Bank of America (BAC: 7.29 -0.14%) reported a Q409 loss of $5.2bn, or $0.60 per diluted share, after shedding obligations to the Troubled Asset Relief Program (TARP).

In the same quarter of 2008, BofA posted a net less of $2.4bn, or $0.48 per diluted share. Excluding the $4bn TARP repayment, BofA had a net loss of $194m in Q409, which narrowed from the $1.8bn loss from a year earlier. For all of 2009, BofA reported a net income of $6.3bn, an improvement from $4bn in 2008.

Revenue climbed 59% to $25.4bn from $16bn a year ago, stemming from the addition of Merrill Lynch.

During the quarter, BofA funded $86.6bn in first mortgages, including $22.9bn in mortgages made to low-and moderate-income borrowers. BofA provided home ownership retention to 460,000 borrowers, including 260,000 loan modification with a total unpaid principal balance of $55bn and nearly 200,000 customers who were in trial-period modifications under the Home Affordable Modification Program (HAMP).

Under the program, BofA provided 3,183 permanent modifications after shifting its focus to collect more documentation from those in the trial modification stage. It currently receives a potential capped incentive of $1.6bn, the fifth highest of any servicer in in the program.

"As we look at 2010, we are encouraged by signs the economy is improving, as we have seen in the stabilization of our credit costs, particularly in the consumer businesses,” said recently-appointed CEO Brian Moynihan. “That said, economic conditions remain fragile and we expect high unemployment levels to continue, creating an ongoing drag on consumer spending and growth.”

Write to Jon Prior.

The author holds no relevant investments

Global financial services and asset-management firm Morgan Stanley (MS: 18.56 +2.26%) posted $413m of income from continuing operations in the fourth quarter of 2009, compared with a loss of $10.5bn in the previous-year period.

Net revenue of $6.8bn in Q409 brings the full-year net income to $1.35bn, compared with a net loss of $246m in 2008.

Firm-wide results for the full year reflected $1.9bn of net losses on real estate investments "amidst the ongoing industry-wide decline in this market," Morgan Stanley said in the earnings statement.

Investment gains in the firm's institutional securities division were $61m in the quarter, compared with year-ago losses of $1.85bn, driven primarily by gains on real estate investments. The increased gains drove full-year 2009 investment losses to $900m, compared with $2.7bn losses in the previous year.

Morgan Stanley's asset management division saw a pre-tax loss of $55m in the quarter, despite net revenues in the Merchant Banking unit of $153m, driven by principal investment gains the real estate business.

Write to Diana Golobay.

Disclosure: The author holds no relevant investment positions.

Wells Fargo & Company (WFC: 29.60 +1.89%) posted a record year-end net income of $12.3bn, or $1.75 per share, in 2009, capped off by a Q409 net income of $2.8bn, or $0.08 per share.

Results in the quarter were impacted by a pre-tax $500m credit reserve build and $861m in merger-related and incremental expenses. The record profits come nearly a year after Wells Fargo acquired Wachovia, essentially doubling the bank’s size.

Wells Fargo said mortgage originations and servicing revenue was $3.4bn in the quarter, and its total mortgage banking noninterest income accounted for 15% of the company’s consolidated Q409 revenue. The bank had $1.2bn in income from mortgage origination and sales activities on $94bn of residential mortgage originations and $144bn of applications.

Wells originated $94bn in new mortgages in Q409, “essentially flat” from $96bn in Q309, the bank said. Total mortgage applications in the quarter totaled $144bn, up from $123bn in Q309. The bank’s mortgage application pipeline totaled $57bn in quarter’s end, down from $62bn at the end of Q309. Average mortgage escrow deposits were $27.5bn compared with $28.7bn in Q309.

In 2008, Wells Fargo was the country's highest volume mortgage originator with more than $237bn originations. The next closest producer in 2008 was Chase Home Finance, which originated $187.1bn in 2008.

The bank’s owned residential mortgage servicing portfolio totaled $1.8trn at quarter’s end. Wells experienced $1.9bn in market-related valuation changes to mortgage servicing rights (MSRs) net of economic hedge results, reflecting the continuation of strong carry income and effective hedge performance, the bank said. The average servicing portfolio note rate was 5.66%, the lowest since Sept. 30, 2005, Wells said, adding the value of MSRs to loans serviced for others was 91bps.

At the end of 2009, nearly 500,000 mortgage customers were in active trial or completed loan modifications started in prior 12 months, including 119,000 in the Making Home Affordable Modification Program (HAMP), 8,400 of which were completed modifications, and the rest were non-HAMP modifications.

To handle the load of modification applications, Wells increased its home retention staff 17% in the quarter and now has a staff of more than 15,000 loss mitigation employees.

The bank’s net interest income was $11.5bn, down from $11.7bn in Q309, due to the decline in core loans, the reduction in non-strategic assets and the Q309 sale of longer-duration mortgage-backed securities (MBS).

During the quarter, MBS yields increased while capital market credit spreads generally narrowed, the bank said and it had a net unrealized securities gains of $5.6bn at year’s end, including $3.3bn in unrealized gains in its agency MBS portfolio.

Write to Austin Kilgore.

Real estate investment trust (REIT) Invesco Mortgage Capital (IVR: 15.81 -0.25%) completed the total offering of 8.05m shares of common stock and issuance, which raised total gross proceeds of about $171m, according to an e-mailed statement.

The public offering of 7m shares, which priced on January 12th at $21.25 per share, raised an initial $149m with an option for underwriters to purchase up to an additional 1.05m shares to cover any over-allotments.

The over-allotment raised more than $22m, bringing gross proceeds to $171m, more than six months after the REIT went public. The initial public offering (IPO) of 8.5m shares of at $20 per share in the end raised $201m. It was the first blind IPO in the REIT space for 13 months.

As HousingWire previously reported, the second offering just six months later indicates growing investor appetite.

Invesco said in an e-mailed statement it plans to use the net proceeds from the offering to buy residential and commercial mortgage-backed securities (RMBS and CMBS) and leveraged mortgage loans. It also plans to invest in a public-private investment fund managed by Invesco Advisers.

Credit Suisse Securities and Morgan Stanley (MS: 18.56 +2.26%) acted as joint book-running managers for the offering.

Write to Diana Golobay.

Disclosure: The author holds no relevant investment positions.