Bank of America Earns US$4 Billion in 2008

Fri. January 16, 2009; Posted: 08:38 AM

- Extends US$115 Billion in New Credit in Fourth Quarter

- US$15.31 Billion Fourth-Quarter Net Loss at Merrill Lynch

- U.S. Invests US$20 Billion in Bank of America; Also Provides Insurance for US$118 Billion in Exposure

- Quarterly Dividend Reduced to US$.01

Bank of America Corporation today reported full-year 2008 profit of US$4.01 billion compared with net income of US$14.98 billion a year earlier.

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Earnings after preferred dividends and available to common shareholders were US$2.56 billion, or US$0.55 per diluted share, down from US$14.80 billion, or US$3.30 per share.

In the fourth quarter of 2008, the company had a net loss of US$1.79 billion compared with net income of US$268 million a year earlier. The net loss applicable to common shareholders was US$2.39 billion, or US$0.48 per diluted share, down from net income of US$215 million, or US$0.05 per share, in the same period in 2007. Results include Countrywide Financial, which Bank of America purchased on July 1, but not Merrill Lynch & Co., Inc., which was acquired on January 1, 2009.

Fourth quarter results were driven by escalating credit costs, including additions to reserves, and significant writedowns and trading losses in the capital markets businesses. These actions reflect the deepening economic recession and extremely challenging financial environment, both of which significantly intensified in the last three months of 2008.

Global Consumer and Small Business Banking and Global Wealth and Investment Management were profitable, paced by Bank of America's successful and expanding deposit business. Negative results in Capital Markets and Advisory Services masked the profitability in Business Lending and Treasury Services within Global Corporate and Investment Banking.

Bank of America ended 2008 with a Tier 1 capital ratio of 9.15 percent.

Merrill Lynch preliminary results indicate a fourth-quarter net loss of US$15.31 billion, or US$9.62 per diluted share, driven by severe capital markets dislocations. (See the Transition Update section of this news release and supplemental earnings information provided on http://investor.bankofamerica.com for further details.)

In view of the continuing severe conditions in the markets and economy, the U.S. government agreed to assist in the Merrill acquisition by making a further investment in Bank of America of US$20 billion in preferred stock carrying an 8 percent dividend rate.

In addition, the government has agreed to provide protection against further losses on US$118 billion in selected capital markets exposure, primarily from the former Merrill Lynch portfolio. Under the agreement, Bank of America would cover the first US$10 billion in losses and the government would cover 90 percent of any subsequent losses. Bank of America would pay a premium of 3.4 percent of those assets for this program.

On a pro forma basis, this additional capital would boost the company's Tier 1 capital ratio to approximately 10.70 percent.

In light of continuing severe economic and financial market conditions, the Bank of America Board of Directors has declared a first-quarter dividend of US$.01 per share payable March 27, 2009 to shareholders of record as of March 6, 2009.

Combined, these actions strengthen Bank of America and will allow the company to continue business levels that both support the U.S. economy and create future value for shareholders.

Bank of America extended more than US$115 billion in new credit in the fourth quarter. It is increasing staff in its mortgage unit to meet a surge in demand that began late in December as mortgage rates fell. The company continues to prudently extend credit to commercial and consumer borrowers throughout its product line.

Customer Highlights

-- Of the more than US$115 billion in new credit extended during the quarter, about US$49 billion was in commercial non-real estate; US$45 billion was in mortgages; nearly US$8 billion was in domestic card and unsecured consumer loans; nearly US$7 billion was in commercial real estate; more than US$5 billion was in home equity products; and approximately US$2 billion was in consumer Dealer Financial Services.

-- During the fourth quarter, Small Business Banking extended nearly US$1 billion in new credit to over 47,000 new customers.

-- Mortgages made to low- and moderate-income borrowers and areas totaled US$11.3 billion in the fourth quarter, serving more than 77,000 borrowers.

-- To help homeowners avoid foreclosure, Bank of America and Countrywide modified approximately 230,000 home loans during 2008. This year the company embarked on a loan modification program projected to modify over US$100 billion in loans to help keep up to 630,000 borrowers in their homes. The centerpiece of the program is a proactive loan modification process to provide relief to eligible borrowers who are seriously delinquent or are likely to become seriously delinquent as a result of loan features, such as rate resets or payment recasts. In some instances, innovative new approaches will be employed to include automatic streamlined loan modifications across certain classes of borrowers. The program utilizes an affordability equation to qualify borrowers for loan modifications at a targeted first year mortgage debt to income ratio of 34 percent.

-- The company established a lending initiative group: senior officers meeting with the chief executive every week to evaluate how much Bank of America is lending, to whom, and what more can be done while remaining prudent and responsible. The company will report findings monthly.

Fourth Quarter 2008 Financial Summary

Revenue and Expense

Revenue net of interest expense on a fully taxable-equivalent basis rose 19 percent to US$15.98 billion from US$13.45 billion a year earlier.

Net interest income on a fully taxable-equivalent basis rose 37 percent to US$13.41 billion from US$9.82 billion in the fourth quarter of 2007 on higher market-based income, the favorable rate environment, loan growth and the acquisition of Countrywide. The net interest yield improved 70 basis points to 3.31 percent.

Noninterest income declined 29 percent to US$2.57 billion from US$3.64 billion a year earlier. Mortgage banking income, gains on sales of debt securities, insurance premiums and service charges increased. The increases were more than offset by sales and trading losses in the Capital Markets and Advisory Services business.

Noninterest expense rose 5 percent to US$10.95 billion from a year earlier mainly because of the addition of Countrywide, which was partially offset by lower personnel costs. Pretax merger and restructuring charges related to acquisitions were US$306 million compared with US$140 million a year earlier. Given the capital markets disruptions, the company's efficiency ratio remains above normal levels.

Credit Quality

Credit quality deteriorated further during the quarter as the recession worsened. Consumers continued to experience high levels of stress from declining home prices, rising unemployment and tighter credit conditions. These factors led to higher losses and an increase in delinquencies in all consumer portfolios.

Declining home values, a slowdown in consumer spending and continued turmoil in the global financial markets negatively impacted the commercial portfolios. Commercial losses increased during the quarter driven by higher broad-based losses in the non-real estate domestic portfolios, the homebuilder portfolio, and several large defaults by foreign financial services borrowers.

Nonperforming assets were US$18.23 billion or 1.96 percent of total loans, leases and foreclosed properties, compared with US$13.58 billion, or 1.45 percent, at September 30 and US$5.95 billion, or 0.68 percent, at December 31, 2007.

Total managed net losses were US$7.40 billion, or 2.84 percent, of total average managed loans and leases compared with US$6.11 billion, or 2.32 percent, in the third quarter and US$3.28 billion, or 1.34 percent, in the fourth quarter of 2007.

Net charge-offs were US$5.54 billion, or 2.36 percent of total average loans and leases compared with US$4.36 billion, or 1.84 percent, in the third quarter and US$1.99 billion, or 0.91 percent, in the fourth quarter of 2007.

The provision for credit losses was US$8.54 billion, up from US$6.45 billion in the third quarter and US$3.31 billion in the fourth quarter of 2007. The company added US$2.99 billion to the allowance for loan and lease losses during the quarter. The additions were across most consumer portfolios reflecting economic stress on consumers. Reserves were also increased on commercial portfolios.

Capital Management

Total shareholders' equity was US$177.05 billion at December 31. Period-end assets were US$1.82 trillion. The Tier 1 capital ratio was 9.15 percent, up from 7.55 percent at September 30, 2008. The Tier 1 ratio was 6.87 percent a year earlier.

Bank of America issued 455 million common shares for US$9.88 billion, US$15 billion of preferred stock issued to the U.S. Department of the Treasury and did not repurchase any shares in the period. Period-end common shares issued and outstanding were 5.02 billion for the fourth quarter of 2008, 4.56 billion for the third quarter of 2008 and 4.44 billion in the year-ago quarter. The company paid a cash dividend of US$0.32 per common share and recorded US$472 million in preferred dividends during the quarter. An additional US$131 million of preferred dividends were deducted in the calculation of net income applicable to common shareholders.

In January 2009, an additional US$10 billion of preferred stock (part of the original US$25 billion assigned to Bank of America and Merrill Lynch) was issued to the U.S. Department of the Treasury as part of the Troubled Asset Relief Program (TARP). The company also issued approximately 1.4 billion shares of common stock associated with the acquisition of Merrill Lynch.

Full-Year 2008 Financial Summary

Revenue and Expense

Revenue on a fully taxable-equivalent basis increased 8 percent to US$73.98 billion from US$68.58 billion a year earlier.

Net interest income on a fully taxable-equivalent basis increased to US$46.55 billion from US$36.19 billion in 2007 on higher market-based income, consumer and commercial loan growth, the favorable rate environment and the addition of Countrywide and LaSalle. The net interest yield widened 38 basis points to 2.98 percent reflecting the more favorable interest rate environment and product mix.

Noninterest income fell 15 percent to US$27.42 billion from US$32.39 billion in 2007. Writedowns in the wake of market disruptions of US$10.47 billion reduced results. Higher mortgage banking income, service charges and insurance premiums along with an increase in gains on sales of debt securities partially offset the decline.

Noninterest expense increased 11 percent to US$41.53 billion from US$37.52 billion a year ago mainly due to the addition of Countrywide. The increase was partially offset by lower incentive compensation. Given the capital markets disruptions, the company's efficiency ratio remains above normal levels.

Credit Quality

Provision expense increased US$18.44 billion to US$26.83 billion in 2008 because of higher net charge-offs and additions to the reserve. The majority of the reserve additions were in the consumer and small business portfolios as the housing markets weakened and the economy slowed. Reserves on commercial portfolios were increased as the homebuilder and commercial domestic portfolios within Global Corporate and Investment Banking deteriorated.

Total managed net losses were US$22.90 billion during 2008, or 2.27 percent of total average managed loans and leases, compared with US$11.25 billion or 1.29 percent during the prior year. Net charge-offs totaled US$16.23 billion, or 1.79 percent of average loans and leases, compared with US$6.48 billion, or 0.84 percent in 2007. Portfolios directly tied to housing, including home equity, residential mortgage and homebuilders drove a significant portion of the increase. The weaker economy also drove higher levels of net losses across the Card Services portfolios as well as the commercial portfolios.

Capital Management

For 2008, Bank of America recorded US$10.26 billion in dividends to common shareholders and US$1.32 billion to preferred shareholders. The company also issued approximately 580 million common shares, including 455 million during the fourth quarter and 107 million related to the Countrywide acquisition. In addition, Bank of America obtained nearly US$35 billion in additional capital in connection with preferred stock issuances throughout the year.

2008 Business Segment Results Global Consumer and Small Business Banking(1) (US Dollars in millions) 2008 2007 Total managed revenue, net of interest expense(2) $58,344 $47,855 Provision for credit losses(3) 26,841 12,920 Noninterest expense 24,937 20,349 Net income 4,234 9,362 Efficiency ratio(2) 42.74% 42.52% Return on average equity 5.78 14.81 Managed loans(4) $350,264 $294,030 Deposits(4) 370,961 330,661 At 12/31/08 At 12/31/07 Period ending deposits $393,165 $346,908 1 Results shown on a managed basis. Managed basis assumes that loans that have been securitized were not sold and presents earnings on these loans in a manner similar to the way loans that have not been sold (i.e., held loans) are presented. For more information and detailed reconciliation, please refer to the data pages supplied with this Press Release. 2 Fully taxable-equivalent basis 3 Represents provision for credit losses on held loans combined with realized credit losses associated with the securitized loan portfolio 4 Balances averaged for period

Global Consumer and Small Business Banking net income declined from a year ago as credit costs more than doubled. Expenses rose mostly on the addition of Countrywide.

Managed net revenue rose 22 percent due to the Countrywide acquisition and organic loan and deposit growth.

The provision for credit losses increased by US$13.92 billion to US$26.84 billion. Net losses increased US$8.38 billion to US$19.18 billion as housing market deterioration and weak economic conditions impacted most consumer portfolios. Loan loss reserve additions related to deterioration and increased delinquencies contributed to higher credit costs.

-- Deposits and Student Lending net income increased by 9 percent to US$6.21 billion, while net revenue increased 10 percent to US$20.65 billion as net interest income, service charges and debit card income all showed strong growth.

-- Card Services net income fell 85 percent to US$521 million as credit costs rose. Managed net revenue grew 12 percent to US$28.43 billion as higher average loan balances increased net interest income.

-- Mortgage, Home Equity and Insurance Services reported a net loss of US$2.50 billion as home equity credit costs rose. Higher noninterest expense was offset by increases in mortgage banking income, net interest income and insurance premiums. Expense and revenue increases are due to the addition of Countrywide.

Fourth-quarter net income for Global Consumer and Small Business Banking declined 56 percent to US$835 million from a year earlier. The provision for credit losses rose 77 percent as the economy weakened, and expenses rose 28 percent due to the addition of Countrywide. Net revenue increased 26 percent to US$15.91 billion on higher net interest income, mortgage banking income and insurance premiums related to the addition of Countrywide and organic loan and deposit growth.

Global Corporate and Investment Banking (US Dollars in millions) 2008 2007 Total revenue, net of interest expense(1) $13,440 $13,651 Provision for credit losses 3,080 658 Noninterest expense 10,381 12,198 Net income (loss) (14) 510 Efficiency ratio(1) 77.24% 89.36% Return on average equity (0.02) 1.12 Loans and leases(2) $337,352 $274,725 Trading-related assets(2) 341,544 362,195 Deposits(2) 239,097 219,891 1 Fully taxable-equivalent basis 2 Balances averaged for period

Global Corporate and Investment Banking had a net loss of US$14 million on significant writedowns, higher credit costs and lower net revenue. A 48 percent increase in net interest income and higher service charges and investment banking income were more than offset by market disruption charges of US$10.47 billion, which were US$6.45 billion a year earlier. Included in those charges were CDO-related writedowns of US$4.78 billion, down from US$5.65 billion during 2007, and leveraged loan writedowns of US$1.08 billion, compared with US$196 million a year earlier.

The provision for credit losses increased US$2.42 billion to US$3.08 billion. Net charge-offs rose from low 2007 levels and with the exception of homebuilders were across a broad range of borrowers and industries. Reserves were increased due to deterioration in the homebuilder, commercial domestic and dealer-related portfolios.

-- Business Lending net income decreased 14 percent to US$1.72 billion as strong revenue growth and lower expenses were offset by higher credit costs. Net revenue increased 29 percent to US$7.82 billion on organic and merger-related average loan growth of more than US$62 billion.

-- Capital Markets and Advisory Services recorded a net loss of US$4.95 billion compared with a net loss of US$3.39 billion a year earlier. Net revenue losses of US$3.02 billion were lower compared with net revenue of US$549 million a year earlier, driven by writedowns associated with credit-related positions including CDO-related investments and auction rate securities.

-- Treasury Services net income increased 28 percent to US$2.73 billion as net revenue grew 10 percent to US$7.78 billion. Net revenue increased as favorable pricing and increased volume drove deposits and service charges higher. Both revenue and expenses were favorably impacted by the Visa IPO.

Global Corporate and Investment Banking reported a net loss of US$2.44 billion for the quarter, compared with a net loss of US$2.77 billion last year. The net loss narrowed on lower market disruption losses, higher net interest income due to lower short term rates, wider spreads and increased customer balances, and investment banking income, offset by higher credit costs.

Capital Markets and Advisory Services had negative net revenue of US$4.64 billion in the period.

Market disruption-related impacts of US$4.61 billion in the quarter include:

-- Total CDO-related losses of US$1.72 billion.

-- Writedowns of commercial mortgage-backed securities and related transactions of US$853 million.

-- Leveraged lending-related writedowns of US$429 million.

-- Writedowns on auction rate securities of US$353 million.

Global Wealth and Investment Management (US Dollars in millions) 2008 2007 Total revenue, net of interest expense(1) $7,785 $7,553 Provision for credit losses 664 14 Noninterest expense 4,904 4,480 Net income 1,416 1,960 Efficiency ratio(1) 62.99% 59.31% Return on average equity 12.11 19.83 Loans(2) $87,591 $73,473 Deposits(2) 159,525 124,871 (in billions) At 12/31/08 At 12/31/07 Assets under management $524.0 $643.5 1 Fully taxable-equivalent basis 2 Balances averaged for period

Net income declined 28 percent to US$1.42 billion as support for certain cash funds increased and credit costs rose.

Net revenue increased 3 percent from the 2007 addition of U.S. Trust and LaSalle and organic loan and deposit growth. The increase was offset by support to certain cash funds, writedowns related to auction rate securities and weaker equity markets.

The provision for credit losses increased US$650 million to US$664 million as a result of additions to the reserve and higher net charge-offs reflecting housing market deterioration and the slowing economy.

-- U.S. Trust, Bank of America Private Wealth Management net income declined 2 percent to US$460 million. Net revenue rose 14 percent to US$2.65 billion due to the addition of U.S. Trust and LaSalle, partially offset by the weaker equity markets.

-- Columbia Management reported a net loss of US$459 million compared with net income of US$21 million a year ago mainly due to an additional US$725 million in support provided to certain cash funds and weaker equity markets.

-- Premier Banking and Investments net income fell 54 percent to US$584 million as credit costs increased by US$534 million on higher home equity loan losses. Net revenue decreased 15 percent to US$3.20 billion on lower net interest income as spread compression driven by deposit mix and competitive deposit pricing more than offset deposit growth.

Fourth-quarter net income for Global Wealth and Investment Management increased 65 percent to US$511 million compared with a year earlier due to higher net revenue and lower expenses. Net revenue increased 12 percent to US$1.98 billion as higher net interest income driven by growth in loans and deposits was partially offset by weaker equity markets. Expenses declined 2 percent on lower incentive compensation.

All Other(1) (US Dollars in millions) 2008 2007 Total revenue net of interest expense(2) $(5,593) $(477) Provision for credit losses(3) (3,760) (5,207) Merger and restructuring charges 935 410 All other noninterest expense 372 87 Net income (loss) (1,628) 3,150 Loans and leases(4) $135,671 $133,926 1 All Other consists primarily of equity investments, the residential mortgage portfolio associated with asset and liability management activities, the residual impact of the cost allocation processes, merger and restructuring charges, intersegment eliminations, and the results of certain. consumer finance, investment management and commercial lending businesses that are being liquidated. All Other also includes the offsetting securitization impact to present Card Services on a managed basis. Our view of Global Consumer and Small Business Banking operations are also shown on a managed basis. For more information and detailed reconciliation, please refer to the data pages supplied with this Press Release. 2 Fully taxable-equivalent basis 3 Represents the provision for credit losses in All Other combined with the GCSBB securitization offset. 4 Balances averaged for period

All Other had a net loss of US$1.63 billion for 2008 compared with net income of US$3.15 billion a year earlier. For the fourth quarter, the net loss of US$693 million compared with net income of US$830 million a year earlier. The declines are attributable to lower equity investment income, higher credit costs and increased merger and restructuring charges, which more than offset gains on the sales of debt securities. Results were also adversely impacted by the absence of earnings due to the sale of certain businesses and foreign operations during 2007. Credit costs rose, primarily in the residential mortgage portfolio due to deterioration in the housing markets and the impacts of a slowing economy.

Transition Update

(Merrill Lynch results are not part of Bank of America fourth-quarter or full-year 2008 results)

Merrill Lynch was acquired on January 1, 2009 creating a premier financial services franchise with significantly enhanced wealth management, investment banking and international capabilities.

Merrill Lynch preliminary results indicate a fourth-quarter net loss of US$15.31 billion, or US$9.62 per diluted share, driven by severe capital markets dislocations.

Merrill Lynch's Global Wealth Management division generated US$2.6 billion in net revenue in the period as fees held up well in the declining markets. The strongest performance came from the U.S. Advisory portion of the business. Retention of financial advisors remains consistent with historical trends.

Significant negative fourth-quarter items for Merrill Lynch include:

-- Credit valuation adjustments related to monoline financial guarantor exposures of US$3.22 billion.

-- Goodwill impairments of US$2.31 billion.

-- Leveraged loan writedowns of US$1.92 billion.

-- US$1.16 billion in the U.S. Bank Investment Securities Portfolio writedowns.

-- Commercial real estate writedowns of US$1.13 billion.

The LaSalle transition reached a significant milestone in the quarter with successful systems conversions, marking the completion of the integration. In addition, cost savings exceeded original projections.

The integration of Countrywide is on track and expected to reach targeted cost savings, which are currently expected to be around US$900 million after-tax and are expected to be fully realized by 2011.

Note: Chief Executive Officer Kenneth D. Lewis and Chief Financial Officer Joe L. Price will discuss fourth-quarter 2008 results in a conference call at 7 a.m. (Eastern Time) today. The presentation and supporting materials can be accessed on the Bank of America Investor Relations Web site at http://investor.bankofamerica.com. For a listen-only connection to the conference call, dial +1-877-585-6241 (domestic) or +1-785-424-1732 (international) and the conference ID: 79795.

Bank of America

Bank of America is one of the world's largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services. The company provides unmatched convenience in the United States, serving more than 59 million consumer and small business relationships with more than 6,100 retail banking offices, nearly 18,700 ATMs and award-winning online banking with nearly 29 million active users. Following the acquisition of Merrill Lynch on January 1, 2009, Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to more than 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients in more than 40 countries. Bank of America Corporation stock (NYSE: BAC | Quote | Chart | News | PowerRating) is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange.

Forward-Looking Statements

Bank of America may make forward-looking statements, including, for example, statements about management expectations and intentions regarding our future financial results, integration plans and cost savings, growth opportunities, business outlook, loan and deposit growth, mortgage production, credit losses, and other similar matters. These forward-looking statements are not historical facts, but instead represent Bank of America's current expectations, intentions or forecasts of future events, circumstances or results. These statements are not guarantees of future results or performance and involve certain risks, uncertainties and assumptions that are difficult to predict and often are beyond Bank of America's control. Actual outcomes and results may differ materially from those expressed in, or implied by, any of these forward-looking statements.

You should not place undue reliance on any forward-looking statement and should consider the following possible events or factors that could cause results or performance to differ materially from those expressed in the forward-looking statements: negative economic conditions; changes in interest rates and market liquidity; changes in foreign exchange rates; adverse movements and volatility in debt and equity capital markets; changes in market rates and prices, which may adversely impact the value of financial products and instruments; estimates of fair value of assets and liabilities; legislative and regulatory actions in the United States and internationally; liabilities resulting from litigation and regulatory investigations; changes in domestic or foreign tax laws, rules and regulations and governmental interpretations thereof; monetary and fiscal policies and regulations; changes in accounting standards, rules and interpretations; increased competition; the ability to grow Bank of America's core businesses; the ability to develop and introduce new banking-related products, services and enhancements; mergers and acquisitions and their integration; decisions to downsize, sell or close units or otherwise change Bank of America's business mix; management's ability to identify and manage these and other risks; and the other risk factors discussed in Bank of America's Annual Report on Form 10-K for 2007, Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, and in any of Bank of America's other subsequent SEC filings.

Forward-looking statements speak only as of the date they are made, and Bank of America undertakes no obligation to update any forward-looking statement to reflect the impact of circumstances or events that arise after the date the forward-looking statement was made.

http://www.bankofamerica.com Investors May Contact: Kevin Stitt, Bank of America, +1-704-386-5667 Lee McEntire, Bank of America, +1-704-388-6780 Grace Yoon, Bank of America, +1-212-449-7323 Reporters May Contact: Scott Silvestri, Bank of America, +1-980-388-9921 scott.silvestri@bankofamerica.com

Bank of America Corporation and Subsidiaries Selected Financial Data (US Dollars in millions, except per share data; shares in thousands) Summary Income Three Months Ended Statement December 31 Year Ended December 31 2008 2007 2008 2007 Net interest income $13,106 $9,165 $45,360 $34,441 Total noninterest income 2,574 3,639 27,422 32,392 Total revenue, net of interest expense 15,680 12,804 72,782 66,833 Provision for credit losses 8,535 3,310 26,825 8,385 Noninterest expense, before merger and restructuring charges 10,641 10,269 40,594 37,114 Merger and restructuring charges 306 140 935 410 Income (loss) before income taxes (3,802) (915) 4,428 20,924 Income tax expense (benefit) (2,013) (1,183) 420 5,942 Net income (loss) $(1,789) $268 $4,008 $14,982 Preferred stock dividends 603 53 1,452 182 Net income (loss) applicable to common shareholders $(2,392) $215 $2,556 $14,800 Earnings (loss) per common share $(0.48) $0.05 $0.56 $3.35 Diluted earnings (loss) per common share (1) (0.48) 0.05 0.55 3.30 Summary Average Three Months Ended Balance Sheet December 31 Year Ended December 31 2008 2007 2008 2007 Total loans and leases $941,563 $868,119 $910,878 $776,154 Debt securities 280,942 206,873 250,551 186,466 Total earning assets 1,616,673 1,502,998 1,562,729 1,390,192 Total assets 1,948,854 1,742,467 1,843,979 1,602,073 Total deposits 892,141 781,625 831,144 717,182 Shareholders' equity 176,566 144,924 164,831 136,662 Common shareholders' equity 142,535 141,085 141,638 133,555 Performance Ratios Three Months Ended December 31 Year Ended December 31 2008 2007 2008 2007 Return on average assets (0.37)% 0.06 % 0.22 % 0.94 % Return on average common shareholders' equity (6.68) 0.60 1.80 11.08 Credit Quality Three Months Ended December 31 Year Ended December 31 2008 2007 2008 2007 Total net charge-offs $5,541 $1,985 $16,231 $6,480 Annualized net charge- offs as a % of average loans and leases outstanding (2) 2.36 % 0.91 % 1.79 % 0.84 % Provision for credit losses $8,535 $3,310 $26,825 $8,385 Total consumer credit card managed net losses 3,263 2,138 11,382 8,214 Total consumer credit card managed net losses as a % of average managed credit card receivables 7.16 % 4.75 % 6.18 % 4.79 %

December 31 2008 2007 Total nonperforming assets $18,232 $5,948 Nonperforming assets as a % of total loans, leases and foreclosed properties (2) 1.96 % 0.68 % Allowance for loan and lease losses $23,071 $11,588 Allowance for loan and lease losses as a % of total loans and leases (2) 2.49 % 1.33 % Capital Management December 31 2008 2007 Risk-based capital ratios: Tier 1 9.15 % 6.87 % Total 13.00 11.02 Tangible equity ratio (3) 5.01 3.62 Tangible common equity ratio (4) 2.83 3.35 Period-end common shares issued and outstanding 5,017,436 4,437,885 Three Months Ended December 31 Year Ended December 31 2008 2007 2008 2007 Shares issued 455,381 3,730 579,551 53,464 Shares repurchased - (2,700) - (73,730) Average common shares issued and outstanding 4,957,049 4,421,554 4,592,085 4,423,579 Average diluted common shares issued and outstanding (1) 4,957,049 4,470,108 4,612,491 4,480,254 Dividends paid per common share $0.32 $0.64 $2.24 $2.40 Summary Ending Balance Sheet December 31 2008 2007 Total loans and leases $931,446 $876,344 Total debt securities 277,589 214,056 Total earning assets 1,536,198 1,463,570 Total assets 1,817,943 1,715,746 Total deposits 882,997 805,177 Total shareholders' equity 177,052 146,803 Common shareholders' equity 139,351 142,394 Book value per share of common stock $27.77 $32.09 (1) Due to the net loss for the three months ended December 31, 2008, the impact of antidilutive equity instruments have been excluded from diluted earnings per share and average diluted common shares. (2) Ratios do not include loans measured at fair value in accordance with SFAS 159 at and for the three months and year ended December 31, 2008 and. 2007. (3) Tangible equity ratio equals shareholders' equity less goodwill and intangible assets divided by total assets less goodwill and intangible assets. (4) Tangible common equity ratio equals common shareholders' equity less goodwill and intangible assets divided by total assets less goodwill and intangible assets.

Certain prior period amounts have been reclassified to conform to current period presentation.

Information for periods beginning July 1, 2008 includes the Countrywide acquisition; prior periods have not been restated. This information is preliminary and based on company data available at the time of the presentation.

Bank of America Corporation and Subsidiaries Business Segment Results (US Dollars in millions) Global Consumer and Small Three Months Ended Business Banking (1) December 31 Year Ended December 31 2008 2007 2008 2007 Total revenue, net of interest expense (2) $15,911 $12,621 $58,344 $47,855 Provision for credit losses (3) 7,584 4,287 26,841 12,920 Noninterest expense 7,145 5,572 24,937 20,349 Net income 835 1,899 4,234 9,362 Efficiency ratio (2) 44.91 % 44.15 % 42.74 % 42.52 % Return on average equity 4.13 11.23 5.78 14.81 Average - total loans and leases $364,114 $317,629 $350,264 $294,030 Average - total deposits 396,497 342,926 370,961 330,661 Deposits and Student Lending Total revenue, net of interest expense (2) $5,364 $4,843 $20,649 $18,851 Net income 1,753 1,536 6,210 5,713 Card Services (1) Total revenue, net of interest expense (2) 7,316 6,590 28,433 25,315 Net income (loss) (204) 498 521 3,590 Mortgage, Home Equity and Insurance Services Total revenue, net of interest expense (2) 3,231 1,188 9,262 3,689 Net income (loss) (714) (135) (2,497) 59 Global Corporate and Three Months Ended Investment Banking December 31 Year Ended December 31 2008 2007 2008 2007 Total revenue, net of interest expense (2) $(265) $(695) $13,440 $13,651 Provision for credit losses 1,415 274 3,080 658 Noninterest expense 2,229 3,453 10,381 12,198 Net income (loss) (2,442) (2,771) (14) 510 Efficiency ratio (2) n/m n/m 77.24 % 89.36 % Return on average equity (14.24)% (20.53)% (0.02) 1.12 Average - total loans and leases $343,379 $327,622 $337,352 $274,725 Average - total deposits 249,301 235,730 239,097 219,891 Business Lending Total revenue, net of interest expense (2) $2,226 $1,901 $7,823 $6,085 Net income 301 608 1,722 2,000 Capital Markets and Advisory Services Total revenue, net of interest expense (2) (4,639) (4,489) (3,018) 549 Net income (loss) (3,615) (3,782) (4,948) (3,385) Treasury Services Total revenue, net of interest expense (2) 1,916 1,890 7,784 7,104 Net income 756 488 2,732 2,136 Global Wealth and Three Months Ended Investment Management December 31 Year Ended December 31 2008 2007 2008 2007 Total revenue, net of interest expense (2) $1,984 $1,768 $7,785 $7,553 Provision for credit losses 152 34 664 14 Noninterest expense 1,068 1,297 4,904 4,480 Net income 511 310 1,416 1,960 Efficiency ratio (2) 53.77 % 73.34 % 62.99 % 59.31 % Return on average equity 17.32 10.85 12.11 19.83 Average - total loans and leases $88,874 $82,816 $87,591 $73,473 Average - total deposits 171,340 138,163 159,525 124,871 U.S. Trust (4) Total revenue, net of interest expense (2) $640 $700 $2,650 $2,320 Net income 121 124 460 470 Columbia Management Total revenue, net of interest expense (2) 88 20 391 1,076 Net income (loss) (64) (175) (459) 21 Premier Banking and Investments Total revenue, net of interest expense (2) 776 932 3,201 3,749 Net income 201 292 584 1,267

All Other (1) Three Months Ended December 31 Year Ended December 31 2008 2007 2008 2007 Total revenue, net of interest expense (2) $(1,650) $(240) $(5,593) $(477) Provision for credit losses (5) (616) (1,285) (3,760) (5,207) Noninterest expense 505 87 1,307 497 Net income (693) 830 (1,628) 3,150 Average - total loans and leases 145,196 140,052 135,671 133,926 Average - total deposits 75,003 64,806 61,561 41,759 (1) Global Consumer and Small Business Banking is presented on a managed basis, specifically Card Services, with a corresponding offset recorded in All Other. (2) Fully taxable-equivalent (FTE) basis. FTE basis is a performance measure used by management in operating the business that management believes provides investors with a more accurate picture of the interest margin for comparative purposes. (3) Represents provision for credit losses on held loans combined with realized credit losses associated with the securitized loan portfolio. (4) In July 2007, the operations of the acquired U.S. Trust Corporation were combined with the former Private Bank to create U.S. Trust, Bank of America Private Wealth Management. The results of the combined business were reported for periods beginning on July 1, 2007. Prior to July 1, 2007, the results solely reflect that of the former Private Bank. (5) Represents provision for credit losses in All Other combined with the Global Consumer and Small Business Banking securitization offset.

Certain prior period amounts have been reclassified to conform to current period presentation.

Information for periods beginning July 1, 2008 includes the Countrywide acquisition; prior periods have not been restated. This information is preliminary and based on company data available at the time of the presentation.

Bank of America Corporation and Subsidiaries Supplemental Financial Data (US Dollars in millions) Fully taxable-equivalent Three Months Ended basis data December 31 Year Ended December 31 2008 2007 2008 2007 Net interest income $13,406 $9,815 $46,554 $36,190 Total revenue, net of interest expense 15,980 13,454 73,976 68,582 Net interest yield 3.31 % 2.61 % 2.98 % 2.60 % Efficiency ratio 68.51 77.36 56.14 54.71 Other Data December 31 2008 2007 Full-time equivalent employees 243,075 209,718 Number of banking centers - domestic 6,139 6,149 Number of branded ATMs - domestic 18,685 18,753

Certain prior period amounts have been reclassified to conform to current period presentation.

Information for periods beginning July 1, 2008 includes the Countrywide acquisition; prior periods have not been restated. This information is preliminary and based on company data available at the time of the presentation.

Bank of America Corporation and Subsidiaries Reconciliation - Managed to GAAP (US Dollars in millions)

The Corporation reports Global Consumer and Small Business Banking's results, specifically Card Services, on a managed basis. This basis of presentation excludes the Corporation's securitized mortgage and home equity portfolios for which the Corporation retains servicing. Reporting on a managed basis is consistent with the way that management evaluates the results of Global Consumer and Small Business Banking. Managed basis assumes that securitized loans were not sold and presents earnings on these loans in a manner similar to the way loans that have not been sold (i.e., held loans) are presented. Loan securitization is an alternative funding process that is used by the Corporation to diversify funding sources. Loan securitization removes loans from the Consolidated Balance Sheet through the sale of loans to an off-balance sheet qualified special purpose entity which is excluded from the Corporation's Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States (GAAP).

The performance of the managed portfolio is important in understanding Global Consumer and Small Business Banking's and Card Services' results as it demonstrates the results of the entire portfolio serviced by the business. Securitized loans continue to be serviced by the business and are subject to the same underwriting standards and ongoing monitoring as held loans. In addition, retained excess servicing income is exposed to similar credit risk and repricing of interest rates as held loans. Global Consumer and Small Business Banking's managed income statement line items differ from a held basis reported as follows:

-- Managed net interest income includes Global Consumer and Small Business Banking's net interest income on held loans and interest income on the securitized loans less the internal funds transfer pricing allocation related to securitized loans.

-- Managed noninterest income includes Global Consumer and Small Business Banking's noninterest income on a held basis less the reclassification of certain components of card income (e.g., excess servicing income) to record managed net interest income and provision for credit losses. Noninterest income, both on a held and managed basis, also includes the impact of adjustments to the interest-only strip that are recorded in card income as management continues to manage this impact within Global Consumer and Small Business Banking.

-- Provision for credit losses represents the provision for credit losses on held loans combined with realized credit losses associated with the securitized loan portfolio.

Global Consumer and Small Business Banking Year Ended December 31, 2008 Managed Securitization Basis (1) Impact (2) Held Basis Net interest income (3) $33,851 $(8,701) $25,150 Noninterest income: Card income 10,057 2,250 12,307 Service charges 6,807 - 6,807 Mortgage banking income 4,422 - 4,422 Insurance premiums 1,968 (186) 1,782 All other income 1,239 (33) 1,206 Total noninterest income 24,493 2,031 26,524 Total revenue, net of interest expense 58,344 (6,670) 51,674 Provision for credit losses 26,841 (6,670) 20,171 Noninterest expense 24,937 - 24,937 Income before income taxes 6,566 - 6,566 Income tax expense (3) 2,332 - 2,332 Net income $4,234 $- $4,234 Average - total loans and leases $350,264 $(104,401) $245,863 All Other Year Ended December 31, 2008 Reported Securitization Basis (4) Offset (2) As Adjusted Net interest income (3) $(8,610) $8,701 $91 Noninterest income: Card income 2,164 (2,250) (86) Equity investment income 265 - 265 Gains on sales of debt securities 1,133 - 1,133 All other income (loss) (545) 219 (326) Total noninterest income 3,017 (2,031) 986 Total revenue, net of interest expense (5,593) 6,670 1,077 Provision for credit losses (3,760) 6,670 2,910 Merger and restructuring charges 935 - 935 All other noninterest expense 372 - 372 Income (loss) before income taxes (3,140) - (3,140) Income tax expense (benefit) (3) (1,512) - (1,512) Net income (loss) $(1,628) $- $(1,628) Average - total loans and leases $135,671 $104,401 $240,072 Bank of America Corporation and Subsidiaries Reconciliation - Managed to GAAP (US Dollars in millions) Global Consumer and Small Business Banking Year Ended December 31, 2007 Managed Securitization Basis (1) Impact (2) Held Basis Net interest income (3) $28,712 $(8,027) $20,685 Noninterest income: Card income 10,194 3,356 13,550 Service charges 6,007 - 6,007 Mortgage banking income 1,332 - 1,332 Insurance premiums 912 (250) 662 All other income 698 (38) 660 Total noninterest income 19,143 3,068 22,211 Total revenue, net of interest expense 47,855 (4,959) 42,896 Provision for credit losses 12,920 (4,959) 7,961 Noninterest expense 20,349 - 20,349 Income before income taxes 14,586 - 14,586 Income tax expense (3) 5,224 - 5,224 Net income $9,362 $- $9,362 Average - total loans and leases $294,030 $(103,284) $190,746 All Other Year Ended December 31, 2007 Reported Securitization Basis (4) Offset (2) As Adjusted Net interest income (3) $(7,645) $8,027 $382 Noninterest income: Card income 2,817 (3,356) (539) Equity investment income 3,745 - 3,745 Gains on sales of debt securities 180 - 180 All other income (loss) 426 288 714 Total noninterest income 7,168 (3,068) 4,100 Total revenue, net of interest expense (477) 4,959 4,482 Provision for credit losses (5,207) 4,959 (248) Merger and restructuring charges 410 - 410 All other noninterest expense 87 - 87 Income (loss) before income taxes 4,233 - 4,233 Income tax expense (benefit) (3) 1,083 - 1,083 Net income (loss) $3,150 $- $3,150 Average - total loans and leases $133,926 $103,284 $237,210 (1) Provision for credit losses represents provision for credit losses on held loans combined with realized credit losses associated with the securitized loan portfolio. (2) The securitization impact/offset on net interest income is on a funds transfer pricing methodology consistent with the way funding costs are allocated to the businesses. (3) FTE basis (4) Provision for credit losses represents provision for credit losses in All Other combined with the Global Consumer and Small Business Banking securitization offset.

Certain prior period amounts have been reclassified among the segments to conform to the current period presentation.

Information for periods beginning July 1, 2008 includes the Countrywide acquisition; prior periods have not been restated. This information is preliminary and based on company data available at the time of the presentation.

Investors: Kevin Stitt, +1-704-386-5667, Lee McEntire, +1-704-388-6780, Grace Yoon, +1-212-449-7323; Media: Scott Silvestri, +1-980-388-9921, scott.silvestri@bankofamerica.com, all of Bank of America /Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20050720/CLW086LOGO-b , AP Archive: http://photoarchive.ap.org , PRN Photo Desk, photodesk@prnewswire.com

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