Bank of America Earns $4 Billion in 2008



    
    Fourth-Quarter Net Loss of $1.79 Billion

    Extends $115 Billion in New Credit in Fourth Quarter

    $15.31 Billion Fourth-Quarter Net Loss at Merrill Lynch

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

    Quarterly Dividend Reduced to $.01

    
    CHARLOTTE, N.C., Jan. 16 /CNW/ -- Bank of America Corporation today
reported full-year 2008 profit of $4.01 billion compared with net income of
$14.98 billion a year earlier.
    
    (Logo: http://www.newscom.com/cgi-bin/prnh/20050720/CLW086LOGO-b )
    
    Earnings after preferred dividends and available to common shareholders
were $2.56 billion, or $0.55 per diluted share, down from $14.80 billion, or
$3.30 per share.
    In the fourth quarter of 2008, the company had a net loss of $1.79
billion compared with net income of $268 million a year earlier. The net loss
applicable to common shareholders was $2.39 billion, or $0.48 per diluted
share, down from net income of $215 million, or $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
$15.31 billion, or $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 $20 billion in preferred stock
carrying an 8 percent dividend rate.
    In addition, the government has agreed to provide protection against
further losses on $118 billion in selected capital markets exposure, primarily
from the former Merrill Lynch portfolio. Under the agreement, Bank of America
would cover the first $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 $.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 $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 $115 billion in new credit extended during the
quarter, about $49 billion was in commercial non-real estate; $45 billion was
in mortgages; nearly $8 billion was in domestic card and unsecured consumer
loans; nearly $7 billion was in commercial real estate; more than $5 billion
was in home equity products; and approximately $2 billion was in consumer
Dealer Financial Services.
    -- During the fourth quarter, Small Business Banking extended nearly $1
billion in new credit to over 47,000 new customers.
    -- Mortgages made to low- and moderate-income borrowers and areas totaled
$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 $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 $15.98 billion from $13.45 billion a year earlier.
    Net interest income on a fully taxable-equivalent basis rose 37 percent
to $13.41 billion from $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 $2.57 billion from $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 $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 $306 million compared with $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 $18.23 billion or 1.96 percent of total loans,
leases and foreclosed properties, compared with $13.58 billion, or 1.45
percent, at September 30 and $5.95 billion, or 0.68 percent, at December 31,
2007.
    Total managed net losses were $7.40 billion, or 2.84 percent, of total
average managed loans and leases compared with $6.11 billion, or 2.32 percent,
in the third quarter and $3.28 billion, or 1.34 percent, in the fourth quarter
of 2007.
    Net charge-offs were $5.54 billion, or 2.36 percent of total average
loans and leases compared with $4.36 billion, or 1.84 percent, in the third
quarter and $1.99 billion, or 0.91 percent, in the fourth quarter of 2007.
    The provision for credit losses was $8.54 billion, up from $6.45 billion
in the third quarter and $3.31 billion in the fourth quarter of 2007. The
company added $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 $177.05 billion at December 31. Period-end
assets were $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 $9.88 billion, $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 $0.32 per common share and recorded $472
million in preferred dividends during the quarter. An additional $131 million
of preferred dividends were deducted in the calculation of net income
applicable to common shareholders.
    In January 2009, an additional $10 billion of preferred stock (part of
the original $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 $73.98
billion from $68.58 billion a year earlier.
    Net interest income on a fully taxable-equivalent basis increased to
$46.55 billion from $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 $27.42 billion from $32.39 billion
in 2007. Writedowns in the wake of market disruptions of $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 $41.53 billion from $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 $18.44 billion to $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 $22.90 billion during 2008, or 2.27 percent
of total average managed loans and leases, compared with $11.25 billion or
1.29 percent during the prior year. Net charge-offs totaled $16.23 billion, or
1.79 percent of average loans and leases, compared with $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 $10.26 billion in dividends to common
shareholders and $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 $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)
    

    
    (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 $13.92 billion to $26.84
billion. Net losses increased $8.38 billion to $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
$6.21 billion, while net revenue increased 10 percent to $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 $521 million as credit
costs rose.  Managed net revenue grew 12 percent to $28.43 billion as higher
average loan balances increased net interest income.
    -- Mortgage, Home Equity and Insurance Services reported a net loss of
$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 $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 $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
    

    
    (Dollars in millions)                  2008                         2007
    Total revenue, net of
     interest expense(1)                $13,440                      $13,651
    

    
    Provision for credit                                                 658
     losses                               3,080
    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 $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 $10.47 billion, which were $6.45 billion a year earlier. Included in those
charges were CDO-related writedowns of $4.78 billion, down from $5.65 billion
during 2007, and leveraged loan writedowns of $1.08 billion, compared with
$196 million a year earlier.
    The provision for credit losses increased $2.42 billion to $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 $1.72 billion as
strong revenue growth and lower expenses were offset by higher credit costs.
Net revenue increased 29 percent to $7.82 billion on organic and merger-
related average loan growth of more than $62 billion.
    -- Capital Markets and Advisory Services recorded a net loss of $4.95
billion compared with a net loss of $3.39 billion a year earlier. Net revenue
losses of $3.02 billion were lower compared with net revenue of $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 $2.73 billion as
net revenue grew 10 percent to $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 $2.44
billion for the quarter, compared with a net loss of $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 $4.64
billion in the period.
    
    Market disruption-related impacts of $4.61 billion in the quarter include:
    -- Total CDO-related losses of $1.72 billion.
    
    -- Writedowns of commercial mortgage-backed securities and related
transactions of $853 million.
    
    -- Leveraged lending-related writedowns of $429 million.
    -- Writedowns on auction rate securities of $353 million.
    


    
    Global Wealth and Investment Management
    

    
    (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 $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 $650 million to $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 $460 million. Net revenue rose 14 percent to $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 $459 million compared with
net income of $21 million a year ago mainly due to an additional $725 million
in support provided to certain cash funds and weaker equity markets.
    -- Premier Banking and Investments net income fell 54 percent to $584
million as credit costs increased by $534 million on higher home equity loan
losses. Net revenue decreased 15 percent to $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 $511 million compared with a year earlier due to
higher net revenue and lower expenses. Net revenue increased 12 percent to
$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)
    

    
    (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 $1.63 billion for 2008 compared with net
income of $3.15 billion a year earlier. For the fourth quarter, the net loss
of $693 million compared with net income of $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
$15.31 billion, or $9.62 per diluted share, driven by severe capital markets
dislocations.
    Merrill Lynch's Global Wealth Management division generated $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 $3.22 billion.
    
    -- Goodwill impairments of $2.31 billion.
    -- Leveraged loan writedowns of $1.92 billion.
    
    -- $1.16 billion in the U.S. Bank Investment Securities Portfolio
writedowns.
    
    -- Commercial real estate writedowns of $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 $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 877.585.6241 (domestic) or 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) 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
    (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
    (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
    (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
    (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
    (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.




For further information:

For further information: 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 Web Site: http://www.bankofamerica.com

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