2005 Summary Annual Report: How We Grow: Operating Excellence

Bank of America in 2005 efficiently executed the integration of Fleet, exceeding the goals set when the merger was announced in 2003. We delivered on the pre-merger promise to expand into desirable Northeast markets and improve customer satisfaction and sales in the new markets, all while capturing greater cost savings than were projected at the merger’s outset.

Bank of America associates smoothly converted the accounts of approximately 5 million Fleet customers to its retail platform in 2005. During the first seven months of the year, as business systems at former Fleet operations were being converted to Bank of America systems, the bank added 181,000 net new checking accounts in the new markets, increased middle market loans by 8 percent and deposits by 5 percent, and tallied more than 2.5 million product sales in banking centers.

In addition, our customer delight scores in the former Fleet markets had risen approximately 13 percent as of December 2005 from the baseline established at the outset of the merger. “Delighted customers” are those who rank us at 9 or 10 on a 10-point scale when asked, “Overall, how satisfied are you with Bank of America?”

Bank of America boosted customer satisfaction and sales while reducing annual costs by $1.85 billion pre-tax. This significantly surpassed the estimated annual cost savings of $1.6 billion pre-tax that we projected when the Fleet merger was announced in October 2003. The success of the Fleet merger was due to many factors, including thorough market research that identified customer expectations, constant monitoring of customer delight, a judicious systems-conversion strategy that minimized impacts to our customers and our Six Sigma discipline focused on product and service excellence and the elimination of errors.

As part of our commitment to the Northeast, we located the headquarters of our Global Wealth and Investment Management division in Boston, MA, and opened a new, state-of-the-art customer contact center in East Providence, RI.

When we announced this merger in 2003, we said our combined company would deliver more financial service capabilities to more Americans than any bank in our nation’s history. Making good on that promise ranks as one of our company’s great accomplishments. Our customers in the Northeast have access to the broadest banking franchise in the nation with a wide range of products and services under the same roof. Our coast-to-coast presence provides them with access to more than 5,800 retail banking offices, more than 16,700 ATMs and award-winning online banking with nearly 15 million active users.

From left, in Boston, Anne M. Finucane, president, Northeast; Mark J. Hogan, Northeast Consumer Division executive; and William R. Lorenz, Middle Market Banking executive, Northeast Commercial Banking, are part of the Bank of America team that is growing sales and customer satisfaction in the Northeast.

In all, our associates accomplished one of the largest business integrations and systems conversions in history. The bank’s operational excellence—the ability to execute operations flawlessly—made this dramatic growth possible.

We are proud that every associate contributed to this success—whether it was by working on one of the many merger teams or in other areas of the company, continuing their focus on serving and delighting our customers and clients. From the announcement of the merger, to our exciting brand introduction in new Northeast markets, to our unprecedented product and systems conversions in 2004 and 2005, Bank of America associates throughout the company worked together to build a shared future as the world’s premier financial services company.