Bank of America will become one of the largest card issuers in the United States, with $143 billion in managed outstanding balances and 40 million active accounts, upon completion of the transaction. Bank of America will add more than 20 million new customer accounts as well as affinity relationships with more than 5,000 partner organizations and financial institutions.

The acquisition dramatically increases the bank's opportunity to deepen customer relationships across the full breadth of the company by delivering innovative deposit, lending and investment products and services to MBNA's customer base.

"Today's announcement is not only about the creation of one of the world's largest card providers. That is compelling in and of itself," said Bank of America Chairman and Chief Executive Officer Kenneth D. Lewis. "But it's really a much larger story about two companies with complementary strengths. The result will be the country’s top retailer of financial services with the size and scale to drive distribution and marketing efficiencies."

The deal is expected to close in the fourth quarter of 2005. Under terms of the agreement, MBNA stockholders will receive 0.5009 shares of Bank of America common stock for each of their shares plus a cash component of $4.125 per share. Based on the share price of Bank of America at the close of business on June 28, 2005, the transaction is valued at $35 billion in total or $27.50 per MBNA share.

Bank of America expects to achieve overall expense efficiencies of $850 million after-tax, which would be fully realized in 2007, and anticipates a restructuring charge of $1.25 billion after-tax. Cost reductions will come from a range of sources, including the reduction of 6,000 jobs. Additional savings will be achieved through the elimination of overlapping technology, vendor leverage, and marketing expense.

Upon completion of the acquisition, Bank of America will be one of the leading worldwide payments services companies and issuers of credit, debit, and prepaid cards based on total purchase volume. The deal would today make Bank of America the fourth most profitable company in the world.

"This acquisition makes strategic sense for our combined customers and shareholders. It provides us access to MBNA’s attractive portfolio as well as their leading product, service and marketing capabilities,” Lewis said. “We can now deepen existing and future customer relationships with differentiated capabilities to exceed customer expectations and grow market share. This merger also provides us with an attractive foothold in Canada, the United Kingdom, Spain and Ireland."

Bruce L. Hammonds, 57, CEO and president of MBNA Corporation, will become CEO and president of Bank of America Card Services and report to Liam E. McGee, 50, president, Bank of America Global Consumer and Small Business Banking. Hammonds will remain in Wilmington, Del., and be part of Bank of America’s Risk & Capital Committee, which guides the company’s strategic direction.

"The merger will create one of the largest credit card portfolios and will give the combined company access to new marketing channels, customers, products and opportunities for further expansion," Hammonds said. "Both companies benefit as cross-sell opportunities exist to sell MBNA products to Bank of America customers and Bank of America products to MBNA customers."

Significant capital strength
The company will maintain significant capital strength and earnings diversity. About 55 percent of earnings will come from global consumer and small business banking; 17 percent from global business and financial services; 11 percent from global capital markets and investment banking and 10 percent from global wealth and investment management.

"For our shareholders, the Bank of America and MBNA combination yields a diverse business mix less dependent on market-sensitive businesses," Lewis said. "The financial strength and cash flow generation of the combined entity should provide significant resources to support future growth."

Last week Bank of America increased its quarterly dividend 11 percent to 50 cents per share. The current dividend yield is approximately 4 percent. The company will continue to focus on a strong dividend for shareholders. Additionally, Bank of America’s strong cash flow and capital position, strengthened by this transaction, should enable the company to continue repurchasing shares for the foreseeable future.

Commitment to Neighborhood Excellence
Bank of America, a leader in corporate citizenship and philanthropy, intends to build upon its previously announced 10-year, $750 billion community development goal to include a specific community development lending and investment goal for Delaware. The specifics of this goal will be determined based on future dialogue with Delaware community and civic leaders. With MBNA's $60 million annual charitable giving, Bank of America, a worldwide leader in corporate philanthropy, expects to provide more than $200 million in annual giving as a result of this combination.

Additional information
Pursuant to the merger agreement, on the effective date of the merger, Frank P. Bramble, Sr., a vice chairman of MBNA, will be appointed to the Bank of America Board of Directors.

The agreement has been approved by both boards of directors and is subject to approval by regulators and MBNA shareholders. Bank of America was advised in the transaction by Keefe, Bruyette & Woods. Legal counsel was provided to Bank of America by Cleary Gottlieb Steen & Hamilton. MBNA was advised by UBS Securities and Joseph Perella. Legal counsel was provided to MBNA by Wachtell, Lipton, Rosen & Katz.