Bank of America posted sharply lower profit after a $1.2 billion Treasury penalty

Bank of America $BAC reported third-quarter net income of $6.9 billion, or 91 cents per diluted share, down from $8.3 billion, or $1.04 per share, in the same period a year earlier, after absorbing a $1.2 billion regulatory settlement charge tied to anti-money-laundering failures.

Analysts had expected earnings of $1.10 per share, according to CNBC. Revenue came in at $30.0 billion, up 3% from a year earlier. Excluding the settlement charge, adjusted net income was $8.1 billion, or $1.08 per share, the company said.

The penalty came Tuesday after the U.S. Department of the Treasury announced enforcement actions totaling more than $1.21 billion against the bank for violations of anti-money-laundering and sanctions laws. Treasury's Financial Crimes Enforcement Network assessed a $1.2 billion penalty — the third-largest in Treasury history — for the bank's failure to mitigate and report priority national security risks, including Chinese money-laundering networks and illicit finance along the southwest border.

In settling with FinCEN, Bank of America acknowledged willful violations of the Bank Secrecy Act and admitted it had failed to keep a compliant anti-money-laundering program in place, perform due diligence on foreign correspondent accounts, and submit suspicious activity reports, according to Treasury. According to regulators, the bank failed to timely report more than $5 billion in suspicious transactions, and more than $1 billion of that total involved activity tied to national security concerns.

The Office of the Comptroller of the Currency separately assessed a $750 million civil money penalty — the largest in the agency's history — for the bank's deficient and ineffective Bank Secrecy Act compliance program. That sum is credited as part of the $1.21 billion total. The Office of Foreign Assets Control also announced an $11.6 million settlement over 475 apparent violations of sanctions programs targeting Russia, Iran, narcotics, and global terrorism.

Regulators said Bank of America had been under a December 2024 cease-and-desist order requiring it to fix its anti-money-laundering deficiencies, but that significant problems persisted. Treasury said the bank "prioritized its revenues" while keeping compliance resources constrained, and became so dependent on tips and referrals from law enforcement and peer institutions that it ceded a meaningful share of its own responsibility for identifying illicit transactions.

"Today's actions send a clear message that even the biggest financial institutions are not above the law," Treasury Secretary Scott Bessent said in a statement.

Bank of America said in a statement that it has devoted significant resources to compliance efforts and intends to see the remediation process through to completion. Treasury said the bank must also bring in outside parties to examine undetected suspicious transactions and commission independent assessments of its transaction-monitoring and customer due-diligence programs.

Shares of Bank of America fell roughly 2% in after-hours trading after the Treasury Department released its enforcement actions Tuesday.