Annual Report

Checking Retirement Planning Commercial Banking Opportunities IPO are everywhere 2010 Annual Report We built Bank of America to meet the full range of financial needs for people, businesses and institutional investors; to attract the best employees to serve our customers and clients; to support the communities where we do business; and to create long-term value for our shareholders. Today’s Bank of America is a financial services leader serving customers and clients worldwide. We help them to see and act on opportunities to achieve their goals by delivering value, convenience, expertise and innovation. Opportunity Seized: Bank of America has the best franchise in the industry with number one or two positions in the business segments in which we compete and the largest customer and client base in our industry. Dear Shareholders, Our work in 2010 was focused on two key goals: first, rebalancing and realigning our company so we can serve our customers and clients with the broadest and best financial services in the industry; and second, strengthening our balance sheet and capital position to create the right conditions for growth in long-term shareholder value. This work is well underway, and we are making significant progress. As a result, we are a much stronger company today than we were a year ago. We have a vision for our company, a strategy to achieve that vision and well-defined operating principles to help guide our work as we pursue our goals. These are important to understanding how we intend to operate the company, serve customers and clients, and return value to shareholders. Our Vision and Strategy Our vision is for Bank of America to be the world’s finest financial services company. We think that this is an appropriate and achievable goal. I firmly believe that we have all the businesses and capabilities in place to meet the core financial needs of customers and clients more effectively than any other company. Our success in realizing this vision will be measured by our customers, by our own employees and by you, the shareholder. We’ll know we are succeeding when our customers choose to bring us more of their business, and make us their primary financial institution; when employees choose to build their careers here, because they can achieve anything they set out to do; and when shareholders realize the long-term value this franchise can deliver. That means solid returns on equity and assets, steady growth in tangible book value per share, attractive total shareholder returns, and consistent performance through economic cycles. 1 By attracting new customers and more business from Customers have many valuable choices for how to bank existing customers, our deposit balances continue to grow, with us — a great base for building any relationship. topping $1 trillion at the end of 2010. To pursue our vision, we have laid out a clear strategy. We emerged from the economic downturn as a global financial services company with leading positions in all our major businesses. We serve one in two households in the U.S. and operate in more than 40 countries, with nearly 300,000 employees around the world. Despite our global scale and reach, our strategy is relatively straightforward. We serve three customer groups: people, businesses of all sizes, and institutional investors. For each of these groups, we provide core financial services. We serve people with a range of financial services, from secured and unsecured lending, to deposit, checking and savings accounts. We serve parents who want to help their children open their first savings accounts, young people graduating from school and setting up checking and retirement accounts, and the wealthiest families in the world with complex multigenerational wealth management needs. We help companies of all sizes grow by helping them transact, manage their cash, access the debt and equity Brian T. Moynihan, Chief Executive Officer markets, and manage the risk of currency and interest rate fluctuations. We provide strategic advice for transactions such as public offerings, and mergers and acquisitions. Bank of America Operating Principles Our institutional investor clients rely on our research to identify opportunities to invest wisely and confidently. • We are customer-driven We help them execute their transactions and connect them • We are building and will maintain a fortress with the global financial markets through our sales and balance sheet trading technology. • We are pursuing operational excellence in No other financial services company has assembled this breadth of capabilities for all of the customer groups both efficiency and risk management we serve. And, our capabilities are at or near the top • We will deliver on our shareholder return model of the industry in every core financial product and service we offer. • We will continue to clean up our legacy issues We provide the full range of these financial services for all • We will be the best place for people to work three customer groups in the United States. Outside the U.S., we deliver corporate and investment banking, global markets and wealth management services to business clients, institutional investors and wealthy individuals. Our Card Services business also serves customers in Canada, Ireland, the U.K. and Spain. We run the franchise for every customer in full, delivering all of the services they may have traditionally sought separately from a retail bank, a commercial bank, an investment bank, 2 Synergies provide big opportunities. In the past year, With the launch of Merrill Edge, we can help turn millions of our wealth managers referred thousands of clients to our bank customers into early wealth management clients. commercial and global bankers — and vice versa. Total Net Revenue In millions, full-year ended, FTE basis a wealth management firm, a brokerage or a private bank. We serve them on an integrated, customer-focused basis. That’s our strategy. Deliver leading core financial products and services to these three $120,944 $111,390 groups of customers. Do that repeatedly, leave nothing to chance, develop broad, deep, long- term, profitable relationships, and deliver long-term value to you. $73,976 Operating Principles to Move Us Forward So, we have a vision and a strategy. To execute our strategy we have outlined six operating principles that will help guide our activities and focus our resources. 08 09 10 Be a customer-driven company What does it mean to be a “customer-driven company”? Total Shareholders’ It simply means this: We are making business decisions by listening to our customers and Equity responding to their needs and preferences. In millions, at year end Retail customers have told us that they want, and will pay for, value they can see and understand. They value clarity, choice and a healthy sense of security and control in their banking services. $231,444 $228,248 We have taken a number of important steps to help customers take control. We eliminated overdraft fees for debit cards at the point of sale. We created Clarity Commitment® state- $177,052 ments that spell out in plain English key benefits and obligations of certain products. We offer deposit-image ATMs, and online and mobile banking technologies to provide customers with more detailed and timely information. Our new Merrill Edge® account enables customers to manage their banking and investing activities through an integrated platform. And we have 08 09 10 developed employee incentive, reward and recognition programs that align with our customer experience goals. Tier 1 Common Equity Ratio These are important steps as we build a consumer business driven by profitable relation- At year end ships. Some of these actions have cost us revenue in the short term. But we also are working to mitigate revenue losses, whether due to our own decisions or regulatory and legislative changes. And, we are seeing immediate improvements in customer satisfaction, problem 8.60% resolution and willingness to broaden and deepen relationships. 7.81% In serving businesses — from our millions of small business customers to our largest corporate clients — the idea is the same: We believe we can create more value by pursuing 4.80% broad, deep and long-lasting relationships. One very promising area involves our work to integrate the way we deliver wealth management products and services with the work we do for commercial, corporate and investment banking clients. Many of our business clients 08 09 10 need employee benefits management, for example, or access to global capital markets and wealth management solutions. These efforts are paying off. Clients consistently tell me how much more they know we can do for them than our competitors. As a result, they are giving us more opportunities, and we are seeing a steady increase in successful customer referrals across our major lines of business. In focusing on expanding relationships, we exited several businesses that were not driven by the core financial needs of our customers and clients. Overall, we divested assets valued at more than $20 billion, strengthening our capital and liquidity position and allowing us to sharpen our focus on serving customers. 3 In 2010, approximately 281,000 loan and deposit products Bank of America provided $92 billion in credit to small- and were sold to customers who had an investment relationship medium-sized businesses in 2010, exceeding our previously with Merrill Lynch. announced goal by more than 6 percent. Total Assets In millions, at year end Build a fortress balance sheet Maintaining a fortress balance sheet through economic cycles entails strong liquidity and credit reserve positions, good asset quality, sufficient capital and a diverse mix of core businesses. We have been improving in all these areas. $2,230,232 $2,264,909 Although we held assets relatively flat last year, we significantly reduced risk-weighted assets $1,817,943 while also taking down long-term debt, growing deposits and strengthening global excess liquidity to more than $336 billion.

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