Key Stats for Bank of America Stock
- Price change for Bank of America stock in the last 6 months: -5%
- $BAC Stock Price as of Oct. 14: $51
- 52-Week High: $65
- $BAC Stock Price Target: $67
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What Happened?
U.S. regulators fined Bank of America (BAC) $1.21 billion, and the Treasury Department says the bank failed to catch possible money laundering and other illegal activity.
It is the third-largest fine in Treasury history.
The bank reported less than $5 billion in suspicious activity to the government, $1 billion of which carried national security risks.
Treasury said the bank “prioritized its revenues” when it built its compliance programs. Most of the fine, $750 million, came from the Office of the Comptroller of the Currency.
That is the largest penalty it has ever issued, and the regulator called the bank’s compliance program “deficient and ineffective.”
The bank also paid $11.6 million for more than 400 sanctions violations, including payments tied to Russia and Iran.
The bank must now hire an independent third party to review past transactions and flag any suspicious activity it missed.
The fine impacted Q3 results, with net income at $6.9 billion, or $0.91 a share. Without the $1.2 billion charge, it was about $8.1 billion, or $1.08 a share.
The charge cut earnings by about $0.17 a share.
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What the Market Is Telling Us About Bank of America Stock
Bank of America stock declined after the news, falling almost 5%.
UBS analyst Erika Najarian said the fine could hurt investor confidence. She also raised concerns about higher costs and was asked whether the bank can maintain its $6 billion quarterly buyback pace.
CEO Brian Moynihan said the costs are already in the bank’s expense base, and CFO Alastair Borthwick said there is no asset cap, so the bank can still grow.
The bank also bought back $6 billion in shares last quarter and returned $8.3 billion to shareholders in total.
Outside the fine, the core business looked healthy. Net interest income rose 8% to $16.6 billion and loans have grown for 10 straight quarters.
Credit quality improved and wealth management revenue rose 13%.
Markets were the weak spot.
Sales and trading revenue fell 5%, and investment banking fees dropped. Bank of America stock now faces a trust test as investors want proof the compliance work is on track.
The bank expects NII to grow about 8% in 2027, which could help. Bank of America stock will likely move on how well the bank handles the cleanup.
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So what is Bank of America stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
