Bank of America Corp. reported Thursday earning $367 million for shareholders in the fourth quarter, or 3 cents per share.
That’s down from a profit of $1.6 billion for shareholders in the same quarter last year. But the Charlotte bank’s performance likely would have exceeded that had it not been for two massive legal settlements. Both were announced Jan. 7.
The bank agreed to pay more than $10 billion to settle a long-running dispute with mortgage giant Fannie Mae over millions of loans sold by Countrywide Financial Corp. to be bundled into securities.
Bank of America also agreed to pay $1.1 billion and provide another $1.8 billion in loan relief to customers to end the independent foreclosure review mandated by an earlier settlement with the Office of the Comptroller of the Currency and the Federal Reserve.
When those were announced, the bank said it expected its earnings to be “modestly positive.”
Bank of America’s full-year 2012 earnings came in at $2.8 billion for shareholders, up from $85 million in 2011.
"We’ve made a lot of progress during 2012," Chief Financial Officer Bruce Thompson said on a conference call with journalists Thursday. “We’ve continued to reduce the legacy issues, the balance sheet’s in great shape, and credit quality continues to improve.”
He also touted the bank’s mortgage production, which is now down exclusively direct to consumer. It produced $21.5 billion in mortgages in the fourth quarter, up 6 percent from the quarter before. For comparison, Wells Fargo originated $63 billion in mortgages through its retail channel.
Bank of America’s headcount fell by more than 5,000 -- or 2 percent -- in the fourth quarter, the steepest drop over the past year. In a conference call with journalists, Thompson said that 3,000 of those were in the unit dedicated to servicing troubled mortgages.
That was possible, he said, because the number of mortgages 60 days or more past due fell by 17 percent in the quarter, to 773,000.
The number of contractors in that unit came down by another 6,000, Thompson said.
Dunn: 704-358-5235 Twitter: @andrew_dunn
