TLDR
- Bank of America (BAC) stock fell 2% in extended trading Tuesday after regulators announced $1.21 billion in penalties.
- Q3 EPS was $0.91 against $1.10 expected, with the fine cutting earnings by about $0.17 per share.
- Adjusted EPS was $1.08 and revenue rose 3% to $30.0 billion.
- Regulators said the bank failed to report over $5 billion in suspicious transactions.
- TipRanks shows a Strong Buy rating, with a $65.87 average target implying 22.1% upside.
Bank of America (BAC) stock dropped 2.3% in extended trading Tuesday after U.S. regulators announced $1.21 billion in penalties. The stock was also down 1.14% in the latest quote.
Bank of America Corporation, BAC
The news came hours before the bankās third-quarter report. Timing was not kind.
Net income came in at $6.9 billion, or $0.91 per diluted share. A year earlier, it was $8.3 billion, or $1.04 per share.
Analysts had expected $1.10 per share. The fine explains most of the miss.
Revenue was $30.0 billion, up 3% from last year. Analysts had forecast about $30.69 billion.
Take out the settlement charge and adjusted net income was $8.1 billion. That works out to $1.08 per share.
The charge is not tax deductible. The bank said it trims earnings by about $0.17 per share.
What Regulators Found
The Treasury Department announced the actions on October 13. It said the bank failed to report more than $5 billion in suspicious transactions.
More than $1 billion of that was tied to national security concerns. Treasury pointed to Chinese money-laundering networks and illicit finance along the southwest border.
FinCEN assessed a $1.2 billion penalty, the third largest in Treasury history. The bank admitted willful violations of the Bank Secrecy Act.
The OCC added a $750 million civil penalty, the largest in its history. That amount counts toward the $1.21 billion total.
The Office of Foreign Assets Control announced an $11.6 million settlement. It covers 475 apparent violations of sanctions programs tied to Russia, Iran, narcotics and terrorism.
A cease-and-desist order from December 2024 was already in place. Regulators said problems persisted.
Treasury said the bank leaned too heavily on tips from law enforcement and peer banks. Secretary Scott Bessent said the biggest banks are ānot above the law.ā
Analyst Ratings and Dividend
The bank must bring in outside parties to review undetected suspicious transactions. It must also commission independent reviews of its transaction monitoring and customer due diligence programs.
Bank of America said it will see remediation through to completion. It said it has invested billions in technology and assigned thousands of employees to fight financial crime.
On TipRanks, BAC holds a Strong Buy consensus from 13 Buy and three Hold ratings. The average price target of $65.87 implies 22.1% upside.
The quarterly dividend is $0.32 per share, a 2.13% yield. On Wednesday, the bank reported Q3 adjusted earnings of $1.08 per share on revenue of $30.0 billion.
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