Business

Big Legal Charge Drags Down Bank of America’s Profit

In this Dec. 7, 2011 photo, a woman passes a Bank of America office branch, in New York. Bank of America said Jan. 19, 2012, it made $2 billion in the last three months of 2011 from selling its stake in a Chinese bank and selling debt. That offset losses and higher legal expenses in its mortgage business. (AP Photo/Mark Lennihan)
In this Dec. 7, 2011 photo, a woman passes a Bank of America office branch, in New York. Bank of America said Jan. 19, 2012, it made $2 billion in the last three months of 2011 from selling its stake in a Chinese bank and selling debt. That offset losses and higher legal expenses in its mortgage business. (AP Photo/Mark Lennihan)

(New York Times) – Bank of America said on Wednesday that its profit fell sharply in the third quarter, weighed down by a large legal charge related to its record mortgage settlement with federal and state authorities.

The bank’s net income dropped to $168 million from $2.5 billion in the period a year earlier, though the decline was not as bad as Wall Street analysts had expected.

After accounting for dividend payments on preferred shares, the results amounted to a loss of 1 cent a share. Wall Street had been expecting a loss of 9 cents a share, according to a survey of analysts by Thomson Reuters. The bank’s revenue fell 1 percent, to $21.4 billion, from the third quarter of 2013, slightly topping analysts’ estimates of $21.36 billion.

In August, Bank of America agreed to a $16.65 billion deal with federal and state authorities to settle civil charges related to its sale of shoddy mortgage securities. The third-quarter results, however, are a reminder that the bank has not yet put the financial crisis behind it.

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