Bank of America Earns US$3.2 Billion in First Quarter (2)

Noninterest expense increased 5 percent to US$17.8 billion from US$17.0 billion a year earlier as personnel costs and other general operating expenses rose. Pretax merger and restructuring charges declined to US$521 million from US$765 million a year earlier.

The efficiency ratio on an FTE basis was 55.05 percent, compared with 47.12 percent a year earlier.

(1) FTE basis is a non-GAAP measure. For a reconciliation to GAAP, refer to page 20 of this press release

(All Amounts in US Dollars unless otherwise noted)

    
    Credit Quality
    
    (Dollars in millions)                  Q1 2010      Q4 2009     Q1 2009
    ---------------------                  -------      -------     -------
    Provision for credit losses             $9,805      $10,110     $13,380
    ---------------------------             ------      -------     -------
    
    
    Net charge-offs(1)                      10,797        8,421       6,942
    -----------------                       ------        -----       -----
    Net charge-off ratio(1,2)                 4.44%        3.71%       2.85%
    ------------------------                  ----         ----        ----
    
    
    Total managed net losses(3)                  -      $11,347      $9,124
    --------------------------                 ---      -------      ------
    Total managed net loss
     ratio(2,3)                                  -         4.54%       3.40%
    --------------------------                 ---         ----        ----
    
    
                                        At 3/31/10  At 12/31/09  At 3/31/09
                                        ----------  -----------  ----------
    Nonperforming loans, leases and
     foreclosed properties                 $35,925      $35,747     $25,632
    -------------------------------        -------      -------     -------
    Nonperforming loans, leases and
     foreclosed properties ratio(4)           3.69%        3.98%       2.64%
    -----------------------------------       ----         ----        ----
    
    
    Allowance for loan and lease
     losses                                $46,835      $37,200     $29,048
    ----------------------------           -------      -------     -------
    Allowance for loan and lease
     losses ratio(5)                          4.82%        4.16%       3.00%
    --------------------------------          ----         ----        ----
    
    
    
    (1)Current period reflects the adoption of new accounting guidance
    resulting in the addition of approximately $103 billion in loans to
    the balance sheet on January 1, 2010.
    (2) Net charge-off/loss ratios are calculated as annualized held
    net charge-offs or managed net losses divided by average
    outstanding held or managed loans and leases during the period.
    (3) Prior periods are shown on a managed basis, which prior to the
    adoption of new accounting guidance on January 1, 2010 included
    losses on securitized credit card and other loans which are reported
    in net charge-offs post adoption.
    (4) Nonperforming loans, leases and foreclosed properties ratios are
    calculated as nonperforming loans, leases and foreclosed properties
    divided by outstanding loans, leases and foreclosed properties at
    the end of the period.
    (5) Allowance for loan and lease losses ratios are calculated as
    allowance for loan and lease losses divided by loans and leases
    outstanding at the end of the period.
    Note: Ratios do not include loans measured under the fair value
    option.

Credit quality continued to improve during the quarter, with net losses declining in most consumer portfolios. Credit costs, however, remain high amid relatively weak global economic conditions.

Credit quality across most commercial portfolios showed signs of improvement with criticized and nonperforming loans decreasing from the prior quarter. Net charge-offs in the commercial portfolios declined across a broad range of borrowers and industries.

Net charge-offs were $2.4 billion higher than the fourth quarter of 2009, driven mainly by the adoption of new accounting guidance that resulted in securitized credit card loans and other loans coming back onto the company's balance sheet. Also contributing to the increase were charge-offs on certain modified collateral-dependent consumer real estate loans. Excluding these factors, net charge-offs would have been $1.3 billion lower. Net charge-offs in the first quarter of $10.8 billion, or 4.44 percent, which reflect the new accounting guidance, are comparable with managed net losses of $11.3 billion, or 4.54 percent, in the prior quarter. Nonperforming loans, leases and foreclosed properties were $35.9 billion, compared with $35.7 billion at December 31, 2009.

The provision for credit losses was $9.8 billion, $305 million lower than the fourth quarter of 2009 and $3.6 billion lower than the same period a year earlier. Excluding the $10.8 billion increase to the reserve for credit losses associated with adopting the new accounting guidance, which did not initially impact provision, reserves were reduced $992 million during the quarter. This compares with a $1.7 billion addition to the reserve for credit losses in the fourth quarter and $6.4 billion a year earlier. The reduction from the fourth quarter of 2009 was primarily due to improved delinquencies and lower bankruptcies in consumer and small business products in Global Card Services and the stabilization of commercial portfolios. These were partially offset by higher reserve additions in the consumer real estate portfolios amid continued stress in the housing market, including reserve additions for purchased credit-impaired consumer portfolios obtained through acquisitions.

    
    Capital and Liquidity Management
    
    
                                      At 3/31/10   At 12/31/09   At 3/31/09
                                      ----------   -----------   ----------
    Total shareholders' equity          $229,823      $231,444     $239,549
    --------------------------          --------      --------     --------
    (in millions)
    -------------
    
    
    Tier 1 common ratio                     7.60%         7.81%        4.49%
    -------------------                     ----          ----         ----
    Tier 1 capital ratio                   10.23         10.40        10.09
    --------------------                   -----         -----        -----
    Total capital ratio                    14.47         14.66        14.03
    -------------------                    -----         -----        -----
    Tangible common equity ratio(1)         5.24          5.57         3.13
    ------------------------------          ----          ----         ----
    
    
    Tangible book value per share         $11.70        $11.94       $10.88
    -----------------------------         ------        ------       ------
    
    
    
    (1)Tangible common equity and tangible book value per share are non-
    GAAP measures. Other companies may define or calculate the tangible
    common equity ratio and tangible book value per share differently.
    For reconciliation to GAAP measures, please refer to page 20 of this
    press release.

Capital ratios were negatively impacted from the fourth quarter of 2009 primarily due to the adoption of new accounting guidance on consolidation. The company's liquidity position strengthened during the quarter as customers continued to reduce debt. Cash and equivalents rose more than $20 billion. The company's total global excess liquidity sources rose by approximately $50 billion to more than $260 billion. The company's time to required funding stands at 24 months.

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