Bank of America Earns US$3.2 Billion in Second Quarter (3)

    
    Global Card Services
    (Dollars in millions)                       Q2 2009              Q2 2008
    --------------------                        -------              -------
    Total managed revenue, net
     of interest expense(1),(2)                  $7,337               $7,500
    Provision for credit
     losses(3)                                    7,741                4,259
    Noninterest expense                           1,976                2,375
    Net income (loss)                            (1,618)                 582
    Efficiency ratio(2)                           26.93%               31.67%
    Return on average equity                        n/m                 6.01
    Managed loans(4)                           $220,365             $238,918

                                             At 6/30/09           At 6/30/08
                                             ----------           ----------
    Period-ending loans                        $215,904             $240,617
     (1) Managed basis.  Managed basis assumes that credit card 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 credit card
         loan portfolio
     (4) Balances averaged for period
     n/m = not meaningful

Global Card Services swung to a net loss of $1.6 billion as credit costs rose in the weakening economies in the U.S., Europe and Canada. Managed net revenue declined 2 percent to $7.3 billion mainly due to lower fee income partially offset by higher net interest income, as lower funding costs outpaced the decline in average managed loans.

Provision expense increased to $7.7 billion from a year earlier as the consumer card and consumer lending portfolios deteriorated due to the economic conditions and a rising level of bankruptcies. Also contributing were reserve additions related to maturing securitizations.

Noninterest expense fell 17 percent on lower operating and marketing costs.

    
    Home Loans and Insurance
    (Dollars in millions)                       Q2 2009              Q2 2008
    --------------------                        -------              -------
    Total revenue, net of
     interest expense(1)                         $4,461               $1,261
    Provision for credit losses                   2,726                2,034
    Noninterest expense                           2,829                  732
    Net income (loss)                              (725)                (948)
    Efficiency ratio(1)                           63.41%               58.02%
    Return on average equity                        n/m                  n/m
    Loans(2)                                   $131,509              $91,199

                                             At 6/30/09           At 6/30/08
                                             ----------           ----------
    Period-ending loans                        $131,120              $92,064
     (1) Fully taxable-equivalent basis
     (2) Balances averaged for period
     n/m = not meaningful

The net loss in Home Loans and Insurance narrowed as higher revenue was mostly offset by increased credit costs and noninterest expense. Net revenue rose mainly due to the acquisition of Countrywide and higher mortgage banking income as lower interest rates spurred an increase in refinance activity.

The provision for credit losses increased to $2.7 billion driven by economic weakness and falling home prices.

Noninterest expense increased to $2.8 billion mostly due to the acquisition of Countrywide.

    
    Global Banking
    (Dollars in millions)                       Q2 2009              Q2 2008
    --------------------                        -------              -------
    Total revenue, net of
     interest expense(1)                         $8,658               $4,455
    Provision for credit losses                   2,584                  400
    Noninterest expense                           2,232                1,747
    Net income                                    2,487                1,433
    Efficiency ratio(1)                           25.78%               39.24%
    Return on average equity                      16.50                11.85
    Loans and leases(2)                        $323,217             $315,282
    Deposits(2)                                 199,879              169,738
     (1) Fully taxable-equivalent basis
     (2) Balances averaged for period

Global Banking net income rose to $2.5 billion, benefitting from a $3.8 billion pretax gain generated by the sale of the company's merchant processing business to a joint venture, the addition of Merrill Lynch and strong deposit growth. Higher revenue was partially offset by the challenging credit environment and the FDIC special assessment.

The provision for credit losses increased to $2.6 billion, driven by loan loss reserve increases and higher losses within the commercial domestic portfolio, which were across a broad range of borrowers and industries. Also contributing to the increase were higher losses and reserve additions in the commercial real estate portfolio for deterioration across various property types.

    
    - Corporate Banking and Investment Banking revenue rose 28 percent to
      $2.0 billion as a result of the Merrill Lynch acquisition, strong fee
      growth from debt and equity capital markets, higher deposits and a
      change in deposit mix. These increases were more than offset by higher
      credit costs and the FDIC special assessment.
    - Commercial Banking revenue, excluding the $3.8 billion pretax
      gain associated with the sale of the merchant processing business to a
      joint venture, was $2.9 billion as credit and deposit net interest
      margins improved, offset by lower residual net interest income. Net
      income was negatively impacted by higher credit costs and the FDIC
      special assessment.
         - Note: Total investment banking income, including self-led
           deals, in the quarter of $1.7 billion is shared primarily between
           Global Banking and Global Markets based on an internal fee-sharing
           arrangement between the two segments. Debt and Equity issuance
           income led to an increase from the year-ago quarter, while
           advisory fees increased 83 percent, reflecting the larger
           investment banking platform from the Merrill Lynch acquisition.

    Global Markets
     (Dollars in millions)                       Q2 2009              Q2 2008
    --------------------                        -------              -------
    Total revenue, net of
     interest expense(1)                         $4,452               $1,378
    Provision for credit losses                      (1)                 (38)
    Noninterest expense                           2,559                  951
    Net income                                    1,377                  298
    Efficiency ratio(1)                           57.46%               69.04%
    Return on average equity                      17.81                 9.90
    Trading-related
     assets(2)                                 $503,688             $332,748
     (1) Fully taxable-equivalent basis
     (2) Balances averaged for period

Global Markets net income increased $1.1 billion. The increase was driven by the addition of Merrill Lynch and lower market disruption related charges of $900 million - a portion of the $1.3 billion total for the company. Net revenue was strong during the period, excluding the credit valuation adjustment on derivative liabilities and market disruption charges, surpassing record first-quarter 2009 revenue. Noninterest expense was higher as a result of the addition of Merrill Lynch.

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