Shares of Bank of America Corp. have fallen 21% in the last month as skittish investors dumped shares of the nation's second-largest banking company on concerns about credit quality.

The stock slipped in early trading Wednesday, then fell further as investors reacted to news that Federal Reserve policymakers indicated they may move to tighten credit further later in the year, though they held the fed funds rate at 6.5% at this week's meeting. Shares of Bank of America dropped 3.46%, to $45.375 for the day.

Investors' anxieties about banks' credit quality were aroused this month when Wachovia Corp. of Winston-Salem, N.C., and Unionbancal Corp. of San Francisco warned that their second-quarter earnings would not meet analysts' expectations because of problem loans.

Bank of America is a major arranger of syndicated loans, which has led many investors to believe that its earnings could come under pressure too. At an investor conference held by UBS Warburg on Tuesday, the Charlotte, N.C., banking company said that its nonperforming assets would rise slightly and that chargeoffs would also rise because of a single problem loan.

The company's ratio of chargeoffs to average loans was 0.45% in the first quarter, off from 0.55% in the fourth quarter. Before that chargeoffs had been 0.50% of average loans in the third quarter, 0.57% in the second quarter, and 0.58% in the first quarter of 1999, according to Keefe, Bruyette & Woods Inc.

Lawrence Cohn, an analyst at Ryan, Beck & Co. of Livingston, N.J., noting recent declines in the Nasdaq composite index, said that Bank of America would probably take a "small writedown in their venture capital portfolio" for the second quarter.

Mr. Cohn was one of several analysts who said investors' concerns about the stock are overblown.

"I expect the stock to get a pop once they announce their earnings," Mr. Cohn said. "Nonperformers will go up, but the increase will not surprise or frighten investors."

He said he doubted Bank of America would have participated in the UBS conference if a second-quarter earnings warning were imminent.

R. Jay Tejera, an analyst at Ragen MacKenzie, agreed with that assessment. He pointed out that Bank of America's shares have languished for the last year and a half, primarily because "the market still does not like the idea of big mergers."

Bank of America Corp. was formed in the merger of BankAmerica Corp. and NationsBank Corp. in September 1998.

Bank stocks fell after Fed policymakers, as expected, left a key interest rate unchanged at 6.5% but warned in a statement that the economy is still growing at a pace that could ignite inflation.

"Signs that growth in demand is moving to a sustainable pace are still tentative and preliminary, and the utilization of the pool of available workers remains at an unusually high level," said a statement released after the midyear, two-day meeting of the Federal Open Market Committee.

Few were surprised that the Fed kept the federal funds rate at 6.5%. Recent economic data showed a drop in new home construction and a rise in the nation's unemployment rate, to 4.1% in May. The Nasdaq composite was also down 24% from a record high in March. Policymakers had already raised interest rates 1.75 percentage point since last June.

The American Banker index of the 50 largest banks gained 1.62%. Its index of 225 banks fell 0.39%.

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