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updated: 1/17/2013 7:17 AM

BofA's earnings shrink on mortgage settlements

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  • A Bank of America logo is displayed at a branch office in Palo Alto, Calif., Monday, Sept. 12, 2011. Bank of America will cut about 30,000 jobs over the next few years in a bid to save $5 billion per year. The cost-cutting drive is part of a broader effort to reshape and shrink the nation's largest bank as it copes with fallout from the housing bust.

      A Bank of America logo is displayed at a branch office in Palo Alto, Calif., Monday, Sept. 12, 2011. Bank of America will cut about 30,000 jobs over the next few years in a bid to save $5 billion per year. The cost-cutting drive is part of a broader effort to reshape and shrink the nation's largest bank as it copes with fallout from the housing bust.

 
Associated Press

NEW YORK -- Bank of America says its fourth-quarter earnings shrank as it cleaned up old problems from its mortgage unit.

The bank made $367 million in the last three months of 2012, down from $1.6 billion in the same period a year ago. The earnings were equivalent to 3 cents per share.

The bank had warned that it expected earnings to be only "modestly positive." It took big charges related to a settlement with the government-backed mortgage lender Fannie Mae and a separate agreement in which it and other banks settled government accusations of wrongful foreclosure practices.

Earnings beat the expectations of analysts polled by FactSet, who predicted 2 cents a share.

Revenue was $19.6 billion after stripping out an accounting charge, down from $26.4 billion. That missed expectations for $21.2 billion.

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