Bank of America Corp Reports Quarterly Loss Thanks to $6 Billion Legal Expense
Bank of Americaannounced this morning that it recorded a loss of $276 million, or $0.05 per share, in the first quarter of 2014 as a result of $6 billion in litigation expenses related to its settlement with the Federal Housing Finance Authority (FHFA).
Bank of America also watched its revenue fall 3% from $23.4 billion in the year-ago quarter to $22.7 billion in the first quarter of 2014. This was the result of its interest income falling from $10.7 billion to $10.1 billion and its mortgage banking income falling from $1.3 billion to $412 million. However, it went from reporting a loss of $112 million to a gain of $412 million in other income.
The chart below shows year-over-year net income changes. Global Banking, which saw a decrease, encompasses commercial and investment banking operations. The Consumer Real Estate segment saw its loss balloon, but this was largely the result of the $5.8 billion in litigation expenses in the first quarter of this year versus $2.0 billion in the first quarter of last year.
Line of Business
Consumer and Business Banking
Consumer Real Estate Services
Global Wealth and Investment Management
"The cost of resolving more of our mortgage issues hurt our earnings this quarter," noted Bank of America CEO Brian Moynihan in the earnings announcement. "But the earnings power of our business and customer strategy generated solid results and we continued to return excess capital to our shareholders."
Shares were down about 3% as of about 10 a.m.
The article Bank of America Corp Reports Quarterly Loss Thanks to $6 Billion Legal Expense originally appeared on Fool.com.Patrick Morris owns shares of Bank of America. The Motley Fool recommends Bank of America. The Motley Fool owns shares of Bank of America. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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