Bank of America has another loss for 3rd Quarter; Ken Lewis won’t be getting Paid this year

October 16, 2009 – 2:00 pm – No Comment

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Bank of America reported a $2.24 billion loss in the third quarter of this year today. The latest news has shaken investors and the bank has failed to meet analysts expectations. BofA posted a net income of $704 million, representing 15 cents per diluted share in the third quarter of 2008. Many analysts expected the bank to lose around 7 cents per share in this quarter.

The latest quarter’s loss includes $893 million that was paid back to the United States government for the money borrowed from the TARP funds. It also paid $402 million to end a government guarantee term sheet.

The blame for the loss can be pointed anywhere. Most are putting the blame on the economy. Poor economic conditions are still haunting the financial sector. There are still rising foreclosures and credit card defaults are still on the rise as well.

The bank also charged off a huge amount of loans in the third quarter. Here are some examples:

•Credit card debt 30-plus days past due dropped to 7.4 percent from 7.6 percent in the second quarter. But the bank charged off 12.9 percent of its credit card portfolio, up from 11.7 percent in the second quarter.

•Home equity loans 30-plus days past due were reported at 1.4 percent, compared with 1.3 percent in the second quarter. Charge-offs increased to 5.1 percent, up from 4.7 percent in the second quarter.

•Consumer loans, including auto loans, 30-plus days past due increased to 10.1 percent from 9.9 percent in the second quarter. Charge-offs also increased to 20.3 percent in the third quarter, up from 18.9 percent in the second quarter.

BofA also reports that it charged off $873 million, or 4.67 percent of commercial real estate loans in the third quarter, up from $629 million in the previous quarter.

The bank charged off $796 million in small-business loans, or 17.45 percent, in the latest quarter, up from $773 million in the second quarter.

In other Bank of America news, Kenneth Lewis, exiting CEO of the company, will not be getting paid for work that he has done this year. He will not even be receiving a bonus of any kind. All of this is at the request of the “pay czar.”

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