NEW YORK — Bank of America Corp. posted its first quarterly loss of the year as greater consumer and commercial loan losses more than offset strong trading profits and a boost in revenue from its recent acquisition of Merrill Lynch & Co.
The bank posted a loss of $1 billion on increased revenues of $26.04 billion, which was less than the $27.7 billion that analysts surveyed by Thomson Reuters anticipated.
The bank swung to a loss in the third quarter in part from $2.6 billion in writedowns, although the bank's revenue soared by one-third on its acquisition of Merrill Lynch.
Shares were down 2.2% premarket at $17.71. After an historic low in March, the stock was up 29% for the year through Thursday.
Chief Executive Ken Lewis, who will exit the company in less than three months amid numerous government probes into himself and the bank, Friday noted a leveling off of late payments among credit-card customers.
Bank of America is considered particularly vulnerable to high U.S. unemployment, which climbed to 9.8% last month, and the state of its gigantic portfolio of credit-card loans could be a bellwether for the industry at large. Its global-card-services loss widened significantly to $1.03 billion from $167 million a year ago.
Continued weakness in BofA's traditional retail and consumer lending businesses has been offset by newfound strength in investment banking, thanks largely to the controversial but beneficial takeover of Merrill Lynch.
Bank of America posted a loss of $1 billion, or 26 a share, compared with a year-earlier profit $1.18 billion, or 15 cents a share. The most recent period included about $2.6 billion in writedowns from improvement in credit spreads and a $402 million charge from a payment the U.S. government linked to pulling out of an asset-guarantee deal.
The company had 90% more shares outstanding because of heavy issuance of shares for the Merrill purchase and capital raises to offset rising losses from souring loans and bad assets.
Revenue increased 33% to $26.04 billion.
A survey of analysts by Thomson Reuters anticipated a 6-cent loss on revenue of $27.7 billion.
The bank's tangible common equity ratio, which measures how much of a bank's hard assets its common shareholders actually own, rose to 4.82% from 2.75% last year and 4.67% last quarter. Its Tier 1 capital ratio, a key measure of financial strength, was up to 12.46% from 7.55% last year and 11.93% last quarter.
Credit-loss provisions swelled 81%, while the net charge-off rate was up at 4.13% from 1.84% a year earlier and 3.64% in the second quarter. Total nonperforming assets rose to 3.72% from 1.45% in the prior year and 3.31% last quarter.