BofA shares dip below $10 for first time in 2 years
Bank of America Corp. shares have dropped below $10 a share for the first time in more than two years, as investors worry that the bank will have more bad news to disclose when it reports earnings on Tuesday.
Pre-announcing results late last month, BofA said it would take an additional $20 billion in charges stemming from its ill-fated 2008 purchase of Countrywide Financial Corp., the aggressive Calabasas-based mortgage lender. That was expected to result in a second-quarter net loss of $8.6 billion to $9.1 billion, the bank said, instead of a profit of $3.2 billion to $3.7 billion.
At the time, Wall Street seemed to breathe a sigh of relief that things weren't even worse, and Bank of America shares ended the day up 32 cents, or 3%, at $11.14. But they have since retreated and were down as much as 19 cents Thursday at $9.88 in trading in New York.
The last time BofA shares traded in single digits was in early May 2009, when the Charlotte, N.C.-based bank was emerging from the worst of the financial meltdown.
It and New York's Citigroup Inc. were the only two major banks that required two rounds of federal bailout funds to get through the crisis.
By October 2009, the stock had recovered to more than $18, but gradual decline set in. The shares rose early this year to close at $15.23 on Jan. 14, with the decline since then shaving more than $50 billion off Bank of America's stock market value.
The stocks of many banks have dropped recently -- but although Wells Fargo and JPMorgan are down about 10% over the last three months, Bank of America is off by about 25%.
-- E. Scott Reckard
Photo: A customer at BofA, whose shares have taken a dive. Credit: Associated Press / Paul Sakuma