Bank Of America Posts Q3 Loss, Slammed By Yet Another "One-Time, Non-Recurring" Legal Charge

Tyler Durden's picture

Remember when banks said to ignore "one-time, non-recurring" legal fees because they are going away? Well, JPM yesterday showed they aren't. But it was Bank of America today which was slammed with the latest whopping $5.3 billion pretax litigation charge, which pushed its EPS once again into the red.

But wait, there's great news: the loss of $0.01 is really a $0.42 non-GAAP adjusted profit if one "adds back" the $0.43 in litigation charges.

Which is great for ostriches who like having their heads shoved in the sand. The only problem is that addbacks usually require charges to be one-time, non-recurring. Instead as the chart below shows Bank of America's litigation and legal charges are not only very much recurring, but as a cost of doing business, they keep increasing quarter after quarter:

And imagine how bad it would be if BofA hadn't taken out yet another $407MM in loan loss reserve releases, bringing BofA's total reserve releases in the past three years to a massive $13.6 billion:

So whether one treats BofA as a criminal, racketeering organization or not aside, the bigger problem is that the bank's already deplorable trading results from Q2 declined even more in the 3rd quarter as volumes crashed, showing that banks desperately need volume to make money since they clearly can't rely on rising rates to boost their Net Interest Margin:

Not surprisingly, BofA is hardly betting on a "recovery" - its full time employees declined yet again, hitting a multi-year low ofonly 212,400. Somehow we doubt those terminated will ever see the BLS rolls.

Finally, see if you can spot the real-estate recovery in the following chart.

Stick a fork in US banks.

Here is the full presentation

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stocktivity's picture

But is it bullish enough for Tyler to show the deer in the headlights today?

LULZBank's picture

Would you also want a lollipop with that?

LULZBank's picture

Banks have expenses?

Xrated's picture

we do in the mortgage department, the Loan Officers all have expensive BMW payment I pay out every month. On a nice day, most of them ride their Screaming Eagles to work too, and Harley is bigtime grateful. We all profit from the global economy

kowalli's picture

It's good or bad for new normal?

youngman's picture

and a 10 cent beat..that is what they are yelling on CNBC...weeeee

eeaton's picture

The Reuters report in the Frontrunning post below is extremely positive about BOA's earnings report and future, hmmm now who to believe?

 

Seasmoke's picture

Just imagine what the loss would be, if the people finally woke up to the fact that they are being fraudclosed on by scumbag servicer debt collecting with robo signed worthless papers !!!!

LULZBank's picture

People dont care dude, stop fantasizing.

You just make sure the whole neighbourhoods sink as people only care about competing with the Jones's.

Ban KKiller's picture

After three years they are still losing. Their docs are fraudulent and the courts are seeing that. Counterclaims here we come!

Xrated's picture

The last parting shot on Financials, been in that industry for 30 years as an independent, always in mortgages. 90% of the defaults were due to Clinton, Bush and Obama allowing the reduction in credit standards. 90% of the default people today are pure scumbags and their scumbag lawyers have Congress on their side.

How do you feel knowing these POS are using the Obama Hamp program to stay in their homes 6 years later without making more than a couple of payments, and now they are somewhat eligible for principal reduction.

 

The blood sucking lawyers are telling these people Fuck BK, Lets fight BOA because you were disrespected and you might get your house paid free and clear. The DOJ agreed. Enough said, Bitches.

.

Ban KKiller's picture

Continuing criminal enterprise supported by the sleeping sheep.

Fuck you prudential and bank of America!

Triphage worm release tonight on server farm...North Carolina.

Xrated's picture

Why so hard on BOA? Wells was twice as dirty, guess they paid Obama more money than everyone else.

Fuck Wells Fargo!

eeaton's picture

I'm reading press releases that the $16B settlement with DOJ is accounted for in this quarters report, I don't see it? Am I missing something?

Xrated's picture

That was turned into a 30 year mortgage, interest free defer untill year 15 when the balloon is due, it pays when your a Fed Board Member

A82EBA's picture

I remember when Buffet bought BOA at $4

Caveman93's picture

I almost shed a tear...almost.

JailBanksters's picture

I don't see the problem, just call Jan and tell her you want another 5 Bees, and you'll pay it back, well never. No what I meant was I'll pay back the 5B's with another loan for 5.5B. And we're still good with the ZIRP right. Sweeeeeeeet.