Bank of America reports first quarter loss of $276 million

by: Jim Bradley Updated:

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CHARLOTTE, N.C. - The start of 2014 can't be what Bank of America executives were hoping for. 
 
Instead of profits, like those the bank has reported for 9 consecutive quarters, Bank of America said it posted a loss of more than a quarter-of-a-billion.
 
The bank said it had a net loss of $276 million in the first quarter of 2014. That's compared with $1.5 billion in profits during the same time period last year.
 
A big part of its losses is $6 billion the bank set aside to pay for settlements of lawsuits connected to bad mortgages.
 
"The tragedy of this is the bank, in essence, would have posted first-quarter earnings equivalent to what Wells (Fargo) and other companies have done. -- $6 billion plus. But each of these set asides is just chewing into those earnings," said Charlotte economist John Connaughton. 
 
Thursday’s report of losses raises new questions about when Bank of America will be able to stop paying for its disastrous decision in 2008 to buy Countrywide Financial and its portfolio of what turned out to be toxic loans.
 
Bank of America has paid more than $50 billion to settle lawsuits related to the bad mortgages. 
 
Bank CEO Brian Moynihan said things are getting better. 
 
"What would be the ongoing litigation cost? Much, much lower," Moynihand said.
 
Bank of America did report growth in the amount of new deposits and in the number of new credit cards issued. 
 
It also said it will continue closing some branches because traffic at them is down. 
 
Bank of America said online and mobile banking are taking off. 
 
Still, Connaughton said those victories won't matter nearly as much unless bad mortgages stop costing the bank billions of dollars. 
 
"Everything else they're doing well," Connaughton said. "This is the shame of it. They've got this one albatross that's basically tearing the company down."

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