NEW YORK (CNNMoney.com) -- Many of the nation's largest financial firms are set to soon report their latest quarterly results -- and analysts think bonuses won't be the only thing that will be big.
Many forecasts are calling for another bloodbath. Bank of America (BAC, Fortune 500), the nation's largest lender, is expected to report a loss of $3.7 billion in the quarter, according to estimates from Thomson Reuters. That would be BofA's biggest quarterly loss since the crisis first erupted.
Even supposedly stronger rivals like Wells Fargo (WFC, Fortune 500) are expected to take it on the chin. The San Francisco-based bank is expected to report a profit of just $71 million, down 97% from the $2.6 billion it earned in the previous quarter.
The poor results are largely a direct result of last month's decision by those three banks to repay billions of dollars in bailout money they owed to the government.
But even putting charges tied to those payments aside, things are hardly rosy for these banks and other top U.S. lenders that paid back bailout funds months ago.
"I think the fourth quarter is likely to show we aren't out of the woods yet," said Shannon Stemm, a financial services analyst with Edward Jones.
For starters, revenues at many of the big banks' investment banking businesses are expected to slip for the second straight quarter.
Experts said part of that decline was due to the typical holiday slowdown. At the same time though, financial firms simply aren't issuing as much corporate debt and underwriting as many new stock issuances as they were last spring just after the financial markets started to turn around.
"Everybody has been talking about how the capital markets business has been lousy," said Robert Maneri, managing director at Victory Capital Management, whose firm owns shares of a number of large banks.
In addition, many financial firms continue to grapple with festering loan issues.
JPMorgan Chase (JPM, Fortune 500) and Bank of America, for example, have found little relief in their credit card and home equity loan businesses as the nation's unemployment rate remains stubbornly high at 10%. JPMorgan Chase will release its results on January 15.
And while fears about a major fallout in commercial real estate have subsided somewhat, there are still concerns that big banks will face problems in that corner of their loan portfolios.
Compounding matters even further this quarter is the fact that overall loan demand continues to remain severely depressed as businesses and consumers are focused on paying down existing debt.
Demand for new home loans is down almost a quarter from where it was just a year ago, according to a weekly survey published Wednesday by the Mortgage Bankers Association.
"I think the big question this quarter is whether there is any loan demand anywhere," said analyst Nancy Bush, founder of NAB Research.
Focus on guidance, not just bonuses. Poor results could be a big problem for the top banks -- and not just because they may disappoint investors.
Resentment against the largest lenders is running high among lawmakers in Washington and the American public. As such, the banks are expecting intense scrutiny this earnings season over how much they plan to set aside to pay bonuses for 2009.
Experts that track the industry however will be looking more closely for any clues about how lenders may perform during 2010. There is already a widespread belief that bank profits will be hit hard by many of the regulatory reforms that lawmakers are expected to pass sometime this year.
Analysts will also be particularly interested in whether executives from many of the top lenders divert from previous expectations about loan losses and the economic recovery.
Wells Fargo, for example, indicated in its third quarter results that consumer-related loan losses would peak during the first half of this year, while commercial real estate loan losses would crest during the second half of 2010.
But with the economic recovery showing few signs of gaining significant momentum, Bush said she wouldn't be surprised if leading bank CEOs dialed back their expectations.