Countrywide Financial Corp., the Calabasas mortgage lender being acquired by Bank of America Corp., today posted a surprisingly large $893.1 million first-quarter loss as it took more than $3 billion of charges for write-downs and bad loans.
The loss equaled $1.60 per share, and compared with a profit of $434 million, or 72 cents, a year earlier.
Analysts on average expected a loss of 12 cents per share, according to Reuters Estimates. Countrywide has lost more than $2.5 billion in the nine months ending March 31.
Countrywide, the nation's largest mortgage lender, set aside $1.5 billion for bad loans in the quarter, 10 times as much as a year earlier. It also wrote down an additional $1.5 billion for other securities and claims.
Countrywide said about one in 11 borrowers has fallen behind on home loan payments, nearly twice as many as a year earlier. It also said more than one in three subprime borrowers is delinquent.
The results may be Countrywide's last as an independent company.
Bank of America, the second-largest U.S. bank agreed in January to swap 0.1822 of a share for each Countrywide share, valuing Countrywide on Monday at about $4 billion.
Bob Stickler, a Bank of America spokesman, declined to comment on Countrywide's results, but said the merger remains on track to close in the third quarter.
The combined company would make about one in four U.S. home loans. Bank of America has said it will install Countrywide Chief Operating Officer David Sambol to run its combined mortgage business, to be based in Calabasas, but not make many of the riskier home loans that caused problems for Countrywide.
Countrywide, which collects payments on $1.48 trillion of mortgages, said 9.27% of borrowers with home loans it serves were behind on payments at the end of March, up from 8.64% at year end and 4.90% in March 2007.
The delinquency rate for subprime borrowers rose to 35.88% from 33.64% at year end.
Countrywide also faces a wide variety of investigations into its lending practices, lawsuits from shareholders and borrowers, and a U.S. Securities and Exchange Commission probe into Chief Executive Angelo Mozilo's stock sales. Mozilo has denied wrongdoing.
Bank of America has said it expects to modify or work out at least $40 billion of troubled mortgage loans over two years to keep at least 265,000 borrowers in their homes.
