Bank of America's (NYSE:BAC) Legacy Issues Will Take Time to Work Out

Bank of America (NYSE:BAC) will eventually get back on track, says Barclays, buy legacy issues will continue weigh on the company for some time.

Barclays says, "Bottom-line, while BAC has taken steps to address mortgage repurchase concerns, though more progress has been made on the GSE front than private label (though it did put an upper bound of $7-$10B of additional costs), concerns on its pre-provision net revenue outlook remain. While results in 4Q were hampered by soft trading results, looking toward 1H11, net interest income and mortgage are expected to be under pressure, while expenses should remain elevated. While we expect this company to get back on track, it could take some time to put legacy issues to rest.

"We are reducing our 2011 EPS estimate from $1.65 to $1.20 to reflect a more challenging net interest income landscape in 1H, as well as lower trading revenue expectations. Still, we expect results to improve over the course of the year. Our inaugural 2012 EPS estimate is $1.80."

Barclays reiterates an "Equalweight" rating on Bank of America (BAC), which closed Monday at $13.92, losing $0.33, or 2.32 percent. Barclays has a price target of $19 on Bank of America.