Saturday, April 16, 2011

NEW YORK - Bank of America Corp.'s first-quarter income fell 39 percent compared with a year earlier on higher costs related to its mortgage business and litigation. The bank also settled a claim over faulty mortgage investments and set aside less money to cover soured loans.

The Charlotte, N.C., bank on Friday said it earned $1.7 billion, or 17 cents per share, compared with $2.8 billion, or 28 cents a share in the first quarter of last year. The earnings fell short of the 28 cents a share estimated by analysts surveyed by FactSet.

Revenue fell to $26.9 billion from $32 billion in the same period last year.

"All the businesses have moved back to profitability except our mortgage business," chief executive officer Brian Moynihan said in a conference call with analysts.

Bank of America continued to be weighed down by losses, lawsuits, and higher costs related to its mortgage businesses. Its real estate services business reported a first-quarter loss of $2.4 billion compared with a loss of $2.1 billion for the same period in 2010.

The bank is fighting lawsuits from investors and insurers who say they were duped into buying mortgage loans that were based on fraudulent documents. Bank of America set aside a $1 billion in the first quarter to repurchase those mortgages. That's on top of $4.1 billion that the bank had already set aside in the fourth quarter of 2010 and $526 million in the first quarter of last year.

Litigation expenses, related mostly to mortgages, were up $352 million from the first quarter of 2010.

Bank of America was among 16 of the nation's largest mortgage lenders who were directed by the Federal Reserve and other federal banking regulators Wednesday to reimburse homeowners who were improperly foreclosed upon. Attorneys general of all 50 states are also investigating allegations of improper foreclosures, and the banks will likely pay fines once the probe is over.

Read more:
Watch sports videos you won't find anywhere else


Post a Comment