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 [X]
Filed by a Party other than the Registrant [ ]
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
FIRSTAR CORPORATION
(Name of Registrant as Specified in Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if Other Than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed below per Exchange Act Rules 14a-6(i)(1) 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. (Set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
[ ] 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>
INFORMATION CONCERNING PARTICIPANTS
Firstar Corporation (the "Company") and certain other persons named
below may be deemed to be participants in the solicitation of proxies of the
Company's shareholders to approve the proposed merger transaction between the
Company and U.S. Bancorp, a Delaware corporation. The participants in this
solicitation may include the directors of the Company: Victoria Buyniski
Gluckman, John C. Dannemiller, David B. Garvin, Jerry A. Grundhofer, J. P.
Hayden, Jr., Joe F. Hladky, Roger L. Howe, Thomas H. Jacobsen, Sheldon B.
Lubar, Frank Lyon, Jr., Daniel F. McKeithan, Jr., David B. O'Maley, O'dell M.
Owens, M.D., M.P.H., Thomas E. Petry, Craig D. Schnuck, John J. Stollenwerk,
Patrick T. Stokes and William W. Wirtz. As of the date of this communication,
Frank Lyon, Jr. owns approximately 1.45% of the Company's outstanding common
stock, and none of the other foregoing participants individually beneficially
owns in excess of 1% of the Company's outstanding common stock. Additional
information about the directors of the Company is included in the Company's
proxy statement for its 2000 Annual Meeting of Shareholders dated March 1, 2000.
Information will also be included in a joint proxy statement/prospectus to be
filed by the Company and U.S. Bancorp in connection with the proposed merger.
Investors will be able to obtain these documents free of charge at the SEC's web
site (www.sec.gov) or by contacting Firstar Corporation, 777 East Wisconsin
Avenue, Milwaukee, Wisconsin 53502, Attention: Joseph D. Messinger, Senior Vice
President, Investor Relations, telephone (414) 765-5235.
INVESTORS SHOULD READ THE JOINT PROXY STATEMENT-PROSPECTUS CAREFULLY
WHEN IT BECOMES AVAILABLE BEFORE MAKING ANY VOTING OR INVESTMENT DECISIONS.
<PAGE>
The following is a press release issued by the Company and U.S. Bancorp on
October 4, 2000:
WEDNESDAY OCTOBER 4, 7:34 AM EASTERN TIME
PRESS RELEASE
SOURCE: FIRSTAR CORPORATION AND U.S. BANCORP
FIRSTAR CORPORATION AND U.S. BANCORP MERGE, CREATING $160 BILLION HIGH-GROWTH
FINANCIAL SERVICES COMPANY
$21.2 BILLION SHARE EXCHANGE WILL PROVIDE IMMEDIATE EPS ACCRETION
MILWAUKEE and MINNEAPOLIS, Oct. 4 /PRNewswire/ -- Firstar Corporation (NYSE:
FSR - news) today announced that it has signed a definitive agreement to
--- ----
merge with U.S. Bancorp (NYSE: USB - news) through an exchange of shares
--- ----
valued at approximately $21.2 billion.
The combined companies will have a powerful presence in consumer and corporate
financial services, wealth management, capital markets and payment systems. The
Firstar/U.S. Bancorp combination would become the 8th largest bank holding
company in the United States, with assets of more than $160 billion, deposits of
$107 billion, assets under management of $145 billion and a pro forma market
capitalization of approximately $40 billion. The franchise will span 24
Midwestern and Western states with 2200 branches.
Firstar will exchange 1.265 shares of Firstar common stock for each share of
U.S. Bancorp common stock in a tax-free exchange agreement. Based on
Firstar's closing stock price of $22.38 on September 29, 2000, this
represents a price of $28.30 for each U.S. Bancorp share, a premium of 24.4
percent over U.S. Bancorp's closing price that date, and a multiple of 11.7
times U.S. Bancorp's estimated 2001 earnings per share.
The transaction is expected to close in the first quarter of 2001. After the
closing, the combined companies will operate under the U.S. Bancorp name, and
locate their corporate headquarters in Minneapolis. After the closing, the
board of directors of the combined companies will consider payment of
dividends at an annual rate of 75 cents per common share, which would
represent an increase of 11 percent over U.S. Bancorp's current dividend and
an increase of 15 percent over Firstar's current dividend.
Jerry Grundhofer, president and chief executive officer of Firstar, will
continue in those positions in the combined company. John "Jack"
Grundhofer, chairman, president and chief executive officer of U.S. Bancorp,
will serve as chairman of the board until his planned retirement on December
31, 2002. The board of directors will be composed of 14 members from Firstar,
and 11 members from U.S. Bancorp.
Jerry Grundhofer of Firstar, noted, "We are creating the industry leader in
growth, performance and diversification. The combined companies will have a
multitude of high growth, non-banking businesses as well as an enviable
banking franchise in attractive growth markets. We're already two of the most
efficient banking franchises in the country, so we can quickly devote our
attention to enhancing our customer relationships, integrating our
businesses, and remaining the low cost provider in our key business areas.
The new U.S. Bancorp will be the leader in service quality and financial
performance."
Jack Grundhofer of U.S. Bancorp remarked, ``Our geographies fit together, our
business lines complement each other, we are both devoted to high standards
of customer service, and we have a lot of other strengths to offer each other
in areas ranging from sales culture to information technology. By any
standard, we've built a tremendous institution at U.S. Bancorp. But as we
<PAGE>
considered how best to convert our potential into real value for our
shareholders and our customers, it became clear that combining with Firstar
was far and away the best course to follow." The transaction, which will be
accounted for as a pooling of interests, is expected to be 3.7 percent accretive
to Firstar earnings per share in 2001, and 3.9 percent accretive in 2002. These
accretion numbers include anticipated expense reductions, but do not include
increased earnings from revenue enhancements, or the reinvestment of excess
capital. Firstar expects to incur pre-tax merger-related and restructuring
charges of $800 million between the closing of the transaction and the end of
2002.
Firstar and U.S. Bancorp expect to reduce their combined expense levels by
$266 million per year, pre-tax. This is equal to 8 percent of U.S. Bancorp's
current expense base, or 5 percent of the combined companies' expense base.
The companies anticipate phasing in 25 percent of these savings in 2001, 80
percent by the end of 2002, and 100 percent by the end of 2003. These cost
savings primarily involve elimination of redundancies in administration and
corporate support functions. Systems integration will begin immediately after
closing and will conclude by year-end 2002.
"Our integration approach involves hands-on senior management involvement,
intense emphasis on customer and employee retention, and constant tracking of
performance. In each previous merger integration, we've achieved our
operating goals on time and on budget. The Firstar/Mercantile integration was
successfully concluded last month," said Firstar CEO Jerry Grundhofer.
"Both Firstar and U.S. Bancorp are already highly efficient and we will be
able to increase our focus on the factors affecting revenue growth. Our
customers and our employees continue to be our highest priorities."
In addition to its corporate headquarters in Minneapolis, the new U.S.
Bancorp will have a significant presence in Arizona, Arkansas, California,
Colorado, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky Minnesota,
Missouri, Montana, Nebraska, Nevada, North Dakota, Ohio, Oregon, South
Dakota, Tennessee, Utah, Washington, Wisconsin and Wyoming.
Community commitment will continue to be paramount for the combined company.
Both Firstar and U.S. Bancorp have strong records of community investment and
a proud history of giving back to the communities they serve. The new company
will be equally committed to continuing these endeavors at current levels in
the states it will serve.
The companies believe that their merger can significantly enhance their
combined revenue growth potential, although revenue synergies have not been
included in their earnings-per-share accretion estimates. The combined
company will serve 10 million customers in a geographic territory that
includes nine of the 15 fastest growing states in the country. In deposits,
the company will rank first in the northwest and upper midwest, second in the
lower midwest, and sixth in the far west.
The new U.S. Bancorp will have a broadly diversified revenue stream: consumer
financial services will account for 38 percent, corporate financial services
for 29 percent, wealth management and capital markets for 19 percent and
payment systems for 14 percent. Its family of businesses will rank among the
top five banks in branches, ATMs and home equity lending, and in the top ten
in total consumer lending. It will be a leader in commercial real estate
lending, leasing and small business lending. Its U.S. Bancorp Piper Jaffray
unit is a major regional broker that is a national leader in initial public
offerings. Its wealth management businesses will have $145 billion in assets
under management and $50 billion in mutual fund assets. And its high-growth
specialty businesses include major presence in merchant processing,
purchasing cards, corporate cards, corporate trust, mutual fund processing
and corporate and institutional trust.
<PAGE>
In developing these businesses, the combined companies have invested over $1
billion during the last four years in technology, including product
development, distribution and infrastructure. Firstar expects also to adapt
its highly successful customer service programs to U.S. Bancorp's markets;
these include guaranteed delivery on key service standards in each line of
business, and recognition and incentive programs tied to sales and service
levels.
The combined company will be one of the strongest financially performing
banks in the United States. For the quarter ended June 30, 2000, its pro
forma combined return on assets was 1.98 percent and its return on equity was
22.7 percent. Its net interest margin was 4.41 percent and its efficiency
ratio was 43.2 percent.
In addition to Jerry Grundhofer and Jack Grundhofer, the senior management
team of the new U.S. Bancorp will include: David Moffett, currently vice
chairman of Firstar, as chief financial officer; Andrew Duff, currently vice
chairman of U.S. Bank, as head of wealth management, trusts & investments and
capital markets; Richard Davis, currently vice chairman of Firstar, as head
of consumer banking; Daniel Frate, currently vice chairman of U.S. Bank, as
head of payment systems; Joseph Hasten, currently vice chairman of Firstar,
as head of large corporate banking; Daniel Quinn, currently vice chairman of
U.S. Bank, as head of middle market corporate banking; William Chenevich,
currently vice chairman of Firstar, as head of information technology and
operations; Robert Hoffman, currently executive vice president of U.S.
Bancorp, as chief credit officer; Steve Smith, currently executive vice
president of Firstar, as head of human resources: and Lee Mitau, currently
executive vice president of U.S. Bancorp, as general counsel.
The transaction, which was approved by the boards of directors of both
companies, is subject to normal shareholder and regulatory approvals. Also
today, Firstar announced that its board of directors has rescinded its prior
authority, granted on April 11, 2000, to repurchase up to 100 million shares
of its common stock. Both companies have completed due diligence. Firstar and
U.S. Bancorp have granted each other cross-options to purchase common shares
equal to 19.9 percent of the other company under certain circumstances.
Firstar was advised in this transaction by the investment bank of Credit
Suisse/First Boston and the law firm of Wachtell, Lipton, Rosen & Katz. U.S.
Bancorp was advised by the investment bank of Goldman Sachs and the law firm
of Sullivan & Cromwell.
Firstar Corporation is a financial holding company with approximately $74
billion in total assets. Firstar has nearly 1,200 full-service banking
offices and more than 2,200 ATM locations in Ohio, Wisconsin, Missouri,
Kentucky, Illinois, Indiana, Iowa, Minnesota, Tennessee, Arkansas, Kansas,
Arizona and Florida. Firstar, founded in 1853, offers a comprehensive line of
consumer and commercial banking products and services, personal and
commercial trust, investment management, insurance, securities brokerage,
mortgage, credit card, cash management, international banking and other
financial services. Visit Firstar on the web at http://www.firstar.com.
----------------------
Minneapolis-based U.S. Bancorp, with $86 billion in assets, operates
approximately 1,000 banking offices in the Midwest and West. The company
provides comprehensive banking, trust, investment and payment systems
products and services to consumers, businesses and institutions. It operates
a network of 5,000 ATMs and provides 24-hour, seven-days-a-week telephone
customer service. The company offers full-service brokerage services at
approximately 100 offices through U.S. Bancorp Piper Jaffray. The company is
the largest provider of Visa corporate and purchasing cards in the world, and
is one of the largest providers of corporate trust services in the nation.
Visit U.S. Bancorp on the web at http://www.usbank.com.
---------------------
<PAGE>
Firstar and U.S. Bancorp will hold a conference call to discuss this
transaction at 10 a.m. Eastern Daylight Time on Wednesday, October 4, 2000.
Investors, analysts and other interested parties may dial into the conference
call at 1-888-732-8927 for domestic access and 1-212-896-6093 for
international access. During the call, the slide presentation will be
available on the Firstar web site, at http://www.firstar.com.
This news release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Such statements
include, but are not limited to statements about the benefits of the merger
between Firstar Corporation and U.S. Bancorp, including future financial and
operating results, Firstar's plans, objectives, expectations and intentions
and other statements that are not historical facts. Such statements are based
upon the current beliefs and expectations of Firstar's and U.S. Bancorp's
management and are subject to significant risks and uncertainties. Actual
results may differ from those set forth in the forward-looking statements.
The following factors, among others, could cause actual results to differ
from those set forth in the forward-looking statements: the ability to obtain
governmental approvals of the merger on the proposed terms and schedule: the
failure of Firstar Corporation and U.S. Bancorp stockholders to approve the
merger; the risk that businesses will not be integrated successfully; the
risk that the revenue synergies and cost savings from the merge may not be
fully realized or may take longer to realize than expected; disruption from
the merger making it more difficult to maintain relationships with clients;
employees or suppliers; increased competition and its effect on pricing,
spending, third-party relationships and revenues; the risk of new and
changing regulation in the U.S. and internationally. Additional factors that
could cause Firstar Corporation's and U.S. Bancorp's results to differ
materially from those described in the forward-looking statements can be
found in the 1999 Annual Reports on Forms 10-K of Firstar and U.S. Bancorp,
filed with the Securities and Exchange Commission and available at the
Securities and Exchange Commission's internet site (http://www.sec.gov).
------------------
Stockholders are urged to read the joint proxy statement/prospectus regarding
the proposed transaction when it becomes available, because it will contain
important information. Stockholders will be able to obtain a free copy of the
joint proxy statement/prospectus, as well as other filings containing
information about Firstar Corporation and U.S. Bancorp, without charge at the
SEC's internet site (http://www.sec.gov). Copies of the joint proxy
statements/prospectuses can also be obtained, without charge, by directing a
request to Firstar Corporation, 777 East Wisconsin Avenue, Milwaukee, WI
53202, Attention: Joe Messinger or to U.S. Bancorp, Attention: Judy Murphy or
John Danielson.
<PAGE>
The following is a joint presentation given by officers of the Company and U.S.
Bancorp to analysts and investors on October 4, 2000:
[FIRSTAR LOGO]
MERGER WITH
[US BANCORP LOGO]
OCTOBER 4, 2000
SETTING THE STANDARD FOR GROWTH,
PROFITABILITY AND DIVERSIFICATION
<PAGE>
FORWARD LOOKING INFORMATION
--------------------------------------------------------------------------------
THIS PRESENTATION CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH STATEMENTS INCLUDE, BUT
ARE NOT LIMITED TO STATEMENTS ABOUT THE BENEFITS OF THE MERGER BETWEEN FIRSTAR
CORPORATION AND U.S. BANCORP, INCLUDING FUTURE FINANCIAL AND OPERATING RESULTS,
FIRSTAR'S PLANS, OBJECTIVES, EXPECTATIONS AND INTENTIONS AND OTHER STATEMENTS
THAT ARE NOT HISTORICAL FACTS. SUCH STATEMENTS ARE BASED UPON THE CURRENT
BELIEFS AND EXPECTATIONS OF FIRSTAR'S AND U.S. BANCORP'S MANAGEMENT AND ARE
SUBJECT TO SIGNIFICANT RISKS AND UNCERTAINTIES. ACTUAL RESULTS MAY DIFFER FROM
THOSE SET FORTH IN THE FORWARD-LOOKING STATEMENTS.
THE FOLLOWING FACTORS, AMONG OTHERS, COULD CAUSE ACTUAL RESULTS TO DIFFER FROM
THOSE SET FORTH IN THE FORWARD-LOOKING STATEMENTS: THE ABILITY TO OBTAIN
GOVERNMENTAL APPROVALS OF THE MERGER ON THE PROPOSED TERMS AND SCHEDULE: THE
FAILURE OF FIRSTAR CORPORATION AND U.S. BANCORP STOCKHOLDERS TO APPROVE THE
MERGER; THE RISK THAT BUSINESSES WILL NOT BE INTEGRATED SUCCESSFULLY; THE RISK
THAT THE REVENUE SYNERGIES AND COST SAVINGS FROM THE MERGE MAY NOT BE FULLY
REALIZED OR MAY TAKE LONGER TO REALIZE THAN EXPECTED; DISRUPTION FROM THE MERGER
MAKING IT MORE DIFFICULT TO MAINTAIN RELATIONSHIPS WITH CLIENTS; EMPLOYEES OR
SUPPLIERS; INCREASED COMPETITION AND ITS EFFECT ON PRICING, SPENDING,
THIRD-PARTY RELATIONSHIPS AND REVENUES; THE RISK OF NEW AND CHANGING REGULATION
IN THE U.S. AND INTERNATIONALLY. ADDITIONAL FACTORS THAT COULD CAUSE FIRSTAR
CORPORATION'S AND U.S. BANCORP'S RESULTS TO DIFFER MATERIALLY FROM THOSE
DESCRIBED IN THE FORWARD-LOOKING STATEMENTS CAN BE FOUND IN THE 1999 ANNUAL
REPORTS ON FORMS 10-K OF FIRSTAR AND U.S BANCORP, FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION AND AVAILABLE AT THE SECURITIES AND EXCHANGE COMMISSION'S
INTERNET SITE (HTTP://WWW.SEC.GOV).
STOCKHOLDERS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS REGARDING
THE PROPOSED TRANSACTION WHEN IT BECOMES AVAILABLE, BECAUSE IT WILL CONTAIN
IMPORTANT INFORMATION. STOCKHOLDERS WILL BE ABLE TO OBTAIN A FREE COPY OF THE
JOINT PROXY STATEMENT/PROSPECTUS, AS WELL AS OTHER FILINGS CONTAINING
INFORMATION ABOUT FIRSTAR CORPORATION AND U.S. BANCORP, WITHOUT CHARGE, AT THE
SEC'S INTERNET SITE (HTTP://WWW.SEC.GOV). COPIES OF THE JOINT PROXY
STATEMENTS/PROSPECTUSES CAN ALSO BE OBTAINED, WITHOUT CHARGE, BY DIRECTING A
REQUEST TO FIRSTAR CORPORATION, 777 EAST WISCONSIN AVENUE, MILWAUKEE, WI 53202,
ATTENTION: JOE MESSINGER (414) 765-5235 OR TO U.S. BANCORP 601 SECOND AVENUE
SOUTH, MINNEAPOLIS, MINNESOTA 55402-4302, ATTENTION JUDY MURPHY (612) 973-2429
OR JOHN DANIELSON (612) 973-2264.
<PAGE>
--------------------------------------------------------------------------------
1. Transaction Rationale
2. The New U.S. Bancorp
3. Emphasis on Execution
4. Transaction Economics
5. Summary
Appendix
<PAGE>
--------------------------------------------------------------------------------
TRANSACTION RATIONALE
--------------------------------------------------------------------------------
<PAGE>
1
TRANSACTION RATIONALE
--------------------------------------------------------------------------------
STRATEGICALLY AND FINANCIALLY ATTRACTIVE
- Maintains industry-leading earnings growth with benefits of
geographic and business mix diversification
- Combines high growth Western markets with stable Midwestern
economies
- Creates critical mass in core business lines while building
substantial scale in higher growth specialty businesses
- Strong execution skills and platform across the new business mix
- Immediate accretion with conservative synergies
- Enhances advantages from being a low cost provider of financial
services
- Low risk execution which leverages proven merger integration skills
<PAGE>
2
TRANSACTION RATIONALE
--------------------------------------------------------------------------------
REGIONAL SCALE, BALANCE AND DIVERSIFICATION THROUGHOUT FRANCHISE
- Access to high growth West and Northwest economies
[MAP]
<TABLE>
<S> <C>
NORTHWEST $18.9B
HH GROWTH 7.2%
WEST $13.6B
HH GROWTH 7.8%
UPPER MIDWEST $34.2B
HH GROWTH 3.1%
LOWER MIDWEST $39.6B
HH GROWTH 3.4%
</TABLE>
[LOGO] PRO FORMA REGIONAL RANK BASED ON DEPOSITS
<PAGE>
3
TRANSACTION RATIONALE
--------------------------------------------------------------------------------
COMPLEMENTARY AND DIVERSIFIED BUSINESSES PROVIDE THE PLATFORM TO LEVERAGE LONG
TERM EARNINGS GROWTH
- Overlaying Firstar's high growth consumer banking model onto U.S.
Bancorp franchise
<TABLE>
<CAPTION>
CONSUMER BANKING GROWTH RATES
<S> <C>
Firstar 21.2%
U.S. Bancorp 6.1%
</TABLE>
SUSTAINED LONG-TERM EARNINGS GROWTH
HIGH GROWTH BUSINESSES
<TABLE>
<CAPTION>
U.S. BANCORP
------------
<S> <C>
- Payment Systems
- U.S. Bancorp Piper Jaffray
- Wealth Management
- Home Equity Lending
- SBA Lending
</TABLE>
<TABLE>
<CAPTION>
FIRSTAR
-------
<S> <C>
- Consumer Finance
- Personal Transaction Accounts
- Mutual Fund Processing
- Custody
- Treasury Management
- Small Business Lending
</TABLE>
<PAGE>
4
TRANSACTION RATIONALE
--------------------------------------------------------------------------------
LEVERAGING COMPLEMENTARY CORE COMPETENCIES
<TABLE>
<CAPTION>
FIRSTAR
-------
<S> <C>
- Emphasis on Execution
- Excellence in Traditional Banking Activities
- Disciplined Financial and Operational Management
- "Best in Class" Employee Base
</TABLE>
<TABLE>
<CAPTION>
U.S. BANCORP
------------
<S> <C>
- High P/E and Growth in Non-Bank Businesses
- High Growth Markets
- Strong Product Array
- "Best in Class" Employee Base
</TABLE>
SETTING THE STANDARD FOR GROWTH, PROFITABILITY AND DIVERSIFICATION
<PAGE>
--------------------------------------------------------------------------------
THE NEW U.S. BANCORP
--------------------------------------------------------------------------------
<PAGE>
5
THE NEW U.S. BANCORP
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ENHANCED MANAGEMENT TEAM DEPTH
------------------------------
<S> <C>
CHAIRMAN: JOHN F. GRUNDHOFER
PRESIDENT & CEO: JERRY A. GRUNDHOFER
FINANCE: DAVID MOFFETT
WEALTH MANAGEMENT/
TRUST & INVESTMENTS/
CAPITAL MARKETS: ANDREW DUFF
CONSUMER: RICHARD DAVIS
PAYMENT SYSTEMS: DANIEL FRATE
LARGE CORPORATE: JOSEPH HASTEN
MIDDLE MARKET: DANIEL QUINN
IT/OPERATIONS: WILLIAM CHENEVICH
CREDIT: ROBERT HOFFMANN
HUMAN RESOURCES: STEVE SMITH
LEGAL: LEE MITAU
</TABLE>
<PAGE>
6
THE NEW U.S. BANCORP
--------------------------------------------------------------------------------
A PREMIER FINANCIAL SERVICES FIRM WITH A DIVERSIFIED, HIGHER-GROWTH BUSINESS MIX
[CHART]
<TABLE>
<S> <C> <C>
WEALTH
MANAGEMENT &
CAPITAL MARKETS(1)
19% CONSUMER
PRO FORMA FINANCIAL
REVENUE SERVICES
BREAKDOWN PAYMENT 38%
SYSTEMS
14%
CORPORATE
FINANCIAL
SERVICES
29%
</TABLE>
(1) Includes Trust, Investment Services and Investment Banking.
<PAGE>
7
THE NEW U.S. BANCORP
--------------------------------------------------------------------------------
CONSUMER FINANCIAL SERVICES POWERHOUSE WITH COST EFFECTIVE DISTRIBUTION
<TABLE>
<S> <C> <C>
Top Regional Broker Top Consumer Over 2,200
(11th nationally/100+ Lender ($41BN/Top 10) Branches
Offices in 18 states) (Top 5)
Top ATM Network Top Home
(7.700/Top 5) CONSUMER Equity Lender
FINANCIAL ($13BN/Top 5)
High Performance SERVICES
Community On-Line Banking
Banking Model (420,000 Customers)
Mutual Funds
($50BN Mutual
Fund Assets)
</TABLE>
<PAGE>
8
THE NEW U.S. BANCORP
--------------------------------------------------------------------------------
FIRSTAR'S CONSUMER FINANCIAL SERVICES GROWTH SUCCESS HAS BEEN ACCOMPLISHED IN
LOWER GROWTH MIDWEST ECONOMIES:
- U.S. Bancorp's franchise provides high growth demographics
PROJECTED FIVE YEAR HOUSEHOLD GROWTH RATE
(1999-2004)
<TABLE>
<CAPTION>
AVERAGE = 5.2%
<S> <C>
Firstar Markets 3.4%
U.S. Bancorp Markets 6.2%
</TABLE>
% OF DEPOSITS IN LARGE, HIGH GROWTH MARKETS(1)
<TABLE>
<CAPTION>
SUPERREGIONAL PEER GROUP AVERAGE (2) = 40.0%
<S> <C>
Firstar 12.0%
U.S. Bancorp 52.0%
</TABLE>
(1) Large Markets defined as MSAs with over 100,000 households. High growth
market defined as large MSAs with projected 1999-2004 household growth
rates higher than the U.S. average (5.2%).
(2) Consists of BAC, FBF, FTU, KEY, NCC, PNC, ONE, STI, WB and WFC.
<PAGE>
9
THE NEW U.S. BANCORP
--------------------------------------------------------------------------------
COMPLEMENTARY CORPORATE FINANCIAL SERVICES CAPABILITIES
<TABLE>
<CAPTION>
CORE
----
<S> <C>
- Large Corporate
- Extensive Fortune 2000 Relationships
- Opportunity to Leverage Payment Systems
- Middle Market
- Similar Relationship Manager Focused Models
- Opportunity to Leverage Piper Jaffray
- Treasury Management
- Leading Share of Paper Electronic Corporate Payments
- Browser-Based Information and Transactions
- B2B Opportunities
</TABLE>
<TABLE>
<CAPTION>
SPECIALTY
---------
<S> <C>
- Corporate Trust
- Top 3 Overall
- Top 2 in Municipal Issues
- Leasing
- #7 Bank-Owned Leasing Company
- Small Business Lending
- Top 3 Overall
- Correspondent Banking
- #1 in Midwest
</TABLE>
<PAGE>
10
THE NEW U.S. BANCORP
--------------------------------------------------------------------------------
A LEADER IN WEALTH MANAGEMENT AND CAPITAL MARKETS
<TABLE>
<CAPTION>
<S> <C> <C>
[US BANCORP LOGO] - $145BN in AUM
Piper Jaffray(R)
- $400BN in Total Assets under Administration
[US BANCORP LOGO]
Investments - $50BN in Mutual Fund Assets
>
[FIRST AMERICAN FUNDS(R)LOGO] - #7 Mutual Fund Processor
The power of disciplined investing(R)
- 45 Mutual Funds with Morningstar 4 and 5 Star Ratings
[FIRSTAR FAMILY OF FUNDS LOGO]
[FIRSTAR STELLAR FUNDS LOGO] - #9 in IPO underwriting and #7 in Technology IPOs
[FIRSTAR LOGO]
Investments Services, Inc.
</TABLE>
<PAGE>
11
THE NEW U.S. BANCORP
--------------------------------------------------------------------------------
A LEADER IN PAYMENT SYSTEMS
- CORPORATE PAYMENT SYSTEMS
- Corporate Card
- Business Card
- Purchasing Card
- Fleet Card
- RETAIL PAYMENT SYSTEMS
- Consumer Card
- Consumer Lines of Credit
- MERCHANT PROCESSING
- ATM PROCESSING
- E-COMMERCE INITIATIVES / B2B JOINT VENTURES
- #5 IN CREDIT CARD CHARGE VOLUME
- #1 IN COMMERCIAL CARDS
- A LEADER IN STATE AND FEDERAL GOVERNMENT PAYMENT PROCESSING
- #6 DEBIT CARD ISSUER
- #11 IN MERCHANT PROCESSING
- #3 ATM NETWORK/SWITCH
20+% REVENUE GROWTH
<PAGE>
12
THE NEW U.S. BANCORP
--------------------------------------------------------------------------------
DIVERSIFIED FEE INCOME STREAM
[PIE CHART]
<TABLE>
<CAPTION>
PRO FORMA FEE INCOME BREAKDOWN
<S> <C>
Mutual Fund Processing and Custody 2.1%
Mortgage Banking 3.6%
Cash Managment Income 5.8%
Deposit Fees 12.0%
Investment Banking and Brokerage 13.5%
Payment Systems Income 21.0%
Trust Income 23.6%
Other Fees 18.4%
---------------------------------------
42.% in High Growth Businesses
---------------------------------------
FEE INCOME / TOTAL NET REVENUES 43.2%
</TABLE>
<PAGE>
13
THE NEW U.S. BANCORP
A COMBINATION OF TWO HIGH PERFORMING COMPANIES
- Both companies embrace strategy of being low cost provider of financial
services
<TABLE>
<CAPTION>
FOR THE QUARTER ENDED JUNE 30, 2000
------------------------------------------------------------------------------------------------------------------------------
TOP 25 BANK
FIRSTAR U.S. BANCORP COMBINED(1) RANK (2)
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ROA 1.91% 1.86% 1.98% 3
ROE 23.4 20.2 22.7 4
Net Interest Margin 4.06 4.72 4.41 4
Efficiency Ratio(3) 39.9 49.3 43.2 2
Banking Efficiency Ratio(4) 39.9 41.2 37.8 -
Fee Income Ratio 35.4 48.0 43.2 10
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Note: Financial data for Firstar and U.S. Bancorp is pro forma for pending
acquisitions and excludes merger related charges.
(1) Includes fully phased-in transaction synergies and impact of anticipated
deposit divestiture.
(2) Based on data for the quarter ended June 30, 2000.
(3) Excludes amortization of intangible assets.
(4) Excludes investment banking and brokerage activity as well as amortization
of intangibles.
<PAGE>
---------------------------------------------------------
EMPHASIS ON EXECUTION
---------------------------------------------------------
<PAGE>
14
EMPHASIS ON EXECUTION
--------------------------------------------------------------------------------
LOW EXECUTION RISK
- Combined management team has extensive proven experience with large
transactions
- Thoughtful, deliberate approach to merger integration
- All transactions completed ahead of schedule
- Mercantile integration successfully completed in September 2000
- Complementary business lines and minimal geographic overlap diminish
run-off concerns
- Single operating/systems platform strategy utilized by both companies
- Firstar has consistently delivered stated financial results on
acquisitions
<TABLE>
<CAPTION>
===========================================================================================================================
EPS ESTIMATE PROJECTION PRE- PROJECTION PRO FORMA ACTUAL RESULT /
YEAR TRANSACTION FOR TRANSACTION CURRENT PROJECTION
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Star / Firstar 1999 $1.07 $1.13 $1.25
Firstar / Mercantile 2000 1.38 1.52 1.52
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
15
EMPHASIS ON EXECUTION
--------------------------------------------------------------------------------
FIRSTAR'S HIGHLY SUCCESSFUL APPROACH TO MERGER INTEGRATION
<TABLE>
<CAPTION>
KEY INTEGRATION ELEMENT TARGETED RESULTS
<S> <C> <C>
IMMEDIATE, HANDS ON > - Aligns employees with combined "best practices"
SENIOR MANAGEMENT business paradigm
INVOLVEMENT - Maintenance of competencies and strengths of
acquired company
CUSTOMER AND EMPLOYEE > - Thoughtful integration process aids employee
RETENTION retention
- Limit impact on acquired customer base wherever
possible
- Continuously monitor customer satisfaction
- Quick remediation if issues arise
CONSTANT TRACKING AND > - Weekly tracking to monitor progress and measure integration
MEASUREMENT OF results
PERFORMANCE - Sales of all products in all markets monitored
constantly
- Employee performance reinforced by financial
incentives
STAYING COMPETITIVE DURING > - Maintenance/improvement of competitive position
INTEGRATION PROCESS relative to peers
</TABLE>
<PAGE>
16
EMPHASIS ON EXECUTION
--------------------------------------------------------------------------------
FIRSTAR INVESTMENTS IN SERVICE
<TABLE>
<S> <C>
[FIRSTAR LOGO] - Customer service is an integral element of
Firstar's operating strategy and results supported
at the highest level
- Firstar guarantees delivery on key customer
service standards for each line of business
[CIRCLE OF SERVICE EXCELLENCE LOGO] - Exporting service strategy to new markets
- Circle of Service Program
- Customer Satisfaction Surveys
- Meet the CEO employee meetings
- Buddy Branches/Ambassador Programs
[THE FIVE STAR SERVICE GUARANTEE LOGO] - Employee recognition and incentive programs tied
to sales and service and aligned between line and
support functions
</TABLE>
<PAGE>
17
EMPHASIS ON EXECUTION
--------------------------------------------------------------------------------
FIRSTAR INVESTMENTS IN TECHNOLOGY
<TABLE>
<S> <C> <C>
- Firstar has invested approximately $800 million
from 1997-2000 in technology, product development,
product distribution, and infrastructure
INVESTMENTS - Primary investments
IN - Internet
TECHNOLOGY - Telecommunications
- Mainframe/Hardware
- Software Development
- Data Warehouse
- New Full Service Branches
- In-Store Branches
- Branch Platform Technology
</TABLE>
<PAGE>
------------------------------------------
TRANSACTION ECONOMICS
------------------------------------------
<PAGE>
18
TRANSACTION SUMMARY
--------------------------------------------------------------------------------
FIXED EXCHANGE RATIO: 1.265 Firstar shares per U.S. Bancorp share
PRICE PER U.S. BANCORP SHARE:(1) $28.30
STRUCTURE: Pooling of interests / Tax-free exchange
Cross option agreements in place
TRANSACTION VALUE: $21.2 billion
EXPECTED CLOSING: 1st Quarter 2001
INTEGRATION COMPLETION: 4th Quarter 2002
COST SAVINGS: 8% of U.S. Bancorp's expense base (5% of
combined) phased in 25% in 2001, 80% in
2002, 100% in 2003
(1) Based on Firstar's price of $22.38 as of September 29, 2000.
<PAGE>
19
TRANSACTION SUMMARY
--------------------------------------------------------------------------------
DIVIDEND:(1) Firstar intends to increase dividend post-
closing to $0.75, providing U.S. Bancorp
shareholders with an 11% increase over U.S.
Bancorp's current dividend - a 15.4% increase
to current Firstar dividend
OWNERSHIP SPLIT: Firstar 50.5% / U.S. Bancorp 49.5%
MANAGEMENT: John F. Grundhofer - Chairman until 12/31/02
Jerry A. Grundhofer - President and CEO
BOARD: 25 member Board:
Firstar - 14
U.S. Bancorp - 11
NAME: U.S. Bancorp
HEADQUARTERS: Minneapolis
(1) All dividends on common stock subject to determination by Firstar Board of
Directors in its discretion.
<PAGE>
20
TRANSACTION SUMMARY
--------------------------------------------------------------------------------
BANKING HEADQUARTERS
[MAP]
[STAR] Banking Headquarters
<PAGE>
21
TRANSACTION ECONOMICS
--------------------------------------------------------------------------------
DISCIPLINED USE OF A PREMIUM MULTIPLE
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
TRANSACTION
TRANSACTION FIRSTAR MULTIPLE AS A % OF
PRICE = $28.30(1) MULTIPLES(1) MULTIPLES FIRSTAR MULTIPLE
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Price as a Multiple to:
2000E EPS 13.0x 14.7x 88%
2001E EPS 12.0 12.8 94
Book Value 2.63 3.49 75
Tangible Book Value 4.55 4.92 93
</TABLE>
--------------------------------------------------------------------------------
(1) Based on Firstar's price of $22.38 as of September 29, 2000, and the 1.265
exchange ratio.
<PAGE>
22
TRANSACTION ECONOMICS
--------------------------------------------------------------------------------
- Immediate EPS accretion based on conservative assumptions
- EPS accretion does not include any potential revenue enhancements
- Accretion does not rely on reinvestment of excess capital
- Utilizes Street estimates for Firstar and Firstar Management estimates
for U.S. Bancorp based on transaction analysis
- Conservative 8% expense savings assumptions (5% of combined)
- Optimizes two highly efficient franchises
- Conservative relative to other market extension transactions
- Realistically phased in at 25% in 2001, 80% in 2002, and 100% in 2003
- Restructuring charge estimated to be $800 million pre-tax
- IRR in excess of 15%
<PAGE>
23
TRANSACTION ECONOMICS
--------------------------------------------------------------------------------
ACCRETION SUMMARY - 1.265 EXCHANGE RATIO
(DOLLARS IN MILLIONS; EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
2001 2002 2003
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Projected Firstar Net Income - First Call $1,698 $1,953 $2,245
Projected U.S. Bancorp Net Income - Management (1) 1,766 1,951 2,156
Cost Savings(2) 27 118 148
------- ------- -------
Projected Net Income $3,490 $4,021 $4,549
-----------------------------------------------------------------------------------------------------------------------
ORIGINAL FIRSTAR FULLY DILUTED EPS $1.75 $2.02 $2.32
PRO FORMA FULLY DILUTED EPS 1.82 2.10 2.37
ACCRETION 3.7% 3.9% 2.2%
YEAR OVER YEAR EPS GROWTH 19.9 15.2 13.1
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
------------------------------------------------------------------------------
(1) Firstar Management EPS estimates equal to $2.35 in 2001 (First Call 2001
EPS = $2.42) grown at 10.5% thereafter.
(2) Cost savings equal to 8% of U.S. Bancorp's expense base and are phased in
25% in 2001, 60% in 2002 and 100% in 2003. Cost savings are also net of
cost of financing restructuring charge and impact of estimated
divestitures.
<PAGE>
24
TRANSACTION ECONOMICS
--------------------------------------------------------------------------------
THE NEW U.S. BANCORP HAS SEVERAL WAYS TO MAINTAIN INDUSTRY LEADING LONG TERM EPS
GROWTH RATE:
EACH 1% INCREASE IN PRO FORMA COMPANY EPS GROWTH RATE IS EQUAL TO:
[CHART]
<TABLE>
<CAPTION>
<S> <C>
Pre-Tax Income $ 63 million
ADDITIONAL COST SAVINGS
U.S. Bancorp Expense Base 1.9%
Combined Expense Base 1.3%
REVENUE ENHANCEMENTS
U.S. Bancorp Net Revenue Base 0.9%
Combined Net Revenue Base 0.6%
</TABLE>
<PAGE>
25
TRANSACTION ECONOMICS
--------------------------------------------------------------------------------
THE NEW U.S. BANCORP WILL ALSO GENERATE OVER $5 BILLION IN EXCESS EQUITY OVER
NEXT 3 YEARS:
- Current EPS projections do not rely on reinvestment of excess equity
- Tangible common equity ratio assumed to be 6.24% on 3/31/01
EXCESS EQUITY GENERATED BY NEW U.S. BANCORP (2001-2003)
($ IN MILLIONS)
[GRAPH]
<TABLE>
<CAPTION>
<S> <C> <C> <C>
2001 $917 $917
2002 $2,069 $2,986
2003 $2,343 $5,329
</TABLE>
<TABLE>
<S> <C> <C> <C>
YEAR-END 2001 2002 2003
TANGIBLE COMMON
EQUITY RATIO 7.04% 8.16% 9.31%
</TABLE>
Note: Excess equity is based on a 6.5% target tangible common ratio and 5%
asset growth.
<PAGE>
26
TRANSACTION ECONOMICS
--------------------------------------------------------------------------------
EXPECTED COST SAVINGS
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
COST
SAVINGS
--------------------------------------------------------------------------------
<S> <C>
Major Business Lines $101
Systems & Operations 85
G&A/Other 80
-------------
Total $266(1)
</TABLE>
--------------------------------------------------------------------------------
(1) Equates to $168MM after tax cost savings.
<PAGE>
27
TRANSACTION ECONOMICS
--------------------------------------------------------------------------------
CONSERVATIVE COST SAVINGS
<TABLE>
<CAPTION>
RECENT MERGER TRANSACTIONS
---------------------------------------------------------------------------------------------------------------------
COST SAVINGS AS % OF
COST SAVINGS -------------------------------
ANNOUNCE DATE BUYER / SELLER ($MM) TARGET EXP. COMBINED EXP.
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
10/00 FIRSTAR / U.S. BANCORP $266 8% 5%
4/99 Firstar / Mercantile 169 19 8
3/99 Fleet Financial / BankBoston 600 21 9
7/98 Star Banc / Firstar 174 23 16
6/98 Norwest / Wells Fargo 650 14 7
4/98 NationsBank / BankAmerica 2,203 26 13
4/98 Bank One / First Chicago NBD 930 28 10
---------- ----------
Transaction Average 22% 11%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
Note: Cost savings are pre-tax and are based on information disclosed in
investor presentations.
<PAGE>
28
TRANSACTION ECONOMICS
--------------------------------------------------------------------------------
ESTIMATED MERGER RELATED CHARGES
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
TOTAL
---------------------------------------------------------------------------------------------
<S> <C>
Conversion Costs $226
Employee Related 208
Systems / Operations 118
Occupancy / Equipment Writedowns 48
Other 200
-----
Total Pre-Tax Merger Related Charges $800
Total After-Tax Related Charges $578(1)
---------------------------------------------------------------------------------------------
</TABLE>
(1) Assumes an effective tax rate of 37% and 75% of restructuring charge is
tax deductible.
<PAGE>
29
SUMMARY
--------------------------------------------------------------------------------
STRATEGICALLY COMPELLING
- Enhanced scale and scope of core businesses
- Proven high growth specialty businesses
- Higher growth demographics
- Leveraging complementary core compentencies
FINANCIALLY ATTRACTIVE
- Immediately accretive
- Industry leading growth rate maintained
- Superior financial performance
LOW EXECUTION RISK
- Conservative assumptions
- Proven integration track record
- Strong management team in place
<PAGE>
--------------------------------------------------------------------------------
APPENDIX
--------------------------------------------------------------------------------
<PAGE>
30
FOOTPRINT
--------------------------------------------------------------------------------
CONTIGUOUS FRANCHISE WITH CRITICAL MASS SERVING OVER 10 MILLION CUSTOMERS IN
HIGH GROWTH MARKETS
- Operations in 9 of the top 15 highest growth states in the U.S.(1)
[MAP]
(1) Based on household growth
Note: Circled numbers represent new U.S. Bancorp market share ranks based on
deposits.
<PAGE>
31
MARKET SHARE
--------------------------------------------------------------------------------
LEADING MARKET SHARE IN MAJOR MSA'S, MANY WITH HIGHER GROWTH CHARACTERISTICS
THAN U.S. AVERAGE (5.2%)
TOP 15 MSAS
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
% MARKET MARKET PROJECTED HOUSEHOLD
MSA $ DEPOSITS SHARE RANK GROWTH RATE
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Minneapolis(1) $15,317 35.8% 1 4.2%
St. Louis 9,228 25.6 1 3.5
Portland 5,489 34.9 1 7.7
Milwaukee 5,084 19.1 2 2.0
Seattle-Tacoma 4,879 13.4 3 7.2
Cincinnati 4,221 16.3 3 3.2
Denver 3,922 15.7 2 5.2
Kansas City 2,786 11.3 3 5.2
Chicago 2,712 1.7 11 1.6
Cleveland 1,892 4.1 7 1.8
Omaha 1,485 15.2 2 4.8
San Diego 1,445 5.5 6 6.7
Los Angeles 1,356 1.0 17 4.3
Boise 1,105 31.6 2 10.9
Nashville 1,096 6.8 4 7.1
---------------------------------------------------------------------------------------------------
</TABLE>
(1) Before assumed divestitures of deposits.
<PAGE>
32
LOAN COMPOSITION
--------------------------------------------------------------------------------
AS OF JUNE 30, 2000
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
FIRSTAR (1) U.S. BANCORP (1) COMBINED (2)
------------------- ---------------------- -------------------------
AMOUNT % AMOUNT % AMOUNT %
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Commercial $19,040 35% $34,038 50% $53,077 43%
Commercial RE 11,578 22 14,563 21 26,141 21
Consumer 15,426 28 17,242 25 32,668 27
Residential Mortgage 8,092 15 2,752 4 10,844 9
----------- ------------ ---------
Total $54,135 $68,595 $122,730
Loan Portfolio Yield 8.54% 9.30% 8.96%
----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Pro forma for pending acquisitions.
(2) Excludes impact of divestitures.
<PAGE>
33
DEPOSIT COMPOSITION
--------------------------------------------------------------------------------
AS OF JUNE 30, 2000
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
FIRSTAR (1) U.S. BANCORP (1) COMBINED (2)
------------------------ -------------------------- ----------------------------
BALANCE % OF TOTAL BALANCE % OF TOTAL BALANCE % OF TOTAL
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Non-Interest Bearing $10,088 19% $16,424 31% $26,513 25%
Interest Bearing:
Savings & NOW $9,912 18% $8,412 16% $18,323 17%
Money Market 9,962 18 12,539 23 22,501 21
Time 24,428 45 15,791 30 40,220 37
------- ------- ---------
Total Interest Bearing $44,302 81% $36,742 69% $81,044 75%
------- ------- ---------
Total Deposits $54,390 $53,167 $107,557
------- ------- ---------
MEMO:
Cost of Deposits 3.62% 3.19% 3.41%
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Pro forma for pending acquisitions.
(2) Excludes impact of divestitures.
<PAGE>
34
CREDIT QUALITY
--------------------------------------------------------------------------------
AT OR FOR THE QUARTER ENDED JUNE 30, 2000
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
FIRSTAR U.S. BANCORP COMBINED(1)
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Total Loans, Net $53,417 $67,556 $120,974
Nonperforming Loans 210 369 579
Nonperforming Assets 229 409 638
Loan Loss Reserve 718 1,039 1,757
NPLs/Loans 0.39% 0.54% 0.48%
NPAs/Assets 0.30 0.46 0.39
NCOs/Average Loans 0.38 0.99 0.72
Reserves/Loans 1.33 1.51 1.43
Reserves/NPLs 342 281 303
Reserves/NPAs 313 254 276
-------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Excludes impact of any divestitures.
