Bank of America Corp., the fifth-ranked U.S. mortgage lender by total volume, today reported its first profit decline in more than four years, citing consumer bankruptcies driving up loan losses and a weak trading quarter as causes.

Net income for the fourth quarter of 2005 fell 2 percent to $3.77 billion, or 93 cents per share, from $3.85 billion, or 94 cents, a year earlier.

Home equity production volume, one of the bright spots in the earnings report, increased 27 percent to a record $72 billion in 2005, the company said. Bank of America is one of the nation’s leading home equity loan providers as measured by outstanding balances, according to the company.

The earnings decline, the first since the third quarter of 2001, also resulted in part from narrower lending margins.

Rising short-term rates drove up the bank’s borrowing costs, but long-term rates were little changed, making it more difficult to charge more on lending. Bank of America’s lending margin fell to 2.82 percent from 3.18 percent a year earlier.

Excluding merger and restructuring charges, profit was 94 cents per share, missing the average forecast of $1.02 from analysts polled by Reuters Estimates. Revenue rose 3 percent to $14.12 billion, below forecasts of $14.59 billion.

Shares of Charlotte, N.C.-based Bank of America were down 24 cents, or 0.5 percent, at $43.95 in the New York Stock Exchange trade this afternoon.


Send tips or a Letter to the Editor to or call (510) 658-9252, ext. 140.

Show Comments Hide Comments


Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Inman Connect Las Vegas Memorial Day sale – 44% off exclusively for Select subscribers!Register Now To Save×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription