Bank of America's stock fell 3% after the company reported legal costs… (Stan Honda / Getty )
NEW YORK -- Investors sent Bank of America's stock 3.7% lower Thursday morning after the firm said legal costs dragged down earnings in the fourth quarter.
BofA's stock fell 43 cents, or 3.7%, to $11.35 in midday trading on Wall Street.
The bank, which has continued to struggle from mortgage woes and acquisitions it made during the financial crisis, said legal costs stemming from massive mortgage-related settlements pushed down fourth-quarter earnings by 63%.
Net income was $732 million, or 3 cents a share, down from $2 billion, or 15 cents, in the fourth quarter in 2011. Revenue fell 25% to about $19 billion.
In the fourth quarter, BofA booked a $2.7-billion charge related to the bank's recent settlement with Fannie Mae. The deal, announced last week, resolves lingering problems with faulty mortgages originated by Countrywide Financial Corp., which BofA purchased during the financial crisis.
Bank of America also had to swallow a $1.1-billion hit for its portion of a settlement reached last week between regulators and major banks over foreclosure abuses. The bank reported a further litigation expense of $900 million.
For all of 2012, the North Carolina-based bank reported earnings of $4.2 billion, or 25 cents a share, up from $1.4 billion, 1 cent per share in 2011.
"We addressed significant legacy issues in 2012 and our strengths are coming through," Chief Financial Officer Bruce Thompson said in a statement. "Capital and liquidity remain strong and credit continues to improve. Our primary focus this year is to grow revenue, manage expenses and drive core earnings growth."
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