Part of the problem for Bank of America compared with peers like JPMorgan Chase (JPM - Get Report) is that the bank as consistently surprised investors and analysts to the downside, reporting a string of negative earnings hits.
"One thing that I don't think Moynihan has done well which the best managers do well is under promise and over deliver," says Sinegal of Morninstar. "I think that's something that Jamie Dimon has done a good job of, that's why he gets so much credit," he adds.
Seen in that light, Friday's settlement represents just another negative earnings surprise on the heels of quarter after quarter of one-time charges related to the bank's activities prior to the financial crisis. Those losses include shareholder lawsuits against Bank of America on a litany of disclosures, settlements with state attorney generals on underwriting at its Countrywide unit - another hotly contested acquisition -- and legal battles with Fannie Mae and Freddie Mac on whether it misrepresented the quality of mortgage bonds it sold both government-sponsored agencies.
Moody's highlights in a Monday note that the shareholder settlement on Merrill Lynch may "be a step in the right direction" for Bank of America, but the ratings agency also notes a litany of liabilities remain for the bank to work through."
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