Countrywide posts 1Q loss of $893M

Countrywide Financial Corp., which is being acquired by Bank of America Corp., reports a first-quarter net loss of $893 million, or $1.60 per diluted share.

In the same period last year, Countrywide posted a profit of $434 million, or 72 cents per diluted share.

Analysts had, on average, forecast Countrywide would earn 2 cents per share in the latest quarter.

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The company's total revenue fell 77 percent in the first quarter to $678.9 million from $2.41 billion a year earlier.

The Calabasas-based mortgage lender's provision for loan losses grew 888 percent to $1.5 billion from nearly $152 million a year ago.

Residential charge-offs, or loans written off as not being paid, rose to $606 million in the latest quarter from $39 million in the year-ago period.

The company says nearly 36 percent of its subprime loans were in delinquency at the end of March, up from 19.6 percent a year ago.

Charlotte-based BofA announced in early January it would buy Countrywide (NYSE:CFC) inan all-stock transaction worth about $4 billion. The deal is slated to close in the third quarter.

In August, BofA (NYE:BAC) invested $2 billion in Countrywide, the country's largest mortgage lender. BofA's investment came in the form of a nonvoting convertible preferred security yielding 7.25 percent annually. The security can be converted into 16 percent of Countrywide's common stock.

At that time, Countrywide's stock price was falling amid concerns about its exposure to the subprime-mortgage market. Since then, that market has deteriorated, and Countrywidehas fought off rumors of bankruptcy.