By David Mildenberg Jan. 20 (Bloomberg) -- Bank of America Corp., the largest U.S. bank, posted its third loss in the past five quarters, driven by the cost of repaying U.S. bailout funds and defaults on consumer loans. The fourth-quarter loss of $194 million before the costs of repaying the U.S. Treasury Department narrowed from the record loss of $1.8 billion, or 44 cents a share, a year earlier, Bank of America said today in a statement. Including those costs, the net loss to common shareholders was $5.2 billion, or 60 cents a share, compared with a loss of $2.4 billion, or 48 cents. The average estimate of 20 analysts surveyed by Bloomberg was a loss per share of 52 cents. New Chief Executive Officer Brian T. Moynihan promises a “DNA change” as the firm focuses on operations, instead of takeovers and bailouts. Repaying the Troubled Asset Relief Fund sliced $4.1 billion from income available to shareholders in the final quarter, while freeing the bank from federal pay limits and as much as $2.85 billion a year in dividends to the U.S. “Investors are focusing on consumer credit, and there’s not been a lot to celebrate there so far,” Jack Ablin, chief investment officer at Harris Private Bank in Chicago, said in an interview before results were announced. “Bank of America has a larger exposure to the consumer than the other big banks.” The quarterly report is the first led by Moynihan, 50, after he took over on Jan. 1 for Kenneth D. Lewis, 62, who spent more than $120 billion on acquisitions since 2004. Moynihan has said the Charlotte, North Carolina-based bank doesn’t need more big purchases to recover from the recession. The bank set aside $10.1 billion of provisions for credit losses during the quarter, down from an average $12.8 billion in the previous three quarters. Growth of loans that aren’t collecting interest slowed in each of the three preceding quarters. Economic Outlook “It’s important for that trend to continue,” said Alan Villalon, a senior research analyst at FAF Advisors Inc., a unit of U.S. Bancorp that owns 9.5 million shares. “Their fortunes are tied to the U.S. economy.” Bank of America closed yesterday at $16.32 on the New York Stock Exchange, rebounding from as low as $2.53 in February when investors were speculating about nationalization in the depths of financial crisis. Of 34 analysts that track Bank of America, 26 rate the shares a “buy” and none says “sell,” according to data compiled by Bloomberg. Owners include Berkshire Hathaway Inc., the insurance and holding company run by billionaire Warren Buffett, and Paulson & Co., the hedge fund run by billionaire John Paulson who told clients during the fourth quarter that the stock could reach almost $30 by December 2011. “The bank is well-positioned for an improving economic environment and the shares are likely to double or triple over the next two years,” said Marshall Front, chairman of Front Barnett Associates LLC, a Chicago firm that holds about 342,000 shares. To contact the reporter on this story: David Mildenberg in Charlotte at dmildenberg@bloomberg.net.

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