Bank of America Corp. (BAC) heads into its third-quarter report Wednesday morning carrying more than $1.21 billion in penalties announced by U.S. regulators Tuesday.
The U.S. Treasury revealed the penalties against the lender for breaking anti-money laundering and sanctions laws. The package includes the third-largest penalty in Treasury history. It is also the largest ever from the Office of the Comptroller of the Currency.
MarketDash reached out to Bank of America for comment, but did not receive an immediate response.
Three Agencies Pile On
The Financial Crimes Enforcement Network imposed a $1.2 billion penalty. It found the bank failed to report more than $5 billion in suspicious transactions on time, according to the Treasury.
Over $1 billion of that activity involved priority risks, including suspected Chinese money laundering networks, fraud and potential trade-based money laundering tied to the southwest border. Bank of America admitted it willfully violated the Bank Secrecy Act.
The OCC assessed a $750 million civil money penalty and called the bank's compliance program "deficient and ineffective." FinCEN counted that payment toward its own penalty, leaving $450 million due to Treasury, according to FinCEN's consent order.
The Office of Foreign Assets Control settled for $11,662,930 over 475 apparent sanctions violations between September 2021 and April 2025. Most came from 403 payments totaling about $14.3 million that went through 35 blocked banks, and 32 of those banks were sanctioned under Russia-related rules, according to the OFAC enforcement release.
OFAC gave no reduction to the base penalty. It also pointed to the bank's "less than fulsome cooperation."
Treasury Secretary Scott Bessent said the actions show "even the biggest financial institutions are not above the law."
Earnings Setup
The timing is rough. Analysts expect third-quarter earnings of $1.11 per share on revenue of $30.69 billion, according to market data. A year earlier, the bank earned $1.06 per share on $28.24 billion in revenue.
Bank of America has beaten EPS estimates for 16 straight quarters. It has also beaten revenue estimates in four straight quarters and in nine of the past 10.
This quarter will test the streak. In September, CEO Brian Moynihan said investment banking fees would come in at $1.6 billion to $1.8 billion, below Wall Street's $2 billion consensus. He also guided for flat trading revenue.
On Tuesday, rival JPMorgan Chase & Co. (JPM) missed estimates for both earnings and revenue.
Options are pricing in a 3.35% move, per market data. Several analysts had already cut price targets ahead of the report: UBS lowered its target to $67 from $70 and JPMorgan kept its Overweight rating but cut its target to $62 from $68.
BAC Stock Price Activity: Bank of America shares were down 2.62% at $53.15 during after-hours trading Tuesday, according to market data.
