Thread: Bank of America's Profit Drops 77 Percent

Bank of America's Profit Drops 77 Percent

Monday, April 21, 2008 7:49 AM

CHARLOTTE, N.C. -- Bank of America Corp. said Monday its profit fell 77 percent in the first quarter, hurt by trading losses and a $3.3 billion increase in reserves for problem loans.

The Charlotte-based bank, which recently bought struggling mortgage lender Countrywide Financial, reported earnings of $1.21 billion, or 23 cents per share, on $17 billion in revenue.

Analysts on average expected a profit of 41 cents per share on revenue of $16.5 billion, according to Thomson Financial.

The bank's shares fell 67 cents to $37.89 in premarket trading.

"These results clearly did not meet our expectations," Chief Executive Ken Lewis said in a statement. "The weakness in the economy and prolonged disruptions in the capital markets took their toll."

Results included $1.31 billion of trading losses compared with income of $1.66 billion a year earlier. This was driven primarily by $1.47 billion in write-downs of collateralized debt obligations, a security often backed by subprime mortgage loans, and $439 million for loans to fund leveraged buyouts. Trading losses were $5.15 billion in the fourth quarter of 2007.

Bank of America said the $3.3 billion increase in reserves was part of a $4.78 billion increase in provisions, to $6.01 billion, "due to rising credit costs - particularly in the home equity, small business and homebuilder portfolios."

The company said it "remains concerned" about the health of the consumer.

http://www.newsmax.com/money/Bank_of_Am ... 89621.html

Woooooooooooooooo Hoooooooooooooooooooo go give out more credit cards to Illegal Aliens

Isn't this the bank that was giving loans and stuff to illegals?

Originally Posted by ourcountrynottheirs

Isn't this the bank that was giving loans and stuff to illegals?

Yes, Moving this to News Section

Market Dispatches4/21/2008 12:00 PM ET
Bank of America's profit plunges

The bank reports a 77% drop in profit and misses Wall Street's estimate. National City is reportedly close to getting a cash injection. Oil continues to soar. Eli Lilly and Merck report higher earnings.

By Charley Blaine and Elizabeth Strott

The subprime mess took its toll on Bank of America (BAC, news, msgs) in the first quarter.

The bank this morning reported a 77% drop in profit for the first quarter, with BofA earning $1.21 billion, or 23 cents per share -- down from the $5.26 billion, or $1.16 per share, the banking giant reported in the first quarter of 2007. Analysts were expecting earnings of 41 cents per share.

Shares of the Dow component fell 65 cents, or 1.7%, to $37.91 in midday trading. More broadly, stocks were lower this morning after soaring on Friday.

At 12 p.m. ET, the Dow Jones Industrial Average was down 55 points to 12,795 after gaining 229 points, or 1.8%, on Friday. This morning, the Nasdaq Composite Index had lost 2 points to 2,401, and the Standard & Poor's 500 Index had shed 6 points to 1,384.

Bank of America wrote down $1.9 billion on bad mortgage-related securities in the quarter and set aside $6 billion to cover bad loans and credit losses, up from the $3.3 billion it had set aside in the fourth quarter.

"The weakness in the economy and prolonged disruptions in the capital markets took their toll on our performance," Chief Executive Officer Ken Lewis said in a press release. "We remain concerned about the health of the consumer given the prolonged housing slump, subprime issues, employment levels and higher fuel and food prices."

* Video: Inside BofA's earnings report

http://articles.moneycentral.msn.com/In ... rkets.aspx

this is one of many banks I hope collapses on it's own corrupt weight

Originally Posted by AirborneSapper7

this is one of many banks I hope collapses on it's own corrupt weight

Somehow they ended up with our mortgage. The bank we originally borrowed from sold it to country wide, now we had a letter to send our payments to BOA. If they go belly up, where do we make our payments?

Gogo wrote:

Somehow they ended up with our mortgage. The bank we originally borrowed from sold it to country wide, now we had a letter to send our payments to BOA. If they go belly up, where do we make our payments?

Unfortunately, I doubt BOA will go under. As for your mortgage, it's considered an asset and would be sold off. For example, your new mortgage holder could be Wells Fargo, Wachovia, etc.

Can't think of any one corporation who deserves it more!!

I will ask JP to post this news on our boycott site at www.bankofamericaboycott.com

W

Maybe we should send Absolut a copy of our BOA boycott and this article :P