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

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)

Copyright 2011 Thomson Reuters. Click for Restrictions.

Comments

[Ken Greve]

07:47 PM on 07/20/2011

I find it very hard to shed a tear for Bank of FU America.

[jwilson1]

04:12 PM on 07/20/2011

Big banks all five of them have another 40 trillion to go! The government allows them to borrow money from FED at .0037% and they take the money and invest it, overcharge their depositors,
charge 6 to 26% on credit cards, loan money at 3.5% to 7.5% and all kinds of other fees to use their debit card to retailers. Good business!
Now what the government is not saying is they allow the banks to get away with it so they can claw back billions over time as the banks get profitable. $40 billion to go. Crooks all of them!

[jabreal00]

04:00 PM on 07/20/2011

It's a horrible bank. My fiance has an old checking account with little money in there. She wanted to get a certified check from her BofA savings account. They wanted to charge her for that! People need to stay away from that bank.

[anastasiabeaverhousen]

03:00 PM on 07/20/2011

That sound you hear is AP Giannini spinning in hisgrave.

[sinnerG7]

12:13 AM on 07/20/2011

AHHHH poor BofA This is the bank that charges working class people$5 to cash their paychecks even when they go to the branch that the check is drawn on.Take my advice and join a Credit Union.

[J T K]

11:26 AM on 07/20/2011

I'm willing to blame them for a lot of bad things that they do, but when it comes to check cashing fees they aren't much worse than their competitors.

Walmart charges up to $3 for up to $1000 check, and up to $6 for anything up to their $5000 limit

Here's Moneygram's list courtesy of Consumerist:

$25 - $1
$50 - $1
$75 - $1.31
$200 - $3.50
$500 - $8.75
$1000 - $17.50
$2000 - $35

That's just the two I could find quickly but my point is that BOFA's fees are a little bit elevated, especially as a percentage of the amount on smaller checks, but it isn't like they're ripping you off like you seem to be implying with your comment.

Sources:
http://www.walmart.com/cp/Check-Cashing/632047
http://consumerist.com/2008/03/how-bad-are-check-cashing-fees-really.html

[sinnerG7]

01:56 PM on 07/20/2011

If you don't think charging people $5 to cash their paychecks at the branch the check was drawn isn't ripping them off then you must work for a bank.Wallmart and other establishment that cash checks offer that service as a courtesy,banks are supposed to cash checks that's one of their primary services.Think about how much revenue is generated every week for them and don't forget they didn't always charge you to cash a check.

[jabreal00]

04:01 PM on 07/20/2011

How about BofA wanted to charge my fiance for making her a certified check when she has a BofA checking and savings account? How bout them apples?

[GloriaY]

12:12 AM on 07/20/2011

No one should shed a tear since BoA is heavily insured. That would not stop its CEO and the rest of the Shylocks to receive their million dollar tax free bonuses and profit sharing perks, and too bad not one of them would find him/herself in the unemployment line.

[ragnbully]

11:55 PM on 07/19/2011

Shortly after the banking meltdown; I tried withdrawing $200 from a BofA ATM for a disclosed fee of $2. The machine dispensed only $60 for a fee of $4...I looked to the sky and winked. Now BofA is losing billions of dollars from loan fraud! Karma?

[james rimes]

10:18 PM on 07/19/2011

The Bank of America Business Model is to have the American People Pay to Mediate away all of their belongings for 2 cents on the Dollar.. Lobby Some Lube!!!!!!!!!!

[MyResponsibility]

10:09 PM on 07/19/2011

Why is this a story? Not sure what the point was.

[Keyop]

08:43 PM on 07/19/2011

But this won't affect the bonuses, gotta keep that top talent.

[LightShadow62]

08:33 PM on 07/19/2011

And yet they will still show a huge profit over the 12 month period.

Will anyone here shed a tear for them?

[sunelpru]

08:08 PM on 07/19/2011

ALL BANKS ARE FINDING THE TRUTH ABOUT THE AMERICAN PUBLIC. WHEN THEY GET SCREWED THE BANKS WILL SUFFER.

[Gonz0]

06:46 PM on 07/19/2011

Here comes the layoffs so the execs can still get their bonuses.

[Reno Fickler]

06:10 PM on 07/19/2011

Americo Vespucio's namesakes are not doing so well. United States of.........., Bank of.........!

[moiraz]

05:41 PM on 07/19/2011

I don't have any savings in it but my pensions go into Bof A and my bills are paid through it. I hope it doesn't fold as they have served me quite well for over 30 years. I paid my mortgage off years ago through Washington Mutual and where is it now.