Bad loans hit more than just the bottom line last year — they slashed the market capitalization of several of the largest U.S. banking companies.

Bank of America Corp.’s slipped to fourth largest at the end of last year, down 12%, to $75.3 billion, according to American Banker’s data. The decline came in the second half of the year and particularly in December, after the Charlotte, N.C., company warned of lower-than-expected fourth-quarter profits due to problem loans. On Dec. 6 alone — the day of the warning — Bank of America shed $8 billion of market cap. Its market cap continued to get a beating in January. Investors dumped Bank of America shares on Friday even though the company denied rumors that it had suffered huge losses from derivatives trades. (See story, back page.)

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