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					                                                                              MORGAN            STANLEY              RESEARCH
                                                                              NORTH          AMERICA


                                                                              Morgan Stanley & Co. Incorporated   Betsy L. Graseck, CFA
                                                                                                                  Betsy.Graseck@morganstanley.com
                                                                                                                  +1 (1)212 761 8473

                                                                                                                  Cheryl M. Pate, CFA
                                                                                                                  Cheryl.Pate@morganstanley.com
                                                                                                                  +1 (1)212 761 3324

                                                                                                                  Michael J. Cyprys, CFA, CPA
                October 20, 2010                                                                                  Michael.Cyprys@morganstanley.com
                                                                                                                  +1 (1)212 761 7619


Stock Rating    Bank of America
Overweight

Industry View
                Fundamentals Anyone?
Attractive                                                                    Key Ratios and Statistics
                What's Changed                                                Reuters: BAC.N Bloomberg: BAC US
                Price Target                               $24.00 to $22.00   Banking - Large Cap Banks / United States of America
                2010E EPS                              From $1.24 to $1.33    Price target                                                       $22.00
                2011E EPS                              From $1.63 to $1.69    Shr price, close (Oct 19, 2010)                                    $11.80
                                                                              Mkt cap, curr (mm)                                              $118,398
                                                                              52-Week Range                                                $19.82-11.71
                Investment conclusion: BAC’s results in 3Q10 were
                far better than expected. Credit losses were down a           Fiscal Year ending                     12/09   12/10e     12/11e     12/12e

                massive 25% q/q. Yes, NII was down 4% q/q, but less           ModelWare EPS ($)                     (0.40)      1.33       1.69      2.38
                than the 6% decline we were looking for. Expenses             Prior ModelWare EPS ($)                    -      1.24       1.63      2.33
                                                                              P/E                                      NM        8.9        7.0       5.0
                were tightly managed and BAC exceeded market
                                                                              Consensus EPS ($)§                    (0.29)      0.84       1.52      2.10
                expectations for quality disclosure on non-core assets,
                                                                              Div yld (%)                              0.3       0.3        1.3       4.4
                Basel 3 and reps and warranties. Overwhelming the             Unless otherwise noted, all metrics are based on Morgan Stanley ModelWare
                                                                              framework (please see explanation later in this note).
                fundamentals is the fear of reps and warranty costs.          § = Consensus data is provided by FactSet Estimates.
                The stock took it on the chin as a group of notable bond      e = Morgan Stanley Research estimates

                investors (Pimco, Blackrock, Wamco, NY Fed) gave
                BAC notice that they demand BAC cure servicing                Quarterly ModelWare EPS
                defaults. First pass we pencil out potential reps and                                               2010e     2010e     2011e       2011e
                warranties associated with this claim of $2.5-5.5 billion.    Quarter                     2009       Prior Current        Prior Current
                We believe we have captured this in our $21 bill total        Q1                           0.32          -    0.36a        0.32      0.35
                reps and warranties costs ($5 bill down, $16 bill to go).     Q2                         (0.41)          -    0.24a        0.42      0.44
                                                                              Q3                         (0.12)          -    0.31a        0.38      0.39
                Why stay long the stock? We think BAC has the                 Q4                         (0.13)       0.41     0.42        0.51      0.51
                                                                              e = Morgan Stanley Research estimates, a = Actual company reported data
                earnings power to meet these challenges over time and
                raise the divi next year. Yes, reps and warranties will be
                with us for a while. But as they stabilize and fade,
                investors will see falling credit losses, rising PPoP and
                higher EPS and BVPS. At 0.6x PB and 0.9x PTB with
                growing earnings, BAC is cheap, in our view.

                What's new: BAC reported 3Q10 operating EPS of
                $0.31, ex OTTI (1c), M&I (3c) and goodwill impairment
                (104c). Higher beta from higher volatility pushes our
                target price down from $24 to $22.

                Where we differ: We are baking in another $16 bill in         Morgan Stanley does and seeks to do business with
                reps and warranties with as many investors telling us we      companies covered in Morgan Stanley Research. As
                are too high as those telling us we are too low.              a result, investors should be aware that the firm may
                                                                              have a conflict of interest that could affect the
                                                                              objectivity of Morgan Stanley Research. Investors
                Investment thesis: BAC is our top pick in Large Cap           should consider Morgan Stanley Research as only a
                Banks. Lower losses, higher PPoP, fading regulatory and       single factor in making their investment decision.
                litigation challenges and higher dividends are catalysts      For analyst certification and other important
                over the next year.                                           disclosures, refer to the Disclosure Section,
                                                                              located at the end of this report.
                                                                                                   MORGAN                               STANLEY   RESEARCH

                                                                                                   October 20, 2010
                                                                                                   Bank of America




Risk-Reward Snapshot: Bank of America (BAC, Overweight, PT $22)
Risk-Reward Looks Attractive
    $35                                                                                                                                       Investment Thesis

     30                                                                                         $30.00 (+154%)
                                                                                                                                             •Credit recovery play. Expect ROA to
                                                                                                                                              rise to 1.1% and ROE to 11.5% as BAC
     25                                                                                                                                       reduces credit losses (in particular card
                                                                                                 $22.00 (+86%)
                                                                                                                                              and housing) and as efficiencies build in
     20                                                                                                                                       retail, high net worth and capital
                                                                                                                                              markets. Capital return to shareholders
     15
                                                                           $ 11.80                                                            begins in 2H11.
     10
                                                                                                   $9.00 (-24%)                              •High exposure to early cycle credit
      5
                                                                                                                                              (~18% of loans are credit card), low
                                                                                                                                              exposure to late cycle credit (7% of
      0                                                                                                                                       loans are CRE) means BAC’s credit
      Oct-08              Apr-09       Oct-09              Apr-10          Oct-10         Apr-11                     Oct-11
           Price Target (Oct-11)            Historical Stock Performance             Current Stock Price
                                                                                                                                              losses should decline faster than
                                                                                                       WARNINGDONOTEDIT_RRS4RL~BAC.N~




Source: Morgan Stanley Research, FactSet
                                                                                                                                              median large cap banks in 2010 and
                                                                                                                                              into 2011
 Price Target $22                             Based on blend of valuation methodologies including residual
                                              income, P/B and P/E
                                                                                                                                              Key Value Drivers
 Bull               Residual Income           Sharp Economic Recovery. Credit improves more rapidly
 Case               2.0x 2011 Bull            than our base case. Valuation based on bull case residual
                                                                                                                                             • Credit card charge-offs expected to fall
 $30                Case Tangible BV          income.
                                                                                                                                               from 9.12% in 3Q10 to 8.70% in 4Q101
                                                                                                                                               given the sharp decline in delinquencies
 Base               Blended valuation         Modest “U” Recovery. NPLs peak in 1Q10. Unemployment                                             over the past quarter (3.16% in 2Q10 to
 Case               methodologies             rate remains around 10% in 2010. Valuation based on residual                                     2.84% in 3Q10June)
 $22                1.5x 2011 Base            income, using the normalized cost of capital.
                    Case Tangible BV                                                                                                         • Stabilization of reps/warranties claim

                                                                                                                                             • NPL q/q decline expected going forward
 Bear               0.6x 2011                 Double Dip Recession. Fading stimulus is not replaced by
 Case               Bear Case                 corporate reinvestment or consumer demand. Unemployment         • Continued reserve release
 $9                 Tangible BV               increases to 12%. Market does not look through to normalizing
                                              EPS, nor does it discount strategic options. Valuation based on
                                                                                                              • Dividends starting 3q11 and buybacks
                                              bear case TBV.
                                                                                                                                              starting 4q11




                                                                                                                                                                                   2
                                                                    MORGAN                      STANLEY                          RESEARCH

                                                                    October 20, 2010
                                                                    Bank of America




                                                                    Exhibit 1
Investment Case                                                     We forecast a normalized ROE of 11.5% and ROA of
                                                                    ~1%, with Common Tier 1 under Basel 3 normalizing
Summary & Conclusions                                               at 8.6%
BAC’s results in 3Q10 were far better than expected. Credit                                             ROE vs. ROA vs. Common Tier 1 (Basel 3)
losses were down a massive 25% q/q. Yes, NII was down 4%               14.0%                                                                                                                               1.4%
q/q, but less than the 6% decline we were looking for.
                                                                       12.0%                                                                                                                               1.2%
Expenses were tightly managed and BAC exceeded market
expectations for quality disclosure on non-core assets, Basel 3        10.0%                                                                                                                               1.0%

and reps and warranties.                                                 8.0%                                                                                                                              0.8%

                                                                         6.0%                                                                                                                              0.6%
Overwhelming the fundamentals is the fear of reps and
warranty costs. The stock took it on the chin as a group of              4.0%                                                                                                                              0.4%

notable bond investors (Pimco, Blackrock, Wamco, NY Fed)                 2.0%                                                                                                                              0.2%
gave BAC notice that they demand BAC cure servicing defaults.
                                                                         0.0%                                                                                                                              0.0%
First pass we pencil out potential reps and warranties                                1Q10           2Q10         3Q10        4Q10E 2011E 2012E 2013E 2014E
associated with this claim of $2.5-5.5 billion. We believe we
                                                                                                     ROE         Common Tier 1 (Basel 3)                            ROA (right axis)
have captured this in our $21 bill total reps and warranties
costs ($5 bill down, $16 bill to go).                               Source: Company data, Morgan Stanley Research e = Morgan Stanley Research estimates

                                                                    Exhibit 2
Why stay long the stock? We think BAC has the earnings              BAC Trading at P/B of 0.60, Cheap on Fwd ROE
power to meet these challenges over time and raise the divi          25%
                                                                                                                            BAC - Price/ Book Value                                                          5.00

next year. Yes, reps and warranties will with us for a while. But                                                           April 1998:
                                                                                                                            Multiple of 2.89x                             10/20/2010:
                                                                     20%                                                                                                                                     4.00
as they stabilize and fade, investors will see falling credit                  October 1990:
                                                                               Recessionary Trough
                                                                                                                                                                          Current Multiple:
                                                                                                                                                                          0.6x
                                                                               Multiple: 0.55x
losses, rising PPoP and higher EPS and BVPS. At 0.6x PB              15%                                                                                                                                     3.00


and 0.9x PTB with growing earnings, BAC is cheap.                    10%                                                                                                                                     2.00



                                                                      5%                                                                                                                                     1.00




Key debates on the stock are:                                         0%                                                                                                                                     -

                                                                                                                                                                                              MS
                                                                      -5%                                                                                                                     Estimates      (1.00)

    •    Reps/Warranties: We bake in $16.1 reps/warranties               1/90 1/91 1/92 1/93 1/94 1/95 1/96 1/97 1/98 1/99 1/00 1/01 1/02 1/03 1/04 1/05 1/06 1/07 1/08 1/09 1/10 1/11 1/12 1/13 1/14

                                                                                                                              BAC ROE                 Price/ Book
         expense over the next four years
                                                                    Source: Company data, Morgan Stanley Research
    •    Credit improvement: BAC’s current valuation is
         pricing in rising losses from here, we expect declining    Exhibit 3
         credit losses given declining delinquency and charge       Current P/BV vs ROE 2012e: Stock is Cheap and
         off rates                                                  Reps/Warranties Are Manageable
    •    Expense management : Expect tighter expense                 Current P/BV
         controls, benefit from MER systems integration              1.8x                                                                                                                            USB

                                                                     1.6x
BAC is also one of the cheapest banks in our coverage, trading       1.4x
                                                                                                                                                                                                 WFC
at 5.0x 2012e EPS, 0.6x current book value and 0.9x current          1.2x                                                           FITB
                                                                                                                                                 JPM
                                                                                                                                                           BBT
                                                                                                                                                                    PNC

tangible book. Catalysts are stabilization of reps/warranties        1.0x
                                                                                                               COF STI C
claims, continued credit improvement (declining delinquencies,       0.8x                                        RF
                                                                                                                                                BAC
NPLs and charge-offs), higher PPoP, and tighter capital              0.6x

management in 2011.                                                  0.4x
                                                                     0.2x
                                                                     0.0x
We expect BAC to boost its dividend in 3q11 and begin to
                                                                            0%                             5%                              10%                              15%                             20%
buyback stock in 4q11. Our target price of $22 is based on a                                                                                                                                      ROE 2012e
blend of valuation methodologies including residual income,
                                                                    Source: Company data, Morgan Stanley Research estimates
P/B and P/E.




                                                                                                                                                                                                                    3
                                                                                       MORGAN                STANLEY               RESEARCH

                                                                                       October 20, 2010
                                                                                       Bank of America




Exhibit 4                                                                              Exhibit 6
BAC Valuation Cheap: Trading at 3.9x 2013                                              We estimate $21B total reps/warranties
Normalized Earnings, 4.8x Discounted 2012 EPS                                          expense….$5B incurred already….$16B remaining
                                                                                       and in our estimates.
                             BAC Forward PE Multiples
                                                                                       BAC Reps/Warranty Loss Estimates Relating to 2005-2008 Originations
                                                                                       ($ billions)                   Base Case
   14.0 x                                                                                                                                                               HELOC
                                                                                                                                                                           and
   12.0 x                                                                                                               Agency    Prime   Alt-A Subprime     Sub Total 2nd Lien   Total
                                                                                       Originations                       914      117    193       137         1,361
   10.0 x                                                                              Refi/Paydowns                      351       15    137       106          608
                                                                                       Balance Outstanding                563      102     56        31          753
    8.0 x
                                                                                       Delinquent                          89       22     25        12          148
    6.0 x                                                                              Liquidiation Losses                  6        2      3         3           14
                                                                                       Putback Universe                    95       24     28        15          162        8.5   170
    4.0 x

    2.0 x
                                                                                       Putback %                          50%      20%    20%       20%          35%      100%
    0.0 x                                                                              Success Rate                       50%      50%    75%       75%          55%       43%
                                                                                       Severity on DQs                    45%      45%    60%       70%
               Current (disc.)               Target               Historical Average   Severity on Liquidation Loss      100%     100%    100%     100%
                                                                                       Total Severity                     49%      50%    64%       75%          55%      100%
Source: Factset, Company data, Morgan Stanley Research
                                                                                       Repurchase Request                 47.7     4.7     5.5      3.0          61.0      8.5
                                                                                       Repurchases                        23.9     2.4     4.2      2.3          32.6      3.7
                                                                                       Loss on Repurchases                11.6     1.2     2.7      1.7          17.2        4    20.8
                                                                                        DQ Loss                           10.0     1.0     2.2      1.3
Reps and Warranties                                                                     Liquidation Loss                   1.6     0.2     0.5      0.4
We bake in $16.1b of R/W expense through 2014, significantly
                                                                                       As % of Total Balance O/S
higher than estimates implied by the disclosure in BAC’s                               Repurchase Request                 8.5%    4.6%    9.8%     9.6%          8.1%
presentation.                                                                          Repurchases                        4.2%    2.3%    7.4%     7.2%          4.3%
                                                                                       Severity                           2.1%    1.2%    4.8%     5.4%          2.3%

Exhibit 5                                                                              Bull Case Severity                 11.6     0.9     2.0      1.3          15.8      2.2    18.0
We estimate BAC is 77% of the way through                                              Bear Case Severity                 12.7     2.2     5.0      3.1          23.1      7.3    30.4

recognizing reps/warranties losses                                                     Source: Company data, Morgan Stanley Research


                     BAC Reps/ Warranty Losses ($M): 2008 - 2014E
                                                                                       Our R/W estimates of $16b appears significantly higher than
  $4,500
                                                                                       the $6.4b implied in BAC’s presentation. To get to this $6.4 bill,
  $4,000
                                                                                       we calculate $2.8b of private label severity (including an est
  $3,500
                                                                                       $341m already incurred) by applying BAC’s disclosure on GSE
  $3,000                           4%
                                                                                       putbacks, payouts and severity. We also calculate $3.6b of
  $2,500                                                                               GSE severity (including $2.5 of losses incurred) by applying
  $2,000                                                   20%                         implied paydowns on private label originations and BAC’s
                                               18%                     18%
                                                                                17%
  $1,500                                                                               disclosure on GSEs experience and expectations.
                                   13%
  $1,000                9%
   $500
              1%
      $0
             2008      2009       2010E       2011E       2012E       2013E    2014E

                         R/ W Losses Taken To Date    Remaining R/ W Losses

Source: Company data, Morgan Stanley Research; e = Morgan Stanley Research estimates




                                                                                                                                                                                    4
                                                                                     MORGAN        STANLEY        RESEARCH

                                                                                     October 20, 2010
                                                                                     Bank of America




Exhibit 7                                                                            A group of investors including Blackrock, PIMCO, Wamco and
When we apply BAC’s GSE experience to date to                                        the NY Fed among others publicly announced a notice of
monolines, other and remaining GSE, this implies                                     Non-Performance to Countrywide Servicing (Master Servicer)
$3.6b                                                                                for its servicing of 115 loan pools totaling $47 billion. The
($ millions)                                    Private Label
                                                                                     investors claim that Countrywide Servicing is not adhering to its
                                  GSE   Monolines           Other            Total
                                                                                     PSA agreements. Assuming our weighted average estimates
Originations ('04-'08)      1,200,000    160,000          750,000       2,110,000
Amount Outstanding            673,913     83,710          450,000       1,207,623    for the agency and non-agency assets (22% of the portfolio
Amount O/S %                      56%        52%              60%             57%    delinquent or in loss, a weighted average success rate of 53%
Expected Putback                3.8%             3.8%            3.8%
                                                                                     and a 47% weighted average severity), we estimate BAC's cost
Payout Rate                    63.3%            63.3%           63.3%                of remedying losses on these pools would be $2.5 billion.
Severity                       22.0%            22.0%           22.0%                Assuming weighted averages associated with a non-agency
Total Severity as % of Is       0.5%             0.5%            0.5%
                                                                                     portfolio (33% of the portfolio delinquent or in loss, a weighted
Putback                       25,714            3,194       17,171        46,079     average success rate of 62% and a 54% weighted average
Payout                        16,286            2,023       10,875        29,183     severity), we estimate BAC’s cost of remedying losses on
Severity                       3,583              445        2,392         6,420
                                                                                     these pools would be $5.5 billion.
Activity To Date
Putback                       18,000            4,800           3,900     26,700
                                                                                     If we use BAC's experience to date, this implies $176 million. If
Payout                        11,400              550           1,000     12,950
Severity                       2,508              121             220      2,849     we double BAC's severity and defect rate, then we get to $353
                                                                                     million.
Remaining
Putback                        7,714                0       13,271        20,985
Payout                         4,886            1,473        9,875        16,233     We will update our loss estimates as we get more detail on
Severity                       1,075              324        2,172         3,571     these specific servicing agreements and loan experience to
Source: Company data, Morgan Stanley Research                                        date. At this stage, we believe we have captured the potential
                                                                                     for loss against these pools in our $16 billion of future reps and
                                                                                     warranties costs which we bake in through December 2014.
Applying GSE severity rates to private label originations likely
understates the $3.6b estimate. Even if we double the severity                       The investor group has put a 60 day clock on Countrywide
to 44%, we still end up with a total r/w loss of $9.3b that is                       Servicing or, they say, they will call for an event of default. This
significantly below our $16b estimate. We’ll stick with our                          sounds to us as a possible way of getting BAC to the
estimates for now, which come from working with our bond                             negotiating table. Do these bondholders really want to move
colleagues.                                                                          $47 billion in bonds to another servicer? Who else has the
                                                                                     capacity to take on these servicing agreements? Would the
Exhibit 8
                                                                                     bondholders really want to move the portfolio which would
…Doubling GSE severity experience to date and                                        likely lower its value as delinquencies and losses would likely
applying to private label implies $9.3b                                              rise. It’s possible we get a quick resolution (BAC may be
Reps/Warranty expense remaining                                                      incentivised to resolve this quickly given the NY Fed is a
($ millions)                                    Private Label
                                                                                     bondholder in this case), but equally possible this drags on for
                                                                                     quite some time. We believe we have captured the loss in our
                                GSE     Monolines           Loans            Total
Expected Putback                3.8%        3.8%             3.8%                    $2.5-$5.5 billion estimate.
Payout Rate                    63.3%       63.3%            63.3%
Severity                       22.0%       44.0%            44.0%

Putback                       25,714            3,194       17,171        46,079
Payout                        16,286            2,023       10,875        29,183     Credit Improvement
Severity                       3,583              890        4,785         9,258
                                                                                     Our overweight call is driven by 1) credit improvement that we
Remaining                                                                            expect will continue in into 2011-2013, and 2) a return of tighter
Putback                        7,714                0       13,271        20,985     capital management in 2H11. Credit improvement is
Payout                         4,886            1,473        9,875        16,233
Severity                       1,075              769        4,565         6,409
                                                                                     progressing, in 3Q10 BAC’s ncos fell 25% q/q and accelerated
Source: Company data, Morgan Stanley Research
                                                                                     its reserve bleed to 12c per share, up from 6c per share in
                                                                                     2Q10.




                                                                                                                                                      5
                                                                                    MORGAN           STANLEY            RESEARCH

                                                                                    October 20, 2010
                                                                                    Bank of America




Exhibit 9                                                                           Exhibit 11
Credit improvement drives 81c of EPS growth in                                      We expect credit improvement to drive a majority of
2011-2013                                                                           earnings in 2010 and 5-30% of EPS in 2011-2013
                  Credit Improves   Other Earnings     Share Repo
                     2011-2013        2011-2013         2011-2013                                     Credit Improvement as % of EPS Estimate

                                                          0.40                        120%
                                        0.45                            3.01                         96%
                                                                                      100%
                       0.83
                                                                                        80%

                                                                                        60%

      1.33                                                                              40%                           28%
                                                                                        20%                                          9%
                                                                                                                                                 4%
                                                                                         0%
  2010 EPS est.                                                     2013 EPS est.                  2010E             2011E          2012E       2013E

Source: Company data, Morgan Stanley Research estimates
                                                                                    Source: Company data, Morgan Stanley Research
                                                                                    e = Morgan Stanley Research estimates


Exhibit 10
We expect earnings to benefit from provision                                        Provisions declined significantly in 3Q10 led by Home Loans
decline of $21 after-tax in 2010-2013                                               46% provision decline and Card Services 16% provision
                    Cumulative Provision Improvement                                decline. Net charge-offs declined across all asset categories
                                                                                    (ex. Deposits) led by Home Loans and Card. We expect
                                        BAC                                         charge off ratios to continue declining in 2011 following recent
    $0                                                                              declining delinquency rates.
   ($5)
  ($10)                                 ($20)
  ($15)
  ($20)
                                         ($7)
  ($25)
  ($30)                                  ($3)
                                         ($2)
  ($35)                                 ($32)

                          2010       2011       2012   2013

Source: Company data, Morgan Stanley Research estimates




                                                                                                                                                        6
                                                                                               MORGAN                 STANLEY               RESEARCH

                                                                                               October 20, 2010
                                                                                               Bank of America




Exhibit 12                                                                                     Exhibit 14
Charge-offs fell 25% and provisions declined 33% as                                            Expect housing and commercial NPL ratios to trend
BAC bled $1.8B of reserves in 3Q10                                                             down in 2011
Provisions (in $mill)                 3Q09       4Q09        1Q10        2Q10         3Q10
                                                                                                                                            NPL Ratio
Home Loans & Insurance               2,896      2,249        3,600       2,390        1,302
Commercial Banking                   2,058      1,832          916         623          554        15.00%
Investment Banking                     537        558          256        (133)        (157)
Wealth & Investment Mgt.               515         54          242         121          128        12.00%
Other                               (1,217)    (1,512)       1,219       1,248          330
Card Services                        6,823      6,854        3,535       3,795        3,177        9.00%
Deposits                                93         75           37          61           62
Total                               11,705     10,110        9,805       8,105        5,396        6.00%

                                                                                                   3.00%
Net Charge Offs (in $mill)            3Q09       4Q09        1Q10        2Q10         3Q10
                                                                                                   0.00%
Home Loans & Insurance                1,963       1,501      2,317       1,664        1,323




                                                                                                            09

                                                                                                                  09

                                                                                                                        09

                                                                                                                                09

                                                                                                                                           10

                                                                                                                                                  10

                                                                                                                                                        10


                                                                                                                                                                  E

                                                                                                                                                                         E

                                                                                                                                                                                E

                                                                                                                                                                                        E

                                                                                                                                                                                                   E
Commercial Banking                    1,452       1,310      1,065         958          728




                                                                                                                                                                10

                                                                                                                                                                       11

                                                                                                                                                                              11

                                                                                                                                                                                      11

                                                                                                                                                                                                 11
                                                                                                        1Q

                                                                                                                 2Q

                                                                                                                       3Q

                                                                                                                               4Q

                                                                                                                                       1Q

                                                                                                                                                2Q

                                                                                                                                                       3Q

                                                                                                                                                             4Q

                                                                                                                                                                      1Q

                                                                                                                                                                             2Q

                                                                                                                                                                                     3Q

                                                                                                                                                                                            4Q
Investment Banking                      486         517        154          87           52
Wealth & Investment Mgt.                285         211        119         115          112
                                                                                                             Commercial         Construction/CRE                Residential mortgage + HELs
Other                                (2,060)     (1,702)     1,088         993          680
Card Services                         7,400       6,487      6,011       5,674        4,232
                                                                                               Source: Company data, Morgan Stanley Research; e = Morgan Stanley Research estimates
Deposits                                 98          97         43          66           70
Total                                 9,624       8,421     10,797       9,557        7,197

Provisions / NCOs                     3Q09       4Q09        1Q10        2Q10         3Q10
                                                                                               Card delinquencies and charge offs declined significantly in the
Home Loans & Insurance                148%       150%        155%        144%          98%
                                                                                               quarter.
Commercial Banking                    142%       140%         86%         65%          76%
Investment Banking                    110%       108%        166%       -153%        -302%
Wealth & Investment Mgt.              181%        26%        203%        105%         114%     Exhibit 15
Other                                  59%        89%        112%        126%          49%     Card losses have likely peaked
Card Services                          92%       106%         59%         67%          75%
                                                                                               NCO Rate                1Q09     2Q09            3Q09   4Q09        1Q10      2Q10E    3Q10E        4Q10E
Deposits                               95%        77%         86%         92%          89%     AXP                     8.20%    9.70%       8.60%      7.30%      7.00%      6.14%        6.00%    6.00%
Total                                 122%       120%         91%         85%          75%     BAC                     8.62%    11.73%      12.90%     11.88%     12.00%     12.21%   11.25%       10.25%
Source: Company data, Morgan Stanley Research                                                  C                       8.40%    10.02%      10.14%     9.27%      9.96%      9.80%        9.57%    9.35%
                                                                                               COF U.S. Card           8.39%    9.23%       9.64%      9.59%      10.48%     9.54%        9.40%    9.25%
                                                                                               DFS                     6.61%    7.99%       8.63%      8.81%      9.00%      8.56%        8.15%    7.85%
                                                                                               Legacy JPM              6.86%    8.97%       9.41%      8.64%      10.54%     9.02%        8.50%    8.25%
Exhibit 13                                                                                     Median                  8.30%    9.47%       9.53%      9.04%      10.22%     9.28%        8.95%    8.75%

Charge offs ratios declined in all asset classes with                                          Avg Unemployment        8.1%         9.3%        9.6%   10.0%       9.7%      9.7%         9.7%         9.6%
                                                                                               EOP Unemployment        8.5%         9.5%        9.8%   10.0%       9.7%      9.7%         9.7%         9.4%
credit card down 310 bp, CRE down 110 bp and                                                   NCOs vs Unemploym 1Q09            2Q09        3Q09       4Q09       1Q10      2Q10E    3Q10E        4Q10E
home equity down 90 bp                                                                         AXP                0.13%         0.43%       -1.00%     -2.70%     -2.70%     -3.56%   -3.70%       -3.55%
                                                                                               BAC                0.55%          2.46%       3.30%     1.88%       2.30%      2.51%    1.55%        0.70%
                                                                                               C                  0.33%         0.75%        0.54%     -0.73%      0.26%      0.10%   -0.13%       -0.20%
                                  Net Charge Offs Ratio                                        COF U.S. Card      0.32%         -0.04%       0.04%     -0.41%      0.78%     -0.16%   -0.30%       -0.30%
                                                                                               DFS               -1.46%         -1.28%      -0.97%     -1.19%     -0.70%     -1.14%   -1.55%       -1.70%
  16.00%                                                                                       Legacy JPM        -1.21%         -0.30%      -0.19%     -1.36%      0.84%     -0.68%   -1.20%       -1.30%
                                                                                               Median             0.23%          0.20%      -0.08%     -0.96%      0.52%     -0.42%   -0.75%       -0.80%

  12.00%                                                                                       Source: Company data, Morgan Stanley Research e = Morgan Stanley Research estimates
                                                                                               Note: 3Q10 reflects actual data for BAC, C, DFS, JPM
   8.00%


   4.00%


   0.00%
               1Q09        2Q09   3Q09    4Q09       1Q10    2Q10      3Q10       4Q10E

             Commercial               Construction/CRE          Residential real estate
             Home Equity              Other Consumer            Credit Card

Source: Company data, Morgan Stanley Research e = Morgan Stanley Research estimates




                                                                                                                                                                                                          7
                                                                                                   MORGAN           STANLEY             RESEARCH

                                                                                                   October 20, 2010
                                                                                                   Bank of America




Exhibit 16                                                                                         Exhibit 18
We expect that “consumer healing” will drive down                                                  Total Delinquency Roll Rates Declining
losses                                                                                                                     Total Delinquencies to Charge Off Roll Rate
                                                                                                   20%
NCO Rate               2008       2009       2010E        2011E      2012E     2013E     2014E
                                                                                                   19%
AXP                   5.42%      8.43%       5.77%        4.92%      5.00%     5.00%     5.00%     18%
BAC                   6.18%      11.25%      10.65%       8.85%      8.25%     7.50%     7.00%     17%
C                     6.03%      9.46%       9.23%        8.35%      7.65%     6.85%     6.65%     16%
                                                                                                   15%
COF U.S. Card         6.33%      9.19%       9.16%        7.50%      6.90%     6.45%     6.15%     14%
DFS                   5.08%      8.00%       8.06%        6.52%      6.25%     6.10%     6.00%     13%
Legacy JPM            5.01%      7.82%       8.69%        7.30%      7.00%     6.50%     6.50%     12%
                                                                                                   11%
Median                5.73%      8.81%       8.92%        7.40%      6.95%     6.48%     6.33%
                                                                                                   10%
Avg Unemployment       5.8%      9.3%        9.7%         9.2%        8.3%     7.5%      6.9%       9%
                                                                                                    8%
EOP Unemployment       7.2%      10.0%       9.7%         9.0%        NF        NF        NF
                                                                                                    7%
NCOs vs Unemploym         2008       2009      2010E        2011E      2012E     2013E     2014E    6%
AXP                   -0.39%     -0.87%      -3.93%       -4.28%     -3.30%    -2.50%    -1.90%     5%




                                                                                                         Aug-10
                                                                                                         Aug-09
                                                                                                         Aug-08




                                                                                                         May-10
                                                                                                         May-09
                                                                                                         May-08




                                                                                                         Jun-10
                                                                                                         Apr-09

                                                                                                         Jun-09
                                                                                                         Jun-08




                                                                                                         Nov-09




                                                                                                         Apr-10
                                                                                                         Apr-08




                                                                                                         Nov-08
                                                                                                         Nov-07




                                                                                                          Jan-09
                                                                                                         Feb-09
                                                                                                         Mar-09



                                                                                                          Jul-09

                                                                                                         Sep-09
                                                                                                         Oct-09

                                                                                                         Dec-09
                                                                                                          Jan-10
                                                                                                         Feb-10
                                                                                                         Mar-10



                                                                                                          Jul-10

                                                                                                         Sep-10
                                                                                                         Oct-08

                                                                                                         Dec-08
                                                                                                         Sep-07
                                                                                                         Oct-07

                                                                                                         Dec-07
                                                                                                          Jan-08
                                                                                                         Feb-08
                                                                                                         Mar-08



                                                                                                          Jul-08

                                                                                                         Sep-08
BAC                   0.37%      1.95%       0.95%        -0.35%     -0.05%    0.00%     0.10%
C                      0.22%      0.16%      -0.47%       -0.85%     -0.65%    -0.65%    -0.25%
COF U.S. Card          0.53%     -0.11%      -0.54%       -1.70%     -1.40%    -1.05%    -0.75%                     AXP        BAC          C        COF            DFS       JPM
DFS                   -0.73%     -1.30%      -1.64%       -2.68%     -2.05%    -1.40%    -0.90%
Legacy JPM            -0.80%     -1.48%      -1.01%       -1.90%     -1.30%    -1.00%    -0.40%    Source: Company data, Morgan Stanley Research
Median                -0.08%     -0.49%      -0.78%       -1.80%     -1.35%    -1.03%    -0.58%

e = Morgan Stanley Research estimates Source: Company data, Morgan Stanley Research                Reserves

                                                                                                   We expect further reserve release in 2011 though at slightly
Card Roll Rates: Master Trust Data
                                                                                                   lower levels than occurred in 2q and 3q. Current reserve ratio
Exhibit 17                                                                                         is at 4.68%. Consumer reserve ratio is 5.57%. Commercial
Current - 30 Day Roll Rates: Trending Down                                                         reserve ratio at 2.78%. Reserve release accounts for 36c, 25c,
                         Current Receivables to 30+ DQs Roll Rate
                                                                                                   and 22c of EPS in 2010, 2011 and 2012 (27%, 15%, 9% of
2.75%                                                                                              EPS).
2.50%

2.25%

2.00%                                                                                              Exhibit 19
1.75%                                                                                              Total Reserve Ratio at 4.67% as of 3Q10, down 7 bp
1.50%                                                                                              q/q
1.25%
                                                                                                                                     Total Reserve Ratio
1.00%

0.75%                                                                                                6.00%

0.50%
        Aug-07




        Aug-08




        Aug-09




        Aug-10




                                                                                                     5.00%
        May-07




        May-08




        May-09




        May-10
        Nov-06



        Apr-07
        Jun-07



        Nov-07



        Apr-08
        Jun-08



        Nov-08



        Apr-09
        Jun-09



        Nov-09



        Apr-10
        Jun-10
        Sep-06
        Oct-06
        Dec-06
         Jan-07
        Feb-07
        Mar-07


         Jul-07
        Sep-07
        Oct-07
        Dec-07
         Jan-08
        Feb-08
        Mar-08


         Jul-08
        Sep-08
        Oct-08
        Dec-08
         Jan-09
        Feb-09
        Mar-09


         Jul-09
        Sep-09
        Oct-09
        Dec-09
         Jan-10
        Feb-10
        Mar-10


         Jul-10
        Sep-10




                AXP      BAC             C          COF             DFS        JPM                   4.00%

Source: Company data, Morgan Stanley Research                                                        3.00%

                                                                                                     2.00%

                                                                                                     1.00%

                                                                                                     0.00%
                                                                                                             3Q09   4Q09    1Q10     2Q10   3Q10E   4Q10E   1Q11E    2Q11E   3Q11E   4Q11E


                                                                                                   Source: Company data, Morgan Stanley Research; e = Morgan Stanley Research estimates




                                                                                                                                                                                             8
                                                            MORGAN           STANLEY            RESEARCH

                                                            October 20, 2010
                                                            Bank of America




Exhibit 20                                                  Exhibit 22
Residential Mortgage Reserves at 1.78%                      Credit Card Reserves (Held Basis) at 10.10%
                       Residential Mortgage Reserve Ratio                               Credit Card Reserve Ratio
   2.50%                                                       12.00%

   2.00%                                                       10.00%

                                                                8.00%
   1.50%
                                                                6.00%
   1.00%
                                                                4.00%
   0.50%
                                                                2.00%
   0.00%                                                        0.00%
          08

          08

          08

          08

          09

          09

          09

          09

          10

          10

          10




                                                                       08

                                                                       08

                                                                       08

                                                                       08

                                                                       09

                                                                       09

                                                                       09

                                                                       09

                                                                       10

                                                                       10

                                                                       10
        1Q

        2Q

        3Q

        4Q

        1Q

        2Q

        3Q

        4Q

        1Q

        2Q

        3Q




                                                                     1Q

                                                                     2Q

                                                                     3Q

                                                                     4Q

                                                                     1Q

                                                                     2Q

                                                                     3Q

                                                                     4Q

                                                                     1Q

                                                                     2Q

                                                                     3Q
Source: Company data, Morgan Stanley Research               Source: Company data, Morgan Stanley Research




Exhibit 21                                                  Exhibit 23
Home Equity Reserves at 9.13%                               Other Consumer (ex Discontinued Real Estate,
                                                            SOP-3) at 2.97%
                           Home Equity Reserve Ratio
   10.00%                                                                            Other Consumer Reserve Ratio
    9.00%
                                                               6.00%
    8.00%
    7.00%                                                      5.00%
    6.00%
    5.00%                                                      4.00%
    4.00%
    3.00%                                                      3.00%
    2.00%
    1.00%                                                      2.00%
    0.00%
                                                               1.00%
           08

           08

           08

           08

           09

           09

           09

           09

           10

           10

           10
         1Q

         2Q

         3Q

         4Q

         1Q

         2Q

         3Q

         4Q

         1Q

         2Q

         3Q




                                                               0.00%
                                                                         1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10
Source: Company data, Morgan Stanley Research

                                                            Source: Company data, Morgan Stanley Research




                                                                                                                                  9
                                                                      MORGAN        STANLEY      RESEARCH

                                                                      October 20, 2010
                                                                      Bank of America




Exhibit 24                                                            Changes to our 2010 & 2011 Estimates
Commercial Real Estate Reserves at 6.76%
                                                                      Post-quarter, our 2010 estimates rise by 9c driven by BAC
                      Commercial Real Estate Reserve Ratio            coming in 7c above our 2q forecast, higher NII, higher
   8.00%                                                              mortgage banking revenue driven by 3q’s strong
   7.00%                                                              performance and lower provisions. Higher taxes, and lower
   6.00%                                                              IB and trading are partial offsets.
   5.00%
   4.00%                                                              Our 2011 estimates rise by 6c driven by higher NII, lower
   3.00%
                                                                      expenses and lower provisions. Reduced service charges,
                                                                      insurance income and higher taxes are partial offsets.
   2.00%
   1.00%
                                                                      Changes to our Price Target:
   0.00%                                                              Higher beta from higher volatility pushing target price down
             1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10   from $24 to $22.

Source: Company data, Morgan Stanley Research
                                                                      Valuation and Risks:
                                                                      Our $22 price target is based on a blend of valuation
Exhibit 25
                                                                      methodologies including P/B and P/E and residual income
Non-CRE Commercial Reserves at 1.91%                                  using a normalized beta and cost of equity capital. Catalysts
                                                                      are declining credit losses in 2010 and capital management
                        Commercial, ex CRE Reserve Ratio              in 2011 (higher dividends and share buybacks). Our bull
   2.50%                                                              case intrinsic values use residual income valuation and our
                                                                      bear case intrinsic values are based on 2010,
   2.00%                                                              bottom-of-cycle, bear case, price-to-tangible book. We
                                                                      assume a 5.0% risk-free rate and a 4.5% equity market risk
   1.50%
                                                                      premium in the base case and a 2.5% risk free rate and
   1.00%                                                              4.5% equity market risk premium in the bear case.

   0.50%                                                              Bank of America: For BAC shares specifically, downside
                                                                      risks to our thesis and price target include higher cum
   0.00%                                                              losses, ratings downgrade, legal challenges from
             1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10   homeowner or investor groups, integration challenges
                                                                      associated with the MER, lower share buybacks than we
Source: Company data, Morgan Stanley Research                         currently forecast, and stricter than expected regulatory
                                                                      interpretation of financial reform legislation and Basel 3
                                                                      capital regulations. Upside risks include lower consumer
3Q10 Earnings Recap                                                   losses, realization of any of several different investments
BAC reported 3Q10 operating EPS of $0.31, ex OTTI (1c),               such as China Construction Bank and MER’s securities
M&I (3c) and goodwill impairment (104c). Reported EPS                 processor, and earlier and larger accretion from MER and
came in at a loss of -$0.77. Operating EPS, was 7c ahead              CFC.
of our expectations on higher NIM (3c), higher trading
revenues (3c) and lower provisions (17c), partially offset by
lower fee income (12c). Reserve bleed contributed 3c to               Citigroup may be deemed to control Morgan Stanley Smith
the provision beat vs. expectations.                                  Barney LLC due to ownership, board membership, or other
                                                                      relationships. Morgan Stanley Smith Barney LLC may
Forward looking credit appears to have stabilized, with NPLs to       participate in, or otherwise have a financial interest in, the
down sequentially (comm’l NPLs down 4%, consumer down                 primary or secondary distribution of securities issued by
2%). Charge-offs ($) declined 25% q/q with the NCO ratio              Citigroup or an affiliate of Citigroup that is controlled by or
declining 90bp and Card NCOs down 310bp.                              under common control with Morgan Stanley Smith Barney
                                                                      LLC.




                                                                                                                                 10
                                                                 MORGAN        STANLEY        RESEARCH

                                                                 October 20, 2010
                                                                 Bank of America




Exhibit 26
BAC 3Q10 Operating EPS $0.31 vs. MS Estimate of $0.24
3Q10 Actual vs Estimate


($ millions)                                                            3Q10
                                                Operating                  MS                  Diff


   NIM                                                2.72%                         2.62% $           0.03
     Total Loan & Leases                            934,860                   928,760
     Other Earning Assets                           928,959                   945,720
   Earning Asset Volume                           1,863,819                 1,874,479 $               (0.01)
Net Interest Income (FTE)                            12,717                     12,396 $              0.02
Service Charges                                       2,212                         2,318 $           (0.01)
Investment and brokerage services                     2,724                         3,006 $           (0.02)
Mortgage banking income                               1,755                         1,744 $           0.00
Insurance Income                                            75                       698 $            (0.05)
Investment banking income                             1,371                         1,566 $           (0.01)
Equity investment gains                                 357                          340 $            0.00
Card income                                           1,982                         2,046 $           (0.00)
Trading account profits                               2,596                         2,242 $           0.03
Other income                                            433                         1,531 $           (0.08)
Securities gains                                        883                          500 $            0.03
Fee Income                                           14,388                     15,991 $              (0.12)
Net Revenue                                          27,105                     28,387 $              (0.10)
Provisions                                            5,396                         7,648 $           0.17
Total NonInterest Expense                            16,395                     17,115 $              0.05
Expense Ratio                                           60%                          60%
Tax Rate                                                35%                          25% $            (0.05)

Operating Income                                      3,455                         2,718 $           0.07

Preferred Dividend                                      348                          340 $            (0.00)

Operating Income to Common                            3,107                         2,378 $           0.07

Share Count                                           9,976                     10,106           ($0.00)

EPS                                                   $0.31                         $0.24         $0.07
Source: Company data, Morgan Stanley Research




                                                                                                               11
MORGAN        STANLEY   RESEARCH

October 20, 2010
Bank of America




                                   12
                                                                                               MORGAN             STANLEY        RESEARCH

                                                                                               October 20, 2010
                                                                                               Bank of America




Exhibit 27
New vs. Old Forecast, 2010E - 2011E
New vs. Old Forecast, 2010E - 2011E                                  2010               2010                              2011          2011
BAC
($ millions)                                                   2010             2010               Difference       2011          2011             Difference
                                                               New               Old                in EPS          New           Old               in EPS


  NIM                                                              2.76%           2.73% $               0.03         2.60%         2.57% $              0.04
    Total Loan & Leases                                         951,221          947,627       $         0.01       900,149       889,118      $         0.02
    Other Earning Assets                                        940,306          944,496       $         (0.01)     942,621       944,490      $         (0.00)
  Earning Asset Volume                                        1,891,527       1,892,124        $         (0.00)    1,842,770     1,833,608     $         0.02
Net Interest Income                                              52,166           51,702       $         0.03        47,974        47,174      $         0.06
Service Charges                                                    9,345           9,547       $         (0.01)       8,163         8,555      $         (0.03)
Investment and brokerage services                                11,902           12,109       $         (0.01)      13,133        12,771      $         0.03
Mortgage banking income                                            5,632           5,460       $         0.01         4,914         5,003      $         (0.01)
Insurance Income                                                   1,993           2,811       $         (0.06)       2,665         2,906      $         (0.02)
Investment banking income                                          5,519           5,959       $         (0.03)       6,519         6,624      $         (0.01)
Equity investment gains                                            3,086           3,069       $         0.00         2,106         2,106      $           -
Card income                                                        7,948           8,012       $         (0.00)       7,253         7,290      $         (0.00)
Trading account profits                                          12,054           12,324       $         (0.02)      13,706        13,935      $         (0.02)
Other income                                                       5,018           6,143       $         (0.08)       6,361         6,470      $         (0.01)
Securities gains                                                   2,154           1,771       $         0.03              750          750    $           -
Fee Income                                                       64,652           67,205       $         (0.19)      65,568        66,409      $         (0.06)
Net Revenue                                                     116,818          118,907       $         (0.15)     113,542       113,583      $         (0.00)
Total NonInterest Expense                                        66,835           67,809       $         0.07        65,785        66,074      $         0.02
Expense Ratio                                                         57%               57%                                58%          58%
Provisions                                                       28,830           32,175       $         0.24        21,534        23,803      $         0.17
Tax Rate                                                              30%               27% $            (0.07)            30%          25% $            (0.12)


Preferred Dividend                                                 1,376           1,368       $         (0.00)       1,360         1,360      $           -


Operating Income to Common                                       13,340           12,457       $         0.09        16,996        16,419      $         0.06


Share Count                                                      10,030           10,080       $         0.00        10,057        10,104      $         0.00


EPS                                                                  1.33               1.24   $         0.09             1.69        1.63     $         0.06


Source: Company data, Morgan Stanley Research   E = Morgan Stanley Research estimates




                                                                                                                                                                  13
                                                                                                 MORGAN          STANLEY              RESEARCH

                                                                                                 October 20, 2010
                                                                                                 Bank of America




Exhibit 28
Investment Banking Details: 1Q09 – 2014E
BAC Trading and Investment Banking Details
$ Millions



IB Fees                                  1Q10        2Q10        3Q10       4Q10E       1Q11E        2Q11E       3Q11E       4Q11E        2007        2008        2009       2010E       2011E       2012E       2013E       2014E
Advisory                                  167         242         273         375         320          314         282         288         444         519         993       1,057       1,205       1,365       1,594       1,706
DCM                                       773         827         798         926       1,016        1,026         872         916       1,774       1,537       3,039       3,324       3,831       3,867       4,049       4,211
ECM                                       344         318         341         346         466          416         375         454         319         624       1,477       1,349       1,711       2,053       2,313       2,521
Gross IB Fees                           1,284       1,387       1,412       1,647       1,803        1,757       1,530       1,658       2,537       2,680       5,509       5,730       6,747       7,286       7,957       8,438
Other                                     (44)        (68)        (41)        (58)        (57)         (57)        (57)        (57)          0        (417)       (299)       (211)       (228)       (228)       (228)       (228)
Net IB Fees                             1,240       1,319       1,371       1,589       1,746        1,700       1,473       1,601       2,537       2,263       5,210       5,519       6,519       7,058       7,729       8,210

IB Analysis                             1Q10         2Q10        3Q10       4Q10E       1Q11E        2Q11E       3Q11E       4Q11E        2007        2008        2009       2010E       2011E       2012E       2013E       2014E
Advisory
   Fees                                167            242         273         375         320           314        282         288          444        519       1,167       1,057       1,205       1,365       1,594       1,706
   Volumes                          58,211         96,131     117,517     124,913     110,423       108,215     97,393      99,341    1,023,902    691,738     385,162     396,772     415,373     487,584     569,429     609,289
   Margin                            0.29%          0.25%       0.23%       0.30%       0.29%         0.29%      0.29%       0.29%        0.04%      0.08%       0.30%       0.27%       0.29%       0.28%       0.28%       0.28%

ECM
  Fees                                 344            318         341         346         466          416         375         454         319         624       1,964       1,349       1,711       2,053       2,313       2,521
  Volumes                           11,145         13,397       9,819      12,570      17,598       15,706      14,136      17,124      93,628      80,681      70,963      46,932      64,565      78,980      90,717      98,882
  Margin                             3.09%          2.37%       3.47%       2.75%       2.65%        2.65%       2.65%       2.65%       0.34%       0.77%       2.77%       2.87%       2.65%       2.60%       2.55%       2.55%

DCM
  Fees                                 773            827         798         926       1,016         1,026        872         916       1,774       1,537       3,124       3,324       3,831       3,867       4,049       4,211
  Volumes                          126,050         78,848      91,115     108,979     127,038       128,309    109,062     114,515     689,600     408,914     366,317     404,992     478,924     495,759     539,847     561,440
  Margin                             0.61%          1.05%       0.88%       0.85%       0.80%         0.80%      0.80%       0.80%       0.26%       0.38%       0.85%       0.82%       0.80%       0.78%       0.75%       0.75%

Industry Volumes
Announced M&A                         1Q10           2Q10        3Q10       4Q10E       1Q11E         2Q11E      3Q11E       4Q11E         2007        2008        2009       2010E       2011E       2012E       2013E       2014E
                                   653,200        606,001     793,101     832,756     849,411       832,423    749,181     764,164    4,825,749   3,474,506   2,415,299   2,885,058   3,195,179   3,482,745   3,796,192   4,061,926
Base                                                                      832,756     849,411       832,423    749,181     764,164                                        2,091,957   3,195,179   3,482,745   3,796,192   4,061,926
Bull                                                                      872,411     866,066       874,894    840,747     771,656                                        2,131,612   3,353,363   3,688,699   4,131,343   4,544,478
Bear                                                                      674,136     707,843       849,411    749,181     749,181                                        1,933,337   3,055,615   3,269,508   3,498,374   3,743,260
Custom                                                                    832,756     849,411       832,423    749,181     764,164                                        2,091,957   3,195,179   3,482,745   3,796,192   4,061,926

ECM                                   1Q10           2Q10        3Q10       4Q10E       1Q11E         2Q11E      3Q11E       4Q11E        2007        2008        2009       2010E       2011E        2012E       2013E       2014E
                                   173,147        164,237     201,444     209,502     219,977       224,376    201,939     214,055     877,775     630,696     895,588     748,330     860,347      929,174   1,003,508   1,093,824
Base                                                                      209,502     219,977       224,376    201,939     214,055                                         546,886     860,347      929,174   1,003,508   1,093,824
Bull                                                                      217,559     226,262       235,312    235,312     242,372                                         554,944     939,258    1,051,969   1,157,166   1,261,311
Bear                                                                      171,227     145,543       152,820    160,461     168,484                                         508,612     627,310      671,221     718,207     768,481
Custom                                                                    209,502     219,977       224,376    201,939     214,055                                         546,886     860,347      929,174   1,003,508   1,093,824

DCM                                    1Q10           2Q10        3Q10       4Q10E       1Q11E        2Q11E       3Q11E       4Q11E        2007        2008        2009       2010E       2011E       2012E       2013E       2014E
                                  1,791,754      1,240,122   1,526,314   1,556,840   1,587,977    1,603,857   1,363,278   1,431,442   6,353,841   4,337,220   6,002,603   6,115,030   5,986,554   6,166,151   6,351,135   6,605,181
Base                                                                     1,556,840   1,587,977    1,603,857   1,363,278   1,431,442                                       4,588,716   5,986,554   6,166,151   6,351,135   6,605,181
Bull                                                                     1,587,367   1,634,988    1,651,337   1,651,337   1,667,851                                       4,619,242   6,605,513   6,869,734   7,213,220   7,573,881
Bear                                                                     1,221,051   1,159,999    1,206,399   1,254,654   1,304,841                                       4,252,927   4,925,892   5,024,410   5,225,387   5,486,656
Custom                                                                   1,556,840   1,587,977    1,603,857   1,363,278   1,431,442                                       4,588,716   5,986,554   6,166,151   6,351,135   6,605,181

Market Share                            1Q10         2Q10        3Q10       4Q10E       1Q11E        2Q11E       3Q11E       4Q11E        2007        2008        2009       2010E       2011E       2012E       2013E       2014E
Announced M&A                             9%          16%         15%       15.0%       13.0%        13.0%       13.0%       13.0%         21%         20%         16%         14%         13%       14.0%       15.0%       15.0%
ECM                                       6%           8%          5%        6.0%        8.0%         7.0%        7.0%        8.0%         11%         13%          8%          6%          8%        8.5%        9.0%        9.0%
DCM                                       7%           6%          6%        7.0%        8.0%         8.0%        8.0%        8.0%         11%          9%          6%          7%          8%        8.0%        8.5%        8.5%

e = Morgan Stanley Research estimates                                         Source: Company data, Morgan Stanley Research




                                                                                                                                                                                      14
                                                                                          MORGAN          STANLEY       RESEARCH

                                                                                          October 20, 2010
                                                                                          Bank of America




Exhibit 29
Trading Details: 1Q10 – 4Q11E
BAC Trading and Investment Banking Details
$ Millions

Trading                                          1Q10            2Q10            3Q10            4Q10E         1Q11E      2Q11E          3Q11E            4Q11E
FICC - Reported                                 5,515           2,316           3,527            3,242         3,862      3,901          3,315            3,481
CVA
FICC, net of CVA                                5,515           2,316           3,527             3,242        3,862      3,901           3,315            3,481
MTM
Normalized FICC                                 5,515           2,316           3,527             3,242        3,862      3,901           3,315            3,481

Equity                                          1,530             852             974             1,037        1,446      1,290           1,161            1,407

Total Trading (with marks)                      7,045           3,168           4,501             4,279        5,308      5,191           4,477            4,888
Trading Fees / Total Trading                      74%             39%             58%               70%          69%        69%             69%              69%
Total Trading (Normalized)                      7,045           3,168           4,501             4,279        5,308      5,191           4,477            4,888

Trading Fee Income (with marks)                 5,236           1,227          2,596             2,995        3,662       3,582          3,089            3,373
Trading Fee Income (Normalized)                 5,236           1,227          2,596             2,995        3,662       3,582          3,089            3,373



Trading Fees / UW Fees                           1Q10            2Q10            3Q10            4Q10E         1Q11E      2Q11E          3Q11E            4Q11E
Fixed Income                                      7.1 x           2.8 x           4.4 x           3.5 x         3.8 x      3.8 x          3.8 x            3.8 x
Equity                                            4.4 x           2.7 x           2.9 x           3.0 x         3.1 x      3.1 x          3.1 x            3.1 x
Total                                             5.5 x           2.3 x           3.2 x           2.6 x         2.9 x      3.0 x          2.9 x            2.9 x

* Note only CVA on derivatives liabilities charged through trading. DVA on MER structured credit hits other income
Source: Company data, Morgan Stanley Research                                                                                e = Morgan Stanley Research estimates




                                                                                                                                                              15
                                                                                              MORGAN           STANLEY        RESEARCH

                                                                                              October 20, 2010
                                                                                              Bank of America




Exhibit 30
Trading Details: 2007 – 2014E
BAC Trading and Investment Banking Details
$ Millions

Trading                                           2007          2008          2009          2010E           2011E     2012E       2013E         2014E
FICC - Reported                                 (3,437)       (7,617)       12,727         14,600          14,559    14,192      14,535        15,159
CVA                                                  0             0           799              0               0
FICC, net of CVA                                (3,437)       (7,617)       13,526         14,600          14,559    14,192      14,535        15,159
MTM                                              6,837         9,695         3,834              0               0
Normalized FICC                                  3,400         2,078        17,360         14,600          14,559    14,192      14,535        15,159

Equity                                           1,320          743          4,901          4,393           5,304     6,263       6,940         7,564

Total Trading (with marks)                      (2,117)       (6,874)       17,628         18,993          19,863    20,455      21,475        22,723
Trading Fees / Total Trading                      242%           86%           69%            63%             69%       69%         70%           70%
Total Trading (Normalized)                       4,720         2,821        22,261         18,993          19,863    20,455      21,475        22,723

Trading Fee Income (with marks)                 (5,131)      (5,911)        12,235         12,054         13,706     14,114     15,033         15,906
Trading Fee Income (Normalized)                  1,706        3,784         16,868         12,054         13,706     14,114     15,033         15,906



Trading Fees / UW Fees                            2007          2008           2009          2010E          2011E     2012E       2013E         2014E
Fixed Income                                      1.9 x         1.4 x          5.7 x          4.4 x          3.8 x     3.7 x       3.6 x         3.6 x
Equity                                            4.1 x         1.2 x          3.3 x          3.3 x          3.1 x     3.1 x       3.0 x         3.0 x
Total                                             1.9 x         1.1 x          4.0 x          3.3 x          2.9 x     2.8 x       2.7 x         2.7 x

* Note only CVA on derivatives liabilities charged through trading. DVA on MER structured credit hits other income
Note: Legacy BAC for 2007 and 2008
Source: Company data, Morgan Stanley Research                                                                                      e = Morgan Stanley Research estimates




                                                                                                                                                                    16
                                                                             MORGAN          STANLEY        RESEARCH

                                                                             October 20, 2010
                                                                             Bank of America




Exhibit 31
Mortgage Banking Details: 1Q10 – 4Q11E
BAC - Mortgage Banking Income                        4         4         4             4             4          4          4          4
$ Millions

MSR Rollforward                                   1Q10      2Q10      3Q10         4Q10E         1Q11E      2Q11E      3Q11E      4Q11E
Beginning Balance                               19,465    18,842    14,745        12,251        14,579     15,552     15,518     15,426
CFC Beg Balance
ML Beg Balance
Additions / Sales                                 1131        882       742
Impact of Customer Payments                        -603      -981      -923
Other changes                                    -1151     -3998     -2313
Ending Balance                                  18,842    14,745    12,251        14,579        15,552     15,518     15,426     15,272

Mortgage Servicing Portfolio ($ Billions)         1Q10      2Q10       3Q10        4Q10E         1Q11E      2Q11E      3Q11E      4Q11E
Beginning Balance                                2,151     2,144      2,145        2,080         2,083      2,074      2,069      2,057
Originations                                      68.0      70.4       70.4          44.8          37.8       52.5       49.8       41.2
Implied Prepayments                              (75.1)    (69.4)    (135.6)        (41.6)        (46.9)     (57.0)     (62.1)     (61.7)
Ending Balance                                   2,144     2,145      2,080        2,083         2,074      2,069      2,057      2,036
Average Balance                                  2,147     2,144      2,112        2,081         2,078      2,071      2,063      2,047

Estimated Sales %                                  95%       95%       95%           95%           95%        95%        95%        95%

Loans Serviced for Investors                     1,717     1,706     1,669         1,666         1,659      1,655      1,645      1,629
% of Total Loans Serviced                          80%       80%       80%           80%           80%        80%        80%        80%

Loan Production                                   1Q10      2Q10      3Q10         4Q10E         1Q11E      2Q11E      3Q11E      4Q11E
Home Loans & Insurance
 First Lien                                     67,313    69,141    69,875            NF            NF         NF         NF         NF
 Home Equity                                     1,771     1,831     2,000            NF            NF         NF         NF         NF
 Total                                          69,084    70,972    71,875            NF            NF         NF         NF         NF
Total BAC
 First Lien                                     69,502    71,938    71,925            NF            NF         NF         NF         NF
 Home Equity                                     2,027     2,137     2,136            NF            NF         NF         NF         NF
 Total                                          71,529    74,075    74,061        47,160        39,780     55,260     52,380     43,380

Total Mortage Market Originations               356,000   428,000   403,000      262,000        221,000    307,000    291,000    241,000
BAC Market Share                                  20.1%     17.3%     18.4%        18.0%          18.0%      18.0%      18.0%      18.0%

Mortgage Banking Income                           1Q10      2Q10      3Q10         4Q10E         1Q11E      2Q11E      3Q11E      4Q11E
Production Income                                  761       180       977           330           159        166        157        87

Servicing Income
  S ervicing fees and ancillary income           1,567     1,647     1,623         1,731         1,742      1,756      1,768      1,754
  Impact of Customer Payments                     (600)     (981)     (924)         (416)         (469)      (570)      (621)      (617)
                            R,
  Fair Value change in MS net of hedges           (259)       12       (90)         (110)            0          0          0          0
  Other servicing-related income                   172       162       170           147            77         77         78         77
  Total S ervicing Income                          880       840       779         1,352         1,350      1,263      1,225      1,214

Other business segments' mtg banking income       (141)     (122)        (1)        (203)         (189)      (177)      (171)      (170)

Total Mortgage Banking Income                    1,500       898     1,755         1,479         1,320      1,252      1,211      1,131
Source: Company data, Morgan Stanley Research
e = Morgan Stanley Research estimates




                                                                                                                                            17
                                                                               MORGAN           STANLEY       RESEARCH

                                                                               October 20, 2010
                                                                               Bank of America




Exhibit 32
Mortgage Banking Details: 2008 – 2014E
BAC - Mortgage Banking Income                          1           1           1           1             1           1           1
$ Millions

MSR Rollforward                                     2008        2009       2010E       2011E         2012E       2013E       2014E
Beginning Balance                                  3,053      12,733      19,465      19,465        19,465      19,465      19,465
CFC Beg Balance                                   17,188           0
ML Beg Balance                                         0         209
Additions / Sales                                  2,587       5,728
Impact of Customer Payments                       (3,313)     (3,709)
Other changes                                     (6,782)      4,504
Ending Balance                                    12,733      19,465      19,465      19,465        19,465      19,465      19,465

Mortgage Servicing Portfolio ($ Billions)           2008        2009       2010E       2011E         2012E       2013E       2014E
Beginning Balance                                    517       2,057       2,151       2,083         2,036       1,962       1,916
Originations                                       171.9       371.8       253.5       181.3         211.0       209.3       193.9
Implied Prepayments                                1,368        (278)       (322)       (228)       (285.1)     (255.1)     (210.8)
Ending Balance                                     2,057       2,151       2,083       2,036         1,962       1,916       1,899
Average Balance                                    1,289       2,131       2,121       2,065         1,999       1,939       1,908

Estimated Sales %                                    95%         95%         95%         95%           95%         95%         95%

Loans Serviced for Investors                       1,654       1,716       1,666       1,629         1,570       1,533       1,520
% of Total Loans Serviced                            80%         80%         80%         80%           80%         80%         80%

Loan Production                                     2008        2009       2010E       2011E         2012E       2013E       2014E
Home Loans & Insurance
 First Lien                                      128,945     357,371          NF          NF            NF          NF          NF
 Home Equity                                      31,998      10,488          NF          NF            NF          NF          NF
 Total                                           160,943     367,859          NF          NF            NF          NF          NF
Total BAC
 First Lien                                      140,510     378,105          NF          NF            NF          NF          NF
 Home Equity                                      40,489      13,214          NF          NF            NF          NF          NF
 Total                                           180,999     391,319     266,825     190,800       222,120     220,269     204,073

Total Mortage Market Originations               1,618,000   2,103,000   1,449,000   1,060,000     1,234,000   1,295,700   1,360,485
BAC Market Share                                    11.2%       18.6%       18.4%       18.0%         18.0%       17.0%       15.0%

Mortgage Banking Income                             2008        2009       2010E       2011E         2012E       2013E       2014E
Production Income                                  2,118       5,539       2,248        569           333         330         306

Servicing Income
  S ervicing fees and ancillary income             3,529       6,200       6,568       7,020         6,997       6,788       6,678
  Impact of Customer Payments                     (3,313)     (3,709)     (2,921)     (2,277)       (2,851)     (2,551)     (2,108)
                            R,
  Fair Value change in MS net of hedges            1,906         712        (447)          0           584         779         779
  Other servicing-related income                     182         579         651         309           389         389         389
  Total S ervicing Income                          2,304       3,782       3,851       5,052         5,120       5,405       5,738

Other business segments' mtg banking income         (335)       (530)       (467)       (707)         (666)       (649)       (689)

Total Mortgage Banking Income                      4,087       8,791       5,632       4,914         4,787       5,086       5,355
Source: Company data, Morgan Stanley Research
e = Morgan Stanley Research estimates




                                                                                                                                      18
                                                                                     MORGAN          STANLEY         RESEARCH

                                                                                     October 20, 2010
                                                                                     Bank of America




Exhibit 33
Key Metrics
Bank of America
$ Millions

Income Statement                            2008       2009      2010E      2011E     2012E      2013E      2014E
Net Interest Income                       27,960     31,609     35,815     36,182    46,554     48,410     52,166
Fee Revenue                               22,729     26,555     37,381     29,743    26,646     61,873     64,652
Total Revenue                             50,689     58,164     73,196     65,925    73,200    110,283    116,818
Non Interest Expense                      26,394     28,269     34,792     36,220    40,661    63,590      66,835
Pre-Provision Earnings                    24,295     29,895     38,404     29,705    32,539    46,693      49,983
Provisions                                 2,769      3,964      5,010      8,385    26,675    48,570      28,830
Pre-Tax Earnings                          21,526     25,931     33,394     21,320     5,864     (1,877)    21,152
Taxes                                      7,169      9,159     11,977      7,229     1,876     (3,253)     6,437
Minority Interest                              0          0          0          0         0          0          0
Net Income                               $14,357    $16,773    $21,417    $14,091    $3,988     $1,376    $14,716
Pref Dividend                                 16         18         22        181     1,452      4,480      1,376
Net Income to Common                     $14,341    $16,755    $21,395    $13,910    $2,536    ($3,104)   $13,340

Drivers                                      2008     2009E      2010E      2011E     2012E     2013E       2014E
NIM                                         3.24%     2.84%      2.82%      2.60%     2.98%     2.64%       2.76%
Service Fees / Avg Core Dep. (bps)          141.5     136.7      143.1      150.0     148.1     128.2       105.1
Other Fees / Avg Loans (bps)                333.2     326.8      447.1      268.6     179.3     535.6       581.4
AUM Growth                               #DIV/ 0!        7%        13%        19%      -11%       27%        -10%
Avg Loan Growth                               33%       22%        13%        19%       17%        4%          0%
Avg Earning Asset Growth                      39%       22%        14%        10%       12%       17%          3%
Expense Ratio                                 52%       49%        48%        55%       56%       58%         57%
NCO Ratio (Reported)                        0.66%     0.79%      0.70%      0.84%     1.78%     3.55%       3.62%
NCO Ratio (Managed)
Reserves / Loans                           1.91%      1.40%      1.28%      1.32%     2.48%      4.13%      4.64%
NPL Ratio                                  0.47%      0.26%      0.27%      0.72%     1.80%      3.53%      3.19%

Balances                                     2008     2009E     2010E     2011E     2012E     2013E     2014E
EOP AUM ($B)                                  452       482       543       644       571       723       652
Average Managed Loans ($M)                472,444   576,891   652,173   775,719   910,694   949,099   951,221
Average Managed Earning Assets ($M)       910,333 1,111,650 1,268,833 1,389,734 1,562,417 1,830,591 1,891,527
Average Assets ($M)                     1,042,730 1,269,542 1,466,379 1,601,525 1,843,521 2,437,914 2,432,795

Profitability                               2008      2009E      2010E      2011E     2012E      2013E      2014E
ROA                                         1.4%       1.3%       1.5%       0.9%      0.1%      -0.1%       0.5%
Assets / Equity                            12.3 x     12.9 x     11.2 x     11.7 x    11.2 x     10.0 x     10.5 x
ROE                                        16.9%      17.0%      16.5%      10.4%      1.8%      -1.7%       6.3%
ROTA                                        1.4%       1.4%       1.5%       0.9%      0.1%      -0.1%       0.6%
ROTE                                       31.8%      33.6%      37.7%      24.6%      4.7%      -3.5%      11.2%
ROEE                                       11.1%      11.7%      12.2%       7.7%      1.2%      -1.1%       4.8%
PPOP / Avg Assets                           2.3%       2.4%       2.6%       1.9%      1.8%       1.9%       2.1%

Capital                                     2008      2009E      2010E      2011E     2012E      2013E      2014E
TCE / TA                                   4.79%      4.24%      4.05%      3.35%     2.83%      4.70%      6.09%
TCE / RWA                                  0.00%      0.00%      0.00%      4.50%     3.70%      6.47%      9.61%
Common Tier 1                              0.00%      0.00%      6.85%      5.12%     4.80%      7.81%      9.27%
Tier 1 Ratio                               8.10%      8.25%      8.64%      6.87%     9.15%     10.40%     12.10%

Dividends / Repurchases                     2008      2009E      2010E      2011E     2012E     2013E       2014E
Dividend per share                         $1.70      $1.90      $2.12      $2.40     $2.24     $0.04       $0.04
Dividend Payout Ratio                        46%        46%        46%        72%      400%      -15%         20%
Share Buybacks                               -5%        -3%        -7%        -2%        0%        0%          0%

Per Share Data                              2008      2009E      2010E      2011E     2012E     2013E       2014E
Diluted Shares Outstanding                 3,823      4,068      4,594      4,480     4,610     7,742      10,030
EPS                                        $3.75      $4.12      $4.66      $3.10     $0.55    ($0.40)      $1.33
BVPS                                      $24.70     $25.32     $29.70     $32.09    $27.78    $22.45      $21.51
TBVPS                                     $12.56     $13.18     $12.86     $12.30     $9.74    $11.54      $13.44
PPOP/ S hare                               $6.35      $7.35      $8.36      $6.63     $7.06     $6.03       $4.98
e = Morgan Stanley Research estimates                                                                                Source: Company data, Morgan Stanley Research




                                                                                                                                                              19
                                                                                            MORGAN         STANLEY        RESEARCH

                                                                                            October 20, 2010
                                                                                            Bank of America




Exhibit 34
Income Statement, 1Q10 – 4Q11E
Bank of America
                                                              4               4             4             4         4           4         4         4
                                                            1Q10            2Q10          3Q10         4Q10E     1Q11E       2Q11E     3Q11E     4Q11E
INCOME STATEMENT

Interest income and expense (FTE Basis)
    Interest income                                       $20,199        $19,428        $18,384      $17,805    $16,999     $17,052   $17,242   $17,432
    Interest expense                                        6,129          6,231          5,774        5,516      5,221       5,104     5,197     5,230
       Net interest income                                 14,070         13,197         12,610       12,289     11,778      11,948    12,045    12,203

Non interest income items:
   S ervice Charges                                         2,566          2,576          2,212        1,991      1,941       1,980     2,059     2,183
   Investment and brokerage services                        3,025          2,994          2,724        3,159      3,158       3,256     3,344     3,375
   Mortgage banking income                                  1,500            898          1,755        1,479      1,320       1,252     1,211     1,131
   Insurance Income                                           715            678             75          525        656         663       669       676
   Investment banking income                                1,240          1,319          1,371        1,589      1,746       1,700     1,473     1,601
   Equity investment income                                   625          1,604            357          500        327         727       327       727
   Card income                                              1,976          2,023          1,982        1,967      1,950       1,930     1,683     1,691
   Trading account profits                                  5,236          1,227          2,596        2,995      3,662       3,582     3,089     3,373
   Other income                                             1,204          1,801            433        1,580      1,584       1,588     1,592     1,596
   S ecurities gains                                          734             37            883          500        188         188       188       188
       Total noninterest income                            18,821         15,157         14,388       16,286     16,532      16,864    15,634    16,539
Market S ensitive Revenues                                10,126           7,144          7,048        8,244      8,893       9,263     8,232     9,075
Total revenues                                            32,891          28,354         26,998       28,575     28,310      28,811    27,679    28,741
Market S ensitive as a % of Total Revenue                     31%             25%           26%          29%        31%         32%       30%       32%
Provision                                                   9,805           8,105         5,396        5,524      5,562       5,433     5,402     5,136
Revenues net of provisions                                 23,086         20,249         21,602       23,051     22,748      23,379    22,277    23,605


Noninterest expense items:
   Compensation                                             9,158          8,789          8,402        8,150      8,965       8,517     8,346     8,263
   Amortization of intangibles                                446            439            426          422        413         405       397       389
   Other Noninterest Expense                                7,650          7,517          7,567        7,870      7,791       7,635     7,406     7,258
      Total non interest expense                           17,254         16,745         16,395       16,441     17,169      16,557    16,149    15,910
Pretax-preprovision                                       15,637          11,609        10,603        12,134    11,141      12,255    11,530    12,831
Pretax income                                              5,832           3,504         5,207         6,609     5,579       6,822     6,128     7,695
Tax rate                                                      33%             22%           34%           30%       30%         30%       30%       30%
Tax Expense                                                1,921             781         1,752         1,983     1,674       2,046     1,838     2,309
Operating income                                           3,911           2,723         3,455         4,627     3,905       4,775     4,289     5,387
   Preferred Dividend                                         348             340           348          340        340         340       340       340
   Minority Interest                                            0               0             0            0          0           0         0         0
Operating income to common                                  3,563           2,383         3,107        4,287      3,565       4,435     3,949     5,047

Extraordinary Item Pre-tax                                 (1,122)           588        (10,944)        (385)        0           0         0         0
tax rate
Extraordinary item                                           (729)           400        (10,754)        (250)        0           0         0         0

Reported Net income to Common                              $2,834          $2,783       ($7,647)      $4,037     $3,565      $4,435    $3,949    $5,047


EPS
Operating                                                   $0.36           $0.24         $0.31        $0.42      $0.35       $0.44     $0.39     $0.51
Reported                                                    $0.28           $0.27        ($0.77)       $0.40      $0.35       $0.44     $0.39     $0.51


Source: Company data, Morgan Stanley Research   E = Morgan Stanley Research estimates




                                                                                                                                                     20
                                                                                                   MORGAN           STANLEY     RESEARCH

                                                                                                   October 20, 2010
                                                                                                   Bank of America




Exhibit 35
Income Statement, 2007 – 2014E
     Bank of America
                                                           1               1                 1                1            1         1         1          1
                                                        2007            2008              2009             2010E        2011E     2012E     2013E      2014E
INCOME STATEMENT

Interest income and expense
   Interest income                                    $89,053         $86,878           $79,217         $75,816       $68,726   $72,449   $74,685    $82,651
   Interest expense                                   $52,871         $40,324           $30,807         $23,650       $20,752    23,111    22,954     27,633
      Net interest income                              36,182          46,554            48,410          52,166        47,974    49,338    51,731     55,018

Non interest income items:
  Se                                                    8,908          10,316            11,038           9,345         8,163     8,979     9,607     10,280
  Investment and brokerage services                     5,147           4,972            11,919          11,902        13,133    13,776    14,511     15,527
  Mortgage banking income                                 902           4,087             8,791           5,632         4,914     4,787     5,086      5,355
  Insurance Income                                                      1,833             2,760           1,993         2,665     2,958     3,106      3,261
  Investment banking income                             2,345           2,263             5,551           5,519         6,519     7,058     7,729      8,210
  Equity investment income                              3,467            (237)            1,714           3,086         2,106     2,031     2,194      2,370
  Card income                                          14,077          13,314             8,353           7,948         7,253     7,321     7,525      7,876
  Trading account profits                              (5,131)         (5,911)           12,235          12,054        13,706    14,114    15,033     15,906
  Other income                                           (152)         (5,115)           (5,211)          5,018         6,361     6,679     7,013      7,364
  Securities gains                                        180           1,124             4,723           2,154           750       500      (250)      (500)
      Total noninterest income                         29,743          26,646            61,873          64,652        65,568    68,203    71,554     75,649
   Market S ensitive Revenues                           5,828           1,087            31,419          32,562        35,463    36,978    39,466     42,013
   Total revenues                                      65,925          73,200           110,283         116,818       113,542   117,541   123,285    130,667
   Market S ensitive as a % of Total Revenue               9%              1%               28%             28%           31%       31%       32%        32%
   Provision                                            8,385          26,675            48,570          28,830        21,534    18,088    16,072     16,423
   Revenues net of provisions                          57,540          46,525            61,713          87,988        92,009    99,453   107,214    114,245


Noninterest expense items:
  Personnel                                            18,753          18,371            31,528          34,499        34,091    34,091    34,773     35,468
  Amortization of intangibles                           1,676           1,834             2,080           1,733         1,604     1,524     1,448      1,375
                                                       15,791          20,456            29,982          30,604        30,090    29,789    30,683     31,604
     Total non interest expense                        36,220          40,661            63,590          66,835        65,785    65,404    66,904     68,447
Pretax-Preprovision                                   29,705           32,539           46,693           49,983       47,757    52,137    56,382     62,220
Pretax income                                         21,320            5,864            (1,877)         21,152       26,223    34,048    40,310     45,798
Tax rate                                                  34%              32%             173%              30%          30%       30%       32%        32%
Tax Expense                                            7,229            1,876            (3,253)          6,437        7,867    10,214    12,899     14,655
Operating income                                      14,091            3,988             1,376          14,716       18,356    23,834    27,411     31,142
     Preferred Dividend                                   181           1,452             4,480           1,376         1,360     1,360     1,360      1,360
     Minority Interest                                      0               0                 0               0             0         0         0          0
Operating income to common                             13,910           2,536            (3,104)         13,340        16,996    22,474    26,051     29,782

Extraordinary Item Pre-tax                                                71              1,384          (11,863)          0
tax rate                                                  NM               1                  0                0          NM        NM        NM         NM
Extraordinary item                                       888              20                900          (11,333)          0         0         0          0

Reported Net income to Common                         $14,798          $2,556           ($2,204)         $2,007       $16,996   $22,474   $26,051    $29,782



Operating                                               $3.10           $0.55            ($0.40)          $1.33         $1.69     $2.38     $3.01      $3.75
Reported                                                $3.30           $0.55            ($0.28)          $0.20         $1.69     $2.38     $3.01      $3.75

Source: Company data, Morgan Stanley Research   E = Morgan Stanley Research estimates




                                                                                                                                                                21
                                                                                                     MORGAN          STANLEY            RESEARCH

                                                                                                     October 20, 2010
                                                                                                     Bank of America




Exhibit 36
Average Balance Sheet, 1Q10 – 4Q11E
AVERAGE BALANCE SHEET
                                                                   1Q10           2Q10             3Q10         4Q10E         1Q11E          2Q11E         3Q11E         4Q11E
Assets                                                               1%             -3%              -3%           -2%           -1%            1%            1%            1%
   Commercial, financial and agricultural                      $253,140       $244,979         $244,248      $243,285      $243,014       $242,529      $241,806      $240,852
   Comm. Real estate, construction and other                    $68,526        $64,218          $55,660       $52,800       $51,395        $50,090       $48,981       $47,520
   Residential mortgage                                        $243,833       $247,715         $237,292      $230,961      $229,203       $230,375      $232,546      $234,425
   Home Equity                                                 $152,536       $148,219         $143,083      $140,155      $138,808       $140,808      $141,652      $143,659
    Other consumer (incl discont'd RE from CFC acq)             118,355         115,479          112,279      $111,404      $110,070       $110,860     $111,718      $112,518
    Credit Card                                                 155,225         146,444          142,298       132,749       129,032        125,461       123,799       119,474
       Total Loans                                              991,615         967,054          934,860       911,354       901,522        900,123       900,502       898,449
       Other Earning Assets                                     941,445         943,736          928,959       947,084       946,152        943,736       938,249       942,349
    Total Earning Assets                                      1,933,060       1,910,790        1,863,819     1,858,438     1,847,674      1,843,859     1,838,750     1,840,798
    Cash and due from banks                                     196,911         209,686          155,784       155,784       155,784        155,784       155,784       155,784
    Allowance for losses                                        (42,018)        (46,045)         (44,418)      (42,890)      (41,709)       (40,739)      (39,783)      (38,853)
    Goodwill and other intangibles                               98,097          97,225           91,301        85,793        85,376         84,966        84,565        84,172
    Other assets                                                323,710         318,089          304,722       303,341       301,867        301,387       300,715       301,096
       Total Assets                                           2,509,760       2,489,745        2,371,207     2,360,466     2,348,991      2,345,257     2,340,032     2,342,997
    memo: Managed Loans                                        991,615         967,054          934,860       911,354       901,522        900,123       900,502       898,449
    memo: Market Based Earning Assets                          527,319         521,010          494,777       492,536       490,141        489,362       488,272       488,891
    memo: Loan to Deposits                                        112%            108%             106%          102%          101%           100%          100%           99%
Liabilities
    Core Int. Bearing deposits                                 $617,425        $626,977         $612,601     $624,927      $629,774       $639,517      $624,853      $637,426
    Other deposits and borrowings                              $697,164        $647,587         $577,598      $524,737      $480,228       $436,710      $446,326      $429,708
    Long Term Debt                                              513,634         497,469          485,588       472,166       462,271        447,722       437,029       424,950
         Total interest bearing liabilities                   1,828,223       1,772,033        1,675,787     1,621,831     1,572,272      1,523,948     1,508,208     1,492,084
    Noninterest bearing deposits                                264,892         271,123          270,060       268,401       264,892        262,989       275,461       273,769
    Other liabilities                                           186,754         213,128          191,382       237,222       274,565        317,158       311,387       330,514
         Total liabilities                                   $2,279,869      $2,256,284       $2,137,229    $2,127,454    $2,111,729     $2,104,096    $2,095,057    $2,096,367
    Memo: Core deposits (int and non Int)                       882,317         898,100          882,661       893,329       894,666        902,506       900,314       911,195
    Memo: Borrowings                                          1,210,798       1,145,056        1,063,186       996,903       942,498        884,432       883,355       854,658
    Memo: Core deposts as a % of Earning Assets                      46%             47%              47%           48%           48%            49%           49%           50%
    Preferred stock                                              27,586          17,979           18,049        18,104        18,104         18,104        18,104        18,104
    Common stockholders' equity                                 202,305         215,483          215,930       214,909       219,159        223,058       226,871       228,526
         Total shareholders' equity                            $229,891        $233,461         $233,978      $233,013      $237,263       $241,162      $244,975      $246,630

Total liabilities and equity                                 $2,509,760      $2,489,745       $2,371,207    $2,360,466    $2,348,991     $2,345,257    $2,340,032    $2,342,997


Source: Company data, Morgan Stanley Research         E = Morgan Stanley Research estimates




                                                                                                                                                                              22
                                                                                             MORGAN           STANLEY             RESEARCH

                                                                                             October 20, 2010
                                                                                             Bank of America




Exhibit 37
Average Balance Sheet, 2007 – 2014E
              E
AVERAGE BALANC SHEET
                                                           2007             2008             2009          2010E         2011E          2012E         2013E         2014E
Assets
   Commercial, financial and agricultural              $224,869          $275,261        $278,826      $246,413      $242,050       $244,471      $254,250      $264,420
   Comm. Real estate, construction and other            $42,896           $63,205         $73,348       $60,301       $49,496        $47,517       $48,467       $50,406
   Residential mortgage + HELs                         $264,540          $260,253        $249,433      $239,950      $231,637       $238,586      $248,130      $260,536
   Home Equity                                          $98,703          $134,978        $154,787      $145,998      $141,232       $144,056      $148,378      $152,829
   Other consumer                                        $74,483          $97,161        $120,656      $114,379      $111,291       $113,517      $116,923      $120,430
   Credit Card                                            70,228           79,836           72,049       144,179       124,442        115,731       116,888       120,395
      Total Loans                                        775,719          910,694          949,099       951,221       900,149        903,878       933,035       969,016
      Other Earning Assets                               614,015          651,723          881,492       940,306       942,621        942,621       942,621       942,621
   Total Earning Assets                                1,389,734        1,562,417        1,830,591     1,891,527     1,842,770      1,846,500     1,875,657     1,911,638
   Cash and due from banks                                33,096           45,292          196,024       179,541       155,784        156,099       158,564       161,606
   Allowance for losses                                   (9,407)         (17,424)         (32,200)      (43,843)      (40,271)       (36,804)      (33,790)      (32,372)
   Goodwill and other intangibles                         77,000           88,782           98,308        93,104        84,770         94,516        93,030        91,618
   Other assets                                          111,102          164,455          345,192       312,465       301,266        303,811       308,699       314,454
      Total Assets                                     1,601,525        1,843,521        2,437,914     2,432,795     2,344,319      2,364,122     2,402,160     2,446,944
   memo: Managed Loans                                  876,835         1,015,107       1,047,584       951,221       900,149        903,878       933,035       969,016
   memo: Market Based Earning Assets                    412,608           360,990         481,574       508,910       489,167        493,299       501,236       510,580

Liabilities
   Core Int. Bearing deposits                           $420,203         $503,722         $610,444      $620,483     $632,892        $658,208     $684,536       $718,763
   Other deposits and borrowings                        $630,649         $665,224         $681,739      $611,771      $448,243       $440,647      $449,054      $450,130
   Long Term Debt                                        169,709          231,075          446,630       492,214       442,993        425,273       421,020       416,810
       Total interest bearing liabilities              1,220,561        1,400,021        1,738,813     1,724,468     1,524,128      1,524,128     1,554,611     1,585,703
   Noninterest bearing deposits                          173,551          192,905          250,609       268,619       269,278        277,356       288,451       299,989
   Other liabilities                                      70,775           85,801          204,132       207,121       308,406        316,827       314,589       318,551
       Total liabilities                              $1,464,887       $1,678,727       $2,193,554    $2,200,209    $2,101,812     $2,118,311    $2,157,650    $2,204,243
              ore
   Memo: C deposits (int and non Int)                    593,754          696,627          861,053       889,102       902,170        935,564       972,987     1,018,752
   Memo: Borrowings                                      800,358          896,299        1,128,369     1,103,986       891,236        865,920       870,074       866,940
              ore
   Memo: C deposts as a % of Earning Assets                   43%              45%              47%           47%           49%            51%           52%           53%
   Preferred stock                                         3,183           21,666           57,058        20,429        18,104         18,104        18,104        18,104
   Common stockholders' equity                           133,454          143,128          187,496       212,156       224,403        227,707       226,406       224,598
       Total shareholders' equity                       $136,638         $164,794         $244,554      $232,586     $242,507       $245,811      $244,510       $242,702

Total liabilities and equity                          $1,601,525       $1,843,521       $2,437,914    $2,432,795    $2,344,319     $2,364,122    $2,402,160    $2,446,944


Source: Company data, Morgan Stanley Research   E = Morgan Stanley Research estimates




                                                                                                                                                                     23
                                                                                                  MORGAN          STANLEY           RESEARCH

                                                                                                  October 20, 2010
                                                                                                  Bank of America




Exhibit 38
Equity and Capital, 1Q10 – 4Q11E
EQUITY ANALYSIS

Equity roll forward:                                             1Q10           2Q10            3Q10         4Q10E        1Q11E          2Q11E        3Q11E        4Q11E
   Beginning common equity                                   $194,236       $211,859        $215,181      $212,391     $217,427       $220,891     $225,225     $228,517
   Add: net income                                              2,834          2,783           (7,647)       4,037        3,565          4,435        3,949         5,047
   Less: dividends                                                (100)          (100)           (100)        (101)         (101)          (101)        (657)        (644)
   Less: share repurchase                                            0             17               0            0             0              0            0       (4,385)
   Other comprehensive income                                      690            482           4,783        1,100             0              0            0            0
   Other change in equity                                      14,199             140             174                          0              0            0            0
      Ending common shareholders equity                      $211,859       $215,181        $212,391      $217,427     $220,891       $225,225     $228,517     $228,535
   Preferred S hares                                          $17,964        $17,993         $18,104        18,104       18,104         18,104       18,104       18,104
   Total Shareholders equity                                  229,823        233,174         230,495       235,531      238,995        243,329      246,621      246,639

Book value calculations
   Book value / share                                          $21.12         $21.45          $21.17        $21.51       $21.86         $22.28       $22.61       $23.07
   Tangible book value / share                                 $11.70         $12.14          $12.91        $13.44       $13.82         $14.29       $14.65       $14.99

Regulatory capital
   Tier 1 capital                                            $155,428       $159,551        $164,763      $170,979     $174,443       $179,647     $187,189     $188,304
   Tier 2 capital                                              29,152         30,732          32,406        31,025       30,043         29,085       28,131       27,225
      Total capital                                          $219,913       $220,827        $231,120      $202,004     $204,486       $208,731     $215,321     $215,529

   Risk weighted assets                                     1,519,723       1,494,990       1,476,774     1,413,533    1,383,601     1,381,402     1,373,731    1,380,070
                                                                 -1.5%           -1.6%           -1.2%         -4.3%        -2.1%         -0.2%         -0.6%        0.5%
   Risk weighted assets / total assets (BAC)                      65%             63%             63%           61%          60%           60%           60%          60%

Shares outstanding roll forward:
   Beginning shares                                           8,650.2        10,032.0        10,033.0      10,033.7     10,107.0      10,107.0      10,107.0     10,107.0
   Less: repurchases                                              0.0             1.0                           0.0          0.0           0.0           0.0       (202.1)
   Options issuance and other                                 1,381.8             0.0             0.7          73.3          0.0           0.0           0.0          0.0
      Ending shares                                          10,032.0        10,033.0        10,033.7      10,107.0     10,107.0      10,107.0      10,107.0      9,904.9

   Average Shares
     Basic                                                    9,177.5         9,956.8         9,976.4      10,107.0     10,107.0      10,107.0      10,107.0      9,904.9
     Dilution                                                   827.8            73.0             0.0           0.0          0.0           0.0           0.0          0.0
     Diluted                                                 10,005.3        10,029.8         9,976.4      10,107.0     10,107.0      10,107.0      10,107.0      9,904.9

   Avg share price                                             $16.25          $16.93         $13.56        $13.90       $17.28         $17.24       $19.85       $21.69
   Trailing 12 mo multiple                                      -47.5x          -54.8x          40.4x         18.0x        13.0x          13.0x        13.0x        13.5x
                                                                                                 0.6x          0.6x         0.8x           0.8x         0.9x         0.9x
CAPITAL ALLOCATION
Dividends                                                        1Q10            2Q10           3Q10         4Q10E        1Q11E          2Q11E        3Q11E        4Q11E
    Dividends per share                                         $0.01           $0.01          $0.01         $0.01        $0.01          $0.01        $0.07        $0.07
Share repurchase
    Net Repurchases / total outstanding                         16.0%            0.0%            0.0%          0.7%         0.0%           0.0%         0.0%        -2.0%
    Authorization remaining (millions of shares)                 189             190             190           190          190            190          190           (12)
    new share repurchase authorization

Capital adequacy & allocation ratios
   Tangible Common Equity (incl DTL)                          117,964         122,542         130,345       135,802      139,680       144,419       148,108      148,515
   Tangible Assets                                          2,235,347       2,267,281       2,241,807     2,231,685    2,220,833     2,217,572     2,212,839    2,216,139
   Total equity / total assets                                    9.9%           9.9%            9.9%         10.2%        10.4%         10.6%         10.7%        10.7%
   TE / TA                                                        5.9%           6.0%            6.4%          5.4%         5.6%           5.8%         6.0%         6.0%
   TE / non-trading TA                                            7.2%           7.5%            8.2%          8.6%         8.9%           9.2%         9.4%         9.4%
   TCE / TA                                                     5.28%           5.40%           5.81%         6.09%        6.29%         6.51%         6.69%       6.70%
   TCE / RWA                                                     7.8%            8.2%            8.8%          9.6%        10.1%         10.5%         10.8%       10.8%
   Tier 1 ratio                                                10.23%          10.67%          11.16%        12.10%       12.61%        13.00%        13.63%      13.64%
   Total capital ratio                                         14.47%          14.77%          15.65%        14.29%       14.78%        15.11%        15.67%      15.62%
   Leverage ratio                                               6.44%           6.67%           7.23%         5.38%        5.51%         5.68%         5.92%       5.95%

   Dividend payout ratio                                           4%             4%             -1%            3%           3%             2%          17%          13%
   Buyback ratio (buybacks / reported net income)                  0%            -1%              0%            0%           0%             0%           0%          87%
   Gross distribution to shareholders                              4%             3%             -1%            3%           3%             2%          17%         100%
   Less: issuance for options, etc..                            -501%            -5%              2%            0%           0%             0%           0%           0%
   Net distribution to shareholders                             -497%            -2%              1%            3%           3%             2%          17%         100%
   Implied reinvestment rate                                     597%           102%             99%           97%          97%            98%          83%           0%
   Total uses of capital                                         100%           100%            100%          100%         100%           100%         100%         100%

Source: Company data, Morgan Stanley Research       E = Morgan Stanley Research estimates




                                                                                                                                                                        24
                                                                                                 MORGAN           STANLEY             RESEARCH

                                                                                                 October 20, 2010
                                                                                                 Bank of America




Exhibit 39
Equity and Capital, 2007 – 2014E
EQUITY ANALYSIS

Equity roll forward:                                            2007            2008E           2009E         2010E         2011E          2012E        2013E        2014E
   Beginning common equity                                  $132,421         $142,394        $139,351      $194,236      $217,427       $228,535     $226,879     $225,933
   Add: net income                                             14,798            2,556          (2,204)       2,007        16,996          22,474       26,051       29,782
   Less: dividends                                            (10,651)         (10,225)           (324)         (402)       (1,503)        (4,732)      (8,740)      (8,908)
   Less: share repurchase                                      (3,715)               0              17            17        (4,385)       (19,398)     (22,006)     (23,546)
   Other comprehensive income                                     800          (13,573)          5,206        7,055              0              0            0            0
   Other change in equity                                       8,741           18,199         52,190        14,514              0              0        3,750            0
      Ending common shareholders equity                     $142,394         $139,351        $194,236      $217,427      $228,535       $226,879     $225,933     $223,262
   Preferred S hares                                            4,409          37,701          37,208        18,104        18,104         18,104       18,104       18,104
   Total Shareholders equity                                 146,803          177,052         231,444       235,531       246,639        244,983      244,037      241,366

Book value calculations
  Book value / share                                          $32.09           $27.78          $22.45        $21.51        $23.07         $25.17       $27.14       $29.47
  Tangible book value / share                                 $12.30            $9.74          $11.54        $13.44        $14.99         $16.46       $17.89       $19.48

Regulatory capital
  Tier 1 capital                                             $83,372         $120,804        $160,388      $170,979      $188,304       $192,341     $191,395     $188,724
  Tier 2 capital                                              50,348          $52,916         $38,787       $31,025       $27,225         24,033       21,197       21,197
     Total capital                                          $133,720         $171,644        $226,077      $202,004      $215,529       $216,374     $212,592     $209,920

   Risk weighted assets                                    1,212,905       $1,320,824       $1,542,517    $1,413,533    $1,380,070      1,391,728    1,420,013    1,452,489
                                                                                                                  -8%           -2%            1%           2%           2%
   Risk weighted assets / total assets (BAC)                     71%              73%             69%            61%           60%            60%          60%          61%

Shares outstanding roll forward:
   Beginning shares                                          4,457.9          4,437.9          5,016.9       8,650.2      10,107.0        9,904.8      9,013.4      8,324.0
   Less: repurchases                                           (73.8)             0.0              1.0           1.0        (202.1)        (891.4)      (811.2)      (749.2)
   Options issuance and other                                     54            579.0          3,632.2       1,455.8           0.0            0.0         122             0
      Ending shares                                          4,437.9          5,016.9          8,650.2      10,107.0       9,904.8        9,013.4      8,324.0      7,574.8

   Average Shares
     Basic                                                   4,423.5          4,591.1          7,720.2       9,804.4      10,056.5        9,459.1      8,668.7      7,949.4
     Dilution                                                   56.4             18.6             22.1         225.2           0.0            0.0          0.0          0.0
     Diluted                                                 4,480.0          4,609.7          7,742.2      10,029.6      10,056.5        9,459.1      8,668.7      7,949.4

   Avg share price                                            $49.27           $56.62          $13.01        $15.16        $19.02         $24.51       $29.75       $33.11
   Trailing 12 mo multiple                                      10.6x            18.3x          -10.3x        -11.0x         13.1x          14.5x        12.5x        11.0x
                                                                 1.5x             2.0x            0.6x          0.7x          0.8x           1.0x         1.1x         1.1x
C          LOC
 APITAL AL ATION
Dividends                                                      2007             2008            2009           2010E         2011E         2012E        2013E        2014E
   Dividends per share                                         $2.40            $2.24           $0.04          $0.04         $0.15         $0.53        $1.05        $1.18
Share repurchase
   Repurchases / total outstanding                              -0.4%           12.8%            62.7%         16.7%         -2.0%          -9.0%        -7.6%         -9.0%
   Authorization remaining (millions of shares)                  188             388              589           790           788              97         (515)      (1,064)
   new share repurchase authorization                            200             200              200           200           200            200           200          200

Capital adequacy & allocation ratios
  Tangible Common Equity                                      54,568           48,882           99,854       135,802       148,515        148,383      148,885      147,589
  Tangible Assets                                          1,627,920        1,727,474        2,124,959     2,231,685     2,216,139      2,237,093    2,275,862    2,321,177
   Total equity / total assets                                   8.6%             9.7%           10.4%         10.2%         10.7%          10.6%        10.4%        10.1%
   TE / TA                                                       3.6%             5.0%            6.3%          6.7%          7.3%           7.3%         7.2%         7.0%
   TE / non-trading TA                                           4.4%             5.8%            7.6%          8.6%          9.4%           9.3%         9.2%         8.9%
   TCE / TA                                                    3.35%            2.83%            4.70%         6.09%         6.70%          6.63%        6.54%        6.36%
   TCE / RWA                                                    4.5%             3.7%             6.5%          9.6%         10.8%          10.7%        10.5%        10.2%
   Tier 1 ratio                                                 6.9%             9.1%            10.4%         12.1%         13.6%          13.8%        13.5%        13.0%
   Total capital ratio                                         11.0%            13.0%            14.7%         14.3%         15.6%          15.5%        15.0%        14.5%
   Leverage ratio                                               5.5%             6.9%             4.9%          5.3%          6.0%           6.1%         6.0%         5.8%

   Dividend payout ratio                                         72%             400%            -15%           20%            9%            21%          34%          30%
   Buyback ratio (buybacks / reported net income)                25%               0%              1%           -1%           26%            86%          84%          79%
   Gross distribution to shareholders                            97%             400%            -14%           19%           35%           107%         118%         109%
   Less: issuance for options, etc..                            -62%            -456%          -3792%          -99%            0%             0%         -14%           0%
   Net distribution to shareholders                              35%             -56%          -3806%          -79%           35%           107%         104%         109%
   Implied reinvestment rate                                     65%             156%           3906%          179%           65%            -7%          -4%          -9%
   Total uses of capital                                        100%             100%            100%          100%          100%           100%         100%         100%

Source: Company data, Morgan Stanley Research       E = Morgan Stanley Research estimates




                                                                                                                                                                       25
                                                                                               MORGAN          STANLEY             RESEARCH

                                                                                               October 20, 2010
                                                                                               Bank of America




Exhibit 40
Credit Analysis, 1Q10 – 4Q11E
CREDIT ANALYSIS
                                                        1Q10            2Q10            3Q10           4Q10E         1Q11E           2Q11E         3Q11E         4Q11E

Reserves
   Beginning reserves                                     $37,200         $46,835        $45,255         $43,581       $42,200         $41,218       $40,260       $39,306
   Add: provisions                                          9,805           8,105          5,396           5,524         5,562           5,433         5,402         5,136
   Commercial, financial and agricultural                     934             770            681             613           569             514           518           455
   Comm. Real estate, construction and other                  615             645            410             439           406             387           370           359
   Residential mortgage                                     1,069             971            660             728           706             689           703           650
   Home Equity                                              2,397           1,741          1,372           1,325         1,266           1,299         1,285         1,249
   Other consumer                                           1,188              971            804             772           733             719           732           709
   Credit Card                                              4,594            4,459          3,270           3,028        2,863           2,784         2,746         2,620
      Total Net charge-offs                                10,797            9,557          7,197           6,905        6,544           6,392         6,355         6,043
   Reserve Build                                              (992)         (1,452)        (1,801)         (1,381)         (982)           (959)         (953)         (906)
   Other Change                                            10,627             (128)           127               0             0               0             0             0
      Ending reserves for loan losses                     $46,835         $45,255        $43,581         $42,200       $41,218         $40,260       $39,306       $38,400
   memo: Ending reserves for credit losses                $48,356         $46,668        $46,668         $45,287       $44,305         $43,347       $42,393       $41,487


                   ard
   memo: Managed C NCOs                                     4,594           4,459          3,270           3,028         2,863           2,784         2,746         2,620
   memo: Total Managed NCOs                                10,797           9,557          7,197           6,905         6,544           6,392         6,355         6,043
                   ard
   memo: Managed C Provisions                               3,535           3,795          3,177           2,574         2,434           2,366         2,334         2,227
   memo: Total Managed Provisions                           9,805           8,105          5,396           5,524         5,562           5,433         5,402         5,136

Reserve ratios
   Reserves / total loans                                    4.80%           4.73%          4.67%           4.64%         4.58%           4.48%         4.37%         4.28%
   Reserves / Nonperforming loans                             139%           136%            135%           139%          141%             141%         142%           141%
   Reserves / Nonperforming assets                            130%           127%            126%           139%          141%             141%         142%           141%
   Reserves / annualized charge-offs                          108%           118%            151%           153%          157%             157%         155%           159%

Net Charge offs Ratios (Reported Basis)
    Commercial                                               1.50%           1.26%          1.11%           1.00%         0.95%           0.85%         0.85%         0.75%
    Construction/ CRE                                        3.64%           4.03%          2.92%           3.30%         3.20%           3.10%         3.00%         3.00%
    Residential real estate                                  1.78%           1.57%          1.10%           1.25%         1.25%           1.20%         1.20%         1.10%
    Home Equity                                              6.37%           4.71%          3.80%           3.75%         3.70%           3.70%         3.60%         3.45%
    Other Consumer                                           4.07%           3.37%          2.84%           2.75%         2.70%           2.60%         2.60%         2.50%
    Credit Card                                             12.00%          12.21%          9.12%           9.05%         9.00%           8.90%         8.80%         8.70%
       Total                                                 4.42%           3.96%          3.05%           3.01%         2.94%           2.85%         2.80%         2.67%

Net Charge offs Ratios (Managed Basis)
    Commercial                                               1.50%           1.26%          1.11%           1.00%         0.95%           0.85%         0.85%         0.75%
    Construction/ CRE                                        3.64%           4.03%          2.92%           3.30%         3.20%           3.10%         3.00%         3.00%
    Residential real estate                                  1.78%           1.57%          1.10%           1.25%         1.25%           1.20%         1.20%         1.10%
    Other Consumer                                           4.07%           3.37%          2.84%           2.75%         2.70%           2.60%         2.60%         2.50%
    Credit Card                                             12.00%          12.21%          9.12%           9.05%         9.00%           8.90%         8.80%         8.70%
       Total                                                 4.42%           3.96%          3.05%           3.01%         2.94%           2.85%         2.80%         2.67%

Nonperforming assets
   Nonperforming loans:
   Commercial, financial and agricultural                  $4,704          $4,590         $4,491          $4,014        $3,524          $3,153        $2,660        $2,529
   Comm. Real estate, construction and other               $7,177          $6,704         $6,376          $5,544        $5,139          $4,759        $4,408        $4,039
   Residential mortgage + HELs                            $21,098         $21,234        $20,993         $20,325       $20,055         $20,158       $20,232       $20,161
   Other consumer                                            $638            $672           $436            $501          $495            $499          $447          $450
      Total nonperforming loans                           $33,617         $33,200        $32,296         $30,384       $29,214         $28,568       $27,747       $27,179
   Foreclosed assets                                        2,308           2,501          2,260              NF            NF              NF            NF            NF
      Total nonperforming assets                          $35,925         $35,701        $34,556         $30,384       $29,214         $28,568       $27,747       $27,179


   Credit Card - 90+ Delinqencies (Held)                   $5,572           $4,526        $4,007

   Loans 90 + past due and accruing                        21,423           21,769        22,208               NF            NF              NF            NF            NF

As a % of loans                                                 0%             -1%            -3%
    Commercial, financial and agricultural                   1.86%           1.87%          1.84%          1.65%         1.45%            1.30%         1.10%         1.05%
    Comm. Real estate, construction and other               10.47%          10.44%         11.46%         10.50%        10.00%            9.50%         9.00%         8.50%
    Residential mortgage + HELs                              8.65%           8.57%          8.85%          8.80%         8.75%            8.75%         8.70%         8.60%
    Other consumer                                           0.54%           0.58%          0.39%          0.45%         0.45%            0.45%         0.40%         0.40%
       Total nonperforming loans                             3.39%           3.43%          3.45%          3.33%         3.24%            3.17%         3.08%         3.03%

   Credit Card - 90+ Delinquencies                           3.59%           3.09%          2.82%

As a % of avg. assets
      Total nonperforming assets                             1.54%           1.51%          1.48%           1.31%         1.27%           1.24%         1.21%         1.18%

Source: Company data, Morgan Stanley Research   E = Morgan Stanley Research estimates




                                                                                                                                                                         26
                                                                                                 MORGAN        STANLEY           RESEARCH

                                                                                                 October 20, 2010
                                                                                                 Bank of America




Exhibit 41
Credit Analysis, 2007 – 2014E
CREDIT ANALYSIS
                                                      2007            2008               2009         2010E          2011E     2012E       2013E       2014E

Reserves
   Beginning reserves                                $9,016         $11,588         $23,071         $37,200     $42,200      $38,400     $35,208     $32,372
   Add: provisions                                    8,385          25,423          48,570          28,830      21,534       18,088      16,072      16,423
   Commercial, financial and agricultural             1,010           2,682           5,808           2,998       2,057        1,711       1,525       1,322
   Comm. Real estate, construction and other             47             887           2,702           2,109       1,522        1,188         727         428
   Residential mortgage                                  57             925           4,350           3,428       2,749        2,147       1,861       1,303
   Home Equity                                          274           3,496           7,050           6,835       5,100        3,962       3,339       2,292
   Other consumer                                     1,651          3,529           5,992            3,735        2,893        2,724       2,689      2,649
   Credit Card                                        3,441          4,712           7,786          15,351       11,013         9,548       8,767      8,428
      Total Net charge-offs                           6,480         16,231          33,688          34,456       25,334       21,280      18,908      16,423
   Reserve Build                                      1,905          9,192          14,882           (5,626)      (3,800)      (3,192)     (2,836)         0
   Other Change                                         667          2,291             (753)        10,626             0            0           0          0
      Ending reserves for loan losses               $11,588        $23,071         $37,200         $42,200      $38,400      $35,208     $32,372     $32,372
   memo: Ending reserves for credit losses          $12,106        $23,589         $37,718         $42,718      $38,918      $35,726     $32,890     $32,890


                   ard Os
   memo: Managed C NC                                 8,214         11,382          19,185          15,351          11,013     9,548       8,767      8,428
   memo: Total Managed NC Os                         11,253         22,901          45,087          34,456          25,334    21,280      18,908     16,423
                   ard
   memo: Managed C Provisions                        11,317         20,024          30,081          13,081           9,361     8,116       8,767      8,428
   memo: Total Managed Provisions                    13,344         32,094          59,969          28,830          21,534    18,088      16,072     16,423

Reserve ratios
   Reserves / total loans                             1.32%           2.48%             4.13%         4.64%          4.28%      3.91%       3.48%      3.35%
   Reserves / Nonperforming loans                     207%            141%              111%          139%           141%       142%        169%       233%
   Reserves / Nonperforming assets                     207%            141%              111%         139%           141%       142%        169%       233%
   Reserves / annualized charge-offs                  179%            142%              110%           122%           152%       165%        171%      197%
                                                                        0.7               1.1           1.7            1.8        1.9         2.0
Net Charge offs Ratios
  Commercial                                          0.45%           0.97%              2.08%        1.22%          0.85%      0.70%       0.60%      0.50%
  Construction/ CRE                                   0.11%           1.40%              3.68%        3.50%          3.08%      2.50%       1.50%      0.85%
  Residential real estate                             0.02%           0.36%              1.74%        1.43%          1.19%      0.90%       0.75%      0.50%
  Home Equity                                         0.28%           2.59%              4.55%        4.68%          3.61%      2.75%       2.25%      1.50%
  Consumer                                            2.22%           3.63%              4.97%        3.27%          2.60%      2.40%       2.30%      2.20%
  Credit Card                                         4.90%           5.90%             10.81%       10.65%          8.85%      8.25%       7.50%      7.00%
      Total                                           0.84%           1.78%              3.55%        3.62%          2.81%      2.35%       2.03%      1.69%

Net Charge offs Ratios (Managed Basis)
  Commercial                                          0.45%           0.97%              2.08%        1.22%          0.85%      0.70%       0.60%      0.50%
  Construction/ CRE                                   0.11%           1.40%              3.68%        3.50%          3.08%      2.50%       1.50%      0.85%
  Residential real estate                             0.02%           0.36%              1.74%        1.43%          1.19%      0.90%       0.75%      0.50%
  Other Consumer                                      2.22%           3.63%              4.97%        3.27%          2.60%      2.40%       2.30%      2.20%
  Credit Card                                         4.79%           6.18%             11.25%       10.65%          8.85%      8.25%       7.50%      7.00%
      Total                                           1.28%           2.26%              4.30%        3.62%          2.81%      2.35%       2.03%      1.69%

Nonperforming assets
  Nonperforming loans:
  Commercial, financial and agricultural             $1,056          $2,591          $5,417          $4,014      $2,529       $2,078      $1,907      $1,587
  Comm. Real estate, construction and other          $1,099          $3,906          $7,286          $5,544      $4,039       $3,089      $1,939      $1,512
  Residential mortgage + HELs                        $3,339          $9,694         $20,400         $20,325     $20,161      $19,087     $14,888     $10,421
  Other consumer                                       $103            $194            $439            $501        $450         $454        $409        $361
    Total nonperforming loans                        $5,597         $16,385         $33,542         $30,384     $27,179      $24,708     $19,143     $13,881
  Foreclosed assets                                      NF              NF              NF              NF          NF           NF          NF          NF
    Total nonperforming assets                       $5,597         $16,385         $33,542         $30,384     $27,179      $24,708     $19,143     $13,881




   Loans 90 + past due and accruing                       0              NF                NF            NF             NF         NF          NF         NF

As a % of loans
   Commercial, financial and agricultural             0.47%           0.94%             1.94%         1.63%          1.04%      0.85%       0.75%      0.60%
   Comm. Real estate, construction and other          2.56%           6.18%             9.93%         9.19%          8.16%      6.50%       4.00%      3.00%
   Residential mortgage + HELs                        1.26%           3.72%             8.18%         8.47%          8.70%      8.00%       6.00%      4.00%
   Other consumer                                     0.14%           0.20%             0.36%         0.44%          0.40%      0.40%       0.35%      0.30%
      Total nonperforming loans                       0.72%           1.80%             3.53%         3.19%          3.02%      2.73%       2.05%      1.43%



As a % of avg. assets
      Total nonperforming assets                      0.33%           0.90%             1.51%         1.31%          1.18%      1.07%       0.81%      0.58%

Source: Company data, Morgan Stanley Research   E = Morgan Stanley Research estimates




                                                                                                                                                               27
                                                                                                                                     MORGAN                   STANLEY                   RESEARCH

                                                                                                                                     October 20, 2010
                                                                                                                                     Bank of America




Exhibit 42
Residual Income Valuation
Bank of America
Residual Income Valuation Model                                                 (5 years - Bank Version)


BAC
Assumptions                                                                      Valuation Analysis

Share Information                                                                  Present Value of Residual Income ($ Millions)                                            Key Valuation Measures
Expected 12 Month Dividend                                           $0.10
                                                                                    6,000
Current S tock Price                                                 12.01                                                                                                  Stock Price                                                     12
Issued Shares (million)                                              9,976          4,000                                                                                   Est. Current Fair Value ($)                                     20
Reported Book Value Per Share                                        21.17                                                                                                  12 Month Intrinsic Value ($)                                    22
                                                                                    2,000
                                                                                                                                                                            12 Month Total Return (%)                                       88
Cost of Capital                                                                         -
10-yr. Govt. Bond Yield (%)                                           5.00               2010      2013      2016     2019         2022      2025      2028       2031      Price/ Book Value                                               0.6
Beta                                                                  1.58         (2,000)                                                                                  Price/ Economic Book Value                                      0.4
Market Risk Premium (%)                                                4.5                                                                                                  2010E Return on Economic Equity (%)                             0.8
                                                                                   (4,000)
Cost of Common Equity (%)                                             12.1                                                                                                  Cost of Common Equity (%)                                      12.1
                                                                                   (6,000)
Maturity Phase                                                                                                                                                              Current Operations ValueTM/ Est. Fair Value (%)                 10
                                                                                   (8,000)
Number of Years                                                          8
Target Capital Ratio (%)                                              10.2        (10,000)                                   Years
                                                                                                Valuation Drivers
Decline Phase                                                                                                                                          CAGR (%)                    End of Phase                  % of Fair Value
Decay Factor (0-10%)                                                        3                                                                          Cash                        ROEE         Payout
Growth in RWA (%)                                                           2                   Phase                                Years          Earnings        RWA              (%)      Ratio (%)        Phase          Cumulative
                                                                                                Economic BV                              -               -              -               -             -        138.4             138.4
Goodwill                                                                                        Development                             5              99.1          0.7            10.7          23.8         (27.6)            110.8
Current Goodwill                                                   75,602                       Maturity                                8               0.7          2.1            10.7          89.7          (7.1)            103.7
BV Adjustment                                                      45,019                       Decline                              #N/ A                                          #N/ A         #N/ A         (3.7)            100.0



Valuation Parameters                                                             Return on Economic Equity

                                                                                   ROEE (%)                                                                                               Distribution of Forecasted ROEE

                            Est. Current Fair Value as a Multiple of               30
                       Bk Val      Econ Bk       Earnings       Cash Earn                                                                                                                            ROEE                  ROEE
 2010                   1.0          0.8          100.0            100.0           25                                                                                                              Frequency             Threshold
 2011                   0.9          0.8           13.0             13.0                                                                                                                              (%)                   (%)
 2012                   0.9          0.7            9.4             9.4            20                                                                                                                  75                    10
 2013                   0.8          0.7            7.2             7.2                                                                                                                                65                    10
 2014                   0.7          0.6            6.4             6.4            15
                                                                                                                                                                                                       55                    10
                                                                                                                                                                                                       50                    10
                                                                                                                                                                                                       45                    10
                                                                                   10
                                                                                                                                                                                                       35                    10

                                                                                    5                                                                                                                  25                       11

                                                                                     -
                                                                                         1                                   Years




Source: Company data, Morgan Stanley Research estimates




                                                                                                                                                                                                                                                  28
                                                                                 MORGAN         STANLEY         RESEARCH

                                                                                 October 20, 2010
                                                                                 Bank of America




                                                       Morgan Stanley ModelWare is a proprietary analytic framework that helps clients
                                                       uncover value, adjusting for distortions and ambiguities created by local accounting
                                                       regulations. For example, ModelWare EPS adjusts for one-time events, capitalizes operating
                                                       leases (where their use is significant), and converts inventory from LIFO costing to a FIFO
                                                       basis. ModelWare also emphasizes the separation of operating performance of a company
                                                       from its financing for a more complete view of how a company generates earnings.



                                                       Disclosure Section
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                                                                                                                                                      29
                                                                                           MORGAN           STANLEY            RESEARCH

                                                                                           October 20, 2010
                                                                                           Bank of America




Morgan Stanley Research contains more complete information concerning the analyst's views, investors should carefully read Morgan Stanley
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                             Coverage Universe    Investment Banking Clients (IBC)
                                            % of                   % of % of Rating
Stock Rating Category           Count       Total     Count Total IBC Category
Overweight/Buy                  1115           42%           394         43%          35%
Equal-weight/Hold               1146           43%           413         45%          36%
Not-Rated/Hold                      14          1%              4          0%          29%
Underweight/Sell                  381          14%             99        11%          26%
Total                           2,656                        910

Data include common stock and ADRs currently assigned ratings. An investor's decision to buy or sell a stock should depend on individual
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                                                                                              MORGAN            STANLEY           RESEARCH

                                                                                              October 20, 2010
                                                                                              Bank of America




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                                                                                                                                                                              31
                                                                                       MORGAN    STANLEY            RESEARCH




The Americas                                   Europe                                    Japan                           Asia/Pacific
1585 Broadway                                  20 Bank Street, Canary Wharf              4-20-3 Ebisu, Shibuya-ku        1 Austin Road West
New York, NY 10036-8293                        London E14 4AD                            Tokyo 150-6008                  Kowloon
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Tel: +1 (1) 212 761 4000                       Tel: +44 (0) 20 7 425 8000                Tel: +81 (0) 3 5424 5000        Tel: +852 2848 5200




Industry Coverage:Banking - Large Cap Banks

Company (Ticker)                              Rating (as of) Price* (10/19/2010)


Betsy L. Graseck, CFA
American Express Company                     O (11/23/2009)                    $39.3
(AXP.N)
BB&T Corporation (BBT.N)                     E (10/05/2007)                   $22.92
Bank of America (BAC.N)                      O (05/07/2009)                    $11.8
Bank of New York Mellon Corp                 O (04/13/2006)                   $25.99
(BK.N)
Capital One Financial Corporation             E (11/23/2009)                  $38.76
(COF.N)
Citigroup Inc. (C.N)                          E (07/24/2008)                   $4.06
Discover Financial Services                   E (03/05/2010)                  $17.32
(DFS.N)
Fifth Third Bancorp (FITB.O)                 E (07/10/2008)                   $12.38
J.P.Morgan Chase & Co. (JPM.N)               O (12/11/2006)                   $37.69
KeyCorp (KEY.N)                              E (08/07/2009)                     $8.3
Northern Trust Corp. (NTRS.O)                O (10/31/2007)                   $49.29
PNC Financial Services (PNC.N)               O (10/31/2005)                   $53.04
Regions Financial Corp (RF.N)                U (11/21/2008)                    $7.34
State Street Corporation (STT.N)             E (04/26/2009)                    $40.3
SunTrust (STI.N)                             E (10/30/2009)                   $24.74
U.S. Bancorp (USB.N)                         E (12/02/2002)                   $22.81
Wells Fargo & Co. (WFC.N)                    O (10/16/2008)                   $24.55
Cheryl M. Pate, CFA
Boston Private Financial Holdings,            E (11/21/2008)                   $6.88
Inc. (BPFH.O)
Wilmington Trust Corporation                  E (11/21/2008)                   $8.39
(WL.N)

Stock Ratings are subject to change. Please see latest research for each company.
* Historical prices are not split adjusted.




© 2010 Morgan Stanley

				
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