Last month it agreed to pay $2.4bn to settle claims it hid crucial information from shareholders when it bought Merrill Lynch.
But despite the $1.6bn charge booked in the quarter, the bank still recorded a profit thanks to tough staff cuts and rising lending to retail customers.
Profits came in at $340m, down 95 per cent on the year.
On top of the litigation expenses, the bank was also hit by a UK tax-related charge of $0.8bn.
Total revenues slid 28 per cent on the year to $22.66bn. Consumer revenues dropped on new debit card interchange fee rules, while average loan balances fell and the wider low-interest rate environment hit earning opportunities.
However, it cut headcount by 16,145 on the year to 272,594, driving personnel expenses down 4.9 per cent to $8.43bn, helping to keep the bank in the black.
And the bank’s provision for credit losses fell by $162m on a sharp improvement in delinquencies and bankruptcies.
However there may still be some legal costs to come – chief finance officer Bruce Thompson said disagreements with state-backed Fannie Mae are ongoing.