Bank of America (BAC) Reports Q4 Loss of $0.48, Gets Additional $20B From U.S., Cuts Dividend

January 16, 2009 7:05 AM EST

Bank of America (NYSE: BAC) reported a Q4 net loss of $0.48 per share, well below the consensus of an $0.08 profit.

Merrill Lynch preliminary results indicate a fourth-quarter net loss of $15.31 billion, or $9.62 per diluted share, driven by severe capital markets dislocations.

In view of the continuing severe conditions in the markets and economy, the U.S. government agreed to assist in the Merrill acquisition by making a further investment in Bank of America of $20 billion in preferred stock carrying an 8 percent dividend rate.

In addition, the government has agreed to provide protection against further losses on $118 billion in selected capital markets exposure, primarily from the former Merrill Lynch portfolio. Under the agreement, Bank of America would cover the first $10 billion in losses and the government would cover 90 percent of any subsequent losses. Bank of America would pay a premium of 3.4 percent of those assets for this program.

In light of continuing severe economic and financial market conditions, the Bank of America Board of Directors has declared a first-quarter dividend of $.01 per share payable March 27, 2009 to shareholders of record as of March 6, 2009. The company's last quarterly dividend was $0.32 and was $0.64 before that.

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• UBS
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• Banc of America
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