Bank of America Securities 37th Annual Investor Conference

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Bank of America Securities 37th Annual Investor Conference

  1. 1. Bank of America Joe Price Chief Financial Officer Bank of America Securities Conference September 17, 2007
  2. 2. Forward Looking Statements This 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 reduce interest margins and impact funding sources; 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. 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. 2
  3. 3. Bank of America Today Diversified Earnings Strong Balance Sheet Market Leadership Customer Convenience 3
  4. 4. A Diverse Business Mix First Six Months 2007 Earnings - $11 Billion Other 14% Global Consumer & Global Corporate & Small Business Banking Investment Banking 47% 29% Global Wealth & Investment Management 10% 4
  5. 5. Global Consumer & Small Business Banking First Six Months 2007 Earnings - $5.1 Billion Strengths • #1 deposit market share • #1 card services in US and UK Consumer • #1 small business lender Real Other/ALM 1% Estate • Largest delivery network 7% Deposits 51% Growth Opportunities Card Services • Deposits and debit businesses 41% • Unsecured consumer credit, including card • Payments business integration • Consumer real estate GCSB results presents on a managed basis 5
  6. 6. Consumer Credit • Credit losses remain within expected ranges in 2007 • Exited subprime loan origination business in 2001 • Consumer real estate loss ratios remain below industry averages • Expect card losses to have peaked in 2Q for the year 6
  7. 7. Global Corporate & Investment Banking First Six Months 2007 Earnings - $3.1 Billion Strengths • #1 Middle market lender • Top 3 US fixed income capital markets • Leading treasury services provider Treasury Other/ALM Services -3% 32% Business Lending 34% Growth Opportunities Capital • Business banking product penetration Markets 37% • Electronic payments • International presence and treasury services • Middle market investment banking 7
  8. 8. Global Wealth & Investment Management First Six Months 2007 Earnings - $1.2 Billion Strengths • #1 Mass affluent services provider (Premier Banking) • 19th largest US asset manager (Columbia) Other/ALM • Largest US Private Bank ( US Trust) 7% Columbia Management 19% Premier Banking & Investments 56% Growth Opportunities Private • Mass affluent expansion Bank 18% • Private bank • Columbia Management AUM growth 8
  9. 9. 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 9
  10. 10. Bank of America Differentiating Factors • Ubiquitous franchise Vast customer base Unparalleled customer convenience Market and product leadership positions Information and innovation • Demonstrated ability to execute Leverage franchise capabilities Provide innovative customer solutions Superior integration expertise • Opportunities for continued organic growth Retail banking penetration Capturing the wealth opportunity Commercial banking client expansion 10
  11. 11. Coast to Coast Footprint In Bank of America Markets • 76% of U.S. population • 57 million consumer and small business households Positioned in growth markets • 16 of 20 fastest growing states • 20%+ retail deposit market share in top 30 markets Business Client Leader Affluent relationships • #1 Small Business Bank • Relationship with 44% of mass affluent • Relationships with 98% of the U.S. households Fortune 500 companies and • 44% of wealthy households in footprint • 80% of the Global Fortune 500 11
  12. 12. Reaching Customers 3,000 Times A Second Can reach 63% 5,700 Banking Centers handheld devices Customer 5,000 Affinity Groups Almost 23MM Online Users 2.6B Contacts 17,000 ATMs 12
  13. 13. Effectively Managing Costs Efficiency Ratio 54% 54% 53% 52% 52% 50% 50% 47% 47% target 2000 2001 2002 2003 2004 2005 2006 2007 YTD 13 FTE basis; excludes merger & restructuring charges
  14. 14. Consistent Attractive Earnings Growth Diluted EPS $4.70 th ow $4.11 d Gr n pou C om $3.75 11% $3.55 $3.05 $2.88 $2.55 2000 2001 2002 2003 2005 2004 2006 2000 - $2.26 reported EPS has been adjusted to exclude $.10 impact of restructuring charges as well as $.19 goodwill amortization expense eliminated in 2002 for comparability to other periods. 2001 - $2.30 reported EPS has been adjusted to exclude $.39 impact of business exit costs as well as $.19 goodwill amortization expense eliminated in 2002 for comparability to other periods. 2004 - $3.64 reported EPS has been adjusted $. 11 to exclude charges for merger and restructuring costs. 2005 - $4.04 reported EPShas been adjusted $.07 to excludes charges for merger and restructuring costs 2006 - $4.59 reported EPShas been adjusted $.11 to excludes charges for merger and restructuring costs 14
  15. 15. Capital Usage $27 Billion Cash Flow Business Acquisitions Growth Strong Balance Share Sheet Repurchases Dividends 15
  16. 16. Adding 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 16
  17. 17. 30 Consecutive Years of Dividend Increases $2.12 • Recently announced a 14% dividend increase to $.64 per quarter ($2.56 annually) Dividend Yield wth gr o ed 5.20%+ z uali ann 13% 1977 2006 17 Yield based on annualized dividend and price as of 9/10/07
  18. 18. Actively Managing Excess Capital ($ in millions) • Returned more than $86 billion in capital since 1998 $86,793 • Repurchases plus dividends have averaged 80% of net income $49,708 $37,085 Cumulative 1H07 1998 1999 2000 2001 2002 2003 2004 2005 2006 Dividends Repurchases Capital returned as 91% 63% 63% 91% 60% 80% 58% 96% 89% 84% 88% a % of earnings Tier 1 Tier 1 7.06% 8.52% 18
  19. 19. Managing for Growth • Leveraging scale of national franchise • Utilizing our knowledge to innovate • Focused on growth opportunities • Driving capital returns for shareholders 19
  20. 20. Bank of Opportunity™ 20

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