It has been a losing battle for Kenneth D. Lewis in the four months since Bank of America Corp. tried to play the hero with a blockbuster deal to save Merrill Lynch & Co. Inc.

Things have gotten so bad that talk of nationalizing B of A has become commonplace.

Senate Banking Committee Chairman Christopher Dodd weighed in Friday, saying it may be necessary for the government to take over some banking companies. "I don't welcome that at all, but I could see how it's possible," he said in an interview on Bloomberg Television. "I'm concerned that we may end up having to do that, at least for a short time."

The American Bankers Association was moved to say Friday: "We believe that the whole discussion about nationalization is impairing the financial sector and making the credit situation worse."

Mr. Lewis has tried everything in the book to douse the speculation. He has bought big chunks of B of A stock — twice. He called government talk of a takeover "absurd" in an interview on CNBC, and he has repeatedly shot down nationalization talk in memos to employees.

On Friday he sent his third internal memo in as many weeks. "We have a clear challenge in front of us: to prove the cynics and the critics wrong," the memo said. Though he conceded that the recession and rising credit costs would "continue to put great pressure on our ability to generate earnings," Mr. Lewis had some encouraging news. At midquarter B of A's trading business "continues to be vastly improved over last quarter," he wrote, and the mortgage business is "running at full tilt and processing record volumes."

Strong first-quarter results would do more for B of A than anything Mr. Lewis says or does, according to observers.

"The market should like it if they can demonstrate that core earnings power is strong enough to offset another significant reserve build and credit costs," said Jeff Harte, an analyst at Sandler O'Neill & Partners LP. "It should put people in the mind-set that they can get through this without chewing through all of their capital."

Still "It is going to be hard for Bank of America to earn its way back to respect," Mr. Harte said.

Paul J. Miller Jr., an analyst at Friedman, Billings, Ramsey & Co. Inc., agreed with that assessment. "There is really nothing they can do," Mr. Miller said in an interview. "Even if they make a little money, … the losses in its portfolios are just too big and will overshadow earnings. They need chargeoffs to go down, and that is just not going to happen."

Mr. Lewis, B of A's chairman, chief executive, and president, continued to push back against the critics Friday while trying to quash speculation that his company is headed toward a government takeover.

"Our company continues to be profitable," he said. "We see no reason why a company that is profitable with strong levels of capital and liquidity and that continues to lend actively should be considered for nationalization. Speculation about nationalization is based on a lack of understanding of our bank's financial position, as well as a lack of appreciation for the adverse ramifications for our customers and the economy."

B of A has plenty of capital; it has received two Treasury Department infusions worth $45 billion. But the company — along with Citigroup Inc., a fellow Treasury beneficiary — remains at the epicenter of the debate over whether to nationalize large U.S. banking companies. Shareholders have fled both companies' stocks on fears that such a move would erase any value left in the common stock. (See related story.)

In a Feb. 9 memo to employees, Mr. Lewis acknowledged that "talk can be cheap," and he noted that he purchased roughly $2.2 million of B of A stock in recent weeks. "I only hope my actions speak for my confidence in our company," he wrote. By Friday's close, the value of that stock had fallen 30%, to $1.5 million.

And the bad news keeps piling up. Late Thursday reports surfaced that the New York Attorney General's Office had subpoenaed Mr. Lewis in its investigation of allegations that Merrill doled out bonus payments to executives, including John Thain, its former CEO, just days before finalizing the sale to B of A.

Mr. Lewis ousted Mr. Thain late last month.

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