Bank of America 2006 Annual Report Download - page 5

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To Our
Shareholders
2006 was another demonstration of the many paths to growth
available to your company, and our proven ability to drive
growth through the competitive advantages Bank of America
brings to the marketplace.
Our ability to innovate, integrate and execute to serve cus-
tomers’ needs enabled us to grow our customer relationships
last year. At the same time, our associates again demonstrated
that few of our peers are as efficient, effective or profitable at
integrating acquisitions to enhance shareholder value.
Our efforts were recognized by investors, as our shares
appreciated 16 percent during the year, exceeding the perfor-
mance of the S&P 500 Index.
Bank of America today is one of the largest companies
in the world; we were the fifth most profitable company in
2006 with a net profit of more than $21 billion. But while we
have built leading positions in many customer segments and
product lines in banking, our market penetration is actually
small, given our potential, in a number of areas, such as first
mortgage lending, small business lending, capital markets and
wealth management.
These and other areas of opportunity are discussed in
this annual report. Our new marketing platform, Bank of
OpportunityTM, reflects our vision for Bank of America as a cat-
alyst to create opportunities for all of our constituencies, from
customers and associates to communities and shareholders.
We are building a financial services company that offers
the most convenient banking network for our retail customers
coast-to-coast and a global capital markets platform to serve
our corporate and institutional clients.
We are building a company that consistently leverages
information and market knowledge to innovate for customers
and clients; that knows how to integrate its operations and
businesses to create greater value for customers and share-
holders alike; and that delivers the highest standard of service
Revenue
’05
’06
’04
Bank of America 2006 3
quality to consumers, businesses and institutions of all sizes.
In sum, we are building a financial services company that
people and organizations throughout the United States and
around the world instinctively seek out to help them create,
build, preserve and grow the wealth they need to seize their
opportunities, achieve their goals and realize their dreams.
In this letter, I will discuss some of our strategies for ful-
filling this vision, and I encourage you to review the articles
that follow, in which we connect opportunities created for
customers to value created for shareholders. First, though, I’d
like to review some of our financial results from 2006.
Strong financial performance yet again. In 2006 Bank of
America earned a record $21 billion. While earnings were up
28 percent on a 30 percent rise in revenue, much of that
increase was driven by the addition of MBNA. A better mea-
sure of the year’s success was the 14 percent increase in diluted
earnings per share. Adding MBNA’s results back into our 2005
financial results to create an apples-to-apples comparison,
revenue was up 10 percent in 2006 while we controlled expenses
and achieved merger-related savings.
$49 . 7
$56 . 9
$74 . 2
(in billions, fully
taxable-equivalent basis)