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 integration of the Merrill Lynch and Countrywide acquisitions and related cost savings, future results and revenues, credit losses, credit reserves and charge-offs, delinquency trends, nonperforming assets levels, level of preferred dividends, service charges, the closing of the sale of Columbia Management and First Republic Bank, competitive position, the consolidation of certain VIEs and QSPEs and the related financial statement and regulatory impact 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 Corporation's modification policies and related results; 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 (including the CARD Act of 2009 and related regulations) 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 (including SFAS 166 and 167) 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 September 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 September 30, 2009, the Corporation had $2.3 trillion in assets and approximately 282,000 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.

The economic recession accelerated in late 2008 and continued to deepen into the first half of 2009 but has shown some signs of stabilization and possible improvement toward the end of the third quarter. Consumers experienced high levels of stress from higher unemployment and underemployment as well as further declines in home prices. These factors led to lower consumer spending, negatively impacting growth in the consumer loan portfolio including credit card and real estate. Consumer net charge-offs in our credit card and 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 commercial portfolio declined as a result of these factors combined with further reductions in spending by businesses and the resurgence of capital markets which allowed corporate clients to issue bonds and equity to replace loans as a source of funding. 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 exposures were higher which contributed to increased reserves across most portfolios during the nine months ended September 30, 2009. For more information on credit quality, see the Credit Risk Management discussion beginning on page 159.

Capital market conditions showed some signs of improvement during the first nine months of 2009 and Global Markets took advantage of the favorable trading environment. However, during the second and third quarters of 2009 our results were adversely impacted by credit spread adjustments on certain Merrill Lynch structured notes and the Corporation's derivative liabilities as our credit spreads improved. Market dislocations that occurred throughout 2008 continued to impact our results in the first nine months of 2009 but to a lesser extent as we experienced 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 its related exposures, see the discussion beginning on page 128 and for more information on the impact of the Merrill Lynch structured notes see the All Other discussion beginning on page 139.

In addition, our assets under management (AUM) were adversely impacted by the market downturn in the fourth quarter of 2008 and first quarter of 2009 which drove lower fees and brokerage commissions. The market downturn showed some signs of improvement in the second and third quarters of 2009. In addition we continued to provide support to certain cash funds during the first nine months of 2009 although to a lesser extent than in the prior year. As of September 30, 2009, all capital commitments to these cash funds have been terminated. For more information on GWIM's results and related cash funds support see the discussion beginning on page 133.

The above conditions, together with continued weakness in the overall economy and recent and proposed regulatory changes, will continue to affect many of the markets in which we do business and may adversely impact our results for the remainder of 2009 and into 2010. However, we do not expect the impacts to be as significant as those experienced in the first nine months of 2009. The degree of the impact is dependent upon the timing of the economic recovery.

On October 22, 2009, the House Financial Services Committee proposed the Consumer Financial Protection Agency Act of 2009 (CFPA Act of 2009) that would establish the Consumer Financial Protection Agency (CFPA) as an independent executive agency to regulate the provisions under the CFPA Act of 2009 and certain other consumer protection acts. In addition, this CFPA Act of 2009 would require the CFPA to seek to promote transparency, simplicity, fairness, accountability, and access in the market for consumer financial products or services and authorizes the agency to take administrative actions to enforce the provisions in the acts noted above.

In 2008, the FDIC implemented the Temporary Liquidity Guarantee Program (TLGP) to strengthen confidence and encourage liquidity in the banking system by allowing the FDIC to guarantee senior unsecured debt (e.g., promissory notes, unsubordinated unsecured notes and commercial paper) up to prescribed limits, issued by participating entities beginning on October 14, 2008, and continuing through October 31, 2009. The Corporation participated in this program, however, as announced in September 2009, due to improved market liquidity and the Corporation's ability to issue debt without the FDIC guarantee, the Corporation, with the FDIC's agreement, has exited the program. The TLGP also offered the Transaction Account Guarantee Program (TAGP) that provides guarantees on noninterest-bearing deposit accounts held at participating FDIC-insured institutions on balances in excess of $250,000. The Corporation is expected to opt out of the six-month extension of the TAGP which extends the program to June 30, 2010 and expects to exit the TAGP effective December 31, 2009. For further discussion on our liquidity and capital, see Liquidity Risk and Capital Management beginning on page 150.

On September 29, 2009, the FDIC issued a Notice of Proposed Rulemaking (NPR) that would require insured institutions to prepay on December 30, 2009 their estimated quarterly risk-based assessments for the fourth quarter of 2009

and for all of 2010, 2011 and 2012. For the fourth quarter of 2009 and for all of 2010, the prepaid assessment rate would be based on each institution's total base assessment rate for the third quarter of 2009, modified to assume that the assessment rate in effect for the Corporation on September 30, 2009 had been in effect for the entire third quarter of 2009. The prepaid assessment rates for 2011 and 2012 would be equal to the Corporation's modified third quarter 2009 total base assessment rate plus three basis points (bps). Each institution's prepaid assessment base would be calculated using its third quarter 2009 assessment base, adjusted quarterly for an estimated five percent annual growth rate in the assessment base through the end of 2012. In addition, the prepayment will be paid by each of the Corporation's banking subsidiaries and not by the parent company. As the prepayment is related to future periods it would be recorded as a prepaid asset and recognized as expense over the coverage period. The FDIC expects to issue a final ruling on the NPR during the fourth quarter of 2009.

On September 15, 2009, joint regulatory agencies (e.g., the OCC, Federal Reserve and FDIC) issued an NPR regarding risk-based capital and the impact of adoption of 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), on consolidation of VIEs. The proposed rule considers eliminating the exclusion of certain asset-backed commercial paper (ABCP) program assets from risk-weighted assets and provides a reservation of authority to permit the agencies to require banks to treat structures that are not consolidated under the accounting standards as if they were consolidated for risk-based capital purposes, commensurate with the risk relationship of the bank to the structure. The Corporation is currently evaluating the potential impact of adopting SFAS 166 and SFAS 167 and this NPR on our risk-based capital levels and ratios. The joint regulatory agencies expect to issue a final ruling on this NPR during the first quarter of 2010.

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 including a new Capital Assistance Program (CAP) to help ensure that banking institutions have sufficient capital. 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 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. We achieved the increased capital requirement during the first half of 2009 through strategic transactions that increased common capital, including the expected reductions in preferred dividends and related reduction in deferred tax asset disallowances, 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, $1.6 billion due to reduced actual and 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 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 was 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.

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 Act 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. Under the CARD Act of 2009, banks must 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. As announced in October 2009, the Corporation will not increase interest rates on consumer credit accounts in response to provisions in the CARD Act prior to the effective date of the CARD Act unless the customer's account falls past due or is based on a variable interest rate. The Federal Reserve is in the process of publishing rules that clarify and implement a number of the provisions in this legislation. In addition, in the fourth quarter of 2009, the Federal Reserve is expected to issue the final Electronic Funds Transfer Act (i.e., Regulation E) which could negatively

impact future net revenue growth related to deposits. We continue to review the potential impact these initiatives 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 this 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 related to 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 is designed 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 in Recent Events below.

These regulatory initiatives, among others, present certain risks in managing the results of our businesses. Many of the industry changes, such as the CARD Act of 2009 and potential regulatory reform legislation discussed above, could require us to change certain of our business practices, impose additional costs on us, or otherwise adversely affect our business operations. Recent and proposed regulatory changes, such as the NPR issued by joint regulatory agencies regarding the adoption of SFAS 166 and SFAS 167, TARP and other changes (including exceptional TARP assistance repayment guidelines) may impact our results and financial condition. In response to these risk factors, the Corporation has taken numerous actions to address these risks, including realigning certain committees of the Board of Directors (the Board). For more information regarding these committees see the Managing Risk discussion on page
149. For more information on risk factors please refer to Part II-Item 1A. Risk Factors beginning on page 216.

For additional information related to these regulatory initiatives 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 October 28, 2009, the Board declared a regular quarterly cash dividend on common stock of $0.01 per share, payable on December 24, 2009 to common stockholders of record on December 4, 2009. On July 21, 2009, the Board declared a regular quarterly cash dividend on common stock of $0.01 per share, which was paid on September 25, 2009 to common stockholders of record on September 4, 2009. In addition, in October 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 third quarter of 2009, we recorded aggregate dividends on preferred stock of $1.1 billion including $713 million to the U.S. government. For further discussion on our liquidity and capital, see Liquidity Risk and Capital Management beginning on page 150.

On October 21, 2009, the Corporation reached an agreement to sell First Republic Bank (First Republic) to a number of investors, led by First Republic's existing management, Colony Capital, LLC and General Atlantic, LLC. First Republic, acquired on January 1, 2009 as part of the Merrill Lynch acquisition, provides personalized relationship-based banking services, including private banking, private business banking, real estate lending, trust, brokerage and investment management. First Republic is a standalone bank that operates primarily on the west coast and in the northeast and caters to high-end customers. As of September 30, 2009, First Republic had approximately $19.0 billion in total assets, $16.0 billion in deposits, and $15.0 billion in AUM. The transaction is expected to close in the second quarter of 2010 subject to regulatory approval.

On September 30, 2009, the Corporation reached an agreement to sell the long-term asset management business of Columbia Management (Columbia) to Ameriprise Financial, Inc., for consideration of approximately $900 million to $1.2 billion subject to certain adjustments including, among other factors, customer retention by the buyer. The sale includes the management of Columbia's equity and fixed-income mutual funds and separate accounts. The transaction is expected to close in the second quarter of 2010 and is subject to regulatory approvals and customary closing conditions, including fund board, fund shareholder and other required client approvals.

On September 21, 2009, the Corporation reached an agreement to terminate its term sheet with the U.S. government under which the U.S. government agreed in principle to provide protection against the possibility of unusually large losses on a pool of the Corporation's financial instruments that were acquired from Merrill Lynch. In connection with the termination of the term sheet, the Corporation paid a total of $425 million in the third quarter to the U.S. government to be allocated among the U.S. Treasury, the Federal Reserve and the FDIC.

To help homeowners avoid foreclosure, we have provided rate relief or agreed to modifications with approximately 215,000 customers during the first nine months of 2009. In addition, through November 1, 2009 over 125,000 Bank of America customers are already in a trial period modification under the MHA program.

In addition to being committed to the loan modification programs, we extended approximately $183.7 billion of credit during the third quarter which was comprised of $95.7 billion in mortgages, $65.5 billion in commercial non-real estate, $8.3 billion in commercial real estate, $4.5 billion in domestic retail and small business credit card, $2.7 billion in home equity products; and approximately $7.0 billion in other consumer credit products. Commercial credit extensions of $73.8 billion included commercial renewals of $50.9 billion.

On June 12, 2009, the FASB issued two new accounting standards: SFAS 166 and SFAS 167, which will amend FASB ASC 860-10, "Transfers and Servicing," and FASB ASC 810-10, "Consolidation of Variable Interest Entities." These statements are effective on January 1, 2010. As described more fully in Note 1 - Summary of Significant Accounting Principles to the Consolidated Financial Statements, SFAS 166 revises existing sale accounting criteria for transfers of financial assets and SFAS 167 significantly changes the criteria by which an enterprise determines whether it must consolidate a VIE. The adoption of SFAS 166 and 167 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. For more information, see Estimated Impact of Adopting SFAS 166 and 167 beginning on page 155.

Net income (loss) was $(1.0) billion, or $(0.26) per diluted common share after preferred dividends for the three months ended September 30, 2009, compared to $1.2 billion, or $0.15 per diluted common share, for the same period in 2008. Net income was $6.5 billion, or $0.39 per diluted common share for the nine months ended September 30, 2009, compared to $5.8 billion, or $1.09 per diluted common share, for same period in 2008.

 Table 1
 Business Segment Total Revenue and Net Income
                                                          Three Months Ended September 30                                    Nine Months Ended September 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
                                         $    3,666      $  4,725          $       798      $ 1,575          $   10,560      $ 13,182          $     1,912       $   3,949
 Global Card Services (2)
                                              7,327         7,753               (1,036 )       (167 )            22,181        23,202               (4,527 )         1,244
 Home Loans & Insurance
                                              3,411         3,474               (1,632 )        (54 )            13,101         6,058               (2,850 )       (1,775)
 Global Banking
                                              4,670         4,284                   40        1,024              18,100        12,737                2,703           3,440
. . .