Bank of America Corp., currently the second-largest lender in the U.S., made an official statement today, posting its first quarterly loss in nearly three years. The unsatisfactory result was due to the fact that the company was affected by litigation expenses, estimated to 6 billion dollars.
The 6 billion dollars in question included 3.6 billion dollars associated with the settlement in the U.S., which Bank of America revealed in March 2014. The sum also includes an increase in reserves, which is estimated to 2.4 billion dollars. As reported by Bloomberg, according to one of the banks analysts who work at Guggenheim Securities LLC – Marty Mosby – legal settlements are “just another issue that is being filed away and you hopefully don’t have to worry about anymore”.
Mr. Bran Moynihan, who is the Chief Executive Officer of Bank of America Corp. said in the statement, which was cited by the Financial Times: “The cost of resolving more of our mortgage issues hurt our earnings this quarter. But the earnings power of our business and customer strategy generated solid results and we continued to return excess capital to our shareholders.”
Bank of America Corp. posted a first-quarter loss that amounted to 276 million dollars in comparison to a 1.48 billion dollars profit posted for the same period in 2013. The banks overall revenues decreased from 23.6 billion dollars a year ago to 22.7 billion dollars.
The companys 35-cent adjusted earnings surpassed the analysts estimates. The results announced by the company include a charge that amounted to 21 cents per share bound to a mortgage securities settlement that was previously revealed.
Under the lead of Chief Executive Officer Moynihan, Bank of America has become more focused on finalizing its bog legal settlements. It is also seeking to eliminate litigation uncertainty for investors.
Bank of America Corp. was trading at $15.88 per share by 16:35 GMT, losing 3.11% for the day and capping a +29.32% one-year change. The 29 analysts offering 12 month price targets for Bank of America Corp. have a median target of 18.00, with a high estimate of 21.00 and a low estimate of 8.68. The median estimate represents a 9.82% increase from the last price of 16.3900.
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