by Calculated Risk on 4/21/2008 11:18:00 AM

Here are a few excerpts from the BofA conference call:

CEO Kenneth D. Lewis on outlook:

"As you realize by now, first quarter was much worse than our expectations three months ago with the most notable duration in the latter part of the quarter. The issues we faced in capital markets in the fourth quarter continued into the fourth quarter with March being particularly difficult. Consumer credit quality deteriorated substantially from fourth quarter, particularly in home equity. ... Credit quality will continue to be an issue with charge-offs at least at first quarter levels but probably higher for the rest of the year."
emphasis added

Here is another CEO saying that March was really bad.

CFO on Home Equity Book:

"Credit quality in our consumer real estate business mainly home equity deterioriated sharply in the first quarter as a result of the weaker housing market. The problems to date have been centered in higher LTV home equity loans particularly in states that have experienced significant decreases in home prices. Almost all of these states have been growth markets in the past several years. Our largest concentrations are in California and Florida [40% of portfolio]. Home equity net charge-offs increased to 496 million or 1.71% up from 63 basis points in the prior quarter. 30-day performing delinquencies are up 7 basis points to 1.33%. Nonperforming loans in home equity rose to 1.51% of the portfolio from 1.17% in the prior quarter. 82% of the net charge offs related to loans where the borrower was delinquent and had little or no equity in the home. Loans with the greater than 90% CLTV on a refreshed basis currently represent 26% of loans versus 21% in the fourth quarter. This change reflects the continued decline in home prices most acutely in the states I noted earlier. ... We believe net charge offices in home equity will continue to rise given softness in the real estate values and seasoning in the portfolio. We increased reserves for this portfolio to 215 basis points reflecting the continued elevated level of delinquency roles, loss occurrences and loss severities. As a result, we would expect to see losses cross the 200 basis points market by the middle of this year as we work through these issues. We instituted a number of initiatives to mitigate risk and new originations as well as existing exposure including lower maximum CLTV across geography and borrower. Two issues that is playing home equity and could drive losses are a prolonged deterioration in home values and further deterioration in the economy."

And a question from analyst Meredith Whitney on how far along BofA is in the write down process:

Question, Meredith Whitney: So my final wrap up is when you see CEOs mainly CEOs from brokerage firms saying that we're beyond the worst of things, can you comment in terms of the regulators involvement with the housing situation and make any similar type of comment?

Answer: Well, in a broad sense, and just talk about regulators or the government, I think first it would be too early to strike up the band and sing happy days are here again, but from the investment banking standpoint, that is the right [view], I do think we're in the last innings or last quarter whatever sports a analogy you wanted to use, and then the other credit issues is so housing dependent and related and economic and economy related I think we're not in the last inning or the last few innings, and we have at least the rest of this year to go.

Once again, March was very weak, and there is much more to come.