Bank of America Corporation has announced a definitive agreement to purchase Countrywide Financial Corp. in an all-stock transaction worth approximately $4 billion.

The purchase will make Bank of America the nation’s largest mortgage lender and loan servicer. This is an important advancement in the company’s desire to help customers and clients meet all of their financial needs. A mortgage is one of the key foundations of many customer relationships.

Countrywide will benefit from the stability of being part of the largest and one of the most financially strong financial institutions in the United States.

Bank of America will benefit from Countrywide’s broader mortgage capabilities, including its extensive retail, wholesale and correspondent distribution networks. The Calabasas, California-based company operates more than 1,000 field offices and has a sales force of nearly 15,000. Countrywide also has a leading mortgage technology platform, a well known brand in home lending and management expertise in a number of key areas.

Bank of America would gain greater scale in originating and servicing mortgages in the U.S. Countrywide had $408 billion in mortgage originations in 2007 and has a servicing portfolio of about $1.5 trillion with 9 million loans. The purchase also includes Countrywide’s Lender Placed insurance and other businesses.

Countrywide’s deep retail distribution will enhance Bank of America’s network of more than 6,100 banking centers throughout the U.S. After closing, Bank of America plans to operate Countrywide separately under the Countrywide brand with integration occurring no sooner than 2009.

Financial Terms
Under the terms of the agreement, shareholders of Countrywide would receive .1822 of a share of Bank of America stock in exchange for each share of Countrywide.

The purchase is expected to close in the third quarter and to be neutral to Bank of America earnings per share in 2008 and accretive in 2009, excluding merger and restructuring costs.

Bank of America expects $670 million in after-tax cost savings in the transaction, or 11 percent of the expense base of the two companies’ mortgage operations. About one third of those savings would come in 2009, two thirds would be realized in 2010 and savings would be fully realized in 2011.

The agreement has been approved by Bank of America’s board of directors and Countrywide’s board of directors and is subject to approval by Countrywide’s shareholders and customary regulatory approvals.

Subprime Initiatives
Origination of subprime loans is not planned for the combined company. Both companies share the goal of keeping distressed mortgage borrowers in their homes when possible. Both Bank of America and Countrywide continue to work with public officials and community groups to explore new initiatives to help homebuyers and communities affected by the subprime issue.

– Bank of America and Countrywide both support efforts to fight predatory
lending practices.

– Bank of America and Countrywide are active participants in the Hope Now
Alliance, which has launched a letter campaign to delinquent borrowers,
created a counseling hotline and facilitates the sharing of best
servicing practices. Bank of America also will continue Countrywide’s
commitment to participate in the American Securitization Forum’s
December 2007 reset freeze framework for 2/28 and 3/27 adjustable rate
mortgages (ARMs).

– Bank of America will continue Countrywide’s commitment to participate
in California Governor Arnold Schwarzenegger’s November 2007 subprime
ARM program.

Bank of America plans to expand the capacity and marketing of credit counseling programs and internal capacity and flexibility for loan modifications for loan workout teams following the purchase of Countrywide.

Countrywide also has a number of programs in place designed to minimize foreclosures where feasible.

– On October 23, 2007, Countrywide announced a major expansion of its
foreclosure prevention efforts by starting a $16 billion home
preservation program to assist as many as 82,000 subprime hybrid ARM
customers facing ARM resets through the end of 2008.

– On October 24, 2007, Countrywide entered into a groundbreaking
partnership with the Neighborhood Assistance Corporation of America
(NACA) to leverage Countrywide’s market leading home retention programs
and NACA’s unique model for counseling borrowers.

– On December 21, 2007, Countrywide announced work on an agreement with
the Association of Community Organizations for Reform Now (ACORN) to
serve as a blueprint for home retention and foreclosure prevention
initiatives in the mortgage industry, with a particular focus on
subprime borrowers.

Bank of America was advised by Banc of America Securities and the law firms of Cleary, Gottlieb, Steen & Hamilton LLP and K&L Gates in the transaction. Countrywide was advised by Sandler O’Neill & Partners LP and Goldman Sachs Group Inc. and the law firm of Wachtell Lipton Rosen & Katz. Countrywide’s Board of Directors was advised by Sandler O’Neill & Partners LP. Both Goldman Sachs and Sandler O’Neill delivered fairness opinions to the Countrywide Board.

Note: Bank of America management will present transaction details in an 8:30 a.m. webcast today. The presentation and supporting materials can be accessed on the Bank of America Investor Relations Web site at http://investor.bankofamerica.com/. For a listen-only connection to the conference call, dial 800.895.1241 and the conference ID: 79795.

Bank of America
Bank of America is one of the world’s largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services. The company provides unmatched convenience in the United States, serving more than 57 million consumer and small business relationships with more than 6,100 retail banking offices, more than 17,000 ATMs and award-winning online banking with more than 23 million active users. Bank of America is the No. 1 overall Small Business Administration (SBA) lender in the United States and the No. 1 SBA lender to minority-owned small businesses. The company serves clients in 175 countries and has relationships with 99 percent of the U.S. Fortune 500 companies and 80 percent of the Fortune Global 500. Bank of America Corporation stock (NYSE:BAC) is listed on the New York Stock Exchange.

Countrywide Financial
Founded in 1969, Countrywide Financial Corporation (NYSE:CFC) is a diversified financial services provider and a member of the S&P 500, Forbes 2000 and Fortune 500. Through its family of companies, Countrywide originates, purchases, securitizes, sells, and services residential and commercial loans; provides loan closing services such as credit reports, appraisals and flood determinations; offers banking services which include depository and home loan products; conducts fixed income securities underwriting and trading activities; provides property, life and casualty insurance; and manages a captive mortgage reinsurance company. For more information about the Company, visit Countrywide’s website at http://www.countrywide.com/.