Overview
Bank of America
BAC · NYSEQ3 2026Financials · Banking
Since the Report − 1.5%
Revenue grew 3.2% year over year, EPS missed the estimate by 1.8%; the stock fell 4.8% in its first reaction.
- RevenueQ3
- $29.96B
- Estimate $30.58B · 2.0% Below
- EPS Ex-FineGAAP $0.91
- $1.08
- Estimate $1.10 · 1.8% Below
Verdict
SELLBank of America's revenue came in 2.0% below expectations, and EPS excluding the fine missed the $1.10 estimate by 1.8%; score 44, verdict sell. The stock closed 4.8% lower on a $1.2 billion regulatory penalty and a 5.8% drop in markets revenue. The number to watch next is whether fourth-quarter net interest income clears $16.6 billion.
Close on Report DayOct 14
$51.39▼ 4.8%Report-Day Move
- Market Cap(Today)
- ≈ $350 B
- 1Y Return(At Report)
- + 2%
- P/E(At Today's Price · $4.38 · Trailing 12M)
- 11.6
- PEG(Next-year Estimate)
- 0.80
- Net Margin(Trailing 12M)
- 30.2%
Earnings Summary
In 30 Seconds- Revenue of $29.96 billion missed by 2.0%, and EPS excluding the fine of $1.08 missed by 1.8%.
- Net interest income grew 8%; management expects about 8% growth in 2026 and at least 8% in 2027.
- The stock closed 4.8% lower on a $1.2 billion regulatory penalty and weak markets revenue.
The Numbers
Net Interest Income (NII)
$16.45B
▲ 8% YoY · Yield 2.16%
Stock Reaction
−4.8%
Close to Close · Intraday Low −8.7%
Regulatory Penalty
$1.2B
EPS Impact $0.17 · Not Tax-Deductible
CET1 Ratio
10.9%
Q2 11.2% · Q3 25 11.6% · Down 0.7 Points
Quarterly Revenue ($ Billion)
29.04
Q3 25 · $29.0 B
28.37
Q4 25 · $28.4 B · QoQ − 2.3%
30.27
Q1 26 · $30.3 B · QoQ + 6.7%
31.56
Q2 26 · $31.6 B · QoQ + 4.2%
29.96
Q3 26 · $30.0 B · QoQ − 5.1% · YoY + 3.2%
- Q3 25
- Q4 25
- Q1 26
- Q2 26
- Q3 26
Q4 2026 Company Guidance
- Full-Year NII Growth8%
About 8% · Prior Outlook 8%In Line ✓
- 2027 NII Growth8%
At Least 8% · Assumes Three Rate Hikes
Segment and KPI Data
Revenue by Segment
- Consumer Banking$11.6 BShare 37.6%▲ 3.6% YoY
Net income $3.52B
- Global Wealth & Investment Management$7.12 BShare 23.1%▲ 12.8% YoY
Net income up 21.7%
- Global Banking$6.21 BShare 20.2%▲ 0.3% YoY
Net income down 4.6%
- Global Markets$5.87 BShare 19.1%▼ 5.8% YoY
Net income down 25.1%
Key Metrics
Investment Banking Fees
$1.80 B
▼ 11.0% YoYPress Release
Equities Trading Revenue
$2.50 B
▲ 11.0% YoYPress Release
Fixed Income Trading Revenue
$2.60 B
▼ 17.0% YoYPress Release
Provision for Credit Losses
$1.27 B
▼ 2.0% YoYPress Release
Average Loans
$1.23 T
▲ 6.0% YoYPress Release
Average Deposits
$2.02 T
▲ 2.0% YoYPress Release
Net Charge-Off Ratio
0.4%
Press Release
Share Repurchases
$6.00 B
Press Release
Shares are computed over the segment total: $30.8 B. The segment total differs from consolidated revenue ($30.0 B); the company's eliminations and other lines are not in this table. Source: Press Release.
Metrics come only from the company's own filings; each one names the document it was taken from.
“The team delivered organic growth, deepening client relationships and adding new ones. While investment banking and sales and trading revenues were lower, commercial lending grew in every client segment. Our momentum, reflected in growth in client deposits, wealth flows and consumer activity, supported solid earnings, balance-sheet growth and long-term shareholder value.”
- Diversified Business Model
- 2027 NII Growth of 8% or More
- Compliance Fine Seen As One-time
Summary and Review
Summary
Bank of America reported third-quarter revenue of $29.96 billion. The market expected $30.58 billion; the gap is 2.0%, so the revenue gate is closed. EPS excluding the fine was $1.08, 1.8% below the $1.10 estimate; the earnings gate is in line. The full-year net interest income growth outlook of about 8% was kept; the guidance gate is in line too. One closed and two in-line gates map to the sell band; score 44.
The stock closed 4.8% lower at $51.39 from a prior close of $53.96. The intraday low was $49.26, an 8.7% loss. The main weight is a $1.2 billion penalty over anti-money-laundering compliance gaps. The fine is not tax-deductible and cut EPS by $0.17. The market did not read this report as a growth story; it read it as a compliance and capital story.
The core of the quarter is sound. Net interest income rose 8% to $16.45 billion, and loans grew for a tenth straight quarter. Wealth management revenue rose 12.8%. But markets revenue fell 5.8% and investment banking fees dropped 11%. The CET1 ratio fell 0.7 points in a year to 10.9%. Even excluding the fine, revenue and earnings missed; that keeps the score in the upper half of the sell band at 44.
Full Review
Earnings missed even excluding the fine.
GAAP EPS was $0.91. The restated year-ago figure was $1.04, a 12.5% decline. Most of the gap comes from a $1.2 billion regulatory penalty. The fine relates to gaps in anti-money-laundering and sanctions compliance. Because it is not tax-deductible, the per-share hit is $0.17. EPS excluding the fine was $1.08, still 1.8% below expectations. Noninterest expense rose 13.8% to $19.72 billion. Excluding the fine, expense was $18.5 billion, still up about 7%. Credit is not the problem. The provision for credit losses fell 2% from a year ago to $1.27 billion. The net charge-off ratio eased from 0.47% to 0.44%. For how to read earnings-day numbers, see the earnings day guide.
The interest income engine keeps running.
Net interest income rose 8% year over year to $16.45 billion. On a fully taxable-equivalent basis the figure was $16.61 billion. Net interest yield was 2.16%, versus 2.08% last quarter and 2.01% a year ago. Average loans grew 6% to $1.23 trillion. Average deposits rose only 2% to $2.02 trillion. CFO Alastair Borthwick kept the full-year growth outlook at about 8%. He also gave a first signal for 2027: growth of at least 8%. That assumes three rate hikes, in December, March and June. A 100-basis-point rise in rates adds $1.4 billion of annual net interest income. A move of the same size lower costs $1.9 billion. For the link between rates and bank profits, see the rates and bonds guide.
Markets and investment banking were weak.
Global Markets revenue fell 5.8% to $5.87 billion. The segment's net income dropped 25.1%. Sales and trading revenue fell 5% to $5.1 billion. Fixed income, currencies and commodities dropped 17% to $2.6 billion. Equities rose 11% to $2.5 billion, the bank's best third quarter. Investment banking fees fell 11% to $1.8 billion. For comparison, JPMorgan reported a 49% jump in equities trading yesterday. Bank of America captured less of that wave. Moynihan summed it up on the call in one line: the third quarter showed the importance of a diversified company. In other words, the other businesses offset the weak ones, but not by enough to beat expectations.
The capital buffer is getting thinner.
The standardized CET1 ratio fell to 10.9%. It was 11.2% last quarter and 11.6% a year ago, a 0.7-point annual decline. The bank bought back $6.0 billion of stock in the quarter and paid $2.2 billion in dividends. Total capital returned was $8.3 billion. Book value per share is $39.26, and tangible book value is $29.14. Average diluted shares fell 5.3% in a year to 7.22 billion. The quarterly dividend is $0.32, up 14% from $0.28 a year ago. Management does not guide on buybacks and gives no CET1 target. Final capital rules are expected in the fourth quarter. With a thinner buffer, keeping buybacks at this pace may get harder. The mechanics are explained in the share buyback guide.
The threshold that changes the story: $16.6 billion.
Management expects fourth-quarter net interest income to rise from the third quarter. It gave no dollar figure. Borthwick also said the bank will return to operating leverage in the fourth quarter, meaning revenue growing faster than expenses. The 200-300 basis-point operating leverage target is unchanged. Keep the rule simple. In January, taxable-equivalent net interest income needs to clear $16.6 billion. If it does, the 2027 target of at least 8% stays credible. If expense growth also trails revenue growth that quarter, the fine stays a one-time hit. If net interest income stalls and CET1 drops below 10.9%, the story shifts from growth to capital protection. If the Fed does not hike in December, the 2027 assumption fails its first test.
Looking Ahead
Strengths and Risks
6 Strengths · 6 RisksStrengths
6- Net interest income rose 8% to $16.45 billion, and net interest yield climbed to 2.16%.
- Wealth and investment management revenue rose 12.8% to $7.12 billionSegment net income grew 21.7%.
- Equities trading revenue rose 11% to $2.5 billion, the best third quarter on record.
- The net charge-off ratio eased to 0.44% from 0.47% both a year ago and last quarter.
- Management expects net interest income to grow at least 8% in 2027.
- The bank repurchased $6.0 billion of stock, and the share count fell 5.3% in a year.
Risks
6- Revenue came in 2.0% below the $30.58 billion estimate.
- The $1.2 billion regulatory penalty is not tax-deductible and cut EPS by $0.17.
- Noninterest expense rose 13.8%Even excluding the fine, growth was about 7%.
- Fixed income trading fell 17% and investment banking fees dropped 11%.
- The CET1 ratio fell 0.7 points in a year to 10.9%.
- The 2027 net interest income outlook assumes three rate hikesLower rates would reverse the effect.
What to Watch
4- January 15, 2027Fourth-quarter earnings; whether net interest income clears $16.6 billion.
- Fourth quarter — final capital rules and their effect on buyback pace.
- Fourth quarter — management's 2027 expense and operating leverage guidance.
- December 2026Fed decision; the company's 2027 outlook assumes a rate hike at this meeting.
Upcoming Earnings
To Understand This