CHARLOTTE, N.C. -- Bank of America Corp. this morning reported a second-quarter net loss of $8.8 billion, as previously announced mortgage-related charges walloped its bottom line.

After disclosing more than $20 billion in mortgage-related charges last month, Bank of America had said it expected to report a net loss between $8.6 billion and $9.1 billion. The mortgage expenses included $8.5 billion for a proposed settlement with investors who bought now soured mortgage loans from Countrywide Financial during the housing boom.

The Charlotte bank's second-quarter loss compared to a $3.1 billion profit in the second quarter of 2010. Including dividends paid to preferred shareholders, Bank of America posted a loss of $9.1 billion applicable to common shareholders, compared to a gain of $2.8 billion a year ago.

Excluding mortgage-related items and other charges, Bank of America said it posted a profit of $3.7 billion in the second quarter. The bank's results were boosted by lower loan losses in other businesses, gains from selling noncore assets and securities and increased revenue in investment banking, trading and wealth management.

Bank of America's mortgage unit posted a $14.5 billion loss, while its other businesses made $5.7 billion. The bulk of the bank's mortgages woes are tied to the bank's $2.5 billion purchase of subprime lender Countrywide Financial Corp. in 2008, under former chief executive Ken Lewis. Since that deal closed, the bank's mortgage unit has lost $30.4 billion.

Obviously, the solid performance in our underlying businesses continues to be clouded by the costs we are absorbing from our legacy mortgage issues, said Bank of America chief executive Brian Moynihan, who replaced Lewis in January 2010, in a statement. But it is clear that from deposits to wealth management to investment banking our customers and clients are choosing to do more with us every day. We intend to continue our efforts to put the mortgage uncertainty behind us, build capital through the strength of the franchise, and deliver the returns for shareholders that we owe them.

The mortgage charges announced last month mostly address requests by investors to buy back loans Countrywide sold off during the housing boom. The bank stuck by its estimate that it could still take another $5 billion in losses related to these requests.

That estimate doesn't include reasonably possible litigation losses, the bank said in its earnings presentation. Bank of America and other large lenders are in settlement talks with the U.S. Justice Department and state attorneys general over allegations of faulty foreclosure practices.

The bank set aside $1.9 billion for litigation expenses in the second quarter, up from about $800 million in the first quarter.

The bank's mortgage troubles have raised concerns about whether it has enough capital to absorb future losses and meet stricter international capital standards that are being phased in through 2019. The bank reported a tier 1 common equity ratio a measure of capital against assets weighted for risk of 8.23 percent, which was down from 8.64 percent in the first quarter but up from 8.01 percent a year ago. The bank had said last month that the ration would be above 8 percent.

Bank of America, which is at the beginning of a cost-cutting campaign, saw its total employment dip to 287,839 from 288,062 in the first quarter. Total branches declined to 5,742 from 5,805 as the bank works to reduce total locations by 10 percent. Last week, New York-based JPMorgan Chase & Co. said it earned $5.3 billion for common shareholders in the second quarter, up about 14 percent from a year earlier. New York-based Citigroup Inc. reported a second-quarter profit for common shareholders of $3.3 billion, up 23 percent.

Bank of America's shares are trading at a two-year low, closing Monday at $9.72. The bank's executives will host a conference call for analysts at 8:30 a.m.

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