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 Bank of America Corp. (NYSE:BAC) reported a third-quarter 2009 net loss of $1.0 billion, or 26 cents per diluted
share. With dividend payments included, the total loss was $2.24 billion. The loss exceeded analysts' estimates of 6 cents a share. Credit costs climbed with net charge-offs to $9.6 billion from mortgages, home equity loans, credit cards and loans tied to commercial loans. The bank's credit card business took permanent losses of $6.5 billion alone. Credit card debt and bad loans increased due to an increase in unemployment. CEO Ken Lewis said during a conference call that he believed that losses will continue in credit due to unemployment, but that credit losses may have peeked in this quarter. Results were aided by Merrill Lynch & Co., which contributed greatly to the bank's trading profits, causing a 57% increase over the second quarter to $3.4 billion. Investment banking fees brought in $1.2 billion of that with Bank of America ranking sixth in M&A. However, expenses rose to The bank's capital has strengthened, which will allow BofA to pay back TARP. Forty percent of the bank's retail deposit base is in checking deposits. BofA is planning on paying back TARP soon, although management would not specify a time frame. During the conference call, CFO Joe Price said, "We are supplying all the information and doing everything we can. The government is putting out some more criteria shortly."  On the conference call, Lewis said the search for a successor for CEO was being done with a sense of urgency and balance. Lewis said he would give his recommendation for a successor to the board, but he would not tell analysts who it was. He also explained why he decided to retire abruptly without referring to the trial over Merrill's acquisition and bonuses. He stated, "I came back from time off and reflected back on those 40 years. I always thought I would intuitively know when the time was right. And I did, and 8 years of CEO is enough. We bought the best financial franchise in the world and I look forward to seeing how this plays out." - Maria Woehr
CategoriesComments
From: Maria Woehr
 ,
Thanks Frank. I'll check it out. I don't think anyone is really happy about the losses at BofA in my opinion. As a taxpayer I'm not, shareholders are certainly not and I'm sure employees are not either. I hope these losses don't continue either, but I think that depends a lot on the economy and its recovery. What do you think?
Posted on:
October 16, 2009 9:46 PM
From: Steve,
I understand they want to continue to give their dividend to investors but when losses are this great, it makes sense to reduce them as much as possible. I hope BofA turns itself around as other banks like JPM and GS have not had the same poor performance.
Posted on:
October 17, 2009 12:05 AM
From: Joan Smith,
Hi
Posted on:
November 4, 2009 1:11 PM
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Any business that’s hemorrhaging this kind of money would be looking for anyway to combat it. Cutting corners or smudging the ethical grey area boundary, might seem like a perfectly reasonable option when your losing billions of dollars.
As much as I understand though, I certainly don’t condone most of what Bank of America’s been doing. I might be more understanding if this thing carries on for awhile, but this has not been an ongoing issue. For the first two quarters of this year Bank of America had big time profits. So nobody should really be crying all that much for the poor folks at Bank of America.
I know some people out there are going to be happy about these losses for Bank of America. That feeling of they got what they deserve might make you feel better in the short term, but the long term ramifications of these losses are something that’s not going to make consumers happy. Elevated risk = elevated interest rates for all of us. Honorable creditors are going to end up paying for the people that have not been able to pay their money back. So as much as it pains me to say it, I have to hope that these losses do not continue for Bank of America. They may be bastards, but we sure do need them.
Check out my blog on BofA's 3rd quarter earnings report at..... http://www.thedebtgazette.com/2009/10/bank-of-america-3rdquarter-losses/