Bank of America Card Services

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1 Bank of America Card Services Growth through Market Leading Products and Distribution Bruce Hammonds President Merrill Lynch Financial Services Conference November 15 th, 2006

2 2 Bank of America Card Services

3 Card Services Profile Based on 3Q06 Net Income Bank of America other Businesses 47% GCSBB 53% GCSBB (excl Card services) 49% Card Services 51% Bank of America Corporation Global Consumer & Small Business Banking (GCSBB) $194.9 billion in Managed Loans U.S Credit Card loans of $146.8 billion International card business $31.6 billion in loans in 4 countries Consumer Finance business with $16.5 billion $283 billion in Merchant sales volume Note: US credit card includes Business Card; Consumer Finance 3 include Practice Finance

4 Top U.S. Credit Card Issuers 3Q06 $160 $140 $147 $140 Bank of America is the leading credit card issuer in the U.S. and has the highest return among the card portfolios of commercial banks with a 3.73% ROML compared to a peer group average of 3.07% in 3Q06. $120 $110 $ in Billions $100 $80 $60 $51 $50 $45 $40 $20 $0 Bank of JP Morgan Citigroup Capital American Discover America Chase One Express 4 Source: Ending loans based on company reports (excludes international and private label)

5 Card Services Growth in 2006 Managed Basis ($ in billions) September YTD YOY Growth (1) Total Revenue $ % Net Interest Income % Non Interest Income % Provision for Credit Losses 5.5 (21%) Total Non-Interest Expense 5.8 (10%) Net Income Before Tax % Net Income $ % 3Q 2006 Chg vs. 3Q 2005 Risk Adjusted Margin 8.69% 4 bps 5 (1) YOY growth is pro forma with MBNA

6 Asset Quality Managed Credit Card loss rate rose to 4.23%, which is 56 basis points higher than 2Q 2006 but 55 basis points lower than 3Q 2005 Managed Credit Card losses were $1.75 billion, down $159 million from 3Q % $3, % 8.00% $2,500 $1, % $1,907 $2, % $1, % $1, % $1, % 4.00% 2.00% 0.00% $1,000 3Q05 4Q05 1Q06 2Q06 3Q % Managed Credit Card Charge-offs Managed Credit Card Charge-off Ratio 6

7 Payments Positioned to Lead #1 Credit Card #1 Debit Card #1 Check Processor #1 Online Banking/Bill Pay 54.8% Share Online Bill Pay #1 Cash Management #1 ACH Receiver #2 Merchant Acquiring 15.7% Share Debit Card Customers & Clients 21.5% Share Credit Card #1 Share in Fastest Growing Payment Types 7

8 Payments Market Cards continue to grow market share.. 47% Check 19% Cash % Other 7% Debit 20% Credit Cards 36% Checks 13% Cash 10% Other 15% Debit 26% Credit Cards 100% = $5.5 trillion 100% = $6.8 trillion 8 Source: Other includes ACH and other plastic including private label and gift cards Credit = general purpose credit cards

9 Profitable Growth through Size and Scale Distribution 5,700+ banking centers 17,000 ATM s Leading Internet and Telephone channels 5,000 Affinity Groups Product Innovation Unique Reward Programs WorldPoints, MLB Extra Bases, NFL Extra Points, NASCAR RacePoints PayPass Keep The Change Bank of America Data Warehouse Data Management Information-driven Customer lifecycle management of 55 millions households 9

10 Diversifying Sales & Service Delivery Channels Optimizing Origination Costs $113 $98 31% $78 24% 0.6MM 65% 14% 24% 10% 12% Other 22% 46% 40% 2% 10% Sept YTD 2006 Card Sales Mix By Channel Direct Mail Banking Center E-Commerce 10 Note: 2005 and 2006 Sales units incl. MBNA; Other includes Telesales, Event Marketing and Group Maximization channels

11 Affinity Marketing Success is Getting the Right Customers and Keeping Them To get the right customers, we developed affinity marketing selling to people with a strong common interest. 11

12 Affinity Customers Affinity customers have better credit experience. Use their cards more. Carry a larger balance. Will use other Bank of America endorsed products. 12

13 Affinity Marketing Customers Have a propensity to accept multiple endorsed products. Example: National Education Association More than one-third of teachers nationwide carry MBNA cards 3.1 million members $2.5 billion in credit card loans $900 million in other consumer loans $4.4 billion in deposit balances 13

14 Dominance in Affinity Marketing More than 5,000 organizations endorse our products including: 1,400 professional organizations with $6.4B in loans 900 colleges and universities with $6.4B in loans 600 sports related organizations with $5.1B in loans 275 Financial Institutions with $17B in loans 14

15 Leveraging Best of Both Leveraging the BAC Franchise through Affinity Marketing: 1 Affinity Marketing Assets 5,000 Endorsing Organizations 24 Million Affinity Card Customers Bank of America Retail Product and Distribution + = 5,700 Banking Centers 17,000 ATMs 21 Million On-Line Customers #1 Deposit Market Share #1 Small Business Lender #1 Home Equity Lender #1 Debit Card Share #1 Credit Card Lender New Affinity Banking Model Leverage Customer Passions Manage Customer Information Cross-Sell Banking Products

16 Affinity Banking Endorsements American Quarter Horse Assoc. Habitat for Humanity The Humane Society of the U.S. The University of Arizona Alumni Assoc. Defenders of Wildlife The Medical Society of the State of NY New York State Bar Assoc. Brown Alumni Assoc. Nat l Trust for Historic Pres. National Wildlife Federation National Wild Turkey Fed. The D.C. Bar 2

17 Marketing/Sales Highlights Signed new affinity groups, including Allegacy Credit Union, Philadelphia Federal Credit Union, American Academy of General Dentistry, and Merrimack College Renewed contracts with approximately 900 affinity organization, including NASCAR, New York Mets, Penn State Alumni Association, UCLA, and the University of Texas, and Merrill Lynch Received endorsement of unsecured loan products from AAA, one of our largest affinity 3

18 New Products In Market 4Q06-1Q07 Bank of America American Express KTC & Credit Bundle Ownership Rewards MLB Extra Bases GWIM Amex VIP 4 RF Pilot

19 New Markets Healthcare Caremark Aetna 5

20 New Segments Student Emerging Credit Hispanic 25% growth from last year 75% of students in BAC footprint 90% of Hispanics in BAC footprint 6

21 Small Business Bank of America Small Business Customer Penetration 18.2% 20.8% 22.4% Growing credit share to match market penetration 22% 8% Credit Share Market Penetration 7

22 International $31.6 billion in loans 20% growth in 2006 United Kingdom #1 Market Share in the U.K. 1,500 endorsements Ireland Exploring opportunities in China, Italy, Portugal, Japan 8 Canada Spain

23 Consumer Finance $15.1 billion of outstanding loans 25% growth in 2006 Unsecured consumer loans cross-sold to existing customers Products endorsed by hundreds of our affinity partners Aircraft Lending Practice Finance 9

24 Card Services Transition Transition on target Continuing to meet revenue and expense targets Affinity card sales now in all BAC channels October Conversion Completed the largest consumer card conversion in industry history On track to offer all our customers superior service from a single platform Leveraging judgmental lending and collections best practices 10

25 Card Services Our Unique Model Distribution diversity Efficiency Pricing Risk/reward risk adjusted margin 11

26 Forward Looking Statements This presentation contains forward-looking statements, including statements about the financial conditions, results of operations and earnings outlook of Bank of America Corporation. The forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results or earnings to differ materially from such forward-looking statements include, among others, the following: 1) projected business increases following process changes and other investments are lower than expected; 2) competitive pressure among financial services companies increases significantly; 3) general economic conditions are less favorable than expected; 4) political conditions including the threat of future terrorist activity and related actions by the United States abroad may adversely affect the company s businesses and economic conditions as a whole; 5) changes in the interest rate environment reduce interest margins and impact funding sources; 6) changes in foreign exchange rates increases exposure; 7) changes in market rates and prices may adversely impact the value of financial products; 8) legislation or regulatory environments, requirements or changes adversely affect the businesses in which the company is engaged; 9) changes in accounting standards, rules or interpretations, 10) litigation liabilities, including costs, expenses, settlements and judgments, may adversely affect the company or its businesses; 11) mergers and acquisitions and their integration into the company; and 12) decisions to downsize, sell or close units or otherwise change the business mix of any of the company. For further information regarding Bank of America Corporation, please read the Bank of America reports filed with the SEC and available at 12

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