<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [_]
Filed by party other than the Registrant [X]
Check the appropriate box:
[ ] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[X] Soliciting Material Pursuant
to Rule 14a-11(c) or Rule 14a-
12
FIRST INTERSTATE BANCORP
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
WELLS FARGO & COMPANY
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[X] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
Certain members of Wells Fargo's management used the following materials
in preparation for and in connection with a slide presentation and accompanying
remarks to investors. The presentation was made in New York City at the Met Life
Building on the evening of November 6, 1995. Certain prepared remarks of Paul
Hazen, CEO of Wells Fargo, are included. The information set forth below
was the first slide. The successive pages also represent slides.
Wells Fargo National Rankings
- --------------------------------------------------------------------------------
#1 -- Auto leasing (among banks)
#1 -- Mutual fund sales to bank customers
#2 -- Number of loans to small business
#2 -- Home equity lender
#2 -- Agricultural Lender
<PAGE>
WELL FARGO PROFITABILITY
- --------------------------------------------------------------------------------
RANKING
-------
Return on Assets: #1 of 50
2.07% largest banks
Return on Equity: #1 of 50
30% largest banks
Creation of Top quartile
shareholder value of Fortune 500
<PAGE>
Graphic: Depicts above and below water line view of a duck. Above water
everything looks quiet, but below the water line the legs are paddling like mad.
This graphic is used as an analogy to Wells Fargo's business.
[GRAPHIC APPEARS HERE]
<PAGE>
- --------------------------------------------------------------------------------
How We Earned
Our Reputation
- --------------------------------------------------------------------------------
<PAGE>
Bank Branches
per 10,000 Households*
5-- BAR GRAPH 3 BAR GRAPH 4
4-- BAR GRAPH 2
3-- BAR GRAPH 1
2--
1--
0--
---------------------------------------------------------------------------
1960 1970 1980 1990
*Bar graph represents approximate numbers of bank branches per 10,000
households.
Source: California State Banking Commission
U.S. Bureau of the Census
<PAGE>
Graphic: Title page of Harvard Business Review article "Management
Lessons from Airline Deregulation" by Thomas S. Robertson and Scott Ward.
<PAGE>
[GRAPHIC]
Picture of door of Wells Fargo Bank branch with sign reading
"We've Moved
to
One Montgomery Street,
San Francisco"
<PAGE>
DEPOSITS PER BRANCH
1982 1990
---- ----
$24.8mm $71.5mm
[GRAPHIC] [GRAPHIC]
<PAGE>
Customers who agree their Bank (WFB)
- -- "Gives Good Service to Customers"*
1984 1985 1986 3Q86
---- ---- ---- ----
60% 60% 55% 45%
* Percentages rounded to nearest 5%.
<PAGE>
Number of Tellers Prior to Modeling
# Transactions*
57 Teller Hours
130 210 170 220 210 210 210 230 250
--- ---- ---- ---- --- --- --- --- --- ---
9AM 10AM 11AM Noon 1PM 2PM 3PM 4PM 5PM 6PM
* Transactions averaged over period and rounded to nearest multiple of 10.
NOTE: The overlay of the bar graph demonstrates that one hour modeling results
in inefficient use of tellers.
<PAGE>
Number of Tellers Prior to modeling
# Transactions*
[CHART]
55 1/2 Teller Hours
45 80/110 90/75 100/110 110/110 90/90 120/105 100/95 130/140 105
--- ------ ----- ------- ------- ----- ------- ------ ------- ---
9AM 10AM 11AM Noon 1PM 2PM 3PM 4PM 5PM 6PM
* Transactions averaged over period and rounded to nearest multiple of 5.
Note: The overlay of the bar graph demonstrates that half-hour modeling results
in efficient use of tellers.
<PAGE>
Graphic of newspaper article including the following text:
"Bank robber
foiled again,
police say
Man held in heist try
two days after release
By JOHN WHITEHAIR
Sun Staff Writer
SAN BERNARDINO--
William Howard Croghan
had two days of freedom.
Police Detective Steve
Barilics said Croghan had
intended to rob the nearby
Bank of America at Third
and D streets but com-
plained to police that the
teller lines were too long."
<PAGE>
GRAPHIC: Picture of advertisement showing Wells Fargo stage coach and
banner reading: "Doors Now Open 9 to 6."
<PAGE>
GRAPHIC: Newspaper/magazine advertisement reading:
"SATURDAY JUST GOT LONGER. Wells Fargo is now open 10 to 4 every Saturday.
Now you have 50% more time to bank on Saturdays. And more freedom to plan your
day because we're open till 4 in the afternoon.
So even if your Saturday morning chores run well past noon, you've still
plenty of time to run into Wells Fargo. Open a checking account or IRA.
Invest in a CD or do whatever else you'd like inside the bank.
Weekdays we're open 9 to 6. You can use our ATM's and person-to-person phone
service 24 hours a day seven days a week. Wells Fargo comes through with longer
hours for Californians."
[GRAPHIC]
WELLS FARGO BANK
<PAGE>
GRAPHIC: Picture of Wells Fargo ATM machine.
<PAGE>
GRAPHIC: Picture of newspaper/magazine advertisement:
"NEW! 24-HOUR
PERSON-TO-PERSON
SERVICE WITH EVERY
CHECKING ACCOUNT
[GRAPHIC APPEARS HERE]
ASK US ABOUT IT."
<PAGE>
Customers who agree their Bank (WFB)
- -- "Gives Good Service to Customers"*
[CHART]
1984 1985 1986 1987 1988 1989 1990 1991 1992
---- ---- ---- ---- ---- ---- ---- ---- ----
60% 60% 55% 50% 50% 60% 65% 65% 65%
* Percentages rounded to the nearest 5%.
<PAGE>
1982-1990 COST SAVINGS
1982 1990
==== ====
Non-Interest Expense
---------------------
Core Deposits + Loans 2.7% 1.9%
<PAGE>
1982-1992 COST SAVINGS
1982 1990
---- ----
Non-Interest Expense
--------------------
Core Deposits + Loans 2.7% 1.9%
--------------------------------------------
Cumulative Cost Savings:
Over $3 Billion
--------------------------------------------
<PAGE>
Chart displaying various "Wells Fargo milestones" on approximate dates, as
follows:
Centralize Underwriting: 1981
Close/Consolidate Branches: 1982
Crocker-First Mega Merger: 1986
Flex-Scheduled Tellers: 1987
24-Hour Telephone Service: 1988
9-6 Hours: pre-1989
Saturday Hours: pre-1989
[CHART APPEARS HERE]
<PAGE>
GRAPHIC: Partial reproduction of newspaper article from The New York Times
dated November 22, 1995 and entitled "After the Gold Rush: Wells Fargo Bets
Heavily on Electronic Banking". Featured Text Reads:
"The question is
whether Wells Fargo
is like a marathon
runner who hasn't
eaten enough
carbohydrates: they
may hit the 25th mile
and start eating into
the muscle."
<PAGE>
GRAPHIC: Partial reproduction of newspaper article from The New York Times dated
November 22, 1995 and entitled "After the Gold Rush -- Wells Fargo Bets Heavily
on Electronic Banking". Featured text reads:
"And some bankers
wonder whether
Wells Fargo is,
in effect, eating
its seed corn."
<PAGE>
Topic heading title page with text reading:
"Small
Business"
<PAGE>
A Business is Small If...
- --------------------------------------------------------------------------------
The Owner...
sole proprietor
partner
principal officer
...Is the primary financial decision
maker
- --------------------------------------------------------------------------------
We Bank the Owner, Rather than the Business
<PAGE>
Small Business Lending
[GRAPHIC APPEARS HERE]
1989 1990 1991 1992 1993 1994 1995
---- ----- ----- ----- ----- ----- -----
Total Loan Commitments*: $750 1,500 2,000 2,500 2,750 3,500 4,750
Ending Outstandings: 500 1,000 1,250 1,500 1,750 2,000 2,500
*Amounts rounded to nearest $250,000,000. Dollar amounts in table in millions.
<PAGE>
Small Business
California Market Share*
1989 1993
Checking ---- ----
Accounts 13% 18%
Loans 1% 8%
*Original accompanied by pie-graphs.
<PAGE>
GRAPHIC: Shows graphic representation of cut-outs from newspaper headlines. The
feature headlines are as follows:
The Oakland Tribune, May 11, 1993: "Wells Fargo increases small business loans"
The San Diego Union-Tribune, May 11, 1993: "Wells Fargo aiding small firms"
Novato Advance, May 19, 1993: "Wells Fargo commits to Marin small business"
The Sacramento Bee, Tuesday, May 11, 1993: "Wells commits $2 billion to small
business in state"
The Fresno Bee, May 13, 1993: "Wells Fargo aims to boost Valley loans"
The Sacramento Bee, May 11, 1993: "Wells Fargo trumpets lending program"
Contra Costa Times, May 11, 1993: "Wells will accelerate its lending to
business"
<PAGE>
[GRAPHIC APPEARS HERE]
GRAPHIC: Entitled "Small Business Segments". This is a bar chart showing the
small business segments divided in terms of the present value of the business
included in such segment.
<PAGE>
GRAPHIC: Entitled "Cost to Acquire Small Business Segments".
[GRAPHIC APPEARS HERE]
This is a bar chart showing that small business with comparatively lower
present values are more difficult to serve properly with the face to face sales
force.
<PAGE>
GRAPHIC: Entitled: "Customer Acquisition Challenge".
[GRAPHIC APPEARS HERE]
This is a bar chart showing that (i) the key to profitability in serving small
businesses with high present values is increased productivity and (ii) the key
to profitability in serving small businesses with low present values is
developing better processes for reviewing and granting applications for loans.
<PAGE>
Our Thinking
. Growing, underserved market
. Opportunity in all segments
. Our efficiency rankings suggested other banks must be unprofitable
. Challenge was to create lower cost channels
. Make it work in California, take it national...if...
<PAGE>
"GRAPHIC: Displays Wells Fargo's aggressive attitude to redesigning its business
sales force.
<PAGE>
GRAPHIC: Entitled "And...Create a Direct Channel". This graphic displays various
means by which Wells Fargo communicates directly with customers, i.e. phone,
mail and computer.
<PAGE>
GRAPHIC: This is a reproduction of the cover of the book "The Machine that
Changed the World" by James P. Womack, Daniel T. Jones and Daniel Roos.
<PAGE>
GRAPHIC: Entitled "Changing the Sales Force". This graphic displays the change
in the nature of Wells Fargo's sales force from a force that works primarily in
the office to a one that operates primarily from the field.
[GRAPHIC APPEARS HERE]
<PAGE>
GRAPHIC: Entitled "Time Study Business Account Executive"
This graphic breaks down the typical Business Account Executives split of time
between various responsibilities. The breakdown is as follows:
Service
Customer Internal Issues
35% 30% and 20%
<PAGE>
GRAPHIC: Entitled "Lending Process." This graphic depicts the lending process,
including the steps of prospecting, selling and underwriting, booking and
servicing and renewal.
<PAGE>
GRAPHIC: Entitled "Technology Enables New Process." This graphic depicts the
ways in which technology enables new lending processes.
<PAGE>
GRAPHIC: Entitled "Specialists For Each Activity." This graphic depicts how
specialists are utilized at each stage in the lending process.
<PAGE>
Better Process in Less Time...
New
Process Change
------- ------
Hand-Offs 1 or 2 (95)%
Sales Force 200 (67)%
Days to Decision 1 (75)%
<PAGE>
GRAPHIC: Entitled "...And Increases New Loan Originations."
This graphic compares Wells Fargo's new loan origination in the small business
sector: $570 million in 1993 to $850 million for year to date 1995, an increase
of 49%.
<PAGE>
Graphic entitled "Double and Halve" depicting "New Loans" doubling and
"Expenses" being cut in half.
<PAGE>
Graphic entitled "Business Direct" illustrating that the bank should say "yes"
to loans, but not spend extensive time "touching" the customer.
<PAGE>
Small Lines...
----------------------------------------
WFB Business Line
. $20,000 Average Line
. Unsecured
. Revolving
. Prime + 3.75% to 8.75%
. Renews without Paperwork
. Check, Card, Phone Access
----------------------------------------
<PAGE>
Graphic of man standing in front of street lined with small businesses and the
following text:
...To Small Customers
. Feather Supplier Napa
. Furniture Liquidator Kansas City
. Childcare Center Baltimore
. Auto Repair Boston
. Wholesale Jeweler Dallas
<PAGE>
Graphic with arrows connecting the following words and pictures to show that
each action leads to the next.
Mass Market Customer
Acquisition*
Target [people]
Solicit [telephone and letter]
Apply [computer printer, letter]
Underwrite Statistically [computer]
Manage Risk Statistically [computer]
*Bracketed text describes drawings that accompany the text in the slide.
<PAGE>
Graphics illustrating that loan applicants are "touched" at limited points
during the process.
Hands Touch Only One Step
Target
Solicit
Apply
Underwrite Statistically
Manage Risk Statistically
Target
<PAGE>
Graphic of an arrow spanning the entire United States with the following text:
Taking Business Direct National
7+ Million Pieces of Mail 2+ Million Phone Calls
200,000+ Applications 60,000+ Lines
<PAGE>
Graphic of man on a telephone accompanying the following text:
Low-Cost Service
National Business Banking Center
One Call
Service and Sales
---
<PAGE>
Creating..."You Know Me!"
. Ask about their business
. Store and use the information
. Learn about their behavior
. Store and use the information
. Make learning apparent in our contact
<PAGE>
National Telephone Center
Sales Closed*
[CHART]
2000 2000 -- [BAR
GRAPHIC]
1000 -- [BAR
GRAPHIC]
750 -- [BAR
GRAPHIC]
0
------------------------------------------------------------
1st Qtr 2nd Qtr 3rd Qtr
1995 Booked Accounts
* Numbers rounded to the nearest 250.
<PAGE>
Return on Acquisition Cost
10X
[BAR GRAPHIC]
5X
[BAR GRAPHIC]
2X
[BAR GRAPHIC]
----------------------------------------
$15 K $25 K $50 K
<PAGE>
Small Business
California Loan Market Share
1989 1993 1995
---- ---- ----
1.% 8% 15%
<PAGE>
Growth that is Profitable
LINE OF BUSINESS RESULTS (estimated)
------------------------------------
WELLS FARGO & COMPANY
This is a graphic depicting Wells Fargo's presentation of its line of business
results as shown in its Quarterly Report on Form 10-Q for the period ended
September 30, 1995.
<PAGE>
Growth that is Profitable
Business
Banking Group
-------------
3Q95 3Q94
---- ----
Net income $ 29 $ 18
==== ====
Average loans $2.5 $1.9
Average assets 3.8 3.1
Average core deposits 6.4 7.1
Return on equity 33% 24%
<PAGE>
Growth that is Profitable
Business
Banking Group
-------------
3Q95 3Q94
---- ----
Net interest income $ 94 $ 76
Provision for loan losses 9 7
Noninterest income 38 31
Noninterest expense 72 67
---- ----
Return on equity 33% 24%
<PAGE>
To Grow Profits 30% Per Year
. Strategies can sustain growth for couple more years
. Working on strategies for longer term growth
"Wells Fargo
Arithmetic"
Profits: 30%
Revenues: 20%
Expenses: 4%
<PAGE>
Chart displaying various "Wells Fargo Milestones" on approximate dates, as
follows:
Flex-Scheduled Tellers: 1987
24-Hour Telephone Service: 1988
Saturday Hours: pre-1989
9-6 Hours: pre-1989
Redesign Small Business Sales
Force: 1993
Shorten Underwriting Process: 1993
Create Small Business Direct Channel: mid-1995
<PAGE>
- --------------------------------------------------------------------------------
Physical
Distribution
- --------------------------------------------------------------------------------
<PAGE>
Coffee Consumption by Age Group
(% who drink coffee)
--------------------------
Age 1972 1982 1992
------ ---- ---- ----
25-34: 49% 35% 27%
35-44: 58% 46% 37%
45-54: 63% 54% 43%
Source: McKinsey Consumer Practice
<PAGE>
The Starbucks Story
Sales Growth in Millions*
1988 1989 1990 1991 1992 1993
---- ---- ---- ---- ---- ----
$10 $20 $30 $50 $ 90 $150
[LOGO of Starbucks Coffee]
*Rounded to the nearest ten million.
<PAGE>
GRAPHIC: Picture of a coffee shop
<PAGE>
GRAPHIC: Picture of a Starbucks coffee shop
<PAGE>
GRAPHIC: Picture of a Taco Bell restaurant
<PAGE>
GRAPHIC: Picture of a Taco Bell Express restaurant
<PAGE>
Customer Perspective:
There is no inherent value
in visiting a branch.
<PAGE>
Customer Perspective:
There is no inherent value
in visiting a branch.
The best location
is somewhere
I'm already going.
<PAGE>
Increasing Staffed Outlets
[BAR CHART]
615 985 1,075
--- --- -----
Nov 1994 Dec 1995 Dec 1996
<PAGE>
Deploying New Types of Outlets
Percent of Outlets
- ------------------
YE 1994: YE 1996:
Banking Centers - 2% Banking Centers - 49%
In-Store Branches - 4% In-Store Branches - 23%
Traditional - 94% Traditional - 28%
<PAGE>
[Film clip shown at this point in the presentation.]
<PAGE>
Economic Implications
. Increase acquisition
rate of new households
<PAGE>
Household Acquisition Varies
By Type of Outlet
Checking Households Acquired/FTE
@Established Outlets
[BAR CHART]
7.2 10.3 17.4
--- ---- ----
Traditional In-Store Banking Centers
<PAGE>
Implications of Changing FTE Mix
% FTE by Type of Outlet
------------------------
1995 1996 1997
---- ---- ----
Traditional 92% 74% 58%
In-Store 5 15 25
Banking Centers 3 11 17
Acquisition
Capacity
(1995=100) 100 114 128
<PAGE>
Economic Implications
. Increase acquisition
rate of new households
. Lower overall
distribution costs
<PAGE>
Physical Outlet Cost Comparison
Supermarket
Traditional In-Store Center
----------- -------- -----------
One-Time
Opening
Costs $1.2 MM $250 K $65 K
FTE Staff 11.7 6.1 1.8
Annual
Operating
Costs $880 K $530 K $150 K
<PAGE>
What Additional
Convenience Can
Customers Get for
5 Traditional Branches?
<PAGE>
5 Traditional Branches =
8 In-Store Branches
OR
28 Banking Centers
<PAGE>
5 Traditional Branches =
4 In-Store Branches
+
8 Banking Centers
+
$1MM in Cost Savings
<PAGE>
Retail Physical Distribution Costs
Total Distribution Costs
[BAR CHART]
$650 MM $539 MM
- ------- ---------
1995 1997/1998
Down approximately 20% from 1995 to 1997/1998.
<PAGE>
Retail Physical Distribution Costs
Total Distribution Cost per
Costs Household
[BAR CHARTS] [BAR CHARTS]
$650 MM $539 MM $224 $169
------- --------- ---- ---------
1995 1997/1998 1995 1997/1998
Down approximately 20% from Down approximately 25% from
1995 to 1997/1998. 1995 to 1997/1998.
<PAGE>
GRAPHIC: Map of Wells Fargo bank locations in Sacramento as of December 1993.
<PAGE>
GRAPHIC: Map of Wells Fargo bank locations in Sacramento as of January 1996.
<PAGE>
Sacramento
5% of
Customer Base
<PAGE>
GRAPHIC: Wells Fargo bank locations in San Diego (South) as of December 1994.
<PAGE>
GRAPHIC: Wells Fargo bank locations in San Diego (South) as of October 1995.
<PAGE>
Supermarket Channel
Number Bank
Chain of Stores Partner
----- --------- -----------
Ralph's 425 Wells Fargo
(Alpha Beta, Bell, Food 4 Less)
Lucky 423 Bank of America
Vons 345 Wells Fargo
Safeway 237 Wells Fargo
Albertsons 175 Wells Fargo
- --------------------------------------------------------------------------------
Top 5 = 80% market share in California
- --------------------------------------------------------------------------------
<PAGE>
Chart displaying various "Wells Fargo Milestones" on approximate dates, as
follows:
Redesign Small Business Sales Force: early 1993
Shorten Underwriting Process: early 1993
Supermarket Centers: mid-1994
Double Number of Outlets: mid-1995
<PAGE>
WELLS FARGO By Phone
By ATM
By Computer
[GRAPHIC]
<PAGE>
- --------------------------------------------------------------------------------
Channel Preferences
- --------------------------------------------------------------------------------
Strongly prefer 24-hour access to bank
[BAR CHART]
82% 64% 40% 27%
------ ------ ------- -------
AGE: 18-34 35-49 50-64 65+
Source: Synergistics
<PAGE>
- --------------------------------------------------------------------------------
Percentage of Americans Having
Salaries Directly Deposited
- --------------------------------------------------------------------------------
[BAR CHART]
4% 6% 7% 10% 15% 20% 25% 35% 42%
---- ---- ---- ---- ---- ---- ---- ---- ----
1986 1987 1988 1989 1990 1991 1992 1993 1994
Source: Montgomery Securities, NACHA
<PAGE>
- --------------------------------------------------------------------------------
Wells Fargo's Response
- --------------------------------------------------------------------------------
. Provide customers with choices
. Optimize every customer contact
. Facilitate electronic payments
<PAGE>
- --------------------------------------------------------------------------------
Telephone Strategy
- --------------------------------------------------------------------------------
. Give customers true alternatives to a branch
. Create opportunity through technology
. Turn service strength into sales
<PAGE>
Photo of woman on telephone with the following language:
- --------------------------------------------------------------------------------
With Only One Call...
- --------------------------------------------------------------------------------
. Open new accounts
. Pay bills
. Buy travelers cheques
. Order foreign currency
. Trade securities and mutual funds
<PAGE>
[BAR GRAPH]
- --------------------------------------------------------------------------------
Service Costs
- --------------------------------------------------------------------------------
$10.00 $2.50 $0.40
-------- ------- -------
Branch Phone Phone
(Agent) (ARU)
<PAGE>
----------------------------------------
Potential Cost Savings
----------------------------------------
2 million service requests moved
from branch to telephone:
Agent saves $15 million
ARU saves $19 million
<PAGE>
----------------------------------------
Smart Selling
----------------------------------------
----------------------------------------
Customer
----------------------------------------
<PAGE>
----------------------------------------
Smart Selling
----------------------------------------
Customer
Customer [ARROW] -- Data
Warehouse
<PAGE>
----------------------------------------
Smart Selling
----------------------------------------
Customer Decision
Customer [ARROW] -- Data [ARROW] -- Models
arehouse
<PAGE>
----------------------------------------
Smart Selling
----------------------------------------
Customer Decision Deliver
Customer [ARROW] -- Data [ARROW] -- Models [ARROW] -- Right
Warehouse Offer
<PAGE>
----------------------------------------
Smart Selling
----------------------------------------
<TABLE>
<S> <C> <C> <C>
------------- ------------
- ------------ Deliver Customer
Decision Right ------------ Data
Models [ARROW] -- Offer [ARROW] -- Customer [ARROW] -- Warehouse [with ARROW leading back to Decision Models]
- ------------ ------------ ------------ ------------
</TABLE>
<PAGE>
A video clip was shown at this point in the presentation.
<PAGE>
GRAPHIC: Four photos of objects and people demonstrating "Smart Selling."
Photos are of (clockwise, from upper left-hand corner) a woman on a telephone,
a computer, a businessman, and a Wells Fargo automated teller machine. The
words "Smart Selling" are located in the center of the graphics.
[GRAPHIC] [GRAPHIC]
- --------------------------------------------------------------------------------
Smart Selling
- --------------------------------------------------------------------------------
[GRAPHIC] [GRAPHIC]
<PAGE>
[BAR CHART]
- --------------------------------------------------------------------------------
Relative Acquisition Costs*
- --------------------------------------------------------------------------------
100% 60% 85% 15%
----------------- ------------- ----------------- -------------
Branch Branch Telephone Telephone
Not pre-qualified Pre-qualified Not pre-qualified Pre-qualified
* Percentages rounded to nearest 5%.
<PAGE>
Bar chart entitled "Smart Selling Results" depicting number of customers
resulting from "Smart Selling" for each quarter of 1995. The results depicted
are 18,000 for the first quarter, 45,000 for the second quarter, 62,000 for the
third quarter, and 65,000 (estimated) for the fourth quarter.
<PAGE>
- --------------------------------------------------------------------------------
Technology At Work
- --------------------------------------------------------------------------------
. Reduced cost of customer service
. Increased sales
. Lowered sales costs
. Provided better customer
experience
<PAGE>
- --------------------------------------------------------------------------------
On-Line Customers
(in 000's)*
- --------------------------------------------------------------------------------
[CHART]
0 5 10 15 20 20 20
---- ---- ---- ---- ---- ---- ----
Dec Dec Dec Dec Dec Dec Dec
1988 1989 1990 1991 1992 1993 1994
* Annual data rounded to nearest multiple of 5000.
<PAGE>
- --------------------------------------------------------------------------------
Grew On-Line Customers
By Over 160%
- --------------------------------------------------------------------------------
[CHART]
(Customers in 000's)*
Launched Internet Account Access -- May 1995
20 20 20 20 20 20 25 30 35 40 45 50 55
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Dec March June Sept Dec
1994 1995 1995 1995 1995
* Monthly data rounded to nearest multiple of 5000.
<PAGE>
Graphic depicting Wells Fargo's World Wide Web Home page on November 28, 1995.
<PAGE>
Graphic depicting Wells Fargo's ON-LINE Banking computer screen for a line of
credit account.
<PAGE>
- --------------------------------------------------------------------------------
Wells Fargo Firsts
- --------------------------------------------------------------------------------
[LOGO]VIRTUAL VINEYARDS [LOGO]NETSCAPE
FOOD & WINE
[LOGO] CyberCash [LOGO] MONDEX
[LOGO] http://wells fargo.com
<PAGE>
A video was shown at this point in this presentation.
<PAGE>
Wells Fargo Milestones
--------------
Develop Direct
Distribution
Channels
--------------
===================+===================+===================+===================+
1995 2000
<PAGE>
Graphic showing developments to occur from the beginning of 1995 into the
future.
<PAGE>
Graphic showing where we are on the First Interstate Bancorp exchange offer in
late 1995.
<PAGE>
- --------------------------------------------------------------------------------
"What is the difference
between 'in-market'
and 'out-of-market'
expense cuts?"
- --------------------------------------------------------------------------------
<PAGE>
First Interstate NIE has Significant Overlap
with Wells Fargo
- --------------------------------------------------------------------------------
FIB NIE Proximity
to Wells Fargo
-------------------------
. In-Market $1,002 MM
$1,002*
Annual FIB NIE by State
based on June, 1995
Call Reports and Y-9 data
*Dollar amount shown inside an outline of the State of California.
<PAGE>
First Interstate NIE has Significant Overlap
with Wells Fargo
- --------------------------------------------------------------------------------
FIB NIE Proximity
to Wells Fargo
-------------------------
. In-Market $1,002 MM
. Contiguous $ 668
Annual FIB NIE by State
based on June, 1995
Call Reports and Y-9 data
Dollar figures are shown inside outlines of corresponding States. (Oregon
($259), Nevada ($119), California (1,002), Arizona ($209)).
<PAGE>
[BAR CHART]
Cost Savings by Proximity
================================================================================
55%+ 20%+ 10%+
--------- ---------- -------------
In-Market Contiguous Out-of-Market
<PAGE>
First Interstate NIE Proximity to Wells Fargo
=============================================
Implied
NIE Cost Saves
--------- ----------
In-Market $1,002 MM $550+ MM
Contiguous 668 135+
Out-of-Market 541 55+
------ ------
Total $2,211 MM $740+ MM
<PAGE>
First Interstate NIE Proximity to First Bank
============================================
Implied
NIE Cost Saves
---------- ----------
In-Market $ 65 MM $ 36+ MM
Contiguous 71 14+
Out-of-Market 2,075 208+
------ ------
Total $2,211 MM $258+ MM
<PAGE>
- -------------------------------------------------------------------------------
"Why isn't your only
cost advantage
branch consolidation
in California?"
- -------------------------------------------------------------------------------
<PAGE>
Bar graph showing the number of total staffed outlets Wells Fargo had each year
between 1994 and 1996 and number of total staffed outlets for First Interstate.
Graph breaks down outlets as being either banking centers, supermarket branches,
or traditional branches. Wells Fargo had 615 staff outlets in November 1994,
985 in December 1995, and 1075 in December 1996. First Interstate had 431
staffed outlets, all of which were traditional branches.
<PAGE>
Significant Non-Branch In-Market Savings
========================================
. Cash and Paper Handling . Corporate Communications
. Middle Market . Occupancy
. Private Banking/Trust . Backoffice Operations
. Real Estate . Staff/Management
. Advertising . Systems/Network Support
<PAGE>
Wells Fargo Middle Market Lending
=================================
. $9.1B in loans; roughly doubles with FIB
. 1,231 FTE: 300 Customer Contact (in RCBOs)
803 Centralized Backoffice
123 Admin/Staff
With FIB:
- --------
. 54% FTE increase -- Double Customer Contact
. 41% NIE increase
<PAGE>
Wells Fargo Trust / Investment Management
================================================================================
. Proven Economics of Scale: Pre-Crocker Current
=========== =======
FTE 600 832
Managed Assets $ 5B $32B
NIBT $17MM $65MM
. 832 FTE: 244 Customer Contact
514 Centralized Backoffice
74 Admin/Staff
With FIB:
=========
. 72% increase in Managed Assets
. 44% NIE increase (Customer Contact up in proportion to assets)
<PAGE>
Wells Fargo Commercial Real Estate
================================================================================
. $6.3B in loans; FIB adds $4B
. 500 FTE: 128 Customer Contact
336 Backoffice
36 Admin/Staff
With FIB:
=========
. 18% NIE increase (mostly Customer Contact)
<PAGE>
Summary: Post-Merger
================================================================================
. Middle Market Lending:
-- Portfolio roughly doubles
-- NIE increase of 41%
. Trust/Investment Management:
-- Managed assets up 72%
-- NIE increase of 44%
. Commercial Real Estate:
-- Loans increase 63%
-- NIE increase of 18%
<PAGE>
The Crocker Experience
================================================================================
$146MM / 60% Cut of 55% Cut of
Month Crocker NIE 26,000 Crocker FTE
- --------- ---------
$110MM /
Month Pre- 19,400
Pre- ----------- Merger ---------
Merger FTE
Operating Post- Post-
Expense* Merger Merger
(18 months FTE
later
- --------- ----------- --------- ---------
* Wells Fargo & Crocker pre-merger operating expenses adjusted for 4% annual
inflation and BofA Trust acquisition.
<PAGE>
- --------------------------------------------------------------------------------
"If you close
so many branches,
why won't you
lose the revenues?"
- --------------------------------------------------------------------------------
<PAGE>
The Crocker Experience
================================================================================
[CHART]
Total Branches
-----------------
Closed 57% of
Crocker branches
-----------------
621 619 568 513 458 449 442 439
---- ---- ---- ---- ---- ---- ---- ----
1Q86 2Q86 3Q86 4Q86 1Q87 2Q87 3Q87 4Q87
(Pre-Merger) (18 Months
Post-Merger)
<PAGE>
Deposit and Revenue Growth
After 57% Branch Consolidation
================================================================================
Deposits (LESS THAN) $100K Revenues / Assets
------------------------------- ------------------------------
Pre-Merger $26.6B Pre-Merger 5.3%
1 Year Later 27.4 1 Year Later 5.3
1 1/2 Years Later 27.4 1 1/2 Years Later 5.3
2 Years Later 27.6 2 Years Later 5.7
2 1/2 Years Later 28.9 2 1/2 Years Later 6.0
------------------------------- ------------------------------
<PAGE>
Bar graph showing the number total staffed outlets Wells Fargo had each year
between 1994 and 1996. The graph breaks down outlets as being either banking
centers, supermarket branches, or traditional branches. Wells Fargo had 615
staffed outlets in November 1994, 985 in December 1995, and 1,075 in December
1996.
<PAGE>
- --------------------------------------------------------------------------------
"Where's the growth?"
- --------------------------------------------------------------------------------
<PAGE>
Total Revenues* 3Q95 vs. 2Q95
================================================================================
[CHART]
10% per annum First Bank First Interstate
0% -----------------------------------------------------------------------------
Wells Fargo (4)% per annum (2)% per annum
*Excludes securities gains and non-recurring items.
<PAGE>
A Revenue Comparison
3Q95 -- Percent of Average Assets
=================================
Wells First First
Fargo Bank Interstate
----- ----- ----------
Net Interest Income 5.29% 4.40% 4.64%
Noninterest Income 2.66 2.28 2.05
- ------------------ ------- ------ ------
Total Revenue 7.95 6.68 6.69
* * $(5) MM * *
* * * * * * * *
* $690 MM *
* * * * * * * * * * * * *
<PAGE>
- --------------------------------------------------------------------------------
"Why is your deal
worth at least $20
per share more?"
- --------------------------------------------------------------------------------
<PAGE>
A Simple View of the Acquisition
Based on 1995 EPS Estimates
===================================================================
First Bank Wells Fargo
------------ -------------
Expense Cuts for
No Dilution $140 MM $100 MM
Remaining NIE cuts $360 MM $800 MM
EPS Pick-up from
remaining NIE cuts $0.66 / 15% $4.67 / 29%
Resulting Share Price
(8x multiple) $ 56 $251
Implied FIB Share Price $146 $167
------------------------------
Difference = $21 per FIB share
------------------------------
<PAGE>
- --------------------------------------------------------------------------------
"Everbody else has
an EPS estimate
for 1996,
what is yours?"
- --------------------------------------------------------------------------------
<PAGE>
The Outlook
================================================================================
. Net Interest Income
. Noninterest Income
. Noninterest Expense
. Pretax, Pre-provision
Net Interest Income:
Trends in Net Interest Income in 1996 will be primarily determined by
loan growth replacing lower yielding securities. We anticipate about $1 billion
per quarter of loan growth (primarily in small business, middle market and
consumer portfolios) with about $600 MM per quarter of securities runoff.
Deposit growth will be relatively modest. Based on these trends, and assuming no
major adjustment of deposit rates, we would expect net interest income growth of
a bit less than 5% year over year.
Non-Interest Income:
1996 will be another year of good growth in Non-Interest Income across a
number of our business groups, reflecting further results from some of our
growth initiatives. We would expect Non-Interest Income growth in 1996 in the
12% range, not including any gain from the sale of Wells Fargo-Nikko Investment
Advisers.
Non-Interest Expense:
Non-Interest Expense will be up in 1996 a couple of percent as we
continue to fund a number of our growth initiatives. On a normalized basis the
increase would be greater because of FDIC premium reductions.
Pre-Tax, Pre-Provision:
Putting these trends together we would expect Pre-Tax, Pre-Provision
growth in 1996 in the 12% range.
We will continue to use retained earnings net of dividends to repurchase
shares and would anticipate average shares for the year to be less than 45 MM.
---------------------
The foregoing projections are based upon several estimates and assumptions that,
while presented with some numerical specificity and considered reasonable by
Wells Fargo (the "Company"), are inherently subject to significant business,
economic and competitive uncertainties and contingencies, many of which are
beyond the control of the Company, and upon assumptions with respect to future
business decisions that are subject to change. In particular, the estimates are
dependent on no significant deterioration in 1996 from economic conditions
prevailing in 1995, especially in the Company's market areas. Although the
projections reflect the best estimates by the Company for which the Company
believes it had a reasonable basis as of the time of the preparation thereof,
they are only estimates, and actual results may vary from the projections.
The foregoing projections should be read together with the information contained
in the Consolidated Financial Statements of the Company and the related notes
incorporated by reference into the Wells Fargo exchange offer prospectus.
<PAGE>
- --------------------------------------------------------------------------------
"How would you
summarize all of this?"
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
"Wells' proposal is clearly
a great deal for their
shareholders."
-- Rick Zona
CFO, First Bank System
- --------------------------------------------------------------------------------
<PAGE>
Graphic depicting Wells Fargo & Co. stock price over the time period between
January 1, 1983 and December 1, 1995 and the resulting percentage return to
shareholder compared to S&P 500 for the same time period.
<PAGE>
Wells Fargo's
Management Shareholdings
================================================================================
Current Market Value
of Shares Held
as of 11/30/95
====================
Five most highly $61 Million
compensated
members of
management
<PAGE>
Paul Hazen comments
- -------------------
Thank you all for coming
As most all of you know, in the last 2 years we haven't appeared frequently on
the speaking circuits.
. We've broken that pattern today in order to reintroduce ourselves to many
of you who don't know us well.
. Recently we've been characterized as merely "financial engineers and cost
cutters."
. Although we'll gladly accept the second label, we'd like to add a few we've
also earned.
It hasn't been our style to talk about our national rankings much.
BUT, we do happen to lead our industry in many ways. (Slide)
Here's a partial list, and I'll just point out a few of my favorites, such as:
. #1 nationally, in sale of mutual funds to bank customers
. #1 among banks in auto leasing
. #2 nationally in the number of small business loans underwritten by banks
. #2 largest home equity lender nationally
However, the 2 rankings that probably have the most significance to us,
personally, are that...(Slide)
. As of the third quarter, we were the most profitable of the 50 largest
banks in the country by virtue of our
<PAGE>
2.07% Return on Assets, and
30% Return on Equity
. And lastly, for the 10 years ended 1994 we rank in the top quartile among
all Fortune 500 companies in creation of shareholder value.
What have we done to produce these kinds of results?
For the last decade, the answer is that we have stuck to a few simple guidelines
in running our company.
Briefly, we believe you have to:
. Run it like you own it:
We not only expect our managers to act like owners, we want them to BE
owners.
We even set guidelines for the amount our SVPs and executive officers
should hold.
. Know the numbers: We expect managers to know the economic dynamics of
their businesses.
. Know your customer: If you don't know your customers and how to profitably
keep them satisfied, you're out of business.
. Develop good people: Simplest measure of how well we've done this is to
look at our alumni clubs of financial company CEOs, here and abroad.
. Control expenses: But you already know we emphasize this.
2
<PAGE>
I won't devote any more time than that to our approach, but if you're
interested, I recommend our 1994 annual report to you. I spent a fair amount of
time describing our philosophy there.
As for how we produced those 3rd quarter results, (Slide)
I'll just say that for the last 2 years I have characterized Wells Fargo
recently like a duck swimming along in the water --everything looks quiet on the
surface, but below the water, the legs are paddling like mad.
. Since 1994 we've been paddling' like mad in many of our businesses.
. But not just cutting cost. We spent $175 million to fund initiatives to
build businesses in new markets and develop new products and delivery
systems.
This is what we've labeled our "investment initiatives."
Without that discretionary investment spending, our efficiency ratio this year
would have been...3 percentage points lower than it is today.
3rd quarter was when some of the progress we've made on these initiatives
started to pay off.
. And, it's because of this progress that we have a lot of confidence in
what we can do with the First Interstate franchise.
Today, Rod will give you an update on our way of thinking about our merger
offer.
But, before he does that, we thought it would be useful
to have you hear and see some of what has made us feel
so positive about the outlook for the Wells Fargo franchise.
We could have brought any number of different line managers for you to meet
today.
3
<PAGE>
. We decided to bring the manager of one business in which we've actually
been investing for 5 years--one in which we're seeing revenue growth.
. We've also brought a member of our team who is responsible for developing
some of the ways we see as important to development of future income
streams.
But, to fully set the stage, I've asked our president, Bill Zuendt to talk about
why and how we earned our reputation as a cost cutter.
. He probably did the most to help us earn that reputation because of how
he managed the redesign
of our most expensive distribution system,
our branch system in California.
Paul Hazen conclusion:
- ----------------------
Rod has answered many of the questions we've received about our First Interstate
proposal.
We've also brought copies of our exchange offer for you.
Pages 14 - 23 will probably answer many more of your questions.
We'll get to the ones you have today in a minute.
Before we do, I'd like to summarize briefly.
Through Terri's presentation, we wanted you to see that
we approach our businesses differently from most banks you meet.
------------------------------------------------------
We actually do get much higher efficiency levels
with no decline in customer satisfaction.
4
<PAGE>
Dudley's description of what we are learning about direct distribution
demonstrated that
not only do we think about the future,
--------------------------------------
we are consciously investing R & D dollars
------------------------------------------
to prepare for it.
-----------------
Finally, our physical distribution strategy -- what Bill laid out for you --
is the thinking that makes us so confident in our bid for First Interstate.
There are two additional points I want to leave you with today:
. We've got a great franchise, AND
a management team that is savvy and adaptable enough to take it forward, no
matter what may be in store for us.
In other words: I'M CONFIDENT ABOUT WELLS FARGO'S FUTURE.
. Second, we have a track record of doing what's right for our shareholders,
(Slide)
Here's both our stock price since 1982 and
the total return we produce for shareholders.
My point is:
We didn't just start running our business like we own it.
----------
It's been a part of our culture for over a decade.
And it's part of our culture because
we ARE owners. (Slide)
5
<PAGE>
THE TOP 5 MEMBERS OF OUR MANAGEMENT TEAM,
THE ONES WE NAME IN THE PROXY, AS OF 11/30/95
HELD SHARES OF WELLS FARGO STOCK (NOT INCLUDING OPTIONS) WORTH $61 MILLION
[@ $216.875].
I account for over 194,000 shares myself.
So you can see, we definitely plan to keep doing
what's right for our shareholders,
including those First Interstate shareholders among you,
when you accept our offer.
I'd be happy to take your questions now.
6
<PAGE>
SHARES OF FIRST INTERSTATE COMMON STOCK HELD BY WELLS FARGO, ITS
DIRECTORS AND EXECUTIVE OFFICERS AND CERTAIN EMPLOYEES AND
OTHER REPRESENTATIVES OF WELLS FARGO WHO MAY ALSO SOLICIT
PROXIES, AND CERTAIN TRANSACTIONS BETWEEN ANY OF THEM AND
FIRST INTERSTATE
Wells Fargo may solicit proxies against the First Interstate/First
Bank System merger. The participants in this solicitation may include Wells
Fargo, the directors of Wells Fargo (H. Jesee Arnelle, William R. Breuner,
William S. Davila, Rayburn S. Dezember, Paul Hazen, Robert K. Jaedicke, Ellen M.
Newman, Philip J. Quigley, Carl E. Reichardt, Donald B. Rice, Susan G. Swenson,
Chang-Lin Tien, John A. Young and William F. Zuendt), and the following
executive officers and employees of Wells Fargo: Michael J. Gillfillan (Vice
Chairman), Charles M. Johnson (Vice Chairman), Clyde W. Ostler (Vice Chairman),
Rodney L. Jacobs (Vice Chairman and Chief Financial Officer), Leslie L. Altick
(Executive Vice President and Director of Corporate Communications), Patricia R.
Callahan (Executive Vice President and Personnel Director), Frank A. Moeslein
(Executive Vice President and Controller), Guy Rounsaville, Jr. (Executive Vice
President, Chief Counsel and Secretary), Ross J. Kari (Executive Vice President
and General Auditor) and Eric D. Shand (Executive Vice President and Chief Loan
Examiner).
As of November 20, 1995, Wells Fargo owned beneficially 100 shares of
First Interstate Common Stock. Additionally, as of October 20, 1995, Wells
Fargo held 1,961,095 shares of First Interstate Common Stock (or approximately
2.6% of the outstanding shares) in a fiduciary capacity. Wells Fargo disclaims
beneficial ownership of the shares owned in such fiduciary capacity and any
other shares held by any pension plan of Wells Fargo or any affiliates of Wells
Fargo.
Philip J. Quigley beneficially owns 500 shares of First Interstate
Common Stock through the Philip J. Quigley Trust.
As of November 1, 1995, Rayburn S. Dezember had outstanding a loan
from First Interstate in a principal amount of $365,000.
As the Chancellor of the University of California, Berkeley, Chang-Lin
Tien is an officer of the Regents of the University of California (the
"Regents"), the legal entity which encompasses the University of California.
The Regents' business relationships with First Interstate Bank of California
("FICAL"), a subsidiary of First Interstate, include: (i) FICAL's acting as
trustee under $1.9 billion in debt issued by the Regents (for which the Regents
paid FICAL $231,800 in trustee fees from the period from January 1, 1994,
through September 30, 1995), (ii) FICAL's acting as lender of certain
construction and other loans made to the Regents (for which there was $122
million outstanding as of September 30, 1995), and (iii) the maintenance of two
deposit accounts with FICAL (for which the Regents incurred $671,000 in service
fees and other charges from January 1, 1994, through September 30, 1995).
Although CS First Boston Corporation and Montgomery Securities,
financial advisors to Wells Fargo, do not admit that they or any of their
directors, officers, employees or affiliates are a "participant," as defined in
Schedule 14A promulgated under the Securities Exchange Act of 1934 by the
Securities Exchange Commission, or that such Schedule 14A requires the
disclosure of certain information concerning CS First Boston Corporation and
Montgomery Securities, they may assist Wells Fargo in such a solicitation. Each
of CS First Boston Corporation and Montgomery Securities engages in a full range
of investment banking, securities trading, market-making and brokerage services
for institutional and individual clients. In the normal course of their
businesses, CS First Boston Corporation and Montgomery Securities may trade
securities of First Interstate for their own account and the account of their
customers and, accordingly, may at any time hold a long or short position in
such securities. As of December 1, 1995, CS First Boston held a net long
position of approximately 5,893 shares of First Interstate Common Stock, and
Montgomery Securities held no shares of First Interstate Common Stock.
Except as disclosed above, to the knowledge of Wells Fargo, none of
Wells Fargo, the directors or executive officers of Wells Fargo or the employees
or other representatives of Wells Fargo named above has any interest direct or
indirect, by security holdings or otherwise, in First Interstate.
# # #
