Thread: Bank of America's fourth-quarter profit falls on credit loss

Bank of America's fourth-quarter profit falls on credit losses

By IEVA M. AUGSTUMS, AP Business Writer 23 minutes ago

CHARLOTTE, N.C. - Bank of America Corp. said Tuesday its fourth-quarter earnings fell 95 percent, hurt by mounting credit losses and weak investment banking results.

Net income at the Charlotte-based bank dropped to $268 million, or 5 cents per share, in the three months ended Dec. 31 from $5.26 billion, or $1.16 per share, a year ago.

The bank's revenue fell 32 percent to $12.67 billion from $18.49 billion last year.

The quarter included results from LaSalle Bank, which Bank of America purchased on Oct. 1.

Analysts expected earnings of 18 cents per share on revenue of $13.24 billion, according to a poll by Thomson Financial. The earnings estimates typically exclude one-time items.

In premarket trading, Bank of America shares were down $1.92 at $34.05.

Crosstown rival Wachovia said its fourth-quarter earnings tumbled to $51 million, or 3 cents per share, from $2.3 billion, or $1.20 per share, during the same period the previous year.

Excluding merger-related expenses, Wachovia earned $160 million, or 8 cents per share, during the fourth quarter.

Analysts polled by Thomson Financial, on average, forecast earnings of 33 cents per share for the quarter.

Wachovia, the nation's fourth-largest bank, took a $1.7 billion write-down during the quarter due to weakening credit markets.

Wachovia shares were down $1.10 at $29.70 in premarket trading.

Results at Bank of America reflected $5.44 billion of trading losses, compared with profits of $460 million a year earlier. This reflected a $5.28 billion write-down related to collateralized debt obligations, which the bank said reduced trading profit by $4.5 billion and other income by about $750 million.

CDOs are complex investments that combine slices of different kind of risk and often are backed in part by subprime mortgages — loans given to customers with poor credit history — as well as other loans.

Bank of America said it also set aside $3.31 billion for possible future credit losses.

"We certainly are not pleased with our performance," Chief Executive Ken Lewis said in a statement. "We are cautiously optimistic about 2008, though we believe economic growth will be anemic at best in the first half."

The news was the latest in a series of earnings declines among the largest U.S. banks as the nation's housing crisis and a slowing economy have forced many consumers to fall behind on their bills.

For the year, Bank of America reported earnings of $14.98 billion, or $3.30 per share, compared with $21.13 billion, or $4.59 cents per share, in 2006. Revenue fell to $66.32 billion from $72.58 billion a year earlier.

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On the Net:

Bank of America Corp.: http://www. bankofamerica .com
www.boycottbankofamerica.com

http://news.yahoo.com/s/ap/20080122/ap_ ... of_america

Perhaps they should reconsider their efforts to give credit cards and home loans to people who do not have a social security number.

Of course when the illegals can no longer repay their loans they pack up and head back to Mexico, leaving America to clean up their mess.

Way to go BofA....

bttt

added to homepage with new title and note

Bank of America Tumbles further from economics, boycott, and illegals!

ALIPAC NOTE: While much of Bank of America's financial troubles arise from broader economic trends, the Bank of America Boycott and loses from giving credit to illegal aliens is taking a toll on the bank as well!


http://www.alipac.us/article2896.html

If we could organize enough American citizens maybe we could put IA hugger companies out of business by way of boycotts. Then we could support those companies on American soil that don't outsource to foreign countries and hire illegals!