The quarter showed broad balance-sheet and fee growth, with NII, wealth fees and loan growth offsetting weaker markets and investment banking. But the reported miss versus last year was largely an expense story, including a $1.2 billion regulatory settlement charge 8-K.
Bank of America Corporation · Q3 2026 · Reported 14 Oct 2026 · US
Q3 2026 | Q3 2025 | Change | |
|---|---|---|---|
Revenue, net of interest expense | $30.0bn | $29.0bn | +3% |
Net interest income | $16.4bn | ~$15.2bn | +8% |
Provision for credit losses | $1.27bn | $1.30bn | ~-2% |
Noninterest expense | $19.7bn | $17.3bn | +14% |
Pretax income | $9.0bn | $10.4bn | -13% |
Net income | $6.9bn | $8.3bn | -17% |
Diluted EPS | $0.91 | $1.04 | -13% |
Total assets | $3,427.7bn | $3,403.1bn | +0.7% |
Total shareholders' equity | $296.7bn | $302.4bn | -1.9% |
Underlying revenue growth was broader than the headline suggests
Revenue rose 3% to $30.0 billion as net interest income increased 8% to $16.4 billion, driven primarily by higher loan and deposit balances, higher NII related to Global Markets activity and fixed-rate asset repricing 8-K. Management also pointed to organic growth in deposits, wealth flows and consumer activity, while average loans and leases increased 6% to $1.23 trillion with growth across every business segment 8-K.
That mix matters because the weaker businesses were identified and contained: total corporation investment banking fees fell 11% to $1.8 billion, and sales and trading revenue fell 5% to $5.1 billion, with FICC down 17% to $2.6 billion partly offset by equities up 11% to $2.5 billion 8-K8-K. In other words, the release describes a quarter where spread income and wealth fees carried growth while capital-markets activity did not 8-K8-K.
The year-on-year earnings decline was mostly an expense issue
Net income fell to $6.9 billion from $8.3 billion, and diluted EPS fell to $0.91 from $1.04 8-K. The release explicitly says results included a $1.2 billion regulatory settlement charge, and excluding it adjusted net income was $8.1 billion with adjusted EPS of $1.08 8-K.
Even on that adjusted basis, costs were heavier: adjusted noninterest expense was $18.5 billion versus $17.3 billion a year earlier, while reported noninterest expense was $19.7 billion 8-K. The release does not provide a full corporate expense bridge beyond the settlement charge, but segment detail shows spending rising with technology, brand, people and revenue-related incentives in Consumer Banking, Global Banking and Wealth 8-K8-K8-K.
Credit stayed stable while wealth and commercial lending looked strongest
Provision for credit losses was $1.3 billion, relatively flat to 3Q25, and net charge-offs of $1.3 billion decreased from both 3Q25 and 2Q26 8-K. CFO Alastair Borthwick said asset quality continued to improve, which supports the view that the quarter's pressure was not coming from a deteriorating credit book 8-K.
The cleanest operating momentum sat in wealth and commercial lending. Global Wealth and Investment Management revenue rose 13% to $7.1 billion as asset management fees increased 16% to $4.5 billion on higher market valuations, strong AUM flows and higher NII, while average loans grew 13% to $279 billion 8-K. Global Banking revenue was relatively flat at $6.2 billion because higher NII and treasury service charges were offset by lower investment banking fees, but average loans still increased 8% to $419 billion across corporate, commercial and business banking 8-K.
What to watch next
Whether NII can keep helping offset weaker investment banking and markets revenue; management highlighted higher balances, Global Markets-related NII and fixed-rate asset repricing as the current drivers 8-K.
Whether expense growth moderates after the regulatory settlement charge; the release gives adjusted expense but not the fuller cost detail or risk-factor discussion that would come with a 10-Q 8-K8-K.
Sources
Produced by Clarifo Research with the Clarifo financial research engine from the company's public filings. AI was used in parts of the analysis and drafting. Figures are checked automatically against the filings they come from. This is not investment advice.