Bank of America shares fall 5% after earnings miss and Treasury fine

Bank of America shares closed at $51.39 on Tuesday, a 4.76% decline, after the company reported third-quarter earnings that missed Wall Street expectations and disclosed a $1.2 billion fine from the U.S. Treasury Department. The penalty, issued for violations of anti-money-laundering and sanctions laws, reduced the bank's reported earnings per share by $0.17. Even excluding this charge, the bank's adjusted EPS of $1.08 fell two cents short of analyst estimates. The stock briefly posted its largest single-day drop since April 2025, falling nearly 10% in early trading before recovering about 5 points to close the session.

The selling pressure contrasted sharply with the performance of its major competitors, as JPMorgan Chase shares rose 1.16% to close at $335.28 and Wells Fargo stock gained 0.20% to finish at $80.91. This divergence highlighted a mixed session for large-bank equities, with investors scrutinizing specific balance sheet items and regulatory costs at Bank of America while other financial peers saw modest gains.

The broader market also finished lower on the day. The S&P 500 index closed at 7,721, down 1.08%, while the Nasdaq Composite dropped 1.88% to end at 26,693. Within Bank of America's results, management provided updated guidance for net interest income, projecting growth of 8% in 2027. This represents an upward revision from previous guidance that had anticipated growth in the range of 5% to 7%. Investors are now focused on how the compliance penalty and trading revenue trends will influence the bank's loan growth and future profitability metrics.