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NEW YORK (CNNMoney.com) -- Bank of America proved no match for the ongoing recession as the nation's biggest bank reported a steep loss Friday.

With Americans continuing to default on their credit cards and mortgages, the company said it lost $2.2 billion in the third quarter, which included several charges related to the government's move to rescue the firm over the past year.

Bank of America's results come at a particularly difficult time for the Charlotte, N.C.-based lender and its CEO Ken Lewis.

Last month, the company's embattled leader announced plans to step down amid ongoing scrutiny over his role in the company's controversial purchase of Merrill Lynch.

Friday's results also come just a day after Lewis agreed to a deal not to accept a salary or bonus in his final year as CEO in an effort to deflect some of scrutiny the firm faces.

During a conference call with analysts, Lewis thanked the investment community for its support over the years, adding that he felt confident that Bank of America's board would find a suitable replacement. The company has provided no indication when a new CEO might be named.

"I have no doubt that Bank of America will thrive in my absence," he said.

Credit fallout

Lewis' outlook, however, did little to soften the blow of the firm's latest results. During the quarter, the company said it lost 26 cents. Analysts were anticipating BofA to fare slightly better, expecting a loss of 21 cents a share, according to Thomson Reuters.

Experiencing the bulk of the quarter's losses was Bank of America's mortgage and credit card businesses. Both divisions lost more than $1 billion during the July-September period, as more and more Americans found themselves out of work and unable to keep up with their loan payments.

Loan troubles also intensified within Bank of America's commercial real estate portfolio, amid slower spending by both businesses and consumers.

Still, there were some encouraging signs. In the latest quarter, the company set $11.7 billion for bad loans, down from $13.4 billion in the previous quarter.

"If you look at underlying numbers, credit quality is improving," said Alan Villalon, a senior research analyst at Minneapolis-based First American Funds

Bank of America's Lewis acknowledged that credit issues remained the biggest challenge facing the company going forward, but added that the company may have reached a peak in loan losses.

One bright spot was its wealth management division, one of the key businesses that led Bank of America to complete its controversial deal with Merrill Lynch last year. Both revenues and profits within the division were more than double the previous year's levels and held steady from last quarter.

Challenges remain

One key question that continues to swirl around the company is when it might be able to get out from under the government's thumb.

In exchange for accepting $45 billion in bailout money over the past year, the company is required to make hefty dividend payments. In the latest quarter, it paid $1.2 billion in preferred share dividends, with much of it going to the government.

The company's pay practices for its top 100 highest paid employees are also currently under review by the Obama administration's so-called "pay czar". Kenneth Feinberg, the man charged with handling the task, is expected to rule on the matter by the end of the month.

And that's not including the numerous high-profile state and federal investigations the company is facing related to its controversial purchase of Merrill Lynch. It is also engaged in a legal battle with the Securities and Exchange Commission over its alleged failure to notify shareholders of its decision to pay Merrill executives outsized bonuses last year.

Hoping to deflect some of that scrutiny, Bank of America agreed earlier this week to share previously undisclosed information related to its purchase of Merrill Lynch with regulators.

The agreement would give regulators access to details concerning the bank's failure to disclose what it knew about pending losses at Merrill when it bought the troubled brokerage last year.

Bank of America (BAC, Fortune 500) shares fell more than 4% in late Friday trading.