Bank of America's (NYSE:BAC) 4Q10 EPS Lowered by Barclays (NYSE:BCS)

Bank of America (NYSE:BAC) had their EPS estimate for the fourth quarter lowered significantly by Barclays (NYSE:BCS), citing the expected $3 billion repurchase provision in 2011.

Barclays noted, "We expect BAC to report 4Q10 EPS of $0.16 versus our prior $0.26 estimate and the $0.24 consensus. The reduction to our 4Q EPS estimate reflects the $3 billion ($2.4B more than we had forecasted) mortgage repurchase provision BAC expects to book in 4Q10. This provision relates to its late December agreement reached with FNM and FRE to resolve repurchase claims on certain residential mortgage loans sold by CFC. The higher than forecasted provision more than offsets our newly included gains of $1 billion or so that we estimate on its November sales of its BLK stake and its share of CCB's $9.2 billion rights offer.

"We expect it to point to an ongoing improvement in credit trends with reserve reductions continuing over the next few quarters. It should guide to a net interest margin contraction in 1H11 before flattening out in 2H11, as long-term debt is targeted for a 15-20% reduction by the end of 2011."

Barclays reiterates an "Equalweight" rating on Bank of America, which was trading at $14.62, gaining $0.23, or 1.56 percent, as of 2:54 PM EST. Barclays has a price target of $19 on them.