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Bank of America
Joe Price Chief Financial Officer
Merrill Lynch Financial Services ConferenceNovember 13, 2007
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Forward Looking StatementsThis presentation contains forward-looking statements, including statements about the financial conditions, results of operations and earnings outlook of Bank of America Corporation. The forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results or earnings to differ materially from such forward-looking statements include, among others, the following: 1) projected business increases following process changes and other investments are lower than expected; 2) competitive pressure among financial services companies increases significantly; 3) general economic conditions are less favorable than expected; 4) political conditions including the threat of future terrorist activity and related actions by the United States abroad may adversely affect the company’s businesses and economic conditions as a whole; 5) changes in the interest rate environment and market liquidity reduce interest margins, impact funding sources and effect the ability to originate and distribute financial products in the primary and secondary markets; 6) changes in foreign exchange rates increases exposure; 7) changes in market rates and prices may adversely impact the value of financial products; 8) legislation or regulatory environments, requirements or changes adversely affect the businesses in which the company is engaged; 9) changes in accounting standards, rules or interpretations, 10) litigation liabilities, including costs, expenses, settlements and judgments, may adversely affect the company or its businesses; 11) mergers and acquisitions and their integration into the company; and 12) decisions to downsize, sell or close units or otherwise change the business mix of any of the company. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made. Bank of America does not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements are made. For further information regarding Bank of America Corporation, please read the Bank of America reports filed with the SEC and available at www.sec.gov.
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Bank of America Today
Strong Balance Sheet
Diversified Earnings
MarketLeadership
Customer Convenience
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A Diverse Business Mix
Nine Months 2007 Earnings - $14.7 Billion
Global Wealth &Investment Management
12%
Global Consumer & Small Business Banking
51%Global Corporate &Investment Banking
22%
Other15%
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Bank of America Differentiating Factors
• Ubiquitous franchiseVast customer base
Unparalleled customer convenience
Market and product leadership positions
Information and innovation
• Demonstrated ability to executeLeverage franchise capabilities
Provide innovative customer solutions
Superior integration expertise
• Opportunities for continued organic growthRetail banking penetration
Capturing the wealth opportunity
Commercial banking client expansion
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Global Consumer & Small Business BankingNine Months 2007 Earnings - $7.6 Billion
Other/ALM0%
Deposits53%Card
Services41%
Consumer Real
Estate6%
Growth Opportunities• Deposits and debit businesses
• Unsecured consumer credit, including card
• Payments business integration
• Consumer real estate
Strengths• #1 deposit market share
• #1 card services in US and UK
• #1 small business lender
• Largest delivery network
GCSB results presents on a managed basis
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Added Density in Important Markets
Chicago Market BAC LaSalle Combined
Banking centers 56 141 197
ATMs 231 450 681
LaSalle
Michigan Market Detroit Other Michigan
Banking centers 160 110 270
ATMs 632 418 1,050
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Global Corporate & Investment BankingNine Months 2007 Earnings - $3.3 Billion
Other/ALM-7%
Business Lending
44%Capital Markets
14%
Treasury Services
49%
Growth Opportunities• Business banking product penetration
• Electronic payments
• International presence and treasury services
• Middle market investment banking
Strengths• #1 Middle market lender
• Top 3 US fixed income capital markets
• Leading treasury services provider
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Global Wealth & Investment ManagementNine Months 2007 Earnings - $1.8 Billion
Other/ALM5%
Premier Banking &
Investments56%
US Trust20%
Columbia Management
19%
Growth Opportunities• Mass affluent expansion
• Private bank
• Columbia Management AUM growth
Strengths• #1 Mass affluent services provider (Premier Banking)
• 19th largest US asset manager (Columbia)
• Largest US Private Bank ( US Trust)
10 FTE basis; excludes merger & restructuring charges
Effectively Managing Costs
2005
Efficiency Ratio
50%
54%
52%53%
2000 2001 2002 2003 2004
47%
2006
50% target
54%
52%
48%
2007YTD
Fourth Quarter Events
• China Construction Bank investment
• Sale of Marsico Capital Management
• Visa settlement and IPO
• Capital markets dislocations
• Leveraged loan and high yield pipelines stabilizing– Minor exposure to covenant-lite B, second lien or subordinated positions– Funded exposures from 9/30 clearing within marks and caps – U.S. markets stabilizing faster than European markets
• Exposure to collateralized debt obligations– $15.5 billion ($12.8 billion net) in super senior liquidity support
• $9.8 billion net, backed principally by subprime securities
– $5.2 billion ($2.4 billion net) in super senior securities exposure• $1.9 billion net, backed principally by subprime securities
– $1.0 billion in CDO pipeline warehouse• $400 million net, backed principally by subprime securities
Leveraged Lending and CDOs
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Asset Quality Trends
• Managed net credit loss ratio 1.27% in 3Q, down 4 basis points from 2Q – Held net charge-offs relatively unchanged at .80%
• Increasing reserves for growth and weakening in housing– Reflects seasoning and higher loss expectations in targeted growth
portfolios, particularly small business and home equity – Building commercial reserves for homebuilder exposures
• Consumer card losses tracking as expected – Managed consumer credit card net loss rate down to 4.67% from 5.02% in 2Q. – 30 day delinquencies to 5.24% from 5.08% in 2Q. – 90 day delinquencies to 2.48% from 2.55% in 2Q.
• Growth in Small Business lending drove commercial losses in 3Q – Excluding small business, commercial losses near historic lows of 0.05% in
3Q, unchanged from 2Q– Carefully watching homebuilder and related exposures
Performance of Targeted Growth Portfolios
Avg balances in billions. Other $ changes in millions
• 97% of home equity customers have at least one other product with Bank of America• Average CLTV 68% with an average refreshed FICO of 721; 83% of portfolio less than 90% LTV • More than 95% of portfolio generated through branch originations
• Deterioration driven by 2005 and 2006 vintages with risk expansion• Instituted more judgmental procedures in underwriting and collections • Increased required number of years in business for lending
• Losses for 2007 peaked at 5.02% in 2Q07 and dropped as expected in 3Q07• Average refreshed FICO of 687; average originated FICO of 738• Losses expected to trend toward previously announced 5-5.5% range in 2008 or later
3Q07 3Q07 annualized NPAs 30+ Avg. bal. net c/o ratio % of loans Past due
Managed credit card 172.0 4.67% N/A 5.24%$ change from 3Q06 7.9 276 722 BP change from 3Q06 5% 44 bps 14 bps
Home equity 98.6 0.20% 0.76% 1.01%$ change from 3Q06 18.5 39 556 492 BP change from 3Q06 23% 14 bps 51 bps 37 bps
Small business 16.0 5.89% 0.59% 5.07%$ change from 3Q06 3.5 138 45 419 BP change from 3Q06 28% 273 bps 18 bps 187 bps
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BusinessGrowth
Capital Usage
Strong Balance Sheet
Share Repurchases
Acquisitions
Dividends
$27 Billion Cash Flow
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$37,022
$52,601
1998
1999
2000
2001
2002
2003
2004
2005
2006
9M07
Cum
ulat
ive
Actively Managing Excess Capital
• Returned $90 billion in capital since 1998• Repurchases plus dividends have
averaged 78% of net income
($ in millions)
Tier 1 7.06%
Tier 1 8.22%
Dividends Repurchases
$89,623
Capital returned as a % of earnings 58% 88% 84% 96% 89% 91% 63% 63% 91% 64% 78%
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$2.12
1977 2006
13% annualized growth
30 Consecutive Years of Dividend Increases
Dividend Yield5.8%
Yield based on annualized dividend and price as of 11/09/07
• Current dividend rate of $.64 per share ($2.56 annually)
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Long-term Financial Objectives
10% EPS growth to be driven by:
• 6% to 9% revenue growth
• 2% to 4% operating leverage
• Manageable credit costs
• Advantageous capital management
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Managing for Growth
• Leveraging scale of national franchise
• Utilizing our knowledge to innovate
• Committed to businesses important to customers
• Focused on growth opportunities
• Driving capital returns for shareholders