Posted on 04/21/2008 7:55:21 AM PDT by BGHater
Bank of America Corp , the second-largest U.S. bank, on Monday said quarterly profit fell 77 percent, hurt by more than $5 billion of write-downs and credit-related costs as more borrowers fell behind on payments.
First-quarter net income fell to $1.21 billion, or 23 cents per share, from $5.26 billion, or $1.16, a year earlier.
Excluding merger costs, profit was 26 cents per share, below the average analyst forecast of 45 cents, according to Reuters Estimates. Results included a $776 million gain from credit card network Visa Inc's initial public offering last month.
Net revenue dropped 6 percent to $17 billion. Analysts expected revenue of $16.33 billion.
Bank of America shares were off 6 cents to $38.50 in pre-market electronic trading.
"These results clearly did not meet our expectations," Chief Executive Kenneth Lewis said in a statement. "The weakness in the economy and prolonged disruptions in the capital markets took their toll."
Bank of America said it set aside $6.01 billion for credit losses, quintuple the year-earlier level, hurt by credit costs in home equity, small business and homebuilder portfolios.
The bank added $3.29 billion to its reserves for credit losses. Net charge-offs nearly doubled to $2.72 billion and nonperforming assets nearly quadrupled to $7.83 billion.
Results also included $1.31 billion of trading losses, reflecting write-downs of $1.47 billion for collateralized debt obligations and $439 million for loans to fund leveraged buyouts. Trading losses declined from $5.15 billion from the fourth quarter.
The bank's Tier-1 capital ratio, a measure of its ability to cover losses, rose to 7.51 percent from the fourth quarter's 6.87 percent, following a sale of $12.9 billion of preferred stock.
OTHER BANKS
Bank of America joined Citigroup Inc , JPMorgan Chase & Co , Wachovia Corp and other banks in reporting losses related to leveraged loans, mortgages, consumer credit, or a combination.
The bank, however, generates much of its business in the United States. Lewis said he expects U.S. gross domestic product growth to be "minimal at best" this quarter, with a slight pickup in the second half of 2008.
Profit in consumer and small business banking fell 59 percent to $1.09 billion. The corporate and investment bank saw profit fall 92 percent to $115 million.
In wealth and investment management, profit fell 54 percent to $228 million, hurt by a $220 million loss to prop up some money funds in its Columbia Management unit.
Results were the second to reflect Bank of America's $21 billion purchase of ABN AMRO Holding NV's LaSalle Bank on October 1.
The U.S. Federal Reserve in Chicago is holding the first of three public hearings on Tuesday concerning Bank of America's planned purchase of Countrywide Financial Corp , the largest U.S. mortgage lender. Bank of America agreed in January to buy Countrywide in a transaction valued Friday at about $4.1 billion. The Fed has also scheduled hearings for April 28 and 29 in Los Angeles.
Charlotte, North Carolina-based Bank of America ended the quarter with 6,148 U.S. branches, nearly twice as many as any other bank, and $1.74 trillion of assets.
Through Friday, Bank of America shares had fallen 7 percent this year compared with an 8 percent drop in the Philadelphia KBW Bank Index <.BKX>.
Maybe they were hurt by giving credit cards to illegals.
Profit??? I thought the banks were all going broke, This must be because of Hillary and her great leadership.(LOL)
They could save a lot of money by getting rid of all that bilingual signage in their banks. My account is at B of A, and every time I have to go in there (about once a month) I notice that EVERY SINGLE sign and advertisement is either printed in both languages, or there’s an English ad and an identical ad in Spanish somewhere else in the lobby. They are very aggressive in going after the Hispanic market here in North Carolina, a good portion of which is illegal aliens because this is a pretty illegal-friendly state.
}:-)4
Didn’t they just plunk down a big wad of cash and buy Countrywide in a firesale?
Hmmmm....
needed to be said again!
Same thing in Lowe’s here in the Albany oblast of the People’s Republic of New York.
Maybe they were hurt by giving credit cards to illegals.
^^^^
Uh-huh. And that’s why I feel soooo sorry for them.
Same thing in Lowe’s here in the Albany oblast of the People’s Republic of New York.
Thats a given, A good portion of the illegals in this country are doing “under the table” construction work.
They fueled the housing boom by giving mortgages to illegals with six months of paystubs, and then are surprised that, when the boom busted and all those illegal construction workers were laid-off, mortgage payments stop. Who’s the genius leading their mortgage division?
This is only the tip of the iceberg. People borrowed against the inflated value of their homes to buy cars, go on vacations, pay credit card debt, etc. They also used home equity credit when purchasing a home, the so called no down payment option. Now the consequences of our profligate spending are becoming painfully apparent.
The Federal Reserve will not be able to print money fast enough to keep this mountain of debt from overwhelming us.
Bank of Amigo gets their just desserts.
Not too many people can see this coming. It is far worst than one can imagine.
The web of defaults is so large and global that it would be impossible to get a true picture of what is in store in the next 36 months.
ping
I had a CC with them since ‘85.
We were late by one day on a payment and BAM! 32% APR
I’m not talking a thirty day late i’m talking 1 day.
I paid them off and threw the CC in the trash can.
If you have a CC with them watch out
My apologies to the slime.
These results clearly did not meet our expectations," Chief Executive Kenneth Lewis said in a statement. "The weakness in the economy and prolonged disruptions in the capital markets took their toll."
Stockholders: Don't give him a pass...fire his ass! BOA, if you'll remember, was all for giving illegal immigrants credit cards.
It has been pretty much the same here in Las Vegas, with some branches actually having fewer signs in English than Spanish and the majority of tellers being bilingual in English & Spanish. The most annoying thing was the signs encouraging Mexican customers to send their money to Mexico through BofA for free. Recently, however, I have noticed far fewer signs in Spanish at the branches I go to. I get the feeling that BofA is no longer so gung-ho on attracting the Hispanic market.
Bank of America was notorious for giving credit cards and mortgages to illegal aliens.
You think they’ll expect the taxpayers to bail them out?
“
Bank of America was notorious for giving credit cards and mortgages to illegal aliens.
You think they’ll expect the taxpayers to bail them out?”
Of course they expect it, and they’ll get it. I burned my BAC Visa card years ago and told them why.
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