Bank of America Corp., reports a fourth-quarter net loss of $2.39 billion, or 48 cents per diluted share. The news comes on the same day the Charlotte-based bank says it will slash its dividend to one cent per share from 32 cents and accept an additional $20 billion in bailout money.

The federal funds are in addition to the $25 billion BofA has already received under the Troubled Asset Relief Program, which is designed to unfreeze the credit markets and boost the economy.

BofA earned $215 million, or 5 cents per diluted share, in the fourth quarter of 2007.

The latest figures include results from Countrywide Financial Corp., which BofA purchased on July 1, but not Merrill Lynch & Co. Inc., which it purchased Jan. 1.

Net interest income rose to $13.1 billion in the latest quarter from nearly $9.17 billion in the fourth quarter of 2007. Total noninterest income fell to $2.57 billion from $3.64 billion in the same period.

BofA (NYSE:BAC) says fourth-quarter results were driven by escalating credit costs, including additions to reserves, and significant writedowns and trading losses in its capital-markets businesses.

"These actions reflect the deepening economic recession and extremely challenging financial environment, both of which significantly intensified in the last three months of 2008," BofA says.

BofA's provision for credit losses rose to $8.54 billion from $3.31 billion in the fourth quarter of 2007.

Global consumer and small-business banking and global wealth and investment management were profitable, boosted by BofA's expanding deposit business. However, BofA says negative results in capital markets and advisory services offset the bank's profitability in business lending and treasury services, which are part of BofA's global corporate- and investment-banking division.

Merrill Lynch's preliminary results indicate a fourth-quarter net loss of $15.31 billion, or $9.62 per diluted share, driven by severe dislocations in the capital markets.

As part of BofA's acquisition of Merrill Lynch, federal officials have given BofA an additional $20 billion in funds. The government also has agreed to provide protection against further losses on $118 billion in capital-markets exposure, primarily from the Merrill Lynch portfolio.

Under the agreement, BofA would cover the first $10 billion in losses and the government would cover 90 percent of any subsequent losses. BofA has agreed to pay a premium of 3.4 percent of those assets.

The latest assistance from the U.S. Treasury Department and the Federal Deposit Insurance Corp. come amid growing concerns about BofA's financial condition.

Federal officials announced the deal early this morning.

BofA's stock, which has traded between $7.35 and $45.08 over the last year, closed at $8.32 per share Thursday, down from Wednesday's closing price of $10.20. It dropped another 13.7 percent Friday, closing at $7.18 per share.

For the full year, BofA earned $2.56 billion, or 55 cents per diluted share, down from $14.8 billion, or $3.30 per diluted share.

Net interest income rose to $45.36 billion from $34.44 billion in 2007. Total noninterest income fell to $27.42 billion from $32.39 billion in the same period.

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