This summary is based on the fourth quarter fiscal 2007 earnings call conducted by Bank Of America Corp. (BAC: chart) on January 22, 2008.

Management:

- Chairman, President and CEO: Ken Lewis
- CFO: Joe Price
- Investor Relations: Kevin Stitt

Key Investors Issues

- Net income declined 29% to $14.98 billion from $21.13 billion a year earlier.
- Net income dropped 28% to $15 billion or $3.30 a share from $21.13 billion or $4.59 in 2006.
- The bank acquired U.S Trust and LaSalle Bank during the year.

Fourth Quarter Highlights

- Net income was $268 million, or 5 cents per diluted share, down 95% from $5.26 billion, or $1.16 a share, a year earlier.
- Revenues also dropped 29% to $13.12 billion.
- Equity investment gains for the total corporation were reported to be $317 million.

Full Year Highlights:

Revenue declined 8% to $68.07 billion from $73.80 billion a year earlier as net interest income increased to $36.18 billion due to a higher contribution from market-based net interest income, consumer and commercial loan growth and the addition of LaSalle.

- The net interest yield declined 22 basis points to 2.60% reflecting ongoing spread compression and non-interest income fell 16% to $31.89 billion from $37.99 billion in 2006, due to CDO related write- down.
- The corporation recorded trading account losses of $5.13 billion and the decline was offset in part by the Marsico gain.
- Improvements in equity investment income of $875 million, investment and brokerage services income of $691 million, service charges of $684 million and gains on sales of debt securities of $623 million were recorded.

Net income fell 29% to $14.98 billion or $3.30 a share from $21.13 billion or $4.49 a share in the prior year as market dislocations and slowdowns in the economy impacted performance.

- Total retail sales increased 9% to 49 million products, including strong growth in checking and savings products, first mortgage and online banking activations.
- The efficiency ratio was 54.37% or 53.77% excluding merger and restructuring charges, while non-interest expense increased 4% to $37.01 billion due to the addition of U.S. Trust and LaSalle and costs of business initiatives.
- Provision expense increased $3.38 billion to $8.39 billion partly because of higher net charge-offs and the absence of 2006 commercial reserve releases.
- The company added reserves in the home equity and homebuilder loan portfolios on continued weakness in the housing markets.

Reserves also were added for small business portfolio seasoning and deterioration, as well as growth in the consumer portfolios.

- The increases were partially offset by the release of reserves from the sale of the Argentina portfolio in the first quarter of 2007.
- Net charge-offs totaled $6.48 billion, or 0.84% of average loans and leases, compared with $4.54 billion, or 0.70% in 2006 with the increase driven by seasoning of the consumer portfolio, seasoning and deterioration in the small business and home equity portfolios as well as lower commercial recoveries.

Capital

- Tier one capital at the end of December was 6.87%, down from 8.22% at September 30 due mainly to the acquisition of LaSalle and lower earnings in the fourth quarter.
- The financial institution raised $1.6 billion in tier one capital and the preferred market and it reduced its share repurchases.

Strategic Acquistions:

- The corporation completed the acquisition of U.S. Trust, creating U.S. Trust, Private Wealth Management, within Global Wealth and Investment Management, to serve wealthy and ultra-wealthy clients.
- The financial institution completed the purchase of LaSalle Bank, addressing a key geographic gap in its franchise and expanding its presence in the Chicago region and in Michigan.

Business Segments Highlights:

- In Global consumer and small business banking total revenue increased 6% due to impressive performance in non-interest income and increased net interest income.
- However earnings of $9.4 billion were down 17% from a year ago, due to a 51% increase in provision and a spike in technology, overhead and personnel expenses.
- Non-interest income grew 13% due to good card performance and higher service charges.

The corporation increased the allowance for loan losses by around $2 billion, due mainly to ongoing weaknesses in the housing market along with seasoning of several growth portfolios.