NEW YORK ( TheStreet) -- Bank of America (BAC - Get Report), the second-largest U.S. bank, reported a first-quarter loss as the company dealt with litigation expenses for residual faulty mortgage products from the financial crisis.
For the three months to March, the bank reported a loss of $276 million, or 5 cents a share, after taking a $6 billion hit related to a settlement with the Federal Housing Finance Agency (FHFA). The expense resolved litigation filed against Bank of America regarding residential mortgage-backed securities (RMBS) allegedly misrepresented as complying with regulatory standards.
"The cost of resolving more of our mortgage issues hurt our earnings this quarter," said Chief Executive Officer Brian Moynihan in a statement.
Stripping out the impact of these expenses, North Carolina-based Bank of America recorded adjusted net income of 35 cents a share.Revenue of $22.8 billion was 3% lower year over year but beat analysts' estimates by $470 million. The bank's Basel III Common equity ratio, a marker of liquidity risk and capital adequacy, increased to 11.8% from 11.7% at the end of the last quarter. Its tangible book value per share increased to $13.81, 2 cents higher than at year's end. --Written by Keris Alison Lahiff in New York.