SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 1)
Date of Report (date of earliest event reported): February 4, 1998
GOLDEN STATE BANCORP INC.
(Exact name of registrant as specified in its charter)
Delaware 333-28037 95-4642135
(State of Incorporation) (Commission File (IRS Employer
Number) Identification
Number)
414 North Central Avenue
Glendale, California 91203
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (818) 500-2000
<PAGE>
Item 5. Other Events.
This Amendment No. 1 ("Amendment No. 1") to the Registrant's
Current Report on Form 8-K, dated as of February 4, 1998 and filed with
the Securities and Exchange Commission on February 17, 1998 (the
"February 17 8-K"), amends the February 17 8-K through the inclusion
herein of revised analyst presentation materials, which are attached as
Exhibit 99.4 to this Amendment No. 1 and are hereby incorporated by
reference herein. Capitalized terms used but not defined herein have the
meanings set forth in the February 17 8-K.
This Amendment No. 1 and the exhibits hereto contain forward looking
statements with respect to management beliefs, estimates, projections,
assumptions and the financial condition, results of operations and business of
Parent Holdings and the Registrant (and their respective subsidiaries) and,
assuming the consummation of the Mergers, a combined Golden State Bancorp
Inc./First Nationwide (Parent) Holdings Inc., including statements relating to
the cost savings and accretion to reported and cash earnings that will be
realized from the Mergers, the impact on revenues of the Mergers, and the
restructuring charges expected to be incurred in connection with the Mergers.
These forward looking statements involve certain risks and uncertainties,
including the risks and uncertainties detailed from time to time in the
Rigistrant's and Parent Holding's filings under the federal securities laws and
and those of their subsidiaries. Factors that may cause actual results to differ
materially from those contemplated by such forward looking statements include,
among others, the following possibilities: (1) expected cost savings from the
Mergers cannot be fully realized or realized within the expected time frame; (2)
revenues following the Mergers are lower than expected; (3) competitive pressure
among depository institutions increases significantly; (4) costs or difficulties
related to the integration of the businesses of the Registrant and Parent
Holdings are greater than expected; (5) changes in the interest rate environment
reduce interest margins or accelerate mortgage refinancings; (6) general
economic conditions, either nationally or in the states in which the combined
company will be doing business, are less favorable than expected; (7)
legislation or regulatory changes adversely affect the businesses in which the
combined company would be engaged; or (8) the respective goodwill lawsuits of
Glendale Federal and California Federal are not finally resolved in the time
frames expected by the parties, or a final resolution of either or both of such
lawsuits does not result in a net recovery or results in a net recovery that is
less than that anticipated by the parties.
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits
The following exhibits are filed as part of this report:
2.1* Agreement and Plan of Reorganization, dated as of February 4, 1997, by and
among the Registrant, First Nationwide (Parent) Holdings, Inc., First
Nationwide Holdings, Inc., First Gibraltar Holdings, Inc., Hunter's
Glen/Ford, Ltd. and Golden State Financial Corporation.
99.1* Stock Option Agreement, dated as of February 4, 1998, by and between the
Registrant, as issuer, and First Nationwide (Parent) Holdings, Inc., as
grantee.
99.2* Litigation Management Agreement, dated as of February 4, 1998, by and
among the Registrant, Glendale Federal Bank, Federal Savings Bank,
California Federal Bank, A Federal Savings Bank, Stephen J. Trafton and
Richard A. Fink.
99.3* Joint Press Release, dated February 5, 1998.
99.4 Analyst Presentation Materials.
- - --------------
* Included as an exhibit to the February 17 8-K.
-2-
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
Dated: February 26, 1998
GOLDEN STATE BANCORP INC.
By: /s/ John E. Haynes
Name: John E. Haynes
Title: Chief Financial Officer
-3-
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
2.1* Agreement and Plan of Reorganization, dated as of February 4,
1997, by and among the Registrant, First Nationwide (Parent)
Holdings, Inc., First Nationwide Holdings, Inc., First Gibraltar
Holdings, Inc., Hunter's Glen/Ford, Ltd. and Golden State
Financial Corporation.
99.1* Stock Option Agreement, dated as of February 4, 1998, by and
between the Registrant, as issuer, and First Nationwide (Parent)
Holdings, Inc., as grantee.
99.2* Litigation Management Agreement, dated as of February 4, 1998, by
and among the Registrant, Glendale Federal Bank, Federal Savings
Bank, California Federal Bank, A Federal Savings Bank, Stephen J.
Trafton and Richard A. Fink.
99.3* Joint Press Release, dated February 5, 1998.
99.4 Analyst Presentation Materials.
- - --------------
* Included as an exhibit to the February 17 8-K.
-4-
Exhibit 99.4
THE NEW GOLDEN STATE BANCORP INC.
(GSB)
<PAGE>
MERGER OF CALIFORNIA FEDERAL BANK, FSB
and
GLENDALE FEDERAL BANK, FSB
through the acquisition by Golden State Bancorp Inc. of
First Nationwide (Parent) Holdings Inc.
February 1998
[CALIFORNIA FEDERAL [GOLDEN STATE
BANK LOGO] BANCORP LOGO]
<PAGE>
2
FORWARD LOOKING STATEMENT
This presentation contains forward looking statements with respect to management
beliefs, estimates, projections, assumptions, the financial condition, results
of operations and business of First Nationwide (Parent) Holdings Inc. and Golden
State Bancorp Inc. (and their respective subsidiaries) and, assuming the
consummation of the merger, a combined Golden State Bancorp Inc./First
Nationwide (Parent) Holdings Inc. including statements relating to: (a) the cost
savings and accretion to reported and cash earnings that will be realized from
the merger; (b) the impact on revenues of the merger; and (c) the restructuring
charges expected to be incurred in connection with the merger. These forward
looking statements involve certain risks and uncertainties, including the risks
and uncertainties detailed from time to time in Glendale Federal's and
California Federal's OTS reports and filings. Factors that may cause actual
results to differ materially from those contemplated by such forward looking
statements include, among others, the following possibilities: (1) expected cost
savings from the merger cannot be fully realized or realized within the expected
time frame; (2) revenues following the merger are lower than expected; (3)
competitive pressure among depository institutions increases significantly; (4)
costs or difficulties related to the integration of the businesses of Golden
State Bancorp Inc. and First Nationwide (Parent) Holdings Inc. are greater than
expected; (5) changes in the interest rate environment reduce interest margins
or accelerate mortgage refinancings; (6) general economic conditions, either
nationally or in the states in which the combined company will be doing
business, are less favorable than expected; or (7) legislation or regulatory
changes adversely affect the businesses in which the combined company would be
engaged.
[CALIFORNIA FEDERAL [GOLDEN STATE
BANK LOGO] BANCORP LOGO]
<PAGE>
3
1. Certain forward looking statements and financial information contained in
this presentation differ from forward looking statements and financial
information disclosed in earlier presentations. The factors resulting in these
include: (a) changes in share prices for publicly traded securities since the
earlier presentation date or dates; (b) revised estimates of fully diluted
shares outstanding to reflect the adoption of SFAS 128; (c) the inclusion of
goodwill amortization estimated for GSB stand alone for the purposes of
calculating pro forma cash earnings and pro forma cash EPS; (d) the inclusion of
the estimated merger-related costs in the determination of purchase accounting
adjustments for the pro forma balance sheet; (e) revised estimates of fair value
adjustments in the determination of purchased accounting adjustments for the pro
forma balance sheet (see note 2 below); and (f) revised pro forma adjustments to
GSB's balance sheet as of December 31, 1997 reflecting the acquisitions of
CENFED and RedFed.
2. The pro forma financial information set forth in this presentation reflects
preliminary purchase accounting adjustments in compliance with generally
accepted accounting principles. Estimates, including those relating to the fair
value of certain assets, liabilities and other events requiring recognition,
have been made in connection with the presentation of such pro forma financial
information based on information available as of the date hereof. Such estimates
may vary as additional information becomes available in the future. Actual
adjustments will be made on the basis of actual assets, liabilities and other
items as of the closing date of the merger on the basis of appraisals and
evaluations and, therefore, estimated fair value amounts at such time will
differ from those reflected in the pro forma financial information set forth
herein.
[CALIFORNIA FEDERAL [GOLDEN STATE
BANK LOGO] BANCORP LOGO]
<PAGE>
4
TRANSACTION OVERVIEW
Transaction: Merger of First Nationwide (Parent) Holdings
Inc. ("FNPH") into Golden State Bancorp Inc.
("GSB"). GSB shareholders retain their
existing shares
Consideration: - Current GSB shareholders to own between
55% and 58% of pro forma company
- GSB to distribute LTWs(TM) for 85% of
goodwill lawsuit as planned
- CalFed to leave a proportional amount of
proceeds from their lawsuit behind in the
company upon settlement
Accounting: Purchase Accounting applied to GSB/Fiscal year
changed to December 31
Tax Treatment: Tax-free to both GSB and FNPH shareholders
Management: CalFed management team to manage pro forma
company
- Gerald J. Ford - Chairman and CEO
- Carl B. Webb - President and COO
Board of Directors: 10 CalFed/5 GSB
Corporate Name: Golden State Bancorp - Holding Company
California Federal Bank - Operating Subsidiary
Management of Goodwill Stephen J. Trafton and Richard A. Fink to
Lawsuits: assume primary responsibility for management
of both GSB's and CalFed's goodwill lawsuits
[CALIFORNIA FEDERAL [GOLDEN STATE
BANK LOGO] BANCORP LOGO]
<PAGE>
5
TRANSACTION RATIONALE
- Strategically Compelling
- Financially Attractive
- Low Risk Transaction
- Creates Shareholder Value
[CALIFORNIA FEDERAL [GOLDEN STATE
BANK LOGO] BANCORP LOGO]
<PAGE>
STRATEGICALLY COMPELLING
<PAGE>
7
STRATEGICALLY COMPELLING
- Creates CA's 5th largest depository institution:
- $25 billion in deposits with a 6.4% statewide market
share
- $28 billion in total deposits and $51 billion in
total assets
- Marries GSB's low-cost deposit generation franchise with
CalFed's strong mortgage origination capability:
- GSB pro forma cost of funds of 4.82%
- Combined mortgage banking business among top 10 in
the US:
- Approximately $100 billion servicing portfolio,
7th nationally
- $10 billion in pro forma 1997 originations,
12th nationally
- Broader base to grow consumer and business banking
franchise:
- Combined $287 million in business loans outstanding
- $1 billion in consumer loans
- Provides CalFed with currency for ongoing M&A activity
[CALIFORNIA FEDERAL [GOLDEN STATE
BANK LOGO] BANCORP LOGO]
<PAGE>
8
CREATES A LEADING CALIFORNIA FRANCHISE
<TABLE>
<CAPTION>
(DOLLARS IN BILLIONS)
CALIFORNIA
RANK COMPANY DEPOSITS MARKET SHARE
---- ------- ---------- ------------
<S> <C> <C>
1. BankAmerica $81.4 20.7%
2. Wells Fargo 54.2 13.8
3. Ahmanson(1) 33.8 8.6
4. Washington Mutual 33.3 8.5
PRO FORMA 25.3 6.4
5. UnionBanCal 20.3 5.2
6. CalFed 13.7 3.5
7. Golden West 13.7 3.5
8. GSB(1) 11.6 3.0
9. Sanwa Bank 5.8 1.5
10. Citicorp 4.8 1.2
- - --------------
<FN>
(1) Pro forma for all pending acquisitions. Data as of June 30, 1997.
</FN>
</TABLE>
[CALIFORNIA FEDERAL [GOLDEN STATE
BANK LOGO] BANCORP LOGO]
<PAGE>
9
CALIFORNIA BRANCH OVERLAP
Pro Forma Company Has a Top Ranking in Each of CA's Most Populous Regions
[COUNTY-BY-COUNTY MAP INDICATING WHERE COMPANIES HAVE OVERLAPPING BRANCHES]
<TABLE>
<CAPTION>
Pro Forma Market Share ($ bn)
MSA DEPOSITS SHARE RANK
- - --- -------- ----- ----
<S> <C> <C> <C>
Los Angeles $9.4 7.3% 4
San Francisco 3.7 6.5 4
Orange County 2.4 7.1 5
Riverside - 2.0 10.4 3
San Bernadino
Oakland 1.6 5.0 5
Central Valley(1) 1.4 6.6 4
San Diego 0.9 3.9 6
<FN>
(1) Includes Fresno, Kern, Kings, Madera, Merced, San Joaquin, Stanislaus
and Tulare counties.
</FN>
</TABLE>
[CALIFORNIA FEDERAL [GOLDEN STATE
BANK LOGO] BANCORP LOGO]
<PAGE>
10
DEPOSIT PORTFOLIO COMPOSITION
- - - Pro forma GSB compares favorably with other large thrifts in checking
and other transaction accounts
<TABLE>
<CAPTION>
AT OR FOR THE QUARTER ENDED DECEMBER 31, 1997
(DOLLARS IN MILLIONS)
FNPH GSB(1) PRO FORMA WAMU AHM(2) GDW
- - ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Transaction Accounts
Savings & Money Market $3,142 $3,037 $6,179 $14,940 $10,028 $3,413
Checking 2,316 1,746 4,062 7,914 2,173 286
------ ------ ------ ------ ------ ------
Total $5,458 $4,783 $10,241 $22,854 $12,201 $3,699
====== ====== ====== ======= ======= ======
DDA Accounts/Total Deposits 14.3% 14.6% 14.4% 15.5% 5.6% 1.2%
Transaction Accounts/Total
Deposits 33.4 40.1 36.4 44.8 31.4 15.3
Cost of Deposits 4.54 4.39 4.48 4.18 4.46 5.04
Cost of Funds 4.97 4.82 4.91 4.90 4.92 5.36
- - ----------------------------------------------------------------------------------------
<FN>
(1) Pro forma for the CENFED and RedFed acquisitions.
(2) Deposits as of September 30, 1997.
</FN>
</TABLE>
[CALIFORNIA FEDERAL [GOLDEN STATE
BANK LOGO] BANCORP LOGO]
<PAGE>
11
MORTGAGE BANKING OPERATIONS
- - - Pro forma combined mortgage banking business ranks among the top
institutions in the U.S.
<TABLE>
<CAPTION>
(DOLLARS IN BILLIONS)
FNPH GSB(2) PRO FORMA
---- ------ ---------
<S> <C> <C> <C>
12/31/97 Servicing Portfolio $61.7 $38.2 $99.9
U.S. Rank(1) 10 23 7
Number of Loans Serviced (000s) 811 293 1,104
1997 Origination Volume $8.5 $1.5 $10.0
U.S. Rank(1) 15 -- 12
- - -----------------
<FN>
(1) Most recent available, as of or for the nine months ended September 30,
1997.
(2) Pro forma for CENFED and RedFed.
</FN>
</TABLE>
[CALIFORNIA FEDERAL [GOLDEN STATE
BANK LOGO] BANCORP LOGO]
<PAGE>
12
LOAN AND MORTGAGE-BACKED SECURITIES
- - - Combined company provides a broader base to grow the consumer and
business banking franchise
<TABLE>
<CAPTION>
AT DECEMBER 31, 1997
(DOLLARS IN BILLIONS)
FNPH GSB(1) COMBINED
---------------- ---------------- ----------------
BALANCE % BALANCE % BALANCE %
------- --- ------- --- ------- ---
<S> <C> <C> <C> <C> <C> <C>
1-4 Family $15.5(2) 72.4% $10.3 71.5% $25.8 72.1%
Multi-Family 3.0 14.1 2.1 14.6 5.1 14.3
Commercial Real Estate 2.2 10.3 1.4 9.7 3.6 10.1
Consumer Loans 0.7 3.3 0.3 2.1 1.0 2.8
Business -- -- 0.3 2.1 0.3 0.8
----- ------ ----- ------ ----- -----
Total Gross Loans $21.4 100.0% $14.4 100.0% $35.8 100.0%
===== ====== ===== ====== ===== =====
MBS $6.4 $2.8 $9.2
- - ---------------------------------------------------------------------------------
<FN>
(1) Adjusted for the CENFED and RedFed acquisitions.
(2) Includes $1.5 billion of loans held for sale.
</FN>
</TABLE>
[CALIFORNIA FEDERAL [GOLDEN STATE
BANK LOGO] BANCORP LOGO]
<PAGE>
FINANCIALLY ATTRACTIVE
<PAGE>
14
FINANCIAL IMPLICATIONS OF THE MERGER
- - - Significantly accretive to cash earnings
- - - Accretion predicated upon low risk in-market cost savings
- - - Refinance of existing leverage provides for "built-in"
earnings growth
[CALIFORNIA FEDERAL [GOLDEN STATE
BANK LOGO] BANCORP LOGO]
<PAGE>
15
SIGNIFICANTLY ACCRETIVE TO CASH EARNINGS
- - - Transaction results in 17% and 28% accretion to Cash EPS in calendar
1999 and 2000
- - - Transaction is modestly dilutive to Reported EPS - 2% in 2000 (with
full phase-in of cost savings)
- - - Accretion to Cash EPS predicated upon low risk in-market cost savings
of 46% of GSB's stand alone expense base
- - - Accretion also assumes reduction in leverage expense of $17.9
million in 1999 and $45.8 million in 2000
[CALIFORNIA FEDERAL [GOLDEN STATE
BANK LOGO] BANCORP LOGO]
<PAGE>
16
SIGNIFICANTLY ACCRETIVE TO CASH EARNINGS
<TABLE>
<CAPTION>
FOR THE CALENDAR YEAR
ENDED DECEMBER 31,
------------------------------
1998 1999 2000
------ ------ ------
<S> <C> <C> <C>
GSB Net Income(1) $150.6 $165.9 $182.9
FNPH Net Income 16.0(2) 66.5 69.6
Add: Effect of Debt Repayment/Refinancing -- 17.9 45.8
Less: Incremental Goodwill Amortization (17.3) (69.3) (69.3)
Add: Projected Cost Savings(3) 9.4 56.8 79.6
------ ------ ------
Pro Forma Reported Net Income $158.7 $237.8 $308.6
====== ====== ======
GSB Stand Alone EPS(1) $1.94 $2.14 $2.36
GSB Pro Forma EPS(4) 1.73 1.78 2.30
ACCRETION/(DILUTION) (10.8)% (16.8)% (2.1)%
Pro Forma Net Income $158.7 $237.8 $308.6
Add: Goodwill Amortization 43.6 134.3 134.3
------ ------ ------
Pro Forma Cash Net Income $202.3 $388.8 $442.9
====== ====== ======
GSB Stand Alone Cash EPS $2.13 $2.37 $2.59
Pro Forma Cash EPS (4) 2.21 2.78 3.31
ACCRETION/(DILUTION) 3.7% 17.4% 27.9%
- - ------------------------------------------------------------------------------
<FN>
(1) Pro forma CENF/REDF pending transactions. Based on First Call analysts'
consensus estimates as of February 4, 1998, adjusted to calendar year and
grown at a long term growth rate of 10%. Assumes 77.7 million fully
diluted shares for the purpose of projected net income.
(2) Based on anticipated close of merger of September 30, 1998. Represents one
quarter of earnings.
(3) Excludes synergies anticipated from pending CENF/REDF transactions, which
are included in GSB stand alone net income projections.
(4) Based on pro forma GSB ownership of 58%. Results in average FDSO of 91.7
million shares in 1998 and 133.9 million shares in 1999 and 2000.
</FN>
</TABLE>
[CALIFORNIA FEDERAL [GOLDEN STATE
BANK LOGO] BANCORP LOGO]
<PAGE>
17
LOW RISK IN-MARKET COST SAVINGS
- - - Cost savings based on low risk in-market consolidations
- - - Cost savings of $160 million (including those from CENFED and RedFed
acquisitions) represents 46% of GSB's stand alone expense base
- - - Cost savings achieved in First Nationwide/CalFed merger were 37% of
CalFed's stand-alone expense base in the first year
- - - Integration processes already underway
[CALIFORNIA FEDERAL [GOLDEN STATE
BANK LOGO] BANCORP LOGO]
<PAGE>
18
LOW RISK IN-MARKET COST SAVINGS
- - - Cost savings based on low risk in-market consolidations:
<TABLE>
<CAPTION>
PROJECTED SAVINGS
-------------------------------
GSB AS A % OF AS A % OF
STAND GSB COST COMBINED
FUNCTION ALONE(1) COMBINED(2) $ MM BASE COST BASE
- - ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Compensation & Benefits $170 $424 $90 53% 21%
Occupancy and Equipment 61 143 23 38 16
Marketing 23 37 12 53 33
Other 93 244 34 37 14
---- ---- ----
TOTAL EXPENSES 347 847 160 46 19
Less: CENF/REDF Cost Savings (29) (29) (29) -- --
---- ---- ----
Adjusted Total Expenses $319 $819 $131 41% 16%
- - ------------------------------------------------------------------------------------
<FN>
(1) Pro forma CENF and REDF. Based on most recent financial data as of
December 31, 1997.
(2) First Nationwide expense base represents nine months ended September 30,
1997, annualized.
</FN>
</TABLE>
[CALIFORNIA FEDERAL [GOLDEN STATE
BANK LOGO] BANCORP LOGO]
<PAGE>
19
REFINANCE OF LEVERAGE - BUILT-IN EARNINGS
GROWTH
- - - Paydown/refinancing of outstanding debt and preferred instruments
provides meaningful built-in upside
- - - Tangible book value per share expected to double by end of year 1999
- - - Bank projected to remain "well capitalized" at closing
- - - Holding Company will continue to be significantly leveraged at closing
[CALIFORNIA FEDERAL [GOLDEN STATE
BANK LOGO] BANCORP LOGO]
<PAGE>
20
REFINANCE OF LEVERAGE - BUILT IN EARNINGS GROWTH
- - - Paydown/refinancing of outstanding debt and preferred instruments
provides meaningful built-in upside
<TABLE>
<CAPTION>
(DOLLARS IN MILLIONS)
- - --------------------------------------------------------------------------------
AFTER-TAX
EXPECTED SAVINGS BY
SECURITY REDEMPTION BALANCE REFINANCING(1)
- - --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FIRST NATIONWIDE PARENT 12 1/2%
HOLDINGS Senior
Notes 2000 $455 $11.8
FIRST NATIONWIDE HOLDINGS 12 1/4%
Senior
Notes 1999 200 4.9
9 1/8%
Senior
Notes 2001 140 0.9
10 5/8%
Notes 2001 575 8.7
CALIFORNIA FEDERAL 11 1/2%
Preferred 1999 301 25.0
10 5/8%
Preferred 1999 172 12.8
------ ----
$1,843 $64.3
====== =====
- - --------------------------------------------------------------------------------
TOTAL AFTER-TAX SAVINGS BY REFINANCING $64.3
SAVINGS PER SHARE $0.48
- - --------------------------------------------------------------------------------
<FN>
(1) Assumes an average financing cost of 8.0% for subordinated debt, 5.5% for
cash and a 42% tax rate. Debt refinanced with sub debt; preferred
refinanced with excess cash.
</FN>
</TABLE>
[CALIFORNIA FEDERAL [GOLDEN STATE
BANK LOGO] BANCORP LOGO]
<PAGE>
21
MAINTAIN WELL CAPITALIZED POSITION
- - - Bank projected to be well capitalized upon closing, although Holding
Company will continue to be significantly leveraged:
-- Tangible book value per share expected to increase to $5.50 at
closing
<TABLE>
<CAPTION>
(DOLLARS IN MILLIONS)
- - --------------------------------------------------------------------------------
GSB (1) FNPH
12/31/97 12/31/97 ADJ PRO FORMA(2)
- - --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
HOLDING COMPANY
Intangibles $245 $676 $980 $1,901
Total Assets 19,226 31,362 1,292 51,880
Total Equity 1,287 206 929 2,421
Tangible Leverage Ratio 5.49% (1.53)% -- 1.04%
Tangible Book Value Per
Share $13.42 NM -- $3.89
BANK
Intangibles $248 $676 $980 $1,904
Total Assets 19,228 31,296 1,292 51,816
Common Equity 1,156 1,787 996 3,940
Total Equity 1,271 2,260 996 4,528
Core Capital Ratio 5.24% 5.65% -- 5.41%
- - --------------------------------------------------------------------------------
<FN>
(1) Pro forma for acquisitions of CENFED and RedFed.
(2) At December 31, 1997.
</FN>
</TABLE>
[CALIFORNIA FEDERAL [GOLDEN STATE
BANK LOGO] BANCORP LOGO]
<PAGE>
CREATES SHAREHOLDER VALUE
<PAGE>
23
CREATES SHAREHOLDER VALUE
- - - GSB is an attractive investment opportunity:
-- Significantly undervalued based on range of valuation
methodologies
-- Attractive investment attributes relative to peers
-- Leverage refinance provides meaningful upside
-- Management interests clearly aligned with shareholders
[CALIFORNIA FEDERAL [GOLDEN STATE
BANK LOGO] BANCORP LOGO]
<PAGE>
24
ATTRACTIVE VALUATION DYNAMICS
- - - Attractive underlying valuation "story" driven by strength of deposit
franchise
<TABLE>
<CAPTION>
AT DECEMBER 31, 1997
- - --------------------------------------------------------------------------------
PEER GROUP
---------------------------------
GSB PRO PEER
FORMA AVG AHM(1) COFI GDW(1) WAMU
- - --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Checking Accounts/Total
Deposits 14.4% 8.5% 5.6% 11.6% 1.2% 15.5%
Transaction Accounts/Total
Deposits 36.4 33.0 31.4 40.5 15.3 44.8
CDs/Total Deposits 63.6 67.0 68.6 59.5 84.7 55.2
- - --------------------------------------------------------------------------------
<FN>
(1) Deposit composition as of September 30, 1997.
</FN>
</TABLE>
[CALIFORNIA FEDERAL [GOLDEN STATE
BANK LOGO] BANCORP LOGO]
<PAGE>
25
ATTRACTIVE VALUATION DYNAMICS
- - - Profitability measures in-line with peer group
<TABLE>
<CAPTION>
FOR THE QUARTER ENDED DECEMBER 31, 1997
- - --------------------------------------------------------------------------------
PEER GROUP
GSB PRO PEER -------------------------------
FORMA AVG AHM COFI GDW WAMU
- - --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NIM 2.78% 2.75% 2.69% 2.93% 2.36% 3.03%
Efficiency Ratio 43.4 45.3 49.6 46.3 33.9 51.2
(Cash) ROA 0.82 0.96 0.73 1.23 0.88 1.01
(Cash) ROE 78.3 17.7 19.4 18.8 12.9 19.6
</TABLE>
[CALIFORNIA FEDERAL [GOLDEN STATE
BANK LOGO] BANCORP LOGO]
<PAGE>
26
COMPARISON TO PEERS
- - - Implied value of underlying franchise trades at a discount to peers
<TABLE>
<CAPTION>
- - --------------------------------------------------------------------------------------
GSB PRO PEER AVERAGE
FORMA MULTIPLE(1) AHM COFI GDW WAMU
- - --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Market Price(2) $29.41(3) -- $60.50 $58.08 $87.50 $68.63
Market Price to:
Book Value(4) 1.63x 2.26x 2.26x 2.69x 1.85x 3.10x
Tangible Book
Value(4) 7.57 2.79 3.07 2.88 1.85 3.32
1999E (Cash) EPS 10.1 11.5 11.7 12.0 11.5 11.7
2000E (Cash) EPS 8.9 10.4 10.7 10.7 10.4 10.2
Deposit Premium 12.1% 13.9% 11.2% 23.6% 9.5% 22.7%
- - --------------------------------------------------------------------------------------
<FN>
(1) Consists of AHM, ASFC, BVCC, COFI, DME, DSL, GDW, GPT, SVRN, WAMU and
WFSL.
(2) Market data as of February 17, 1998.
(3) Implied underlying bank franchise value, excluding value of goodwill
lawsuit.
(4) Pro forma data as of December 31, 1997.
</FN>
</TABLE>
[CALIFORNIA FEDERAL [GOLDEN STATE
BANK LOGO] BANCORP LOGO]
<PAGE>
27
COMPONENTS OF VALUE
- - - Bank currently trades at an implied value of approximately $29.41 when
backing out value of goodwill lawsuit
<TABLE>
- - --------------------------------------------------------------------------------
<S> <C>
Market Price(1) $36.56
Less: Value of LTWs(TM)(2) (6.08)
Less: Value of Bank's Retained Interest(2) (1.07)
------
Implied Value of Underlying Franchise $29.41
- - --------------------------------------------------------------------------------
<FN>
(1) Based on GSB share price as of February 17, 1998.
(2) See following page for estimated value of LTWs(TM).
</FN>
</TABLE>
[CALIFORNIA FEDERAL [GOLDEN STATE
BANK LOGO] BANCORP LOGO]
<PAGE>
28
VALUE OF GOODWILL LAWSUIT
- - - Tax efficient separation of goodwill lawsuit creates value:
-- LTWs(TM) likely to trade at significant premium to other similar
securities given time value and liquidity premium
<TABLE>
<CAPTION>
(DOLLARS IN MILLIONS)
- - --------------------------------------------------------------------------------
COMPARABLE SECURITY
-----------------------------------
AVERAGE CALGZ CALGL CCPRZ
- - --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Goodwill Written-Off $485 $485 $299
Market Value of Lawsuit -- 447 452 279
Market Value/Goodwill
Written-Off 92.8% 92.1% 93.1% 93.3%
Add: Time Value/ Liquidity
Premium 20% 20% 20% 20%
Implied Market Value of GSB
Lawsuit(1) $613 $608 $615 $616
Adjusted Market
Value/Goodwill Written-Off 111% 111% 112% 112%
Implied Value/Share: $7.15(2) $7.09 $7.18 $7.19
LTW(TM) Value (6.08)(3) (6.03) (6.10) (6.11)
------ ----- ---- ----
Value Remaining in Bank $1.07 $1.06 $1.08 $1.08
- - --------------------------------------------------------------------------------
<FN>
(1) Based on original goodwill written off of $550 million.
(2) Based on 85.7 million fully distributed shares outstanding.
(3) Based on distribution of 85% of Adjusted Litigation Proceeds.
</FN>
</TABLE>
[CALIFORNIA FEDERAL [GOLDEN STATE
BANK LOGO] BANCORP LOGO]
<PAGE>
29
PEER GROUP ANALYSIS
- - - Based on peer group multiples, GSB's underlying banking franchise is
significantly undervalued
<TABLE>
<CAPTION>
(DOLLARS IN PER SHARE AMOUNTS)
- - --------------------------------------------------------------------------------
GSB PEER AVG GSB IMPLIED
PRO FORMA MULTIPLE(1) PRICE/SHARE
- - --------------------------------------------------------------------------------
<S> <C> <C> <C>
Book Value(2) $18.09 2.26x $40.90
Tangible Book Value(2) 3.89 2.79 10.90
1999E Cash EPS 2.78 11.5 32.00
2000E Cash EPS 3.31 10.4 34.40
Deposit Premium 12.1%(3) 13.9% 33.10
- - --------------------------------------------------------------------------------
<FN>
(1) Consists of AHM, ASFC, BVCC, COFI, DME, DSL, GDW, GPT, SVRN, WAMU and
WFSL.
(2) Pro forma data as of December 31, 1997.
(3) Based on implied underlying bank value of $29.41, excluding the value
of goodwill lawsuit.
</FN>
</TABLE>
[CALIFORNIA FEDERAL [GOLDEN STATE
BANK LOGO] BANCORP LOGO]
<PAGE>
30
REGRESSION ANALYSIS
- - - While applying Price/Tangible Book value multiples yields low implied
valuation, banking franchise is meaningfully undervalued when taking into
account cash return on equity
[Graphic showing x-y graph, with x-axis corresponding to 4th quarter
1997 cash return on equity and the y-axis corresponding to the ratio
of market price to tangible book value, with data points for each of
Golden State and H.F. Ahmanson & Company, Astoria Financial
Corporation, Bay View Capital Corporation, Dime Bancorp, Inc.,
Downey Financial Corp., Golden West Financial Corporation, Sovereign
Bancorp, Inc., Washington Mutual, Inc. and Washington Federal, Inc.;
a line representing a least-squares fit to such data points (other
than Golden State) with an indicated R2 of 0.8107; and resulting
implied valuations per share of Golden State of $37.01 and $40.40,
respectively, based on Golden State's projected 1999 cash return on
equity with expected merger cost savings 75% and 100% phased-in,
respectively]
[CALIFORNIA FEDERAL [GOLDEN STATE
BANK LOGO] BANCORP LOGO]
<PAGE>
31
BANK LEVEL ANALYSIS
- - - Applying peer group multiples to value bank level earnings
"neutralizes" impact of leverage:
-- $1,370 MM in net Holding Company debt can then be deducted from
implied valuation to yield an implied value range for GSB
-- Methodology does not ascribe any value to GSB's Holding Company
debt
<TABLE>
<CAPTION>
- - --------------------------------------------------------------------------------------
GSB PRO LESS:
FORMA/PER PEER GROUP IMPLIED HOLDING IMPLIED
SHARE (BANK AVG. PRICE OF COMPANY VALUE/
LEVEL) MULTIPLE BANK/SHARE DEBT/SHARE GSB SHARE
- - --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1999E Cash EPS $3.52 11.5x $40.50 $(10.20) $30.30
2000E Cash EPS 4.05 10.4 42.10 (10.20) 31.90
Tangible Book
Value(1) 14.12 2.79 39.40 (10.20) 29.20
Book Value(1) 28.32 2.26 64.00 (10.20) 53.80
Deposit Premium 12.1%(2) 13.9% 43.30 (10.20) 33.10
- - --------------------------------------------------------------------------------------
<FN>
(1) Pro forma data as of December 31, 1997.
(2) Based on implied underlying bank franchise value of $29.41, excluding the
value of goodwill lawsuit.
</FN>
</TABLE>
[CALIFORNIA FEDERAL [GOLDEN STATE
BANK LOGO] BANCORP LOGO]
<PAGE>
32
CONCLUSION
- - - Strategically Compelling
- - - Financially Attractive
- - - Low Risk Transaction
- - - Creates Shareholder Value
[CALIFORNIA FEDERAL [GOLDEN STATE
BANK LOGO] BANCORP LOGO]
<PAGE>
APPENDIX
<PAGE>
34
ANTICIPATED TIMETABLE
Feb Announce GSB/CalFed Transaction
Mar GSB Completes CENFED Acquisition
Apr GSB Issues LTWs(TM)
May GSB Issues LTWs(TM)
GSB Repurchases Shares to be
Issued for RedFed
Jun GSB Repurchases Shares to be
Issued for RedFed
GSB Completes RedFed Acquisition
Jul GSB Completes RedFed Acquisition
Aug GSB/FNPH Transaction
Pricing Period; Closing
Sep GSB/FNPH Transaction
Pricing Period; Closing
[CALIFORNIA FEDERAL [GOLDEN STATE
BANK LOGO] BANCORP LOGO]
<PAGE>
35
SUMMARY STRUCTURE
GSB SHAREHOLDERS RETAIN THEIR EXISTING SHARES
RONALD O. PERELMAN
|
| 100% GSB Shares
| [Arrow up to Perelman]
FIRST NATIONWIDE Stock Merger GOLDEN STATE
PARENT HOLDINGS ----------------------------> BANCORP
| [Arrow down to Ford]
| 80% GSB Shares |
| 20% |
FIRST NATIONWIDE--------GERALD J. FORD (1) |
HOLDINGS |
| |
| 100% |
| |
CALIFORNIA Operations Combined GLENDALE
FEDERAL BANK{-------------------------------}FEDERAL BANK
(1) Ford's interest in First Nationwide Holdings to be exchanged for GSB
stock.
[CALIFORNIA FEDERAL [GOLDEN STATE
BANK LOGO] BANCORP LOGO]
<PAGE>
36
SUMMARY OF COLLAR
<TABLE>
<CAPTION>
- - --------------------------------------------------------------------------------
GSB PRO FORMA GSB PRO FORMA
ADJUSTED FULLY-DILUTED PERELMAN/FORD
PRICE OWNERSHIP OWNERSHIP
- - --------------------------------------------------------------------------------
<S> <C> <C>
$32.00 or less 58% 42%
> $32.00 but less than $32.50 57 43
> or = $32.50 but less than $33.00 56 44
$33.00 or more 55 45
- - --------------------------------------------------------------------------------
</TABLE>
- - - Shares issued to Perelman/Ford at closing according to pro forma
ownership percentage
- - - Assuming an adjusted price of $32.00, the implied current trading value of
GSB shares would approximate $38.00, based on a $6.00 per share value
ascribed to GSB's goodwill litigation claim
[CALIFORNIA FEDERAL [GOLDEN STATE
BANK LOGO] BANCORP LOGO]
<PAGE>
37
PRO FORMA ASSET QUALITY DATA
<TABLE>
<CAPTION>
(DOLLARS IN MILLIONS)
- - --------------------------------------------------------------------------------
PRO
CALFED GSB(1) FORMA
- - --------------------------------------------------------------------------------
<S> <C> <C> <C>
Non-Performing Loans (NPLs) $192.2 $127.7 $319.9
REO 80.1 57.5 137.6
Non-Performing Assets (NPAs) 272.3 185.2 457.5
Loan Loss Reserve 439.2 188.3 627.5
NPAs/Assets 0.87% 0.96% 0.88%
Reserves/NPLs 2.29x 1.01x 1.96x
Reserves/Loans 2.10% 1.33% 1.79%
- - --------------------------------------------------------------------------------
<FN>
(1) Pro forma for CENFED and RedFed.
</FN>
</TABLE>
[CALIFORNIA FEDERAL [GOLDEN STATE
BANK LOGO] BANCORP LOGO]
<PAGE>
38
PRO FORMA BALANCE SHEET DATA
<TABLE>
<CAPTION>
AT DECEMBER 31, 1997
(DOLLARS IN MILLIONS)
- - --------------------------------------------------------------------------------
PRO
FNPH GSB(1) ADJUSTMENTS FORMA
---- ---- ----------- ---------
<S> <C> <C> <C> <C>
Loans, net $20,908 $14,151 19 $35,077
MBS 6,414 2,757 44 9,216
Intangibles 676 245 $980 1,901
Total Assets 31,362 19,226 1,292 51,880
Wholesale Borrowings 13,075 5,711 -- 18,786
Deposits 16,203 11,941 -- 28,143
Common Equity 206 1,171 1,044 2,421
Preferred Equity -- 116 (116) --
- - ------------
<FN>
(1) Pro forma for acquisitions of CENFED and RedFed.
</FN>
</TABLE>
[CALIFORNIA FEDERAL [GOLDEN STATE
BANK LOGO] BANCORP LOGO]
