NEW YORK — Bank of America (NYSE: BAC) pointed investors on Wednesday to adjusted earnings that exclude a $1.2 billion penalty, and even those show profit slipping. Third-quarter net income was $6.9 billion, or 91 cents a share, against $8.3 billion, or $1.04, a year earlier, the bank said in its earnings release.
The charge books the Bank of America Treasury penalty that the Office of the Comptroller of the Currency and the Financial Crimes Enforcement Network announced on Tuesday. It is not tax-deductible and cost 17 cents a share. Exclude it and the bank reports adjusted net income of $8.1 billion and adjusted earnings of $1.08, both non-GAAP figures of management’s choosing.
That adjustment flatters less than it sounds. Revenue rose 3% to $30.0 billion and net interest income climbed 8% to $16.4 billion, yet noninterest expense excluding the charge still rose to $18.5 billion from $17.3 billion, roughly 7% on rounded figures. The adjusted efficiency ratio worsened to 62% from 60%. Investors were told to ignore one cost while another outgrew revenue.
The weak spots sat in the deal and trading businesses. Investment banking fees fell 11% to $1.8 billion and sales and trading revenue slipped 5% to $5.1 billion, according to the earnings release filed with the SEC. By mid-morning, Seeking Alpha reported, the stock was having its steepest daily decline since April 2025. Outlets differ on the size of the drop, and The Eastern Herald has not confirmed a closing figure.
The comptroller’s office called its $750 million penalty the largest in the agency’s history:
Treasury put the three actions, which include an $11.6 million settlement with the Office of Foreign Assets Control, at more than $1.21 billion. The earnings release never mentions that office, so it is unclear whether the rounded $1.2 billion accrual covers it. Nor does the release put a number on remediation work still to come.
Brian Moynihan’s statement, two paragraphs long, does not mention the penalty. He said “we are turning our scale into a competitive advantage,” pointing to more than 200,000 employees using AI tools. Common equity tier 1 capital fell $3.2 billion from the second quarter to $198 billion. The bank still repurchased $6.0 billion of its own stock, and the release calls its 10.9% ratio well above the regulatory minimum.
A separate OCC debanking probe naming nine large lenders, Bank of America among them, was pending when TEH reported on it in June. Whether it has concluded, and what it might add to a cost base already rising faster than revenue, the bank did not say.
