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Wednesday, December 12, 2007

Bank of America, Wachovia, PNC Warn

by Calculated Risk on 12/12/2007 10:19:00 AM

From MarketWatch: Bank of America, Wachovia, PNC see tough fourth quarter, more credit losses

Bank of America Chief Executive Ken Lewis said the firm would have to write down a larger amount of its investment in some debt securities than previously planned.

"Based on conditions today, we expect those write-downs will be larger than have already been reported -- although obviously we won't know our final numbers until we close the fourth quarter," Lewis said in remarks prepared for delivery at a Goldman Sachs conference.
Lewis said the problems continue to grow, based on a slowing economy, but he stopped short of predicting a recession. "We're getting closer to 50-50 though, "Lewis said, referring to the likelihood of a recession.
Also Wednesday, Wachovia ... in a Securities and Exchange Commission filing, said it now estimates its loan-loss provision for the fourth quarter will be about $1 billion in excess of charge-offs.

Its previous forecast was between $500 million and $600 million due to slowing loan growth and ongoing deterioration in its loan portfolio.
PNC said it expects to report fourth-quarter earnings in the range of 60 cents to 75 cents a share, and adjusted earnings between $1 and $1.15 a share. Analysts polled by Thomson Financial are looking for profit of $1.39 a share, on average.

The revised expectation is due to write-downs on its $1.5 billion of commercial mortgage loans held for sale and lower trading revenue as a result of "unprecedented market price volatility," PNC said in the filing.