B of A CEO sees Countrywide well-priced: analyst

By Jonathan Stempel

BANGALORE (Reuters) - Bank of America Corp (BAC.N: Quote, Profile, Research, Stock Buzz) Chief Executive Kenneth Lewis was quoted by an analyst as saying the bank's planned $3.1 billion purchase of Countrywide Financial Corp CFC.N remains attractively priced, even if write-downs at the largest U.S. mortgage lender exceed expectations.

Oppenheimer & Co analyst Meredith Whitney also said Bank of America views its quarterly dividend of 64 cents per share as "safe," though it equates to an 8.64 percent annual yield based on Tuesday's closing stock price.

Whitney said in a June 11 report that she ate dinner Tuesday with Lewis, who runs the second-largest U.S. bank.

Bob Stickler, a bank spokesman who attended the dinner, said Lewis did not use the word "safe" to characterize the dividend but that "Ken discussed a number of scenarios in which not cutting the dividend was seen as most likely."

The bank has raised the dividend for 30 straight years. Several large U.S. banks, including Citigroup Inc (C.N: Quote, Profile, Research, Stock Buzz) and Wachovia Corp (WB.N: Quote, Profile, Research, Stock Buzz), have cut their dividends this year to preserve capital as loan losses mount.

A surge in problem loans contributed to $2.52 billion of losses at Countrywide in the nine months ended in March.

In morning trading on the New York Stock Exchange, shares of Bank of America fell 45 cents to $29.17 and touched their lowest level since 2002, Reuters data show. Countrywide fell 5 cents to $4.81.

Countrywide's problems have led many investors to question Bank of America's commitment to the merger, including after the Charlotte, North Carolina-based bank said in a regulatory filing last month that it might not assume all Countrywide debt.