Bank of America Earns US$15 Billion, or US$3.30 Per Share, in 2007

CHARLOTTE, North Carolina, January 22 /PRNewswire/ --

- Fourth-Quarter Earnings Fall to US$268 Million, or US$0.05 Per Share

Bank of America Corporation today reported full-year 2007 net income declined 29 percent to US$14.98 billion from US$21.13 billion a year earlier. Diluted earnings per share fell 28 percent to US$3.30 from US$4.59 in 2006.

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In the fourth quarter of 2007 net income was US$268 million, or US$0.05 per diluted share, compared with US$5.26 billion, or US$1.16 a share, a year earlier. The quarter included results from LaSalle Bank, which Bank of America purchased on October 1.

"Our fourth quarter results were severely impacted by ongoing dislocations in capital markets and the slowing economy," said Kenneth D. Lewis, chairman and chief executive officer. "Even given that environment, we certainly are not pleased with our performance. However, we are cautiously optimistic about 2008, though we believe economic growth will be anemic at best in the first half.

"While we are intensely focused on managing through the current period, the diversity and strength of our company is allowing us to continue to invest in our businesses to drive future profit growth. The addition of U.S. Trust and LaSalle Bank should add to earnings this year and we believe that innovative products such as No Fee Mortgage PLUS, Keep the Change(TM), our unequalled product suite for small businesses as well as our integrated approach to serving larger business clients will continue to attract new customers."

Here are the primary drivers of reduced fourth quarter earnings from a year ago:

- Trading account losses of US$5.44 billion, compared with profits of US$460 million a year earlier, were driven by writedowns of collateralised debt obligations (CDOs) and weaker trading results. - Provision expense increased US$1.74 billion, largely due to a US$1.33 billion addition to the reserve for credit losses. Fourth Quarter Impact of Capital Markets on Financial Results - CDO-related writedowns totaled US$5.28 billion, reflecting the impaired value of the underlying assets based on expected credit losses, the lack of demand in the marketplace and the impact of credit rating agency downgrades of the securities. The writedowns reduced trading profits by about US$4.50 billion and other income by about US$750 million. - The company incurred about US$400 million in losses to support certain cash funds and also had subsequent writedowns of about US$400 million related to securities originally purchased from the funds at fair value. - Equity investment income fell US$750 million due to fewer opportunities for gains in the current markets. 2007 Business Highlights - In July, Bank of America completed the acquisition of U.S. Trust, creating U.S. Trust, Bank of America Private Wealth Management, within Global Wealth and Investment Management, to serve wealthy and ultra- wealthy clients. - Bank of America completed the purchase of LaSalle Bank on October 1, addressing a key geographic gap in its franchise and expanding its presence in the Chicago region and in Michigan. Integration of the two companies is proceeding as planned. - Total retail sales increased 9 percent to 49 million products, including strong growth in checking and savings products, first mortgage and online banking activations. - Year-end retail deposits increased nearly US$48 billion, or 10 percent, on higher account balances, new account growth and acquisitions. Debit card purchase volume increased 12 percent from the addition of new accounts and higher usage. - First mortgage originations of more than US$104 billion rose 22 percent, helped by the success of No Fee Mortgage PLUS, which accounted for 16 percent of the company's first mortgage production in the fourth quarter. - Total sales to small businesses with less than US$2.5 million in annual sales rose 26 percent, or 668,000 units, due to increases in sales of online banking and deposit products. - Business Lending, within Global Corporate and Investment Banking, reported a 31 percent, or US$70.45 billion, increase in total loans at year end. About US$44 billion was related to the acquisition of LaSalle with the rest mainly coming from organic growth. - Premier Banking and Investments, within Global Wealth and Investment Management, had a 23 percent increase in fee-based assets amid favorable market conditions as client balances rose and the number of relationships increased. - Total assets under management (AUM) in Global Wealth and Investment Management increased to more than US$643 billion including the impact of the U.S. Trust purchase and the sale of Marsico Capital Management. On a 1-year and 3-year AUM-weighted basis, 68 percent and 93 percent, respectively, of the Columbia and Excelsior equity funds were in the top 2 performance quartiles compared with their peer group. (1) 2007 Business Accomplishments - The introduction of the US$0 Online Equity Trades initiative resulted in nearly 55,000 net new self-directed accounts. - During the fourth quarter of 2007 the company introduced Mobile Banking, recording more than 600,000 subscribers who can access their accounts via mobile phone or handheld device. - Keep the Change(TM), Bank of America's savings program that combines debit cards and deposit products, had about 3 million enrollments during the year. - Global Wealth and Investment Management was named among the top 5 wealth managers in the U.S. by Barron's in 2007. (1) Results shown are defined by Global Wealth and Investment Management's calculation of the percentage of assets under management in the top two quartiles of categories based on Morningstar as of December 31, 2007. The category percentile rank was calculated by ranking the one and three year net returns of share classes within the categories. The assets of the number of funds within the top 2 quartile results were added and then divided by Columbia Management's total equity fund assets under management. Past performance is no guarantee of future results. The share class earning the ranking may have limited eligibility and may not be available to all investors.

Fourth Quarter 2007 Financial Summary

Revenue and Expense

Revenue net of interest expense on a fully taxable-equivalent basis declined 29 percent to US$13.32 billion from US$18.84 billion in the fourth quarter a year earlier.

Net interest income on a fully taxable-equivalent basis rose 10 percent to US$9.81 billion from US$8.96 billion in the fourth quarter of 2006. The increase was mainly due to the addition of LaSalle, consumer and commercial loan growth, a higher contribution from market-based net interest income and a one-time benefit related to the restructuring of the company's leasing business. The increase was partially offset by the impact of rate fluctuations. The net interest yield narrowed 14 basis points to 2.61 percent.

Noninterest income declined 65 percent to US$3.51 billion from US$9.89 billion. The decrease was driven by significant trading account losses, lower equity investment income, and losses related to the support of certain cash funds and subsequent writedowns related to securities originally purchased from the funds at fair value. The decline was offset in part by the US$1.50 billion gain on the sale of Marsico.

Noninterest expense rose 13 percent to US$10.28 billion from US$9.09 billion a year earlier as a result of higher personnel-related expenses, marketing costs and the previously announced Visa settlement. Pretax merger and restructuring charges related to acquisitions were US$140 million compared with US$244 million a year earlier.

Credit Quality

Credit quality indicators deteriorated from favorable levels experienced in 2006. Weakness in the housing and financial markets resulted in rising credit risk in some portfolios, most notably in home equity, homebuilders and small business. In addition, seasoning in recent home equity and small business vintages contributed to higher delinquencies and net losses.

Credit costs rose in the fourth quarter compared with the third quarter of 2007 and the fourth quarter of 2006 driven by additions to reserves and higher charge-offs in home equity because of weakness in the housing markets as well as continued growth and seasoning of the consumer portfolios. The increase from the fourth quarter of 2006 also was impacted by seasoning and deterioration in the small business portfolio and the absence in 2007 of commercial reserve releases experienced in 2006.

- Provision for credit losses was US$3.31 billion, up from US$2.03 billion in the third quarter of 2007, and US$1.57 billion in the fourth quarter of 2006. - Net charge-offs were US$1.99 billion, or 0.91 percent, of total average loans and leases compared with US$1.57 billion, or 0.80 percent, in the third quarter of 2007 and US$1.42 billion, or 0.82 percent, in the fourth quarter of 2006. - Total managed net losses were US$3.31 billion, or 1.34 percent, of total average managed loans and leases compared with US$2.84 billion, or 1.27 percent, in the third quarter of 2007 and US$2.45 billion, or 1.23 percent, in the fourth quarter of 2006. - Nonperforming assets were US$5.95 billion, or 0.68 percent of total loans, leases and foreclosed properties, at December 31, 2007. LaSalle contributed US$1.21 billion to the year-end levels. Nonperforming assets were US$3.37 billion, or 0.43 percent, at September 30, 2007 and US$1.86 billion, or 0.26 percent, at December 31, 2006. - The allowance for loan and lease losses was US$11.59 billion, or 1.33 percent of loans and leases measured at historical cost, at December 31, 2007. That compared with US$9.54 billion, or 1.21 percent, at September 30, 2007 and US$9.02 billion, or 1.28 percent, at December 31, 2006, which excluded LaSalle.

Capital Management

Total shareholders' equity was US$146.80 billion at December 31. Period-end assets were US$1.72 trillion. The Tier 1 capital ratio was 6.87 percent, down from 8.22 percent at September 30, 2007 and 8.64 percent a year ago due to the impact of the US$21 billion cash purchase of LaSalle and lower net income in the second half of 2007.

During the quarter, Bank of America paid a cash dividend of US$0.64 per share. The company also issued about 4 million common shares related to employee stock options and ownership plans and repurchased nearly 3 million common shares. Period-end common shares issued and outstanding were 4.44 billion for the fourth and third quarters of 2007 and 4.46 billion for the fourth quarter of 2006.

Full-Year 2007 Financial Summary

Revenue

Revenue on a fully taxable-equivalent basis declined 8 percent to US$68.07 billion from US$73.80 billion a year earlier.

Net interest income on a fully taxable-equivalent basis increased to US$36.18 billion from US$35.82 billion in 2006. The increase was mainly due to a higher contribution from market-based net interest income, consumer and commercial loan growth and the addition of LaSalle. The increase was partially offset by the impact of rate fluctuations. The net interest yield declined 22 basis points to 2.60 percent reflecting ongoing spread compression.

Noninterest income fell 16 percent to US$31.89 billion from US$37.99 billion in 2006. The results were reduced primarily by CDO-related writedowns, driving trading account losses of US$5.13 billion and losses related to the support of certain cash funds. The decline was offset in part by the Marsico gain and improvements in equity investment income of US$875 million, investment and brokerage services income of US$691 million, service charges of US$684 million and gains on sales of debt securities of US$623 million.

Efficiency

The efficiency ratio on a fully taxable-equivalent basis for 2007 was 54.37 percent (53.77 percent excluding merger and restructuring charges). Noninterest expense increased 4 percent to US$37.01 billion from US$35.60 billion a year ago mainly due to the addition of U.S. Trust and LaSalle and costs of business initiatives.

Credit Quality

Provision expense increased US$3.38 billion to US$8.39 billion in 2007 partly because of higher net charge-offs and the absence of 2006 commercial reserve releases. The company added reserves in the home equity and homebuilder loan portfolios on continued weakness in the housing markets. Reserves also were added for small business portfolio seasoning and deterioration, as well as growth in the consumer portfolios. The increases were partially offset by the release of reserves from the sale of the Argentina portfolio in the first quarter of 2007.

Net charge-offs totaled US$6.48 billion, or 0.84 percent of average loans and leases, compared with US$4.54 billion, or 0.70 percent in 2006. The increase was primarily driven by seasoning of the consumer portfolio, seasoning and deterioration in the small business and home equity portfolios as well as lower commercial recoveries.

Capital Management

For 2007, Bank of America paid US$10.70 billion in cash dividends to common shareholders. The company also issued more than 53 million common shares, primarily related to employee stock options and ownership plans, and repurchased nearly 74 million common shares for US$3.79 billion.

2007 Business Segment Results Global Consumer and Small Business Banking(1) (Dollars in millions) YTD 2007 YTD 2006 Total managed revenue net of interest expense(2) US$47,682 US$44,926 Provision for credit losses 12,929 8,534 Noninterest expense 20,060 18,375 Net income 9,430 11,378 Efficiency ratio 42.07% 40.90% Return on average equity 14.94 18.11 Managed loans and leases(3) US$327,810 US$288,131 Deposits(3) 328,918 332,242 At 12/31/07 At 12/31/06 Period ending deposits US$344,850 US$329,195 (1) Managed basis. Managed basis assumes that loans that have been securitized were not sold and presents earnings on these loans in a manner similar to the way loans that have not been sold (i.e. held loans) are presented. For more information and detailed reconciliation, please refer to the data pages supplied with this Press Release. (2) Fully taxable-equivalent basis (3) Balances averaged for period

Managed net revenue rose 6 percent as higher service charges, debit card, mortgage banking and credit card income helped generate a 13 percent increase in noninterest income.

Net income declined 17 percent from a year ago, as credit costs rose and expenses increased 9 percent mainly due to increases in technology, overhead and personnel expenses.

Provision for credit losses increased US$4.40 billion, or 51 percent, to US$12.93 billion in 2007 compared with 2006. Net losses rose US$3.19 billion to US$10.82 billion in 2007 reflecting portfolio growth and housing market weakness. Reserves were added for deterioration in the home equity portfolio, reflecting weakness in the housing market, seasoning and deterioration of the small business portfolio and growth in the businesses.

- Deposits net revenue increased 6 percent to US$17.58 billion and net income increased by 7 percent to US$5.23 billion as service charges and debit card income increased. - Card Services managed net revenue grew 4 percent to US$25.53 billion due to growth in cash advance fees and interchange income while net income of US$3.71 billion was down 35 percent as credit costs rose. - Consumer Real Estate had US$3.68 billion in net revenue, a 26 percent increase, as mortgage banking income rose. Net income declined 48 percent to US$371 million on higher credit costs.

Fourth quarter net revenue for Global Consumer and Small Business Banking increased 7 percent to US$12.51 billion, reflecting higher service charges and mortgage banking income and the addition of LaSalle. Net income declined 28 percent to US$1.87 billion compared with a year earlier as the provision for credit losses rose 55 percent and expenses increased 15 percent mainly due to higher personnel and overhead costs and the addition of LaSalle.

Global Corporate and Investment Banking (Dollars in millions) YTD 2007 YTD 2006 Total revenue net of interest expense(1) US$13,417 US$21,161 Provision for credit losses 652 9 Noninterest expense 11,925 11,578 Net income 538 6,032 Efficiency ratio 88.88% 54.71% Return on average equity 1.19 14.33 Loans and leases(2) US$274,015 US$232,623 Trading-related assets(2) 362,193 336,860 Deposits(2) 220,724 194,972 (1) Fully taxable-equivalent basis (2) Balances averaged for period

Net revenue declined 37 percent and net income fell 91 percent on CDO-related writedowns and weaker trading results.

The provision for credit losses increased US$643 million compared with a year ago. The increase was driven by the absence of 2006 reserve releases, higher net charge-offs and additions to reserves related to weakness in the homebuilder loan portfolio. Net charge-offs increased US$258 million to US$504 million in 2007 as retail automotive and other dealer-related portfolio losses rose due to growth, seasoning and deterioration and commercial recoveries declined.

- Business Lending net revenue increased 10 percent, of which 5 percent came from LaSalle, to US$6.17 billion due to portfolio growth, partially offset by spread compression. Net income fell 6 percent to US$2.12 billion as credit costs rose. Average loans and leases increased 14 percent to nearly US$249 billion. - Capital Markets and Advisory Services had net revenue of US$303 million, including more than US$5 billion in trading account losses. The business had a net loss of US$3.36 billion compared with net income of US$1.68 billion a year earlier. - Treasury Services net revenue declined 1 percent to US$7.14 billion, while net income decreased 10 percent to US$2.06 billion on higher noninterest expense.

In the fourth quarter, Global Corporate and Investment Banking reported a net revenue loss of US$781 million compared with revenue of US$5.15 billion, and a net loss of US$2.76 billion compared with net income of US$1.39 billion in the year ago quarter.

Global Wealth and Investment Management (Dollars in millions) YTD 2007 YTD 2006 Total revenue net of interest expense(1) US$7,923 US$7,357 Provision for credit losses 14 (39) Noninterest expense 4,635 3,867 Net income 2,095 2,223 Efficiency ratio 58.50% 52.57% Return on average equity 18.87 22.28 Loans and leases(2) US$73,469 US$60,910 Deposits(2) 124,867 102,389 (in billions) At 12/31/07 At 12/31/06 Assets under management US$643.5 US$542.9 (1) Fully taxable-equivalent basis (2) Balances averaged for period

Net revenue in Global Wealth and Investment Management rose 8 percent as record brokerage income and a 26 percent increase in asset management fees were partially offset by the impact of support provided to certain cash funds. Record asset management fees of US$3.53 billion were helped by higher asset levels on net client inflows of US$25 billion, market appreciation of US$16 billion and the acquisition of U.S. Trust and LaSalle.

Net income declined 6 percent as noninterest expense rose 20 percent due to the addition of U.S. Trust, continued investment in client-facing associates, higher incentive expense related to revenue generating activities and increased marketing costs.

In December, Bank of America completed the sale of Marsico, which resulted in a US$61 billion net decrease in assets under management. The gain of US$1.50 billion is reflected in All Other.

- U.S. Trust, Bank of America Private Wealth Management net revenue rose 22 percent to US$2.32 billion and net income rose 4 percent to US$467 million driven by the acquisition of U.S. Trust. - Columbia Management net revenue declined 2 percent to US$1.51 billion, reflecting about US$400 million in support for certain cash funds ofset in part by 21 percent growth in asset management fees including the addition of U.S. Trust. Net income decreased 41 percent to US$196 million. - Premier Banking and Investments net revenue rose 9 percent to US$3.75 billion on record brokerage income and 19 percent growth in fee-based assets, excluding the impact of LaSalle. Net income increased 8 percent to US$1.28 billion.

Fourth quarter net revenue in Global Wealth and Investment Management fell 4 percent to US$1.83 billion from a year ago. Net income in the period was 42 percent lower at US$334 million compared with US$573 million from a year earlier.

All Other(1) (Dollars in millions) YTD 2007 YTD 2006 Total revenue net of interest expense(2) US$(954) US$360 Provision for credit losses (5,210) (3,494) Noninterest expense 390 1,777 Net income 2,919 1,500 Loans and leases(3) US$100,860 US$70,753 (1) All Other consists primarily of equity investments, the residual impact of the allowance for credit losses and the cost allocation processes, Merger and Restructuring Charges, intersegment eliminations, and the results of certain consumer finance and commercial lending businesses that are being liquidated. All Other also includes the offsetting securitization impact to present Global Consumer and Small Business Banking on a managed basis. For more information and detailed reconciliation, please refer to the data pages supplied with this Press Release. (2) Fully taxable-equivalent basis (3) Balances averaged for period

All Other net income was US$2.92 billion, an increase of 95 percent from US$1.50 billion a year earlier. The increase was mainly due to the US$1.50 billion pretax gain from the sale of Marsico and an increase of US$873 million in equity investment income. Partially offsetting the increase were the absence of the results and the related gain from the sale of certain international operations in the prior year and losses of about US$400 million on the subsequent writedowns of securities that were originally purchased from certain company-managed cash funds at fair value.

Net income in the fourth quarter was US$825 million compared with US$691 million a year earlier, primarily driven by the Marsico sale, partially offset by the absence of the net income of certain international operations that were sold in the prior year and losses in 2007 related to the securities that were originally purchased from certain cash funds at fair value.

Note: Chief Executive Officer Kenneth D. Lewis and Chief Financial Officer Joe L. Price will discuss fourth quarter 2007 results in a conference call at 9:30 a.m. (Eastern Time) today. The presentation and supporting materials can be accessed on the Bank of America Investor Relations Web site at http://investor.bankofamerica.com. For a listen-only connection to the conference call, dial +1-800-894-5910 and the conference ID: 79795.

Bank of America

Bank of America is one of the world's largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services. The company provides unmatched convenience in the United States, serving more than 59 million consumer and small business relationships with more than 6,100 retail banking offices, nearly 19,000 ATMs and award-winning online banking with more than 12 million active users. Bank of America is the No. 1 overall Small Business Administration (SBA) lender in the United States and the No. 1 SBA lender to minority-owned small businesses. The company serves clients in 175 countries and has relationships with 99 percent of the U.S. Fortune 500 companies and 80 percent of the Fortune Global 500. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.

This press release 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 and market liquidity reduce interest margins, impact funding sources and effect the ability to originate and distribute financial products in the primary and secondary markets; 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. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made. Bank of America does not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements are made. 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.

Columbia Management: Columbia Management Group, LLC ("Columbia Management") is the investment management division of Bank of America Corporation. Columbia Management entities furnish investment management services and products for institutional and individual investors. Columbia Funds and Excelsior Funds are distributed by Columbia Management Distributors, Inc., member FINRA and SIPC. Columbia Management Distributors, Inc. is part of Columbia Management and an affiliate of Bank of America Corporation.

Investors should carefully consider the investment objectives, risks, charges and expenses of any Columbia Fund or Excelsior Fund before investing. Contact your Columbia Management representative for a prospectus, which contains this and other important information about the fund. Read it carefully before investing.

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