Monday, April 27th12.8°C
25936
24949

Bank of America swings to loss from profit, hurt by legal charges

CHARLOTTE, N.C. - Bank of America said Wednesday that it swung to a loss in the first quarter, hurt by $6 billion in legal charges.

A LOSS: The Charlotte, N.C., bank reported a loss applicable to common shareholders of $514 million, compared with a profit of $1.11 billion a year earlier. The loss amounted to 5 cents a share. A year earlier, the bank earned 10 cents a share.

STUNG BY LEGAL EXPENSES: BofA's results were lowered by $6 billion, or 40 cents a share, in legal charges, with $3.6 billion of that amount from a previously announced settlement with the Federal Housing Finance Agency, and $2.4 billion from an addition to the bank's legal reserves for other mortgage-related matters. The bank also said it reached a settlement with the Financial Guaranty Insurance Company, as well as separate settlements with The Bank of New York Mellon, over residential mortgage-backed securities.

THE QUOTE: "The cost of resolving more of our mortgage issues hurt our earnings this quarter," said BofA CEO Brian Moynihan in a prepared statement.

BALANCE SHEET: The amount of bad loans and mortgages on Bank of America's balance sheet continued to improve in the first quarter. The bank had $1.4 billion in net charge offs, or loans that the bank considers unlikely to be repaid, down from $2.5 billion a year earlier. Loans that were more than 30 days past due fell to $5.6 billion from $7.9 billion a year earlier.

SLIMMING DOWN: The bank continues to slim down as a result of the financial crisis. The bank had 238,600 full-time employees this quarter, down from 262,800 employees a year earlier. It reduced the number of branches to 5,095, or 5 per cent less than a year earlier.

HOUSING MARKET SLOWNESS: Like its peers, Bank of America has seen a sharp decline in its mortgage business. The bank did $8.9 billion in mortgage originations in the first quarter this year, down from $23.9 billion in the same period a year ago. Interest rates are up from last spring, so the demand to refinance home mortgages has fallen.

BACK TO BASICS: Bank of America's consumer and business banking division, the company's core business, reported a profit of $1.66 billion, up from a profit of $1.45 billion a year earlier. Bank deposits and brokerage account assets all rose, as well as the number of credit card accounts. Credit card net charge-off fell to 3.25 per cent from 4.2 per cent.

STOCK REACTION: Bank of America shares fell 42 cents, or 2.5 per cent, to $15.98 in afternoon Wednesday trading.

The Canadian Press


Read more Business News

24947


Recent Trending




Today's Market
S&P TSX15343.99-64.34
S&P CDNX696.58-1.12
DJIA18057.95-22.19
Nasdaq5069.24-22.84
S&P 5002113.16-4.53
CDN Dollar0.8262+0.0056
Gold1203.60+28.40
Oil57.37+0.22
Lumber256.50-2.00
Natural Gas2.476-0.055

 
Okanagan Companies
Pacific Safety0.12-0.01
Knighthawk0.010.00
QHR Technologies Inc1.41+0.03
Cantex0.035+0.005
Anavex Life Sciences0.40-0.03
Metalex Ventures0.11+0.02
Russel Metals27.20+0.04
Copper Mountain Mining1.23+0.08
Colorado Resources0.095+0.000
ReliaBrand Inc0.004-0.001
Sunrise Resources Ltd0.04+0.01
Mission Ready Services0.21+0.01
Decisive Dividend Corporation1.80+0.10

 



25753

FEATURED Property
21485054310 Hazell Road,
6 bedrooms 5 baths
$729,900
more details
image2image2image2
Click here to feature your property
Please wait... loading


Buy versus rent

Consider the top five reasons to buy versus rent: #5 Experience Freedom: Home ownership will free you from the ties that bind you to a landlord...no longer will you be dependent on someone else&rsq...


What's your score?

There was a time when we would sit down with nothing more than a sheet of paper and a sharp pencil to do the math. Totalling our expenses and subtracting our revenue, the amount left over was the answ...


Do you dare to dream?

Photo: Thinkstock.comI have never been able to understand why some people can only see as far ahead as the end of the current day. Instead of aiming for long term goals, they just wallow in their ever...

_



26091

25482


Member of BC Press Council


24843