2004 Annual Report: Chairman’s Letter to Shareholders

To our shareholders:

Strategic vision, financial results

Our associates are pursuing our vision of a nationwide, universal bank for consumers and small businesses; a full-service corporate and investment bank with global capabilities for our commercial and corporate clients; and a company that produces strong, consistent financial returns for its shareholders by delivering higher standards of service for our customers every day. Our financial results are evidence that, in this pursuit, we are winning in the marketplace.

In 2004, Bank of America earned $14.1 billion, was the world’s fifth most profitable company and, with a market capitalization at year-end of $190 billion, was the second most highly valued financial services company in the world. Our results exceeded our goals in most important financial categories, including diluted earnings per share, net income, revenue and credit quality. I hope you will review our financial results in more detail in the financial summary on page 30 and in the Management Discussion & Analysis starting on page 33.

Our financial results in 2004 continued the strong returns we have posted for our shareholders over the past four years. In fact, we have met or exceeded the rising expectations of Wall Street every quarter since the beginning of 2001. From 2000 through 2004, our diluted earnings per share grew at a 10% annual rate, despite an economic slowdown and market turbulence that derailed many competitors.

Our strong profit growth provides us multiple opportunities for capital deployment, which we pursue in three broad categories: investments in existing lines of business, acquisitions of other companies and capital returned to shareholders.

Our internal investments are tightly focused on areas of the company with strong long-term growth prospects. Prominent examples include a $675 million investment beginning in 2005 in Global Capital Markets and Investment Banking, where growth priorities include expanding capabilities in debt sales and trading, client management, our equity platform, and our ability to serve clients’ needs in Europe and Asia. In Global Wealth and Investment Management, we continue to invest in sales and relationship management capacity. And in Global Consumer and Small Business Banking, we’re continuing to build out our banking center network as we move into new and fast-growing markets.

Our most visible acquisition last year was Fleet, but our acquisition of National Processing Corporation was a great example of an effort to build scale and capabilities in an existing business. The addition of National Processing to Bank of America Merchant Services is enabling us to offer more payments solutions to our customers. As payments continue to shift from paper to plastic, the Merchant Services expansion has enabled us to strengthen our leadership position in the payments business.

In deploying capital, we have complemented investments and acquisitions with an extremely shareholder-friendly capital strategy. Since 1998, Bank of America has returned more than $65 billion in capital to shareholders through a combination of increasing dividends and the repurchase of shares. Our dividend has grown at an annual rate of 13% over the past 27 years, from $0.07 in 1977 to $1.70 today, and our current dividend yield of almost 4% is among the most attractive in the industry.

Our strategic vision and financial results have been rewarded in the marketplace. Over the past five years, our shares have appreciated faster than our peers’, faster than the KBW Banks Index, faster than the S&P 500 and faster than the Dow Jones Industrial Average. With an annualized total shareholder return (including stock price appreciation and dividends) of 18% from 1999 through 2004, Bank of America has been an extremely strong investment.