NEW YORK (Dow Jones)--Bank of America Corp.'s (BAC) third-quarter earnings showed the withering effects of new financial regulations, even as the giant Charlotte bank took advantage of its size to generate higher revenue from mortgage banking and fixed-income trading.

The biggest U.S. bank by assets swallowed a $10.4 billion goodwill impairment charge as it posted a $7.3 billion loss for the quarter. The charge was at the high end of what the bank forecast in mid-July and in essence means its credit-and-debit card business is less valuable than before because new financial regulations will shrink the business's earnings. Without the $10 billion-plus non-cash charge, the bank would have earned $3.1 billion.

Credit improved, bolstering earnings; the bank released $1.8 billion of its loan-loss reserves, higher than the $1.5 billion it released in the second quarter.

The bank, which has 5,900 branches nationwide, reported higher revenue from originating mortgages, up to $2.4 billion from $2.1 billion a year ago.

Bank of America's investment bank, which includes its Merrill Lynch unit--purchased during the financial crisis--earned $1.4 billion, compared with $900 million a quarter before. The investment bank notably turned in sharply higher revenues from fixed-income trading compared to a quarter before, at $3.5 billion. By contrast, fixed-income revenues fell in the quarter at competitors Citigroup Inc. (C), J.P. Morgan Chase & Co. (JPM) and Goldman Sachs Group Inc. (GS).

The bank also paid out $400 million for claims tied to mortgage representations and warranties, and issued a murky forecast for how high--and long--those costs could eventually run. Banks have faced a rising number of "reps and warranties" claims, which refer to complaints from buyers of mortgages--especially government agencies Fannie Mae and Freddie Mac--that Bank of America and other big banks issued mortgages with faulty underwriting or documentation, and now must compensate them when the loans fail.