(Logo: http://www.newscom.com/cgi-bin/prnh/20050720/CLW086LOGO-b )

The company also announced two initiatives to raise capital, targeting an8 percent Tier 1 capital ratio. The company intends to sell common stock witha target of raising $10 billion. In addition, the Board of Directors hasdeclared a quarterly dividend on common stock of $0.32 to be paid on December26, 2008 to shareholders of record on December 5, 2008. Assuming the currentnumber of issued and outstanding shares, the reduction from $0.64 paid inrecent quarters would add more than $1.4 billion to capital each quarter.

"These are the most difficult times for financial institutions that I haveexperienced in my 39 years in banking," said Kenneth D. Lewis, chairman andchief executive officer. "We believe it is prudent to raise capital to verysubstantial levels in this uncertain environment. Both economic and financialmarket conditions have changed significantly in the last two months. We werewilling to operate at capital levels over the short-term that were good, butnot at our targeted levels, given projections two months ago. We now believeit is important to be at or near our 8 percent Tier 1 capital ratio targetgiven the recessionary conditions and outlook for still weaker economicperformance which we expect to drive higher credit losses and depressearnings. We believe that achieving higher capital levels today will positionour company to provide credit to those consumers and businesses that areattracted to our strength and stability.

"We know many investors in our stock are quite disappointed with adividend reduction," Lewis continued. "It is not a decision we made lightly.However, we cannot pay out what we have not earned. Our goal is to resumedividend increases from the new level as soon as our earnings performancewarrants.

"All that said, our company continues to be profitable, and we have beenable in the last year to make a number of moves that should significantlyenhance our earnings when economic and financial market conditions improve.Our diversity and scale give us strength to deal with the current issues thatfew competitors can match. I have never been more optimistic about thelong-term prospects of Bank of America."

Lower earnings in the third quarter compared with a year earlier weredriven by a significant increase in provision expense, as credit costscontinued to rise, partially offset by advances in various income categorieslargely as a result of the acquisition of Countrywide Financial Corporation onJuly 1, 2008 and LaSalle Bank. Countrywide results were not included in priorperiod results.

Bank of America is clearly benefiting from consumer and business flight tosafety, as shown by year-over-year increases in loans and especially deposits.While consumer credit costs continued to increase in line with economicconditions, the company continued to increase the number of customer accountsand make progress in such categories as investment banking.

Third Quarter Selected Business Developments

-- Retail deposits increased $56 billion to $586 billion from June 30 toSeptember 30, 2008, including the addition of $35 billion from Countrywide,extending Bank of America's lead as the largest retail depository institutionin the United States. Excluding the impact of Countrywide, Bank of Americagained $21 billion in retail deposits during the quarter as consumers movedmoney to safety. That gain was almost three times the industry average.Service charges increased $84 million from the second quarter, but debit cardrevenue declined slightly as consumers pulled back on spending.

-- Reflecting deteriorating economic conditions, the consumer credit cardbusiness experienced a decrease in purchase volumes, slowing repayments andincreased delinquencies during the quarter. Credit card held net charge offsincreased to $1.24 billion, representing a net charge off rate of 6.14percent. Credit card managed net credit losses rose to $3.00 billion,representing a loss rate of 6.40 percent.

-- Investment banking income was up 22 percent from the previous year to$474 million. Revenue in Capital Markets and Advisory Services was adverselyimpacted by $952 million in CDO-related charges, $327 million in leveragedloan and commercial mortgage related writedowns and $190 million in losses ona commitment to buy back auction-rate securities from clients.

-- Equity investment income results were negatively impacted by writedownstotaling $320 million on the preferred stock of Fannie Mae and Freddie Mac.

-- Global Wealth and Investment Management revenue was affected by $630million in support for cash funds and $123 million in losses on a commitmentto buy back auction-rate securities from clients.

Third Quarter 2008 Financial Summary

Revenue and Expense

Revenue net of interest expense on a fully taxable-equivalent basis rose21 percent to $19.90 billion from $16.47 billion a year earlier.

Net interest income on a fully taxable-equivalent basis rose 33 percent to$11.92 billion from $8.99 billion in the third quarter of 2007 due to theacquisitions of LaSalle and Countrywide, loan and deposit growth, and theimpact of rate movements. The net interest yield increased 32 basis points to2.93 percent due to increased yields on market-based activity driven by thesteepening of the yield curve and the mix of products.

Noninterest income increased 7 percent to $7.98 billion from $7.48 billiona year earlier. The company booked a $630 million charge for providing supportto cash funds and losses of $313 million related to auction-rate securities.Noninterest income was adversely impacted by Global Corporate and InvestmentBanking's $1.8 billion in writedowns and charges associated with marketdisruptions, which included its portion of the losses associated withauction-rate securities. Service charges income rose due in part to theincrease in deposits. Mortgage banking income and insurance income also rosedue to the acquisition of Countrywide.

Noninterest expense rose 34 percent to $11.66 billion, largely reflectingthe addition of Countrywide and LaSalle. Pretax merger and restructuringcharges related to acquisitions were $247 million compared with $84 million ayear earlier. The efficiency ratio, on a fully taxable-equivalent basis, was58.60 percent.

Credit Quality

Credit quality continued to weaken during the quarter with more rapiddeterioration noted recently. The economy has moved to a recessionaryenvironment and the risk of a prolonged recession has increased. Consumers areexperiencing higher levels of stress from depreciating home prices, risingunemployment and tighter credit conditions. Higher levels of bankruptcies areoccurring and delinquencies and losses have increased in all consumerportfolios.

Increased loss and delinquency trends first experienced in the home equityand homebuilder portfolios have now spread into the first mortgage, unsecuredconsumer lending and credit card portfolios. Deterioration has been morepronounced in California and Florida, which have been hit harder by home pricedepreciation and rising unemployment than in other markets. Commercial lossesin sectors other than real estate and small business also increased, butremain below normalized ranges.

The company added almost $2 billion to the allowance for loan and leaselosses during the quarter through provision. The additions were mainly forconsumer loans, including the unsecured consumer lending, credit card andresidential mortgage portfolios. The current coverage ratios and amounts shownbelow include the addition of Countrywide.

Provision for credit losses was $6.45 billion, up from $5.83 billion inthe second quarter and from $2.03 billion in the third quarter of 2007.

Net charge-offs were $4.36 billion, or 1.84 percent of total average loansand leases compared with $3.62 billion, or 1.67 percent, in the second quarterand $1.57 billion, or 0.80 percent, in the third quarter of 2007.

Total managed net losses were $6.11 billion, or 2.32 percent, of totalaverage managed loans and leases compared with $5.26 billion, or 2.16 percent,in the second quarter and $2.83 billion, or 1.27 percent, in the third quarterof 2007.

Nonperforming assets were $13.36 billion or 1.42 percent of total loans,leases and foreclosed properties, compared with $9.75 billion, or 1.13percent, at June 30, 2008 and $3.37 billion, or 0.43 percent, at September 30,2007.

The allowance for loan and lease losses was $20.35 billion, or 2.17percent of loans and leases measured at historical cost compared with $17.13billion, or 1.98 percent, at June 30, 2008 and $9.54 billion, or 1.21 percent,at September 30, 2007.

Capital Management

Total shareholders' equity was $161.04 billion at September 30. Period-endassets were $1.83 trillion. The Tier 1 capital ratio estimate is 7.50 percent,down from 8.25 percent at June 30, 2008. The ratio was 8.22 percent a yearearlier.

Bank of America paid a cash dividend of $0.64 per share in the quarter.The company also issued about 109 million common shares, including 107 millionshares for the acquisition of Countrywide and 2 million shares related toemployee stock options and ownership plans. No shares were repurchased duringthe quarter. Period-end common shares issued and outstanding were 4.56 billionfor the third quarter, up from 4.45 billion for the second quarter of 2008 and4.44 billion in the year ago quarter.

Transition update

The LaSalle transition will reach a significant milestone in the fourthquarter with expected major systems conversions. In addition, the cost savesachieved in connection with the transaction will exceed original projections.

The transition at Countrywide, which was acquired on July 1, is on track.The company today reached a major milestone by announcing in conjunction witha number of state attorneys general a proactive home retention program thatwill modify troubled mortgages using principal reductions for nearly 400,000Countrywide customers nationwide (see separate press release issued earliertoday).

The combined company modified loans for more than 73,000 customers duringthe third quarter, up from 14,000 in the similar period in 2007.

Countrywide added $259 million in operating earnings to Bank of Americathis quarter, which was accretive to earnings per share by $0.06. Thetransition team is on track to reach targeted cost savings, which have beenincreased from original projections to $900 million after-tax, and expect tofully realize the benefits by 2011.

Bank of America agreed on September 15, 2008 to acquire Merrill Lynch. Thecompany has begun to announce the senior management team of the combinedcompany and the transition teams are beginning to map out their activities.

Note: Chief Executive Officer Kenneth D. Lewis and Chief Financial OfficerJoe L. Price will discuss third quarter 2008 results in a conference call at 5p.m. EDT today. The presentation and supporting materials can be accessed onthe Bank of America Investor Relations Web site athttp://investor.bankofamerica.com. For a listen-only connection to theconference call, dial 877-585-6241 or (international) 785-830-1916 and theconference 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 largecorporations with a full range of banking, investing, asset management andother financial and risk-management products and services. The companyprovides unmatched convenience in the United States, serving more than 59million consumer and small business relationships with more than 6,100 retailbanking offices, more than 18,000 ATMs and award-winning online banking withmore than 25 million active users. Bank of America offers industry leadingsupport to more than 4 million small business owners through a suite ofinnovative, easy-to-use online products and services. The company servesclients in more than 150 countries and has relationships with 99 percent ofthe U.S. Fortune 500 companies and 83 percent of the Fortune Global 500. Bankof America Corporation stock (NYSE: BAC) is a component of the Dow JonesIndustrial Average and is listed on the New York Stock Exchange.

Forward-Looking Statements

This press release contains forward-looking statements, includingstatements about the financial conditions, results of operations and earningsoutlook of Bank of America Corporation. The forward-looking statements involvecertain risks and uncertainties. Factors that may cause actual results orearnings to differ materially from such forward-looking statements include,among others, the following: 1) projected business increases following processchanges and other investments are lower than expected; 2) competitive pressureamong financial services companies increases significantly; 3) generaleconomic conditions are less favorable than expected; 4) political conditionsincluding the threat of future terrorist activity and related actions by theUnited States abroad may adversely affect the company's businesses andeconomic conditions as a whole; 5) changes in the interest rate environmentand market liquidity reduce interest margins, impact funding sources andeffect the ability to originate and distribute financial products in theprimary and secondary markets; 6) changes in foreign exchange rates increasesexposure; 7) changes in market rates and prices may adversely impact the valueof financial products; 8) legislation or regulatory environments, requirementsor changes adversely affect the businesses in which the company is engaged; 9)changes in accounting standards, rules or interpretations, 10) litigationliabilities, including costs, expenses, settlements and judgments, mayadversely affect the company or its businesses; 11) mergers and acquisitionsand their integration into the company; and 12) decisions to downsize, sell orclose 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 toreflect the impact of circumstances or events that arise after the date theforward-looking statements are made. For further information regarding Bankof America Corporation, please read the Bank of America reports filed with theSEC and available at www.sec.gov.

The Company has filed a registration statement (including a prospectus)with the SEC for the offering to which this communication relates. Before youinvest, you should read the prospectus in that registration statement andother documents the Company has filed with the SEC for more completeinformation about the Company and this offering. You may obtain thesedocuments for free by visiting EDGAR on the SEC Web site at www.sec.gov.Alternatively, Bank of America Corporation or the lead managers will arrangeto send you the prospectus if you request it by contacting Bank of AmericaCorporation, Corporate Treasury - Securities Administration, at 1-866-804-5241, Banc of America Securities LLC, toll free at 1-800-294-1322 or MerrillLynch & Co. at 1-866-500-5408.

http://www.bankofamerica.comSOURCE Bank of America Corporation