BofA carrying loans on books for $44 billion above fair value

| 27 February 2009 21:01

This news comes via Reuters:

Bank of America Corp is carrying loans on its balance sheet marked at more than $44 billion above their fair value, the company said in its annual report filed with U.S. regulators on Friday.

The bank said it ended 2008 with $886.2 billion in loans, but estimated the fair value — or market price — for these loans as $841.6 billion.

In a related Bloomberg article, an analyst from Friedman, Billings & Ramsey gets right to the point:

“That’s the heart of why these companies are trading where they are,” Friedman Billings Ramsey & Co. analyst Scott Valentin said in an interview. “Technically, if you mark-to- market the entire balance sheet, most of these banks are insolvent.”

bank-of-america-fair-value-loans

Sources
Bank of America SEC Filings
Bank of America Loans Valued at $44 Billion Less Than Books Say – Bloomberg.com
BofA carries loans $44 billion above market value – Reuters

avatar About Edward Harrison

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty years of business experience. He is also a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages, a skill he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.

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