With all the mollycoddling and free money given the banks by the US government over the last year, you’d think they would all be turning a profit by now. Heck, even $C eked out a number very slightly in the green (so very proud of you, Bandit), but there’s one hot mess that still hasn’t figured it out. And that hot mess is Bank of America:

Bank of America posted a loss of $1 billion, or 26 [cents] a share, compared with a year-earlier profit $1.18 billion, or 15 cents a share. The most recent period included about $2.6 billion in write-downs from improvement in credit spreads and a $402 million charge from a payment the U.S. government linked to pulling out of an asset-guarantee deal.

The company had 90% more shares outstanding because of heavy issuance of shares for the Merrill purchase and capital raises to offset rising losses from souring loans and bad assets.

Issuing more shares, still writing stuff down. They went on to go ahead and blame you guys for the fact that they aren’t making any scratch anywhere other than at Merrill’s newly acquired i-banking operations:

Chief Executive Ken Lewis, who will exit the company in less than three months amid numerous government probes into himself and the bank, Friday noted a leveling of delinquencies among credit-card customers.

Bank of America is considered particularly vulnerable to unemployment, which climbed to 9.8% in the U.S. last month, and the state of its gigantic portfolio of credit-card loans could be a bellwether for the industry at large. Global-card-services loss widened significantly to $1.03 billion from $167 million a year ago.

It’s those damn consumers! Incidentally, $BAC made my never-use-this-card-again list for a number of reasons, so I am at least one solvent customer they lost this year. But they’ve still got the insolvent ones, and that’s all that matters, right?

I think Kennay will be glad to go up, up and away in his beautiful balloon at the end of the year.