Bank earnings diverge as compliance penalties hit Bank of America

Bank of America faces a $1.2 billion earnings charge for compliance violations. The bank said federal penalties will produce a non-tax-deductible third-quarter charge after it admitted willful Bank Secrecy Act violations involving more than $5 billion in unreported suspicious transactions. CNBC reported penalties exceeding $1.2 billion, including a $750 million OCC penalty. American Banker reported that Bank of America must conduct a third-party transaction lookback and undergo independent reviews of its anti-money-laundering governance.

Citigroup raises its annual profitability outlook, with a fourth-quarter seasonality caveat. The bank now expects 2026 return on tangible common equity above 11%, versus its prior 10%–11% range. Third-quarter returns were 11.5%, and earnings per share exceeded analysts’ forecasts, but management warned that seasonal markets activity could reduce fourth-quarter revenue. Wealth net new assets rose 105% year over year to $38 billion, helping the division’s return on tangible common equity reach 14.3%, against a near-term 15%–20% target.

JPMorgan Chase reports lower sequential profit despite year-over-year revenue growth. Third-quarter net income was $15.305 billion, down 28% from the second quarter, while revenue rose 8% year over year to $50.172 billion. The New York Times reported profit below expectations of more than $16 billion, citing weaker fixed-income and commodities trading, slower debt deals and higher loss provisions. JPMorgan raised its net interest income forecast but expects higher full-year expenses.

Goldman Sachs beats earnings estimates on strong equities trading. Third-quarter diluted earnings per share reached $17.01, with $18.68 billion in revenue, $5.29 billion in net earnings and an annualized return on equity of 18.7%. Equities trading revenue of $6.44 billion exceeded expectations, but fixed-income and commodities revenue of $3.47 billion missed estimates and fell slightly year over year. Higher credit-loss provisions and challenges in Platform Solutions remained caveats to the results.

Wells Fargo grows loans and deposits but misses revenue expectations. Average loans and deposits each rose 11% year over year, reaching $1.03 trillion and $1.48 trillion, respectively. Consumer nonaccrual loans fell more than 8% to $2.9 billion. The bank beat earnings estimates but missed revenue expectations amid weaker trading, with management citing a sharp late-September slowdown in client activity. Wells Fargo reaffirmed approximately $50 billion of 2026 net interest income and expects $13 billion of fourth-quarter spread income.

FB Financial reports loan and deposit growth despite mortgage banking pressure. Third-quarter earnings per share were $1.20, or $1.21 adjusted, with annualized loan growth of 9.7% and customer deposit growth of 11.2%. Rising interest rates pressured mortgage banking, and the company recorded a $1 million interest-income reversal on a nonaccrual loan. FB Financial maintained its outlook for mid- to high-single-digit balance-sheet growth.

Unity Bancorp’s quarterly earnings include a one-time tax-credit benefit. Third-quarter net income reached $17.4 million, or $1.70 per diluted share. A $2.5 million benefit from purchased transferable federal investment tax credits reduced tax expense, making it a nonrecurring contributor to reported earnings. Unity Bancorp also reported loan and deposit growth, a wider net interest margin and improved asset quality.

Pinnacle Bancorp agrees to buy SouthStar Bank’s parent. The $20.9 billion-asset buyer agreed to acquire Southern Bancshares, parent of the $1.4 billion-asset SouthStar Bank, for an undisclosed price. Closing is expected early next year. The acquisition would expand Pinnacle Bancorp’s Texas footprint beyond its Dallas-Fort Worth concentration into Austin and central Texas.