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Bank of America 2008 Annual Report

Table of contents

  • Page 1
    Bank of America 2008 Annual Report

  • Page 2
    ... 79% Revenue* (in millions) $13,440 18% $7,785 11% $(5,593) (8)% At year end Total assets Total loans and leases Total deposits Total shareholders' equity Book value per common share Market price per share of common stock (closing) Common shares issued and outstanding (in millions) 2008 $1,817...

  • Page 3
    ...& Student Lending Card Services Businesses Deposits & Student Lending Card Services Mortgage, Home Equity & Insurance Services $(2,497) Mortgage, Home Equity & Insurance Services Global Corporate & Investment Banking Global Corporate & Investment Banking provides comprehensive financial solutions...

  • Page 4
    ... allow our capital markets operations to return to profitability in 2009. These developments resulted in our first quarterly loss since 1991, and a sharp drop in our profitability for the year. In view of the challenging environment, we took a number of difficult steps: We cut our dividend - which...

  • Page 5
    ...well-capitalized, deposit-funded and extremely liquid. We have one of the largest, broadest customer bases in the industry. We have a diverse collection of market-leading businesses that help support one another through economic cycles. Most important, we have a long history of managing successfully...

  • Page 6
    ...up capital levels as credit losses accelerated, we raised nearly $10 billion through the sale of common stock and cut our dividend on common stock in half. Then, in mid-October, the U.S. Treasury Department decided to use funds from the Troubled Asset Relief Program (TARP) to inject capital directly...

  • Page 7
    ...We now approach the market as an undisputed global leader in wholesale financial services, providing clients with lending, deposits, cash management, group banking, wealth management, debt and equity capital raising, syndications, mergers & acquisitions advisory services, risk Bank of America 2008 5

  • Page 8
    Total Deposits $805,177 $693,497 $882,997 '06 '07 '08 In millions, at ye ar e nd management products, and securities sales and trading. We are already seeing business activity levels beginning to pick up. We now have leading positions in markets all over the world, and our investment banking ...

  • Page 9
    ...to increase customer loyalty for the future as we help customers work through hard economic times. In 2008, we modified nearly 850,000 credit card loans, whether by lowering interest rates, reducing monthly payments or eliminating fees. We also continue to refer customers to debt management programs...

  • Page 10
    ... 2008 financing. To help people keep their savings secure, we've opened millions of retirement accounts, CDs and savings accounts. All these activities are helping to provide support to the economy as we work our way toward recovery. They also are helping Bank of America increase our market share...

  • Page 11
    ...can be sobering. The answer, in my view, is for financial institutions to Strong Customer Support We modified about 230,000 home loans during 2008 to help avoid foreclosures diversify their business models, creating a balanced revenue stream that includes both interest and noninterest income from...

  • Page 12
    ... operated in just a handful of Southern states. Over the 10 Bank of America 2008 past 20 years, she has helped guide our growth through at least a half-dozen transformative mergers and several business cycles. As a member of our Corporate Governance Committee, she has been instrumental in guiding...

  • Page 13
    ..., credit and debit cards, mortgages and investments - as well as industry-leading positions in commercial lending, treasury management, capital raising, advisory services, and institutional sales and trading. As markets improve, we believe we are uniquely positioned to deliver value, deepen customer...

  • Page 14
    ...'ve raised capital and fortified our balance sheet in order to continue to support the millions of Americans who rely on us for banking, credit and investment services. We've made the hard choice to reduce our common stock dividend to $0.01 per share. We've taken a conservative view of managing our...

  • Page 15
    ... Global Corporate & Investment Banking lost money, Treasury Services and Business Lending were both profitable. That says Bank of America's earnings engine is still quite strong. Within Global Consumer & Small Business Banking, Deposits & Student Lending net income increased by 9 percent. In 2008...

  • Page 16
    ... 1 provider of both mortgage originations and servicing. As a combined company, we believe we will be recognized as a responsible lender who is committed to helping our customers be successful homeowners. The acquisition of Merrill Lynch makes us a leading U.S. wealth management firm, with more than...

  • Page 17
    ...,000 credit card loans. We work hand-in-hand with these agencies to tailor customized repayment programs to help people get back on solid financial footing. Small businesses remain a critical driver of the U.S. economy, and Bank of America will continue to serve this important sector. In 2008, Bank...

  • Page 18
    ... with local governments and organizations to help make neighborhoods more energy efficient and environmentally responsible. And in 2007, we committed to investing $20 billion over 10 years to nurture businesses that address global climate change, lending to and investing in pioneering companies that...

  • Page 19
    Bank of America 2008 Financial Review Bank of America 2008 17

  • Page 20
    ... Losses Allowance for Credit Losses Market Risk Management Trading Risk Management Interest Rate Risk Management for Nontrading Activities Mortgage Banking Risk Management Compliance and Operational Risk Management ASF Framework Complex Accounting Estimates 2007 Compared to 2006 Overview Business...

  • Page 21
    ... Business Banking (GCSBB), Global Corporate and Investment Banking (GCIB), and Global Wealth and Investment Management (GWIM). At December 31, 2008, the Corporation had $1.8 trillion in assets and approximately 243,000 full-time equivalent employees. Notes to the Consolidated Financial Statements...

  • Page 22
    ... Note 14 - Shareholders' Equity and Earnings Per Common Share to the Consolidated Financial Statements. On November 25, 2008 the U.S. Treasury, using its authority under the EESA, announced a plan to allocate $20 billion of TARP funds to the Federal Reserve Bank of New York as credit protection for...

  • Page 23
    year. The underlying credit exposures of eligible securities used for collateral must be newly or recently originated auto loans, student loans, credit card loans, small business loans guaranteed by the U.S. Small Business Administration, or commercial mortgage-backed securities. Originators of the ...

  • Page 24
    ... increase the amount of time customers have to make their credit card payments, change the use of payment allocations related to interest charges and limit certain fees. Further, federal bank regulators plan to adopt final rules to amend the Truth in Lending Act, requiring changes to the disclosures...

  • Page 25
    ... exchange ratio. The acquisition added Merrill Lynch's approximately 16,000 financial advisors, $1.2 trillion of client assets and its interest in BlackRock, Inc., a publicly traded investment management company. In addition, the acquisition adds strengths in debt and equity underwriting, sales...

  • Page 26
    ...Income (Dollars in millions) 2008 2007 Card income Service charges Investment and brokerage services Investment banking income Equity investment income Trading account profits (losses) Mortgage banking income Insurance premiums Gains on sales of debt securities Other income (loss) $13,314 10,316...

  • Page 27
    ...to total loans and leases, $17.4 billion to securities, $17.2 billion to MSRs and $63.0 billion to total deposits. The majority of Countrywide's ongoing operations are recorded in Mortgage, Home Equity and Insurance Services (MHEIS). Countrywide's acquired first mortgage and discontinued real estate...

  • Page 28
    ... Period end and average federal funds sold and securities purchased under agreements to resell, and trading account assets decreased $49.6 billion and $21.4 billion in 2008, attributable to balance sheet efficiencies and the sale of our equity prime brokerage business partially offset by an increase...

  • Page 29
    ... government and corporate debt), equity and convertible instruments. Period end federal funds purchased and securities sold under agreements to repurchase, and trading account liabilities decreased $34.9 billion primarily due to the rebalancing of hedges for market movements and lower customer...

  • Page 30
    Table 5 Five Year Summary of Selected Financial Data (Dollars in millions, except per share information) 2008 2007 2006 2005 2004 Income statement Net interest income Noninterest income Total revenue, net of interest expense Provision for credit losses Noninterest expense, before merger and ...

  • Page 31
    ... to evaluate our use of equity (i.e., capital) at the individual unit level and are integral components in the analytics for resource allocation. In addition, profitability, relationship, and investment models all use ROE as key measures to support our overall growth goal. Bank of America 2008 29

  • Page 32
    ... Financial Measures (Dollars in millions) 2008 2007 2006 2005 2004 Operating basis Operating earnings Return on average assets Return on average common shareholders' equity Return on average tangible shareholders' equity Operating efficiency ratio (FTE basis) Dividend payout ratio Operating...

  • Page 33
    ... balance in the debt securities portfolio increased from 2007 due to net purchases of securities, the securitization of residential mortgage loans into mortgage-backed securities which we retained and the LaSalle and Countrywide acquisitions. Core net interest yield on a managed basis remained flat...

  • Page 34
    ... on the performance of corporate ALM activities. Some ALM activities are recorded in the businesses (e.g., Deposits and Student Lending) such as external product pricing decisions, including deposit pricing strategies, as well as the effects of our internal funds transfer pricing process. The net...

  • Page 35
    ...loss) Net interest yield Return on average equity (4) Efficiency ratio (2) Period end - total assets (5) (2) $ (2,497) 2.52% (25.79) 75.02 $205,386 8.43% 5.78 42.74 $511,401 3.23% 28.37 47.79 $389,450 2007 Deposits and Student Lending (Dollars in millions) Total (1) Card Services (1) Mortgage...

  • Page 36
    ... assets through client-facing lending and ALM activities. The revenue is allocated to the deposit products using our funds transfer pricing process which takes into account the interest rates and maturity characteristics of the deposits. Deposits also generate fees such as account service fees...

  • Page 37
    ... marketing expense were partially offset by higher personnel and technology-related expenses from increased customer assistance and collections infrastructure. Key Statistics (Dollars in millions) 2008 2007 Card Services Average - total loans and leases: Managed Held Period end - total loans...

  • Page 38
    ... real estate products and services to customers nationwide. MHEIS products are available to our customers through a retail network of personal bankers located in 6,139 banking centers, mortgage loan officers in nearly 1,000 locations and through a sales force offering our customers direct telephone...

  • Page 39
    ... in the capitalized MSRs as a percentage of loans serviced. MSR economic hedge results were more than sufficient to offset this decrease. Servicing of residential mortgage loans, home equity lines of credit, home equity loans and discontinued real estate mortgage loans. Bank of America 2008 37

  • Page 40
    ... Investment Banking 2008 Capital Markets and Advisory Services (1) (Dollars in millions) Total Business Lending Treasury Services ALM/ Other Net interest income (2) Noninterest income: Service charges Investment and brokerage services Investment banking income Trading account profits (losses...

  • Page 41
    ... information related to the Merrill Lynch acquisition, see Note 2 - Merger and Restructuring Activity to the Consolidated Financial Statements. During 2008, we reached an agreement with the Massachusetts Securities Division under which we offered to purchase at par ARS held by our retail customers...

  • Page 42
    ... services and risk management products using interest rate, equity, credit, currency and commodity derivatives, foreign exchange, fixed income and mortgage-related products. The business may take positions in these products and participate in marketmaking activities dealing in government securities...

  • Page 43
    ... financing transactions. In addition, 2008 included losses related to other structured products including $738 million of losses for counterparty credit risk valuations related to our structured credit trading business. Other structured products, including residential mortgage-backed securities...

  • Page 44
    ... when subprime consumer real estate loans make up at least 35 percent of the ultimate underlying collateral's original net exposure value. Includes highly-rated collateralized loan obligations and commercial mortgage-backed securities super senior exposure. Insured exposures are presented prior...

  • Page 45
    ... impairments of principal as credit conditions deteriorated in the corporate debt and commercial mortgage markets during the second half of 2008. In addition to the super senior exposure including purchased securities at December 31, 2008, we also had exposure with a market value of $563 million...

  • Page 46
    ... network of proprietary offices and special clearing arrangements. Our clients include multinationals, middle-market companies, correspondent banks, commercial real estate firms and governments. Our products and services include treasury management, trade finance, foreign exchange, short-term credit...

  • Page 47
    Global Wealth and Investment Management 2008 U.S. Trust (1) Columbia Management Premier Banking and Investments ALM/ Other (Dollars in millions) Total Net interest income (2) Noninterest income: Investment and brokerage services All other income (loss) Total noninterest income Total revenue, net ...

  • Page 48
    ... of services offered through three primary businesses: U.S. Trust, Bank of America Private Wealth Management (U.S. Trust); Columbia Management (Columbia); and PB&I. In addition, ALM/Other primarily includes the results of ALM activities. On January 1, 2009, we acquired Merrill Lynch in exchange for...

  • Page 49
    ... see Note 5 - Securities to the Consolidated Financial Statements. We may from time to time, but are under no obligation to, provide additional support to funds managed within Columbia. Future support, if any, may take the form of additional capital commitments to the funds or the purchase of assets...

  • Page 50
    ... decrease in total revenue combined with increases in provision for credit losses and merger and restructuring charges. Net interest income decreased $291 million resulting largely from the reclassification to card income related to our funds transfer pricing for Card Services' securitizations. This...

  • Page 51
    ... credit costs related to our ALM residential mortgage portfolio reflective of deterioration in the housing markets and the impacts of a slowing economy. Additionally, deterioration in our Countrywide discontinued real estate portfolio subsequent to the July 1, 2008 acquisition Bank of America 2008...

  • Page 52
    ... Unconsolidated Unconsolidated Total Consolidated (1) Commercial paper conduits Multi-seller conduits Asset acquisition conduits Other corporate conduits Home equity securitizations (2) Municipal bond trusts Customer-sponsored conduits Credit card securitizations Collateralized debt obligation...

  • Page 53
    ... information on home equity securitizations, see Note 8 - Securitizations to the Consolidated Financial Statements. Credit Card Securitizations During the second half of 2008, we entered into a liquidity support agreement related to our commercial paper program that obtains financing by issuing...

  • Page 54
    ... of SFAS 159, see Note 19 - Fair Value Disclosures to the Consolidated Financial Statements. We enter into commitments to extend credit such as loan commitments, SBLCs and commercial letters of credit to meet the financing needs of our customers. For a summary of the total unfunded, or off-balance...

  • Page 55
    ... net losses recorded in earnings and OCI did not have a significant impact on our liquidity or capital resources. Table 10 Level 3 - Fair Value Measurements Year Ended December 31, 2008 Trading Account Assets Availablefor-Sale Debt Securities Loans and Leases(2) Mortgage Servicing Rights Loans Held...

  • Page 56
    ...monitoring all risks within their lines of business, while certain enterprise-wide risks are managed centrally. For example, except for trading-related business activities, interest rate risk associated with our business activities is managed centrally as part of our ALM activities. Line of business...

  • Page 57
    ...of our Consolidated Financial Statements and (3) compliance with legal and regulatory requirements. In addition, the Audit Committee oversees the internal audit function and the independent registered public accountant. The Board's Asset Quality Committee oversees credit and market risks and related...

  • Page 58
    ...Corporation's debt issuances. After incorporating the impacts of the Corporation's acquisition of Merrill Lynch, including the $10.0 billion of Series Q Preferred Stock issued in connection with the TARP Capital Purchase Program, "Time to Required Funding" increased to 23 months at December 31, 2008...

  • Page 59
    ... ensure compliance with these parameters. The contingency funding plan for the banking subsidiaries evaluates liquidity over a 12-month period in a variety of business environment scenarios assuming different levels of earnings performance and credit ratings as well as public and investor relations...

  • Page 60
    ...common stock and net income during the year was more than offset by dividend payments and an increased loss in accumulated OCI. Management remains focused on balance sheet discipline and reducing non-core business asset levels to improve this ratio in future periods. Unlike the Tier 1 Capital ratio...

  • Page 61
    ... by the U.S. government, from time to time, in the open market or in private transactions through our approved repurchase programs. We did not repurchase any shares of the Corporation's common stock during 2008 and we issued 107 million shares in connection with the Countrywide acquisition and 17...

  • Page 62
    ... on the issuance of preferred stock, see Note 14 - Shareholders' Equity and Earnings Per Common Share to the Consolidated Financial Statements. Preferred Stock Dividends In 2008, we declared a total of $1.3 billion in cash dividends on our various series of preferred stock, which does not include...

  • Page 63
    ... and have instituted a number of other initiatives related to our credit portfolios in an attempt to mitigate losses and enhance our support for our customers. To help homeowners avoid foreclosure, Bank of America and Countrywide modified approximately 230,000 home loans during 2008. The majority of...

  • Page 64
    ..., credit protection is purchased on certain portions of our portfolio to enhance our overall risk management position. The merger with Merrill Lynch will increase our concentrations to certain products and loan types. These increases are primarily in the residential mortgage, home equity and direct...

  • Page 65
    ...-offs and related ratios for our consumer loans and leases and net losses and related ratios for our managed credit card portfolio for 2008 and 2007. The reported net charge-off ratios for residential mortgage, home equity and discontinued real estate benefit from the addition of the Countrywide SOP...

  • Page 66
    ... on existing lines as well as line management initiatives on deteriorating accounts with declining equity positions partially offset by the addition of the Countrywide portfolio which added $4.5 billion of unused lines related to the non SOP 03-3 portfolio. The home equity utilization rate was 52...

  • Page 67
    ... and net charge-offs by certain state concentrations for the home equity portfolio. Discontinued Real Estate The discontinued real estate portfolio, totaling $20.0 billion at December 31, 2008, consisted of pay-option and subprime loans obtained in connection with the acquisition of Countrywide. At...

  • Page 68
    ...-3 the home equity portfolio would have recorded additional net charge-offs of $1.5 billion. The table below presents outstandings net of purchase accounting adjustments and net charge-offs had the portfolio not been subject to SOP 03-3, by certain state concentrations. Discontinued Real Estate The...

  • Page 69
    ...most significant home price declines. Managed domestic credit card outstandings increased $2.3 billion to $154.2 billion at December 31, 2008 compared to December 31, 2007 due in part to lower payment rates partially offset by risk mitigation initiatives. Managed net losses increased $3.1 billion to...

  • Page 70
    ...non-real estate secured and unsecured personal loans). Outstanding loans and leases increased $6.9 billion at December 31, 2008 compared to December 31, 2007 due to purchases of automobile loan portfolios, student loan disbursements and growth in the Card Services unsecured lending product partially...

  • Page 71
    ..., 2008 and are disclosed as such in Note 6 - Outstanding Loans and Leases to the Consolidated Financial Statements. Certain TDRs are classified as nonperforming at the time of restructure and are not returned to performing status until six consecutive, on-time payments have been made by the customer...

  • Page 72
    ... of the loan portfolio. From the perspective of portfolio risk management, customer concentration management is most relevant in GCIB. Within that segment's Business Lending and CMAS businesses, we facilitate bridge financing (high grade debt, high yield debt, CMBS and equity) to fund acquisitions...

  • Page 73
    ... home price declines. Excluding small business commercial - domestic the total net charge-off ratio was 0.52 percent compared to 0.07 percent in 2007. The increase was mainly driven by higher net charge-offs in commercial real estate, principally the homebuilder loan portfolio, as well as commercial...

  • Page 74
    ... 31, 2008 and 2007 which are funded in the normal course of our Business Lending and CMAS businesses and are managed in part through our "originate to distribute" strategy (see Management of Commercial Credit Risk Concentrations on page 70 for more information on bridge financing). The increase in...

  • Page 75
    ...-to-market derivative assets. Commercial Real Estate The commercial real estate portfolio is mostly managed in Business Lending and consists of loans issued primarily to public and private developers, homebuilders and commercial real estate firms. Outstanding loans and leases increased $3.4 billion...

  • Page 76
    ... million were recorded in other income during the year ended December 31, 2008 compared to losses of $274 million in 2007. These losses were primarily attributable to changes in instrument-specific credit risk and were predominately offset by gains from hedging activities. Small Business Commercial...

  • Page 77
    ... do not include nonperforming AFS debt securities of $291 million and $180 million at December 31, 2008 and 2007. Balances do not include nonperforming derivative assets of $512 million at December 31, 2008. Includes small business commercial - domestic activity. Commercial loans and leases may be...

  • Page 78
    ... monitoring. The CRC oversees industry limits governance. Total commercial committed credit exposure increased by $18.3 billion, or two percent, at December 31, 2008 compared to 2007 largely driven by diversified financials partially offset by a decline in commercial real estate. Total commercial...

  • Page 79
    ...) Total Commercial Committed 2008 2007 2008 2007 Real estate (3) Diversified financials Government and public education Capital goods Retailing Healthcare equipment and services Consumer services Materials Commercial services and supplies Individuals and trusts Food, beverage and tobacco Banks...

  • Page 80
    ..., see Note 4 - Derivatives to the Consolidated Financial Statements. Table 33 Credit Derivatives December 31 2008 (Dollars in millions) 2007 Credit Risk(1) Contract/Notional Credit Risk(1) Contract/Notional Credit derivatives Purchased protection: Credit default swaps Total return swaps...

  • Page 81
    ... foreign credit and trading portfolio is subject to country risk. We define country risk as the risk of loss from unfavorable economic and political conditions, currency fluctuations, social instability and changes in government policies. A risk management framework is in place to measure, monitor...

  • Page 82
    ... 31 Public Sector Banks Private Sector China 2008 2007 2006 $ 44 58 127 $ 20,091 16,558 3,174 $524 424 264 $ 20,659 17,040 3,565 1.14% 0.99 0.24 (1) Exposure includes cross-border claims by our foreign offices as follows: loans, acceptances, time deposits placed, trading account assets...

  • Page 83
    ...from December 31, 2007. This increase was primarily driven by reserve increases related to higher losses in our home equity, unsecured lending, consumer card, and residential mortgage portBank of America 2008 Provision for Credit Losses The provision for credit losses increased $18.4 billion to $26...

  • Page 84
    ... increases for higher losses in the home equity and residential mortgage portfolios, reflective of continued weakness in the housing markets and a slowing economy. The higher ratio was also due to reserve increases in the Card Services' unsecured lending, domestic credit card, and small business...

  • Page 85
    ...$4.9 billion and $3.0 billion for 2008 and 2007. (6) We account for acquired impaired loans in accordance with SOP 03-3. For more information on the impact of SOP 03-3 on asset quality, see Consumer Portfolio Credit Risk Management beginning on page 62. n/a = not applicable Bank of America 2008 83

  • Page 86
    ... debt, trading account assets and liabilities, and derivatives. Market-sensitive assets and liabilities are generated through loans and deposits associated with our traditional banking business, customer and proprietary trading operations, ALM process, credit risk mitigation activities and mortgage...

  • Page 87
    ... Accounting Principles and Note 21 - Mortgage Servicing Rights to the Consolidated Financial Statements for additional information on MSRs. Hedging instruments used to mitigate this risk include options, futures, forwards, swaps, swaptions and securities. Trading Risk Management Trading-related...

  • Page 88
    ... majority of the highs for VAR in 2008 occurred during the fourth quarter. In periods of market stress, the GRC members communicate daily to discuss losses and VAR limit excesses. As a result of this process, the lines of business may selectively reduce risk. Where economically feasible, positions...

  • Page 89
    ...6/30/2008 9/30/2008 Daily Tradingrelated Revenue VAR 12/31/2008 Table 39 Trading Activities Market Risk VAR 12 Months Ended December 31 2008 VAR (Dollars in millions) 2007 VAR (1) Average High (2) Low (2) Average High (2) Low (2) Foreign exchange Interest rate Credit Real estate/mortgage...

  • Page 90
    ... of these stress tests point to a decrease in risk taken during the 12 months ended December 31, 2008. The acquisition of Merrill Lynch on January 1, 2009 increased our trading-related activities and exposure. As such, during 2009 we will continue to refine the VAR calculations and develop a set of...

  • Page 91
    ...to the repositioning of our ALM portfolio due to market liquidity and funding conditions as we increased the level of mortgage-backed securities relative to loans and the acquisition of Countrywide. During 2008 and 2007, we purchased AFS debt securities of $184.2 billion and $28.0 billion, sold $119...

  • Page 92
    ... activities, see Note 4 - Derivatives to the Consolidated Financial Statements. Our interest rate contracts are generally non-leveraged generic interest rate and foreign exchange basis swaps, options, futures and forwards. In addition, we use foreign exchange contracts, including cross-currency...

  • Page 93
    ... swaps of $1.1 billion, as well as changes related to the termination of pay fixed interest rate swaps of $429 million and the termination of option products of $155 million. The increase was partially offset by losses from changes in the value of foreign exchange basis swaps of $3.0 billion. The...

  • Page 94
    ... a line of business level. Mortgage Banking Risk Management We originate, fund and service mortgage loans, which subject us to credit, liquidity and interest rate risks, among others. We determine whether loans will be held for investment or held for sale at the time of commitment and manage credit...

  • Page 95
    ... interest rate or payment change. For more information on our loan modification programs, see Recent Events on page 22. Complex Accounting Estimates Our significant accounting principles, as described in Note 1 - Summary of Significant Accounting Principles to the Consolidated Financial Statements...

  • Page 96
    ... are nonfinancial assets that are created when the underlying mortgage loan is sold and we retain the right to service the loan. We account for consumer MSRs at fair value with changes in fair value recorded in the Consolidated Statement of Income in mortgage banking income. Commercial-related and...

  • Page 97
    ... level. For more information on VAR, see Trading Risk Management beginning on page 85. AFS debt and marketable equity securities are recorded at fair value, which is generally based on quoted market prices, market prices for similar assets, cash flow analysis or pricing services. Principal...

  • Page 98
    ... cash flow employs a capital asset pricing model in estimating the discount rate (i.e., cost of equity financing) for each reporting unit. The inputs to this model include: risk-free rate of return; beta, a measure of the level of non-diversifiable risk associated with comparable companies for each...

  • Page 99
    ...activity and the U.S. Trust Corporation acquisition. Service charges grew resulting from new account growth in deposit accounts and the beneficial impact of the LaSalle merger. The increase in gains (losses) on sales of debt securities was driven largely by losses in the prior year. Mortgage banking...

  • Page 100
    ... support provided to certain cash funds. Noninterest expense increased $756 million, or 20 percent, to $4.5 billion driven by the addition of U.S. Trust Corporation, higher revenue related expenses and increased marketing costs. Business Segment Operations Global Consumer and Small Business Banking...

  • Page 101
    ... Yield/ Rate (Dollars in millions) Earning assets Time deposits placed and other short-term investments Federal funds sold and securities purchased under agreements to resell Trading account assets Debt securities (2) Loans and leases (3): Residential mortgage Home equity Discontinued real estate...

  • Page 102
    ... Federal funds sold and securities purchased under agreements to resell Trading account assets Debt securities Loans and leases: Residential mortgage Home equity Discontinued real estate Credit card - domestic Credit card - foreign Direct/Indirect consumer Other consumer Total consumer Commercial...

  • Page 103
    ..., and commercial real estate loans of $203 million and $304 million at December 31, 2008 and 2007. See Note 19 - Fair Value Disclosures to the Consolidated Financial Statements for additional discussion of fair value for certain financial instruments. n/a = not applicable Bank of America 2008 101

  • Page 104
    ... Total consumer (3) Commercial Commercial - domestic (4) Commercial real estate Commercial lease financing Commercial - foreign Small business commercial - domestic Total commercial (5) Total nonperforming loans and leases Foreclosed properties Total nonperforming assets (1) At December 31, 2008...

  • Page 105
    ... of the loan. Balances are related to repurchases pursuant to our servicing agreements with GNMA mortgage pools where repayments are insured by the Federal Housing Administration or guaranteed by the Department of Veteran Affairs. Excludes small business commercial - domestic loans. Balances do not...

  • Page 106
    ...$4.9 billion and $3.0 billion for 2008 and 2007. (6) We account for acquired impaired loans in accordance with SOP 03-3. For more information on the impact of SOP 03-3 on asset quality, see Consumer Portfolio Credit Risk Management beginning on page 62. n/a = not applicable 104 Bank of America 2008

  • Page 107
    ... real estate Credit card - domestic Credit card - foreign Direct/Indirect consumer Other consumer Total consumer Commercial - domestic (2) Commercial real estate Commercial lease financing Commercial - foreign Total commercial (3) Allowance for loan and lease losses Reserve for unfunded lending...

  • Page 108
    ...real estate and commercial - foreign loans. Table IX Short-term Borrowings 2008 (Dollars in millions) 2007 2006 Rate Amount Rate Amount Rate 0.11% 1.67 - 0.84 2.54 - 1.80 3.09 - 2.07 2.99 - Amount Federal funds purchased At December 31 Average during year Maximum month-end balance during year...

  • Page 109
    ...254 Table XI Non-exchange Traded Commodity Contract Maturities December 31, 2008 (Dollars in millions) Asset Positions $ 1,623 2,134 208 75 4,040 (2,869) Liability Positions Maturity of less than 1 year Maturity of 1-3 years Maturity of 4-5 years Maturity in excess of 5 years Gross fair value of...

  • Page 110
    ....95 $ 1.18 1.16 0.56 29.74 Market price per share of common stock Closing High closing Low closing $ $ Market capitalization Average balance sheet Total loans and leases Total assets Total deposits Long-term debt Common shareholders' equity Total shareholders' equity $ 35.00 37.48 18.52 $ 159...

  • Page 111
    ... Yield/ Rate (Dollars in millions) Earning assets Time deposits placed and other short-term investments Federal funds sold and securities purchased under agreements to resell Trading account assets Debt securities (1) Loans and leases (2): Residential mortgage Home equity Discontinued real estate...

  • Page 112
    ... Federal funds sold and securities purchased under agreements to resell Trading account assets Debt securities (1) Loans and leases (2): Residential mortgage Home equity Discontinued real estate Credit card - domestic Credit card - foreign Direct/Indirect consumer (3) Other consumer (4) Total...

  • Page 113
    ... offerings for higher risk borrowers, including individuals with one or a combination of high credit risk factors, such as low FICO scores (generally less than 620 for secured products and 660 for unsecured products), high debt to income ratios and inferior payment history. Bank of America 2008...

  • Page 114
    ...at risk to finance its activities without additional subordinated financial support from third parties. The equity investors may lack the ability to make significant decisions about the entity's activities, or they may not absorb the losses or receive the residual returns generated by the assets and...

  • Page 115
    ... Committee Asset and liability management Auction rate securities Collateralized debt obligation Collateralized loan obligation Commercial mortgage-backed securities Credit Risk Committee Earnings per common share Financial Accounting Standards Board Federal Deposit and Insurance Corporation Federal...

  • Page 116
    ...Over Financial Reporting Bank of America Corporation and Subsidiaries The management of Bank of America Corporation is responsible for establishing and maintaining adequate internal control over financial reporting. The Corporation's internal control over financial reporting is a process designed to...

  • Page 117
    ... and the related Consolidated Statement of Income, Consolidated Statement of Changes in Shareholders' Equity and Consolidated Statement of Cash Flows present fairly, in all material respects, the financial position of Bank of America Corporation and its subsidiaries at December 31, 2008 and 2007...

  • Page 118
    ... Year Ended December 31 (Dollars in millions, except per share information) 2008 2007 2006 Interest income Interest and fees on loans and leases Interest on debt securities Federal funds sold and securities purchased under agreements to resell Trading account assets Other interest income Total...

  • Page 119
    Bank of America Corporation and Subsidiaries Consolidated Balance Sheet December 31 (Dollars in millions) 2008 2007 Assets Cash and cash equivalents Time deposits placed and other short-term investments Federal funds sold and securities purchased under agreements to resell (includes $2,330 and ...

  • Page 120
    ... changes in available-for-sale debt and marketable equity securities Net changes in foreign currency translation adjustments Net changes in derivatives Employee benefit plan adjustments Dividends paid: Common Preferred Issuance of preferred stock Common stock issued under employee plans and related...

  • Page 121
    Bank of America Corporation and Subsidiaries Consolidated Statement of Cash Flows Year Ended December 31 (Dollars in millions) 2008 2007 2006 Operating activities Net income Reconciliation of net income to net cash provided by operating activities: Provision for credit losses (Gains) losses on ...

  • Page 122
    ... Notes to Consolidated Financial Statements On July 1, 2008, Bank of America Corporation and its subsidiaries (the Corporation) acquired all of the outstanding shares of Countrywide Financial Corporation (Countrywide) through its merger with a subsidiary of the Corporation in exchange for stock...

  • Page 123
    ... requires expanded disclosures about credit derivatives and guarantees. The expanded disclosure requirements for FSP 133-1 were effective for the Corporation's financial statements for the year ending December 31, 2008 and are included in Note 4 - Derivatives to the Consolidated Financial Statements...

  • Page 124
    ... financial instrument), index, currency or commodity at a predetermined rate or price during a period or at a time in the future. Option agreements can be transacted on organized exchanges or directly between parties. The Corporation also provides credit derivatives to customers who wish to increase...

  • Page 125
    ... marketable equity security, the Bank of America 2008 123 Interest Rate Lock Commitments The Corporation enters into IRLCs in connection with its mortgage banking activities to fund residential mortgage loans at specified times in the future. IRLCs that relate to the origination of mortgage loans...

  • Page 126
    ... it is probable at purchase that the Corporation will be unable to collect all contractually required payments are accounted for under AICPA Statement of Position 03-3, "Accounting for Certain Loans or Debt Securities Acquired in a Transfer" (SOP 03-3). Evidence of credit quality deterioration as of...

  • Page 127
    ... loans, a group of loans, and loans acquired in a purchase business combination. For more information on the SOP 03-3 portfolio associated with the acquisition of Countrywide, see Note 6 - Outstanding Loans and Leases to the Consolidated Financial Statements. The allowance for loan and lease losses...

  • Page 128
    ... business, the Corporation supports its customers' financing needs by facilitating the customers' access to different funding sources, assets and risks. In addition, the Corporation utilizes certain financing arrangements to meet its balance sheet management, funding, liquidity, and market or credit...

  • Page 129
    ... Note 19 - Fair Value Disclosures to the Consolidated Financial Statements. Level 1 Bank of America 2008 127 Other Special Purpose Financing Entities Other special purpose financing entities (SPEs) (e.g., Corporationsponsored multi-seller conduits, collateralized debt obligations, asset acquisition...

  • Page 130
    ... lists and marketing activities. These agreements generally have terms that range from two to five Accumulated Other Comprehensive Income The Corporation records gains and losses on cash flow hedges, unrealized gains and losses on AFS debt and marketable equity securities, 128 Bank of America 2008

  • Page 131
    ... the credit card agreements are recorded as contra-revenue against card income. Note 2 - Merger and Restructuring Activity Merrill Lynch On January 1, 2009, the Corporation acquired Merrill Lynch through its merger with a subsidiary of the Corporation in exchange for common and preferred stock with...

  • Page 132
    ...customer receivables with a preliminary fair value and gross contractual amounts receivable of $150.7 billion and $156.1 billion at the time of acquisition. Total assets Liabilities Deposits Federal funds purchased and securities sold under agreements to repurchase/securities loaned Trading account...

  • Page 133
    ... services companies managing private wealth in the U.S. The Corporation acquired certain loans for which there was, at the time of the merger, evidence of deterioration of credit quality since origination and for which it was probable that all contractually required payments would not be collected...

  • Page 134
    ... business model changes nor does it consider any potential impacts of current market conditions or revenues, expense efficiencies, asset dispositions, share repurchases, or other factors. 2008 2007 Balance, January 1 Exit costs and restructuring charges: Countrywide LaSalle U.S. Trust Corporation...

  • Page 135
    ... account assets Trading account liabilities U.S. government and agency securities Equity securities Foreign sovereign debt Corporate securities and other Total trading account liabilities (1) Includes $52.6 billion and $21.5 billion at December 31, 2008 and 2007 of government-sponsored enterprise...

  • Page 136
    ... payments based upon the movements of an underlying rate index. The Corporation uses foreign currency contracts to manage the foreign exchange risk associated with certain foreign currency-denominated assets and liabilities, as well as the Corporation's investments in foreign subsidiaries. Foreign...

  • Page 137
    ... AFS debt securities of $291 million and $180 million. During 2008, the Corporation reclassified $12.6 billion of AFS debt securities to trading account assets in connection with the Countrywide acquisition as the Corporation realigned its AFS portfolio. Further, the Bank of America 2008 135

  • Page 138
    ...-impaired available-for-sale debt securities Temporarily-impaired available-for-sale marketable equity securities Total temporarily-impaired available-for-sale securities Corporation transferred approximately $1.7 billion of leveraged lending bonds from trading account assets to AFS debt securities...

  • Page 139
    ... in other assets and is accounted for under the equity method of accounting with income being recorded in equity investment income. For additional information on securities, see Note 1 - Summary of Significant Accounting Principles to the Consolidated Financial Statements. Bank of America 2008 137

  • Page 140
    ..., and commercial real estate loans of $203 million and $304 million at December 31, 2008 and 2007. See Note 19 - Fair Value Disclosures to the Consolidated Financial Statements for additional discussion of fair value for certain financial instruments. n/a = not applicable The Corporation mitigates...

  • Page 141
    ... due to credit deterioration. Accretable Yield Activity Countrywide SOP 03-3 Loans acquired with evidence of credit quality deterioration since origination and for which it is probable at purchase that the Corporation will be unable to collect all contractually required payments are accounted for...

  • Page 142
    ... related to the Corporation's role as servicer and Note 21 - Mortgage Servicing Rights to the Consolidated Financial Statements. The increase in principal balance outstanding at December 31, 2008 from the prior year was due to the addition of Countrywide securitizations. 140 Bank of America 2008

  • Page 143
    ... quoted market prices and recorded in trading account assets. The Corporation has retained consumer MSRs from the sale or securitization of mortgage loans. Servicing fee and ancillary fee income on consumer mortgage loans serviced, including securitizations where we still have continued involvement...

  • Page 144
    .... The Corporation recorded $2.1 billion in servicing fees related to credit card securitizations during both 2008 and 2007. During the second half of 2008, the Corporation entered into a liquidity support agreement related to the Corporation's commercial paper program that obtains financing by...

  • Page 145
    ... home equity loans. The Corporation recorded $78 million in servicing fees related to home equity securitizations during 2008. No such fees were recorded during 2007. For more information on MSRs, see Note 21 - Mortgage Servicing Rights to the Consolidated Financial Statements. At December 31, 2008...

  • Page 146
    ... the credit risk on its residential mortgage loan portfolio as described in Note 6 - Outstanding Loans and Leases to the Consolidated Financial Statements. The Corporation has also provided support to or has loss exposure resulting from its involvement with other VIEs, including certain cash funds...

  • Page 147
    ... CDOs $ 2,383 2,570 $ 732 6 1,039 - - Total Unconsolidated VIEs, December 31, 2008 (1) Maximum loss exposure (2) Total assets of VIEs On-Balance Sheet Assets Trading account assets Derivative assets Available-for-sale debt securities Loans and leases All other assets $69,970 60,403 $ 4,444 3,542...

  • Page 148
    ... market risk of the assets, it consolidates the conduit. Derivative activity related to unconsolidated conduits is carried at fair value with changes in fair value recorded in trading account profits (losses). Municipal Bond Trusts The Corporation administers municipal bond trusts that hold highly...

  • Page 149
    ...acquisition vehicles, which are typically created on behalf of customers who wish to obtain market or credit exposure to a specific company or financial instrument. Credit-linked note vehicles issue notes linked to the credit risk of a specified company or debt instrument, purchase high-grade assets...

  • Page 150
    ...credit default swaps. Asset acquisition vehicles acquire financial instruments, typically loans, at the direction of a single customer and obtain funding through the issuance of structured notes to the Corporation. At the time the vehicle acquires an asset, the Corporation enters into a total return...

  • Page 151
    ... 2013, respectively. Note 11 - Deposits The Corporation had domestic certificates of deposit and other domestic time deposits of $100 thousand or more totaling $136.6 billion and $94.4 billion at December 31, 2008 and 2007. Foreign certificates of deposit and other foreign time deposits of $100...

  • Page 152
    ..., Federal Home Loan Bank advances, U.S. Treasury tax and loan notes, and term federal funds purchased, are reflected in commercial paper and other short-term borrowings on the Consolidated Balance Sheet. Long-term Debt Long-term debt consists of borrowings having an original maturity of one year or...

  • Page 153
    ... price equal to their liquidation amount plus accrued and unpaid distributions for up to one quarter. For additional information on Trust Securities for regulatory capital purposes, see Note 15 - Regulatory Requirements and Restrictions to the Consolidated Financial Statements. Bank of America 2008...

  • Page 154
    The following table is a summary of the outstanding Trust and Hybrid Securities and the related Notes at December 31, 2008 as originated by Bank of America Corporation and its predecessor companies. Aggregate Principal Amount of Trust Securities $ 575 900 500 375 518 1,000 1,221 530 900 1,000 863 ...

  • Page 155
    ... after 3 years through 5 years Expires after 5 years Total Credit extension commitments, December 31, 2008 Loan commitments Home equity lines of credit Standby letters of credit and financial guarantees (1) Commercial letters of credit Legally binding commitments (2) Credit card lines (3) $ 128...

  • Page 156
    ... funds and recorded losses of $418 million. The Corporation may from time to time, but is under no obligation to, provide additional support to funds managed within GWIM. Future support, if any, may take the form of additional capital commitments to the funds or the purchase of assets from the funds...

  • Page 157
    ...related to residential mortgage loans sold and other guarantees related to securitizations, see Note 8 - Securitizations to the Consolidated Financial Statements. Merchant Services The Corporation provides credit and debit card processing services to various merchants by processing credit and debit...

  • Page 158
    ... regulatory actions related to its sale of ARS. As part of these settlements, Merrill Lynch agreed to offer to purchase ARS held by certain individuals, charities, and non-profit corporations and to pay a fine. Countrywide Equity and Debt Securities Matters Countrywide Financial Corporation (CFC...

  • Page 159
    ...in a consolidated putative class action, entitled Luther v. Countrywide Home Loans Servicing LP, et al., filed in the Superior Court of the State of California, County of Los Angeles, that relates to the public offering of various mortgage-backed securities. The consolidated complaint alleges, among...

  • Page 160
    ... Countrywide Securities Corporation and LaSalle Financial Services Inc., along with other underwriters and individuals, were named as defendants in several putative class action complaints filed in the U.S. District Court for the Southern District of New York and state courts in Arkansas, California...

  • Page 161
    ... 5, 2008, a class action complaint was filed against Merrill Lynch & Co., Inc., MLPFS, Merrill Lynch Mortgage Investors, Inc., Merrill Lynch Mortgage Lending, Inc., and Merrill Lynch Credit Corporation, Inc. (collectively Merrill Lynch) and certain present and former Merrill Lynch officers and...

  • Page 162
    ... have filed a Consolidated Class Action complaint in this matter. BANA, BAS, Merrill Lynch and other financial institutions were also named in several related individual suits filed in California state courts on behalf of a number of cities and counties in California. These complaints allege...

  • Page 163
    ... placement offerings have filed complaints against the Corporation and various related entities in the following actions: Principal Global Investors, LLC, et al. v. Bank of America Corporation, et al. in the U.S. District Court for the Southern District of Iowa; Monumental Life Insurance Company, et...

  • Page 164
    ..., the Corporation issued common stock in connection with its acquisition of Merrill Lynch. For additional information, see Note 2 - Merger and Restructuring Activity to the Consolidated Financial Statements. Common Stock In October 2008, the Corporation issued 455 million shares of common stock at...

  • Page 165
    ... cash dividends. Series N Preferred Stock may be redeemed earlier with net proceeds from qualified equity offerings, which is defined generally as a sale or issuance of common or perpetual preferred stock to third parties that qualifies as Tier 1 Capital. n/a = not applicable Bank of America 2008...

  • Page 166
    .... For more information, see Note 16 - Employee Benefit Plans to the Consolidated Financial Statements. For 2008, the net change in fair value recorded in accumulated OCI represented $3.8 billion in losses associated with the Corporation's foreign currency translation adjustments on its net...

  • Page 167
    ...'s market risk capital requirement and may not be used to support its credit risk requirement. At December 31, 2008 and 2007, the Corporation had no subordinated debt that qualified as Tier 3 Capital. Certain corporate sponsored trust companies which issue Trust Securities are not consolidated...

  • Page 168
    ... AFS marketable equity securities. On January 1, 2009, the Corporation completed its acquisition of Merrill Lynch and subsequently issued an additional $10.0 billion of preferred stock in connection with the TARP Capital Purchase Program. On January 16, 2009, the U.S. government agreed to assist in...

  • Page 169
    ... employees in the Pension Plan on or after January 1, 2008, the benefits become vested upon completion of three years of service. It is the policy of the Corporation to fund not less than the minimum funding amount required by ERISA. The Pension Plan has a balance guarantee feature for account...

  • Page 170
    ... 2007 Postretirement Health and Life Plans (1) 2008 2007 2008 2007 Change in fair value of plan assets Fair value, January 1 U.S. Trust Corporation balance, July 1, 2007 LaSalle balance, October 1, 2007 Countrywide balance, July 1, 2008 Actual return on plan assets Company contributions (2) Plan...

  • Page 171
    ... in 2008 using a discount rate of 6.75 percent at July 1, 2008. The net periodic benefit cost of the Countrywide Nonqualified Pension Plan was $1 million and Countrywide did not have a Postretirement Health and Life Plan. In connection with the U.S. Trust Corporation and LaSalle mergers, those...

  • Page 172
    ... investment strategy is designed to provide a total return that, over the long-term, increases the ratio of assets to liabilities. The strategy attempts to maximize the investment return on assets at a level of risk deemed appropriate by the Corporation while complying with ERISA and any applicable...

  • Page 173
    ... table. The risk-free rate for periods within the contractual life of the stock option is based on the U.S. Treasury yield curve in effect at the time of grant. Expected volatilities are based on implied volatilities from traded stock options on the Corporation's common stock, historical volatility...

  • Page 174
    ...of 0.88 years. The total fair value of restricted stock vested in 2008 was $657 million, of which $15 million related to restricted stock acquired in connection with Countrywide and vested upon acquisition as a result of change in control provisions. In 2008, the amount of cash used to settle equity...

  • Page 175
    ... (benefit) Federal State Foreign Total deferred expense (benefit) Total income tax expense (1) (1) Does not reflect the deferred tax effects of unrealized gains and losses on AFS debt and marketable equity securities, foreign currency translation adjustments, derivatives, and employee benefit plan...

  • Page 176
    ... examination In Appeals process Field examination Field examination Deferred tax assets Allowance for credit losses Security and loan valuations Employee compensation and retirement benefits Accrued expenses Net operating loss carryforwards Available-for-sale securities State income taxes Other...

  • Page 177
    ...the election of the fair value option, these AFS debt securities have been transferred to trading account assets. Includes structured reverse repurchase agreements that were hedged with derivatives in accordance with SFAS 133. Includes long-term fixed rate deposits that were economically hedged with...

  • Page 178
    ...- Mortgage Servicing Rights to the Consolidated Financial Statements. Trading Account Assets and Liabilities and Available-for-Sale Debt Securities The fair values of trading account assets and liabilities are primarily based on actively traded markets where prices are based on either direct market...

  • Page 179
    ...Total liabilities $ 47,884 $1,504,539 $ 7,959 $(1,468,691) $ 91,691 December 31, 2007 Assets Federal funds sold and securities purchased under agreements to resell Trading account assets Derivative assets Available-for-sale debt securities Loans and leases (2) Mortgage servicing rights Loans...

  • Page 180
    ... Available-forSale Debt Securities Mortgage Servicing Rights Loans Held-forSale (1) Accrued Expenses and Other Liabilities (1) (Dollars in millions) Net Derivatives Loans and Leases (1) Other Assets Total Card income Equity investment income Trading account profits (losses) Mortgage banking...

  • Page 181
    ... Date Year Ended December 31, 2008 Trading Account Assets Available-forSale Debt Securities Loans and Leases (1) Mortgage Servicing Rights Loans Held-forSale (1) Accrued Expenses and Other Liabilities (1) (Dollars in millions) Net Derivatives Other Assets Total Card income (loss) Equity...

  • Page 182
    ... Value Option Year Ended December 31, 2008 Corporate Loans and Loan Commitments Structured Reverse Repurchase Agreements Longterm Deposits AssetBacked Secured Financings (Dollars in millions) Loans Held-for-Sale Total Trading account profits (losses) Mortgage banking income Other income (loss...

  • Page 183
    ..., time deposits placed, federal funds sold and purchased, resale and certain repurchase agreements, commercial paper and other short-term investments and borrowings, approximates the fair value of these instruments. These financial instruments generally expose the Corporation to limited credit risk...

  • Page 184
    ... $231 million are included in the line "mortgage banking income (loss)" in the table "Level 3 - Total Realized and Unrealized Gains (Losses) Included in Earnings" in Note 19 - Fair Value Disclosures to the Consolidated Financial Statements. At December 31, 2008 and 2007, the fair value of consumer...

  • Page 185
    ... from business banking clients to large international corporate and institutional investor clients using a strategy to deliver value-added financial products and advisory solutions. Global Wealth and Investment Management GWIM offers investment and brokerage services, estate management, financial...

  • Page 186
    ... At and for the Year Ended December 31 (Dollars in millions) Total Corporation (1) 2008 2007 2006 Global Consumer and Small Business Banking (2, 3) 2008 2007 2006 Net interest income (4) Noninterest income Total revenue, net of interest expense Provision for credit losses (5) Amortization of...

  • Page 187
    ... income: Card income (loss) Equity investment income Gains (losses) on sales of debt securities All other income (loss) Total noninterest income Total revenue, net of interest expense Provision for credit losses Merger and restructuring charges All other noninterest expense Income (loss) before...

  • Page 188
    ... businesses Merger and restructuring charges Other Consolidated net income (1) FTE basis December 31 (Dollars in millions) 2008 $1,406,565 553,730 28,839 3,172 (100,611) (100,960) 27,208 $1,817,943 2007 Segments' total assets Adjustments: ALM activities, including securities portfolio Equity...

  • Page 189
    ... Parent Company Only financial information: Condensed Statement of Income Year Ended December 31 (Dollars in millions) 2008 2007 2006 Income Dividends from subsidiaries: Bank holding companies and related subsidiaries Nonbank companies and related subsidiaries Interest from subsidiaries Other...

  • Page 190
    ... purchases of securities Net payments from (to) subsidiaries Other investing activities, net Net cash used in investing activities Financing activities Net increase (decrease) in commercial paper and other short-term borrowings Proceeds from issuance of long-term debt Retirement of long-term debt...

  • Page 191
    ... total assets, total revenue, net of interest expense, income before income taxes and net income by geographic area. The Corporation identifies its geographic performance based upon the business unit structure used to manage the capital or expense deployed in the region as applicable. This requires...

  • Page 192
    ... certain foreign assets and assets originated or issued on or after March 14, 2008. The majority of the protected assets were added by the Corporation as a result of its acquisition of Merrill Lynch. This guarantee is expected to be in place for 10 years for residential assets and five years for...

  • Page 193
    ... Risk Officer Barbara J. Desoer President, Mortgage, Home Equity & Insurance Services Liam E. McGee President, Consumer & Small Business Bank Brian T. Moynihan President, Global Banking & Wealth Management Joe L. Price Chief Financial Officer Richard K. Struthers President, Global Card Services...

  • Page 194
    ..., shareholder relations manager, at 1.800.521.3984. For inquiries concerning dividend checks, dividend reinvestment plan, electronic deposit of dividends, tax information, transferring ownership, address changes or lost or stolen stock certificates, contact Bank of America Shareholder Services at...

  • Page 195
    Please recycle. The front section of this annual report is printed on 100% post-consumer waste (PCW) recycled paper that is manufactured with wind power. The Financial Review is printed on 30% PCW recycled paper. © 2009 Bank of America Corporation 00-04-1364B 3/2009