Bank of America Corp. eked out a $340-million profit for the third quarter after recording $1.6 billion in legal expenses, but analysts say the bank has much more work ahead before it can resolve the headaches that have plagued it since the financial crisis.
The latest litigation costs, disclosed in a third-quarter financial report, stem from a $2.4-billion settlement of lawsuits over BofA's takeover of brokerage giant Merrill Lynch in 2008. The settlement, announced Sept. 28, was with investors who contended BofA knew Merrill was in worse financial shape than it revealed at the time.
Former BofA Chief Executive Ken Lewis engineered the deal at the end of a decades-long expansion spree. His successor, Brian Moynihan, has been scaling back many operations in an effort to create a leaner and more profitable company, including drastically curtailing BofA's mortgage business, once the nation's largest.