By Alan Fein

(AXcess News) New York - Bank of America (NYSE: BAC) post a loss of $1.79 billion, or 48 cents per share, compared with a year-earlier profit of $268 million, or 5 cents.  It marked the first time in 17 years that Bank of America hadn't made a profit.  But those losses were attributed to troubled Merrill Lynch, which BAC purchased thanks to earlier funding by the Treasury Department from the first $350 billion provided the Bush administration in TARP funding.

Due to steeper losses at the troubled investment banking unit of Bank of America, the board of BAC had no choice but to appeal for more TARP funding.  In a late night session with the Fed, FDIC and Treasury Department, Bank of America and the Bush administration hammered out a deal for an additional $20 billion in bailout funds.

Bank of America CEO Kenneth Lewis told analysts on a conference call Friday morning that it was difficult to pinpoint what was working at this stage due to the unprecedented collapse of the financial market in September, which Lewis called "the worst in 40 years".

Lewis added that BAC had considered scrapping the Merrill Lynch merger last month if the government didn't help, saying losses were worse than expected and that the government looked at the deal as being vital to the financial health of the market.  Lewis basically said the Fed was worried about the effect on the economy if Bank of America backed out and left Merrill Lynch to its own devices.

In Lewis' eyes, Bank of America is acting as an 'economic hero' in going through with the Merrill Lynch buyout, considering BAC's balance sheet was in good shape up until now.

"The recession will end some day, and people will remember that our company was there for them in hard times," said Lewis.

But consumers have little sympathy for Lewis or Bank of America, critical of banks tightening credit.  Some lawmakers agree, but in consideration of the Fed guaranteeing over $100 billion in mortgage-backed securities and loans, Lewis had Bernanke and Paulson over a barrel.  Even President Bush looked haggard Friday morning after having to deal with the Bank's last-minute need.

Setting aside Lewis' flag-waving pomp following his "take or leave it" meeting with the Bush administration, investors need to look back before the official declaration of a US recession to where Bank of America took over one of the nation's largest mortgage lenders.  To this day, Bank of America has jockeyed to layoff as much risk to taxpayers as possible and though Merrill Lynch is reeling with losses, no one forced Lewis' board to go after the investment banking giant - that was Bank of America's decision.

Now that the Bank finds itself having to cut its dividend all of a sudden, BAC is doing America a favor?

Lewis is right, Americans will remember what Bank of America did, every time the tax man cometh - and come he will.