Story updated with additional information.
- The bank reported a net loss of $8.8 billion, or 90 cents a share.
- Analysts expected a loss of 90 cents per share.
- Excluding mortgages, net income was $3.7 billion, or 33 cents per share
- The bank closed trading Monday at $9.72.
The largest U.S. bank by assets posted a net loss of $8.8 billion, or 90 cents a share for the second quarter, compared with a net profit $3.2 billion, or 27 cents a share, it earned in the same quarter a year-ago.
|Bank of America CEO Brian Moynihan|
Analysts expected a net loss of 90 cents per share, according to Thomson Reuters.A majority of the loss was attributed to the recent agreement to settle investor claims related to Countrywide-issued first-lien mortgage-backed securitizations, the banks said in a statement. "Obviously, the solid performance in our underlying businesses continues to be clouded by the costs we are absorbing from our legacy mortgage issues," said ceo Brian Moynihan. "We intend to continue our efforts to put the mortgage uncertainty behind us, build capital through the strength of the franchise, and deliver the returns for shareholders that we owe them." Analysts had been prepared for the mortgage-related losses, since they were announced June 29. Even so, they did not appear overly impressed with the performance of the rest of Bank ofr America's businesses. Net interest margin (NIM)--the difference between the bank's cost of capital and what it earns on its loans--was weaker than expected and weaker than it had been in the first quarter, according to a report Tuesday from Stifel Nicolaus after the earnings release. Bruce Thompson, Bank of America's CFO, said during a conference call with analysts Tuesday the NIM of 2.5% was "consistent with our previous guidance where we expected net interest income margin to trough in the 2.5% area." Thompson attributed the NIM compression to lower consumer loan balances, lower yields and the drop in long term interest rates which he said negatively impacted hedging results. He also cited lower trading related revenues. Credit quality continued to improve, though at a slower pace than previously, according to a note from Sandler O'Neill analyst Jeff Harte. Harte argued the results were "generally in line with expectations," adding that "could be good news from