Bank of America Posts $9.1 Billion Loss

Things keep getting worse for Bank of America (BAC).

The nation's largest bank reported a loss of $9.1billion during the second quarter, partly due to an $8.5 billion settlement with investors. That agreement, reached in June, settled claims that the bank had sold the investors poor-quality mortgage bonds.

The Charlotte, N.C. bank has been hamstrung by litigation and demands from investors who want Bank of America to buy back the bonds that it sold years ago. In the quarter, the bank set aside an additional $1.9 billion to fight litigation bringing the total mortgage-related charges in the second quarter to $20.7 billion. The bank does not disclose the total amount reserved for litigation costs.

The reported loss available to common shareholders was 90 cents per share, wider than the 85 cents a share loss expected by analysts surveyed by FactSet. Excluding charges related to investor settlements, Bank of America Corp. earned $3.7 billion, or 33 cents per share. That compares with net income of $3.1 billion, or 27 cents a share, in the same quarter last year. The bank's revenue declined 54 percent to $13.2 billion from $29.1 billion in the same period last year.

While several of the bank's businesses reported positive earnings, almost all of them saw declines in revenue. Loan losses in its consumer businesses dropped for the fifth consecutive quarter. More of the bank's customers paid on time, which led to a 60 percent decline in the amount the bank puts aside for credit losses from last year.

Bank of America's credit card division reported income of $2 billion, up $1.2 billion from the year-ago quarter, as customers paid on time. However, revenue declined by $1.4 billion.

Commercial banking was another bright spot, reporting net income of $1.4 billion, up $566 million from a year ago. But revenue in the division decreased $73 million from a year ago.

Its Merrill Lynch investment banking unit reported fees of $1.6 billion, a 28 percent increase from a year ago.

Bank of America shares were up less than 1 percent in pre-market trading to $9.77.

Increase your money and finance knowledge from home

What is Short Selling?

Make a profit when stocks prices fall.

View Course »

Goal Setting

Want to succeed? Then you need goals!

View Course »

Add a Comment

*0 / 3000 Character Maximum

7 Comments

Filter by:
starfishking28

Thanks for the reminder to close my bank of america credit card account....this bank is 1 of the worst to deal with !!!!

July 19 2011 at 11:38 AM Report abuse rate up rate down Reply
thomasva6

from past experiences with them i know the reason BOA is having problems is because of the clowns they have working there. they never should have been bailed out, let them fail.

July 19 2011 at 11:29 AM Report abuse rate up rate down Reply
sagg1948

Yea pat that CEO on the back and give him a bigger bonus this year for outstanding performance.

July 19 2011 at 10:18 AM Report abuse rate up rate down Reply
donut999

This is good news simply because BAC is taking their lumps clearing the way for a brighter future. What else could we have expected? After all, they did take on Countrywide with some incentives offered. Hope they dip back down
to $8, will load up on shares again. We will eventually hear the same news about the others. Being in front of the pack on reducing their misery index will bode well for them. I still think the Countrywide mazilla, godzilla, whatever
is name is should be doing some time.

July 19 2011 at 10:14 AM Report abuse -1 rate up rate down Reply
lambcsa

Sue,

What about Bush and his "Wall Street mafia?" He ran the debt up more than a trillion dollars to fight an Iraqi war which cost the lives of thousands of American soldiers and terminated the futures of many thousands more. Not only are you rightwing nut cases stupid and ignorant, but you're also vulgar.

July 19 2011 at 8:44 AM Report abuse -1 rate up rate down Reply
captmerit

bunch of crooks

July 19 2011 at 8:23 AM Report abuse +2 rate up rate down Reply
Sue

couldn't have happened to a more deserving group of criminals, but A/H king obama and the rest of his wall street mafia will negate that loss.

July 19 2011 at 8:16 AM Report abuse +1 rate up rate down Reply