Exhibit 99.2

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Supplemental Information

Fourth Quarter 2008

This information is preliminary and based on company data available at the time of the presentation. It speaks only as of the particular date or dates included in the accompanying pages. Bank of America does not undertake an obligation to, and disclaims any duty to, correct or update any of the information provided. Any forward-looking statements in this information are subject to the forward-looking language contained in Bank of America’s reports filed with the SEC pursuant to the Securities Exchange Act of 1934, which are available at the SEC’s website (www.sec.gov) or at Bank of America’s website (www.bankofamerica.com). Bank of America’s future financial performance is subject to risks and uncertainties as described in its SEC filings.


Bank of America Corporation and Subsidiaries

  
Table of Contents    Page

Consolidated Financial Highlights

   2

Supplemental Financial Data

   3

Consolidated Statement of Income

   4

Consolidated Balance Sheet

   5

Capital Management

   6

Core Net Interest Income - Managed Basis

   7

Quarterly Average Balances and Interest Rates

   8

Quarterly Average Balances and Interest Rates - Isolating Hedge Income/Expense

   9

Year-to-Date Average Balances and Interest Rates

   10

Year-to-Date Average Balances and Interest Rates - Isolating Hedge Income/Expense

   11

Global Consumer and Small Business Banking

  

Total Segment Results

   12

Quarter-to-Date Business Results

   13

Year-to-Date Business Results

   14

Key Indicators

   15

E-commerce & BankofAmerica.com

   16

Credit Card Data

   17

Global Corporate and Investment Banking

  

Total Segment Results

   18

Quarter-to-Date Business Results

   19

Year-to-Date Business Results

   20

Business Lending Key Indicators

   21

Capital Markets and Advisory Services Key Indicators

   22

Special Purpose Entities Liquidity Exposure

   23

Super Senior Collateralized Debt Obligation Exposure

   24

Subprime Super Senior Collateralized Debt Obligation Carrying Values

   25

Global Wealth and Investment Management

  

Total Segment Results

   26

Quarter-to-Date Business Results

   27

Year-to-Date Business Results

   28

Key Indicators

   29

All Other

  

Total Segment Results

   30

Outstanding Loans and Leases

   31

Quarterly Average Loans and Leases by Business Segment

   32

Commercial Credit Exposure by Industry

   33

Net Credit Default Protection by Maturity Profile and Credit Exposure Debt Rating

   34

Selected Emerging Markets

   35

Nonperforming Assets

   36

Quarterly Net Charge-offs/Losses and Net Charge-off/Loss Ratios

   37

Year-to-Date Net Charge-offs/Losses and Net Charge-off/Loss Ratios

   38

Allocation of the Allowance for Credit Losses by Product Type

   39

Exhibit A: Non-GAAP Reconciliations

   40

Exhibit B: Selected Fourth Quarter 2008 Merrill Lynch Results

   42

 

  1


Bank of America Corporation and Subsidiaries

Consolidated Financial Highlights

 

(Dollars in millions, except per share information; shares in thousands)

 

     Year Ended
December 31
        

Fourth

Quarter

        

Third

Quarter

       

Second

Quarter

       

First

Quarter

       

Fourth

Quarter

     
                                                
     2008         2007          2008 (1)          2008         2008         2008         2007      

Income statement

                                         

Net interest income

   $ 45,360       $ 34,441         $ 13,106        $ 11,642       $ 10,621       $ 9,991       $ 9,165    

Noninterest income

     27,422         32,392           2,574          7,979         9,789         7,080         3,639    

Total revenue, net of interest expense

     72,782         66,833           15,680          19,621         20,410         17,071         12,804    

Provision for credit losses

     26,825         8,385           8,535          6,450         5,830         6,010         3,310    

Noninterest expense, before merger and restructuring charges

     40,594         37,114           10,641          11,413         9,447         9,093         10,269    

Merger and restructuring charges

     935         410           306          247         212         170         140    

Income tax expense (benefit)

     420         5,942           (2,013 )        334         1,511         588         (1,183 )  

Net income (loss)

     4,008         14,982           (1,789 )        1,177         3,410         1,210         268    

Preferred stock dividends

     1,452         182           603          473         186         190         53    

Net income (loss) applicable to common shareholders

     2,556         14,800           (2,392 )        704         3,224         1,020         215    

Diluted earnings (loss) per common share

     0.55         3.30           (0.48 )        0.15         0.72         0.23         0.05    

Average diluted common shares issued and outstanding

     4,612,491         4,480,254           4,957,049          4,563,508         4,457,193         4,461,201         4,470,108    

Dividends paid per common share

   $ 2.24       $ 2.40         $ 0.32        $ 0.64       $ 0.64       $ 0.64       $ 0.64    
 

Performance ratios

                                         

Return on average assets

     0.22         0.94         (0.37 )        0.25         0.78         0.28         0.06    

Return on average common shareholders’ equity

     1.80           11.08           (6.68 )          1.97           9.25           2.90           0.60      
 

At period end

                                         

Book value per share of common stock

   $ 27.77       $ 32.09         $ 27.77        $ 30.01       $ 31.11       $ 31.22       $ 32.09    

Tangible book value per share of common stock (2)

     11.44         14.62           11.44          12.08         13.65         13.73         14.62    

Market price per share of common stock:

                                         

Closing price

   $ 14.08       $ 41.26         $ 14.08        $ 35.00       $ 23.87       $ 37.91       $ 41.26    

High closing price for the period

     45.03         54.05           38.13          37.48         40.86         45.03         52.71    

Low closing price for the period

     11.25         41.10           11.25          18.52         23.87         35.31         41.10    

Market capitalization

     70,645         183,107           70,645          159,672         106,292         168,806         183,107    
 

Number of banking centers - domestic

     6,139         6,149           6,139          6,139         6,131         6,148         6,149    

Number of branded ATMs - domestic

     18,685         18,753           18,685          18,584         18,531         18,491         18,753    

Full-time equivalent employees

     243,075         209,718           243,075          249,993         206,587         209,096         209,718    

 

 

 

(1) Due to the net loss for the three months ended December 31, 2008, the impact of antidilutive equity instruments have been excluded from diluted earnings per share and average diluted common shares.
(2) Tangible book value per share of common stock is a non-GAAP measure. For a corresponding reconciliation of common tangible shareholders’ equity to a GAAP financial measure, see Supplemental Financial Data on page 3. We believe the use of this non-GAAP measure provides additional clarity in assessing the results of the Corporation.

Certain prior period amounts have been reclassified to conform to current period presentation.

 

Information for periods beginning July 1, 2008 includes the Countrywide acquisition; prior periods have not been restated. This information is preliminary and based on company data available at the time of the presentation.   2


Bank of America Corporation and Subsidiaries

Supplemental Financial Data

 

(Dollars in millions)

Fully taxable-equivalent basis data

 

                 Fourth
Quarter
2008
         Third
Quarter
2008
         Second
Quarter
2008
         First
Quarter
2008
         Fourth
Quarter
2007
     
     Year Ended
December 31
                                         
     2008          2007                                          

Net interest income

   $ 46,554        $ 36,190              $ 13,406            $ 11,920        $ 10,937        $ 10,291        $ 9,815    

Total revenue, net of interest expense

     73,976          68,582            15,980          19,899          20,726          17,371          13,454    

Net interest yield

     2.98     %      2.60          3.31     %      2.93     %      2.92     %      2.73     %      2.61     %

Efficiency ratio

     56.14          54.71            68.51          58.60          46.60          53.32          77.36    

 

Reconciliation to GAAP financial measures

 

Supplemental financial data presented on an operating basis is a basis of presentation not defined by accounting principles generally accepted in the United States (GAAP) that excludes merger and restructuring charges. We believe that the exclusion of merger and restructuring charges, which represent events outside our normal operations, provides a meaningful period-to-period comparison and is more reflective of normalized operations.

 

Return on average common shareholders’ equity and return on average tangible shareholders’ equity utilize non-GAAP allocation methodologies. Return on average common shareholders’ equity measures the earnings contribution of a unit as a percentage of the shareholders’ equity allocated to that unit. Return on average tangible shareholders’ equity measures the earnings contribution of the Corporation as a percentage of shareholders’ equity reduced by goodwill. These measures are used to evaluate our use of equity (i.e., capital) at the individual unit level and are integral components in the analytics for resource allocation. The efficiency ratio measures the costs expended to generate a dollar of revenue. We believe the use of these non-GAAP measures provides additional clarity in assessing the results of the Corporation.

 

Other companies may define or calculate supplemental financial data differently. See the tables below for supplemental financial data and corresponding reconciliations to GAAP financial measures for the three months ended December 31, 2008, September 30, 2008, June 30, 2008, March 31, 2008 and December 31, 2007, and the years ended December 31, 2008 and 2007.

 

Reconciliation of net income to operating earnings

 

                 Fourth
Quarter
2008
         Third
Quarter
2008
         Second
Quarter
2008
         First
Quarter
2008
         Fourth
Quarter
2007
     
     Year Ended
December 31
                               
     2008          2007                                

Net income (loss)

   $ 4,008        $ 14,982              $ (1,789 )          $ 1,177        $ 3,410        $ 1,210        $ 268    

Merger and restructuring charges

     935          410            306          247          212          170          140    

Related income tax benefit

     (305 )        (152 )          (100 )        (64 )        (78 )        (63 )        (52 )  
                                                                              

Operating earnings (loss)

   $ 4,638        $ 15,240              $ (1,583 )          $ 1,360        $ 3,544        $ 1,317        $ 356    
                                                                              

Reconciliation of ending common shareholders’ equity to ending common tangible shareholders’ equity

 

 
 

Ending common shareholders’ equity

   $ 139,351        $ 142,394              $ 139,351            $ 136,888        $ 138,540        $ 139,003        $ 142,394    

Ending goodwill

     (81,934 )        (77,530 )          (81,934 )        (81,756 )        (77,760 )        (77,872 )        (77,530 )  
                                                                              

Ending common tangible shareholders’ equity

   $ 57,417        $   64,864              $   57,417            $   55,132        $   60,780        $   61,131        $   64,864    
                                                                              

Reconciliation of average shareholders’ equity to average tangible shareholders’ equity

 

 
 

Average shareholders’ equity

   $ 164,831        $ 136,662              $ 176,566            $ 166,454        $ 161,428        $ 154,728        $ 144,924    

Average goodwill

     (79,827 )        (69,333 )          (81,841 )        (81,977 )        (77,815 )        (77,628 )        (78,308 )  
                                                                              

Average tangible shareholders’ equity

   $ 85,004        $ 67,329              $ 94,725            $   84,477        $   83,613        $   77,100        $   66,616    
                                                                              
 
Operating basis                                     
 

Return on average assets

     0.25     %      0.95          (0.32 )        0.28     %      0.81     %      0.30     %      0.08     %

Return on average common shareholders’ equity

     2.25          11.27            (6.10 )        2.48          9.63          3.20          0.85    

Return on average tangible shareholders’ equity

     5.46          22.64            (6.65 )        6.40          17.05          6.87          2.12    

Efficiency ratio (1)

     54.88          54.12            66.60          57.36          45.58          52.35          76.32    

 

 

 

(1) Fully taxable-equivalent basis

Certain prior period amounts have been reclassified to conform to current period presentation.

 

Information for periods beginning July 1, 2008 includes the Countrywide acquisition; prior periods have not been restated. This information is preliminary and based on company data available at the time of the presentation   3


Bank of America Corporation and Subsidiaries

Consolidated Statement of Income

 

(Dollars in millions, except per share information; shares in thousands)

 

                 Fourth
Quarter
2008 (1)
    Third
Quarter
2008
    Second
Quarter
2008
    First
Quarter
2008
    Fourth
Quarter
2007
 
     Year Ended
December 31
                 
     2008     2007                  

Interest income

                   

Interest and fees on loans and leases

   $ 56,017     $ 55,681          $ 14,220     $ 14,261     $ 13,121     $ 14,415     $ 15,363  

Interest on debt securities

     13,146       9,784            3,851       3,621       2,900       2,774       2,738  

Federal funds sold and securities purchased under agreements to resell

     3,313       7,722            393       912       800       1,208       1,748  

Trading account assets

     9,057       9,417            2,120       2,344       2,229       2,364       2,358  

Other interest income

     4,151       4,700            1,018       1,058       977       1,098       1,272  
                                                             

Total interest income

     85,684       87,304            21,602       22,196       20,027       21,859       23,479  
                                                             

Interest expense

                   

Deposits

     15,250       18,093            3,296       3,846       3,520       4,588       5,253  

Short-term borrowings

     12,362       21,967            1,910       3,223       3,087       4,142       5,598  

Trading account liabilities

     2,774       3,444            524       661       749       840       825  

Long-term debt

     9,938       9,359            2,766       2,824       2,050       2,298       2,638  
                                                             

Total interest expense

     40,324       52,863            8,496       10,554       9,406       11,868       14,314  
                                                             

Net interest income

     45,360       34,441            13,106       11,642       10,621       9,991       9,165  
 

Noninterest income

                   

Card income

     13,314       14,077            3,102       3,122       3,451       3,639       3,591  

Service charges

     10,316       8,908            2,559       2,722       2,638       2,397       2,415  

Investment and brokerage services

     4,972       5,147            1,072       1,238       1,322       1,340       1,427  

Investment banking income

     2,263       2,345            618       474       695       476       544  

Equity investment income (loss)

     539       4,064            (791 )     (316 )     592       1,054       317  

Trading account profits (losses)

     (5,911 )     (4,889 )          (4,101 )     (384 )     357       (1,783 )     (5,380 )

Mortgage banking income

     4,087       902            1,523       1,674       439       451       386  

Insurance premiums

     1,833       761            741       678       217       197       213  

Gains on sales of debt securities

     1,124       180            762       10       127       225       109  

Other income (loss)

     (5,115 )     897            (2,911 )     (1,239 )     (49 )     (916 )     17  
                                                             

Total noninterest income

     27,422       32,392            2,574       7,979       9,789       7,080       3,639  
                                                             

Total revenue, net of interest expense

     72,782       66,833            15,680       19,621       20,410       17,071       12,804  
 

Provision for credit losses

     26,825       8,385            8,535       6,450       5,830       6,010       3,310  
 

Noninterest expense

                   

Personnel

     18,371       18,753            4,027       5,198       4,420       4,726       4,822  

Occupancy

     3,626       3,038            1,003       926       848       849       827  

Equipment

     1,655       1,391            447       440       372       396       373  

Marketing

     2,368       2,356            555       605       571       637       712  

Professional fees

     1,592       1,174            521       424       362       285       404  

Amortization of intangibles

     1,834       1,676            477       464       447       446       467  

Data processing

     2,546       1,962            641       755       587       563       590  

Telecommunications

     1,106       1,013            292       288       266       260       263  

Other general operating

     7,496       5,751            2,678       2,313       1,574       931       1,811  

Merger and restructuring charges

     935       410            306       247       212       170       140  
                                                             

Total noninterest expense

     41,529       37,524            10,947       11,660       9,659       9,263       10,409  
                                                             

Income (loss) before income taxes

     4,428       20,924            (3,802 )     1,511       4,921       1,798       (915 )

Income tax expense (benefit)

     420       5,942            (2,013 )     334       1,511       588       (1,183 )
                                                             

Net income (loss)

   $ 4,008     $ 14,982          $ (1,789 )   $ 1,177     $ 3,410     $ 1,210     $ 268  
                                                             

Preferred stock dividends

     1,452       182            603       473       186       190       53  
                                                             

Net income (loss) applicable to common shareholders

   $ 2,556     $ 14,800          $ (2,392 )   $ 704     $ 3,224     $ 1,020     $ 215  
                                                             

Per common share information

                   

Earnings (loss)

   $ 0.56     $ 3.35          $ (0.48 )   $ 0.15     $ 0.73     $ 0.23     $ 0.05  

Diluted earnings (loss)

     0.55       3.30            (0.48 )     0.15       0.72       0.23       0.05  

Dividends paid

     2.24       2.40            0.32       0.64       0.64       0.64       0.64  
                                                             

Average common shares issued and outstanding

     4,592,085       4,423,579            4,957,049       4,543,963       4,435,719       4,427,823       4,421,554  
                                                             

Average diluted common shares issued and outstanding

     4,612,491       4,480,254            4,957,049       4,563,508       4,457,193       4,461,201       4,470,108  
                                                             

 

 

 

(1) Due to the net loss for the three months ended December 31, 2008, the impact of antidilutive equity instruments have been excluded from diluted earnings per share and average diluted common shares.

Certain prior period amounts have been reclassified to conform to current period presentation.

 

Information for periods beginning July 1, 2008 includes the Countrywide acquisition; prior periods have not been restated. This information is preliminary and based on company data available at the time of the presentation   4


Bank of America Corporation and Subsidiaries

Consolidated Balance Sheet

 

(Dollars in millions)

 

     December 31
2008
    September 30
2008
    December 31
2007
 
        

Assets

      

Cash and cash equivalents

   $    32,857     $     39,341     $     42,531  

Time deposits placed and other short-term investments

   9,570     11,709     11,773  

Federal funds sold and securities purchased under agreements to resell

   82,478     87,038     129,552  

Trading account assets

   159,522     174,859     162,064  

Derivative assets

   62,252     45,792     34,662  

Debt securities

   277,589     258,677     214,056  

Loans and leases, net of allowance:

      

Loans and leases

   931,446     942,676     876,344  

Allowance for loan and lease losses

   (23,071 )   (20,346 )   (11,588 )

Total loans and leases, net of allowance

   908,375     922,330     864,756  

Premises and equipment, net

   13,161     13,000     11,240  

Mortgage servicing rights (includes $12,733, $20,811 and $3,053 measured at fair value)

   13,056     21,131     3,347  

Goodwill

   81,934     81,756     77,530  

Intangible assets

   8,535     9,167     10,296  

Loans held-for-sale

   31,454     27,414     34,424  

Other assets

   137,160     138,963     119,515  

Total assets

   $1,817,943     $1,831,177     $1,715,746  

Liabilities

      

Deposits in domestic offices:

      

Noninterest-bearing

   $   213,994     $   201,025     $  188,466  

Interest-bearing

   576,938     577,503     501,882  

Deposits in foreign offices:

      

Noninterest-bearing

   4,004     3,524     3,761  

Interest-bearing

   88,061     91,999     111,068  

Total deposits

   882,997     874,051     805,177  

Federal funds purchased and securities sold under agreements to repurchase

   206,598     225,729     221,435  

Trading account liabilities

   57,287     68,229     77,342  

Derivative liabilities

   30,709     26,466     22,423  

Commercial paper and other short-term borrowings

   158,056     145,812     191,089  

Accrued expenses and other liabilities (includes $421, $427 and $518 of reserve for unfunded lending commitments)

   36,952     72,141     53,969  

Long-term debt

   268,292     257,710     197,508  

Total liabilities

   1,640,891     1,670,138     1,568,943  

Shareholders’ equity

      

Preferred stock, $0.01 par value; authorized - 100,000,000 shares; issued and outstanding - 8,202,042, 7,602,067 and 185,067 shares

   37,701     24,151     4,409  

Common stock and additional paid-in capital, $0.01 par value; authorized - 10,000,000,000, 7,500,000,000, and 7,500,000,000 shares; issued and outstanding - 5,017,435,592, 4,562,054,554 and 4,437,885,419 shares

   76,766     65,361     60,328  

Retained earnings

   73,823     77,695     81,393  

Accumulated other comprehensive income (loss)

   (10,825 )   (5,647 )   1,129  

Other

   (413 )   (521 )   (456 )

Total shareholders’ equity

   177,052     161,039     146,803  

Total liabilities and shareholders’ equity

   $1,817,943     $1,831,177     $1,715,746  

Certain prior period amounts have been reclassified to conform to current period presentation.

 

Information for periods beginning July 1, 2008 includes the Countrywide acquisition; prior periods have not been restated. This information is preliminary and based on company data available at the time of the presentation   5


Bank of America Corporation and Subsidiaries

Capital Management

 

(Dollars in millions)

 

     Fourth
Quarter
2008 (1)
        Third
Quarter
2008
        Second
Quarter
2008
        First
Quarter
2008
        Fourth
Quarter
2007
    
                               
                               

Risk-based capital:

                             

Tier 1 capital

   $ 120,804       $ 100,248       $ 101,439       $ 93,899       $ 83,372   

Total capital

     171,644         153,318         154,983         146,531         133,720   

Risk-weighted assets

     1,320,824         1,328,084         1,230,307         1,250,942         1,212,905   

Tier 1 capital ratio

     9.15    %      7.55    %      8.25    %      7.51    %      6.87    %

Total capital ratio

     13.00         11.54         12.60         11.71         11.02   

Tangible equity ratio (2)

     5.01         4.03         4.62         4.16         3.62   

Tangible common equity ratio (3)

     2.83         2.64         3.14         3.11         3.35   

Tier 1 leverage ratio

     6.44         5.51         6.07         5.59         5.04   

 

 

 

(1) Preliminary data on risk-based capital
(2) Tangible equity ratio equals shareholders’ equity less goodwill and intangible assets divided by total assets less goodwill and intangible assets.
(3) Tangible common equity ratio equals common shareholders’ equity less goodwill and intangible assets divided by total assets less goodwill and intangible assets.

Share Repurchase Program

 

No common shares were repurchased in the fourth quarter of 2008.

 

75.0 million shares remain outstanding under the 2008 authorized program.

381 thousand shares were issued in the fourth quarter of 2008 under employee stock plans.

455.0 million common stock shares were issued to raise capital in the fourth quarter of 2008.

LOGO

 

 

 

* Preliminary data on risk-based capital

Certain prior period amounts have been reclassified to conform to current period presentation.

 

Information for periods beginning July 1, 2008 includes the Countrywide acquisition; prior periods have not been restated. This information is preliminary and based on company data available at the time of the presentation   6


Bank of America Corporation and Subsidiaries

Core Net Interest Income - Managed Basis

 

(Dollars in millions)

 

    Year Ended
December 31
         Fourth
Quarter

2008
        Third
Quarter
2008
        Second
Quarter

2008
        First
Quarter
2008
        Fourth
Quarter

2007
     
    2008         2007                           

Net interest income (1)

                             

As reported

  $ 46,554       $ 36,190         $ 13,406       $ 11,920       $ 10,937       $ 10,291       $ 9,815    

Impact of market-based net interest income (2)

    (6,011 )       (2,718 )         (1,886 )       (1,448 )       (1,369 )       (1,308 )       (810 )  
                                                                       

Core net interest income

    40,543         33,472           11,520         10,472         9,568         8,983         9,005    

Impact of securitizations (3)

    8,910         7,841           2,256         2,310         2,254         2,090         2,021    
                                                                       

Core net interest income - managed basis

  $ 49,453       $ 41,313         $ 13,776       $ 12,782       $ 11,822       $ 11,073       $ 11,026    
                                                                       
 

Average earning assets

                             

As reported

  $ 1,562,729       $ 1,390,192         $ 1,616,673       $ 1,622,466       $ 1,500,234       $ 1,510,295       $ 1,502,998    

Impact of market-based earning assets (2)

    (368,751 )       (412,587 )         (318,818 )       (377,630 )       (375,274 )       (403,733 )       (407,315 )  
                                                                       

Core average earning assets

    1,193,978         977,605           1,297,855         1,244,836         1,124,960         1,106,562         1,095,683    

Impact of securitizations

    100,145         103,371           93,189         101,743         103,131         102,577         104,385    
                                                                       

Core average earning assets - managed basis

  $ 1,294,123       $ 1,080,976         $ 1,391,044       $ 1,346,579       $ 1,228,091       $ 1,209,139       $ 1,200,068    
                                                                       
 

Net interest yield contribution (1, 4)

                             

As reported

    2.98     %     2.60         3.31     %     2.93     %     2.92     %     2.73     %     2.61     %

Impact of market-based activities (2)

    0.42         0.82           0.23         0.43         0.49         0.52         0.67    
                                                                       

Core net interest yield on earning assets

    3.40         3.42           3.54         3.36         3.41         3.25         3.28    

Impact of securitizations

    0.42         0.40           0.41         0.43         0.45         0.42         0.38    
                                                                       

Core net interest yield on earning assets - managed basis

    3.82     %     3.82         3.95     %     3.79     %     3.86     %     3.67     %     3.66     %
                                                                       

 

 

 

(1) Fully taxable-equivalent basis
(2) Represents the impact of market-based amounts included in the Capital Markets and Advisory Services business within Global Corporate and Investment Banking. For the year ended December 31, 2008 and 2007, the impact of market-based net interest income excludes $113 million and $70 million, and for the three months ended December 31, 2008, September 30, 2008, June 30, 2008, March 31, 2008 and December 31, 2007, respectively, excludes $36 million, $25 million, $25 million, $27 million and $26 million of net interest income on loans for which the fair value option has been elected and is not considered market-based income.
(3) Represents the impact of securitizations utilizing actual bond costs. This is different from the segment view which utilizes funds transfer pricing methodologies.
(4) Calculated on an annualized basis.

Certain prior period amounts have been reclassified to conform to current period presentation.

 

Information for periods beginning July 1, 2008 includes the Countrywide acquisition; prior periods have not been restated. This information is preliminary and based on company data available at the time of the presentation   7


Bank of America Corporation and Subsidiaries

Quarterly Average Balances and Interest Rates - Fully Taxable-equivalent Basis

 

(Dollars in millions)

 

     Fourth Quarter 2008         Third Quarter 2008         Fourth Quarter 2007     
     Average
Balance
   Interest
Income/
Expense
   Yield/
Rate
        Average
Balance
   Interest
Income/
Expense
   Yield/
Rate
        Average
Balance
   Interest
Income/
Expense
   Yield/
Rate
    

Earning assets

                                   

Time deposits placed and other short-term investments

   $ 10,511    $ 158    5.97    %    $ 11,361    $ 101    3.54    %    $ 10,459    $ 122    4.63    %

Federal funds sold and securities purchased under agreements to resell

     104,843      393    1.50         136,322      912    2.67         151,938      1,748    4.59   

Trading account assets

     205,698      2,170    4.21         191,757      2,390    4.98         190,700      2,422    5.06   

Debt securities (1)

     280,942      3,913    5.57         266,013      3,672    5.52         206,873      2,795    5.40   

Loans and leases (2):

                                   

Residential mortgage

     253,468      3,581    5.65         260,748      3,712    5.69         277,058      3,972    5.73   

Home equity

     152,035      1,969    5.17         151,142      2,124    5.59         112,369      2,043    7.21   

Discontinued real estate

     21,324      459    8.60         22,031      399    7.25         n/a      n/a    n/a   

Credit card - domestic

     64,906      1,784    10.94         63,414      1,682    10.55         60,063      1,781    11.76   

Credit card - foreign

     17,211      521    12.05         17,075      535    12.47         14,329      464    12.86   

Direct/Indirect consumer (3)

     83,331      1,714    8.18         85,392      1,790    8.34         75,138      1,658    8.75   

Other consumer (4)

     3,544      70    7.83         3,723      80    8.78         4,206      71    6.77   

Total consumer

     595,819      10,098    6.76         603,525      10,322    6.82         543,163      9,989    7.32   

Commercial - domestic

     226,095      2,890    5.09         224,117      2,852    5.06         213,200      3,704    6.89   

Commercial real estate (5)

     64,586      706    4.35         63,220      727    4.57         59,702      1,053    6.99   

Commercial lease financing

     22,069      242    4.40         22,585      53    0.93         22,239      574    10.33   

Commercial - foreign

     32,994      373    4.49         33,467      377    4.48         29,815      426    5.67   

Total commercial

     345,744      4,211    4.85         343,389      4,009    4.64         324,956      5,757    7.03   

Total loans and leases

     941,563      14,309    6.06         946,914      14,331    6.03         868,119      15,746    7.21   

Other earning assets

     73,116      959    5.22         70,099      1,068    6.07         74,909      1,296    6.89   

Total earning assets (6)

     1,616,673      21,902    5.40         1,622,466      22,474    5.52         1,502,998      24,129    6.39   

Cash and cash equivalents

     77,388               36,030               33,714         

Other assets, less allowance for loan and lease losses

     254,793                     247,195                     205,755               

Total assets

   $ 1,948,854                   $ 1,905,691                   $ 1,742,467               

Interest-bearing liabilities

                                   

Domestic interest-bearing deposits:

                                   

Savings

   $ 31,561    $ 58    0.73    %    $ 32,297    $ 58    0.72    %    $ 31,961    $ 50    0.63    %

NOW and money market deposit accounts

     285,390      813    1.13         278,520      973    1.39         240,914      1,334    2.20   

Consumer CDs and IRAs

     229,410      1,835    3.18         218,862      1,852    3.37         183,910      2,179    4.70   

Negotiable CDs, public funds and other time deposits

     36,510      270    2.94         36,039      291    3.21         34,997      420    4.76   

Total domestic interest-bearing deposits

     582,871      2,976    2.03         565,718      3,174    2.23         491,782      3,983    3.21   

Foreign interest-bearing deposits:

                                   

Banks located in foreign countries

     41,398      125    1.20         36,230      266    2.91         45,050      557    4.91   

Governments and official institutions

     13,738      30    0.87         11,847      72    2.43         16,506      192    4.62   

Time, savings and other

     48,836      165    1.34         48,209      334    2.76         51,919      521    3.98   

Total foreign interest-bearing deposits

     103,972      320    1.22         96,286      672    2.78         113,475      1,270    4.44   

Total interest-bearing deposits

     686,843      3,296    1.91         662,004      3,846    2.31         605,257      5,253    3.44   

Federal funds purchased, securities sold under agreements to repurchase and other short-term borrowings

     459,743      1,910    1.65         465,511      3,223    2.76         456,530      5,598    4.87   

Trading account liabilities

     70,859      524    2.94         77,271      661    3.40         81,500      825    4.02   

Long-term debt

     255,709      2,766    4.32         264,934      2,824    4.26         196,444      2,638    5.37   

Total interest-bearing liabilities (6)

     1,473,154      8,496    2.30         1,469,720      10,554    2.86         1,339,731      14,314    4.25   

Noninterest-bearing sources:

                                   

Noninterest-bearing deposits

     205,298               195,841               176,368         

Other liabilities

     93,836               73,676               81,444         

Shareholders’ equity

     176,566                     166,454                     144,924               

Total liabilities and shareholders’ equity

   $ 1,948,854                   $ 1,905,691                   $ 1,742,467               

Net interest spread

         3.10    %          2.66    %          2.14    %

Impact of noninterest-bearing sources

                 0.21                     0.27                     0.47   

Net interest income/yield on earning assets

          $ 13,406    3.31    %           $ 11,920    2.93    %           $ 9,815    2.61    %

 

 

 

(1) Yields on AFS debt securities are calculated based on fair value rather than historical cost balances. The use of fair value does not have a material impact on net interest yield.
(2) Nonperforming loans are included in the respective average loan balances. Income on these nonperforming loans is recognized on a cash basis. We account for acquired impaired loans in accordance with SOP 03-3. Loans accounted for in accordance with SOP 03-3 were written down to fair value upon acquisition and acrete interest income over the remaining life of the loan.
(3) Includes foreign consumer loans of $2.0 billion and $2.6 billion in the fourth and third quarters of 2008, and $3.6 billion in the fourth quarter of 2007.
(4) Includes consumer finance loans of $2.7 billion in both the fourth and third quarters of 2008, and $3.1 billion in the fourth quarter of 2007; and other foreign consumer loans of $654 million and $725 million in the fourth and third quarters of 2008, and $845 million in the fourth quarter of 2007.
(5) Includes domestic commercial real estate loans of $63.6 billion and $62.2 billion in the fourth and third quarters of 2008, and $58.5 billion in the fourth quarter of 2007.
(6) Interest income includes the impact of interest rate risk management contracts, which decreased interest income on the underlying assets $41 million and $12 million in the fourth and third quarters of 2008, and $134 million in the fourth quarter of 2007. Interest expense includes the impact of interest rate risk management contracts, which increased interest expense on the underlying liabilities $237 million and $86 million in the fourth and third quarters of 2008, and $201 million in the fourth quarter of 2007.

Certain prior period amounts have been reclassified to conform to current period presentation.

 

Information for periods beginning July 1, 2008 includes the Countrywide acquisition; prior periods have not been restated. This information is preliminary and based on company data available at the time of the presentation   8


Bank of America Corporation and Subsidiaries

Quarterly Average Balances and Interest Rates - Fully Taxable-equivalent Basis - Isolating Hedge Income/Expense(1)

 

(Dollars in millions)

 

     Fourth Quarter 2008          Third Quarter 2008          Fourth Quarter 2007      
     Average
Balance
   Interest
Income/
Expense
    Yield/
Rate
         Average
Balance
   Interest
Income/
Expense
    Yield/
Rate
         Average
Balance
   Interest
Income/
Expense
    Yield/
Rate
     

Earning assets

                             

Time deposits placed and other short-term investments (2) 

   $ 10,511    $ 162     6.13     %    $ 11,361    $ 105     3.68 %      $ 10,459    $ 126     4.79     %

Federal funds sold and securities purchased under agreements to resell (2) 

     104,843      414     1.57          136,322      948     2.78          151,938      1,843     4.84    

Trading account assets

     205,698      2,170     4.21          191,757      2,390     4.98          190,700      2,422     5.06    

Debt securities (2)

     280,942      3,928     5.59          266,013      3,675     5.52          206,873      2,795     5.40    

Loans and leases:

                             

Residential mortgage

     253,468      3,581     5.65          260,748      3,712     5.69          277,058      3,972     5.73    

Home equity

     152,035      1,969     5.17          151,142      2,124     5.59          112,369      2,043     7.21    

Discontinued real estate

     21,324      459     8.60          22,031      399     7.25          n/a      n/a     n/a    

Credit card - domestic

     64,906      1,784     10.94          63,414      1,682     10.55          60,063      1,781     11.76    

Credit card - foreign

     17,211      521     12.05          17,075      535     12.47          14,329      464     12.86    

Direct/Indirect consumer

     83,331      1,714     8.18          85,392      1,790     8.34          75,138      1,658     8.75    

Other consumer

     3,544      70     7.83          3,723      80     8.78          4,206      71     6.77    

Total consumer

     595,819      10,098     6.76          603,525      10,322     6.82          543,163      9,989     7.32    

Commercial - domestic (2) 

     226,095      2,893     5.09          224,117      2,820     5.01          213,200      3,731     6.94    

Commercial real estate

     64,586      706     4.35          63,220      727     4.57          59,702      1,053     6.99    

Commercial lease financing

     22,069      242     4.40          22,585      53     0.93          22,239      574     10.33    

Commercial - foreign (2)

     32,994      373     4.49          33,467      377     4.48          29,815      425     5.67    

Total commercial

     345,744      4,214     4.85          343,389      3,977     4.61          324,956      5,783     7.07    

Total loans and leases

     941,563      14,312     6.06          946,914      14,299     6.02          868,119      15,772     7.22    

Other earning assets (2)

     73,116      957     5.22          70,099      1,069     6.07          74,909      1,305     6.93    

Total earning assets - excluding hedge impact

     1,616,673      21,943     5.41          1,622,466      22,486     5.53          1,502,998      24,263     6.43    

Net hedge income (expense) on assets

            (41 )                 (12 )                 (134 )    

Total earning assets - including hedge impact

     1,616,673      21,902     5.40          1,622,466      22,474     5.52          1,502,998      24,129     6.39    

Cash and cash equivalents

     77,388             36,030             33,714       

Other assets, less allowance for loan and lease losses

     254,793                       247,195                       205,755                 

Total assets

   $ 1,948,854                     $ 1,905,691                     $ 1,742,467                 

Interest-bearing liabilities

                             

Domestic interest-bearing deposits:

                             

Savings

   $ 31,561    $ 58     0.73     %    $ 32,297    $ 58     0.72     %    $ 31,961    $ 50     0.63     %

NOW and money market deposit accounts (2) 

     285,390      813     1.13          278,520      973     1.39          240,914      1,329     2.19    

Consumer CDs and IRAs (2)

     229,410      1,765     3.06          218,862      1,765     3.21          183,910      2,033     4.38    

Negotiable CDs, public funds and other time deposits (2) 

     36,510      267     2.90          36,039      288     3.18          34,997      418     4.73    

Total domestic interest-bearing deposits

     582,871      2,903     1.98          565,718      3,084     2.17          491,782      3,830     3.09    

Foreign interest-bearing deposits:

                             

Banks located in foreign countries (2) 

     41,398      119     1.14          36,230      279     3.07          45,050      553     4.87    

Governments and official institutions

     13,738      30     0.87          11,847      72     2.43          16,506      192     4.62    

Time, savings and other

     48,836      165     1.34          48,209      334     2.76          51,919      521     3.98    

Total foreign interest-bearing deposits

     103,972      314     1.20          96,286      685     2.84          113,475      1,266     4.43    

Total interest-bearing deposits

     686,843      3,217     1.86          662,004      3,769     2.27          605,257      5,096     3.34    

Federal funds purchased, securities sold under agreements to repurchase and other short-term borrowings (2) 

     459,743      1,549     1.34          465,511      2,938     2.51          456,530      5,638     4.90    

Trading account liabilities

     70,859      524     2.94          77,271      661     3.40          81,500      825     4.02    

Long-term debt (2) 

     255,709      2,969     4.64          264,934      3,100     4.68          196,444      2,554     5.20    

Total interest-bearing liabilities - excluding hedge impact

     1,473,154      8,259     2.23          1,469,720      10,468     2.84          1,339,731      14,113     4.19    

Net hedge (income) expense on liabilities

            237                   86                   201      

Total interest-bearing liabilities - including hedge impact

     1,473,154      8,496     2.30          1,469,720      10,554     2.86          1,339,731      14,314     4.25    

Noninterest-bearing sources:

                             

Noninterest-bearing deposits

     205,298             195,841             176,368       

Other liabilities

     93,836             73,676             81,444       

Shareholders’ equity

     176,566                       166,454                       144,924                 

Total liabilities and shareholders’ equity

   $ 1,948,854                     $ 1,905,691                     $ 1,742,467                 

Net interest spread

        3.18             2.69             2.24    

Impact of noninterest-bearing sources

                  0.21                       0.27                       0.47    

Net interest income/yield on earning assets - excluding hedge impact

          $ 13,684     3.39     %           $ 12,018     2.96     %           $ 10,150     2.71     %

Net impact of hedge income (expense)

            (278 )   (0.08 )               (98 )   (0.03 )               (335 )   (0.10 )  

Net interest income/yield on earning assets

          $ 13,406     3.31     %           $ 11,920     2.93     %           $ 9,815     2.61     %

 

 

 

(1) This table presents a non-GAAP financial measure. The impact of interest rate risk management derivatives is shown separately. Interest income and interest expense amounts, and the yields and rates have been adjusted. Management believes this presentation is useful to investors because it adjusts for the impact of our hedging decisions and provides a better understanding of our hedging activities. The impact of interest rate risk management derivatives is not material to the average balances presented above.
(2) The following presents the impact of interest rate risk management derivatives on interest income and interest expense.

Interest income excludes the impact of interest rate risk management contracts, which increased (decreased) interest income on:

 

     Fourth Quarter 2008     Third Quarter 2008     Fourth Quarter 2007      

Time deposits placed and other short-term investments

                               $ (4 )                               $ (4 )                               $ (4 )  

Federal funds sold and securities purchased under agreements to resell

     (21     (36 )     (95 )  

Debt securities

     (15 )     (3 )     —      

Commercial - domestic

     (3 )     32       (27 )  

Commercial - foreign

     —         —         1    

Other earning assets

     2       (1 )     (9 )  
                          

Net hedge income (expense) on assets

                               $ (41 )                               $ (12 )                               $ (134 )  
                          

Interest expense excludes the impact of interest rate risk management contracts, which increased (decreased) interest expense on:

NOW and money market deposit accounts

                               $ —                                   $ —                                   $ 5    

Consumer CDs and IRAs

     70       87       146    

Negotiable CDs, public funds and other time deposits

     3       3       2    

Banks located in foreign countries

     6       (13 )     4    

Federal funds purchased, securities sold under agreements to repurchase and other short-term borrowings

     361       285       (40 )  

Long-term debt

     (203 )     (276 )     84    
                          

Net hedge (income) expense on liabilities

                               $ 237                                 $ 86                                 $ 201    
                          

Certain prior period amounts have been reclassified to conform to current period presentation.

 

Information for periods beginning July 1, 2008 includes the Countrywide acquisition; prior periods have not been restated. This information is preliminary and based on company data available at the time of the presentation   9


Bank of America Corporation and Subsidiaries

Year-to-Date Average Balances and Interest Rates - Fully Taxable-equivalent Basis

 

(Dollars in millions)

 

     Year Ended December 31     
     2008         2007     
     Average
Balance
   Interest
Income/
Expense
   Yield/
Rate
        Average
Balance
   Interest
Income/
Expense
   Yield/
Rate
    

Earning assets

                       

Time deposits placed and other short-term investments

       $ 10,696        $ 440    4.11    %        $ 13,152        $ 627    4.77    %

Federal funds sold and securities purchased under agreements to resell

     128,053      3,313    2.59         155,828      7,722    4.96   

Trading account assets

     193,631      9,259    4.78         187,287      9,747    5.20   

Debt securities (1)

     250,551      13,383    5.34         186,466      10,020    5.37   

Loans and leases (2):

                       

Residential mortgage

     260,213      14,671    5.64         264,650      15,112    5.71   

Home equity

     135,091      7,592    5.62         98,765      7,385    7.48   

Discontinued real estate

     10,898      858    7.87         n/a      n/a    n/a   

Credit card - domestic

     63,318      6,843    10.81         57,883      7,225    12.48   

Credit card - foreign

     16,527      2,042    12.36         12,359      1,502    12.15   

Direct/Indirect consumer (3)

     82,516      6,934    8.40         70,009      6,002    8.57   

Other consumer (4)

     3,816      321    8.41         4,510      389    8.64   
                                           

Total consumer

     572,379      39,261    6.86         508,176      37,615    7.40   
                                           

Commercial - domestic

     220,561      11,702    5.31         180,102      12,884    7.15   

Commercial real estate (5)

     63,208      3,057    4.84         42,950      3,145    7.32   

Commercial lease financing

     22,290      799    3.58         20,435      1,212    5.93   

Commercial - foreign

     32,440      1,503    4.63         24,491      1,452    5.93   
                                           

Total commercial

     338,499      17,061    5.04         267,978      18,693    6.98   
                                           

Total loans and leases

     910,878      56,322    6.18         776,154      56,308    7.25   
                                           

Other earning assets

     68,920      4,161    6.04         71,305      4,629    6.49   
                                           

Total earning assets (6)

     1,562,729      86,878    5.56         1,390,192      89,053    6.41   
                                           

Cash and cash equivalents

     45,354               33,091         

Other assets, less allowance for loan and lease losses

     235,896               178,790         
                                           

Total assets

       $ 1,843,979                 $ 1,602,073         
                                           

Interest-bearing liabilities

                       

Domestic interest-bearing deposits:

                       

Savings

       $ 32,204        $ 230    0.71    %        $ 32,316        $ 188    0.58    %

NOW and money market deposit accounts

     267,818      3,781    1.41         220,207      4,361    1.98   

Consumer CDs and IRAs

     203,887      7,404    3.63         167,801      7,817    4.66   

Negotiable CDs, public funds and other time deposits

     32,264      1,076    3.33         20,557      974    4.74   
                                           

Total domestic interest-bearing deposits

     536,173      12,491    2.33         440,881      13,340    3.03   
                                           

Foreign interest-bearing deposits:

                       

Banks located in foreign countries

     37,657      1,063    2.82         42,788      2,174    5.08   

Governments and official institutions

     13,004      311    2.39         16,523      812    4.91   

Time, savings and other

     51,363      1,385    2.70         43,443      1,767    4.07   
                                           

Total foreign interest-bearing deposits

     102,024      2,759    2.70         102,754      4,753    4.63   
                                           

Total interest-bearing deposits

     638,197      15,250    2.39         543,635      18,093    3.33   
                                           

Federal funds purchased, securities sold under agreements to repurchase and other short-term borrowings

     455,710      12,362    2.71         424,814      21,967    5.17   

Trading account liabilities

     75,270      2,774    3.69         82,721      3,444    4.16   

Long-term debt

     231,235      9,938    4.30         169,855      9,359    5.51   
                                           

Total interest-bearing liabilities (6)

     1,400,412      40,324    2.88         1,221,025      52,863    4.33   
                                           

Noninterest-bearing sources:

                       

Noninterest-bearing deposits

     192,947               173,547         

Other liabilities

     85,789               70,839         

Shareholders’ equity

     164,831               136,662         
                                           

Total liabilities and shareholders’ equity

       $ 1,843,979                 $ 1,602,073         
                                           

Net interest spread

         2.68    %          2.08    %

Impact of noninterest-bearing sources

         0.30             0.52   
                                           

Net interest income/yield on earning assets

          $ 46,554    2.98    %           $ 36,190    2.60    %
                                           

 

 

 

(1) Yields on AFS debt securities are calculated based on fair value rather than historical cost balances. The use of fair value does not have a material impact on net interest yield.
(2) Nonperforming loans are included in the respective average loan balances. Income on these nonperforming loans is recognized on a cash basis. We account for acquired impaired loans in accordance with SOP 03-3. Loans accounted for in accordance with SOP 03-3 were written down to fair value upon acquisition and acrete interest income over the remaining life of the loan.
(3) Includes foreign consumer loans of $2.7 billion and $3.8 billion for the year ended December 31, 2008 and 2007.
(4) Includes consumer finance loans of $2.8 billion and $3.2 billion, and other foreign consumer loans of $774 million and $1.1 billion for the year ended December 31, 2008 and 2007.
(5) Includes domestic commercial real estate loans of $62.1 billion and $42.1 billion for the year ended December 31, 2008 and 2007.
(6) Interest income includes the impact of interest rate risk management contracts, which decreased interest income on the underlying assets $260 million and $542 million for the year ended December 31, 2008 and 2007. Interest expense includes the impact of interest rate risk management contracts, which increased interest expense on the underlying liabilities $409 million and $813 million for the year ended December 31, 2008 and 2007.

Certain prior period amounts have been reclassified to conform to current period presentation.

 

Information for periods beginning July 1, 2008 includes the Countrywide acquisition; prior periods have not been restated. This information is preliminary and based on company data available at the time of the presentation   10


Bank of America Corporation and Subsidiaries

Year-to-Date Average Balances and Interest Rates - Fully Taxable-equivalent Basis - Isolating Hedge Income/Expense (1)

 

(Dollars in millions)

 

     Year Ended December 31      
     2008          2007      
     Average
Balance
   Interest
Income/
Expense
    Yield/
Rate
         Average
Balance
   Interest
Income/
Expense
    Yield/
Rate
     

Earning assets

                   

Time deposits placed and other short-term investments (2) 

       $ 10,696        $ 456     4.26     %    $ 13,152    $ 672     5.11     %

Federal funds sold and securities purchased under agreements to resell (2) 

     128,053      3,507     2.74          155,828      8,120     5.21    

Trading account assets

     193,631      9,259     4.78          187,287      9,747     5.20    

Debt securities (2)

     250,551      13,402     5.35          186,466      10,036     5.38    

Loans and leases:

                   

Residential mortgage

     260,213      14,671     5.64          264,650      15,112     5.71    

Home equity

     135,091      7,592     5.62          98,765      7,385     7.48    

Discontinued real estate

     10,898      858     7.87          n/a      n/a     n/a    

Credit card- domestic

     63,318      6,843     10.81          57,883      7,225     12.48    

Credit card - foreign

     16,527      2,042     12.36          12,359      1,502     12.15    

Direct/Indirect consumer

     82,516      6,934     8.40          70,009      6,002     8.57    

Other consumer

     3,816      321     8.41          4,510      389     8.64    

Total consumer

     572,379      39,261     6.86          508,176      37,615     7.40    

Commercial - domestic (2) 

     220,561      11,733     5.32          180,102      12,932     7.18    

Commercial real estate

     63,208      3,057     4.84          42,950      3,145     7.32    

Commercial lease financing

     22,290      799     3.58          20,435      1,212     5.93    

Commercial - foreign (2)

     32,440      1,503     4.63          24,491      1,450     5.92    

Total commercial

     338,499      17,092     5.05          267,978      18,739     6.99    

Total loans and leases

     910,878      56,353     6.19          776,154      56,354     7.26    

Other earning assets (2)

     68,920      4,161     6.04          71,305      4,666     6.54    

Total earning assets - excluding hedge impact

     1,562,729      87,138     5.58          1,390,192      89,595     6.44    

Net hedge income (expense) on assets

            (260 )                 (542 )    

Total earning assets - including hedge impact

     1,562,729      86,878     5.56          1,390,192      89,053     6.41    

Cash and cash equivalents

     45,354             33,091       

Other assets, less allowance for loan and lease losses

     235,896                       178,790                 

Total assets

       $ 1,843,979                         $ 1,602,073                 

Interest-bearing liabilities

                   

Domestic interest-bearing deposits:

                   

Savings

       $ 32,204        $ 230     0.71     %        $ 32,316        $ 188     0.58     %

NOW and money market deposit accounts (2) 

     267,818      3,771     1.41          220,207      4,342     1.97    

Consumer CDs and IRAs (2)

     203,887      7,015     3.44          167,801      7,167     4.27    

Negotiable CDs, public funds and other time deposits (2) 

     32,264      1,066     3.30          20,557      965     4.69    

Total domestic interest-bearing deposits

     536,173      12,082     2.25          440,881      12,662     2.87    

Foreign interest-bearing deposits:

                   

Banks located in foreign countries (2) 

     37,657      1,068     2.84          42,788      2,168     5.07    

Governments and official institutions

     13,004      311     2.39          16,523      812     4.91    

Time, savings and other

     51,363      1,385     2.70          43,443      1,767     4.07    

Total foreign interest-bearing deposits

     102,024      2,764     2.71          102,754      4,747     4.62    

Total interest-bearing deposits

     638,197      14,846     2.33          543,635      17,409     3.20    

Federal funds purchased, securities sold under agreements to repurchase and other short-term borrowings (2) 

     455,710      11,601     2.55          424,814      22,309     5.25    

Trading account liabilities

     75,270      2,774     3.69          82,721      3,444     4.16    

Long-term debt (2) 

     231,235      10,694     4.62          169,855      8,888     5.23    

Total interest-bearing liabilities - excluding hedge impact

     1,400,412      39,915     2.85          1,221,025      52,050     4.26    

Net hedge (income) expense on liabilities

            409                   813      

Total interest-bearing liabilities - including hedge impact

     1,400,412      40,324     2.88          1,221,025      52,863     4.33    

Noninterest-bearing sources:

                   

Noninterest-bearing deposits

     192,947             173,547       

Other liabilities

     85,789             70,839       

Shareholders’ equity

     164,831                       136,662                 

Total liabilities and shareholders’ equity

       $ 1,843,979                         $ 1,602,073                 

Net interest spread

        2.73             2.18    

Impact of noninterest-bearing sources

                  0.30                       0.52    

Net interest income/yield on earning assets - excluding hedge impact

              $ 47,223     3.03     %               $ 37,545     2.70     %

Net impact of hedge income (expense)

            (669 )   (0.05 )               (1,355 )   (0.10 )  

Net interest income/yield on earning assets

              $ 46,554     2.98     %               $ 36,190     2.60     %

 

 

 

(1) This table presents a non-GAAP financial measure. The impact of interest rate risk management derivatives is shown separately. Interest income and interest expense amounts, and the yields and rates have been adjusted. Management believes this presentation is useful to investors because it adjusts for the impact of our hedging decisions and provides a better understanding of our hedging activities. The impact of interest rate risk management derivatives is not material to the average balances presented above.
(2) The following presents the impact of interest rate risk management derivatives on interest income and interest expense.

Interest income excludes the impact of interest rate risk management contracts, which increased (decreased) interest income on:

 

     Year Ended December 31      
     2008     2007      

Time deposits placed and other short-term investments

                       $ (16 )                    &n