This report on Form 10-Q and the documents into which it may be incorporated by reference may contain, and from time to time our management may make, certain statements that constitute forward-looking statements. Words such as "expects," "anticipates," "believes," "estimates" and other similar expressions or future or conditional verbs such as "will," "should," "would" and "could" are intended to identify such forward-looking statements. These statements are not historical facts, but instead represent the current expectations, plans or forecasts of Bank of America Corporation and its subsidiaries (the Corporation) regarding the Corporation's future results, integration of acquisitions and related cost savings, mortgage originations and market share, credit losses, credit reserves and charge-offs, consumer credit card net loss ratios, mortgage delinquencies, core net interest margin and other matters, relating to the Corporation and the securities that we may offer from time to time. These statements are not guarantees of future results or performance and involve certain risks, uncertainties and assumptions that are difficult to predict and often are beyond the Corporation's control. Actual outcomes and results may differ materially from those expressed in, or implied by, the Corporation's forward-looking statements.

You should not place undue reliance on any forward-looking statement and should consider the following uncertainties and risks, as well as the risks and uncertainties discussed elsewhere in this report, under Item 1A. "Risk Factors" of the Corporation's 2008 Annual Report on Form 10-K and in any of the Corporation's other subsequent SEC filings: negative economic conditions that adversely affect the general economy, housing prices, the job market, consumer confidence and spending habits which may affect, among other things, the credit quality of our loan portfolios (the degree of the impact of which is dependent upon the duration and severity of these conditions); the level and volatility of the capital markets, interest rates, currency values and other market indices which may affect, among other things, our liquidity and the value of our assets and liabilities and, in turn, our trading and investment portfolios; changes in consumer, investor and counterparty confidence in, and the related impact on, financial markets and institutions; the Corporation's credit ratings and the credit ratings of our securitizations, which are important to the Corporation's liquidity, borrowing costs and trading revenues; estimates of fair value of certain of the Corporation's assets and liabilities, which could change in value significantly from period to period; legislative and regulatory actions in the United States and internationally which may increase the Corporation's costs and adversely affect the Corporation's businesses and economic conditions as a whole; the impact of litigation and regulatory investigations, including costs, expenses, settlements and judgments; various monetary and fiscal policies and regulations of the U.S. and non-U.S. governments; changes in accounting standards, rules and interpretations and the impact on the Corporation's financial statements; increased globalization of the financial services industry and competition with other U.S. and international financial institutions; the Corporation's ability to attract new employees and retain and motivate existing employees; mergers and acquisitions and their integration into the Corporation, including its ability to realize the benefits and costs savings from and limit any unexpected liabilities acquired as a result of the Merrill Lynch acquisition; the Corporation's reputation; and decisions to downsize, sell or close units or otherwise change the business mix of the Corporation.

Forward-looking statements speak only as of the date they are made, and the Corporation undertakes no obligation to update any forward-looking statement to reflect the impact of circumstances or events that arise after the date the forward-looking statement was made.

The Corporation, headquartered in Charlotte, North Carolina, operates in all 50 states, the District of Columbia and more than 40 foreign countries. As of June 30, 2009, the Corporation provided a diversified range of banking and nonbanking financial services and products domestically and internationally through six business segments: Deposits, Global Card Services, Home Loans & Insurance, Global Banking, Global Markets and Global Wealth & Investment Management (GWIM).

At June 30, 2009, the Corporation had $2.3 trillion in assets and approximately 283,000 full-time equivalent employees. Notes to the Consolidated Financial Statements referred to in the MD&A are incorporated by reference into the MD&A. Certain prior period amounts have been reclassified to conform to current period presentation.

During the first six months of 2009, credit quality deteriorated further as the global economy continued to weaken. Consumers experienced high levels of stress from higher unemployment and underemployment as well as further declines in home prices. Consumer net charge-offs in our consumer real estate portfolios increased reflecting deterioration in the economy and housing markets particularly in geographic areas that have experienced the most significant declines in home prices. The weak economy also drove higher losses in the consumer credit card portfolio. These factors combined with further reductions in spending by consumers and businesses also negatively impacted the commercial portfolio. Higher commercial net charge-offs were driven by commercial real estate, reflecting deterioration across various property types, and the commercial domestic portfolio, reflecting broad-based deterioration in terms of borrowers and industries. In addition to increased net charge-offs, nonperforming assets and commercial criticized utilized exposure were higher and reserves were increased across most portfolios during the six months ended June 30, 2009. For more information on credit quality, see the Credit Risk Management discussion beginning on page 155.

Capital market conditions showed some signs of improvement during the first six months of 2009 and Global Markets took advantage of the favorable trading environment. However, during the second quarter of 2009 we were adversely impacted by credit valuation adjustments on derivative liabilities as the Corporation's credit spreads tightened. Market dislocations that occurred throughout 2008 continued to impact our results in the first six months of 2009 but to a lesser extent as we incurred reduced market disruption charges on legacy Bank of America positions compared to the same period in the prior year. We have also reduced certain asset levels in Global Markets for balance sheet efficiencies. For more information on Global Markets' results and their related exposures, see the discussion beginning on page 124.

In addition, GWIM was affected by the market downturn which adversely impacted our assets under management (AUM), related fees and lower brokerage commissions. For more information on our GWIM results see the discussion beginning on page 130.

The above conditions, together with continued weakness in the overall economy, will continue to affect many of the markets in which we do business and may adversely impact our results for the remainder of 2009. The degree of the impact is dependent upon the duration and severity of such conditions.

On February 10, 2009, pursuant to the Emergency Economic Stabilization Act of 2008 (EESA), the U.S. Treasury announced the creation of the Financial Stability Plan. This plan outlined a series of key initiatives; a new Capital Assistance Program (CAP) to help ensure that banking institutions have sufficient capital; the creation of a new Public-Private Investment Program (PPIP); the expansion of the Term Asset-Backed Securities Loan Facility (TALF); the extension of the FDIC's Temporary Liquidity Guarantee Program (TLGP) to October 31, 2009; the small business lending initiative; a broad program to stabilize the housing market by encouraging lower mortgage rates and making it easier for homeowners to refinance and avoid foreclosure; and a new framework of governance and oversight related to the use of funds received as a result of the Financial Stability Plan.

As part of the CAP, we, as well as several other large financial institutions, are subject to the Supervisory Capital Assessment Program (SCAP) conducted by the federal regulators. The objective of the SCAP is to assess losses that could occur under certain economic scenarios, including economic conditions more severe than we currently anticipate. As a result of the SCAP, in May 2009, federal regulators determined that the Corporation required an additional $33.9 billion of Tier 1 common capital to sustain the most severe economic circumstances assuming a more prolonged and deeper recession over the next two years than the majority of both private and government economists currently project. As of June 30, 2009, the Corporation increased common capital, including the expected impact of reductions in preferred dividends and related reduction in deferred tax disallowances, by approximately $39.7 billion which significantly exceeded the SCAP buffer. This Tier 1 common capital increase resulted from the exchange of approximately $14.8 billion aggregate liquidation preference of non-government preferred shares into approximately 1.0 billion common shares, an at-the-market offering of 1.25 billion common shares for $13.5 billion, a $4.4 billion benefit (inclusive of associated tax effects) related to the sale of shares of China Construction Bank (CCB), a $3.2 billion benefit (net of tax and including an approximate $800 million reduction in goodwill and intangibles) related to the gain from the contribution of our merchant processing business to a joint venture as discussed further in Recent Events below, $1.6 billion due to reduced forecasted preferred dividends throughout 2009 and 2010 related to the exchange of the preferred for common shares and a $2.2 billion reduction in the deferred tax asset disallowance for Tier 1 common capital from the preceding items.

On May 22, 2009, the FDIC adopted a rule designed to replenish the deposit insurance fund. This rule establishes a special assessment of five basis points
(bps) on each FDIC-insured depository institution's assets minus its Tier 1 capital with a maximum assessment not to exceed 10 bps of an institution's domestic deposits. This special assessment was calculated based on asset levels at June 30, 2009 and will be collected on September 30, 2009. The Corporation recorded a charge of $760 million in the second quarter of 2009 in connection with this assessment. Additionally, beginning April 1, 2009, the FDIC increased fees on deposits based on a revised risk-weighted methodology which increased the base assessment rates. The FDIC has indicated that an additional special assessment of up to five bps may be necessary in the fourth quarter of 2009 but the amount of that assessment, if any, is uncertain.

Additionally, on May 22, 2009, the President signed into law the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009. The majority of the CARD provisions will become effective in February 2010. The CARD Act of 2009 calls for many changes to credit card industry practices including significantly restricting banks' ability to change interest rates and assess fees to reflect individual consumer risk, changing the way payments are applied, and requiring changes to consumer credit card disclosures. Banks must also give customers 45 days notice prior to a change in terms on their account and the grace period for credit card payments will be extended from 14 days to 21 days. The CARD Act of 2009 will also require banks to review any accounts that were repriced since January 1, 2009 for a possible rate reduction. The Federal Reserve is in the process of publishing rules that clarify and implement a number of the provisions in this legislation. We are determining the impact this legislation may have on the Corporation's consolidated financial results.

On March 16, 2009, the U.S. Treasury announced that it will provide $15 billion to help increase small business owners' access to credit. As part of the lending initiative, the U.S. Treasury intends to begin making direct purchases of certain securities backed by Small Business Administration (SBA) loans to improve liquidity in the credit markets and it will stand ready to purchase new securities to ensure that financial institutions feel confident in extending new loans to local businesses. The program will also temporarily raise guarantees to up to 90 percent in the SBA's loan program and temporarily eliminate certain SBA loan fees. The Corporation continues to lend to credit-worthy small business customers through small business credit cards, loans and line of credit products.

On March 4, 2009, the U.S. Treasury provided details of the $75 billion Making Home Affordable program (MHA). The MHA is focused on reducing the number of foreclosures and making it easier for customers to refinance loans. The MHA consists of two separate programs, the Home Affordable Modification program which provides guidelines on loan modifications and the Home Affordable Refinance program which provides guidelines for loan refinancing. The Home Affordable Modification program intends to help up to three to four million at-risk homeowners avoid foreclosure by reducing monthly mortgage payments. This program will provide incentives to lenders to modify all eligible loans that fall under the guidelines of this program. The Home Affordable Refinance program is available to approximately four to five million homeowners who have a proven payment history on an existing mortgage owned by Fannie Mae or Freddie Mac. The MHA will help eligible homeowners refinance their mortgage loans to take advantage of current lower mortgage rates or to refinance adjustable-rate mortgages into more stable fixed-rate mortgages. We will continue to help our customers address financial challenges through these government programs and the continuation of our own home retention programs as discussed in more detail on page 155.

For additional information related to these and other programs, please refer to the detailed discussion provided in Regulatory Initiatives beginning on page 3 of the MD&A filed as Exhibit 99.1 to the Corporation's Current Report on Form 8-K filed on May 28, 2009.

On July 21, 2009, the Board of Directors (the Board) declared a regular quarterly cash dividend on common stock of $0.01 per share, payable on September 25, 2009 to common stockholders of record on September 4, 2009. On April 29, 2009, the Board declared a regular quarterly cash dividend on common stock of $0.01 per share, which was paid on June 26, 2009 to common stockholders of record on June 5, 2009. In addition, in July 2009, the Board declared aggregate dividends on preferred stock of $1.0 billion including $713 million in dividend payments to the U.S. government on the preferred stock issued pursuant to the TARP. In the second quarter of 2009 we recorded aggregate dividends on preferred stock of $1.2 billion including $713 million that were paid to the U.S. government. For further discussion on our liquidity and capital, see Liquidity Risk and Capital Management beginning on page 146.

On June 26, 2009, the Corporation entered into a joint venture agreement with First Data Corporation to form Banc of America Merchant Services, LLC. The joint venture provides payment solutions, including credit, debit and prepaid cards, and check and e-commerce payments, to merchants ranging from small business to corporate and commercial clients worldwide. The joint venture is approximately 46.5 percent owned by the Corporation and 48.5 percent owned by First

Data Corporation with the remaining stake held by a third party investor. The Corporation recorded a pre-tax gain of $3.8 billion related to the contribution of our merchant processing business to the joint venture.

On January 16, 2009, due to larger than expected fourth quarter losses at Merrill Lynch, the U.S. government and the Corporation entered into an agreement in principle in which the U.S. government would provide protection against the possibility of unusually large losses on a pool of the Corporation's financial instruments. As of the time of filing this document, we do not intend to enter into a binding agreement with the U.S. government and negotiations are continuing.

During 2008, we initiated loan modification programs projected to offer modifications for up to 630,000 borrowers, representing $100 billion in mortgage financings. During the six months ended June 30, 2009, to help homeowners avoid foreclosure, the Corporation has provided rate relief or agreed to other modifications for approximately 150,000 customers, compared to 230,000 for all of 2008. In addition, about 80,000 Bank of America customers are already in a trial period modification or were in the process of responding to an offer under the MHA program through mid July.

In addition to being committed to the loan modification programs, we extended more than $211 billion of credit during the second quarter, which was comprised of $111 billion in mortgages; $78 billion in commercial non-real estate; $9 billion in commercial real estate; $4 billion in domestic retail and small business credit card; $4 billion in home equity products; and more than $5 billion in other consumer credit products. Commercial credit extensions of $87 billion included commercial renewals of $55 billion.

On June 12, 2009, the FASB issued SFAS No. 166, "Accounting for Transfers of Financial Assets - an amendment of FASB Statement No. 140" (SFAS 166), and SFAS No. 167, "Amendments to FASB Interpretation No. 46(R)" (SFAS 167). The amendments will be effective January 1, 2010. SFAS 166 revises SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities" (SFAS 140), which establishes sale accounting criteria for transfers of financial assets. As described more fully in Note 8 - Securitizations, the Corporation routinely transfers mortgage loans, credit card receivables, and other financial instruments to SPEs that meet the definition of a QSPE, which are not currently subject to consolidation by the transferor. Among other things, SFAS 166 amends SFAS 140 to eliminate the concept of a QSPE. As a result, existing QSPEs will be subject to consolidation in accordance with the guidance provided in SFAS 167.

SFAS 167 amends FIN 46R by significantly changing the criteria by which an enterprise determines whether it must consolidate a VIE. A VIE is an entity, typically an SPE, which has insufficient equity at risk or which is not controlled through voting rights held by equity investors. FIN 46R currently requires that a VIE be consolidated by the enterprise that will absorb a majority of the expected losses or expected residual returns created by the assets of the VIE. SFAS 167 amends FIN 46R to require that a VIE be consolidated by the enterprise that has both the power to direct the activities that most significantly impact the VIE's economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. SFAS 167 also requires that an enterprise continually reassess, based on current facts and circumstances, whether it should consolidate the VIEs with which it is involved.

The adoption of the amendments on January 1, 2010 will result in the consolidation of certain QSPEs and VIEs that are not currently recorded on the Corporation's Consolidated Balance Sheet. These consolidations will result in an increase in net loans and leases, securities, short-term borrowings and long-term debt. These consolidations will also result in an increase in the provision for credit losses, along with other changes in classification in our income statement. The Corporation expects to consolidate certain credit card securitization trusts, commercial paper conduits and revolving home equity securitization trusts which hold aggregate assets of approximately $150 billion as of June 30, 2009, of which approximately $115 billion is related to credit card securitizations and commercial paper conduits that are currently considered in the Corporation's risk-weighted calculation for regulatory capital purposes. Total assets held by these entities as of January 1, 2010 are expected to be lower than these amounts due to anticipated paydowns of receivables held in the entities and scheduled maturities of securities issued by the entities. The Corporation is also evaluating other VIEs with which it is involved to determine the ultimate impact of adoption.

Net income was $3.2 billion, or $0.33 per diluted common share for the three months ended June 30, 2009 compared to $3.4 billion, or $0.72 per diluted common share, for the three months ended June 30, 2008. Net income was $7.5 billion, or $0.75 per diluted common share for the six months ended June 30, 2009, as compared to $4.6 billion, or $0.95 per diluted common share, for the six months ended June 30, 2008.

 Table 1
 Business Segment Total Revenue and Net Income
                                                            Three Months Ended June 30                                        Six Months Ended June 30
                                             Total Revenue (1)                 Net Income (Loss)                 Total Revenue (1)                  Net Income (Loss)
 (Dollars in millions)                       2009           2008                2009          2008               2009           2008                2009           2008

 Deposits
                                         $    3,495      $  4,400          $       505      $ 1,238          $    6,907      $  8,488          $     1,106      $  2,363
 Global Card Services (2)
                                              7,337         7,500               (1,618 )        582              14,846        15,430               (3,494 )       1,401
 Home Loans & Insurance
                                              4,461         1,261                 (725 )       (948 )             9,684         2,584               (1,223 )      (1,721 )
 Global Banking
                                              8,658         4,455                2,487        1,433              13,298         8,354                2,659         2,456
 Global Markets
                                              4,452         1,378                1,377          298              11,351           537                3,812          (691 )
 Global Wealth & Investment Management
                                              4,196         2,295                  441          581               8,559         4,237                  951           825
 All Other (2)                                  487          (563 )                757          226               4,521        (1,533 )              3,660           (13 )
Total FTE basis
                                             33,086        20,726                3,224        3,410              69,166        38,097                7,471         4,620
 FTE adjustment                                (312 )        (316 )                  -            -                (634 )        (616 )                  -             -
Total Consolidated                       $   32,774      $ 20,410          $     3,224      $ 3,410          $   68,532      $ 37,481          $     7,471      $  4,620

(1) Total revenue is net of interest expense and is on a FTE basis for the business segments and All Other. For more information on a FTE basis, see Supplemental Financial Data beginning on page 103.

(2) Global Card Services is presented on a managed basis with a corresponding offset recorded in All Other.

The table above presents total revenue and net income for the business segments; the following discussion presents a summary of the related results. For more information on these results, see Business Segment Operations beginning on page 110.

• Deposits' net income decreased due to lower revenue and higher noninterest expense. Total revenue declined due to a lower residual net interest income allocation from ALM activities and spread compression due to declining interest rates. These impacts offset the benefits of the migration of certain households' deposits from GWIM to the Deposits segment. In addition, noninterest income decreased due to changes in consumer spending behavior attributable to current economic conditions. Net income was also impacted by higher noninterest expense related to increased FDIC expenses including a special assessment. For more information on Deposits, see page 111.

• Global Card Services recorded a net loss due to higher credit costs and lower managed net revenue. Provision for credit losses increased as economic conditions led to deterioration in the consumer card and unsecured lending portfolio, including a higher level of bankruptcies. Also contributing to the provision were reserve additions related to maturing securitizations. Managed net revenue declined due to a decrease in card income partially offset by the beneficial impact of lower short-term interest rates on our funding costs.

In addition to the drivers discussed above, during the six months ended June 30, 2009, Global Card Services' results compared to the same period in 2008 were unfavorably impacted by the absence of Global Card Services' share of the Visa-related gain recorded in the first quarter of 2008. For more information on Global Card Services, see page 113.

• Home Loans & Insurance's net loss narrowed as an increase in total revenue was mostly offset by an increase in noninterest expense and higher provision for credit losses. Total revenue increased due to the acquisition of Countrywide and higher mortgage banking income as lower interest rates drove an increase in mortgage activity. Higher provision for credit losses was driven by economic and housing market weakness particularly in geographic areas experiencing higher unemployment and falling home prices. Noninterest expense increased primarily due to the addition of Countrywide. For more information on Home Loans & Insurance, see page 116.

• Global Banking's net income increased as total revenue rose due to the gain related to the contribution of the merchant processing business into a joint venture. Additional drivers included increased investment banking income

In addition to the drivers discussed above, during the six months ended June 30, 2009, Global Banking's results compared to the same period in 2008 were unfavorably impacted by the absence of Global Banking's share of the Visa-related gain recorded in the first quarter of 2008. For more information on Global Banking, see page 120.

• Global Markets' net income rose due to higher revenue partially offset by increased noninterest expense. The increase in total revenue was driven by . . .