Oct 15, 2014 9:39 AM
Bank of America earnings slump on legal settlement
The Associated Press
NEW YORK (AP) Bank of America, the second-largest U.S. bank by assets, said Wednesday that its earnings slumped in the third quarter after it agreed to a settlement with the government over its sale of mortgage-backed securities.
The Charlotte, North Carolina-based bank reported net income of $168 million for the period, down from $2.5 billion in the same period a year earlier. After stripping out payments to preferred shareholders that amounted to a loss of 1 cent per common share, compared with a profit of 20 cents a share a year earlier.
Revenue at the bank slipped to $21.21 billion from $21.53 billion a year ago.
Bank of America took a $5.3 billion charge in the third quarter to help cover the settlement with the Justice Department. Those legal costs shaved 43 cents off the banks per-share earnings for the quarter.
"Clearly, (the settlement with the) DOJ was an extraordinarily significant matter, to get put behind us," said Bruce Thomson, Bank of America's chief financial officer on a call with reporters.
The earnings beat the expectations of Wall Street analysts, who had predicted a loss of 9 cents per share, according to data provider FactSet.
Bank of America shares were little changed in premarket trading, rising 5 cents, or 0.03 percent, to $16.56. The lender's shares have risen 6.2 percent since the start of the year.