Bank of America, the second biggest US bank by assets, reported a small quarterly loss today, largely due its record $16.65 billion mortgage settlement with the US government in August.
The bank posted a net loss attributable of $70m, or 1 cent per share, for the three months ended September 30.
This compared with a profit of $2.22 billion, or 20 cents per share, the same time last year.
Net income for the three month period fell to $168m from $2.5 billion.
"We saw solid customer and client activity and improved profitability in most of our businesses relative to the year-ago quarter," the bank's chief executive and chairman Brian Moynihan said.
Fund managers and analysts have said the settlement, tied to the bank's purchases of Countrywide Financial in July 2008 and Merrill Lynch six months later, may finally allow the company to put last decade's housing bubble behind it.
Bank of America is the fourth of the Big Six US banks to report third-quarter results. JPMorgan Chase & Co and Citigroup were also hit by big legal expenses.
Bank of America's litigation costs rose to $5.6 billion in the latest quarter, from $4 billion in the second quarter and $1.1 billion in the third quarter of 2013.
Bank of America has so far agreed to pay about $70 billion to resolve legal disputes related to the financial crisis - more than double the amount JPMorgan has agreed to pay.
The bank said that investment banking fees rose 4% in the third quarter from a year earlier to $1.4 billion. Bond trading revenue, excluding accounting adjustments, rose 11% to $2.2 billion as market activity picked up in September.
Citigroup's revenue from fixed income trading rose 5%, while JPMorgan's increased 2%.
Bank of America said its equities sales and trading revenue increased 6% to $1 billion on the same basis.
Profit in the bank's largest business, retail banking, rose 3.9% to $1.86 billion, driven by lower provisions for credit losses. The business includes credit cards.
Profit from wealth and investment management grew by 12.9% to $813m as asset management fees rose 19% to a record $2 billion.
