The Savior of Countrywide?

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Whatever problems Countrywide had, he concluded, came from bad decisions at the top, not malfeasance on the ground. Once the deal closes later this year, Lewis pledges to do right by Countrywide's borrowers. "We will bend over backwards not to foreclose," he says. "We will find a way to work things out."

That empathy for struggling customers is hard won. How many other FORTUNE 500 CEOs know what it's like to be denied a mortgage — as Lewis was when he was a 30-year-old manager newly posted to New York City from Charlotte, N.C.? A native of Meridian, Miss., Lewis was steeped in the gospel of hard work from an early age. When his father left the family, Lewis' mother Byrdine supported him and his sister in Columbus, Ga., by working double shifts as a nurse. Following her example, Lewis worked his way through Georgia State University as an accountant and an airline-reservation agent.

It would be a mistake, however, to construe his banking strategy as public service. Lewis may have been born in Mississippi and raised in Georgia, but he grew up at NationsBank. It is, essentially, the only full-time employer he has ever had, and he has spent the past 38 years of his life singularly dedicated to the mission set out by his equally determined mentor, Hugh McColl, to transform that North Carolina institution into what would become Bank of America.

McColl and his two predecessors laid the groundwork, challenging interstate banking regulations to expand into a regional powerhouse in the Southeast and then on the West Coast, where it captured BofA in 1998 and hauled the name back to Charlotte. Since Lewis became CEO in 2001, the bank's reach has exploded in every direction. BofA is now No. 1 in deposits (with the $47 billion purchase of FleetBoston Bank), No. 1 in credit cards ($35 billion for MBNA) and No. 1 in wealth management ($3.3 billion for U.S. Trust), and with the Countrywide deal, it will soon be No. 1 in mortgages. If Wall Street once looked at this bank as some sort of Southern arriviste, that notion was erased for good in November 2006 when BofA's $243.7 billion market capitalization surpassed that of Citigroup. Blackstone CEO Stephen Schwarzman, the insider's insider on the Street, praises BofA as "a phenomenally successful earnings machine."

While it may be tempting to think of the Countrywide deal as a happy ending to the fable of the subprime-mortgage market, for BofA it is really the climax of a 30-year saga of grand ambition. What next? "The only way to really succeed," Lewis says, "is to find beauty and excitement in organic growth." For BofA, that means getting credit-card holders to open checking accounts and turning mortgage borrowers into private-banking clients. It's the same strategy that Citi has pursued without much success, but Lewis says his bank is focused on just one country, the U.S. "That's a big advantage and a big difference," he says.

Lewis isn't expecting much beauty or excitement anytime soon. He will consider the Countrywide deal a success if BofA earns back half its purchase price within three years. As his competitors announced massive write-downs and losses in their fourth-quarter earnings reports, Lewis wouldn't allow himself to crow. "I don't feel great about ours either," he says. "If we had met our objectives, I'd be gloating, but we didn't." He has warned that next week's fourth-quarter earnings will be profitable but disappointing, and he expects to set aside $3.3 billion in write-downs. So days after the Countrywide deal, Lewis announced a restructuring of BofA's struggling investment-banking business, including a round of 650 layoffs. Unlike Citi and Merrill Lynch, BofA has never made the grade as a big hitter in investment banking.

Of course, BofA hasn't botched its business so badly that it has to beg for money overseas, as they do. In fact, the bank is making foreign investments, not inviting them, with three recent plays in Mexico, Brazil and China. Lewis says those limited stakes are as far as he plans to go. "I don't see buying any bank," he says. Then again, he says of his last three billion-dollar acquisitions: "Certain things came our way." If a good deal calls, Ken Lewis will be listening.