Bank of America’s Earnings Shrink on Mortgage Settlements

NEW YORK — Bank of America says its fourth-quarter earnings shrank as it cleaned up old problems from its mortgage unit. The bank made $367 million in the last three months of 2012 after paying preferred dividends, down from $1.6 billion in the same period a year ago. The earnings were equivalent to 3 cents per share. The bank had warned that it expected earnings to be only “modestly positive.” It took big charges related to a settlement with the government-backed mortgage lender Fannie Mae and a separate agreement in which it and other banks settled government accusations of wrongful foreclosure practices. The earnings were slightly better than the 2 cents per share estimate of financial analysts polled by FactSet. (MORE: The Rise of the Alterna-Banks: 4 Options Beyond Traditional Banking) Revenue was dragged down by the Fannie Mae settlement. It fell to $19.6 billion afte...