Bank of America Corp., the lender seeking to trim $8 billion in expenses, reduced staff by 4,378 workers in the first quarter, the most among the four largest U.S. banks.
The reductions amounted to almost 2 percent of the Charlotte, N.C.-based lender’s workforce. The job cuts left Bank of America with 262,812 employees as of March 31, the firm said Wednesday in a statement.
Among those being let go are 1,200 workers at a mortgage facility in Crosspoint Business Park in Getzville. Those jobs are being eliminated by May 31.
Bank of America CEO Brian T. Moynihan has said that those handling delinquent mortgages and foreclosures would face the biggest job cuts as the number of late borrowers dwindles. The lender said that it serviced 667,000 overdue loans as of March 31, compared with 1.6 million at the height of the financial crisis.
Moynihan told analysts Jan. 17 that the bank will slice deeper into its mortgage team. “There’s nothing more important in our company than getting this done as quickly as possible,” he said.
Bank of America, the second-biggest U.S. lender by assets, has told state regulators that it intends to close or shrink mortgage-processing facilities in New York and New Jersey. The firm cut 5,400 workers in the fourth quarter, most of them from the legacy assets and servicing unit.
Meanwhile, the bank announced that it would pay $500 million to settle a class-action lawsuit led by pension funds and other investors who say they were misled about $350 billion in mortgage-backed investments they bought from Countrywide, a mortgage lender that Bank of America acquired in 2008. The bank portrayed the settlement as good news because it resolved the bulk of securities claims related to residential mortgage-backed securities.
But financial analysts, in a conference call to discuss the bank’s first-quarter results, peppered bank executives with questions about another pending settlement. Bank of America is still waiting for court approval for a similar settlement that it made with Bank of New York Mellon almost two years ago. If it doesn’t get the go-ahead, Bank of America could have to spend more to resolve the claims.
It was just last quarter that two mortgage-related settlements overshadowed the bank’s results. In early January, the bank took a charge of $2.7 billion to settle a dispute with Fannie Mae, which ordered Bank of America to buy back mortgages that it had sold to the agency before the crisis. It also took a $1.1 billion charge to settle government accusations that it and other banks had wrongfully foreclosed on some homeowners. The charges sent fourth-quarter earnings down sharply.
The bank reported first-quarter earnings of $2.3 billion, soaring from the $328 million that it earned a year ago. But the 2012 results were affected by an accounting rule that forced the bank to record a charge because the value of its debt had risen. Revenue was $23.9 billion after taking out an accounting charge.
The Associated Press contributed to this report.