Citi, BofA Give Investors Only Reason to Fret

Bank of America and Citigroup are giving investors nothing but reasons to fret. The two U.S. banks’ stocks were among the best performers last year – BofA’s doubled, while Citi’s jumped by 50 percent. But their fourth-quarter earnings, which both unveiled on Thursday, offer little to support further optimism. Both of them had a messy final three months of the year, full of litigation costs and other charges. BofA Chief Executive Brian Moynihan had to book $5 billion of charges stemming from predecessor Ken Lewis’s attempt to build the nation’s largest mortgage lender and servicer with purchases like the disastrous Countrywide. It also took a $700 million accounting hit because improving credit made its own liabilities go up in value. There were some offsets, like a $2.4 billion tax break. Stripping out all the one-offs bumps BofA’s fourth-quarter net income to around $2.2 b...