BANK OF AMERICA : reports loss

NEW YORK (Reuters) - Bank of America Corp reported a fourth-quarter loss on Friday, hours after winning a multibillion-dollar lifeline from the U.S. government to help it absorb Merrill Lynch & Co, which lost a record $15.31 billion in the quarter.

The net loss at Bank of America alone was $1.79 billion, or 48 cents per share, compared with a year-earlier profit of $268 million, or 5 cents a share. Net revenue increased 22 percent to $15.68 billion, the bank said.

At Merrill, the loss was $9.62 per share, driven by significant writedowns of troubled assets.

Results were announced hours after Bank of America won $20 billion of new capital from the government's $700 billion Troubled Asset Relief Program.

The government agreed to share in losses on $118 billion of troubled residential and commercial mortgages, derivatives and corporate debt. Bank of America agreed to absorb the first $10 billion of any losses, the government the next $10 billion, and the government 90 percent of any remainder.

That capital infusion means Bank of America has now taken $45 billion of TARP money, the same amount as Citigroup Inc , which won its own rescue package in November. In connection with the package, Bank of America also slashed its quarterly dividend to 1 cent per share from 32 cents.

Bank of America Chief Executive Kenneth Lewis sought government help to combat losses at Merrill, which the company agreed to buy on September 15 after less than 48 hours of hurried talks.

The original $19.4 billion transaction did not get government assistance, and closed on Jan 1. John Thain, Merrill's chief executive, became Bank of America's head of global banking, securities and wealth management.

Bank of America said the rescue package would help it operate as normally as possible. The company said it had extended more than $115 billion of new loans in the quarter and was adding mortgage staff to accommodate an increase in refinancings.

Nevertheless, the bank already has its hands full with soaring credit losses.

Bank of America set aside $8.54 billion for bad loans in the quarter, up from the third quarter's $6.45 billion and $3.31 billion a year earlier.

Net charge-offs nearly tripled from a year earlier to $5.54 billion, or 2.36 percent of average loans and leases.

Shares of Bank of America closed Thursday at $8.32 on the New York Stock Exchange. They have fallen more than 81 percent from their 52-week high last February.

(Reporting by Jonathan Stempel; Editing by Lisa Von Ahn)