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CNBC EXCLUSIVE: CNBC TRANSCRIPT:CNBC'S MARIA BARTIROMO INTERVIEWS KEN LEWIS, PRESIDENT, CHAIRMAN,& CEO, BANK OF AMERICA TODAY ON "CLOSING BELL"

WHEN: Today, Friday, February 6th

WHERE: CNBC'S "CLOSING BELL" 3-5PM ET

Following is the unofficial transcript of a CNBC EXCLUSIVE interview Bank of America President, Chairman & CEO Ken Lewis today on CNBC's "Closing Bell" 3PM-5PM ET.

All references must be source to CNBC's Maria Bartiromo.

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(continuation of interview that began on CNBC's "The Call" today at 11:30 am)

MARIA BARTIROMO: KEN, I WANT TO GET BACK TO THIS IDEA OF THIS NATIONALIZATION TALK OUT THERE. TODAY, ONE OF THE ANALYSTS, WHO FOLLOWS YOUR COMPANY SAID, "LOOK, THERE'S ABSOLUTELY NO WAY THAT THIS COMPANY CAN BE NATIONALIZED." BECAUSE YOU'VE GOT SUCH HUGE MARKET SHARE WHEN IT COMES TO DEPOSITS. AND HE IS NOT EXPECTING IT. AND HE UPGRADES. AND NOW WE'RE SEEING SOME REAL ACTIVITY IN YOUR STOCK, ON THE UPSIDE. BUT WHAT ARE YOU EXPECTING IN TERMS OF GOVERNMENT INPUT IN YOUR DECISIONS? DO YOU WORRY THAT IT'S GOING TO BE A LITTLE OVER THE LINE? PEOPLE SAY, "LOOK, THE GOVERNMENT IS GOING TO TAKE A STAKE IN THESE BANKS, BUT WHO KNOWS WHEN THEY'RE GOING ACTUALLY STEP ASIDE."

KEN LEWIS: YEAH. WELL, FIRST, I HAVE NOT HAD A CONVERSATION WITH ANYONE, BOTH REGULATORY, OR IN CONGRESS, THAT WOULD - THAT KIND OF STATES THAT THEY WANT TO KEEP AN INTEREST IN THE IN THE BANKS FOR A LONG TIME. AND WE'D BE HAPPY TO HAVE US PAY IT BACK AS SOON AS SOON AS WE CAN. AND, OF COURSE, I CAN'T PREDICT WHAT THE GOVERNMENT WOULD WANT OR NOT WANT. BUT I COULD TELL YOU, TO DATE, THERE HAS BEEN NO INTERVENTION IN TERMS OF WHAT WE'VE DONE, OR IN MANAGEMENT, OR SUGGESTIONS THAT WE THAT WE SHOULD DO SOMETHING. THAT HAS NOT HAPPENED.

BARTIROMO: DO YOU THINK THAT THE $500,000 CAP ON SALARIES IS GOING TO STICK? WHAT ARE YOU HEARING ABOUT THAT? PEOPLE ARE VERY WORRIED THAT IT'S GOING TO BE VERY TOUGH FOR YOU TO KEEP TALENTED EXECUTIVES AT THE COMPANY.

LEWIS: YEAH. THAT ONE WORRIES ME BECAUSE YOU WILL HAVE TALENTED INDIVIDUALS, PARTICULARLY REVENUE PRODUCERS, GOING TO FOREIGN BANKS, OTHER ASSET MANAGEMENTS, BOUTIQUES, THINGS OF THAT NATURE. AND SO THAT IS ONE THAT REALLY NEEDS TO BE REVISITED. AND I JUST LEARNED ABOUT IT, I THINK IT WAS LAST NIGHT. AND SO I HAVEN'T HEARD WHAT THE POLITICAL FEEDBACK ON THAT IS.

BARTIROMO: SO YOU HAVEN'T SPOKEN WITH ANYONE IN THE ADMINISTRATION ABOUT THAT PARTICULAR POINT.

LEWIS: NO, I HAVE NOT.

BARTIROMO: OKAY. WHAT ABOUT THE DIVIDENDS? WHAT YOU CAN SPEND MONEY ON? SOME PEOPLE FEEL THAT THIS IS REALLY HAMPERING YOUR ABILITY TO RUN THE COMPANY THE WAY YOU WANT TO RUN IT.

LEWIS: RIGHT. WELL, I THINK THERE WILL BE A NEED FOR CAPITAL IN THE BANKING INDUSTRY IN SUCH A WAY THAT THE DIVIDEND ISSUE WON'T BE A BIG ISSUE. YOU ALSO, IF THINGS DO START TO IMPROVE DRAMATICALLY, YOU DO HAVE THE ABILITY TO GO TO THE TREASURY. AND IF YOU CAN PROVE THAT YOU CAN OBTAIN EQUITY THEN YOU CAN DO SOMETHING WITH YOUR DIVIDEND EITHER, OR BUY BACKS. AND SO THAT'S A POSITIVE. SO WHAT WE NEED IS FOR THIS ECONOMY TO COME TO TURN AROUND, AND WE'LL BE ABLE TO ADDRESS A LOT OF ISSUES.

BARTIROMO: DO YOU REGRET PAYING SUCH A HIGH DIVIDEND FOR SO MANY YEARS? SOME PEOPLE QUESTIONED YOU PAYING THAT HEAVY DIVIDEND OVER THE YEARS.

LEWIS: YEAH, THAT'S ABOUT IT. I DON'T REGRET IT UNTIL THE LAST YEAR OR SO WHEN WE WERE PROBABLY MORE OPTIMISTIC ABOUT THE ECONOMY THAN WAS JUSTIFIED. AND SO IF I HAD KNOWN, OBVIOUSLY THAT THE ECONOMY WOULD DETERIORATE AS MUCH AS IT HAS, THEN WE WOULD HAVE ACTED FASTER. AND THAT'S MY FAULT, FOR BEING MORE OPTIMISTIC THAN I SHOULD, YOU KNOW, BASED ON OUR ECONOMIC PROJECTIONS. BECAUSE IT IS THE MOST EFFICIENT AND EFFECTIVE WAY TO NOT WASTE CAPITAL AND TO RAISE CAPITAL BUT- WITH THE EARNINGS - BEING ABLE TO GO 100 PERCENT INTO YOUR YOUR RETAINED EARNINGS. BUT THAT'S MY FAULT FOR BELIEVING SOME OF OUR ECONOMIC FORECAST. AND, IN RETROSPECT, I WISH I HAD WE WOULD NOT HAVE BEEN SO OPTIMISTIC.

BARTIROMO: CAN YOU WALK US THROUGH WHAT WENT ON AFTER YOU ACQUIRED MERRILL LYNCH? OR EVEN IN THAT WEEKEND WHEN YOU WERE ABOUT TO ACQUIRE MERRILL LYNCH. CLEARLY, THE GOVERNMENT WANTED YOU TO ACQUIRE MERRILL LYNCH. HOW MUCH OF A PUSH DID THEY GIVE YOU? AND DID YOU HAVE ENOUGH TIME TO RECOGNIZE THAT THIS FIRM WAS SADDLED WITH POSITIONS THAT COULD WORSEN AND SERIOUSLY DETERIORATE, CAUSING THIS $15 BILLION LOSS?

LEWIS: RIGHT. WELL THE GOVERNMENT WAS ENCOURAGING. BUT IN NO WAY DID THEY MAKE US DO THE DEAL. THAT WOULD BE A MISCHARACTERIZATION, AND JUST NOT FACTUAL. WE DID HAVE THE TIME, BECAUSE WE HAD TWO SETS OF PEOPLE LOOKING AT IT. WE HAD CHRIS FLOWERS AND HIS GROUP, WE HAD OUR GROUP. AND SO WHEN WE LOOK, NOW, AFTER SEVERAL MONTHS, WE HAD IDENTIFIED THE POSITIONS THAT WERE RISKY. SOME OF THE BIG POOLS OF ASSETS THAT WE SAW DETERIORATION IN. WHAT WE DIDN'T PREDICT IS THE DEGREE OF MELTDOWN THAT OCCURRED DURING THE QUARTER. AND I'M NOT SURE IN PARTICULARLY AMONG CREDIT PRODUCTS, AND I'M NOT SURE ANYBODY DID.

BARTIROMO: BUT YOU WERE ALSO LOOKING AT LEHMAN BROTHERS, RIGHT?

LEWIS: WE LOOKED AT LEHMAN AND FELT LIKE THAT DEAL COULD NOT BE DONE WITHOUT SOME REMOVAL OF ASSETS BY THE GOVERNMENT.

BARTIROMO: WAS BUYING MERRILL A MISTAKE?

LEWIS: NO, IT WAS NOT A MISTAKE. IT IS A TEMPORARY BURDEN BECAUSE OF THAT FOURTH QUARTER. BUT, LONG TERM-- (NOISE) WE'RE GONNA BE VERY HAPPY THAT WE OWN MERRILL LYNCH AND HAVE FILLED THOSE STRATEGIC HOLES THAT WE NEEDED TO FILL.

BARTIROMO: BUT WHAT ABOUT WHEN YOU RECOGNIZED THAT LOSSES WERE SPIRALING, OR THINGS HAD WORSENED, AND YOU WERE LOOKING AT THE POSSIBILITY OF A MATERIA CHANGE IN ADVERSE CHANGE. AND THAT WOULD HAVE OPENED THE DOOR FOR YOU TO WALK. DID BERNANKE PRESSURE YOU NOT TO WALK?

LEWIS: BOTH THE FEDERAL RESERVE AND THE TREASURY AND, YOU KNOW, THE SUPERVISORY AGENCIES, FELT LIKE THAT WOULD BE A MISTAKE. THAT IT WOULD CAUSE PROBLEMS FOR US AND SYSTEMICALLY FOR THE ECONOMY. AND THEY STRONGLY ADVISED US NOT TO CALL THE MAC. THEY (UNINTEL) SAID, "IF, IN FACT, YOU DO THAT, WE WILL USE SOME OF THE TARP MONEY TO FILL THAT HOLE THAT MERRILL LYNCH HAS CAUSED IN THEIR CAPITAL BASE." AND SO WE, OUR BOARD, IN LOOKING AT ALL - TOTAL CONSIDERATION, DECIDED THAT, AS A BUSINESS JUDGMENT, IT WAS THE BEST THING TO DO, AGAIN, BECAUSE WE'RE INEXTRICABLY TIED TO THE US ECONOMY. AND WE DID NOT WANT TO POSE SYSTEMIC RISK TO IT.

BARTIROMO: WHEN DO YOU THINK THE ECONOMY GETS OUT OF THIS, BROADLY SPEAKING? YOU, OBVIOUSLY, HAVE ONE OF THE BEST VANTAGE POINTS TO TELL US WHAT IS HAPPENING WITH THE CONSUMER. ARE THINGS WORSENING RIGHT NOW?

LEWIS: THINGS ARE WORSENING AS WE SPEAK. WE THINK THEY WILL STABILIZE SOMETIME IN THE SECOND HALF. AND THEN WE'LL SEE SOME GROWTH IN 2010. BUT WE HAVE, YOU KNOW, THE PRESIDENT SAYS-- WE HAVE A WAYS TO GO-- AT TIMES, AND WE DO.

BARTIROMO: AND, AS FAR AS UNEMPLOYMENT, DO YOU THINK THAT WILL ALSO WORSEN?

LEWIS: WE THINK IT WILL PEAK SOMEWHERE BETWEEN EIGHT AND 8 1/2 PERCENT. BUT COULD GO TO NINE PERCENT.

BARTIROMO: IS PART OF THE REASON WE GOT HERE BECAUSE OF COMPENSATION? IT SEEMS LIKE THE ALLURE OF EXECUTIVE COMPENSATION, PARTICULARLY ON WALL STREET, IS CERTAINLY CAUSING PUBLIC OUTRAGE. BUT DO YOU THINK THAT WAS ONE OF THE ALLURES, THE LUST FOR GETTING A BIGGER BALANCE SHEET FOR THE LEVERAGE, AND ULTIMATELY GETTING US TO THIS PLACE?

LEWIS: I DON'T THINK YOU COULD TAKE GREED AND LUST FOR THE MONEY, AS YOU SAY, OUT OF THE EQUATION. I CAN'T QUANTIFY IT. BUT I THINK THERE WERE THOSE THAT HAD THAT MOTIVE.

BARTIROMO: AND, AS FAR AS THE FOCUS NOW, ON COMPENSATION, DO YOU THINK THAT THIS IS PARTLY WHAT THE OBAMA ADMINISTRATION SHOULD BE FOCUSED ON?

LEWIS: WELL, I SAID SEVERAL MONTHS AGO, AND, IN FACT, I THINK IT WAS AN INTERVIEW WITH YOU, THAT THE GOLDEN AGE OF BANKING AND COMPENSATION, IT WAS OVER. AND I BELIEVE THAT. AND I THINK SOME CHANGES IN THE WAY EXECUTIVES ARE PAID IS APPROPRIATE. I THINK THEY'VE GONE TOO FAR, HOWEVER.

BARTIROMO: LOOK, YOU CAME INTO BANK OF AMERICA TAKING OVER FOR HUGH MCCALL (PH), WHO WAS A BIG ACQUIRER. YOU SAID, "THE DAYS OF THE BIG DEALS ARE BEHIND US AT THIS POINT." THEN YOU ACQUIRED MBNA. YOU'RE LOOKING AT LOSSES FOR MBNA NOW, CREDIT CARD COMPANY. YOU ACQUIRED LASALLE (PH). YOU WERE MAKING THAT WORK. BUT, STILL, PEOPLE ARE SAYING THESE ARE A LOT OF DEALS. AND, OF COURSE, COUNTRY WIDE FINANCIAL, AND NOW MERRILL LYNCH. WERE THE ACQUISITIONS OF LASALLE AND COUNTRY WIDE MISTAKES?

LEWIS: WELL, YOU'VE GOT FLEET TOO, THAT I

BARTIROMO: THAT'S ANOTHER BIG ONE.

LEWIS: RIGHT.

BARTIROMO: AND PEOPLE SAY YOU OVER PAID FOR FLEET.

LEWIS: AND WE PROVED THEM WRONG, OH, FOR ABOUT A TWO YEAR PERIOD. BECAUSE IT WORKED OUT VERY, VERY WELL. AND WE MET ALL OF OUR OBJECTIVES. AND LASALLE, CHICAGO WAS A MARKET THAT WE REALLY WANTED TO BE IN. AND WE NOW HAVE ONE OF THE DOMINANT BANKS. AND WE'RE GONNA MAKE THAT WORK. AND WE'VE GOTTEN OUR EXPENSIVE SAVES ALREADY. COUNTRY WIDE IS ON FIRE AT THE MOMENT BECAUSE OF RE-FIs AND THE LOWER RATES. AND SO I'M HOPEFUL THAT WE'LL PROVE THAT WAS A VERY GOOD ONE AS WELL. AND THEN, FINALLY IF WE COULD JUST ANNUALIZE, YOU KNOW, THE FIRST FEW DAYS AND OR MONTH OF THIS CALENDAR WITH MERRILL, WE COULD PROVE PEOPLE WRONG ALREADY. BUT ONE MONTH DOESN'T MAKE A QUARTER OR A YEAR, OBVIOUSLY. SO I'M NOT MAKING PREDICTIONS. BUT I THINK, IN THE NEXT TWO YEARS, WE CAN SHOW THAT EVERY ACQUISITION WAS A GOOD ACQUISITION.

BARTIROMO: AND, JUST OVER THE LAST FEW WEEKS, YOU HAVE PERSONALLY BOUGHT SHARES IN BANK OF AMERICA. WHERE DO YOU SEE THE STOCK IN SIX MONTHS?

LEWIS: I HAVE NO IDEA, MARIA. YOU CAN'T GET ME TO PREDICT THAT. BUT I THINK, AS A LONG TERM INVESTMENT AT THESE PRICES, IT'S AN OUTSTANDING ONE. AND I FELT LIKE I SHOULD PUT MY MONEY WHERE MY MOUTH WAS.

BARTIROMO: BUT WASHINGTON HAS PUT BILLIONS INTO THE COMPANY, AND INTO THE INDUSTRY, AND IT JUST SEEMS LIKE THE BAILOUT'S NOT WORKING. WHY?

LEWIS: WELL, THE ECONOMY HAS TO TURN AROUND. I MEAN, BANKS, IN PARTICULARLY BANK OF AMERICA, IS A REFLECTION, MORE THAN ANYTHING, OF THIS US ECONOMY. AND WE'RE A LOT MORE ABOUT MAIN STREET THAN WALL STREET. AND SO WE'RE REALLY DEPENDENT ON THAT US ECONOMY TO TURN AROUND. WHEN IT TURNS AROUND YOU'RE GONNA SEE A NUMBER OF THE BUSINESSES REALLY TAKE OFF IN A DRAMATIC FASHION.

BARTIROMO: KEN, THE STOCK HAS PLUMMETED. WHAT DO YOU WANT TO SAY TO SHAREHOLDERS TODAY? WHAT DO YOU WANT THEM TO WALK AWAY KNOWING ABOUT B OF A?

LEWIS: WE'RE IN THE EXECUTION PHASE. WE'RE GOING TO TURN THIS AROUND. THIS COMPANY WILL TAKE OFF WHEN THE ECONOMY TURNS. IT HAS HUGE REVENUE STREAMS THAT CAN ABSORB A LOT OF CREDIT LOSSES. AND THEN GET PAST THAT. AND REALLY BE A TOP EARNER. WE SHOULD HAVE SOMEWHERE BETWEEN $110 TO $130 BILLION IN REVENUE. WE'VE ALWAYS DONE A VERY GOOD JOB ON EXPENSE CONTROL. AND SO, AS THE PROVISION GOES DOWN, YOU'RE GONNA SEE WHAT A HUGE EARNER THIS COMPANY IS.

BARTIROMO: BUT WILL YOU BE THERE? A LOT OF PEOPLE ARE WORRIED THAT, AFTER THE ACQUISITIONS, AND THE STOCK FALL, THAT YOUR JOB IS IN JEOPARDY. ARE YOU WORRIED ABOUT YOUR JOB?

LEWIS: I DON'T HAVE TIME TO WORRY ABOUT MY JOB. IF SOMEBODY WANTS ME TO GO, ALL THEY HAVE TO DO IS ASK ONE TIME, AND I'M GONE. BUT I FEEL LIKE I OWE 300,000 PEOPLE MY EVERY MINUTE OF FOCUS ON GETTING THIS THING TURNED AND BEING POSITIONED AS THE BEST POSITION, POTENTIALLY, SERVICES COMPANY IN THE WORLD WHEN THE ECONOMY DOES TURN.

BARTIROMO: KEN, WOULD YOU LIKE TO ADD ANYTHING ELSE?

LEWIS: NO, THANK YOU.

BARTIROMO: THANKS SO MUCH FOR JOINING US.


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