The Bank of America said recently its earnings from the second quarter took a dive as a result of high litigation costs.
The North Carolina-based bank earned $2 billion on its second quarter after payments made to preferred shareholders. This was below the $3.6 billion in the same period last year --- a 43% drop.
Bank of America also indicated it arrived at a $650 million settlement recently with American International Group, Inc., to close out any outstanding resident mortgage securities litigation between both firms.
The bank said all of its litigation payments that happened in the second quarter were related to current mortgage matters.
Just like its rivals, Bank of America is still coping with the fallout from a financial crisis that started in 2007 and the housing market collapse.
Bank of America has yet to settle on a federal probe regarding its management on subprime mortgages. Citigroup said recently that it settled with the Department of Justice for $7 billion, while JPMorgan agreed to settle for $13 billion in November.