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UPDATE 1-Litigation expenses push Bank of America into loss

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April 16 (Reuters) - Bank of America Corp posted a first-quarter loss as the No. 2 U.S. bank recorded $6 billion in litigation expenses related to a settlement with the Federal Housing Finance Agency and other mortgage-related matters.

The bank reported a net loss attributable to shareholders of$514 million, or 5 cents per share, in the three months to March 31 compared with a profit of $1.11 billion, or 10 cents per share, a year earlier. 1/8IDn:nBw50C1C1a 3/8

The previous quarter's results were hit by $1.6 billion in charges related to disputes with bond insurers.

Analysts on average had expected earnings of 5 cents per share, according to Thomson Reuters I/B/E/S.

BofA's shares, which have risen 5.3 percent so far this year, were down nearly 2 percent at $16.10 in premarket trading.

Revenue fell 3.8 percent to $22.66 billion, excluding accounting adjustments, but beat the average analyst estimate of $22.33 billion.

Bank of America is coming off its best year since before the financial crisis, with 2013 net income of $11.4 billion the highest since 2007. But large legal bills continue to overshadow the performance of many of its main businesses.

BofA agreed in March to pay $9.5 billion to settle claims that it sold Fannie Mae and Freddie Mac faulty mortgage bonds, helping it to end one of the largest legal headaches it still faced from the financial crisis.

BofA made progress resolving many of its legal issues in the first quarter, although some proved to be costly.

The bank said on March 26 that first-quarter pre-tax profit would be reduced by about $3.7 billion as a result of a settlement with the Federal Housing Finance Agency, the overseer of government-backed mortgage giants Fannie Mae and Freddie Mac.

"The cost of resolving more of our mortgage issues hurt our earnings this quarter," Chief Executive Brian Moynihan said in a statement.

Litigation expenses rose to $6.0 billion from $2.2 billion in the first quarter of 2013. Noninterest expenses increased to $22.24 billion from $19.50 billion.

Costs in the bank's Legacy Assets and Servicing division, excluding litigation expenses, fell to $1.6 billion from $2.6 billion a year earlier and $1.8 billion in the third quarter.

The Charlotte, North Carolina-based bank has said that costs in the unit, which handles delinquent mortgage loans, would fall below $1.1 billion a quarter by the end of 2014 and will be about $500 million a quarter by the end of 2015.

Bank of America released $379 million from its allowances for bad loans, compared with $804 million in the same period a year earlier and $1.2 billion in the fourth quarter.

(Reporting by Peter Rudegeair in New York and Tanya Agrawal in Bangalore; Editing by Ted Kerr)