Bank of America Posts $5.2 Billion Q4 Loss

The nation’s largest bank fell into a larger financial hole last quarter than analysts were expecting. Bank of America reported Wednesday that it lost $5.2 billiondollars in Q4, or $0.60 cents a share. Analysts had forecast a narrower $0.52 cents per share loss.

For the full year of 2009, Bank of America posted net income of $6.3 billion, compared with $4 billion in 2008.

The North Carolina-based institution attributed its shortfall to “dividends and the negative impact from the repayment of the U.S. government’s $45 billion preferred stock investment in the company under the Troubled Asset Relief Program (TARP).” Bank of America said had it not been for costs associated with its payment to the Treasury, its losses for the quarter would have been just $194 million. Citigroup, who also paid back its bailout dollars last month, had a similar story when itannounced its financial results Tuesday.

Bank of America’s loan book did its part to pull the numbers down too, though. The net loss in its home loans and insurance business widened to $3.8 billion for the 2009 fiscal year. While net revenue increased 82 percent,

primarily driven by the full-year benefit of Countrywide and increased refinance activity, the bank explained, higher credit costs continued to negatively impact results.

The company’s nonperforming assets, including both delinquent and defaulted loans, totaled $35.7 billion at the end of the fourth quarter, up 5.6 percent from the end of the third quarter.

Brian T. Moynihan, Bank of America’s newly appointed CEO, called Wednesday’s financial results “disappointing,” but said there was a ray of hope within the numbers.

“Credit quality appears to be stabilizing, if not improving,” Moynihan said.

The bank’s loan charge-offs in the fourth quarter tallied $8.4 billion, down $1.2 billion from the previous three-month period. Money set aside for further anticipated losses came to $1.7 billion in Q4, a smaller provision that the $2.1 billion added to loan loss reserves in the third quarter.

During the October to December timeframe, Bank of America said it funded $86.6 billion in first mortgages, helping more than 400,000 people either purchase homes or refinance their existing mortgages.

The bank says it has stepped up efforts in the home retention arena also. In all of 2009, Bank of America says it provided help to approximately 460,000 customers. This includes 260,000 loan modifications on mortgages with outstanding balances of $55 billion, as well as processing trial modifications under the government’s Making Home Affordable program for 200,000 struggling homeowners.

The company said Bank of America Home Loans expanded its home retention staff last year to more than 15,000, more than doubling the size of the team since Bank of America acquired Countrywide.

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