Bank of America (BAC) shares fell as much as 8.7% on Wednesday before recovering to close down 4.7%. In the third quarter, the bank missed analyst expectations on both revenue and earnings: revenue rose 3.4% to $30.0 billion and adjusted EPS rose 3.8% to $1.08, still short of forecasts even excluding the fine. After the close the previous day, regulators announced a $1.2 billion fine for allegedly failing to properly report about $5 billion in suspicious transactions. Consumer banking revenue rose 4% and wealth management rose 13%, but investment banking fell 11% and sales and trading fell 5%. The article argues that core lending fundamentals remain sound, though hotter inflation could bring more Fed rate hikes and pressure net interest margins.
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