BANK OF AMERICA

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Bank of America Reports Third Quarter Earnings Per Share of $1.45

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Supplemental third quarter 2002 financial information

Strong Performance in Consumer Bank Continues to Lead Growth

CHARLOTTE, N.C., Oct 15, 2002 /PRNewswire-FirstCall via COMTEX/ -- Bank of America Corporation (NYSE: BAC) today reported third quarter net income of $2.24 billion, or $1.45 per share (diluted), up from $841 million, or $0.51 per share, reported a year ago.

Third quarter 2001 earnings included $1.25 billion in after-tax costs related to the exit of the company's auto leasing and subprime real estate lending businesses. In addition, the adoption of FAS No. 142 in the first quarter of 2002 eliminated the amortization of goodwill, which impacts the company's expenses and net income. Excluding goodwill amortization and exit costs in the third quarter of 2001, net income was relatively flat and earnings per share were up 6 percent.

Third quarter results were driven by ongoing growth in consumer revenue from such product lines as mortgage, credit card and deposits, as well as lower credit costs. These improvements offset a significant reduction in market-related revenue from trading and equity investments.

"We continue to benefit from our diversified business mix," said Kenneth D. Lewis, chairman and chief executive officer. "Third quarter performance was led by strong growth in consumer banking, demonstrating the progress we're making in executing our customer-focused strategy."

"We also are encouraged by the reduction of net charge-offs, reflecting improved credit quality in our middle-market business," continued Lewis. "Although the environment remains challenging, we are optimistic that we will continue to gain market share in our businesses and differentiate Bank of America in the eyes of our customers and investors."

In the third quarter, the return on average common equity was 19.02 percent.

Net income for the first nine months of 2002 was $6.64 billion, or $4.22 per share (diluted), up from $4.73 billion, or $2.90 per share, a year ago. Excluding goodwill amortization and exit costs in 2001, net income and earnings per share were up 3 and 7 percent, respectively, in the first nine months.

Third quarter highlights (compared to a year ago)

Financial highlights

* Shareholder Value Added (SVA) grew 7 percent to $880 million.

* Net charge-offs declined to $804 million.

* Average total customer deposits grew 8 percent to $332 billion.

* Average consumer loans grew 8 percent to $192 billion.

* Mortgage banking income doubled to a record $218 million.

* Card income was up 11 percent, driven by increased purchase volume.

* Investment banking revenue grew 4 percent to $318 million.

* Total service charges increased 9 percent, driven by increased consumer activity and higher corporate fees in lieu of compensating balances as a result of the lower rate environment.

Customer highlights

* The company increased checking accounts by 401,000 in the first nine months of the year, compared to 193,000 for all of 2001. The number of accounts increased by 153,000 in the third quarter. The company continues to attract and retain customers with its new My Access Checking(TM) product and through increased customer satisfaction.

* The number of customers expressing the highest level of satisfaction with the company increased 11 percent in the first nine months of the year. This equates to an increase of 1.30 million customers being highly satisfied with their banking experience. These customers are more likely to expand their relationships and refer others to the bank.

* The company achieved the status as the No. 1 national lender by the U.S. Small Business Administration (SBA), by doubling its SBA loan output during the 2002 SBA fiscal year (ended Sept. 30) and providing 3,917 SBA loans, the highest in the industry, to small businesses nationwide.

* LoanSolutions(R), an end-to-end consumer real estate credit solution, has been successfully rolled out to 8,000 banking center employees to provide customers with point-of-sale loan decisions on a range of primary mortgages. This has significantly improved the mortgage experience for the customer and creates new cross-selling opportunities.

* During the third quarter, the company reached 4.3 million active online banking users - the most users in the industry. The growth in that number also reflects the growth in electronic bill payment, which has reached $7.1 billion of transactions per quarter.

* The company launched its Visa Mini Card, a new miniature credit card that fits on a key chain. This debut is part of the company's strategy to create innovative banking solutions for customers.

* The company saw increased usage of its SafeSend(TM) debit card product, which allows consumers to send money to Mexico more efficiently and reduces fraud, helping the company support and strengthen its multicultural strategy by better meeting the needs of its diverse customer base.

Revenue

Total revenue of $8.69 billion was relatively unchanged from the previous year.

Fully taxable-equivalent net interest income rose 3 percent to $5.47 billion, driven by higher securities, consumer loan and deposit levels.

Noninterest income decreased 6 percent to $3.22 billion. Mortgage banking income doubled, card income rose 11 percent, and both total investment and brokerage services income and investment banking income increased 4 percent. Other income also was up 43 percent due primarily to $190 million in gains on whole loan sales. These improvements were offset by lower market-related revenues as equity investments and trading account profits declined a total of $600 million.

During the quarter, the company realized $189 million in net securities gains.

Efficiency

Expenses were down 22 percent from a year ago to $4.6 billion, (adjusted for business-exit costs and amortization of goodwill, expenses increased 4 percent). Noninterest expense included a charge for a change in assumptions on the return for pension plan assets from 9.5 to 8.5 percent. Additional charges included costs associated with a contract termination for discontinued software licenses. The efficiency ratio was 53.19 percent.

Credit quality

Credit quality continued to be affected by the economic slowdown and uncertain market conditions, causing charge-offs to remain at elevated levels.

* Provision for credit losses of $804 million was down $447 million from a year ago and 9 percent from $888 million in the second quarter of 2002. Third quarter 2001 provision included $395 million related to the exit of the subprime real estate business.

* Net charge-offs were $804 million, or 0.94 percent of loans and leases, down from $1.49 billion, or 1.65 percent, a year ago. Third quarter 2001 charge-offs included $635 million in losses related to the exit of the subprime real estate business.

* Total net charge-offs decreased $84 million, or 9 percent, from the second quarter of 2002. The decline was driven by lower middle-market business charge-offs and slightly higher recoveries.

* Nonperforming assets were $5.13 billion, or 1.50 percent of loans, leases and foreclosed properties at Sept. 30, 2002, up 13 percent from $4.52 billion, or 1.33 percent, a year earlier. Nonperforming assets increased 4 percent from levels in the second quarter of 2002 due principally to increases in the corporate portfolio.

* The allowance for credit losses was 2.01 percent of loans and leases on Sept. 30, 2002, an increase in coverage of 4 basis points from 1.97 percent a year ago. The allowance for credit losses, at $6.86 billion, represented 142 percent of nonperforming loans, down from 162 percent a year ago. The allowance for credit losses was virtually unchanged from the second quarter of 2002.

Capital management

Total shareholders' equity was $48.2 billion on Sept. 30, 2002, down 4 percent from a year ago and represented 7 percent of period-end assets of $660 billion. The preliminary Tier 1 Capital Ratio was 8.13 percent, an increase of 18 basis points from a year earlier.

During the quarter, Bank of America repurchased 16.8 million shares and issued 3.3 million shares following exercises of stock options. Average common shares outstanding were 1.50 billion, down 6 percent from 1.60 billion a year earlier and 2 percent from the second quarter of 2002.

Business segment results

To present comparable business segment results, earnings and expenses for the third quarter of 2001 have been adjusted to exclude goodwill amortization.

Consumer and Commercial Banking

Consumer and Commercial Banking (CCB) earned $1.58 billion, up 13 percent from a year ago. Total revenue grew 11 percent while expenses increased 11 percent. Return on equity was 34.6 percent and SVA grew 24 percent to $1.08 billion.

Net interest income increased 11 percent to $3.73 billion, driven by growth in consumer loans and deposits. Consumer loans grew 14 percent, primarily in residential mortgages and credit cards. Commercial loan levels declined 12 percent as companies paid down loan balances.

Average deposits grew 7 percent, as new customers opened checking accounts and consumers moved assets into deposit products with greater liquidity during uncertain market conditions. Growth in consumer deposits continued to be led by increases in money market savings and checking account balances.

Noninterest income was up 12 percent to $2.17 billion, driven by higher consumer service charges from increased customer activity, mortgage activity, growth in new customers, increased use of debit and credit cards by customers and higher commercial account service charges.

Global Corporate and Investment Banking

Global Corporate and Investment Banking (GCIB) earned $428 million, an 18 percent decrease from last year. While revenue declined 11 percent to $2.04 billion, the provision for loan losses decreased 30 percent, partly reflecting lower loan balances. Additionally, expenses declined 1 percent. Return on equity was 15.6 percent and SVA decreased 21 percent to $107 million.

Total trading-related revenue in GCIB, which includes trading-related net interest income and trading account profits, was $576 million, down 29 percent from last year's results, primarily due to weaker demand for equity and interest rate products.

Despite the challenging environment, investment banking income increased 4 percent from last year. These results were driven by higher syndications and advisory services fees.

Asset Management

Asset Management earnings decreased 55 percent from a year ago to $72 million, primarily due to one large charge-off and lower assets under management. Provision for credit losses rose to $118 million from $16 million a year earlier. Revenue of $581 million was down 5 percent while expenses increased 2 percent. Return on equity was 11.3 percent and SVA declined $99 million to $(4) million.

Assets under management declined 3 percent to $271.9 billion. In an effort to increase its distribution capabilities to better serve the financial needs of clients across the franchise, Asset Management is on track to increase the number of financial advisors and relationship managers in 2002 by 20 percent.

Equity Investments

Equity Investments reported a net loss of $160 million, compared to a net loss of $83 million a year ago. In Principal Investing, cash gains were $35 million in the third quarter, offset by impairments and fair market valuation adjustments of $228 million, combined.

One of the world's leading financial services companies, Bank of America is committed to making banking work for customers and clients like it never has before. Through innovative technologies and the ingenuity of its people, Bank of America provides individuals, small businesses and commercial, corporate and institutional clients across the United States and around the world new and better ways to manage their financial lives.

Shares of Bank of America (ticker: BAC), the second largest banking company in the United States by market capitalization, are listed on the New York, Pacific and London stock exchanges. The company's Web site is www.bankofamerica.com. News, speeches and other corporate information may be found at www.bankofamerica.com/newsroom.

Additional financial tables are available at www.bankofamerica.com/investor/.

Note: James H. Hance Jr., vice chairman and chief financial officer, will discuss third quarter results in a conference call at 9:30 a.m. (Eastern Time) today. The call can be accessed via a Webcast available on the Bank of America Web site at http://www.bankofamerica.com/investor/.

Forward-Looking Statements

This press release contains forward-looking statements including, without limitation, statements about the Corporation's financial conditions, results of operations and earnings outlook. These forward-looking statements involve certain risks and uncertainties. Actual conditions, results and earnings may differ materially from those contemplated by such forward-looking statements. Factors that may cause actual results to differ materially from such statements include, among others, the following: 1) projected business increases following process change and other investments are lower than expected; 2) competitive pressure among financial services companies increases significantly; 3) general economic conditions are less favorable than expected; 4) changes in the interest rate environment reduce interest margins and impact funding sources; 5) changes in market rates and prices may adversely impact the value of financial products; 6) legislation or regulatory requirements or changes adversely affect the businesses in which the company is engaged; 7) litigation liabilities, including costs, expenses, settlements and judgments may adversely affect the Corporation and its businesses; and 8) decisions may be made to downsize, sell or close units or otherwise change the business mix of the company. For further information, please read the Bank of America reports filed with the SEC and available at www.sec.gov.

    Bank of America

                                                          Three Months
                                                       Ended September 30
                                                    2002               2001
    (Dollars in millions, except per
     share data; shares in thousands)

    Financial Summary (1)

    Earnings                                       $2,235               $841
        Earnings per common share                    1.49               0.52
        Diluted earnings per common share            1.45               0.51

    Dividends per common share                       0.60               0.56
    Closing market price per common share           63.80              58.40
    Average common shares issued and
     outstanding                                1,504,017          1,599,692
    Average diluted common shares issued
     and outstanding                            1,546,347          1,634,063

    Summary Income Statement (1)

    Net interest income                            $5,302             $5,204
    Noninterest income                              3,220              3,429
    Total revenue                                   8,522              8,633
    Provision for credit losses                       804              1,251
    Gains on sales of securities                      189                 97
    Business exit costs                                 -              1,305
    Other noninterest expense                       4,620              4,606
    Income before income taxes                      3,287              1,568
    Income tax expense                              1,052                727
    Net income                                     $2,235               $841

    Summary Average Balance Sheet

    Loans and leases                             $340,484           $357,726
    Managed loans and leases                      345,812            367,602
    Securities                                     76,484             58,930
    Earning assets                                580,248            557,108
    Total assets                                  669,149            642,184
    Deposits                                      373,933            363,328
    Shareholders' equity                           46,652             49,202
    Common shareholders' equity                    46,592             49,134

    Performance Ratios (1)

    Return on average assets                         1.33 %             0.52
    Return on average common
     shareholders' equity                           19.02               6.78
    Efficiency ratio (taxable-equivalent
     basis)                                         53.19              67.79


    Credit Quality

    Net Charge-offs (2)                              $804             $1,491
      % of average loans and leases                  0.94 %             1.65
    Managed bankcard net charge-offs as a
      % of average
        managed bankcard receivables                 5.13               4.81



                                                           Nine Months
                                                       Ended September 30
                                                     2002               2001
    (Dollars in millions, except per
     share data; shares in thousands)

    Financial Summary (1)

    Earnings                                       $6,635             $4,734
        Earnings per common share                    4.34               2.95
        Diluted earnings per common share            4.22               2.90

    Dividends per common share                       1.80               1.68
    Closing market price per common share           63.80              58.40
    Average common shares issued and
     outstanding                                1,526,946          1,603,340
    Average diluted common shares issued
     and outstanding                            1,573,203          1,632,928

    Summary Income Statement (1)

    Net interest income                           $15,549            $14,873
    Noninterest income                             10,141             10,950
    Total revenue                                  25,690             25,823
    Provision for credit losses                     2,532              2,886
    Gains on sales of securities                      326                 82
    Business exit costs                                 -              1,305
    Other noninterest expense                      13,604             14,081
    Income before income taxes                      9,880              7,633
    Income tax expense                              3,245              2,899
    Net income                                     $6,635             $4,734

    Summary Average Balance Sheet

    Loans and leases                             $334,703           $376,261
    Managed loans and leases                      341,473            386,662
    Securities                                     72,450             56,637
    Earning assets                                563,964            562,038
    Total assets                                  651,257            648,789
    Deposits                                      368,142            360,793
    Shareholders' equity                           47,457             48,597
    Common shareholders' equity                    47,396             48,528

    Performance Ratios (1)

    Return on average assets                         1.36 %             0.98
    Return on average common
     shareholders' equity                           18.71              13.03
    Efficiency ratio (taxable-equivalent
     basis)                                         52.09              59.00


    Credit Quality

    Net Charge-offs (2)                            $2,532             $3,050
      % of average loans and leases                  1.01  %            1.08
    Managed bankcard net charge-offs as a
      % of average
        managed bankcard receivables                 5.38               4.71



                                                       At September 30
                                                  2002               2001

    Balance Sheet Highlights

    Loans and leases                             $341,091           $339,018
    Securities                                     89,581             75,964
    Earning assets                                564,825            539,249
    Total assets                                  660,008            640,105
    Deposits                                      377,415            359,870
    Shareholders' equity                           48,239             50,151
    Common shareholders' equity                    48,179             50,084
        Book value per share                        32.07              31.66

    Total equity to assets ratio (period
     end)                                            7.31 %             7.83

    Risk-based capital ratios: (3)
         Tier 1                                      8.13               7.95
         Total                                      12.38              12.12

    Leverage ratio                                   6.35               6.59

    Period-end common shares issued and
     outstanding                                1,502,162          1,582,129

    Allowance for credit losses                    $6,861             $6,665
    Allowance for credit losses as a % of
     loans and leases                                2.01 %             1.97
    Allowance for credit losses as a % of
     nonperforming loans                              142                162
    Nonperforming loans                            $4,849             $4,119
    Nonperforming assets                            5,131              4,523
    Nonperforming assets as a % of:
         Total assets                                 .78 %              .71
         Loans, leases and foreclosed
          properties                                 1.50               1.33
    Nonperforming loans as a % of loans
     and leases                                      1.42               1.22

    Other Data

    Full-time equivalent employees                134,135            143,824
    Number of banking centers                       4,226              4,259
    Number of ATM's                                12,489             12,986

    (1) The three months ended September 30, 2001 included goodwill
        amortization of $165 million.  The impact on net income was $153
        million, or $0.09 per share (diluted). The nine months ended September
        30, 2001 included goodwill amortization of $502 million.  The impact
        on net income was $467 million, or $0.29 per share (diluted).
    (2) Net charge-offs in 2001 includes $635 million related to the exit of
        certain consumer finance businesses. Excluding these net charge-offs,
        the net charge-off ratio would have been 0.95% and 0.86% for the three
        months and nine months ended September 30, 2001, respectively.
    (3) 2002 ratios are preliminary.


    BUSINESS SEGMENT RESULTS
                                              Consumer and
                                               Commercial            Asset
                                                  Banking          Management
    Three months ended September 30, 2002
    Total revenue                                  $5,902               $581
    Net income                                      1,580                 72
    Shareholder value added                         1,075                 (4)
    Return on equity                                 34.6  %            11.3
    Average loans and leases                     $183,035            $22,964

    Three months ended September 30, 2001
    Total revenue                                  $5,311               $610
    Net Income (4)                                  1,287                148
    Shareholder value added                           867                 95
    Return on equity                                 26.7  %            26.4
    Average loans and leases                     $179,194            $24,631


                            Global Corporate
                             and Investment         Equity       Corporate
                                Banking          Investments       Other
    Three months ended
     September 30, 2002
    Total revenue             $2,039              $(230)          $393
    Net income                   428               (160)           315
    Shareholder value added      107               (222)           (76)
    Return on equity            15.6  %           (30.5)%          n/m
    Average loans and leases $60,821               $446        $73,218

    Three months ended
     September 30, 2001
    Total revenue             $2,286               $(60)          $572
    Net Income (4)               491                (85)        (1,000)
    Shareholder value added      136               (156)          (118)
    Return on equity            15.1  %           (13.7)           n/m
    Average loans and leases $78,219               $468        $75,214


    n/m = not meaningful
    (4) Includes goodwill amortization of $105 million for Consumer and
        Commercial Banking, $12 million for Asset Management, $27 million for
        Global Corporate and Investment Banking, $2 million for Equity
        Investments and $7 million for Corporate Other.


    n/m = not meaningful

    (4) Includes goodwill amortization of $105 million for Consumer and
        Commercial Banking, $12 million for Asset Management, $27 million for
        Global Corporate and Investment Banking, $2 million for Equity
        Investments and $7 million for Corporate Other.


                                                     Three Months Ended
                                                         September 30
                                                     2002            2001

    SUPPLEMENTAL FINANCIAL DATA

    Performance Metrics- Excludes
     nonrecurring charges (1,2)
    Return on average assets                         1.33 %             1.29
    Return on average common
     shareholders' equity                           19.02              16.87
    Efficiency ratio (taxable-equivalent
     basis)                                         53.19              52.82
    Shareholder value added                          $880               $824
    Taxable-equivalent basis data
    Net interest income                             5,465              5,290
    Total revenue                                   8,685              8,719
    Net interest yield                               3.75 %             3.78



                                                      Nine Months Ended
                                                         September 30
                                                     2002             2001

    SUPPLEMENTAL FINANCIAL DATA

    Performance Metrics- Excludes
     nonrecurring charges (1,2)
    Return on average assets                         1.36 %             1.23
    Return on average common
     shareholders' equity                           18.71              16.48
    Efficiency ratio (taxable-equivalent
     basis)                                         52.09              53.99
    Shareholder value added                        $2,546             $2,293
    Taxable-equivalent basis data
    Net interest income                            15,974             15,128
    Total revenue                                  26,115             26,078
    Net interest yield                               3.78 %             3.59



    (1) Excludes nonrecurring charges for provision for credit losses of $395
        million and noninterest expense of $1.3 billion, both which are
        related to the exit of certain consumer finance businesses in the
        third quarter of 2001.  Noninterest expense charges consisted of
        goodwill write-offs, auto lease residual charges, real estate
        servicing asset charges and other transaction costs.  The impact of
        business exit charges on net income for the three months ended
        September 30, 2001 was $1.25 billion or $0.77 per share (diluted).
        The impact of business exit charges on net income for the nine months
        ended September 30, 2001 was $1.25  billion or $0.76 per share
        (diluted).  Nonrecurring charges are charges associated with a one
        time event that is not reasonably expected to recur in the foreseeable
        future.  The Corporation believes that the exclusion of nonrecurring
        charges provides a meaningful comparison to the results in prior
        periods and reflects the results of its core operations.
    (2) See footnote (1) on page 1.

SOURCE Bank of America Corporation

CONTACT: investors, Kevin Stitt, +1-704-386-5667, or Lee McEntire, +1-704-388-6780, or media, Eloise Hale, +1-704-387-0013, or eloise.hale@bankofamerica.com, all of Bank of America

URL: http://www.bankofamerica.com

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