<PAGE> 1
THE FOLLOWING ARE MATERIALS USED IN A PRESENTATION FOR INVESTORS AND ANALYSTS
REGADING THE MERGER HELD ON OCTOBER 4, 2000
[FIRSTAR LOGO]
MERGER WITH
[US BANCORP LOGO]
OCTOBER 4, 2000
SETTING THE STANDARD FOR GROWTH,
PROFITABILITY AND DIVERSIFICATION
<PAGE> 2
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> 3
--------------------------------------------------------------------------------
1. Transaction Rationale
2. The New U.S. Bancorp
3. Emphasis on Execution
4. Transaction Economics
5. Summary
Appendix
<PAGE> 4
--------------------------------------------------------------------------------
TRANSACTION RATIONALE
--------------------------------------------------------------------------------
<PAGE> 5
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> 6
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> 7
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> 8
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> 9
--------------------------------------------------------------------------------
THE NEW U.S. BANCORP
--------------------------------------------------------------------------------
<PAGE> 10
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> 11
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> 12
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> 13
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> 14
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> 15
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> 16
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> 17
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> 18
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> 19
---------------------------------------------------------
EMPHASIS ON EXECUTION
---------------------------------------------------------
<PAGE> 20
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> 21
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> 22
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> 23
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> 24
------------------------------------------
TRANSACTION ECONOMICS
------------------------------------------
<PAGE> 25
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> 26
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> 27
20
TRANSACTION SUMMARY
--------------------------------------------------------------------------------
BANKING HEADQUARTERS
[MAP]
[STAR] Seattle
Portland
Sacremento
Los Angeles
San Diego
Phoenix
Las Vegas
Reno
Boise
Salt Lake City
Denver
Cheyenne
Billings
Kansas City
Omaha
Sioux Falls
Fargo
Minneapolis
Des Moines
St. Louis
Little Rock
Milwaukee
Chicago
Cincinatti
Louisville
Nashville
Cleveland
[STAR] Banking Headquarters
<PAGE> 28
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> 29
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> 30
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> 31
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> 32
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> 33
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 $168MM after tax cost savings.
<PAGE> 34
27
TRANSACTION ECONOMICS
--------------------------------------------------------------------------------
CONSERVATIVE COST SAVINGS
<TABLE>
<CAPTION>
RECENT MERGER TRANSACTIONS
---------------------------------------------------------------------------------------------------------------------
COST SAVINGS AS % OF
COST SAVINGS -------------------------------
ANNOUNCE DATE BUYER / SELLER ($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> 35
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> 36
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> 37
--------------------------------------------------------------------------------
APPENDIX
--------------------------------------------------------------------------------
<PAGE> 38
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> 39
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> 40
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> 41
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> 42
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.
