Bank Of America Earnings Plagued By Legacy Countrywide Woes Offset By $900 Million In Loan Loss Reserve Releases

As disclosed 10 days ago in its agreement with Fannie, Bank of America already warned that it would see a $2.7 billion pre-tax hit to earnings resulting from just one GSE reps and warrants settlement. Sure enough, this was the biggest one time adjustment to the company's earnings which came out at $700 million on a pre-adjustment basis, or some $0.03. Excluding all the various incurred "charges", the bank reported $0.29 in earnings.  Of course, the assumption is that the bulk of the charges highlighted below are "one time" - yet, since most of them relate to the ongoing reps and warrants litigation, it is rather safe to put them in the recurring cost of business as the total amount of outstanding claims on R&W warrant cases has soared to a record $28.3 billion, compared to just $12.6 billion a year ago. Netting out the $13.5 billion in GSE claims which are now settled there are ...