Bank of America reported a 43 percent drop in second-quarter profit, falling short of Wall Street estimates, as revenue from mortgages fell and litigation costs soared.
The second-largest U.S. bank said on Wednesday that earnings attributable to shareholders fell to $2.04 billion, or 19 cents per share, in the three months ended June 30 from $3.58 billion, or 32 cents per share, a year earlier.
Analysts on average had expected earnings of 29 cents per share, according Thomson Reuters I/B/E/S.
Bank of America's shares, which have barely moved this year, were down 1 percent at $15.66 in premarket trading.
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Litigation expenses surged to $4 billion in the latest quarter from $471 million a year earlier, but were less than the $6 billion recorded in the first quarter.
The bank, which has already agreed to pay more than $50 billion to settle disputes stemming from the financial crisis, has been negotiating a multibillion dollar settlement with the Department of Justice to resolve investigations into the sale of mortgage-backed bonds.
Bank of America has offered to settle for about $12 billion, while the Justice Department has suggested $17 billion, sources familiar with the matter have said.