After reporting big profits over the last six months, Bank of America lost $1 billion in the third quarter as growing numbers of consumer loans soured and the bank paid millions of dollars to wean itself off government life support.

Bank of America posted a loss of 26 cents a share for the three months from July through September, compared with a profit of $3.2 billion in the second quarter. Wall Street analysts had been expecting a loss of 12 cents a share. The bank earned $1.18 billion or 15 cents a share in the quarter a year ago.

&S220;Obviously, credit costs remain high, and that is our major financial challenge going forward,&S221; said the bank&S217;s chief executive, Kenneth D. Lewis. &S220;However, we are heartened by early positive signs, such as the leveling of delinquencies among our credit card numbers.&S221;

The bank added $2.1 billion to its reserves to cover more credit losses as unemployment surges and households struggle to keep up on their loans, and it spent more than $400 million to extract itself from an agreement with the government that guaranteed potential losses of its brokerage Merrill Lynch.

Aside from its roster of troubled consumer credit and loan products tied to the sagging mortgage market, Bank of America is beset with problems that run from Washington to civil courtrooms to its own boardroom.

Mr. Lewis announced in late September that he would step down at the end of the year, leaving a leadership vacuum as the bank searches for a successor who can restore the bank&S217;s tarnished image and remove the government crutches holding it up.

Bank of America has accepted some $45 billion in taxpayer bailouts since the financial crisis erupted last year, and has issued in debts backed up by the government no teletrack payday loan. While rivals like Citigroup and Wells Fargo also remain on government support, stronger competitors like Goldman Sachs and JPMorgan Chase have already paid back their bailouts, freeing themselves of the scrutiny and stigma that came with taking the bailout.

A day before reporting its earnings, the bank tried to quell some of the furor over its management and bonus structure by announcing that Mr. Lewis promised to return the pay he received this year to avoid a confrontation with Kenneth R. Feinberg, the Obama administration&S217;s overseer of executive compensation..

While Merrill&S217;s brokerage business may be adding meat to Bank of America&S217;s bottom line, investigations over the $50 billion deal that folded the thundering herd into Bank of America still pose legal tangles and publicity headaches for the bank. Regulators, members of Congress and shareholder lawsuits are examining the merger and questions over bonuses paid out to Merrill executives on the eve of the deal.

Already, e-mail messages have surfaced in which one Bank of America director sums up his take on the Merrill deal by saying, &S220;Unfortunately it&S217;s screw the shareholders!!&S221; Now, Bank of America&S217;s board has voted to partially waive attorney-client privilege, perhaps setting the stage for more disclosures about the boardroom intrigue leading to the Merrill deal.

With $1 Billion Loss, Bank of America Misses Its Forecast