Shares closed at $7.25, down about 26 percent in the past month and 46 percent since the start of the year.
Other banks have also suffered, but Bank of America has been especially vulnerable as it pays for the toxic baggage of Countrywide Financial Corp., a mortgage lender that it bought in 2008 during its days of hasty empire building.
The latest blow to the banking sector came from the federal government's announcement Friday that it would sue Bank of America, JPMorgan Chase & Co., Citigroup Inc., Goldman Sachs Group Inc. and others over the banks' selling Fannie Mae and Freddie Mac mortgage-backed securities that later turned sour. The KBW Bank Index fell about 4 percent Friday.
Bank of America, which has already settled many claims related to the government's losses on the securities, issued a terse response to the lawsuit.
Fannie and Freddie, which are government-backed mortgage agencies, "claimed to understand the risks inherent in investing in subprime securities and continued to invest heavily in those securities even after their regulator told them they did not have the risk management capabilities to do so," Bank of America said in a statement. "Despite this, (Fannie and Freddie) are now seeking to hold other market participants responsible for their losses."
The problems at Bank of America represent quite a turn of fortunes from the pre-financial crisis days, when the Charlotte, N.C., bank was regarded as an industry stalwart. But its purchase of Countrywide has brought it quarterly losses, regulatory probes and lawsuits.
After years of gobbling up other companies, Bank of America has been shrinking as a way to save itself. On Monday it announced it would sell about half of its stake in China Construction Bank. On Wednesday it said it would sell off its correspondent mortgage business, largely a legacy unit of Countrywide. That unit, where the bank buys mortgages from smaller banks and then, in most cases, services them, represented about half of Bank of America's mortgage volume in the first half of this year.
Friday's stock decline also erased the gains that the shares had enjoyed since Aug. 25, when the announcement that Warren Buffett would funnel $5 billion into the company caused shares to pop to $7.65 from $6.99.
Like many peers, including Goldman Sachs and Bank of New York Mellon Corp., Bank of America has also been slashing jobs. In August it said it would cut 3,500 jobs by the end of September. They follow a string of other layoffs, including 2,500 already announced this year.
The Charlotte Observer reported Friday that the bank could shed as many as 25,000 to 30,000 jobs over several years, citing sources familiar with the matter. A bank spokesman declined to comment on the report, except to say that efficiency measures were ongoing.
After this round of layoffs, the bank should have about 284,000 employees. Its roster peaked in early 2009, right after it absorbed Countrywide Financial and investment bank Merrill Lynch, at about 302,000.
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