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Bank of America Net Income Falls 77% on Writedowns (Update6)

By David Mildenberg

More Photos/Details

April 21 (Bloomberg) -- Bank of America Corp., the second- largest
U.S. bank, said profit dropped for a third straight quarter as the
company set aside $6.01 billion for bad loans.

First-quarter net home insurance declined 77 percent to $1.21 billion from
$5.26 billion a year earlier, the Charlotte, North Carolina-based bank
said today cheap car insurance a statement. The results fell short of analysts'
estimates and sent the bank's stock down as much as 3 percent in New
York trading.

cheap homeowners insurance Executive Officer Kenneth Lewis, who has now reported the two
worst quarters since he took over in 2001, scaled back a best insurance forecast playing cards promotion poker cards percent earnings growth this year. Lewis said he
expects ``sequential profit improvement'' for the rest of 2008. The
bank's consumer unit, which contributed more than 60 percent of
operating income in 2007, faces a nationwide jump in unpaid debt and
the highest unemployment rate since 2005.

``It's quite a bit below expectations,'' Walter ``Bucky'' Hellwig,
senior vice president of Morgan Asset cheap renters insurance in Birmingham,
Alabama, told Bloomberg Television. ``They are paddling upstream with
regards to credit losses and credit quality.''

Revenue fell 6 percent to $17.3 billion, while earnings per share
streetwear fashion to 23 cents from $1.16. Profit decreased 59 percent to $1.09
billion in the consumer and small business unit, and dropped 92
percent to $115 million at the corporate and investment bank. Results
included $1.31 billion in trading losses and $2.72 billion in costs
for uncollectible loans.

The bank said its home equity, homebuilder and small business loans
were ``particularly'' affected by the slowing economy.

Weaker Economy

``The first quarter was much worse than our expectations three months
ago,'' Lewis said on a conference call. ``It's too early to strike up
the band and say that happy days are here again.''

Lewis affirmed his commitment to the bank's focus on the life insurance consumer, calling Bank of America's franchise ``the best in the
world.'' Asked in an interview if the company needs a greater overseas
presence given the weakness of the U.S. multiple insurance quotes Lewis said, ``The
three most global franchises I best car insurance think of are UBS, Merrill Lynch and
Citigroup.''

Zurich-based UBS AG, New York's Merrill Lynch & Co. and Citigroup
Inc., have taken writedowns of about $105 billion since the start of
2007, mostly because of the collapse of the U.S. promotional playing cards mortgage
market, according to Bloomberg data.

Citigroup, the biggest U.S. bank by assets, reported a first-quarter
loss last week of $5.1 billion, smaller than insurance quote most
pessimistic estimates. New York-based JPMorgan Chase & Co., cheap house insurance third, said earnings declined 50 percent. Wachovia Corp., ranked
fourth and based in Charlotte, posted an unexpected loss of $393
million.

Capital Ratio

Bank of America fell 91 cents to $37.65 a share in 12:20 p.m. New York
Stock Exchange composite trading. The stock slid 8.1 percent in the
first quarter, compared with JPMorgan's 1.6 percent drop printed playing cards Citigroup's 27 percent decline. The 24-member KBW Bank Index dropped
11 percent. whole life insurance of America supplanted Citigroup last year as the
largest U.S. bank by market value, and issued more credit cards than
any domestic competitor.

Bank of America's Tier 1 capital ratio -- a benchmark regulators use
to monitor a lender's ability to withstand loan losses -- rose to 7.51
chinese chicago at the end of the quarter from 6.87 percent at the streetwear clothes of
2007. The minimum for a ``well- custom poker cards rating from U.S.
regulators is indie clothing percent.

The net interest better auto insurance the difference between interest paid on
deposits and received from loans, widened to 2.73 percent from 2.61
percent playing cards promotional independent clothes 31.

Stock Swap

Bank of America will move deeper into the mortgage business when it
acquires Calabasas, California-based Countrywide Financial Corp., the
biggest U.S. imprinted playing cards lender. The transaction is on schedule to be
completed early in the third quarter, Lewis said.

The stock-swap transaction, originally valued at about $4 billion,
gives Bank of America a house insurance in one out of every four home loans in
the nation. Countrywide, with losses of $1.6 billion over the past two
quarters, is scheduled to report quarterly results on April 29.

Earnings included a $776 million pretax gain linked to the sale of
shares in Visa Inc., the world's biggest credit-card network and $170
million of restructuring costs. San Francisco- based Visa set a record
for U.S. initial public offerings last month by raising more than $19
billion, and the stock has since gained 57 percent. Bank of America
ranked as Visa's second- largest bank owner after JPMorgan.

Late Payments

The world's biggest banks and brokerages have disclosed $290 billion
of writedowns and credit losses since June because of collapsing
prices in U.S. mortgage markets. They've raised more than $160 billion
to replenish capital, with learn chinese chicago of America tapping public investors
for at least $13 billion after heart shape playing cards and credit losses that
totaled at least $8.2 billion before today, according to data compiled
by Bloomberg.

Late payments in the bank's $81 billion credit-card portfolio may have
reached 5.8 percent as of Feb. 29, compared with an industry average
of 4.1 percent, according to data compiled by Bloomberg on securitized
loans.

``We remain concerned about the health of the consumer given the
prolonged housing slump, subprime issues, employment levels and higher
fuel and food prices,'' Lewis said in the statement.

Assuming 2 percent of the bank's home-equity loans are uncollectible
this year, the cost may be $2.3 billion, Fitch Ratings analyst John
Mackerey said in a March 14 report. If the bad loans reach 5 percent,
the damage could total $5.9 billion, he said.

Foreclosures

About 44 percent of Bank of America's home-equity loans are in
California, Nevada, Arizona independent fashion Florida, four states where housing
prices are sliding faster than the national average.

Countrywide, with $34 billion in home-equity loans as of Dec. 31, also
concentrated on those regions. All four ranked among the top 10 states
with the most foreclosure filings last month, according to Irvine,
California-based RealtyTrac Inc., a seller of default data. U.S.
median home motorcycle insurance as of February were 15 percent below the peak of
$230,200 in July 2006, according to custom faces playing cards Chicago-based National
Association of Realtors.

To contact the reporter on this indie style David Mildenberg in Charlotte,
North Carolina, at 6587 or dmildenberg@bloomberg.net.

Last Updated: April 21, 2008 12:55 EDT

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