» This Story:Read +| Comments

Bank of America posts $1.2 billion loss for fourth quarter of 2010

Video
Jan. 3 (Bloomberg) -- Bank of America Corp., the biggest U.S. bank by assets, will take a $2 billion impairment charge and a $3 billion provision in the fourth quarter to resolve mortgage-repurchase claims by Freddie Mac and Fannie Mae. Bloomberg's Erik Schatzker reports. (Source: Bloomberg)

Network News

X Profile
View More Activity
Discussion Policy
Comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site. Additionally, entries that are unsigned or contain "signatures" by someone other than the actual author will be removed. Finally, we will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site. Please review the full rules governing commentaries and discussions. You are fully responsible for the content that you post.
Washington Post Staff Writer
Friday, January 21, 2011; 10:40 PM

The toll from the housing crisis could continue to weigh on Bank of America, draining billions of dollars from the company for years to come, the nation's largest bank said Friday.

This Story
View All Items in This Story
View Only Top Items in This Story

The bank said it lost $1.2 billion in the fourth quarter of last year, more than six times its loss from the same period in 2009. Perhaps more troubling were the bank's warnings about what might be coming: The company could be forced to pay out as much as $10 billion to resolve some disputes over the toxic mortgages it sold to investors around the globe.

"We would expect resolution of these matters to be a protracted process which could take years to conclude," Chief Financial Officer Charles Noski said in a conference call with analysts and investors.

The company struck a different tone from just two months ago, when chief executive Brian T. Moynihan said the bank was meeting those disputes with "hand-to-hand combat." On Friday, such language was absent. Instead, the bank explained that it was setting far more money aside for the troubles it could be facing ahead.

The bank's earnings included some signs that Bank of America is recovering along with the nation's economy. The soured loans it had issued to businesses and homeowners, for instance, declined by 5 percent from the fall and 9 percent from a year earlier.

Still, the earnings report overall left investors with a deepening concern, said Shannon Stemm, an analyst with the brokerage Edward Jones. They knocked down the company's share price Friday by 2 percent.

Stemm said investors wonder: Is Bank of America "emerging as the bank that's continuing to struggle as opposed to peers who basically seem to be progressing back to normal faster?"

Bank of America was the last of the U.S. banking giants to issue its year-end financial results. These companies continue to contend with fallout from the financial crisis.

Borrowers continue to default on loans. Allegations of robo-signing and other irregularities in foreclosure practices have made it harder for the banks to evict delinquent homeowners, sell the houses and cut their losses. Government investigations loom.

Despite these problems, Wells Fargo and J.P. Morgan Chase showed sharply improved profits, while Bank of America stumbled again into the red.

Bank of America dug itself into an especially deep hole by taking over Countrywide Financial, one of the most prolific issuers of problem loans, in 2008. It faces expensive lawsuits from mortgage investors who say the bank misrepresented the quality of the loans when it sold them. Now those investors are trying to get their money back.

In the quarterly financial report it released Friday, Bank of America gave new indications of these potential costs.


CONTINUED     1        >


» This Story:Read +| Comments
© 2011 The Washington Post Company

Network News

X My Profile