Everyones favorite tax write off is in the news again today...
http://money.cnn.com/2009/10/16/news/companies/bank_of_america_results/?postversion=2009101608 said:NEW YORK (CNNMoney.com) -- Bank of America suffered a $2.2 billion loss in the latest quarter, the company said Friday.
Contributing to the grim third-quarter performance was a $1.2 billion dividend payment to its preferred shareholders, including the U.S. government, as well as credit losses within some of its consumer-related businesses.
"Obviously, credit costs remain high, and that is our major financial challenge going forward," Bank of America CEO Ken Lewis said in a statement.
The Charlotte, N.C.-based lender also paid out $402 million in the quarter after it agreed to eliminate a loss-sharing agreement it had struck with the government earlier this year.
Taken together, the company said it lost 26 cents a share.
Just a year ago, the company was comfortably in the black, reporting profit of $704 million, or 15 cents a share.
Friday's results, however, were slightly worse than Wall Street was expecting. Analysts had anticipated that the company would suffer a loss of 21 cents a share, according to Thomson Reuters.
Suffering the brunt of this quarter's losses was Bank of America's mortgage and credit card businesses. Both divisions lost more than $1 billion during the July-September period as more and more Americans found themselves out of work and unable to keep up with their loan obligations.
Loan troubles also intensified within Bank of America's commercial real estate portfolio, amid slower by both businesses and consumers.
One bright spot was its wealth management business, one of the key businesses that led Bank of America to complete its controversial deal with Merrill Lynch last year.
Bank of America's latest results come at arguably one of the most strained periods for the nation's largest bank.
The company is currently facing a number of high-profile state and federal investigations related to its purchase of Merrill Lynch, not to mention a looming legal battle with the Securities and Exchange Commission.
The company's pay plans for its top 100 employees are also under review by the Obama administration's so-called "pay czar." On Thursday, Lewis agreed to a deal not to accept a salary or bonus in his final year as CEO in an effort to deflect some of scrutiny the firm faces.
Last month, Lewis announced his decision to retire from the firm at year end, which some have speculated was prompted by the heightened scrutiny from both Capitol Hill and Wall Street. The company is currently engaged in a search for his replacement.
Bank of America (BAC, Fortune 500) shares fell more than 4% in pre-market trading.
I bet they still get their bonus.
