UPDATE 3-Bank of America credit losses soar, profit falls

* CEO says tough environment to affect results into 2010

* Profit attributable to shareholders down 25 pct

* Credit losses surge anew

* Shares fall in premarket trade (New throughout, adds byline)

By Jonathan Stempel

NEW YORK, July 17 (Reuters) - Bank of America Corp (BAC.N), the largest U.S. bank, posted a quarterly profit that topped Wall Street forecasts but warned of a fresh surge in soured loans to credit card, mortgage and business customers.

Chief Executive Kenneth Lewis said tough economic conditions will hurt results into 2010. Soaring credit losses may add to pressure on Lewis as the U.S. Congress and regulators increase their scrutiny of the bank, including its ability to manage risk and its controversial Jan. 1 acquisition of Merrill Lynch & Co.

"Growth in charge-offs and non-performing assets still scares the daylights out of me," said Paul Miller, an analyst at FBR Capital Markets.

Bank of America set aside $13.38 billion for bad loans for a second straight quarter, and net charge-offs totaled $8.7 billion, up 25 percent from the prior three-month period.

ONE-TIME GAIN HELPS RESULTS

Second-quarter net income applicable to common shareholders fell 25 percent to $2.42 billion, or 33 cents per share, from $3.22 billion, or 72 cents, a year earlier.

Before preferred stock dividends in both periods, profit fell 5 percent to $3.22 billion. Net revenue on a taxable equivalent basis rose 60 percent to $33.09 billion.

Results included a $5.3 billion pre-tax gain from the sale of one-third of the bank's stake in China Construction Bank Corp (601939.SS). They also included $713 million of dividend payments tied to a federal bailout of the bank, and a charge to bolster a federal deposit insurance fund.

Analysts on average expected profit of 29 cents per share on revenue of $33.26 billion, according to Reuters Estimates.

Nonperforming assets surged 21 percent to $30.98 billion. The Charlotte, North Carolina-based bank added $4.63 billion to reserves for bad loans, ending with $35.78 billion, and the rate of credit card losses soared to nearly 12 percent.

"Difficult challenges lie ahead from continued weakness in the global economy, rising unemployment and deteriorating credit quality that will affect our performance for the rest of the year and into 2010," Lewis said.