Bank of America 2006 Annual Report Download - page 7

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smaller than the “natural share” we
should expect given the size of our
company. In the retail markets, that
natural share is defined somewhat
by our deposit share in a given geo-
graphic market. Examples of product
markets in which we have plenty of
room to run include mortgage, home
equity and small business lending.
I would add that the geographic
markets in which we have chosen to compete are the fastest
growing in the country, providing more opportunity for us to
grow our business.
While our wealth management business is large and grow-
ing, we have a huge opportunity embedded in our current client
base: clients who qualify for high service levels such as Premier
or Private Banking but who have not yet chosen to take their
relationship with us to that level. Outside our existing client
base, the opportunity is even larger.
One of the most important moves we made in 2006 to
pursue growth in the wealth management business was our
agreement to acquire U.S. Trust for $3.3 billion, a transaction
we expect to close in the third quarter of 2007. As one of the
oldest, largest and most respected private banks in the coun-
try, U.S. Trust will combine with The Private Bank of Bank
of America to create the leading private bank in the country.
Clients of both our organizations will benefit from a more
comprehensive set of products and services, and access to the
broadest financial services distribution network in America.
U.S. Trust brings to this partnership one of the strongest brands
in the industry, which we are looking very hard at retaining.
By focusing on these and other opportunities, we aim
to generate strong, consistent organic growth across all
our businesses.
Second: Is Bank of America’s growth to be fueled primarily
by acquisitions or by winning and expanding customer
relationships? Our answer: Wrong question.
A better question would be whether Bank of America is
capable of generating revenue and earnings growth organically
and through acquisition. And our answer is an emphatic “yes.”
The strongest companies are those that have the
resources, knowledge, judgment and skills to pursue multiple
paths to growth. For the past nine years, we have focused
primarily on generating organic growth through process
improvement, increasing customer satisfaction and product
innovation. At the same time, we have taken advantage of
select opportunities presented to us to enter new markets.
These acquisitions — Fleet, National Processing Inc., MBNA
and U.S. Trust, scheduled to close in 2007 — add customers,
capabilities and great new opportunities to grow the business.
Today, there is nothing more important than executing well
on our current organic growth strategy. Every other opportu-
nity pales in comparison to the opportunity we have with our
customers and prospects in our current markets. And yet, our
ability to pursue multiple paths to growth is a great strength
Bank of America 2006 5
’06
Net
Income
’05
’04 $13 . 9
$16 . 5
$21 . 1
CREATING
SHAREHOLDER
VALUE
Total annualized
shareholder return
of 20% since
December 31,
2000
(in billions)