Bank of America Corporation today reported a net loss of $276m, or $0.05 per diluted share, for the first quarter of 2014, compared to net income of $1.5bn, or $0.10 per diluted share, in the year-ago period.

Revenue, net of interest expense, on an FTE basis declined three% from the first quarter of 2013 to $22.8bn. Excluding the impact of net debit valuation adjustments (DVA) in both periods, revenue was down four% from the year-ago quarter to $22.7bn.

The results for the first quarter of 2014 include $6.0bn in litigation expense related to the previously announced settlement with the Federal Housing Finance Agency (FHFA), and additional reserves primarily for previously disclosed legacy mortgage-related matters.

“The cost of resolving more of our mortgage issues hurt our earnings this quarter,” said Chief Executive Officer Brian Moynihan. “But the earnings power of our business and customer strategy generated solid results and we continued to return excess capital to our shareholders.”

“During the quarter, our Basel 3 standardised capital ratios and our liquidity improved to record levels and credit quality also improved,” said Chief Financial Officer Bruce Thompson. “In addition, expenses in our legacy mortgage servicing business, excluding litigation, declined by $1bn from the year-ago quarter.”

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