Net income fell to $340m from $6.2bn a year earlier, according to a statement today from the Charlotte, North Carolina-based firm.
Bloomberg reports that CEO Brian Moynihan, who took over in 2010, has approved more than $28bn for settlements of legal and regulatory claims tied to his predecessor’s takeovers of Countrywide Financial Corp. and Merrill Lynch & Co. Last month, he agreed to pay $2.4bn to investors who said management hid Merrill losses ahead of the 2009 deal.
'There are several things floating to the top that reflect a continual clean-up at Bank of America', said Marty Mosby, an analyst at Guggenheim Securities LLC, which manages more than $100bn including Bank of America stock. 'The Merrill settlement was yet another uncertainty that goes away, and at the same time the housing market is getting better, which helps because the lion’s share of their issues are from real estate'.
Moynihan said: 'We are doing more business with our customers and clients: Deposits are up; mortgage originations are up; we surpassed 11 million in mobile customers; small business lending is up 27% year over year; loans to our commercial clients rose for the seventh consecutive quarter; and our corporate clients made us the second-ranked global investment banking firm. Our strategy is taking hold even as we work through a challenging economy and continue to clean up legacy issues'.
'Our focus on strengthening the balance sheet continued this quarter', said Chief Financial Officer Bruce Thompson. 'We ended the quarter with record Tier 1 common capital ratio of 11.41 percent and an estimated Basel 3 Tier 1 common capital ratio of 8.97%, up from 7.95 percent as of the second quarter of 2012. With these gains, we have turned our attention to driving core earnings'.