This summary is based on the first quarter fiscal 2007 earnings call conducted by Bank of America Corp. (BAC: chart) on April 19, 2007.

Key Investors Issues

- Earnings per share grew 8% over the prior year to $1.16.
- Quarterly revenue increased to $18.42 billion from $17.94 billion in last year.
- Total shareholders'' equity was $134.86 billion at March 31, 2007.

First Quarter Fiscal 2007 Financial Highlights

The net income rose 5% in the first quarter of 2007 to $5.26 billion from $4.99 billion a year earlier.

Diluted earnings per share increased 8% to $1.16 from $1.07. Return on average common shareholders'' equity was 16.16%.

Excluding pretax merger and restructuring charges of $111 million, equal to 1 cent per share, the company earned $5.33 billion, or $1.17 per share, in the first quarter. A year earlier merger and restructuring charges of $98 million also were equal to 1 cent per share.

These improved results were primarily driven by increases in service fee income, investment banking income, mortgage banking income and equity investment gains. The benefits of doing more business with more customers was somewhat offset on the bottom line by the impact of a flat yield curve and normalizing credit costs.

Revenue on a fully taxable-equivalent basis increased 3% to $18.42 billion from $17.94 billion in the first quarter of 2006.

Noninterest income rose 10% to $9.83 billion from $8.90 billion in the first quarter of 2006. Results were driven by continued strength in service fee income, investment banking income, mortgage banking income and equity investment gains.

Net interest income on a fully taxable-equivalent basis was $8.60 billion compared with $9.04 billion the previous year. The decline is a result of higher cost deposits, divestitures of businesses and the impact of hedging activities. The net interest yield decreased 37 basis points to 2.61 %.

The expense ratio on a fully taxable-equivalent basis was 49.38% for the first quarter of 2007 (48.78% excluding merger and restructuring charges).

Non-interest expense increased 2% to $9.10 billion from $8.92 billion a year earlier. Expenses were up primarily due to higher incentive and personnel expense, reflecting investment in various business platforms.

The quarter''s results also included $397 million, or 6 cents per share, in expense from the impact of SFAS 123R, which accelerates the recognition of certain equity-based compensation expenses for retirement-eligible associates. A year ago the expense was $320 million, or 5 cents per share. Also included in first quarter 2007 expenses were $111 million in pre-tax merger and restructuring charges related to the MBNA acquisition compared with $98 million a year earlier.

- During the quarter, Card Services posted average managed loan growth of $14.48 billion, an 8% increase, and added 3 million new accounts in the first quarter.
- Net new retail checking accounts grew by 487,000 in the first quarter helped by innovative products such as Keep the Change. Since inception, more than 4 million customers have enrolled in Keep the Change and saved about $400 million.
- Total sales of retail products rose 6 % to nearly 12 million units resulting from strong growth in checking, savings, credit card, mortgage, small business and online banking activations. E-commerce sales remain strong, representing 20 % of total retail product sales. Sales of deposit and credit products through E-commerce increased by 47 %.
- Debit card income rose 16 % to $500 million and purchase volume grew to $43.57 billion.
- Average loans to small businesses with less than $2.5 million in annual sales increased 30% to $14.01 billion.
- Total first quarter average loans and leases rose 10% in Global Corporate and Investment Banking to more than $247 billion.
- Investment banking fees rose 35 %, driven by debt underwriting and mergers and acquisitions deal volume.
- Bank of America began offering Online Equity Trades in late 2006. With the addition of California in the first quarter, the program is now offered nationally. The program helped generate growth in self-directed client brokerage assets, which exceeded $28 billion at March 31, 2007, up 35 %.
- Investment and brokerage services in Global Wealth and Investment Management rose 12 % on strong client asset inflows and record brokerage income.
- Total assets under management in Global Wealth and Investment Management increased 11% to more than $547 billion. On a 3-year assets under management weighted basis, 89% of Columbia''s equity mutual funds were in the top 2 performance quartiles compared with their peer group.

The overall credit quality remained sound.

Compared with the first quarter of 2006, net charge-offs increased reflecting portfolio seasoning and the trend toward more normalized levels post bankruptcy reform. Provision expense in the first quarter was down slightly from a year ago as higher net charge-offs were more than offset by reductions in reserves from consumer credit card securitization activities and the sale of the Argentina portfolio.

- Provision for credit losses was $1.24 billion, down from $1.57 billion in the fourth quarter of 2006, and $1.27 billion in the first quarter of 2006.
- Net charge-offs were $1.43 billion, or 0.81 % of total average loans and leases. This compared with $1.42 billion, or 0.82 %, in the fourth quarter of 2006 and $822 million, or 0.54 %, in the first quarter of 2006. Reported net charge-offs in the first quarter of 2006 excluded $210 million, or 0.14 %, as a result of recording impaired MBNA loans at fair value.
- Total managed losses were $2.57 billion, or 1.26 % of total average managed loans and leases compared with $2.45 billion, or 1.23%, in the fourth quarter of 2006 and $1.48 billion, or 0.84%, in the first quarter of 2006. Managed losses in the first quarter of 2006 excluded $210 million, or 0.11%, as a result of recording impaired MBNA loans at fair value.
- Nonperforming assets were $2.06 billion, or 0.29 % of total loans, leases and foreclosed properties, at March 31 compared with $1.86 billion, or 0.26 %, at December 31, 2006 and $1.68 billion, or 0.27 % at March 31, 2006.
- The allowance for loan and lease losses was $8.73 billion, or 1.21 % of total loans and leases, at March 31 compared with $9.02 billion, or 1.28 % at December 31, 2006 and $9.07 billion, or 1.46 %, at March 31, 2006.

Capital Management

Total shareholders'' equity was $134.86 billion at March 31. Period-end assets grew to $1.5 trillion. The Tier 1 Capital Ratio was 8.57 %, down from 8.64 % at December 31, 2006 and up from 8.45 % a year ago.