BofA Loses $5.2B as it Repays Bailout

(AP)  Bank of America Corp. said Wednesday it lost $5.2 billion during the final three months of 2009 as consumers struggled to make mortgage and credit card payments and the bank repaid its government bailout money.

Bank of America said its loss, which reflected the payment of preferred dividends, compared with a loss of $2.4 billion a year earlier. The bank, which was one of the hardest hit by the credit crisis and recession, said its results were boosted by strong results from its Merrill Lynch investment banking operations that it acquired a year ago .

The report fell in line with those of JPMorgan Chase & Co. and Citigroup Inc., both of which had billions in losses from bad loans offset by investment banking income. The industry's results are a concern for economists and investors, who question whether the economy can have a sustained strong recovery if consumers are still defaulting on loans.

CEO Brian Moynihan echoed those concerns in a statement, saying, "economic conditions remain fragile and we expect high unemployment levels to continue, creating an ongoing drag on consumer spending and growth."

Charlotte, North Carolina-based Bank of America lost 60 cents per share during the fourth quarter, more than the 52 cents analysts were expecting, according to Thomson Reuters. But investors appeared unfazed; the bank's stock was up 11 cents at $16.43 in pre-opening trading.

The bank set aside $10.1 billion to cover soured loans, down nearly 14 percent from the previous quarter.

Like Citigroup, Bank of America said it saw some signs of improvement in its loan portfolios. The company said it charged off $8.4 billion in loans during the quarter, down $1.2 billion from the third quarter. Loans are charged off when they are considered uncollectible.

But credit costs remained high, with the bank's credit card unit posting a $1.03 billion loss, well above a $9 million loss a year ago.

The addition of Merrill Lynch supported the bank's results. But Bank of America said its global wealth and investment management unit saw its net income rise to $1.3 billion in the quarter, up from $515 million a year earlier, driven by the addition of Merrill Lynch.

Bank of America said $4 billion of its fourth-quarter loss came from the costs of paying back $45 billion in government bailout money in December.

JPMorgan Chase, which last Friday reported a $3.28 billion fourth-quarter profit, also said its investment banking earnings offset losses from loans. Many analysts predict loan losses should peak some time in the first half of 2010.

On Tuesday, Citigroup said it lost $7.58 billion in the fourth quarter as consumers continued to struggle to repay loans and the bank repaid its government bailout. The bank said it set aside $8.18 billion to cover bad loans during the most recent quarter.

Moynihan, who became CEO on Jan. 1, has said Bank of America's decision to pay back the government loans was a major step in bringing back employee and shareholder confidence. It also freed the bank from restrictions on how much it could pay employees.

Bank of America's has about 53 million customers, including individual consumers and businesses. That breadth makes BofA particularly vulnerable to high unemployment, which currently sits at 10 percent.

Moynihan, 50, became CEO after Ken Lewis retired.

For the full year, Bank of America lost $2.2 billion, or 29 cents per share. It earned $2.56 billion, or 54 cents per share in 2008.

[zippiez]

From the posts so far, its encouraging to know that not all of America is as stupid as its politicians!
Although we voted the twits in, we can claim ignorance of the apparent fact that when you play with other people's money you don't give a rat's @$$ how you spend it!

[mike18881]

Did we run a credit check on these banks befor we gave them a loan? just wondering.

[stevieboy327]

They would have a better year if they were thinking of serving the public. We had a mortgage modification with Countrywide and had made three payments when B of A took over Countrywide. B of A advised they wouldn't except the modification and would NOT take partial payments. We are working with them but they will not respond back to us other than to say we owe all that we are late even the difference between the modified payments to Countrywide and the original payment. I still have equity in my house so I think they want to take it to balance there budget.

[Rodeo_Joe]

I N S T A N T K A R M A

[thesevenveils]

This is how far a bank will go to out of the public scrutiny so it can continue its practice of paying bonuses in pornographic proportions to its executives and staff.

These banks ar eall using OUR money to make their money. We the people should have a say in how we are being charged to borrow OUR money!

[myopinionpal]

I hear the big banks will loose even more because people are moving their money to small hometown banks and credit unions. Goodby Wachovia aka Wells Fargo.

[midlclass]

In a rush to pay off there goverment bail out loans. so they can pay out there pork barrel bonus's they ran the profit's down into the lose colum. then blame it on the consumer's that have lost there jobs and can''t pay there mortgages and refuse to help the same people out with refinancing or interest only payments. the goverment should get it's money back. and let the company fail.after all aren't we a capitalist nation. this would also flood the market with people looking for jobs so intern the other banks could save money and hire the laid off workers at a lower rate and no bonus's or benefits.

[rematenaj]

Bank of America is losing money? How is that when they rape their customers on a daily basis. I have a BofA credit card that had a $21500 credit limit with a $700 balance - for no reason, they reduced my credit limit to $700 and raised my interest rate. I always make more than minimum payment and am never late with payments. They don't deserve good customers, and I hope they go down the tubes!

[betterusa]

I had a BofA credit card we used for a small business since 2006. The interest rate went from 5 percent to 24 percent in that time. I paid the minimum due plus $100-$300 additional every month for 2 years and my last payment was made 5 months ago. The final statement was received - my final payment was mailed the very next day along with a letter stating the account is now paid in full and to close this account. To my surprise, I received an interest due statement the following month for $3.34. Since the law allows a 7-day period from receipt of statement and sending full payment without additional interest charges I was shocked. Since several hundred of my tax dollars were used to bail out BofA and since I received no interest payment from the portion I gave them, it will be a very cold day in H-E-L-L before they see any more money from me. Our government better not bail these SOBs out again.

[hologram5]

AWWW, all the whos in whoville cried boo hoo hoo. Try not having money to buy food when your kids are hungry you greedy A$$HATS!