Bank of America (NYSE:BAC) reported third-quarter net income of $6.9 billion, or 91 cents a share, including a $1.2 billion non-tax-deductible regulatory settlement charge tied to anti-money-laundering matters. Excluding the charge, the bank said adjusted net income was $8.1 billion, or about $1.08 per share, up from a year earlier.
Chair and CEO Brian Moynihan said the results reflected the benefits of the company’s diversified business model. Consumer banking, wealth management and commercial banking produced growth in loans, deposits, net interest income and client flows, while sales and trading and investment-banking revenue declined from prior-year levels.
Net Interest Income and Balance-Sheet Growth
Revenue was approximately $30 billion, up about 3% from a year earlier, according to Chief Financial Officer Alastair Borthwick. Net interest income, measured on a fully taxable-equivalent basis, rose 8% year over year to $16.6 billion and increased $450 million from the second quarter.
Net interest yield improved to 2.16%, up 15 basis points from a year earlier and 8 basis points sequentially. Borthwick said the company remained on track to achieve about 8% full-year net interest income growth in 2026 and now expects 2027 growth of 8% or more.
The 2027 outlook assumes three 25-basis-point interest-rate increases through June 2027, but Borthwick said the outlook is not solely dependent on rates. He cited continued loan and deposit growth, slowing deposit-pricing rotation and the repricing of fixed-rate assets, including auto loans, residential mortgages, mortgage-backed securities and cash-flow swaps.
Quarter-end loans rose $34 billion from the second quarter to $1.25 trillion, marking the company’s 10th consecutive quarter of loan growth. Ending deposits increased $14 billion sequentially and remained above $2 trillion. Bank of America funded loan growth partly by reducing securities balances and short-term wholesale funding, actions Borthwick said supported the improvement in net interest yield.
- Commercial loans increased 8% year over year, with growth across small business, business banking, global commercial banking and global corporate and investment banking.
- Card balances rose nearly 5% year over year.
- Wealth-management securities-based lending increased 21%.
- Global liquidity sources totaled $914 billion, while the CET1 capital ratio was 10.9%.
Regulatory Settlement and Capital Returns
Moynihan said the company had reached a settlement with regulators related to compliance and financial-crime controls. He said Bank of America had invested billions of dollars in technology and dedicated thousands of employees to the remediation effort. The ongoing remediation costs are embedded in the company’s expense base, he said.
During the analyst question-and-answer session, Borthwick said the consent order does not include an asset cap and should not constrain normal business operations or affect clients. Moynihan said the settlement resolved the penalty associated with a 2024 cease-and-desist order and that management has clarity on the remaining remediation requirements.
Expenses totaled $19.7 billion, including the settlement charge. Excluding that item, adjusted expenses were slightly more than $18.5 billion, down nearly $100 million from the second quarter and up just under 7% from a year earlier. The company expects to return to positive operating leverage in the fourth quarter.
Bank of America returned $8.3 billion to shareholders during the quarter through dividends and share repurchases. That included $6 billion of stock repurchases. Borthwick said the company’s capital-management priorities remained supporting client growth, meeting regulatory minimums, paying the dividend and returning remaining capital to shareholders, while noting that the bank is awaiting final capital rules.
Consumer, Wealth and Commercial Banking Strength
The consumer banking unit generated revenue of $11.6 billion, up about 4% year over year, and net income of $3.5 billion, up about 2%. The bank added 200,000 net new core consumer checking accounts during the quarter, bringing total checking customers to 39 million. It also opened more than 1 million new card accounts.
Consumer deposits averaged about $949 billion, while consumer investment assets reached $664 billion, supported by market gains and roughly $18 billion of net flows over the past year. Digital adoption also continued to expand, with more than 50 million active users and 71% of consumer sales originating through digital channels.
Wealth management revenue rose about 13% to $7.1 billion, while net income increased 22% to more than $1.5 billion. Client balances exceeded $5 trillion for the first time, and assets under management rose 12% to about $2.4 trillion. The business generated approximately $38 billion in quarterly net client flows, including about $20 billion in asset-management flows.
Global banking revenue was relatively flat at $6.2 billion, while net income was just under $2 billion, down modestly from a year earlier. Strong commercial lending, deposit growth and treasury-services revenue helped offset lower investment-banking fees. Treasury-services revenue increased 10%, while total company investment-banking fees, excluding self-led transactions, were about $1.8 billion and declined from a strong year-ago period.
Markets Results and Credit Quality
Global markets revenue, excluding debt valuation adjustments, was $5.8 billion, with sales and trading revenue of $5.1 billion, down 5% year over year. Equities revenue rose 10% to a record third-quarter $2.5 billion, supported by prime financing and client activity. FICC revenue fell 17% to $2.5 billion as lower activity in mortgages, municipals and credit more than offset growth in foreign exchange and commodities.
Borthwick said the sharp movement in interest rates during the quarter reduced client activity in Bank of America’s credit, mortgage and municipal businesses. He said the company did not expect the same market effects to continue into the fourth quarter, although it does not provide quarterly markets guidance.
Credit quality improved during the quarter. Provision expense was approximately $1.3 billion, while the net charge-off ratio improved to 44 basis points. The card loss rate declined to 3.22%, and delinquencies fell year over year for a sixth consecutive quarter. Commercial criticized assets and nonperforming loans also declined.
Moynihan said the company’s core businesses, including consumer, commercial lending and wealth management, continued to show strong organic activity and credit performance despite geopolitical uncertainty and softer institutional-market activity.
About Bank of America (NYSE:BAC)
Bank of America Corporation (NYSE:BAC) is a diversified financial services company serving individual consumers, small businesses, middle-market companies and large corporations. Its principal businesses include consumer banking, wealth and investment management, commercial banking, corporate and investment banking, and sales and trading.
Through its banking and financial services businesses, the company offers deposit accounts, credit cards, mortgages, home equity products, consumer and business loans, payment services, treasury management, brokerage services and investment advice.
