BUSINESS

Bank Of America Posts $8.8 Billion Second-Quarter Loss After Mortgage Settlement

07/19/2011 08:08 am ET | Updated Sep 18, 2011

Bank of America Corp posted a second-quarter net loss after an $8.5 billion settlement with mortgage bond investors.

The largest U.S. bank by assets on Tuesday reported a net loss of $8.8 billion, or 90 cents per share, compared with net income of $3.1 billion, or 27 cents per share, a year earlier.

Analysts on average expected a loss of 90 cents per share, according to Thomson Reuters I/B/E/S.

On June 29, the bank announced it would take a series of big one-time charges in the quarter related to a settlement with private investors who demanded the bank repurchase toxic home loans held in mortgage-backed securities.

Excluding the charges, the bank reported net income of $3.7 billion, or 33 cents per share, for the second quarter.

Revenue tumbled 54 percent to $13.5 billion, due to a $14 billion provision taken as part of the mortgage settlement. Excluding that provision, revenue totaled $26.5 billion.

BofA shares fell 2.8 percent to $9.72 on Monday and have declined 27 percent this year, compared with a 12 percent drop in the KBW Banks Index.

(Reporting by Joe Rauch; editing by John Wallace)

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