The $8.5 billion pact that Bank of America Corp. (BAC) reached with a group of institutional investors Wednesday could be a blueprint for claims other banks face over soured mortgage-backed securities.

Though analysts were split in their opinions as to whether such a result would be good or bad for banks, investors expressed relief that a major worry of the financial crisis could be put in the rear-view mirror.

Bank of America, in its settlement, paid more than most analysts expected but the pact was viewed in the market as removing a significant question mark from the company's future. Shares rose 3.3% to $11.18.

Meanwhile, shares of other banks rose as investors hoped they could now use the Bank of America settlement as a basis for their own agreements. J.P. Morgan Chase & Co. (JPM) rose 2.4% to $40.50, while Citigroup Inc. (C) advanced 2.9% to $41.33 and Wells Fargo & Co. (WFC) added 1.3% to $27.86.

Still, the high cost paid by Bank of America was raising expectations for what other banks might have to pay to investors claiming the mortgages underlying the securities they purchased had been improperly underwritten. And other analysts fretted that investors, not just banks, could use the settlement for a blueprint, leading to more demands for settlements.

"The good news is it implies the exposures are very manageable relative to capital and tangible book values," Nomura analysts said. "The bad news is now that BofA has settled, it would stand to reason that investors will look for settlements from others as well."

Bank of America, the nation's biggest bank by assets, certainly had the biggest headache in mortgages. Between 2004 and 2008, the bank sold some $963 billion in mortgage-backed securities to private investors.

Bank of America said that, by paying $8.5 billion, it was taking care of $424 billion in original principal, of which $221 billion was unpaid. This means the bank was paying 2 cents on the dollar for the initial principal and just under 4 cents on the dollar on the unpaid principal.

In addition, Bank of America said it could face an additional $5 billion in private losses. That means it is estimating it would have to pay less than 1 cent for every dollar in the remaining outstanding initial principal.

Nomura said Bank of America, and Countrywide, likely has a particularly severe loan book, so using the math from the settlement at other banks is "far from perfect" but can at least provide a benchmark.

Nomura, using the 4-cent rate Bank of America had on unpaid principal and reducing it to account for differences at each bank, estimated Wells Fargo could face $700 million in a potential settlement.

The firm also estimated that Capital One Financial Corp. (COF) could settle its unpaid balances for $600 million, while First Horizon National Corp. (FHN) and SunTrust Banks Inc. (STI) could settle for $200 million each.

Meanwhile, JMP analysts said costs are likely to be higher than expected at J.P. Morgan and Citigroup, given Bank of America's settlement.

J.P. Morgan said it had $180 billion in unpaid principal amounts at the end of March, adding repurchase claims have been limited. It had forecast $3.5 billion in liabilities for losses.

If the same math that Bank of America had were applied to J.P. Morgan--to be sure, an estimate that can't necessarily be assumed--J.P. Morgan could be facing $7.2 billion in potential settlement costs.

At Citigroup, its unpaid principle balance was $36 billion at the end of March. If Bank of America's payment was duplicated there, again an assumption that potentially oversimplifies, Citi could be facing about $1.44 billion in any settlement.

-By David Benoit, Dow Jones Newswires; 212-416-2458; david.benoit@dowjones.com

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