.91 per share, compared with the $1.10 per share analysts expected.
- [3]
Q3 net income was $6.9 billion, or 91 cents per diluted share, down from $8.3 billion, or $1.04 per share, in the same period a year earlier.
- [4]
Bank of America's third-quarter profit fell 17% from a year earlier amid a $1.2 billion regulatory penalty.
- [5]
Excluding the regulatory penalty, Bank of America earned $8.1 billion, or $1.08 per share, with adjusted earnings per share rising 4% from a year earlier.
- [6]
Net interest income rose 8% from a year earlier to $16.4 billion, supported by higher loan and deposit balances.
- [7]
Investment banking fees fell 11% from a year earlier to $1.8 billion, still surpassing analyst forecasts.
- [8]
Fixed income trading revenue fell 17% from a year ago to $2.6 billion, offsetting an 11% increase in equities trading revenue to $2.5 billion.
- [9]
"While investment banking and sales and trading revenues were lower, commercial lending grew in every client segment," Bank of America CEO Brian Moynihan said in a statement with the release.
- [10]
Treasury's Financial Crimes Enforcement Network assessed a $1.2 billion penalty, the third-largest in Treasury history, for the bank's failure to mitigate and report priority national security risks.
- [11]
The Office of the Comptroller of the Currency separately assessed a $750 million civil money penalty, the largest in the agency's history, credited as part of the $1.21 billion total.
- [12]
Treasury said the bank must bring in outside parties to examine undetected suspicious transactions and commission independent assessments of its transaction-monitoring and customer due-diligence programs.
- [13]
Bank of America said in a statement that it has devoted significant resources to compliance efforts and intends to see the remediation process through to completion.
- [14]
Bank of America's stock fell more than 3% in premarket trading on Wednesday.
- [15]
Shares of Bank of America fell roughly 2% in after-hours trading on Tuesday after the Treasury Department released its enforcement actions.
- [16]
America's biggest banks have navigated sharply rising borrowing costs, which has supported higher lending income while complicating their Wall Street earnings machines.
- [17]
US regulators charged the bank $1.2 billion in fines on Tuesday afternoon, and the bank reported its third-quarter results on Wednesday.
- [18]
According to regulators, the bank failed to timely report more than $5 billion in suspicious transactions, and more than $1 billion of that total involved activity tied to national security concerns.
- [19]
Regulators said Bank of America had been under a December 2024 cease-and-desist order requiring it to fix its anti-money-laundering deficiencies, but significant problems persisted.
- [20]
Treasury said the bank prioritized its revenues while keeping compliance resources constrained.
- [21]
Net income excluding the penalty ($8.1 billion) was about 2% below the $8.3 billion reported a year earlier.
- [22]
Year-earlier net interest income was about $15.2 billion, so the year-over-year gain was about $1.2 billion.
- [23]
Investment banking fees, fixed income and equities trading revenue together were $6.9 billion, against about $7.4 billion a year earlier, a decline of roughly $0.5 billion.
- [24]
Ex-penalty earnings per share of $1.08 were two cents below the $1.10 analysts expected.
- [25]
Implied share count fell roughly 5% to 6% from a year earlier, from about 8.0 billion to between 7.5 and 7.6 billion, on rounded figures.
- [26]
The roughly $0.5 billion decline in investment banking and trading revenue equals about 42% of the roughly $1.2 billion gain in net interest income.
Sources
3 independent publishers whose own reporting we read for this story.
- finance.yahoo.comBank of America profit tumble 17% as fines, Wall Street slowdown dent lending income
2 articles · October 14, 2026
- qz.comBank of America posted sharply lower profit after a $1.2 billion Treasury penalty
1 article · October 14, 2026
- seekingalpha.comBank of America: Huge Fine Makes Shares Slump
1 article · October 14, 2026
Topics and entities
Topics
- Bank earnings
- Anti-money-laundering enforcement