BofA may soon be part of USA

A few months ago, mighty Bank of America Corp. and its chairman and chief executive, Kenneth D. Lewis, looked like the saviors of the financial system.

Now the giant is foundering, and Lewis could be fighting to keep his job.

The company's stock price has plunged 66% since Jan. 1 and slipped below $5 a share this week, hitting a 25-year low. The precipitous decline has industry analysts speculating about a government takeover, which could wipe out shareholders, including Gene Corbin of Santa Maria, Calif.

The bank's swoon "has crippled us financially," said Corbin, 67, a retired hospital maintenance supervisor. The stock he and his wife own, once worth $50,000, has shriveled to $5,000. He fears a federal takeover or shutdown could vaporize their remaining holdings, which happened last year to shareholders when IndyMac Bancorp and Washington Mutual Inc. failed.

"It'd be a total wipeout, with just micro-pennies left to the dollar for investors," Corbin said. "Our shares would be worth absolutely zilch."

"This morning, we had considered selling what we had left," he said. "But we've rode this horse this long, and we've already lost 95% of what we had, that we're just going to take a chance on the bank recovering. That's all we can really do."

Lewis spokesman Robert Stickler contends the bank -- the nation's No. 1 in deposits, mortgage lending and credit cards -- is fundamentally strong, with reserves to protect against loan losses and pay its debts over the coming years.

Just a few months ago, Lewis was winding down an extraordinary year of deal-making with an acquisition of troubled investment bank Merrill Lynch & Co., giving Bank of America a prominent perch on Wall Street.

The Merrill deal, initially valued at $50 billion, had followed the bank's $21-billion purchase of Chicago-based LaSalle Bank Corp. and its $4-billion takeover of Countrywide Financial Corp., the nation's largest mortgage lender.

Combined, the acquisitions looked to make BofA even more dominant in retail financial services. Instead, they have saddled the company with huge mortgage-related losses.

The deep recession is adding losses on credit cards and, increasingly, business loans to stacks of decaying bubble-era home loans from Countrywide and the exotic securities that Merrill carved out of risky mortgages.