Bank of America Corp. (NYSE:BAC) stock fell more than 5% in Wednesday's premarket trading after the bank reported disappointing third-quarter 2026 results, weighed down by a $1.2 billion regulatory settlement charge and weaker investment banking revenue.

Net income declined to $6.9 billion from $8.3 billion a year earlier, while earnings per share came in at 91 cents.

Adjusted earnings of $1.08 per share missed the analyst consensus estimate of $1.11.

Revenue, net of interest expense, rose 3% year over year to $29.96 billion but fell short of Wall Street's estimate of $30.69 billion.

Despite the earnings miss, consumer spending remained resilient. Debit and credit card spending increased 8% to $266 billion during the quarter.

Consumer Banking and Wealth Management Show Strength

Consumer Banking net income rose to $3.52 billion from $3.44 billion a year earlier. Global Wealth and Investment Management earnings climbed to $1.54 billion from $1.27 billion.

However, Global Banking net income declined to $1.99 billion from $2.09 billion, while Global Markets earnings fell to $1.24 billion from $1.65 billion.

Net interest income increased 8% year over year to $16.45 billion, supported by improvements in net interest yield.

Meanwhile, noninterest income fell 2.2% to $13.51 billion. Provisions for credit losses remained unchanged at $1.3 billion, while investment banking fees dropped 11% to $1.8 billion.

$1.2 Billion Regulatory Charge Weighs on Results

Bank of America recorded a $1.2 billion regulatory settlement charge, equivalent to 17 cents per share.

Chief Financial Officer Alastair Borthwick said the bank has worked with regulators to resolve outstanding issues and completed much of the work required under its consent order.

The charge contributed to higher expenses, with the bank's efficiency ratio rising to 66% from 60% a year earlier.

Borthwick also noted that investment banking deal pipelines remain strong. However, revenue weakened in some fixed-income businesses, including mortgages, municipal securities and credit.

Loan Growth and Deposits Remain Strong

Average loans and leases increased 6% to $1.23 trillion, while average deposits rose 1.54% to $2.02 trillion.

The bank reported growth in commercial lending across every client segment. Consumer, wealth management, business and commercial banking activity also remained healthy.

Its Common Equity Tier 1 (CET1) capital ratio declined to 10.9% from 11.6% a year earlier.

Book value per share increased to $39.26 from $37.72, while tangible book value per share rose to $29.14 from $28.16.

Bank of America returned approximately $8.3 billion to shareholders during the quarter, including $2.2 billion in dividends and $6 billion in share repurchases.

The bank also reported improving asset quality and maintained that its liquidity and capital positions remained strong.

Bank of America Expands AI Adoption

Bank of America said more than 200,000 employees now use its artificial intelligence tools across over 300 approved applications.

The bank sees AI as an opportunity to improve productivity and turn its operational scale into a competitive advantage.

Despite the quarterly earnings miss and regulatory charge, Borthwick said Bank of America enters the final quarter of 2026 with "good momentum."

BAC Price Action: Bank of America shares fell 5.39% to $51.05 in Wednesday's premarket trading, according to market data.