Jan. 24 (Bloomberg) -- Bank of America Corp., the second- biggest U.S. bank, fired about a quarter of the stock analysts in its securities unit, according to two of the employees who are losing their jobs.

The Charlotte, North Carolina-based bank had 72 stock analysts as of last month. Robert Morris, the top ranked oil and gas analyst for six straight years in Institutional Investor magazine's survey, and John McDonald, the second-ranked large-cap bank analyst in 2007, were among those cut yesterday, according to the former employees who asked not to be named because of the terms of their contracts.

The firings come a week after Bank of America said it planned to eliminate 650 jobs in its investment banking unit. The company recorded $5.28 billion of mortgage-related writedowns in the fourth quarter following the collapse of the subprime loan market.

``There will be gaps in coverage,'' said Jack Ablin, who helps oversee $55 billion as chief investment officer of Harris Private Bank, which owns Bank of America shares. ``They've got to reconcile their expenses, and this is part of doing business.''

Paula Dominick, Bank of America's head of research, referred a call to spokesman Brandon Ashcraft, who confirmed that some of the 650 jobs eliminated at the company were analysts. He declined to name the analysts or say how many were fired.

`Core Components'

``Debt and equity research remain core components of the products and services we offer,'' Ashcraft said. ``We continue to provide research on hundreds of individual equity and debt securities across all major sectors.''

An equity research note published in December showed that Bank of America had 72 stock analysts. The financial company is also reducing its research sales staff in Atlanta, Boston, New York, Philadelphia and San Francisco, according to the former employees.

Bank of America announced the 650 job cuts on Jan. 15 and said it would scale back its structured-products unit, stop offering collateralized-debt obligations and sell its prime brokerage, which caters to hedge funds.

The 12 percent cut from the corporate and investment banking staff came on top of 3,000 firings announced in October, Chief Executive Officer Kenneth Lewis said at a meeting last week with reporters in New York. Last year's cut included 500 people from the corporate and investment bank.

Lewis told investors in October he'd had ``all the fun I can stand in investment banking.'' He said the firm will keep arranging syndicated loans and leveraged buyouts.

Shares Slump

Bank of America rose 1 cent to $40.58 as of 9:43 a.m. in New York. In the last year, the shares have lost 24 percent in New York Stock Exchange composite trading.

Bank of America analysts who dropped coverage of their companies yesterday include Joe Arns, Daniel Barcelo, Kuni Chen, Robert Dezego, Scott Flower, Joseph France, Marshall Reid, Jairam Nathan, April Scee, Daniel Scott and Jeff Walkenhorst, according to Bloomberg data.

The company plans to cut an undisclosed number of support jobs in the investment banking unit, Chief Financial Officer Joe Price said in an interview Jan. 22.

Earnings

Bank of America said fourth-quarter earnings dropped 95 percent after $5.28 billion of mortgage-related writedowns and higher provisions for future loan losses. Profit excluding merger and restructuring costs and a gain from the sale of Denver-based Marsico Capital Management LLC was 5 cents a share, missing the 21-cent average estimate of analysts surveyed by Bloomberg.

Last year, Newark, New Jersey-based Prudential Financial Inc., the second-biggest U.S. life insurer, closed its 420-person stock research and trading unit because it wasn't making money.

To contact the reporters on this story: Jeff Kearns in New York at jkearns3@bloomberg.net; Eric Martin in New York at emartin21@bloomberg.net.

Last Updated: January 24, 2008 09:46 EST