Bank of America Corp. (BAC)

David Nest and Ajay Singh

Wednesday, December 6, 2006  

Corporate Profile

Bank of America is one of the world's largest financial institutions.

It was founded in 1874 and is headquartered in Charlotte, North Carolina

No. 1 overall Small Business Administration (SBA) lender in the United States

Operates in 31 countries

Top US Credit Card Issuers (3Q 06)

0 20 40 60 80 100 120 140 160

Bank of America

JP Morgan Chase

Citigroup

Capital One

American Express

Discover

$ in Billions

BAC Competitors and Industry Comparison

Stock BAC C WB WFC Industry Avg.

Market Cap:

240.25B 242.64B 85.54B 118.94B 20.77B

QuarterlyRev. Growth (yoy):

30.70% 2.70% 5.10% 5.80% 19.60%

Revenue (ttm):

63.14B 79.78B 27.31B 32.65B 7.25B

Net Income (ttm):

19.44B 21.03B 6.98B 8.23B 1.65B

P/E (ttm): 12.32 10.63 11.97 14.56 13.23

EPS (ttm): 4.344 4.646 4.519 2.420 2.92

Price/Book (mrq):

1.82 2.09 1.67 2.65 2.17

Competitors

BAC Passes C To become largest U.S. Bank By Market Cap

Reinvesting Money In The Business, Spent 3.3B on Schwab's Private Banking Business (US Trust)

Great Dividend Yield, Above Industry Avg.

Solid Revenue growth compared to peers

Recent News

12/1/2006: Alvaro de Molina announced his intentions to resign from CFO position. Joe Price will take over de Molina’s position on January 1, 2007.

11/27/2006: BAC signs a 5 year deal as the official bank for NASCAR.

11/20/2006: BAC announced to buy U.S. Trust, the Wealth Mgt Subsidiary of Charles Schwab for a $3.3B cash deal.

10/11/06: BAC announces free online equity trades

9/11/06: BAC acquires HealthLogic Systems Corp.

7/26/06: BAC increases quarterly dividend by 12%

Major Institutions and Shareholders

1,376 Institutions currently hold shares of BACBarclays Global Investors UK Holdings Ltd

FMR CORPORATION (FIDELITY MANAGEMENT & RESEARCH CORP)

JP MORGAN CHASE & COMPANY

Major Mutual Fund Holders:Vangaurd 500 Index Fund

Washington Mutual Investors Fund

Fidelity Growth & Income Portfolio

Major Institutions and Shareholders

Two Sides of the Story:Positive

Diverse product line and geographic presence

Acquisition of MBNA

Net interest margin to remain relatively stable

Negative

Significant credit quality deterioration

Potential surge in bankruptcy filings

Unlikely to make future M&A’s

CFO resigns

According to our valuation, the 12 month price target for BAC should be $62.50

Volatility : Low (Beta round 0.47)Institutional Ownership around 60%Good Divided: Current Yield 4.19% compared to an Industry

average of 3.7%

As of today, BAC closed at 52.69