[ by Melanie Gretchen ]

Bank of America reported on Thursday that Q4 profits fell 63%, to $732 million, or 3¢ a share, as mortgage settlements continue to take their toll on the bank's bottom line.  On the bright side, perhaps, BofA's numbers narrowly exceeded analysts' estimates.

What Happened? 

• Fourth quarter revenue fell 25% to $19 billion - largely due to charges related to claims against loans written by Countrywide Financial;  excluding the impact of those charges, BofA revenue would have come in at nearly $23 billion.
• A $700 million accounting-related charge was taken, which investors viewed quite positively because it created greater public confidence in the stability of the bank.
• A $2.5 billion charge was taken to cover foreclosure abuse claims the bank will pay out as part of its settlements with regulators.
• $11 billion was set aside just last week, to resolve claims it had sold troubled mortgages to government-controlled housing finance giant Fannie Mae, which experienced deep losses from the loans.
• A $2.7 billion pretax charge was booked to cover part of the deal

Notwithstanding the relative abundance of bad news, and Thursday's big drop in BAC share price, the bank remains optimistic about its future and had the following positive news to report: 

• Profits for the year, 2012, rose to $4.2 billion, up from $1.4 billion in 2011. 
• Delinquent loans fell in the final quarter.
• Wealth Management continued to report large gains.

CEO Brian Moynihan summed it up:  "We enter 2013 strong and well-positioned for further growth."

For further details, go to [Dealbook, 1/17/13].