Bank of America joins rivals with $3.6B buffer from coronavirus loan defaults

Results reflect CEO Brian Moynihan's turnaround after 2008 financial crisis bailout

Bank of America joined rivals JPMorgan Chase and Wells Fargo in strengthening its buffer against coronavirus-related costs, setting aside an additional $3.6 billion to cover delinquent loans.

The buildout in so-called reserves helped drag net income down 45 percent to $4 billion, or 40 cents a share, in the three months through March, the Charlotte, N.C.-based company said in a statement.

The lender's profitability despite the reserve increase shows CEO Brian Moynihan's success in positioning the bank to be a "source of strength" as government measures intended to limit the COVID-19 pandemic shutter swaths of the U.S. economy and send unemployment soaring, executives said.

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That security is a sharp turnaround from the 2008 financial crisis, when the acquisitions of subprime lender Countrywide Financial and investment Bank Merrill Lynch under Moynihan's predecessor, Ken Lewis, forced the company to take a $45 billion bailout.

"Ten years ago, we set out to transform our business and operate under the principles of responsible growth so we would be a source of strength in the next crisis," Chief Financial Officer Paul Donofrio said in a statement. "Our results this quarter reflect our progress."

The bank ended the first quarter of 2020 with more liquidity than when it began, Moynihan noted.

Bank of America has received nearly 1 million requests for help so far as the economic shutdown left small businesses and consumers alike struggling to cover rent and mortgages and has committed $100 million to aid local communities, he added.

"We are taking extraordinary steps to support our employees, clients and communities during this humanitarian crisis," Moynihan said.