Bank of America 2008 Annual Report Download - page 17

positions so they could continue to
lend. It was also intended to signal to
the rest of the financial community that
they could safely do business with the
banks, which is essential to support
the U.S. and world economies.
We are well aware that our participa-
tion in the program carries a significant
cost to our shareholders. However, we
believe that the investment strength-
ens our ability to continue business
levels that both support the U.S.
economy and create future value for
shareholders. We will be able to
provide much-needed credit to thou-
sands of retail and business customers
across the country. We are committed
to making every good loan we can,
because that’s the business we are in
and it is one way we work to enhance
shareholder value. We believe it will
also help stabilize the economy and
get the country moving forward again.
Q. What is Bank of America doing
to support economic recovery and
what benefi ts does this activity have
for shareholders and customers?
A. Banks reflect the economy in which
they operate. By supporting the econ-
omy, we stimulate further economic
and banking activity. That’s good for
America, and good for Bank of America.
Of the $115 billion in new credit we
extended in the fourth quarter, nearly
$45 billion was in mortgages helping
customers buy homes or save money
on the homes they already owned,
including $11 billion for low- and
moderate-income families. To help
struggling homeowners avoid
foreclosure, Bank of America and
Countrywide modified mortgages for
approximately 230,000 customers in
2008. Through our industry-leading
loan modification programs, Bank of
America has committed to offer loan
modifications to up to 630,000
customers, representing more than
$100 billion in mortgage financing.
In addition, this year we continued
our long-standing annual contribution
of approximately $30 million to
nonprofit credit-counseling agencies
that help people work their way out of
financial distress, and in 2008, we
modified nearly 850,000 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 of
America extended almost $4.8 billion
in new credit to nearly 250,000 small
business customers. During the fourth
investment bank through account
managers who work with clients on
a local level and are knowledgeable
about the client, their industry and
their community. The addition of Merrill
Lynch enhances our capabilities and
gives us greater global reach in
investment banking.
We also will be competing in
a more rational marketplace, as the
elimination of many of our single-
product competitors will lead to more
realistic pricing. Consumers and
business clients will have lowered the
level of debt they carry and strength-
ened their individual financial situa-
tions, creating a healthier environment
for sustained levels of banking activity.
All of these factors should help us
continue to grow our businesses as
conditions improve. While revenue
pools will be smaller, we believe we
will be a stronger player, with market-
leading positions where we choose to
compete and a sustainable stream of
earnings based on our fundamental
business of serving the financial needs
of our customers and clients.
Q. How does your participation in the
Troubled Asset Relief Program (TARP)
impact the company?
A. The TARP was designed to help
banks maintain or improve their capital
We will continue to grow our businesses
as conditions improve. While revenue pools
will be smaller, we believe we will be a stronger
player, with market-leading positions where we
choose to compete.
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