AmSouth was greeted with a 3% decline in RF shares - hardly a vote of confidence. The ASO deal is slightly accretive to Cash EPS in 2007 (goal is $2.93 per share). Ironically, $2.93 per share was the same identical goal laid out for 2005 Cash EPS by RF/UPC in January 2004! But hey, what's two years among friends? We remind investors of past proclamations by RF because today's prediction carries limited credibility, unfortunately. Another good statistic is the ratio of merger charges-to-cost savings promised. RF/UPC was 1.5x, but RF/ASO is 1.75x - this is $100 Million difference. Cost savings of $400 million are planned by mid-2008. This equates to 30% of ASO's 1Q06 annualized overhead base (remember - this is an acquisition of ASO, so ASO stand-alone costs are more relevant in our view). In the UPC deal, RF promised just 18% of UPC's expense base. This history is key for investors to remember. A look back at RF/UPC shows that RF shareholders lost 8% on their stock price (i.e., $37.69 when UPC was announced vs. $35.53 on Wed 5/24 prior to the ASO deal). UPC owners fared better as the stock was about 7% higher. However, strong dividends the past 10 quarters have yielded 9.4% for RF shareholders since late January 2004 (no reinvestment was assumed). The S&P 500 is 12.6% ahead over this time frame, BEFORE dividends. But, fear not, RF should eventually return to buying back its stock and raising dividends. Perhaps such financial engineering smoothes out the rough edges on this transaction. But, like most large mergers, Caveat Emptor!

Two years of postponed earnings growth? Cost savings projections which look high? Financial engineering? It all sounds like Bank of America with training wheels to me.