Updated from 3:10 p.m. EDT

Financial stocks were among the worst performers of Monday's session following Bank of America's ( BAC) first-quarter earnings report, as credit deterioration remains a concern for U.S. banks.

Bank of America reported a surprise first-quarter profit of $2.8 billion, or 44 cents, coming in well ahead of Wall Street's expectations.

However, BofA said its provision for future credit losses jumped 57% to $13.4 billion, as nonperforming assets climbed to $25.7 billion, or 2.65% of the bank's book, from $18.2 billion, or 1.96% at the end of last year.

Bank of America shares dropped 24.3% to close at $8.02 on Monday. Still, the stock is up 60% over the last three months and more than 100% since the beginning of March.

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Other bank stocks also gave back recent gains. Citigroup ( C) slid 19.5%, Wells Fargo ( WFC) closed down 16.1% and JPMorgan Chase ( JPM) shed 10.7%.

Citigroup's loss was exacerbated by a research note from Goldman Sachs that said credit losses, which the firm views as "critical in drawing a line in stabilizing Citi's capital base," continue to grow at a rapid rate. The Goldman analyst said that while Citigroup's headline number was positive when it reported earnings Friday, "we estimate that the underlying earnings were a loss of 38 cents ."

It appears that banks will continue to be a hot topic this week after The New York Times reported that the White House and Treasury Department are considering converting existing government loans to the nation's 19 largest banks into common stock. The shift comes as U.S. officials are looking to stretch what is left of the $700 billion in TARP funds without approaching Congress for more money.

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