Bank of America (BAC) 10-Q 7 May 10 2010 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information
	3 Months Ended Mar. 31, 2010	Apr. 30, 2010
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2010-03-31
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q1
Trading Symbol	BAC
Entity Registrant Name	BANK OF AMERICA CORP /DE/
Entity Central Index Key	0000070858
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		10,032,945,667

Consolidated Statement of Incom

Consolidated Statement of Income (USD $)
In Millions, except Share data in Thousands	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Interest income
Interest and fees on loans and leases	$13,475	$13,349
Interest on debt securities	3,116	3,830
Federal funds sold and securities borrowed or purchased under agreements to resell	448	1,155
Trading account assets	1,743	2,428
Other interest income	1,097	1,394
Total interest income	19,879	22,156
Interest expense
Deposits	1,122	2,543
Short-term borrowings	818	2,221
Trading account liabilities	660	579
Long-term debt	3,530	4,316
Total interest expense	6,130	9,659
Net interest income	13,749	12,497
Noninterest income
Card income	1,976	2,865
Service charges	2,566	2,533
Investment and brokerage services	3,025	2,963
Investment banking income	1,240	1,055
Equity investment income	625	1,202
Trading account profits	5,236	5,201
Mortgage banking income	1,500	3,314
Insurance income	715	688
Gains on sales of debt securities	734	1,498
Other income	1,204	2,313
Other-than-temporary impairment losses on available-for-sale debt securities:
Total other-than-temporary impairment losses	(1,819)	(714)
Less: Portion of other-than-temporary impairment losses recognized in other comprehensive income	1,218	343
Net impairment losses recognized in earnings on available-for-sale debt securities	(601)	(371)
Total noninterest income	18,220	23,261
Total revenue, net of interest expense	31,969	35,758
Provision for credit losses	9,805	13,380
Noninterest expense
Personnel	9,158	8,768
Occupancy	1,172	1,128
Equipment	613	622
Marketing	487	521
Professional fees	517	405
Amortization of intangibles	446	520
Data processing	648	648
Telecommunications	330	327
Other general operating	3,883	3,298
Merger and restructuring charges	521	765
Total noninterest expense	17,775	17,002
Income before income taxes	4,389	5,376
Income tax expense	1,207	1,129
Net income	3,182	4,247
Preferred stock dividends	348	1,433
Net income applicable to common shareholders	$2,834	$2,814
Per common share information
Earnings	0.28	0.44
Diluted earnings	0.28	0.44
Dividends paid	0.01	0.01
Average common shares issued and outstanding (in thousands)	9,177,468	6,370,815
Average diluted common shares issued and outstanding (in thousands)	10,005,254	6,393,407

Consolidated Balance Sheet

Consolidated Balance Sheet (USD $)
In Millions	3 Months Ended Mar. 31, 2010	12 Months Ended Dec. 31, 2009
Assets
Cash and cash equivalents	$144,794	$121,339
Time deposits placed and other short-term investments	20,256	24,202
Federal funds sold and securities borrowed or purchased under agreements to resell (includes $71,300 and $57,775 measured at fair value and $191,346 and $189,844 pledged as collateral)	197,038	189,933
Trading account assets	206,018	182,206
Derivative assets	77,577	80,689
Debt securities:
Available-for-sale debt securities	316,020	301,601
Held-to-maturity, at cost (fair value - $340 and $9,684)	340	9,840
Total debt securities	316,360	311,441
Loans and leases	976,042	900,128
Allowance for loan and lease losses	(46,835)	(37,200)
Loans and leases, net of allowance	929,207	862,928
Premises and equipment, net	15,147	15,500
Mortgage servicing rights (includes $18,842 and $19,465 measured at fair value)	19,146	19,774
Goodwill	86,305	86,314
Intangible assets	11,548	12,026
Loans held-for-sale	35,386	43,874
Customer and other receivables	83,636	81,996
Other assets	196,282	191,077
Total assets	2,338,700	2,223,299
Deposits in domestic offices:
Noninterest-bearing	255,470	269,615
Interest-bearing (includes $1,717 and $1,663 measured at fair value)	643,943	640,789
Deposits in foreign offices:
Noninterest-bearing	5,614	5,489
Interest-bearing	71,075	75,718
Total deposits	976,102	991,611
Federal funds purchased and securities loaned or sold under agreements to repurchase (includes $46,479 and $37,325 measured at fair value)	270,601	255,185
Trading account liabilities	82,532	65,432
Derivative liabilities	46,927	43,728
Commercial paper and other short-term borrowings	85,406	69,524
Accrued expenses and other liabilities	135,656	127,854
Long-term debt	511,653	438,521
Total liabilities	2,108,877	1,991,855
Commitments and contingencies (Note 8 - Securitizations and Other Variable Interest Entities and Note 11 - Commitments and Contingencies)
Shareholders' equity
Preferred stock, $0.01 par value; authorized - 100,000,000 shares; issued and outstanding - 3,960,660 and 5,246,660 shares	17,964	37,208
Common stock and additional paid-in capital, $0.01 par value; authorized - 11,300,000,000 and 10,000,000,000 shares; issued and outstanding - 10,032,001,150 and 8,650,243,926 shares	149,048	128,734
Retained earnings	67,811	71,233
Accumulated other comprehensive income (loss)	(4,929)	(5,619)
Other	(71)	(112)
Total shareholders' equity	229,823	231,444
Total liabilities and shareholders' equity	2,338,700	2,223,299
Variable Interest Entity, Primary Beneficiary
Assets
Trading account assets	11,826
Derivative assets	4,194
Debt securities:
Available-for-sale debt securities	12,074
Loans and leases	129,432
Allowance for loan and lease losses	(11,140)
Loans and leases, net of allowance	118,292
Loans held-for-sale	5,471
Other assets	9,637
Total assets	161,494
Deposits in foreign offices:
Commercial paper and other short-term borrowings	21,631
Accrued expenses and other liabilities	5,135
Long-term debt	90,329
Total liabilities	$117,095

Consolidated Balance Sheet (Par

Consolidated Balance Sheet (Parenthetical) (USD $)
In Millions, except Share data	Mar. 31, 2010	Dec. 31, 2009
Federal funds sold and securities borrowed or purchased under agreements to resell, measured at fair value	$71,300	$57,775
Federal funds sold and securities borrowed or purchased under agreements to resell, pledged as collateral	191,346	189,844
Trading account assets, pledged as collateral	39,131	30,921
Available-for-sale, pledged as collateral	141,111	122,708
Held-to-maturity, at cost, fair value	340	9,684
Loans and leases, measured at fair value	4,087	4,936
Loans and leases, pledged as collateral	106,464	118,113
Mortgage servicing rights, measured at fair value	18,842	19,465
Loans held-for-sale, measured at fair value	25,387	32,795
Other assets, measured at fair value	63,070	55,909
Interest-bearing, measured at fair value	1,717	1,663
Federal funds purchased and securities loaned or sold under agreements to repurchase, measured at fair value	46,479	37,325
Commercial paper and other short-term borrowings, measured at fair value	7,021	813
Accrued expenses and other liabilities, measured at fair value	25,991	19,015
Accrued expenses and other liabilities, reserve for unfunded lending commitments	1,521	1,487
Long-term debt, measured at fair value	48,401	45,451
Preferred stock, par value	0.01	0.01
Preferred stock, authorized shares	100,000,000	100,000,000
Preferred stock, issued shares	3,960,660	5,246,660
Preferred stock, outstanding shares	3,960,660	5,246,660
Common stock, par value	0.01	0.01
Common stock, authorized shares	11,300,000,000	10,000,000,000
Common stock, issued shares	10,032,001,150	8,650,243,926
Common stock, outstanding shares	10,032,001,150	8,650,243,926
Variable Interest Entity, Primary Beneficiary | Short-term Debt
Non-recourse debt	14,490
Variable Interest Entity, Primary Beneficiary | Long-term Debt
Non-recourse debt	86,023
Variable Interest Entity, Primary Beneficiary | Other Liabilities
Non-recourse debt	$2,561

Consolidated Statement of Chang

Consolidated Statement of Changes in Shareholders' Equity (USD $)
In Millions, except Share data in Thousands	Preferred Stock	Common Stock and Additional Paid-in Capital Shares	Common Stock and Additional Paid-in Capital Amount	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Other	Comprehensive Income (Loss)	Total
Beginning Balance (in shares) at Dec. 31, 2008		5,017,436
Beginning Balance at Dec. 31, 2008	$37,701		$76,766	$73,823	($10,825)	($413)		$177,052
Cumulative adjustment for accounting change - Other-than-temporary impairments on debt securities				71	(71)
Net income				4,247			4,247	4,247
Net change in available-for-sale debt and marketable equity securities					(811)		(811)	(811)
Net change in foreign currency translation adjustments					66		66	66
Net change in derivatives					412		412	412
Employee benefit plan adjustments					65		65	65
Dividends paid:
Common				(64)				(64)
Preferred				(1,033)				(1,033)
Issuance of preferred stock and stock warrants	26,800		3,200					30,000
Stock issued in acquisition	8,605		20,504					29,109
Stock issued in acquisition (in shares)		1,375,476
Common stock issued under employee plans and related tax effects (in shares)		8,038
Common stock issued under employee plans and related tax effects			394			108		502
Other	171			(167)				4
Comprehensive Income (Loss)							3,979
Ending Balance at Mar. 31, 2009	73,277		100,864	76,877	(11,164)	(305)		239,549
Ending Balance (in shares) at Mar. 31, 2009		6,400,950
Beginning Balance (in shares) at Dec. 31, 2009		8,650,244
Beginning Balance at Dec. 31, 2009	37,208		128,734	71,233	(5,619)	(112)		231,444
Cumulative adjustment for accounting change - Consolidation of certain variable interest entities				(6,154)	(116)		(116)	(6,270)
Net income				3,182			3,182	3,182
Net change in available-for-sale debt and marketable equity securities					944		944	944
Net change in foreign currency translation adjustments					(43)		(43)	(43)
Net change in derivatives					(161)		(161)	(161)
Employee benefit plan adjustments					66		66	66
Dividends paid:
Common				(102)				(102)
Preferred				(348)				(348)
Common stock issued under employee plans and related tax effects (in shares)		95,757
Common stock issued under employee plans and related tax effects			1,070			36		1,106
Common Equivalent Securities conversion	(19,244)		19,244
Common Equivalent Securities conversion (in shares)		1,286,000
Other						5		5
Comprehensive Income (Loss)							3,872
Ending Balance at Mar. 31, 2010	$17,964		$149,048	$67,811	($4,929)	($71)		$229,823
Ending Balance (in shares) at Mar. 31, 2010		10,032,001

Consolidated Statement of Cash

Consolidated Statement of Cash Flows (USD $)
In Millions	3 Months Ended Mar. 31, 2010		3 Months Ended Mar. 31, 2009
Operating activities
Net income	$3,182		$4,247
Reconciliation of net income to net cash provided by operating activities:
Provision for credit losses	9,805		13,380
Gains on sales of debt securities	(734)		(1,498)
Depreciation and premises improvements amortization	566		578
Amortization of intangibles	446		520
Deferred income tax expense	736		486
Net decrease in trading and derivative instruments	6,770		27,049
Net decrease in other assets	5,723		28,304
Net increase (decrease) in accrued expenses and other liabilities	6,115		(10,870)
Other operating activities, net	(8,733)		(7,399)
Net cash provided by operating activities	23,876		54,797
Investing activities
Net decrease in time deposits placed and other short-term investments	4,023		19,336
Net (increase) decrease in federal funds sold and securities borrowed or purchased under agreements to resell	(7,105)		68,072
Proceeds from sales of available-for-sale debt securities	35,022		53,309
Proceeds from paydowns and maturities of available-for-sale debt securities	18,690		13,871
Purchases of available-for-sale debt securities	(64,899)		(6,576)
Proceeds from maturities of held-to-maturity debt securities			280
Proceeds from sales of loans and leases	857		565
Other changes in loans and leases, net	12,990		(6,636)
Net purchases of premises and equipment	(213)		(531)
Proceeds from sales of foreclosed properties	751		417
Cash received upon acquisition, net			31,804
Cash received due to impact of adoption of new consolidation guidance	2,807
Other investing activities, net	2,884		2,700
Net cash provided by investing activities	5,807		176,611
Financing activities
Net decrease in deposits	(15,509)		(27,596)
Net increase (decrease) in federal funds purchased and securities loaned or sold under agreements to repurchase	15,416		(71,444)
Net decrease in commercial paper and other short-term borrowings	(6,255)		(10,135)
Proceeds from issuance of long-term debt	23,280		24,246
Retirement of long-term debt	(22,750)		(34,711)
Proceeds from issuance of preferred stock			30,000
Cash dividends paid	(450)		(1,097)
Excess tax benefits of share-based payments	45
Other financing activities, net	(11)		11
Net cash used in financing activities	(6,234)		(90,726)
Effect of exchange rate changes on cash and cash equivalents	6		(79)
Net increase in cash and cash equivalents	23,455	[1]	140,603	[1]
Cash and cash equivalents at January 1	121,339		32,857
Cash and cash equivalents at March 31	$144,794		$173,460
[1]During the three months ended March 31, 2009, the Corporation transferred credit card loans of $8.5 billion and the related allowance for loan and lease losses of $750 million in exchange for a $7.8 billion held-to-maturity debt security that was issued by the Corporation's U.S. credit card securitization trust and retained by the Corporation. The fair values of noncash assets acquired and liabilities assumed in the Merrill Lynch acquisition were $619.0 billion and $626.7 billion as of March 31, 2009. Approximately 1.4 billion shares of common stock valued at approximately $20.5 billion and 376 thousand shares of preferred stock valued at approximately $8.6 billion were issued in connection with the Merrill Lynch acquisition.

Summary of Significant Accounti

Summary of Significant Accounting Principles
	3 Months Ended Mar. 31, 2010
Summary of Significant Accounting Principles	NOTE 1 Summary of Significant Accounting Principles Bank of America Corporation and its subsidiaries (the Corporation), a financial holding company, provides a diverse range of financial services and products throughout the U.S. and in certain international markets. When used in this report, the meaning of the words the Corporation may refer to the Corporation individually, the Corporation and its subsidiaries, or certain of the Corporations subsidiaries or affiliates. The Corporation conducts these activities through its banking and nonbanking subsidiaries. At March31, 2010, the Corporation operated its banking activities primarily under two charters: Bank of America, National Association (Bank of America, N.A.) and FIA Card Services, N.A. In connection with certain acquisitions including Merrill Lynch Co. Inc. (Merrill Lynch) and Countrywide Financial Corporation (Countrywide), the Corporation acquired banking subsidiaries that have been merged into Bank of America, N.A. with no impact on the Consolidated Financial Statements of the Corporation. On January1, 2009, the Corporation acquired Merrill Lynch through its merger with a subsidiary of the Corporation in exchange for common and preferred stock with a value of $29.1 billion. Principles of Consolidation and Basis of Presentation The Consolidated Financial Statements include the accounts of the Corporation and its majority-owned subsidiaries, and those variable interest entities (VIEs) where the Corporation is the primary beneficiary. Intercompany accounts and transactions have been eliminated. Results of operations, assets and liabilities of acquired companies are included from the dates of acquisition. Results of operations, assets and liabilities of VIEs are included from the date that the Corporation became the primary beneficiary. Assets held in an agency or fiduciary capacity are not included in the Consolidated Financial Statements. The Corporation accounts for investments in companies for which it owns a voting interest of 20 percent to 50 percent and for which it has the ability to exercise significant influence over operating and financing decisions using the equity method of accounting. These investments are included in other assets and are subject to impairment testing. The Corporations proportionate share of income or loss is included in equity investment income. The preparation of the Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect reported amounts and disclosures. Realized results could differ from those estimates and assumptions. These unaudited Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements included in the Corporations 2009 Annual Report on Form 10-K. The nature of the Corporations business is such that the results of any interim period are not necessarily indicative of results for a full year. In the opinion of management, normal recurring adjustments necessary for a fair statement of the interim period results have been made. Certain pr

Merger and Restructuring Activi

Merger and Restructuring Activity
	3 Months Ended Mar. 31, 2010
Merger and Restructuring Activity	NOTE 2 Merger and Restructuring Activity Merrill Lynch On January1, 2009, the Corporation acquired Merrill Lynch through its merger with a subsidiary of the Corporation in exchange for common and preferred stock with a value of $29.1 billion. Under the terms of the merger agreement, Merrill Lynch common shareholders received 0.8595 of a share of Bank of America Corporation common stock in exchange for each share of Merrill Lynch common stock. In addition, Merrill Lynch non-convertible preferred shareholders received Bank of America Corporation preferred stock having substantially identical terms. Merrill Lynch convertible preferred stock remains outstanding and is convertible into Bank of America Corporation common stock at an equivalent exchange ratio. The purchase price was allocated to the acquired assets and liabilities based on their estimated fair values at the Merrill Lynch acquisition date as summarized in the following table. Goodwill of $5.1 billion was calculated as the purchase premium after adjusting for the fair value of net assets acquired and represents the value expected from the synergies created from combining the Merrill Lynch wealth management and corporate and investment banking businesses with the Corporations capabilities in consumer and commercial banking as well as the economies of scale expected from combining the operations of the two companies. No goodwill is deductible for federal income tax purposes. The goodwill was allocated principally to the GWIM and Global Banking Markets (GBAM) business segments. Merrill Lynch Purchase Price Allocation (Dollars in billions, except per share amounts) Purchase price Merrill Lynch common shares exchanged (in millions) 1,600 Exchange ratio 0.8595 The Corporations common shares issued (in millions) 1,375 Purchase price per share of the Corporations common stock (1) $ 14.08 Total value of the Corporations common stock and cash exchanged for fractional shares $ 19.4 Merrill Lynch preferred stock 8.6 Fair value of outstanding employee stock awards 1.1 Total purchase price $ 29.1 Allocation of the purchase price Merrill Lynch stockholders equity 19.9 Merrill Lynch goodwill and intangible assets (2.6 ) Pre-tax adjustments to reflect acquired assets and liabilities at fair value: Derivatives and securities (1.9 ) Loans (6.1 ) Intangible assets (2) 5.4 Other assets/liabilities (0.8 ) Long-term debt 16.0 Pre-tax total adjustments 12.6 Deferred income taxes (5.9 ) After-tax total adjustments 6.7 Fair value of net assets acquired 24.0 Goodwill resulting from the Merrill Lynch acquisition $ 5.1 (1) The value of the shares of common stock exchanged with Merrill Lynch shareholders was based upon the closing price of the Corporations common stock at December31, 2008, the last trading day prior to the date of acquisition. (2) Consists of trade name of $1.5 billion and customer relationship and core deposit intangibles of $3.9 billi

Trading Account Assets and Liab

Trading Account Assets and Liabilities
	3 Months Ended Mar. 31, 2010
Trading Account Assets and Liabilities	NOTE 3 Trading Account Assets and Liabilities The following table presents the components of trading account assets and liabilities at March31, 2010 and December31, 2009. (Dollars in millions) March31 2010 December31 2009 Trading account assets U.S. government and agency securities (1) $ 56,603 $ 44,585 Corporate securities, trading loans and other 61,384 57,009 Equity securities 32,014 33,562 Foreign sovereign debt 35,817 28,143 Mortgage trading loans and asset-backed securities 20,200 18,907 Total trading account assets $ 206,018 $ 182,206 Trading account liabilities U.S. government and agency securities $ 30,068 $ 26,519 Equity securities 20,419 18,407 Foreign sovereign debt 21,619 12,897 Corporate securities and other 10,426 7,609 Total trading account liabilities $ 82,532 $ 65,432 (1) Includes $28.2 billion and $23.5 billion at March31, 2010 and December31, 2009 of government-sponsored enterprise (GSE) obligations.

Derivatives

Derivatives
	3 Months Ended Mar. 31, 2010
Derivatives	NOTE 4 Derivatives Derivative Balances Derivatives are held for trading, as economic hedges, or as qualifying accounting hedges. The Corporation enters into derivatives to facilitate client transactions, for proprietary trading purposes and to manage risk exposures. For additional information on the Corporations derivatives and hedging activities, see Note 1 Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporations 2009 Annual Report on Form 10-K. The following table identifies derivative instruments included on the Corporations Consolidated Balance Sheet in derivative assets and liabilities at March31, 2010 and December31, 2009. Balances are provided on a gross basis, prior to the application of counterparty and collateral netting. Total derivative assets and liabilities are adjusted on an aggregate basis to take into consideration the effects of legally enforceable master netting agreements and have been reduced by the cash collateral applied. March31, 2010 Gross Derivative Assets Gross Derivative Liabilities (Dollars in billions) Contract/ Notional (1) Trading Derivatives and Economic Hedges Qualifying Accounting Hedges (2) Total Trading Derivatives and Economic Hedges Qualifying Accounting Hedges (2) Total Interest rate contracts Swaps $ 43,320.7 $ 1,128.4 $ 6.2 $ 1,134.6 $ 1,107.0 $ 1.2 $ 1,108.2 Futures and forwards 12,096.0 5.9 0.1 6.0 6.4 - 6.4 Written options 2,791.0 - - - 77.4 - 77.4 Purchased options 2,732.7 78.1 - 78.1 - - - Foreign exchange contracts Swaps 646.7 21.6 5.8 27.4 26.0 1.7 27.7 Spot, futures and forwards 2,207.9 25.7 - 25.7 27.1 - 27.1 Written options 391.3 - - - 10.9 - 10.9 Purchased options 392.4 10.5 - 10.5 - - - Equity contracts Swaps 72.3 7.6 - 7.6 7.5 - 7.5 Futures and forwards 95.7 3.1 - 3.1 2.3 - 2.3 Written options 430.9 - - - 23.3 0.4 23.7 Purchased options 391.4 24.5 - 24.5 - - - Commodity contracts Swaps 101.4 8.8 0.2 9.0 8.4 - 8.4 Futures and forwards 435.0 10.2 - 10.2 9.4 - 9.4 Written options 65.1 - - - 4.8 - 4.8 Purchased options 60.0 4.5 - 4.5 - - - Credit derivatives Purchased credit derivatives: Credit default swaps 2,525.8 88.1 - 88.1 38.7 - 38.7 Total return swaps/other 25.9 1.3 - 1.3 0.8 - 0.8 Written credit derivatives: Credit default swaps 2,

Securities

Securities
	3 Months Ended Mar. 31, 2010
Securities	NOTE 5 Securities The following table presents the amortized cost, gross unrealized gains and losses in accumulated OCI, and fair value of AFS debt and marketable equity securities at March31, 2010 and December31, 2009. (Dollars in millions) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available-for-sale debt securities, March31, 2010 U.S. Treasury and agency securities $ 40,664 $ 291 $ (212 ) $ 40,743 Mortgage-backed securities: Agency 150,356 2,791 (578 ) 152,569 Agency collateralized mortgage obligations 43,403 320 (250 ) 43,473 Non-agency residential (1) 35,008 655 (2,685 ) 32,978 Non-agency commercial 6,971 947 (48 ) 7,870 Foreign securities 3,826 41 (744 ) 3,123 Corporate bonds 6,780 162 (85 ) 6,857 Other taxable securities (2) 19,914 84 (539 ) 19,459 Total taxable securities 306,922 5,291 (5,141 ) 307,072 Tax-exempt securities 9,041 74 (167 ) 8,948 Total available-for-sale debt securities $ 315,963 $ 5,365 $ (5,308 ) $ 316,020 Available-for-sale marketable equity securities (3) $ 2,937 $ 3,679 $ (42 ) $ 6,574 Available-for-sale debt securities, December31, 2009 U.S. Treasury and agency securities $ 22,648 $ 414 $ (37 ) $ 23,025 Mortgage-backed securities: Agency 164,677 2,415 (846 ) 166,246 Agency collateralized mortgage obligations 25,330 464 (13 ) 25,781 Non-agency residential (1) 37,940 1,191 (4,028 ) 35,103 Non-agency commercial 6,354 671 (116 ) 6,909 Foreign securities 4,732 61 (896 ) 3,897 Corporate bonds 6,136 182 (126 ) 6,192 Other taxable securities (2) 25,469 260 (478 ) 25,251 Total taxable securities 293,286 5,658 (6,540 ) 292,404 Tax-exempt securities 9,340 100 (243 ) 9,197 Total available-for-sale debt securities $ 302,626 $ 5,758 $ (6,783 ) $ 301,601 Available-for-sale marketable equity securities (3) $ 6,020 $ 3,895 $ (507 ) $ 9,408 (1) At both March31, 2010 and December31, 2009, includes approximately 85 percent of prime bonds, 10 percent of Alt-A bonds, and five percent of subprime bonds. (2) Substantially all asset-backed securities (ABS). (3) Recorded in other assets on the Corporations Consolidated Balance Sheet. At March31, 2010, the accumulated net unrealized gains o

Outstanding Loans and Leases

Outstanding Loans and Leases
	3 Months Ended Mar. 31, 2010
Outstanding Loans and Leases	NOTE 6 Outstanding Loans and Leases The table below presents outstanding loans and leases at March31, 2010 and December31, 2009. (Dollars in millions) March31 2010 (1) December31 2009 Consumer Residential mortgage (2) $ 245,007 $ 242,129 Home equity 149,907 149,126 Discontinued real estate (3) 14,211 14,854 Credit card domestic 120,783 49,453 Credit card foreign 28,772 21,656 Direct/Indirect consumer (4) 99,372 97,236 Other consumer (5) 3,022 3,110 Total consumer 661,074 577,564 Commercial Commercial domestic (6) 195,862 198,903 Commercial real estate (7) 66,649 69,447 Commercial lease financing 21,465 22,199 Commercial foreign 26,905 27,079 Total commercial loans 310,881 317,628 Commercial loans measured at fair value (8) 4,087 4,936 Total commercial 314,968 322,564 Total loans and leases $ 976,042 $ 900,128 (1) March31, 2010 balances are presented in accordance with new consolidation guidance. (2) Includes foreign residential mortgages of $511 million and $552 million at March31, 2010 and December31, 2009. (3) Includes $12.8 billion and $13.4 billion of pay option loans, and $1.4 billion and $1.5 billion of subprime loans at March31, 2010 and December31, 2009. The Corporation no longer originates these products. (4) Includes dealer financial services loans of $45.3 billion and $41.6 billion, consumer lending of $17.7 billion and $19.7 billion, domestic securities-based lending margin loans of $13.5 billion and $12.9 billion, student loans of $11.1 billion and $10.8 billion, foreign consumer loans of $7.9 billion and $8.0 billion and other loans of $3.9 billion and $4.2 billion at March31, 2010 and December31, 2009. (5) Includes consumer finance loans of $2.2 billion and $2.3 billion, other foreign consumer loans of $680 million and $709 million and consumer overdrafts of $173 million and $144 million at March31, 2010 and December31, 2009. (6) Includes small business commercial domestic loans, including card related products, of $16.6 billion and $17.5 billion at March31, 2010 and December31, 2009. (7) Includes domestic commercial real estate loans of $63.9 billion and $66.5 billion and foreign commercial real estate loans of $2.7 billion and $3.0 billion at March31, 2010 and December31, 2009. (8) Certain commercial loans are accounted for under the fair value option and include commercial domestic loans of $2.5 billion and $3.0 billion, commercial foreign loans of $1.5 billion and $1.9 billion and commercial real estate loans of $101 million and $90 million at March31, 2010 and December31, 2009. See Note 14 Fair Value Measurements for additional information on the fair value option. The Corporation mitigates a portion of its credit risk through synthetic securitizations which are cash collateralized and provided mezzanine risk protection on residential mortgages of $2.4 billion and $

Allowance for Credit Losses

Allowance for Credit Losses
	3 Months Ended Mar. 31, 2010
Allowance for Credit Losses	NOTE 7 Allowance for Credit Losses The following table summarizes the changes in the allowance for credit losses for the three months ended March31, 2010 and 2009. ThreeMonthsEndedMarch31 (Dollars in millions) 2010 2009 Allowance for loan and lease losses, January1, before effect of adoption of new consolidation guidance $ 37,200 $ 23,071 Allowance related to adoption of new consolidation guidance 10,788 n/a Allowance for loan and lease losses, January1 47,988 23,071 Loans and leases charged off (11,501) (7,356) Recoveries of loans and leases previously charged off 704 414 Net charge-offs (10,797) (6,942) Provision for loan and lease losses 9,599 13,352 Other 45 (433) Allowance for loan and lease losses, March31 46,835 29,048 Reserve for unfunded lending commitments, January1 1,487 421 Provision for unfunded lending commitments 206 28 Other (172) 1,653 Reserve for unfunded lending commitments, March31 1,521 2,102 Allowance for credit losses, March31 $ 48,356 $ 31,150 n/a = not applicable During the three months ended March31, 2010 and 2009, the Corporation recorded $848 million and $853 million in provision for credit losses with a corresponding increase in the valuation reserve included as part of the allowance for loan and lease losses specifically for the purchased credit-impaired portfolio. The amount of the allowance for loan and lease losses associated with the purchased credit-impaired loan portfolio was $5.1 billion and $3.9 billion at March31, 2010 and December31, 2009. The increase in the allowance for loan and lease losses was a result of provision for credit losses and the reclassification to the nonaccretable difference of previous write-downs recorded against the allowance. The other amount under the reserve for unfunded lending commitments for the three months ended March31, 2009 represents the fair value of the acquired Merrill Lynch reserve excluding those commitments accounted for under the fair value option, net of accretion, and the impact of funding previously unfunded portions.

Securitizations and Other Varia

Securitizations and Other Variable Interest Entities
	3 Months Ended Mar. 31, 2010
Securitizations and Other Variable Interest Entities	NOTE 8 Securitizations and Other Variable Interest Entities The Corporation utilizes VIEs in the ordinary course of business to support its own and its customers financing and investing needs. The Corporation routinely securitizes loans and debt securities using VIEs as a source of funding for the Corporation and as a means of transferring the economic risk of the loans or debt securities to third parties. The Corporation also administers, structures or invests in other VIEs including multi-seller conduits, municipal bond trusts, CDOs and other entities as described in more detail below. The entity that has a controlling financial interest in a VIE is referred to as the primary beneficiary and consolidates the VIE. In accordance with the new consolidation guidance effective January1, 2010, the Corporation is deemed to have a controlling financial interest and is the primary beneficiary of a VIE if it has both the power to direct the activities of the VIE that most significantly impact the VIEs economic performance and an obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. As a result of this change in accounting, the Corporation consolidated certain VIEs and former QSPEs that were unconsolidated prior to January1, 2010. The net incremental impact of this accounting change on the Corporations Consolidated Balance Sheet is set forth in the following table. The net effect of the accounting change on January1, 2010 shareholders equity was a $6.2 billion charge to retained earnings, net-of-tax, primarily from the increase in the allowance for loan and lease losses, as well as a $116 million charge to accumulated OCI, net-of-tax, for the net unrealized losses on AFS debt securities on newly consolidated VIEs. (Dollars in millions) EndingBalanceSheet December31, 2009 NetIncrease (Decrease) (1) BeginningBalanceSheet January1, 2010 Assets Cash and cash equivalents $ 121,339 $ 2,807 $ 124,146 Trading assets 182,206 6,937 189,143 Derivative assets 80,689 556 81,245 Debt securities: Available-for-sale 301,601 (2,320) 299,281 Held-to-maturity 9,840 (6,572) 3,268 Total debt securities 311,441 (8,892) 302,549 Loans and leases 900,128 102,595 1,002,723 Allowance for loans and leases losses (37,200) (10,788) (47,988) Loans and leases, net of allowance 862,928 91,807 954,735 Loans held-for-sale 43,874 3,025 46,899 Deferred tax asset 27,279 3,498 30,777 All other assets 593,543 701 594,244 Total assets $ 2,223,299 $ 100,439 $ 2,323,738 Liabilities Commercial paper and other short-term borrowings $ 69,524 $ 22,136 $ 91,660 Long-term debt 438,521 84,356 522,877 All other liabilities 1,483,810 217 1,484,027 Total liabilities 1,991,855 106,709 2,098,564 Shareholders equity Retained

Goodwill and Intangible Assets

Goodwill and Intangible Assets
	3 Months Ended Mar. 31, 2010
Goodwill and Intangible Assets	NOTE 9 Goodwill and Intangible Assets Goodwill The following table presents goodwill at March31, 2010 and December31, 2009. As discussed in more detail in Note 17 Business Segment Information, on January1, 2010 the Corporation realigned the former Global Banking and Global Markets business segments. There was no impact on the reporting units used in goodwill impairment testing. The reporting units utilized for goodwill impairment tests are the business segments or one level below the business segments. (Dollars in millions) March31 2010 December31 2009 Deposits $ 17,875 $ 17,875 Global Card Services 22,284 22,292 Home Loans Insurance 4,797 4,797 Global Commercial Banking 20,656 20,656 Global Banking Markets 10,252 10,252 Global Wealth Investment Management 10,411 10,411 All Other 30 31 Total goodwill $ 86,305 $ 86,314 Based on the results of the annual impairment test at June30, 2009, and due to continued stress on Home Loans Insurance and Global Card Services as a result of current market conditions, the Corporation concluded that an additional impairment analysis should be performed for these two reporting units as of March31, 2010. In performing the first step of the additional impairment analysis, the Corporation compared the fair value of each reporting unit to its carrying value, including goodwill. Consistent with the annual test, the Corporation utilized a combination of the market approach and the income approach for Home Loans Insurance and the income approach for Global Card Services. For Home Loans Insurance, the carrying value exceeded the fair value, and accordingly, the second step analysis of comparing the implied fair value of the reporting units goodwill with the carrying amount of that goodwill was performed. Although Global Card Services passed step one of the goodwill impairment analysis, to further substantiate the value of the goodwill balance, the Corporation also performed the step two analysis for this reporting unit. The results of the second step of the goodwill impairment test for Global Card Services and Home Loans Insurance were consistent with the results of the annual impairment test, indicating that no goodwill was impaired as of March31, 2010. Intangible Assets The following table presents the gross carrying values and accumulated amortization related to intangible assets at March31, 2010. March31, 2010 December31, 2009 (Dollars in millions) GrossCarrying Value Accumulated Amortization GrossCarrying Value Accumulated Amortization Purchased credit card relationships $ 7,153 $ 3,611 $ 7,179 $ 3,452 Core deposit intangibles 5,394 3,816 5,394 3,722 Customer relationships 4,232 880 4,232 760 Affinity relationships 1,645 789 1,651 751 Other intangibles 3,438 1,218 3,438 1,183 Total intangible assets $ 21,862 $ 10,314 $ 21,894 $ 9,868 Amortization of intangibles expense was $446 million and $520 millio

Short-term Borrowings and Long-

Short-term Borrowings and Long-term Debt
	3 Months Ended Mar. 31, 2010
Short-term Borrowings and Long-term Debt	NOTE 10 Short-term Borrowings and Long-term Debt Short-term Borrowings The following table presents the Corporations commercial paper and other short-term borrowings at March31, 2010 and December31, 2009. March31, 2010 December31, 2009 (Dollars in millions) Amount Average Rate Amount Average Rate Commercial paper $ 27,086 0.45 % $ 13,131 0.65 % Other short-term borrowings 58,320 1.99 56,393 1.72 Total commercial paper and other short-term borrowings $ 85,406 1.39 $ 69,524 1.47 At March31, 2010, commercial paper issued by consolidated multi-seller conduits and asset acquisition conduits totaled $14.5 billion and $2.2 billion with a weighted-average maturity of 41 and 64 days. Long-term Debt The following table presents the Corporations long-term debt at March31, 2010 and December31, 2009. (Dollars in millions) March31 2010 December31 2009 Long-term debt issued by Merrill Lynch Co., Inc. and subsidiaries $ 138,716 $ 154,951 Long-term debt issued by Bank of America Corporation and subsidiaries 282,608 283,570 Long-term debt issued by consolidated VIEs under new consolidation guidance 90,329 n/a Total long-term debt $ 511,653 $ 438,521 n/a = not applicable At March31, 2010, long-term debt issued by consolidated VIEs included credit card, auto, home equity and first mortgage securitization trusts of $68.4 billion, $8.5 billion, $4.6 billion and $2.7 billion, respectively, and $6.1 billion of other long-term debt issued by consolidated VIEs, and is collateralized by the assets of the VIEs. The Corporation has not assumed or guaranteed long-term debt previously issued or guaranteed by Merrill Lynch Co., Inc. or its subsidiaries. The Corporation has guaranteed certain structured securities issued by Merrill Lynch S.A. and Merrill Lynch International Co. C.V. subsequent to September16, 2009, structured securities issued by Merrill Lynch Canada Finance Company subsequent to October1, 2009 and structured securities issued by Merrill Lynch Japan Finance Co., Ltd. subsequent to October16, 2009. In addition, certain structured notes acquired in the acquisition of Merrill Lynch are accounted for under the fair value option. For more information on these structured notes, see Note 14 Fair Value Measurements. Aggregate annual maturities of long-term debt obligations at March31, 2010 are summarized in the following table. (Dollars in millions) 2010 2011 2012 2013 2014 Thereafter Total Bank of America Corporation $ 16,095 $ 15,971 $ 40,199 $ 7,516 $ 15,309 $ 84,327 $ 179,417 Merrill Lynch Co., Inc. and subsidiaries 21,625 19,390 18,381 17,941 16,427 44,952 138,716 Bank of America, N.A. and other subsidiaries 20,406 3,793 4,949 155 107 10,021 39,431 Other 20,598 21,029 12,513 5,131 1,776 2,713 63,760 Total long-term debt excluding consolidated VIEs 78,7

Commitments and Contingencies

Commitments and Contingencies
	3 Months Ended Mar. 31, 2010
Commitments and Contingencies	NOTE 11 Commitments and Contingencies In the normal course of business, the Corporation enters into a number of off-balance sheet commitments. These commitments expose the Corporation to varying degrees of credit and market risk and are subject to the same credit and market risk limitation reviews as those instruments recorded on the Corporations Consolidated Balance Sheet. For additional information on commitments and contingencies, see Note 14 Commitments and Contingencies to the Consolidated Financial Statements of the Corporations 2009 Annual Report on Form 10-K. Credit Extension Commitments The Corporation enters into commitments to extend credit such as loan commitments, SBLCs and commercial letters of credit to meet the financing needs of its customers. The unfunded legally binding lending commitments shown in the following table are net of amounts distributed (e.g., syndicated) to other financial institutions of $36.3 billion and $30.9 billion at March31, 2010 and December31, 2009. At March31, 2010, the carrying amount of these commitments, excluding commitments accounted for under the fair value option, was $1.6 billion, including deferred revenue of $34 million and a reserve for unfunded lending commitments of $1.5 billion. At December31, 2009, the comparable amounts were $1.5 billion, $34 million and $1.5 billion, respectively. The carrying amount of these commitments is recorded in accrued expenses and other liabilities. The table below also includes the notional amount of commitments of $27.3 billion and $27.0 billion at March31, 2010 and December31, 2009, that are accounted for under the fair value option. However, the table below excludes fair value adjustments of $746 million and $950 million on these commitments that were recorded in accrued expenses and other liabilities. For information regarding the Corporations loan commitments accounted for under the fair value option, see Note 14 Fair Value Measurements. (Dollars in millions) Expiresin1 YearorLess Expiresafter1 Yearthrough3 Years Expiresafter3 Years through 5 Years Expiresafter 5 Years Total Credit extension commitments, March31, 2010 Loan commitments $ 160,606 $ 161,559 $ 26,029 $ 25,163 $ 373,357 Home equity lines of credit 1,817 3,655 12,351 72,498 90,321 Standby letters of credit and financial guarantees (1) 31,694 19,713 4,235 13,791 69,433 Commercial letters of credit 1,971 30 - 1,438 3,439 Legally binding commitments 196,088 184,957 42,615 112,890 536,550 Credit card lines (2) 521,659 - - - 521,659 Total credit extension commitments $ 717,747 $ 184,957 $ 42,615 $ 112,890 $ 1,058,209 Credit extension commitments, December31, 2009 Loan commitments $ 149,248 $ 187,585 $ 30,897 $ 28,489 $ 396,219 Home equity lines of credit 1,810 3,272 10,667 76,924 92,673 Standby letters of credit and financial guaran

Shareholders' Equity and Earnin

Shareholders' Equity and Earnings Per Common Share
	3 Months Ended Mar. 31, 2010
Shareholders' Equity and Earnings Per Common Share	NOTE 12 Shareholders Equity and Earnings Per Common Share Common Stock In December 2009, the Corporation repurchased the non-voting perpetual preferred stock previously issued to the U.S. Treasury (TARP Preferred Stock) through use of $25.7 billion in excess liquidity and $19.3 billion in proceeds from the sale of 1.3 billion Common Equivalent Securities (CES) valued at $15.00 per unit. The CES consisted of depositary shares representing interests in shares of Common Equivalent Junior Preferred Stock, Series S (Common Equivalent Stock) and contingent warrants to purchase an aggregate of 60million shares of the Corporations common stock. On February23, 2010, the Corporation held a special meeting of shareholders at which it obtained stockholder approval of an amendment to the Corporations amended and restated certificate of incorporation to increase the number of authorized shares of common stock, and accordingly, the Common Equivalent Stock automatically converted in full into 1.286 billion shares of common stock on February24, 2010 following the filing of the amendment with the Delaware Secretary of State on February23, 2010. In addition, as a result, the contingent warrants expired without having become exercisable and the CES ceased to exist. For additional information on preferred stock, see Note 15 Shareholders Equity and Earnings Per Common Share to the Consolidated Financial Statements of the Corporations 2009 Annual Report on Form 10-K. Through a 2008 authorized share repurchase program, the Corporation had the ability to repurchase shares, subject to certain restrictions, from time to time, in the open market or in private transactions. The 2008 authorized repurchase program expired on January23, 2010. In the three months ended March31, 2010, the Corporation did not repurchase any shares of common stock and issued approximately 95.8million shares under employee stock plans. At March31, 2010, the Corporation had reserved 1.1 billion of unissued common shares for future issuances under employee stock plans, common stock warrants, convertible notes and preferred stock. In January 2010, the Board of Directors declared a regular quarterly cash dividend on common stock of $0.01 per share, which was paid on March26, 2010 to common shareholders of record on March5, 2010. In April 2010, the Board declared a regular quarterly cash dividend on common stock of $0.01 per share, payable on June25, 2010 to common shareholders of record on June4, 2010. Preferred Stock During the first quarter of 2010, the aggregate dividends declared on preferred stock were $348 million. Accumulated OCI The following table presents the changes in accumulated OCI for the three months ended March31, 2010 and 2009, net-of-tax. (Dollars in millions) Available-for- Sale Debt Securities Available-for- Sale Marketable EquitySecurities Derivatives Employee BenefitPlans (1) Foreign Currency(2) Total Balance, December31, 2009 $ (628 ) $ 2,129 $ (2,535 ) $ (4,092 ) $ (493 ) $ (5,619) Cumulative adjustment for new consolidation guidanc

Pension, Postretirement and Oth

Pension, Postretirement and Other Employee Plans
	3 Months Ended Mar. 31, 2010
Pension, Postretirement and Other Employee Plans	NOTE 13 Pension, Postretirement and Other Employee Plans The Corporation sponsors noncontributory trusteed pension plans that cover substantially all officers and employees, a number of noncontributory nonqualified pension plans, and postretirement health and life plans. Additional information on these plans is presented in Note 17 Employee Benefit Plans to the Consolidated Financial Statements of the Corporations 2009 Annual Report on Form 10-K. As a result of the Merrill Lynch acquisition, the Corporation assumed the obligations related to the plans of Merrill Lynch. These plans include a terminated U.S. pension plan, non-U.S. pension plans, nonqualified pension plans and postretirement plans. The non-U.S. pension plans vary based on the country and local practices. In 1988, Merrill Lynch purchased a group annuity contract that guarantees the payment of benefits vested under the terminated U.S. pension plan. The Corporation, under a supplemental agreement, may be responsible for, or benefit from actual experience and investment performance of the annuity assets. The Corporation contributed $0 and $120 million for the three months ended March31, 2010 and 2009, under this agreement. Additional contributions may be required in the future under this agreement. Net periodic benefit cost of the Corporations plans for the three months ended March31, 2010 and 2009 included the following components. Three Months Ended March31 QualifiedPension Plans Nonqualifiedand OtherPension Plans(1) Postretirement HealthandLife Plans (Dollars in millions) 2010 2009 2010 2009 2010 2009 Components of net periodic benefit cost Service cost $ 103 $ 107 $ 8 $ 7 $ 4 $ 5 Interest cost 187 188 61 60 22 23 Expected return on plan assets (316 ) (308 ) (57 ) (54 ) (2 ) (2) Amortization of transition obligation - - - - 8 8 Amortization of prior service cost (credits) 7 9 (2 ) (2 ) - - Recognized net actuarial loss (gain) 89 99 - 2 (8 ) (15) Recognized termination benefit cost - - 10 - - - Net periodic benefit cost $ 70 $ 95 $ 20 $ 13 $ 24 $ 19 (1) Includes nonqualified pension plans, the terminated U.S. pension plan and non-U.S. pension plans as described above. In 2010, the Corporation expects to contribute approximately $230 million to its nonqualified and other pension plans and $116 million to its postretirement health and life plans. For the three months ended March31, 2010, the Corporation contributed $106 million and $29 million to these plans. The Corporation does not expect to be required to contribute to its qualified pension plans during the rest of 2010. During the three months ended March31, 2010, the Corporation issued approximately 191million restricted stock units to certain employees under t

Fair Value Measurements

Fair Value Measurements
	3 Months Ended Mar. 31, 2010
Fair Value Measurements	NOTE 14 Fair Value Measurements Under applicable accounting guidance, fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Corporation determines the fair values of its financial instruments based on the fair value hierarchy established under applicable accounting guidance which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value. For more information regarding the fair value hierarchy and how the Corporation measures fair value, see Note 1 Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporations 2009 Annual Report on Form 10-K. The Corporation accounts for certain corporate loans and loan commitments, LHFS, structured reverse repurchase agreements, long-term deposits and long-term debt under the fair value option. Level 1, 2 and 3 Valuation Techniques Financial instruments are considered Level 1 when the valuation can be based on quoted prices in active markets for identical assets or liabilities. Level 2 financial instruments are valued using quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or models using inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Financial instruments are considered Level 3 when their values are determined using pricing models, discounted cash flow methodologies or similar techniques, and at least one significant model assumption or input is unobservable and when determination of the fair value requires significant management judgment or estimation. The Corporation uses market indices for direct inputs to certain models where the cash settlement is directly linked to appreciation or depreciation of that particular index (primarily in the context of structured credit products). In those cases, no material adjustments are made to the index-based values. In other cases, market indices are used as inputs to valuation, but are adjusted for trade specific factors such as rating, credit quality, vintage and other factors. Trading Account Assets and Liabilities and Available-for-Sale Debt Securities The fair values of trading account assets and liabilities are primarily based on actively traded markets where prices are based on either direct market quotes or observed transactions. The fair values of AFS debt securities are generally based on quoted market prices or market prices for similar assets. Liquidity is a significant factor in the determination of the fair values of trading account assets and liabilities and AFS debt securities. Market price quotes may not be readily available for some positions, or positions within a market sector where trading activity has slowed significantly or ceased. Some of these instruments are valued using a discount

Fair Value of Financial Instrum

Fair Value of Financial Instruments
	3 Months Ended Mar. 31, 2010
Fair Value of Financial Instruments	NOTE 15 Fair Value of Financial Instruments The fair values of financial instruments have been derived, in part, by the Corporations assumptions, the estimated amount and timing of future cash flows and estimated discount rates. Different assumptions could significantly affect these estimated fair values. In addition, the estimates are only indicative of the value of individual financial instruments and should not be considered an indication of the fair value of the Corporation. The following disclosures include financial instruments where only a portion of the ending balances at March31, 2010 and December31, 2009 is carried at fair value on the Corporations Consolidated Balance Sheet. Short-term Financial Instruments The carrying value of short-term financial instruments, including cash and cash equivalents, time deposits placed, federal funds sold and purchased, resale and certain repurchase agreements, commercial paper and other short-term investments and borrowings, approximates the fair value of these instruments. These financial instruments generally expose the Corporation to limited credit risk and have no stated maturities or have short-term maturities and carry interest rates that approximate market. The Corporation elected to account for certain structured reverse repurchase agreements under the fair value option. See Note 14 Fair Value Measurements for additional information on these structured reverse repurchase agreements. Loans Fair values were generally determined by discounting both principal and interest cash flows expected to be collected using an observable discount rate for similar instruments with adjustments that the Corporation believes a market participant would consider in determining fair value. The Corporation estimates the cash flows expected to be collected using internal credit risk, interest rate and prepayment risk models that incorporate the Corporations best estimate of current key assumptions, such as default rates, loss severity and prepayment speeds for the life of the loan. The Corporation elected to account for certain large corporate loans which exceeded the Corporations single name credit risk concentration guidelines under the fair value option. The carrying value of loans is presented net of allowance for loan and lease losses and excludes leases. See Note 14 Fair Value Measurements for additional information on loans accounted for under the fair value option. Deposits The fair value for certain deposits with stated maturities was calculated by discounting contractual cash flows using current market rates for instruments with similar maturities. The carrying value of foreign time deposits approximates fair value. For deposits with no stated maturities, the carrying amount was considered to approximate fair value and does not take into account the significant value of the cost advantage and stability of the Corporations long-term relationships with depositors. The Corporation accounts for certain long-term fixed-rate deposits which are economically hedged with derivatives under the fair value option. See Note 14 Fair Value Measurements for additional information on these long

Mortgage Servicing Rights

Mortgage Servicing Rights
	3 Months Ended Mar. 31, 2010
Mortgage Servicing Rights	NOTE 16 Mortgage Servicing Rights The Corporation accounts for consumer MSRs at fair value with changes in fair value recorded in the Consolidated Statement of Income in mortgage banking income. The Corporation economically hedges these MSRs with certain derivatives and securities including MBS and U.S. Treasuries. The securities that economically hedge the MSRs are recorded in other assets with changes in the fair value of the securities and the related interest income recorded in mortgage banking income. The following table presents activity for residential first mortgage MSRs for the three months ended March31, 2010 and 2009. ThreeMonthsEndedMarch31 (Dollars in millions) 2010 2009 Balance, January1 $ 19,465 $ 12,733 Merrill Lynch balance, January1, 2009 - 209 Net additions 1,131 1,249 Impact of customer payments (603 ) (1,185 ) Other changes in MSR fair value (1,151 ) 1,090 Balance, March31 $ 18,842 $ 14,096 Mortgage loans serviced for investors (in billions) $ 1,717 $ 1,699 Other changes in MSR fair value in the previous table reflect the change in discount rates and prepayment speed assumptions, largely due to changes in interest rates, as well as the effect of changes in other assumptions, but do not include $453 million and $8 million in gains for the three months ended March31, 2010 and 2009 resulting from lower than expected prepayments. Such gains are included in the impact of customer payments in the table above. The total of these gains and the other changes in MSR fair value of $(698) million and $1.1 billion is included in the line mortgage banking income in the table Level 3 Total Realized and Unrealized Gains (Losses) Included in Earnings in Note 14 Fair Value Measurements. The Corporation uses an OAS valuation approach to determine the fair value of MSRs which factors in prepayment risk. This approach consists of projecting servicing cash flows under multiple interest rate scenarios and discounting these cash flows using risk-adjusted discount rates. The key economic assumptions used in determining the fair value of MSRs at March31, 2010 and December31, 2009 were as follows. March31, 2010 December31, 2009 (Dollars in millions) Fixed Adjustable Fixed Adjustable Weighted-average option adjusted spread 1.63% 4.76% 1.67% 4.64% Weighted-average life, in years 5.55 3.08 5.62 3.26 The table below presents the sensitivity of the weighted-average lives and fair value of MSRs to changes in modeled assumptions. These sensitivities are hypothetical and should be used with caution. As the amounts indicate, changes in fair value based on variations in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, the effect of a variation in a particular assumption on the fair value of a MSR that continues to be held by the Corporation is calculated without changing any other assumption. In reality, changes in one factor may result in cha

Business Segment Information

Business Segment Information
	3 Months Ended Mar. 31, 2010
Business Segment Information	NOTE 17 Business Segment Information The Corporation reports the results of its operations through six business segments: Deposits, Global Card Services, Home Loans Insurance, Global Commercial Banking, Global Banking Markets (GBAM) and Global Wealth Investment Management (GWIM), with the remaining operations recorded in All Other. Effective January1, 2010, the Corporation realigned the Global Corporate and Investment Banking portion of the former Global Banking business segment with the former Global Markets business segment to form GBAM and to reflect Global Commercial Banking as a standalone segment. In addition, the Corporation may periodically reclassify business segment results based on modifications to its management reporting methodologies and changes in organizational alignment. Prior period amounts have been reclassified to conform to current period presentation. Deposits Deposits includes the results of consumer deposits activities which consist of a comprehensive range of products provided to consumers and small businesses. In addition, Deposits includes an allocation of ALM activities. Deposits products include traditional savings accounts, money market savings accounts, CDs and IRAs, and noninterest- and interest-bearing checking accounts. These products provide a relatively stable source of funding and liquidity. The Corporation earns net interest spread revenue from investing this liquidity in earning assets through client-facing lending and ALM activities. The revenue is allocated to the deposit products using a funds transfer pricing process which takes into account the interest rates and maturity characteristics of the deposits. Deposits also generate fees such as account service fees, non-sufficient funds fees, overdraft charges and ATM fees. In addition, Deposits includes the impact of migrating customers and their related deposit balances between GWIM and Deposits. Subsequent to the date of migration, the associated net interest income, service fees and noninterest expense are recorded in the business to which deposits were transferred. Global Card Services Global Card Services provides a broad offering of products including U.S. consumer and business card, consumer lending, international card and debit card to consumers and small businesses. The Corporation reports its Global Card Services current period results in accordance with new consolidation guidance. Under this new consolidation guidance, the Corporation consolidated all credit card trusts. Accordingly, current period results are comparable to prior period results on a managed basis, which was consistent with the way that management evaluated the results of the business. Managed basis assumed that securitized loans were not sold and presented earnings on these loans in a manner similar to the way loans that have not been sold (i.e., held loans) were presented. Loan securitization is an alternative funding process that is used by the Corporation to diversify funding sources. Prior to the adoption of the new consolidation guidance, loan securitization removed loans from the Corporations Consolidated Balance Sheet through the sale of loans to an