Bank of America Warns of 4Q Shortfall

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Bank of America

(BAC) - Get Report

warned Wednesday that fourth-quarter earnings would fall below analysts' expectations because of higher credit costs and slowing capital markets.

The company, which runs the largest bank in the U.S., said it expects fourth-quarter earnings of about $1.4 billion, or 85 cents to 90 cents a share, compared with earnings of $1.23 a share in the same period last year. According to

First Call/Thomson Financial

, 26 analysts expect fourth-quarter earnings of $1.17 a share.

Bank of America says fiscal 2000 earnings are expected to approach $8 billion, or $4.72 to $4.77 a share, compared with $4.68 a share in 1999, while full-year 2001 earnings are expected to be $5.10 a share to $5.20 a share. Analysts, on average, expect $5.03 a share in 2000 and $5.46 a share in 2001.

In addition, Bank of America said the company currently expects its fourth-quarter expense for net charge-offs to be in the range of $1.1 billion to $1.2 billion, including about $100 million for a one-time adjustment to adopt new regulations regarding consumer loans. Last month, the company disclosed that one large loan had been placed on non-performing status and a significant portion will be charged off.

The company also said it is experiencing continuing deterioration in credit quality. Non-performing assets are now expected to be about 20% above the third-quarter level.

Shares of Bank of America were recently down 2.28%, or 94 cents, to $40.25 in

New York Stock Exchange

trading.