Merrill Lynch & Co. posted a deeper-than-expected second-quarter loss of $4.65 billion Thursday, bringing its earnings deficit over the last four quarters to $18.7 billion as write-downs of troubled assets continue to mount.

The investment bank wrote down, or sold at discounts, $9.75 billion of residential mortgages, related securities and leveraged buyout loans in the last three months, bringing its total write-downs in the year-old credit crisis to about $40 billion, among the worst on Wall Street.