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  • 1. Growth Opportunities in Global Wealth & Investment Management Brian Moynihan President Global Wealth & Investment Management
  • 2. Global Wealth & Investment Management: Takeaways • We are a large and profitable competitor in attractive businesses and markets • Our competitive position and integrated model provides strong growth opportunities • Our best and most efficient way to grow is to leverage the strength of our franchise • We are capturing those growth opportunities, but there is much more ahead of us, and we are continuing to invest aggressively to capture it 192
  • 3. A Sizeable and Profitable Competitor 2006 ($B) Percent change Revenue1 $7.8 6.3 Net income 2.4 3.8 Assets under mgt. 542.9 12.6 Total client assets 790.3 11.6 Average loans 61.5 13.7 Average deposits2 115.1 (1.9) Efficiency ratio 51.5% (0.8) Return on equity 23.2% 0.7 Associates 13,728 7.4 1 1Includes $851MM deposit NII on migrated balances 2Includes $48.4B of cumulative migrated average balances since 2004
  • 4. 2006 Revenue Mix and Operating Margins Total Revenue by LOB Total Revenue by Product Other All Other Income Columbia 5% 6% Brokerage Loan NII 13% Management Premier Income 8% 20% Banking & Investments1 48% Asset Mgt Deposit NII Fees 36% 34% The Private Bank 27% Residual and Other NII 3% Line of Business 2006 Revenue 2006 Pre-tax margin Premier Banking & Investments $3.7B1 57.5% The Private Bank $2.1B 41.8% Columbia Management $1.5B 34.5% 2 1PremierBanking & Investments revenue shown as internally managed, including impact of migration from Consumer Banking.
  • 5. Peer Comparison: Profitability 4Q06 Pre-tax Earnings of Major Competitors $956 $759 $649 $625 $520 $361 $249 $242 BAC MER JPM C WB MS AMP NTRS Pre-Tax Margin 48% 23% 33% 23% 27% 17% 16% 31% Competitors listed include their respective GWIM-like businesses, based on Bank of America analysis of 3 publicly available earnings reports. Pro forma results reflect adjustments for significant acquisitions along with other one-time items, and eliminate SFAS 123R stock option expenses where necessary.
  • 6. Trends in Asset Management Asset Management Fees ($MM) Assets Under Management ($B) 543 14% CAGR 517 11% CAGR 742 494 500 713 482 697 680 457 443 645 648 433 638 617 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 4
  • 7. Trends in Loan, Deposit and Liquidity Balances Loans ($B) Deposits ($B) 120 CAGR 1% 119 14% 64 118 CAGR 62 116 115 114 114 60 114 59 57 55 53 51 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 Total BAC Liquidity1 Balance ($B) CAGR 2% 491.2 492.7 493.8 489.3 489.4 487.7 485.4 476.7 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 5 1Total liquidity balance includes deposits and Columbia retail money market funds
  • 8. Trends in Brokerage Transactional/Fee-Based Revenue Brokerage Revenue ($MM) Net New Self Directed Accounts (000) 21.3 4% $617 10.3 $593 (0.2) (12.7) 1Q06 2Q06 3Q06 4Q06 2005 2006 Assets Under Management for all Fee-based Solutions and Accounts for Periods Ending 12/31 Accounts Assets ($B) (accounts) 35 100,000 30 80,000 25 20 60,000 15 40,000 10 20,000 5 0 0 2002 2003 2004 2005 2006 6
  • 9. Our Go-to-market Model Mass Mass Very Mid-Market Large Wealthy Market Affluent Wealthy Institutions Institutions INVESTABLE ASSETS To $100K $100K - $3MM $3MM - $50MM $50MM Plus To $250MM $250MM Plus Banking, Integrated Wealth & Family Office, Investment & Asset NEED Borrowing, Banking & Legacy Investment Distribution Policy, Management Saving Investments Planning Consulting Trustee Services Excellence Deposits,Loans Plus… Plus… Plus… Foundation, Mutual Funds Charitable Giving Integrated Complex Trust Alternative asset Liquidity PRODUCTS Straightforward Investment Banking and mgt products Trustee Services Strategies Alternative Products Investment investments Philanthropic and Investment Separate Insurance Securities Foundation Consulting Accounts Specialty Asset Brokerage Services Management Retirement Simple Trust PTMS / PIMS Administration Consumer Premier Banking The Private Bank Family Wealth Philanthropic Columbia CHANNEL Banking & Investments Advisors Management Management Retirement Solutions 7
  • 10. Growth Opportunities • Affluent households own 77% of personal investable assets in U.S., growing 26% (or 4x rate of U.S. population) from 2006-2010 – We are growing Premier Banking & Investments into the leading franchise in the underserved mass affluent market. • Wealthy households own 15% of personal investable assets in U.S., growing 36% (or 6x rate of U.S. population) from 2006-2010 – With current capabilities and addition of U.S. Trust, we create the largest private banking franchise in this fragmented market. • Columbia Management is well positioned on strong investment performance and strong retail/institutional distribution – Columbia Management is focused on taking greater share. 8
  • 11. Leveraging the Strength of our Franchise • 8MM affluent customer relationships • Nearly 300,000 wealthy customer relationships • Relationships with 30,000 middle market institutions • Relationships with 80% of companies with pension assets of $200MM 9
  • 12. Partnerships for Growth: Converted Client Referrals Why: • Best way to solve our clients’ needs Converted Client Referrals • Deepening relationships with existing clients represents best opportunity for 155,233 profitable growth 48% • Leverages strength of our franchise by generating referrals for all lines of business 104,879 What’s involved: • Goals and incentives in all lines of business • 46 local markets with GWIM leader • Personal and institutional client teams 2005 2006 drive teamwork across lines of business in each market • Integrated client management process 10
  • 13. Investing Aggressively in Growth • People • Training • Technology • Marketing • U.S. Trust acquisition 11
  • 14. Growth Opportunities in Premier Banking & Investments Pat Phillips President, Premier Banking & Investments 12
  • 15. Premier Banking & Investments: Key Takeaways • Bank of America has invested heavily in a scaled model that satisfies affluent clients’ banking & investing needs • The business produces strong growth and profit, and deepens customer relationships • We will grow through increased productivity, sales force expansion and by leveraging the strength of our franchise 13
  • 16. Mass Affluent Segment Who They Are What They Want Share of U.S. personal investable assets Consumer Advice High Net 9% Worth 15% Convenience 77% Respect Mass Affluent Total personal investable assets : $17.5T 14 Source: IXI Xillionaires 2004-2005
  • 17. How we Serve our Affluent Clients in PB&I Dedicated Teams of Client Managers and Financial Advisors • 4,400 professionals based in local markets nationwide Priority service • Premier Relationship Center • BAI Investment Centers • 1,200 professionals Convenience • 5,800 stores, 17,000 ATMs • No. 1 Online Banking • Leading Online Brokerage Relationship and Targeted Pricing • Mortgages • CD Rates • Money Market • $0 Online Equity Trades 15
  • 18. Our Size, Scale and Market Position 4Q06 client balances Market position • Average deposits of $96.5B • Unique service model • Average loans of $32.1B • No. 1 affluent deposit market share • Total client brokerage assets of $187.7B • Highly rated online brokerage platform • Fee based assets of $18.6B • Integration with Consumer Banking Relationships With Mass Affluent Households Product penetration 8MM • 50% of Premier Banking & Investments customers obtain their first mortgage through Bank of America • 74% of Premier Banking & Investments customers obtain their home equity line / loan through Bank of America 1.4MM • Approximately 1/3 of Premier Banking 246K clients have an account with Banc of America Investment Services, Inc. Qualified Bank of Premier Only or Premier Banking & America Customers Investments Only Investments Combined Premier Brokerage 16
  • 19. Improvement Achieved After Client Migration to PB&I 159% 60% Better 22% Better Better 8% Better Deposits Credit Growth Investment Growth Revenue Growth 17 PB&I Test and Control Study of Premier Banking clients vs. similar Premier-eligible households that remain in Consumer Banking; results based on two year period from April 2004 to July 2006
  • 20. Delivering Growth Through Deeper Relationships… PB&I Client Balances1 ($B) PB&I Client Average Loan Balances1 ($B) CAGR 15% 285 244 32.1 20% 214 97 26.6 94 75 29 Deposits 20 MM MF 15 Other Brokerage 159 124 131 4Q04 4Q05 4Q06 4Q05 4Q06 Premier Households with Brokerage Relationship 10% 246K 223K 18 1Includes impact from Consumer migration 12/31/05 12/31/06
  • 21. …and Increased Financial Advisor Productivity Premier Banking & Investments Loans & Deposits Referred to Bankers Investments Revenue by Financial Advisors $805 MM 51% 12% CAGR $7.1 B $4.2 B $720 MM $3.1 B 2004 2005 2006 2005 2006 Recurring Revenue as a Percentage of Fee Based Assets Under Management ($B) Investments Revenue 18.6 46% 49% CAGR 40% 13.7 27% 8.7 2004 2005 2006 2004 2005 2006 19
  • 22. Growth Initiatives • Increased client contact leads to greater client delight • Improved productivity – Better use of technology – Improved client selection – Continued focus on partnerships • Expanded sales force 20
  • 23. Percent of PB&I markets with organic deposit growth Two-Month Moving Average During 2006 70% 60% 50% 40% 30% 20% 10% Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 21
  • 24. Growth Initiatives: Expand the Sales Force 5,940 5,556 770 Premier Relationship 5,070 798 Center 4,721 379 756 409 Investment Center 4,048 464 311 315 400 1,946 Financial Advisors 425 1,954 2,134 1,895 221 CRC Client Managers 2,048 75 Premier Client 2,320 2,624 Managers 1,812 2,104 1,175 2003 2004 2005 2006 2007 22
  • 25. Premier Banking & Investments: Key Takeaways • Bank of America has invested heavily in a scaled model that satisfies affluent clients’ banking & investing needs • The business produces strong growth and profit, and deepens customer relationships • We will grow through increased productivity, sales force expansion and by leveraging the strength of our franchise 23
  • 26. Growth Opportunities in Private Wealth Management Brian Moynihan President Global Wealth & Investment Management 24
  • 27. Private Wealth Management: Key Takeaways • The Private Bank of Bank of America is positioned for stronger growth • The business becomes an even more powerful competitor combined with U.S. Trust • We will grow the business by leveraging the franchise and through more disciplined relationship management 25
  • 28. Wealthy Segment Share of U.S. Personal Investable Assets Unique needs: Consumer • Wealthy clients want access to more specialized and High Net Worth 9% customized solutions 15% • 60% have relationships with at least five providers… but all want a primary advisor 77% • Business owners have Mass accumulated wealth faster than Affluent industry has adapted to serving them Total personal investable assets: $17.5Trillion1 26 1 Source: IXI Xillionaires 2004-2005
  • 29. Combining Strengths to Form Leading Wealth Manager The New Private Wealth Management at Bank of America 118,000 client relationships 2,500 ultra wealthy client relationships $270 billion in assets under management $6B in alternative investments $16B in specialty asset management No. 1 private bank and No. 5 wealth manager* leadership across products, services offices in 32 states, including CA, CT, MA, NY strong brand awareness enormous growth potential Pending legal closing. The proposed acquisition is subject to regulatory approval and, until such acquisition is consummated, U.S. Trust Corporation and Bank of America Corporation will remain separate and competing parties. *Private Bank ranking reflects SEC Filings, Company 10Qs. Wealth Managers ranked by assets, based 27 on individual clients with accounts of $1MM or more, in Barron’s June 30, 2006.
  • 30. Our Size, Scale and Market Penetration Client balances (2006) Products and services • Average deposits of $18.9B • Trust and wealth transfer services • Average loans of $31.2B • Liquidity management • Assets under management of $171.8B • Comprehensive investments • Brokerage assets of $28.3B • Credit expertise • Specialty asset management BAC Relationships With • Philanthropic services Wealthy Households • Family Wealth Advisors Facets of Life analysis 669,807 Market position • Largest private banking footprint in the U.S. with more than 150 locations • Leading private bank lender 295,227 • Leading manager of oil and gas properties • No. 1 trust provider in the U.S. 105,000 • No. 1 in foundation assets among U.S. banks • No. 1 manager of farm and ranch acreage Total BAC PB HNW in HNW Relationships BAC Clients Footprint 28
  • 31. Improving Performance Before the Merger Loans ($B) Deposits ($B) CAGR 5% 32.3 26.9 31.4 25.7 30.4 30.5 30.7 30.1 29.6 29.6 20.8 20.0 18.6 18.6 18.6 18.6 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 Assets Under Management ($B) AUM Net Flows ($B) 171.9 3% CAGR (1.6) 166.6 166.0 165.1 (3.2) 164.6 164.0 163.7 162.9 (4.9) 2004 2005 2006 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 29
  • 32. Growth Initiatives • Increase sales capacity Sales People 2,077 2,051 • Enhance client experience and 1,934 improve productivity – Client Management Process – Integrated desktop tool 2005 2006 2007 – Private Bank Relationship Center Client Delight • Deposits and liquidity (Top 2 Box Delight) 50% • Alternative investments 40% • Wealth transfer / business owners • Focused markets (exit International) 2005 2006 30
  • 33. Private Wealth Management: Key Takeaways • The Private Bank of Bank of America is positioned for stronger growth • The business becomes an even more powerful competitor combined with U.S. Trust • We will grow the business by leveraging the franchise and through more disciplined relationship management 31
  • 34. Growth Opportunities in Asset Management Keith Banks President, Columbia Management 32
  • 35. Asset Management: Key Takeaways • Columbia Management is well positioned given its scale, breadth of products and strong investment performance • We will take share across asset classes by capitalizing on strong performance and more intensive distribution efforts • We will compete to win a greater share from Bank of America’s institutional clients • Our strategic focus is on alternatives, international and retirement solutions to drive longer term growth 33
  • 36. Columbia Management Assets under management: $543B (as of 12/31/06) Total Assets Under Management ($B) 26th largest asset manager globally1 Columbia Management and Affiliates 15th largest U.S. based asset manager1 8th largest U.S. mutual fund family2 CAGR 10% 6th largest global money fund manager3 600 $543 AUM By Client Segment (As of 12/31/06) 500 $482 $451 208 400 184 154 28% 27% 300 87 High Net Retail 96 83 Worth 200 100 215 248 201 45% Institutional 0 2004 2005 2006 Equity Fixed Income Money Mkt/ Other 34 1Ranked by worldwide AUM as of 12/31/05, according to Pension & Investments, 5/29/06 2Source: Strategic Insight, 12/31/06; 3) Source: iMoneyNet,12/31/06
  • 37. Integration Highlights • Reduced number of retail mutual funds by more than 30% • Consolidated 6 fixed-income product centers into 2 • Consolidated core vendors providing services • Returned more than $200 million in savings to mutual fund shareholders through reduced expense ratios, since 2005 35
  • 38. Morningstar Equity Fund Rankings By Firm – 1 Year Rank Firm Count Assets 1 Yr Avg Mstar % Funds Above Median 1 Columbia Management 43 66,467 30.1 83.7% 2 GE Group 14 11,525 32.0 78.6% 3 Royce 16 23,066 33.4 68.8% 4 JP Morgan 50 45,589 34.8 80.0% 5 Vanguard 26 243,904 35.8 73.1% 6 AIM Investments 42 55,427 37.6 59.5% 7 Eaton Vance 29 19,552 37.9 65.5% 8 American Funds 12 696,057 39.4 66.7% 9 Allianz Funds 30 22,454 39.7 66.7% 10 Janus 48 78,140 40.6 60.4% 11 Evergreen 22 18,349 42.4 54.5% 12 Hartford Mutual Funds 54 76,710 43.1 66.7% 13 MFS 28 52,079 43.2 57.1% 14 T. Rowe Price 43 145,960 43.4 55.8% 15 Dreyfus Premier 34 12,367 44.2 58.8% 16 SEI 11 18,464 44.5 63.6% 17 Riversource 29 37,882 44.7 58.6% 18 William Blair 12 11,875 44.7 58.3% 19 ING Investors Trust 37 22,161 44.8 59.5% 20 Wells Fargo Advantage 42 25,782 45.7 50.0% ... 52 Graham, Mayo, van Otterloo 23 53,792 68.6 17.4% Average Rankings (min. 10 funds; $10 billion in AUM) as of 12/31/06 36 Columbia Management based on Morningstar data; rankings include actively managed equity funds but exclude index and Fund of Funds; share classes used may have limited eligibility and may not be available to all investors.
  • 39. Morningstar Equity Fund Rankings By Firm – 3 Year Rank Firm Count Assets 3 Yr Avg Mstar % Funds Above Median 1 JennisonDryden 17 17,990 27.3 76.5% 2 Columbia Management 43 66,467 29.0 88.4% 3 Vanguard 24 241,178 30.2 83.3% 4 Waddell & Reed 11 15,341 31.6 81.8% 5 Janus 42 77,845 32.3 71.4% 6 Allianz Funds 25 22,392 33.0 72.0% 7 T. Rowe Price 43 145,960 35.8 67.4% 8 SEI 10 18,118 37.1 70,0% 9 USAA 13 10,445 38.0 69.2% 10 Neuberger Berman 12 21,084 38.1 75.0% 11 Excelsior 12 12,627 38.3 75.0% 12 American Funds 12 696,057 38.6 58.3% 13 Royce 13 23,056 40.1 61.5% 14 Principal Investors 30 20,094 40.1 73.3% 15 AIM Investments 41 54,946 40.1 63.4% 16 Blackrock 42 45,345 40.4 54.8% 17 MFS 28 52,079 41.9 67.9% 18 OppenheimerFunds 27 83,950 42.0 59.3% 19 Fidelity Investments 143 600,530 42.1 61.5% 20 Van Kampen 24 48,130 42.4 58.3% ... 50 Legg Mason Partners 23 36,107 69.3 21.7% Average Rankings (min. 10 funds; $10 billion in AUM) as of 12/31/06 37 Columbia Management based on Morningstar data; rankings include actively managed equity funds but exclude index and Fund of Funds; share classes used may have limited eligibility and may not be available to all investors.
  • 40. Investment Performance in Fixed-Income and Money Market Percentile Rankings for Taxable Fixed-Income & Money Market Funds based on 3-Year Performance Taxable Fixed-Income Funds Money Market Funds 16th percentile 38th percentile Columbia Taxable Fixed-Income Funds combined average ranking: 38.5th percentile when compared to industry competitors. Source: Columbia Management based on Morningstar data. Mutual Fund complexes with at least $3 B in assets and 5 taxable fixed income funds. Rankings include taxable fixed income funds thru 12/31/06 Columbia Money Market Funds combined average ranking: 16th percentile when compared to industry competitors. Source: iMoneyNet; Money Fund Complexes with at least $10 B in assets and 7 money market funds with similar investment categories as Columbia Management (account performance is simple weighted) thru 11/30/06 38
  • 41. Stronger Performance, Stronger Sales Intermediary Net Sales ($B) 3-year CAGR 194% Institutional Short Term Net Sales ($B) $13.8 $10.2 $10.3 $1.4 2005 2006 $1.6 2004 2005 2006 Institutional Long Term Net Sales ($B) Intermediary sales rank of 173 wholesale complexes1 ($8.6) ($0.6) 1. American Funds 2. Franklin Templeton Investments 3. Oppenheimer Funds, Inc. 4. State Street Global Advisors 2005 2006 5. Columbia Management 39 1Ranked by 2006 LT and ETF AUM, source: FRC
  • 42. How we Realize Additional Growth Equity get our fair share across breadth of product portfolio Fixed Income take it to a higher level and grow assets Cash build upon our considerable strength Plus, greater penetration of Bank of America institutional franchise 40
  • 43. Increase Share With Existing Bank of America Clients U.S. corporations with pension assets of $200MM or more hold $2.9T in assets 80% are Bank of America clients Columbia Management share is < 3% 41
  • 44. How We Realize the Opportunity • Hired new head of distribution • Rebuilding the sales team • Broadening consultant advisory team • Aligning ourselves with Client Management Process in GCIB 42
  • 45. Columbia Management Long Term Strategic Initiatives Alternatives International Retirement 43
  • 46. Asset Management: Key Takeaways • Columbia Management is well positioned given its scale, breadth of products and strong investment performance • We will take share across asset classes by capitalizing on strong performance and more intensive distribution efforts • We will compete to win a greater share from Bank of America’s institutional clients • Our strategic focus is on alternatives, international and retirement solutions to drive longer term growth 44
  • 47. Global Wealth & Investment Management: Summary • We are a large and profitable competitor in attractive businesses and markets • Our competitive position and integrated model provides strong growth opportunities • Our best and most efficient way to grow is to leverage the strength of our franchise • We are capturing those growth opportunities, but there is much more ahead of us, and we are continuing to invest aggressively to capture it 45
  • 48. Enterprise Risk Management Amy Brinkley Chief Risk Officer
  • 49. Our Core Capability is Managing Risk to Enable Growth • Begins with a culture of performance management and accountability • Comprehensive & dynamic: Credit, Market, Operational and Strategic • Forward-looking: Insight and information to define risk appetite and to grow Sustainable growth 48
  • 50. Protecting and Growing Shareholder Value Changing Environment: Competitive Advantages: • Evolving customer needs • Unique insight • Unprecedented • Broad capabilities to take liquidity and manage risk intentionally • New global realities • Comprehensive and integrated management of risk and reward Our processes identify opportunities and risks that drive changes to our business models. 49
  • 51. Positioning our Economic Capital for Growth 2000 2006 Capital Net Income Capital Net Income 100% 100% 100% 100% GCSBB 29% • Capital well aligned to 48% 50% 53% earnings and clients • Supports consumer growth initiatives GCIB 50% • Focused reduction in GCIB credit capital 36% 33% 32% • Created more capital GWIM 6% velocity in GCIB 8% 8% Other 11% 15% 8% 9% 4% 50
  • 52. Consumer Health Household Balance Sheet (as of September) 60,000 40,000 $B 20,000 0 (20,000) 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Real Estate Assets Financial Assets Liabilities Net Worth • Despite consumers’ increasing levels of financial obligations relative to income, consumer aggregate net worth is at its highest levels and growing at a healthy pace • However, stress within the sub prime market may have an adverse impact on some local markets and specific communities 51 Source: Federal Reserve, Flow of Funds
  • 53. Our Managed Consumer Portfolio is a Balanced Mix of Traditional Products Total Consumer Average Balances $553.6B Other Consumer DFS 6% 3% Consumer Finance 4% Foreign Consumer Card 5% Residential Mortgage 42% US Consumer Card 25% Home Equity 15% • 8% YOY Growth • 57% Consumer Real Estate • 30% Consumer Card 52
  • 54. Consumer Real Estate Asset Quality 1st Mortgage- Originated and Serviced Avg. FICO 729 Avg. LTV 57% 31% 1st Mortgage- Serviced By Others 42% Avg. FICO 750 Avg. LTV 56% 27% Home Equity Avg. FICO 724 Avg. LTV 63% Asset Quality of the Consumer Real Estate portfolio is strong. 53 Note: All FICOs and LTVs current or refreshed
  • 55. Proprietary Insight as a Competitive Advantage Relationship Results in Improved Credit Performance Credit Performance of Total Market Credit Performance, both “On-Us” & “Off-Us”, of a BAC Customer with a Large Deposit Balance Delinquency Rate Credit Performance, “On-Us” only, of a BAC customer with a Large Deposit Balance At the same credit score, relationship customers outperform the market Low Credit Score Credit Quality High Credit Score • We have been increasing our use of analytics to understand customer behavior • This knowledge allows us to optimize our business model for the customer segments that we target 54
  • 56. Commercial Health Current vs. Projected S&P Earnings Growth • Corporate profits continue to grow Quarterly S&P 500 Earnings Growth Projected Growth Start of Quarter Actual (blended) Growth • Credit statistic trends remain 30% First Call Analyst favorable 25% Estimates 20% • Market liquidity is strong 15% 10% 5% E E 03 04 05 03 04 05 06 06 07 2Q 2Q 4Q 4Q 4Q 2Q 2Q 4Q 2Q Source: Thompson Financial High Grade Leverage and Coverage High Yield Leverage and Coverage Median Ratio LTM EBITDA to LTM Interest Expense Median Ratio LTM EBITDA to LTM Interest Expense Median Net Leverage Median Coverage Med Net Debt Leverage Med Coverage Median Ratio of Net Debt to LTM EBITDA Median Ratio of Net Debt to LTM EBITDA 8.0 2.7 4.3 4.1 7.5 4.1 3.9 2.5 7.0 3.9 3.7 2.3 3.7 6.5 3.5 3.5 2.1 3.3 6.0 3.3 1.9 3.1 5.5 3.1 2.9 2.9 1.7 5.0 2.7 2.7 1.5 4.5 2.5 2.5 2 4 6 8 6 0 0 2 4 96 04 06 95 97 98 99 00 01 02 03 05 -9 -9 -9 -9 -0 -9 -0 -0 -0 ar ar ar ar ar ar ar ar ar 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q M M M M M M M M M Source: Banc of America Securities, LLC and Factset. Source: Banc of America Securities, LLC and Factset. 55
  • 57. Managing Commercial Credit Risk Our Strengths Advantages in Managing Risk • Breadth of client access • Industry insights and focus • Capital markets and • Market knowledge enabling distribution an originate to distribute strategy • Integrated risk structure • Managing risk globally across products and client segments 56
  • 58. Commercial Credit Risk Profile Commitments as of 12/31/06 Average Funded Commitments 4Q06 $618.0B $238.5B Business Capital 2% DFS Business Capital Aviation Aviation 4% DFS Corporate Banking 2% 1% Business Banking 0% Corporate Banking 3% 23% 4% 44% Business Banking 7% GIB Leasing GMG 5% Leasing 18% 5% CREB GIB 11% 33% 9% CB Regions CREB GMG Other 22% 14% 11% 17% Other CB Regions Commercial Banking 10% 22% Other 46% 17% Commercial Banking Other 60% 10% • Rebalanced the portfolio • Improved risk evaluation and monitoring tools 57
  • 59. Commercial Credit Industry Profile Commitments by Industry 12/31/06 Technology* 3% Other* Real Estate 7% 12% Energy* 6% Media & Telecom* Diversified financials 4% 11% Food Products* 4% Commercial services Retailing & and supplies Consumer Products* 4% 9% Materials Government & public 5% education 6% Individuals and trusts 5% Capital Goods Healthcare 6% Consumer services equipment and 5% Banks & insurance* services 8% 5% • Effective management of industry and single name concentrations • Increased distribution risk in high-return leveraged finance activities • Improved revenue mix and more efficient use of capital 58
  • 60. Credit Comments ($MM) Average Expected Actual Losses Balances Average CONSUMER (Managed) 4Q06 2005 2006 Over a cycle Consumer Real Estate $316,058 0.03% 0.03% <10 bps Consumer Credit Card* 165,991 5.54% 3.90% 500-550 bps Other Consumer 71,524 2.30% 1.45% Total Consumer 553,573 *Average Annual RAM: 7.5 - 8.5% COMMERCIAL (Held) Corporate Banking 51,261 (0.27%) (0.14%) 30-60 bps Commercial Banking 143,293 0.20% 0.04% 30-60 bps Other Commercial 43,900 0.72% 0.72% Total Commercial $238,454 59
  • 61. Managing Market Risk VaR • Directionality New Products • Volatility • Risk forums • Correlation • New Products Committee • Concentration Market Risk Stress Analysis Counter Party Risk • Historical simulation • Ongoing due diligence • Event specific scenarios • Market focused • Hypothetical scenario • Collateral requirements • Business specific Proactive Risk Mitigation stress • Market focused • Structuring risk • Hedging • Integrated Risk Management (Market, Credit, Structuring) aligned with each business line • Risk limits set to encourage velocity and distribution 60
  • 62. Improved Revenue Generation From Market Based Activities Histogram of Daily Market Related Trading Revenue 90 2005 2006 80 70 Number of Days 60 50 40 30 20 10 0 less than -20 to - -10 to 0 0 to 10 10 to 20 20 to 30 30 to 40 40 to 50 greater -20 10 than 50 Revenue ($MM) • 96% of days with positive revenue in 2006 vs. 86% in 2005 • No trading days in 2006 with losses greater than $10mm • VaR maintained at ~$41mm 61
  • 63. Managing Operational Risk • Information security • Business continuity • Vendor management • Talent 62
  • 64. Protecting and Growing Shareholder Equity Changing Environment: Competitive Advantages: • Evolving customer needs, • Unique insight intense competition • Broader capabilities, more • Unprecedented liquidity, choices to take and manage convergence of risks risk more strategically • New global realities • Manage all risks that impact our business 63
  • 65. Financial Management Joe Price Chief Financial Officer Chan Martin Treasurer
  • 66. Bank of America Financial Management • Generate diverse revenue stream through customer/ client activity • Manage resulting interest rate risk in changing environment • Maintain capital and liquidity strength • Manage capital advantageously 66
  • 67. Financial Strength Earnings Liquidity Capital 67
  • 68. Diverse Revenue Sources 2001 2006 $36B* $74B* 44% 48% 56% 52% Net Interest Income Noninterest Income 68 * GAAP, FTE basis
  • 69. History of Revenue Growth Pro Forma FTE Revenue 80,000 70,000 60,000 7% CAGR $ millions 50,000 40,000 30,000 20,000 4% CAGR 10,000 - 2001 2002 2003 2004 2005 2006 Net Interest Income Noninterest Income 69 * 2001 – 2003 reflect summation of line items from former Fleet, MBNA and Bank of America financial statements. For 2004 – 2005 please refer to the Form 8-K filed April 10, 2006.
  • 70. Noninterest Revenue Diversity – 2006 $38 Billion Noninterest Revenue by Noninterest Revenue by Product/Activity Segment Other Other Equity Gains 6% 5% 8% Investment Global Banking Card Income Corporate & 6% 38% Investment Banking Global Trading 31% Consumer & 8% Small Business Investment & Global 54% Brokerage 12% Mortgage Wealth & Banking Service Investment Income Charges Management 1% 21% 10% 70
  • 71. Where We’ve Come From Held Core NII Trends* vs Market Spread Compression 10,000 350 bps. 8,000 250 bps. Core NII ($Millions) 6,000 150 bps. 4,000 50 bps. 2,000 - (50 bps.) 1Q05 4Q05 4Q04 2Q05 3Q05 1Q06 2Q06 1Q04 3Q04 4Q06 2Q04 3Q06 Combined Core NII 5-Year CMS vs. 3-month Libor 71 *Pro Forma Basis
  • 72. 2006 Revenue Growth Pro Forma FTE Revenue 80,000 2006 70,000 Growth 60,000 18% $ millions 50,000 40,000 30,000 20,000 3% 10,000 - 2001 2002 2003 2004 2005 2006 Net Interest Income Noninterest Income 72 * 2001 – 2003 reflect summation of line items from former Fleet, MBNA and Bank of America financial statements. For 2004 – 2005 please refer to the Form 8-K filed April 10, 2006.
  • 73. How Environment has Changed • Abundant liquidity • Productivity and technology impacts • Innovative financial products • Greater financial transparency • Monetary policy • Term structure of rates 73
  • 74. Interest Rate Risk Management • Interest rate sensitivity • Mortgage balances • Proprietary information 74
  • 75. Positioning Bank of America for Success • Diversity of revenue provides stability through cycles • Focused on growing across enterprise to drive revenue • Manage revenue stream holistically • Achieving results from integrated banking 75
  • 76. Integrated Banking Coming to Life Client Improvement After Dual Coverage Momentum Premier Banking Acceptance Product Mix and Revenue Growth YOY w th % Gr o Revenue +33 Growth Lift CMAS 41% +80% 32% 159% 60% Better Treasury 22% 8% Better Services 41% Better 36% +18% Better Deposits Credit Investment Revenue Business 27% 23% +12% Growth Growth Growth Lending 2005 2006 GWIM Converted Client Referrals • Migrating Premier relationships to GWIM 155,233 48% • Consumer channel diversification 104,879 • Originations distributed through GCIB 2005 2006 76
  • 77. Our Positioning for Tomorrow • Pressure on 2007 NII growth • Strength of businesses sustainable • Value of diverse revenue mix 77
  • 78. Liquidity and Capital Strength
  • 79. Liquidity – Time to Required Funding Time to Required Funding 33 Months Before Market Access is Required 30 27 24 21 18 15 2001 2002 2003 2004 2005 2006 Time to Required Funding Maximum Target Minimum Target 79
  • 80. Diversity of Debt Issuance Long-Term Debt Portfolio 2001 2006 Institutional Non-USD 8% Institutional Non-USD Institutional Retail 34% USD 6% 44% Institutional Retail USD 22% 86% 80
  • 81. Capital Strength and Ratios (in billions, as of 12/31) 2006 2005 Total Assets $1,460 $1,292 Total Shareholders’ Equity $135 $102 Tier 1 Capital Ratio 8.64 % 8.25% Tier 1 Leverage Ratio 6.36 % 5.91% Number Common Shares O/S 4.46 4.00 81
  • 82. Capital Usage
  • 83. Capital Usage $27 Billion Cash Flow Business Acquisitions Growth Strong Balance Share Sheet Repurchases Dividends 83
  • 84. Making Good Capital Decisions Capital Investment Primary Advantage Santander Serfin Enhance multicultural strategy Gain scale in merchant services National Processing business China Construction Tap into tremendous growth of Bank Chinese economy Complete national franchise and Fleet entry into NE wealth markets Become premier payments provider MBNA and leverage products and distribution Enhance capability to serve high-net U.S. Trust worth 84
  • 85. Actively Managing Excess Capital ($ in millions) • Returned more than $80 billion in $80,237 capital since 1998 • Repurchases plus dividends have $44,626 averaged 80% of net income $35,611 Dividends Repurchases 1998 1999 2000 2001 2002 2003 2004 2005 2006 Cumulative Capital returned as % 58 88 84 96 89 91 63 63 91 80 of earnings Tier 1 Tier 1 7.06% 8.64% 85
  • 86. Longer-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 86
  • 87. Summary • Generate diverse revenue stream through customer / client activity • Manage resulting interest rate risk in changing environment • Maintain capital and liquidity strength • Manage capital advantageously 87