Kevin Stitt – IR Kenneth Lewis – President & CEO Joe Price - CFO

Meredith Whitney – Oppenheimer Mike Mayo - Deutsche Bank Matthew O'Connor - UBS Nancy Bush - NAB Research Ed Najarian - Merrill Lynch Chris Mutascio - Stifel Nicholaus Jason Goldberg – Lehman Brothers Jefferson Harralson - Keefe, Bruyette & Woods Betsy Graseck - Morgan Stanley Joe Morford – RBC Capital Markets Ron Mandel - GIC Jeffery Harte – Sandler O’Neill & Partners

Welcome to today’s teleconference. (Operator Instructions) I will now turn the program over to Mr. Kevin Stitt; please begin sir.

Good morning and welcome. Before Kenneth Lewis and Joe Price begin their comments let me remind you that this presentation does contain some forward-looking statements regarding both our financial conditions and financial results and that these statements involve certain risks that may cause actual results in the future to be different from our current expectations. These factors include among other things changes in economic conditions; changes in interest rates; competitive pressures within the financial services industry and legislative or regulatory requirements that may affect our businesses. For additional factors please see our press release and SEC documents. And with that let me turn it over to Kenneth Lewis.

Good morning, before we get into the analysis, I’d like to say a few things. It is clear to me at least that many investors see the economy getting substantially worse then it is today, causing major problems for consumers, commercial businesses, and consequently bank earnings. Although we too are sensitive about the health of the economy and monitor it closely, we do not yet see the economy slipping into a prolonged negative growth. While we could be wrong, our analysis indicates continued economic sluggishness through the rest of 2008 resulting in some further deterioration in credit quality. But we see eventual stabilization later this year and start of recovery in the first half of 2009 albeit at a slow pace. In addition I think the market has painted our industry with a broad brush. It seems to me that there’s a big difference between those banks that are diversified and those banks with concentration or funding issues. Here are things to consider about Bank of America. First most of our businesses are performing very well even with the current state of the economy and the problems in housing. We believe our revenue streams are sustainable, both net interest income as you can see in our results today, as well as non-interest income which is driven by our attractive market share in several businesses. However as I said, we are not in denial. Credit losses are still going up but given what we see today, they are manageable. Second the fact that we can absorb $3.6 billion in credit losses, take $1.2 billion of additional write-downs, add $2.2 billion to our allowance for credit losses, and still earn $3.4 billion should tell investors something about the extent and consistency of our earnings power. Third our allowance for loan losses of $17 billion, our Tier 1 capital ratio of 8.25%, and our liquidity strength at the parent provide us with additional strength to weather the issues we see ahead of us. Finally there’s been a lot reported about our Countrywide transaction, much of which has been exaggerated and in some cases untrue. We’ll cover the details later in the call but the essential message is that Countrywide is on track and added to the profits of Bank of America as we speak. So with those comments, let’s go over the numbers. I’ll spend a few moments discussing second quarter earnings focusing mainly on the highlights across the company with some specific comments on individual businesses, then Joe will delve a bit deeper into certain issues such as capital markets, credit quality capital, and of course Countrywide. As you already know, Bank of America earned $3.4 billion during the quarter or $0.75 per diluted share before the impact of merger and restructuring charges of $0.03. Total revenue for the second quarter reached record levels at $20.3 billion, up 19% from the first quarter. Consumer and commercial client flows remained relatively strong throughout the quarter in most of our businesses even with the continued turmoil in the housing markets. Net interest income rose 6% from the first quarter while non-interest income rose 38%. Driving the increase in non-interest income were trading account profits, which returned profitability from a loss in the first quarter, service charges both consumer and commercial, and investment banking. Non-interest expense rose 4%. Provision expense of $5.8 billion dropped slightly while net charge-offs rose to $3.6 billion. The increase in reserves of $2.2 billion brings the allowance for loan and lease losses above $17 billion or approximately 2% of our loan and lease portfolio. As expected credit costs remained at high levels reflecting weaker housing markets, particularly in geographic regions that experienced significant home price declines. This weakening combined with the slower economy resulted in additional credit deterioration mainly across our domestic consumer, small business, and home builders portfolios. Similar to the first quarter there were several bright spots within our core retail, commercial banking and investment banking businesses, that indicate ongoing stability and recurring earnings power. While I understand that most of you are very focused on capital and credit quality it is important to recognize our earnings strength since it is paramount in how we think about the future and about our capital adequacy. Looking specifically at global consumer and small business banking, earnings of $812 million for the second quarter were down from the first quarter but if you adjust for the Visa gain in the first quarter earnings were up 11%. Good growth in net interest income and service charges offset lower core income in the I/O strip valuation and [lowable] reach banking income. Provision was up slightly from the first quarter from higher losses partially offset by lower but still substantial reserve additions. We once again increased the allowance in our consumer businesses due mainly to ongoing weaknesses in the housing market and the economy along with seasoning of several growth portfolios which Joe will discuss. Product sales were strong in several areas with net new checking accounts up seasonally from first quarter to 674,000. In residential mortgage first mortgage originations across the company were up 2.4% to $22.4 billion compared to first quarter results. Average retail deposits including money market accounts rose $7.4 billion or 1.4% from the first quarter as growth in checking, savings, and money market levels were partially offset by a drop in CD balances. Retail purchase volumes [inaudible] the US consumer credit card and debit card were up seasonally from first quarter and on a combined basis were up 6% from a year ago. Global rep investment management earned $573 million in the second quarter up substantially from the first quarter. Revenue increased 19% reflecting lower support to certain cash funds, up $36 million compared to $220 million in the first quarter. In addition provision decreased $124 million due to less reserve increases then in the first quarter partially offset by higher net charge-offs. Asset management fees in GWIM rose slightly from the first quarter as seasonal tax preparation fees were offset somewhat by market-based activity. Brokerage income increased 6%. Premier banking and investments experienced good growth in deposit levels, 6% from the first quarter helped largely by migration of existing customers into Premier. Assets under management and GWIM closed the quarter at $589 billion down from first quarter due to outflows in the cash complex as one of impact of lower equity markets. Global corporate investment banking earned $1.7 billion in the second quarter versus $107 million in the first reflecting improved trading results and lower write-downs. In addition to lower write-downs, provision expense and net charge-offs were also down from the first quarter levels. Capital markets and advisory services earned $449 million in the second quarter versus a loss in the first quarter had a profit of $627 million a year ago. Our investment bank was very active in the quarter with investment banking fees of $765 million reflecting increased market share and good results in debt underwriting. Debt issuance had record market volumes in April and May led by high yield which was almost 13 times the volume in the first quarter. Excluding CMAS the rest of GCIB mainly business lending and treasury services earned $1.3 billion during the quarter up slightly from the first quarter even before adjusting for treasury services portion of the gain of the Visa-related transaction. Business lending experienced average loan growth of $10 billion or 3% which treasury services experienced deposit growth of 6% from first quarter as client demand for these services rose as a result of the recent market disruption. This growth in both areas is an example of the rate intermediation of [accrual] commercial lending to larger depository institutions, a trend we view as structural after several years of disintermediation. Not included in the three business segments is equity investment income of $710 million in the second quarter. These results were driven by actual cash gains, improved valuations and dividends from our various equity investments. Before I turn it over to Joe, let me make a couple of comments about our thinking given the current environment. Although concerned about the economy we are encouraged by the resiliency of our consumer, commercial and corporate customers. Continued good revenue performance in both our consumer and commercial bank along with the bounce back in trading investment banking, drove what we thought was a pretty decent quarter given the environment. As expected consumer credit quality deteriorated from first quarter levels particularly in home equity. Credit quality will continue to be an issue in the second half of 2008 with charge-offs remaining at elevated levels. Going forward we believe actions by the Fed and Treasury along with eventual stabilization in home values should help to significantly slow further credit deterioration. While we don’t expect to increase reserves at the pace we experienced over the past few quarters increases in reserves in future quarters will continue to correlate with the direction of the economy and its impact on our customers. As I alluded to earlier our economic expectations projected decent GDP growth in the second quarter of 2008 aided by strenuous actions with growth pulling back in the second half before gradual recovery in 2009. We closed the acquisition of Countrywide on July 1st and continue to see that investment as being economically attractive in the long-term and we believe in the short-term as well. Our Tier 1 capital ratio closed the quarter at 8.25%, up from 7.51% at March 31st. Although Countrywide will drive our Tier 1 capital ratio under 8% in the third quarter we think we can continue to move back to an 8% range over two to three quarters. We measure capital strength from several perspectives including total shareholders equity of $163 billion as well as the allowance for loan losses of $17 billion [inaudible]. As evidenced by some recent events, I think we were all reminded that capital is only meaningful when viewed along with liquidity strength. We continue to maintain an abundance of liquidity at our holding company where our time to require funding has increased to 22 months; significantly higher then our competitors. Plus we believe our deposit franchise leads others in mix, geographic scope and size giving us a competitive staple funding advantage. Given these parameters our outlook for the economy and our earnings potential we have not changed our philosophy about the dividend. I will recommend to The Board that we maintain the current dividend of $0.64. Given our current economic outlook we believe the drivers of earnings for the remainder of the year will be most of our core businesses along with the continued tight grip on expense levels across the company. Most importantly we remain committed to serving our customers and clients while driving profitability during these tougher times. And with that, I’ll turn it over to Joe.

Thanks Kenneth, let me begin by elaborating a bit more on second quarter results before turning to credit quality, capital and Countrywide, turning to GCIB and more specifically capital markets and advisory services. CMAS earned $449 million this quarter as revenues increased $2.6 billion from first quarter levels. Investment banking fees are very good up 15% from the first quarter and only down 7% from a year ago. Results reflect the success Brian [Monahan] and his team have had in the short-term staying focused in the challenging environment and taking advantage of market volatility, client flows and continued risk reduction. Total revenue and CMAS excluding investment banking fees or what we call sales and trading, was $1.2 billion up $2.5 billion from the first quarter as additional write-downs were substantially less then we experienced in the first quarter. We would characterize market disruption charges this quarter as approximately $1.2 billion compared to $2.8 billion last quarter. These charges continue to be centered in CDO-related write-downs and real estate as well as a couple of other areas. Let me start with leverage lending where we ended the quarter with exposure of $10 billion; $4 billion unfunded and $6 billion funded which was down $3.2 billion from March. The reduction since the end of March was driven by cash sales consistent with the past, meaning once again no transfers to the accrual book. The unfunded portion generally represents new business at market terms. During the quarter we wrote down an additional $64 million versus $439 million in the first quarter as market pricing continued to stabilize due to increased liquidity. Legacy of pre-disruption exposure totaled $6.6 billion at June 30 of which $6 billion was funded. That $6 billion has already been reduced by over $1 billion since the end of June. For perspective total leveraged exposure September 30 of last year was over $32 billion. As a reminder we don’t have any covenant light exposure of note and over 60% is senior secured. On the CMBS side we ended the quarter with $9.2 billion in exposure of which $8.5 billion is funded. More then 80% or approximately $7.6 billion is comprised of larger ticket floating rate debt most of which was acquisition-related. This floating rate debt was written down by $100 million in the second quarter. As we said before this product is difficult to hedge as compared to the remaining $1.6 billion of exposure which is primarily fixed rate conduit product. During the quarter we actually had a net gain of $39 million on the fixed rate exposure, $60 million in write-ups offset by $21 million in hedging losses. On a related matter we recorded $184 million of losses associated with equity investments we made in acquisition-related financing transactions in the past. There are several other legacy books where we continue to record losses but to a lesser extent compared to prior quarters given the reduced risk levels. Finally in the supplemental package you can see our CDO and sub-prime related exposure along with the changes during the quarter where we recorded losses of $645 million. The losses were largely comprised of $450 million of super senior CDO write-downs and a charge of approximately $200 million to reflect the counter party risk associated with our insured super senior positions. At the end of June our net sub-prime super senior related exposure dropped to $3.5 billion from $5.9 billion at the end of March reflecting the write-downs along with reductions of another $2 billion due to liquidations, cancellations and pay-downs. During the second quarter liquidations resulting in us taking onto our books the underlying asset back securities, this exposure is included on the schedule in the supplemental package along with the relevant information. Any losses subsequent to liquidation are included in the $645 million that I referenced earlier. With respect to overall disruption exposure, not just pre-disruption exposure, not just the CDO related, we remain subject to market price fluctuations but we think the worst is behind us on [value] declines as evidenced in our results for the quarter. This thinking is driven more by the size of our exposure that being is its lower and the remaining collateral content then a comment about future market volatility. Now let me switch to credit quality, on a held basis net charge-offs in the quarter increased 42 basis points from the first quarter to 1.67% of the portfolio or $3.6 billion. On a managed basis the overall consolidated net losses in the quarter increased 46 basis points to 2.15% of the managed loan portfolio or $5.3 billion. Managed net losses in the consumer portfolios were 2.82% versus 2.19% in the first quarter. Managed credit card losses continue to represent more then 60% of total consumer losses. Managed consumer credit card net losses as a percentage of the portfolio increased to 5.96% from 5.19% in the first quarter which is at the high end of the range of expectations we expressed last quarter. Thirty-day plus delinquencies in managed consumer credit card decreased eight basis points while 90-day plus delinquencies decreased one basis point. While positive this was due mainly to the seasonal trend we experience every year in cards. We’ve continued to see increased delinquencies in our card portfolio in those states most affected by the housing problems, while other states have actually shown some declines. California, Florida, Nevada, and Arizona make up a little more then a quarter of our domestic consumer card book but represent about a third of the losses. As we’ve indicated before we think the normalized loss rate in consumer credit card is 5% to 5.5%. However we’ve also indicated that we could see 100 basis points over that under recessionary-type conditions. At this point we do not foresee loss rates in excess of 100 basis points above the normalized range. Obviously deterioration of the economy beyond that outlook could change that. A credit [inaudible] in our consumer real estate business primarily home equity continued to deteriorate from the first quarter as a result of the weaker housing market. The problems to date have been centered in higher CLTV home equity loans particularly in states that have experienced significant decreases in home prices. Almost all of these states have been growth markets for the past several years. Our largest concentrations are in California and Florida, which represents 41% of the home equity portfolio but 63% of the losses. Home equity net losses increased to $923 million or 3.08% up from 1.71% in the prior quarter. Thirty-day performing delinquencies decreased six basis points to 1.27% while NPAs were almost flat which is definitely positive but as we know, one quarter doesn’t signify a sustainable outlook. Consistent with the prior quarter 82% of net charge-offs related to loans where the borrower was delinquent and had little or no equity in the home. Loans with greater then 90% CLTV on a refreshed basis currently represent 35% of loans versus 26% in the first quarter. This change reflects the continued decline in home prices most acutely in the states that I noted earlier. Now like others in the industry a large piece of the deterioration is centered in acquired portfolios not originated through the franchise; a practice we discontinued in the second quarter of 2007. These purchased loans represent only 3% of the portfolio but 21% of the net losses. Excluding these losses the net loss rate would be 2.53% for the second quarter versus the reported 3.08% for the total portfolio. We believe net charge-offs in home equity will continue to rise given softness in real estate values and seasoning in the portfolio. We increased reserves for this portfolio to 314 basis points reflecting the continued elevated level of loss severities. We’ve instituted a number of initiatives to mitigate risk in new originations as well as existing exposure including lowering maximum CLTVs across both geography and borrower and actively managing credit lines. So while our view doesn’t call for this the loss rate could approach or even cross the 4% mark if conditions deteriorate beyond our outlook. Our residential mortgage portfolio on a managed basis showed an increase in net losses to $151 million or 23 basis points for the quarter. We’ve seen some deterioration in sub-segments, namely our community reinvestment act portfolio that totaled some 8% of the residential book. Additionally California and Florida which comprises 41% of the balances drove 58% of the net losses. The annualized loss rate from the CRA book was 91 basis points and represented 29% of the residential mortgage net charge-offs. Now although approximately $132 billion or 56% of our residential mortgage portfolio carries risk mitigation protection it does not cover our CRA portfolio. Of the $132 billion approximately 91% is protected where we sell mezzanine risk exposures to cash collateralized structures thereby leaving us with no counter party risk. The remaining 9% is protected by GSEs. Now we currently see some level of continued deterioration as evidenced by our decision to increase reserves to 34 basis points. Assuming additional deterioration in the economy beyond our outlook it wouldn’t surprise us to see loss rates between 40 and 50 basis points by the end of the year. Again as we said with home equity and card worsening economic conditions beyond our outlook could change that view. Our auto portfolio at the end of June was about $28 billion in loans. Net losses in the quarter were $82 million or an annualized 1.26% of the portfolio which is actually down 39 basis points or $19 million from the first quarter related to seasonal trends. Switching to our commercial portfolios net charge-offs increased in the quarter to $694 million or 84 basis points up 15 basis points from the first quarter. Most of the deterioration is driven by small business and to a lesser extent home builders with the other portfolios remaining relatively sound. For example, commercial excluding small business and commercial real estate had a charge-off rate of 13 basis points, flat with the first quarter. Net losses in small business which are reported as commercial loan losses are up $113 million from the first quarter and the net charge-off rate has risen to 9.53%. As we’ve discussed before many of the issues in small business relate to the rapid growth of the portfolio over the past few years which is now compounded by current economic trends. As we also highlighted we’ve since instituted a number of underwriting changes in small business such as increasing the level of judgmental credit decisioning, lowering initial line assignments and changing our direct mail offerings. These actions have resulted in an increase in average FICO at origination, a reduction in average line amounts and a meaningful drop in approval rates. More recent vintages are showing the positive impact of these actions and while we expect higher charge-offs in the near term as evidenced by our reserve levels, we expect the small business portfolio to stabilize during 2009. While it will take some time to work through these earlier vintages small business remains a critical customer segment with attractive profitable growth opportunities. Excluding small business commercial net charge-offs increased $25 million from the first quarter to $217 million representing a net charge-off ratio of 28 basis points. The majority of the increase was due to commercial real estate, namely home builders. Approximately 60% of the $217 million relates to home builders. Criticized utilized exposure excluding available for sale and fair value loans increased $5.6 billion from the end of March of which nearly half was driven by commercial real estate, again principally home builders and the final stages of integrating the LaSalle portfolio into our credit processes. Non-real estate and non-LaSalle loan and derivative exposure drove the remained of the criticized utilized increase. This increase was pretty broad based rising from very low 2007 levels. Commercial NPAs rose $1.1 billion to $4.1 billion. As we saw last quarter additional commercial NPAs were mostly in commercial real estate mainly home builders. Utilized home builder exposure was down to $13 billion from $14 billion at the end of March and total exposure declined to $19 billion. Fifty-seven percent of our home builders’ outstandings are listed as criticized and although pressured we still believe as we said last quarter the portfolio is well collateralized. While we expect to see a continuation of an elevated level of charge-offs we believe this will be manageable. Now looking again at the total loan book, 90-day performing past due on a managed basis increased five basis points to 79 basis points while 30-day performing past due increased two basis points to 2.37%. As Kenneth second quarter provision of $5.8 billion exceeded net charge-offs resulting in the addition of $2.2 billion to the reserve. Approximately 80% of the reserve increase was due to portfolios directly tied to housing, principally home equity and to a lesser extent residential mortgage and home builder. The rest of the increase was due to growth in seasoning mainly in the consumer unsecured lending portfolio coupled with some stress from the slower economy. Our reserve now stands at $17.1 billion or 1.98% of our loan and lease portfolio. Let me get off of credit quality and say a couple of things about net interest income. Compared to first quarter on a managed and FTE basis net interest income was up $810 million of which core excluding trading related represented $749 million. The increase in core NII was driven by increased margins in the current rate environment, loan growth and deposit growth. The core net interest margin on a managed basis increased 19 basis points over first quarter to 3.86% due to the positive impact of wider spreads. As you can see from the bubble chart at June 30, our interest rate risk position is a little more liability sensitive relative to the June 30 forward curves when compared to the end of March. As of June 30 we felt the market expectations of rate increases were a bit aggressive which influenced our positioning. We should continue to benefit from curve steepening especially from short end led steepening which is what we have experienced over the last several months. I should note that because of the Fed Fund LIBOR spread widening we haven’t had as much benefit as we otherwise anticipated. Now let me say a few things about capital, Tier 1 capital at the end of June was 8.25% up from 7.51% at the end of March due mainly to the $6.9 billion of capital we raised during the quarter. As we indicated to you last quarter we’ve reduced risk weighted assets in our capital markets area by around $60 billion to be more efficient in our use of capital. Going forward you should expect preferred dividends to be approximately $472 million in the third quarter and approximately $422 million in the fourth quarter. Our tax rate this quarter excluding the FTE impact was 30.7% which is lower then the normal range due to our periodic true-up of the effective tax rate for the year. Finally all of our forward-looking comments up to now apply specifically to Bank of America before the addition of Countrywide. So let me switch and talk about Countrywide for a few moments. We closed the acquisition of Countrywide on July 1 so its impacts won’t be reflected in our combined results until we report third quarter earnings in October. We issued approximately 106 million Bank of America shares at an exchange rate of 0.1822 Bank of America shares for each Countrywide share. As required the shares issued in the transaction will be recorded for accounting purposes at the value as of the day of the announcement or $4.1 billion versus Countrywide’s July 1 tangible capital of $8.4 billion which excludes our preferred. In our supplemental material we’ve included a preliminary P&L and balance sheet for Countrywide reflecting second quarter results. As you can see total assets at Countrywide at the end of June were $172 billion. Mortgage loans held for investment were $99 billion, deposits were $63 billion and total equity was around $10 billion which included our preferred of $2 billion. The data on Countrywide we are providing today as preliminary is a preliminary overview as Countrywide’s ordinary and usual review process for analyzing the numbers continues. Now once Countrywide’s results are fully completed, Countrywide Financial Corporation will file a Form 10-Q for the second quarter so there’ll be additional information on the second quarter in that report. Now obviously their second quarter results, a loss of $2.3 billion were significantly impacted by continued credit deterioration. Credit costs included in the second quarter were comprised of credit provision which included reps and warranties, impairment of available for sale securities and other smaller items which totaled just under $4 billion pre-tax. I’ll come back to this in a minute but much of this type cost as it relates to the future and to the extent it can be will get recorded in purchase accounting so will have a much lower impact. Mortgage originations during the quarter were $59 billion versus $73 billion in the first quarter and $133 billion a year ago. Driving the decrease in the first quarter was a reduction in refi activity that has spiked during what I guess you would call a mini refi boom in the first quarter. Refi activity dropped 35% in the first quarter to $33 billion while purchase transactions jumped 23% to $25 billion. Now activity at Bank of America showed similar trends with refi down 21% at $10 billion and purchase up 34% to $12 billion. Under purchase accounting we’ll mark Countrywide’s balance sheet to fair value levels as of July 1, our acquisition date. The impact of these purchase accounting adjustments will be included in our third quarter financial statements that we’ll share with you in October. Now let me give you some preliminary purchase accounting estimates around some of the largest exposures realizing that they will probably change somewhat as they are finalized. Our estimate at this time on the loan portfolio would be a loss exposure of approximately 15.6% or $14.3 billion for the held for investment portfolio as of the end of June. Factoring in charge-offs already taken of $1.7 billion this represents a cumulative loss estimate of just over 17%. Obviously the marks are highest for sub-prime, option-ARMs and home equity and lowest for prime first mortgages. From a product standpoint the percentage marks range from a preliminary high in the mid 20s to a low in the single-digits. Now all but about $1 billion of this loss exposure will be recorded in purchase accounting. The $1 billion reflects loss exposure on non-impaired loans greater then Countrywide’s allowance for loan loss. Now if incurred, that amount will flow through our consolidated earnings over a number of years. After considering the existing $5.1 billion allowance for loan losses at Countrywide and excluding the $1 billion that I just mentioned, the additional credit mark on the loan book before tax is estimated to be $8.1 billion. In determining these preliminary marks we assumed peak to trough home price depreciation of 25% to 30% including estimated depreciation in Florida and California in the high 30% to just over 40%. Now we tried to give you some pertinent stats on the portfolio in the material and will provide more details as the marks continue to be finalized but this should give you some understanding of our relative view at this point. Needless to say the loss exposure while within the range of our initial expectations is clearly on the higher side due principally to the continued economic weakness and decline in housing prices. The other significant marks include reevaluating the mortgage servicing rights, the [repurchase] reserves, and various other items such as the adjustment of deferred loan origination fees, deferred currency gains, and other miscellaneous costs and liabilities. Now there are several items that cannot be recorded under purchase accounting rules. These include the future loan loss exposure I just mentioned, certain litigation exposure, and a portion of the reps and warranties exposure. Now let me finish with purchase accounting before I discuss how those items will impact future earnings. All in our preliminary estimates total a net pre-tax write-down of $12 billion to $13 billion which when tax affected and compared to the preliminary June 30 Countrywide tangible common equity result in goodwill of approximately $4 billion. This number also includes our estimate of capitalized restructuring costs. You can see from the material our updated restructuring cost of $1.2 billion after-tax is consistent with our initial estimate. Currently we believe around $400 million will be capitalized in purchase accounting with the remainder or $800 million flowing through the income statement as restructuring expense through 2010. Assuming these shares issued on July 1 pretty much offset our preliminary estimate of goodwill net capital used in the transaction on a consolidated basis would be that required to be allocated to the Countrywide assets after write-downs. Given the size of the balance sheet after the markdowns, adding Countrywide to Bank of America on a pro forma basis would reduce our Tier 1 capital by approximately 65 basis points. Estimated risk weighted assets from Countrywide following purchase accounting adjustments are around $125 billion. Now while we originally envisioned selling a large block of loans shortly after the transaction closed the markets are not currently conducive to such a sale so we’ll table that idea for now. Now as a reminder we closed the quarter with Tier 1 at 8.25% and have continued plans to strengthen our Tier 1 during the third quarter through earnings, the sale of Prime Brokerage and continued management of trading and other asset levels as well as several other initiatives. Now while I’m not going to predict Tier 1 levels at the end of September I’ll reiterate what Kenneth said earlier and say that we feel pretty good about our ability to manage back towards our 8% target over the next two to three quarters without having to take significant capital actions to get there. Obviously future factors could change that opinion, most notably the economy. From an earnings perspective we believe Countrywide on a GAAP basis will be accretive to Bank of America earnings for the second half of 2008 and through 2009 including the restructuring charge. Restructuring charge for the rest of 2008 impact on the P&L is estimated to be under $200 million after-tax. We won’t be any more specific about the impact on 2009 earnings until we announce our earnings in January. Now imbedded in our earnings outlook for the next few years are the assumptions for the exposures I mentioned earlier that aren’t captured in purchase accounting; litigation, excess credit losses, and reps and warranties to name the more notable ones, or a portion of those. Let me give you a little more idea of how we are looking at legal exposure. Although Countrywide did have some legal reserves on the balance sheet we have assumed additional exposure over a number of years. Our people along with two major outside law firms plus various consultants have conducted a thorough due diligence to size the likely magnitude of the exposure. This work was initially performed in due diligence but has been continually updated. Our approach was the realistic, not optimistic and focuses on pending and potential claims realizing that many of these exposures are represented principally by claims in very early stages. Now it’s obviously impossible to predict the exact outcome of the various claims at this stage but based on our review we’ve sized the exposure, considered it in our analysis, and feel it is manageable. We plan to defend any claims vigorously in order to minimize the litigation expense. We’ll accrue litigation expense quarterly as any losses become probable and capable of estimation. Now with respect to the other exposures I referenced, which are primarily credit-based exposures, we applied the same basic assumptions I went over when describing our loan portfolio marks. Now I mentioned restructuring costs earlier, so let me update you on our cost saves we expect to achieve. We expect to exceed our original target of $670 million after-tax by about a third to $900 million and expect to realize over 10% this year. We’ve received a lot of questions about Countrywide’s public debt. All I can say at this point is we don’t intend to guarantee the public debt but we do understand the ramifications of not paying at maturity. We’ll keep you informed as we continue to integrate the Countrywide transaction. Now going forward in 2008 let me piggyback on what Kenneth said and reiterate that there is considerable uncertainty about the economic environment. It still remains unclear what future impact the housing downturn, higher energy and commodity costs, and the sub-prime prices will ultimately have and how long the downturn will persist. But let me reiterate that we feel good about our relative position in our businesses versus the competition. Loan and deposit growth generated by the franchise along with the steeper curve are still expected to benefit net interest income in the short-term. We believe growth will continue in non-interest income from our consumer businesses and as we’ve demonstrated this quarter we think CMAS has turned the corner and is producing good results. Consumer credit quality will continue as a headwind in what appears to be further deterioration in housing and its subsequent impact on consumer asset quality. Similarly we would expect to see challenges in the consumer dependent sectors of our commercial portfolios. Given this scenario we would expect net credit losses to be at least at levels we experienced in the second quarter. On the expense side we’re aiming for improved operating efficiency and heavy expense control as well as savings realized from the LaSalle integration and now Countrywide. With that let me open it up to questions and we thank you for your attention.

(Operator Instructions) Your first question comes from the line of Meredith Whitney – Oppenheimer Meredith Whitney – Oppenheimer: On the foreclosed property you see material deceleration and you don’t see that in the national numbers, granted those are lagged, but can you comment on what you’re seeing in that trend and then you have a great chart on the commercial exposures and the draw downs and the line limits, can you provide color on the commercial side just in comparison?

First of all as you might imagine, our first and foremost goal is to keep people in their homes as opposed to going through the foreclosure process and so if you look at our restructuring then to our workouts as a percent of total people that go delinquent, they are increasing as a percentage of the total. But having said that the number of customers going delinquent is also increasing. From an actual foreclosure standpoint our foreclosure process and taking on REO and distributing REO the numbers are actually increasing i.e. we are in fact distributing more properties or selling more properties, but the inflow of properties into that is still accelerating at a slightly higher pace and so net net we’re seeing growth in the foreclosed property category if you were to look at any point in time given where we are in this cycle. On the commercial loan side I guess you’re speaking to what kind of utilizations that we’re seeing and then what-- Meredith Whitney – Oppenheimer: You show a very detailed table on the commercial side, I’m interested on the consumer side, your experience with line reductions and then draw-downs.

Let me focus on home equity because I think that’s probably the place that that’s most applicable. If you looked at our unfunded exposure at the beginning of the quarter compared to the end of the quarter we were about 50/50 funded to unfunded at the beginning of the quarter, at the end of the quarter that had swayed more towards funded but it was driven by three or four things. One growth, we did continue to see growth in new customers for both the funded and the unfunded components. We did see [drawls] that netted some $3 billion coming out unfunded into funded and then we had line reductions and pay-downs coupled with our charge-offs that drove the remainder of that reduction. So all in, utilization rates not that different but that’s the components of what drove it. Meredith Whitney – Oppenheimer: There’s been a lot of activity in the past month in terms of Fannie Mae proposals and short selling changes I just wanted to get your perspective on that and then sort of larger perspective on the industry and how far we are in terms of what the government is doing?

First of all I think what the Treasury and Federal Reserve are proposing are absolutely necessary the thing to do and I hope congress approves them very, very quickly because I can’t think of a larger systemic risk then the GSEs and we’ve got to restore confidence in them and this is a way to do it. With regard to the industry I don’t pay as much attention to the rest of the industry as I do our clients and customers and us and so I’m not a member of all these industry organizations etc. so I don’t know a lot about what’s happening at other institutions, but as I said in the comments, what we see at the moment absent something, a severe disruption we see as manageable and see things improving sequentially. So from our perspective we have a ray of optimism now that we probably haven’t had for a few quarters.

Your next question comes from the line of Mike Mayo - Deutsche Bank Mike Mayo - Deutsche Bank: First on capital the goodwill of $4 billion what had you expected that to be? I guess as you said the write-downs are higher but I don’t recall the goodwill there.

We hadn’t disclosed anything earlier because it was so early and we knew the level of uncertainty in the marketplace but I guess I would say as I mentioned in the earlier comments that that was on the higher end of that. I don’t know that I ever expected negative goodwill. So that ought to range it for you. Mike Mayo - Deutsche Bank: Book value is kind of flat despite the earnings so I guess unrealized securities losses went up, could you size that?

If you look at our OCI it was relatively flat. We had some pickup because we, as I mentioned I think in the last call, our strategic investment in Brazil actually has gone to one year prior to the restriction lapsing so that came in as a positive but our agency backed mortgage-backed securities because of what you’re seeing in spread widening in the market kind of pulled the other way and that’s what kept it reasonably flat. Mike Mayo - Deutsche Bank: Pro forma book value with Countrywide?

I don’t have it handy right in front of me, get back to me and I’ll give you a view. Mike Mayo - Deutsche Bank: Credit quality, you said expect credit losses to be higher then in the second quarter, that’s not exactly going out on a limb, can you give any more range for that or what you’re thinking? It sounds like you were thinking home equity might be a little bit worse then you thought before, or just give a little more color if you could.

What I tried to do, because all these portfolios had such different characteristics what I tried to do in speaking to each of those portfolios was one give you in the supplemental package kind of what we reserved to so that can kind of give you a view as to our most current view. But then also if the economy continues to deteriorate, I tried to size that for you a little bit with those prepared comments on each one. I think that’s the best way to go about it and for you to be thinking about it because that’s how we think about it. Mike Mayo - Deutsche Bank: Maybe just a more general comment then, so far you’ve seen problems related to real estate, residential and commercial and it hasn’t gone crazy outside of those areas, where are you most concerned outside of real estate? Is the consumer getting much weaker, are we going to be here in two quarters from now and you’re going to say well we just didn’t see it coming?

I think we’ve said before that some time over the next two to three quarters that we do in fact think that consumer losses will peak and to the extent that happens, we’re in pretty good shape and the thing for us at least, is that as we see the increases in charge-offs coming at us, they’re really very manageable and if we can just start diminishing these big reserve bills and these big losses on CDOs and leveraged loans which we see happening, then you can see then that the earnings power of this company starts to really show through. Mike Mayo - Deutsche Bank: Last quarter you said well maybe the dividend would be at risk depending on how things play out and now you’re saying you’re recommending keeping the dividend where it is, so what’s gotten better then what you expected before?

Well earnings tripled and even after preferred the number I think is $3.224 billion or something so that’s the reason. But I’ve tried to be balanced and say that obviously you have to as you look forward be aware that things could change dramatically and in this day and time its hard to be unequivocal on anything but again, the major thing that’s different from the last two quarters is we’re now starting to really show some significant income and we would be the most profitable financial services in the United States this quarter and that gives me some reason for optimism.

Your next question comes from the line of Matthew O'Connor - UBS Matthew O'Connor - UBS: I know the tangible common ratio is not one that you focus on but pro forma for Countrywide I’m getting around 2.6%, 2.7%, is that a level that you’re comfortable with?

Think of the shares issued in the Countrywide was creating common tangible equity that pretty much offsets the goodwill as we talked about earlier so it really just is the added asset base coming off of Countrywide of which is, as I mentioned probably is a little higher then what we would run on a normalized basis once you get out of kind of a disruption period and so I think when you consider all of those factors together we’re pretty comfortable. Matthew O'Connor – UBS: So we shouldn’t expect any common equity raise or anything like that maybe some preferreds if the market opens, but nothing meaningful?

As we said earlier, the game plan given the outlook that Kenneth described earlier absent some unforeseen event is to migrate back to our Tier 1 target over the next two to three quarters and obviously that’s done principally with retained earnings generation which is common. Matthew O'Connor – UBS: A lot of good details on the Countrywide, on page 35 there’s all other charges of $4.6 billion, just wondering what makes up the bulk of that.

A lot of the other items that I referenced that weren’t separately broken out that were—again all these are preliminary but you’ve got rate marks on various assets and liabilities, you’ve got some incremental components of reps and warranties, you’ve got miscellaneous things around the insurance operations. It’s a laundry list but no individual item rises to a level of significance of those others we broke out. Matthew O'Connor – UBS: Very good transaction deposit growth while some of the CDs rolled off a bit, what’s driving that and should we expect more of this mixed change going forward?

Focus, we decided to make that one of our top priorities at the beginning of the year and I don’t think its anything more then that. You can see from rates that we’re not leading on the rates and its just prioritization. Matthew O'Connor – UBS: Are you picking up any commercial deposits from some other banks that might be pulling credit lines and things like that?

We’re picking up commercial deposits; I can’t identify exactly why to that degree but we certainly have good deposit growth there too.

Your next question comes from the line of Nancy Bush - NAB Research Nancy Bush - NAB Research: If you could just give us some very rough terms what LaSalle added, particularly to net interest income and if you could just update us on what’s going on there as far as integration etc?

On the integration front, the end of the third quarter leading into the fourth quarter is our biggest component of integration. We actually got our customer [day one off] this past quarter. It was very successful etc. but the big systems conversions are still coming at us. From a performance standpoint that cost saves are larger and more rapid then we thought. Core operating earnings from the institution are probably a little weaker given the market disruption especially the capital markets related component or the wholesale related component given what’s gone on in the markets, but also volumes in some of the mortgage type product, home equity type product, obviously given again the economic environment. But the deposit franchise and other components of consumer are very strong as we expected. We kind of divided this thing up and put it into the individual business units so there’s not a precise measurement to be able to do it. We’re still very comfortable it’s accretive but I don’t have an exact number because of its now been split up and put out in the various units. From a period to period standpoint I think if you look at linked quarter you can kind of take the acquisition [noise] out as opposed to looking at year-over-year and that’s probably the best place I’d guide you to. Nancy Bush - NAB Research: As an add-on to the Washington question, the things that are being done there seem to be being on an ad hoc basis i.e. in response to whatever crisis arises that week, are Paulson, Bernanki etc. soliciting any input from the banking industry particularly from the major CEOs like yourself about a plan going forward?

Well I hope Secretary Paulson won’t mind me saying this, but I talked to him Saturday morning and I assume that I’m not the only one he’s talking to, so they really are. I also am on a thing called The Federal Reserve Advisory Board that we see the Fed once a quarter and they do ask for our input and they are trying to think broadly to answer it. I know what you said seems that way but to the extent they can, they’re thinking very broadly. Nancy Bush - NAB Research: You weren’t responsible for his going on the Sunday morning talk shows yesterday were you in saying we face months of trouble?

No I don’t have any control over the Secretary of Treasury. Nancy Bush - NAB Research: You are one of the more optimistic I think on consumer credit quality trends peaking over in the next two or three quarters, if you could just give us what you’re looking at to say that? Is it 90-day past dues, is it delinquencies, what gives you that much more optimism then seems to be existing in the rest of the industry?

First of all it does seem like even when you’re trying to give a reason balanced view of things there’s so much cynicism and negative thought out there that you sound probably [annish] despite the fact you’re not trying to be. And we have some pretty good ability to predict the largest driver of our charge-offs and that’s on the credit card side. The team there are just very good at doing that and so we’ve been with them--a pretty realm of ability to predict that, that is future losses. Home equity obviously the pace has surprised us and that’s where we have done a lot of work. We’re doing a lot more collection work then we ever have. We’ve put a lot more people on the issue then we have before and so we do—and obviously we’ve changed our policies and we think some of that will start showing some gains or some ability to mitigate some of these losses. We’re still predicting them to be higher but we just don’t think the pace at which they’ve increased will continue and we think we saw a little bit of that from fourth quarter to first and then now first quarter to second. And so we see a little bit of that dramatic rise and the pace of the charge-offs to be losing a little steam and we think that will continue throughout the rest of this year. Nancy Bush - NAB Research: Does that apply to small business as well? I realize that’s a small piece of the company but that has been really amazing?

No that would be an exception and fortunately it’s not a big piece but we see that continuing into 2009.

Your next question comes from the line of Ed Najarian - Merrill Lynch Ed Najarian - Merrill Lynch: Regarding the commercial loan loss reserve, it seems like—well I noticed that the reserve ratio on commercial lending specifically declined by a few basis points in the quarter yet we see pretty large increases in commercial NPAs as well as commercial criticized exposure, I was wondering if you could just comment on why not much reserve build and an actual decline in the reserve ratio there when you’re seeing such large increases on NPAs and criticized on the commercial side? Does that forebode some noticeable increase in commercial charge-off ratio other then what you talked about already on the small business side?

First of all we had built reserves including the small business commercial piece pretty aggressively over the last two or three quarters as Nancy implied with her question. Take that out for a minute and we did continue to add to our commercial real estate commercial reserves during the quarter but it was a little more of a reallocation of some excess that we felt we would carry and given the underlying quality of the book on the rest of portfolio. Then when you’re looking at that total ratio though go back to your base, our outstandings grew pretty good. We continue to be out there doing business and quite frankly have seen as Kenneth referenced in his comments some pretty good growth in the health care kind of insurance, non-profit etc. kind of grew some with the market disruptions in the ARS securities and things like that we’ve been more of a solid provider for people, for municipalities and others during that period. And then we quite frankly have seen less people at the party on some other very good business that’s enabled us to do some good business but some of the overall ratios also driven by the balance in loans.

I’d also say we try to get a level of preciseness that sometimes drives me crazy and so do the analysts at times, but the reserve is $17 billion and I think that defies at some point preciseness to the decimal point. Ed Najarian - Merrill Lynch: I guess I was referring to—I’m looking at a commercial reserve level on a dollar amount that was pretty flat quarter-to-quarter and that’s I think excluding anything that went into the small business area yet again we see these big increases in criticized exposure and NPAs on the commercial side and again in NPAs excluding anything to do with small business.

All I can tell you is that we’re comfortable with that reserve level. It’s based on as Kenneth said kind of detailed analysis that is driven by all the underlying credit quality parameters, loan by loan scenario with all of our knowledge and we feel good about that. We talked about the areas where we feel the exposure is the greatest, i.e. home builders and others to try to give you the parameters around there. We feel pretty good about the quality of that portfolio especially relative to others and that’s kind of how we do it. So I don’t have anything more to add to it other then as Kenneth said kind of the global overall coverage.

It’s kind of like the issue of trying to estimate the CDO write-downs. In this portfolio you’d have to know every single [lull] and every single risk writing and it’s almost impossible to come up with a bank by bank equivalent. Ed Najarian - Merrill Lynch: I think you mentioned excluding residential construction and small business that your commercial loss ratio was I think I recall in the low teens—13 basis points, how sustainable do you think that ratio is or any context on that ratio over the next 12 months?

That’s a very low ratio for as big a book we’ve got and so I wouldn’t be surprised to see that up a little bit but we don’t see a ton of things coming at us at this point that would cause any kind of material change in that but we need to be realistic about the economy and the weakness in the economy so there’ll be some activity. But we shouldn’t see precipitous change in it. Ed Najarian - Merrill Lynch: Would you be willing to give us any color on what your plans are starting in the fourth quarter of 2008 with respect to liquidating some of your CCB ownership and what’s your view there?

I would be willing to tell you that it’s going to be a long-term significant strategic relationship and we will always have a significant ownership position. Ed Najarian - Merrill Lynch: Is there any kind of a—is it reasonable to take the view that as we see you exercise some of your options position that that could be—to have some correlation with the amount of liquidation we might see in the underlying original investment?

No.

Your next question comes from the line of Chris Mutascio - Stifel Nicholaus Chris Mutascio - Stifel Nicholaus: When I look at the NPAs on the consumer portfolio they were up $800 million this quarter and you built the reserves $2.2 billion, if I look at the NPAs on the commercial portfolio they were up $1.1 billion and yet the reserve build there was less then 50, does the peak or the less severe loss that may be coming from the consumer portfolios in the coming quarters, do they get offset by an increased need to start building the commercial reserves and therefore the provision expense is maintained at a fairly high level for the next several quarters?

Not necessarily. Remember that and I had this in my opening comments, but we continued to moderate our LaSalle portfolio into our credit processes that drove a pretty good sized component of the increase in both the criticized and NTA numbers in there so take that into consideration too. But back to your question, again not necessarily—we reserve now for what we foresee in the commercial portfolio as required under GAAP but also kind of as our view and so not necessarily unless we were to see further deterioration beyond our current expectations.

Your next question comes from the line of Jason Goldberg – Lehman Brothers Jason Goldberg – Lehman Brothers: But it looks like you wrote up the value of the MSR from I guess [$24.3 billion] from $3.2 billion, I guess was there a corresponding hedge off that or just maybe more color there?

That pretty much offset, actually I think overall servicing income was a little lower this quarter due to the [NAT] number. Jason Goldberg – Lehman Brothers: I think in Kenneth’s speech a couple of weeks ago you made the comment that you thought, and I’m sorry if I got this wrong, that nonperformers actually peaked in the third quarter, is that correct? And do you still feel that way?

No I’ve never said—I’ve never commented on nonperformers. Jason Goldberg – Lehman Brothers: Or losses maybe, or no.

No, I had said that—I think I said in a response to a question, that we thought consumer credit losses would peak either late this year or possibly in the first quarter. But that’s our assessment at the moment. Jason Goldberg – Lehman Brothers: Why not guarantee the Countrywide debt given that you fully intend to pay it?

I don’t really have anything beyond what we had said before. We’ll make all determinations on that as we kind of consider options of migrating to the operating environment that we want to be in and how to derive the best efficiencies and position Barbara to run that business and that’s when we’ll make all those determinations.

Your next question comes from the line of Jefferson Harralson - Keefe, Bruyette & Woods Jefferson Harralson - Keefe, Bruyette & Woods: Regarding Countrywide as yet have you gotten in there to look at their accounting, is there any accounting changes you are making, maybe being more aggressive on delinquencies or NPAs, anything like that?

There’ll be a number of conforming accounting adjustments which are typical in any merger that we go through but they’re—most of the changes regarding how we’re running the business have been previously announced or reiterated in the package today. Obviously any accounting will follow those but there’s not any really big significant item in terms of at what point you take charge-offs and things like that. Now acquired loans, this large—when you value impaired loans in an acquisition, you have to apply different accounting standards then on a regular basis and that would be a statement of position 0303 so that’ll have a little different optics that we’ll have to provide you more detail in the future around so you’ll be able to see the underlying as well as the net impact on us as a company given the purchase accounting adjustments. But that’s not a change as much as that’s the application of purchase accounting. Jefferson Harralson - Keefe, Bruyette & Woods: And that you’re talking about the reserve will look optically lower at B of A because the loans are coming over marked down without a reserve?

That is one attribute of it and there are several others too. Jefferson Harralson - Keefe, Bruyette & Woods: You talked about the rep and warranty reserve, that is going into a purchase accounting adjustment, can you tell us how much of purchase accounting adjustment has been incurred because of rep and warranties?

All the purchase account adjustments we showed you are preliminary. They do include some adjustment to rep and warranties as does my comments about there are possible that there’ll be claims post that arise later that we’ll need to consider. But we’ve broken out everything that at this point we’ve got finalized enough to be able to present to you. Jefferson Harralson - Keefe, Bruyette & Woods: So this is in the $4.6 billion all other?

I think that’s where it is along with a multitude of other items. Jefferson Harralson - Keefe, Bruyette & Woods: On just the accounting of how this thing goes forward, so you’ve assumed so far about 14.5% or 15% cumulative loss rate on the Countrywide portfolio--

No, now—but if you add the ones that have already been taken its like 17.3% I think. So that’s what you should look at. Jefferson Harralson - Keefe, Bruyette & Woods: So on the 17.3% as long as that loss estimate is on par every quarter then you won’t show any provision or losses through the—via the income statement in Q3 or Q4?

Correct. New production and non-impaired we’ll have to consider which is kind of what I referenced earlier but for that block of loans, that’s correct.

Your next question comes from the line of Betsy Graseck - Morgan Stanley Betsy Graseck - Morgan Stanley: On the point that you mentioned regarding the Countrywide debt where you indicated that you understand the ramifications of not paying, it’s kind of open-ended. I just wonder if you could clarify a little bit what you’re implications are there?

We don’t really have anything else to add to what I said earlier, responded to earlier. We’ll continue to work through the process and when we decide what the ultimate legal and entity structures look like, how we’re going to operate, all the other parameters, we’ll let you know, but that’s kind of where we are right now. Betsy Graseck - Morgan Stanley: Is there a possibility that you might at some point fully bring the CFC subsidiary into the Bank of America?

Haven’t made any decisions on that. Betsy Graseck - Morgan Stanley: On CDUs have you indicated how the insurance is, who’s covering you on that?

Not specifically but I’ll tell you because you saw a charge for—we called it the CVA charge or the counter party charge and we talked about the CDOs component, most of our insured exposure is high grade exposure to start with. Its covered by full line insurers all the way down to some mono lines, obviously the CVA charge that we’ve taken is on the component that is covered by mono lines and that really is reflective I think that it was just around $200 million this quarter cumulatively on the particular mono line exposure, if you use the exact same valuation process that we’ve used for the direct CDOs, come up with a receivable and then consider that, we’ve probably reserved somewhere around half of that mono line per se receivable, if you want to call it that. Betsy Graseck - Morgan Stanley: On the trading revenues in your supplement you’ve got the breakout between the fixed income product and clearly you had an extremely strong quarter this quarter, how much of this from your opinion is from some of the key drivers be it either customer acquisition, spread tightening, increased capital associated with the business, taking more risk etc?

If you look at the details you can see its kind of across the board except obviously we structured products where we had the continued disruption charges but on the FX and rates, that’s clearly the strong point and if you look linked quarter remember we had a pretty good sized charge associated with auction rate securities last quarter, so performance is actually pretty consistent, strongly consistent quarter-to-quarter even though it looks to be up there. I think the volatility in the market and so I’d say market making any customer flows although clearly some ability to pick up some just given the positioning in the market. Betsy Graseck - Morgan Stanley: So you would think that this line item is really more a function of change in market volatility and spreads then new customer acquisitions?

Brian [Monahan] is probably on the line and he’d shoot me if I said its sustainable because its pretty high hurdle but we clearly feel pretty good about going forward on that line, not suggesting that we can always perform at that level but feel pretty good about it.

There’s increased client activity too.

Your next question comes from the line of Joe Morford – RBC Capital Markets Joe Morford – RBC Capital Markets: I know the share national credit exam just finished at the end of June, but I was curious if you’ve had any initial feedback yet on the results of that exam, say in terms of the classified trends and what level of reserves or provisions may need to be taken for that?

Not speaking specifically of the shared national but overall including that, you can kind of see our results and all that’s considered because at the individual institutions that exam has been completed.

Your next question comes from the line of Ron Mandel – GIC Ron Mandel – GIC: In answer to an earlier question you thought that consumer charge-offs would peak late this year or in the first quarter of next year, and I was wondering if you could elaborate on that. I guess what I’m concerned about is you’re talking about HDD continuing and in one of the charts you showed a percentage of home equity that’s refreshed over 90% and single family over 90%, and big increase this quarter and it seemed to me that would imply that the losses would continue well into 2009, and you also mentioned that credit card losses could go higher so I’m just wondering if you could expand on that because it just seems to me that we’re don’t see the visibility of the end of the negative trends which would as a second step implied a peak in charge-offs.

If you think about our thoughts about the economy and the fact that we see sluggishness but not a recession and that we see some improvement beginning in 2009 and that we see housing price depreciation being mostly over this year, maybe going into next year, that would be kind of consistent with what we see then therefore in the charge-off peak. Ron Mandel – GIC: So there wouldn’t be a lag so even if house prices bottomed, pick a quarter, fourth quarter of this year, there wouldn’t be a lag for the damage that had already occurred and the peak—are you talking about the peak quarterly rate of charge-offs when you make that comment?

No I’m saying some time during either the end of the fourth quarter or some time into the first quarter they peak, I’m picking—I’m trying to pick a month but not being specific about which month. Ron Mandel – GIC: I understand but I meant you’re saying that some time in that period we’ll see the peak rate of charge-offs even though charge-offs might continue at a high level, the peak rate will have been past.

Correct and what that would therefore mean is that you’re then only dealing with charge-offs and not further reserve build. Ron Mandel – GIC: That’s very important obviously when you had $2 billion reserve build this quarter.

You know, $5.5 billion in two quarters.

Your final question comes from the line of Jeffery Harte – Sandler O’Neill & Partners Jeffery Harte – Sandler O’Neill & Partners: If I heard you correctly you were talking about residential mortgage charge-offs say if they were 23 basis points quarter, maybe going toward 40 to 50 basis points by the end of the year, did I hear that correctly?

Well the point was they were about 23, you can see in the supplement what we reserved to, that’s kind of a better way to think about our outlook but we were trying to be realistic and say given the continued deterioration of the environment it wouldn’t surprise us if we saw something go into that range. We’re trying to just give you a feel for if in fact things were--to give you a viewpoint. Jeffery Harte – Sandler O’Neill & Partners: Can you give us then a little color on the portfolio mix kind of in residential, I guess I’d be interested in prime versus non-prime and then specifically in prime how much is jumbo and Alt-A?

Don’t have all the specifics at my fingertips, but I’ll tell you that the principal increase in the charge-offs that we have experienced and that we continue to expect is in our CRA portfolio, in our remarks I did kind of give you some specifics on and in that particular book, I think the charge-off rate this period was just south of 100 so something in the low 90s. And that one is driving a big part of our losses and probably will continue to be a hunk of it.

And that’s because of our product mix. We weren’t in sub-prime. Jeffery Harte – Sandler O’Neill & Partners: In the commercial I know this has been hit a little bit, but I just kind of look at commercial loan growth of 7.5% sequentially, that’s a pretty big annualized growth rate and you talked a little bit about maybe gaining some market share, some other people aren’t competing, how do you—I guess my concern is if credit isn’t necessarily getting better yet you’re growing loans aggressively how do you know or how can we be comfortable you’re not putting tomorrow’s problems on the balance sheet today in the commercial portfolio?

I can’t recall a time that we’ve been able to get the credit structuring terms that we can get now and including levels of equity, all kind of just the various covenants that you would want if there was a time that some were doing covenant light, they’re covenant heavy at the moment. And then secondly the pricing is so much better then we’ve seen it in decades probably. So we think we’re putting on very good business with the right structure and the right covenants and we’re very conscious of the fact that the environment in which we’re operating.

Thank you very much for joining us today.