BofA posts first profit in three quarters, settles faulty-lending disputes

Bank of America (BofA), the largest US lender by assets, reported its first profit in three quarters and settled more claims tied to faulty mortgages as an improving economy helped borrowers keep up with debts.

First-quarter earnings fell 36 per cent to $2.05 billion, or 17 cents a share, from $3.18 billion, or 28 cents, a year earlier, the bank said on Friday in a statement. The bank also replaced its CFO, citing family reasons. Results for the Charlotte, North Carolina-based company missed the average estimate.

CEO Brian T Moynihan has sought to assure investors that the bank is on the path to recovery after last year’s $2.2 billion net loss. The bank added $487 million to its reserve for disputed home loans and said it had resolved claims with Assured Guaranty, the mortgage- bond insurer. Revenue for the first quarter declined 16 per cent to $27.1 billion.

“It’s really a tale of two cities; the rest of the company continues to push forward,” Moynihan said in an interview with Erik Schatzker on Bloomberg Television’s “InsideTrack”. “The mortgage business continues to push us back and we’ve got great customer activity in those other businesses.”

BofA said CFO Charles Noski will be replaced by Chief Risk Officer Bruce Thompson citing an illness in Noski’s family. The company also hired Gary Lynch a former director of enforcement at the Securities and Exchange Commission (SEC), as the lender works to resolves disputes with regulators.