Bank of America (NYSE:BAC) reported a fourth-quarter loss of $5.2 billion, or $0.60 per share, this morning. Stripping out a one-time loss from repaying TARP, and preferred dividends associated with that deal, the loss would have been just $194 million.

That's not bad, but we need to dig deeper. Breaking quarterly income out by segment (net of the TARP charge), here's what you get:

Segment

Q4 2009

Q3 2009

Deposits

$595 million

$798 million

Credit cards

($1 billion)

($1 billion)

Home loans and insurance

($993 million)

($1.6 billion)

Global banking

$264 million

($40 million)

Global markets

$1.2 billion

$2.2 billion

Wealth management

$1.3 billion

$274 million

Other

($1.5 billion)

($1.6 billion)

Total

($194 million)

($1 billion)

A few notable points:                                                                                                            

  • Credit cards are still extremely weak. That was expected.
  • Home-loan losses improved meaningfully.
  • Global markets -- think trading -- fell dramatically.

Nothing too remarkable here, except for the decline in global markets. We saw similar segment declines at Citigroup (NYSE:C) and JPMorgan Chase (NYSE:JPM) when they reported earnings over the past few days. There's clearly a market trend eroding the staggering profits that banks pulled from this segment over the past year. The biggest takeaway is what that means for the bank that relies almost 100% on this area -- Goldman Sachs (NYSE:GS). Goldman reports earnings tomorrow morning. If the same trend in capital markets continues, it could be a very, very interesting report.

Moving on to B of A's credit quality:

Metric

Q4 2009

Q3 2009

Q2 2009

Q1 2009

Loans 90+ days past due

$16.8 billion

$7.6 billion

$6.4 billion

$6.3 billion

Nonperforming loans / total loans

3.75%

3.51%

3.12%

2.47%

Allowance for losses / nonperforming loans

111%

112%

116%

122%

Total net charge-offs

$8.4 billion

$9.6 billion

$8.7 billion

$6.9 billion

To say that credit has stabilized is being generous. Overall, it still ain't a pretty picture. Nonperforming assets are increasing while the proportional allowance for losses is decreasing. Granted, B of A spent the last year bulking up its loss reserves like a champion. But it's a bit brave to conclude that the credit-quality thunderstorm that's utterly crushed B of A's earnings potential is over.

What's your take? Share your thoughts in the comments section below.