SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): March 14, 1999
FLEET FINANCIAL GROUP, INC.
(Exact Name of Registrant as Specified in its Charter)
Rhode Island 1-6366 05-0341324
------------ ------ ----------
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) Number)
One Federal Street, Boston, Massachusetts 02110
-----------------------------------------------
(Address of principal executive offices) (zip code)
(617) 346-4000
-----------------------------------------------
(Registrant's telephone number, including area code)
<PAGE>
ITEM 5. OTHER EVENTS
Fleet Financial Group, Inc., a Rhode Island corporation ("Fleet"), and
BankBoston Corporation, a Massachusetts corporation ("BankBoston"), have entered
into an Agreement and Plan of Merger, dated as of March 14, 1999 (the "Merger
Agreement"). The Merger Agreement provides for the merger of BankBoston with and
into Fleet (the "Merger"). The name of the combined company will be "Fleet
Boston Corporation" and its headquarters will remain in Boston, Massachusetts.
Terrence Murray, Chairman and Chief Executive Officer of Fleet, will be the
Chairman of the Board of Directors and Chief Executive Officer of the combined
company. Charles K. Gifford, Chairman and Chief Executive Officer of Fleet, will
be the President and Chief Operating Officer of the combined company. Mr.
Gifford will succeed to the role of Chief Executive Officer as of December 31,
2001 (or at such earlier time as Mr. Murray may step down from such role), and
he will succeed to the role of Chairman of the Board of Directors on December
31, 2002 (or at such earlier time as Mr. Murray may step down from such role).
The board of directors of the combined company will consist of 12 directors
appointed by Fleet and 10 directors appointed by BankBoston. The Merger is
expected to be (1) accounted for under the "pooling-of-interests" method of
accounting and (2) a "reorganization" under the Internal Revenue Code of 1986,
as amended.
At the effective time of the Merger, each share of common stock, par value
$1.00 per share, of BankBoston ("BankBoston Common Stock"), outstanding
immediately prior to the effective time of the Merger will be converted into
1.1844 shares (the "Exchange Ratio") of common stock, par value $0.01 per share,
of Fleet ("Fleet Common Stock"). At the effective time of the Merger, all rights
with respect to BankBoston Common Stock pursuant to stock options outstanding at
such effective time, whether or not then exercisable, shall be converted into
and shall become rights with respect to Fleet Common Stock on otherwise
substantially similar terms, adjusted to reflect the Exchange Ratio.
Consummation of the Merger is subject to a number of conditions, including
(1) the adoption of the Merger Agreement by the stockholders entitled to vote
thereon of each of Fleet and BankBoston, (2) receipt of all requisite
governmental approvals (including the approval of the Board of Governors of the
Federal Reserve System), and (3) certain other customary conditions.
In connection with the Merger Agreement, BankBoston and Fleet have also
entered into cross stock option agreements, each dated March 14, 1999. Pursuant
to the BankBoston stock option agreement, BankBoston granted to Fleet an
irrevocable option to purchase, under certain circumstances, up to 59,005,179
shares of BankBoston Common Stock at a price, subject to certain adjustments, of
$46.938 per share (the "Fleet Option"). Pursuant to the Fleet stock option
agreement, Fleet granted to BankBoston an irrevocable option to purchase, under
certain circumstances, up to 113,127,918 shares of Fleet Common Stock at a
price, subject to certain adjustments, of $44.75 per share (the "BankBoston
Option" and, with the Fleet Option, the "Options"). Each of the Options, if
exercised by the grantee thereto, is intended to provide the grantee, before
giving effect to the exercise of such Option, 19.9% of the total number of
shares of the issuer then issued and outstanding. Under certain circumstances,
each of the parties may be required to
<PAGE>
repurchase the applicable Option or the shares acquired pursuant to the exercise
of such Option; alternatively, the holder of the applicable Option could
surrender the Option and any shares purchased under the Option in exchange for a
cash payment of $560 million subject to adjustment.
A copy of the joint press release of March 14, 1999, regarding the
Merger is attached as Exhibit 99.1 hereto and is hereby incorporated herein by
reference.
A copy of the presentation to investors, dated March 15, 1999,
regarding the Merger and given jointly by Fleet and BankBoston, is attached as
Exhibit 99.2 hereto and is hereby incorporated herein by reference.
The exhibits to this current report on Form 8-K contain forward looking
statements with respect to the financial conditions, results of operations and
businesses of each of Fleet and BankBoston and, assuming the consummation of the
Merger, a combined Fleet/BankBoston including statements relating to: (a) the
cost savings and accretion to reported earnings that will be realized from the
Merger; (b) the impact on revenues of the Merger, and (c) the restructuring
charges expected to be incurred in connection with the Merger. These forward
looking statements involve certain risks and uncertainties. Factors that may
cause actual results to differ materially from those contemplated by such
forward looking statements include, among others, the following possibilities:
(1) expected cost savings from the Merger cannot be fully realized or realized
within this expected time-frame; (2) revenues following the Merger are lower
than expected; (3) competitive pressure among financial services companies
increases significantly; (4) costs or difficulties related to the integration of
the businesses of Fleet and BankBoston are greater than expected; (5) changes in
the interest rate environment reduce interest margins; (6) general economic
conditions, either internationally or nationally or in the states in which the
combined company will be doing business, are less favorable than expected; or
(7) legislation or regulatory requirements or changes adversely affect the
businesses in which the combined company would be engaged.
Such forward-looking statements speak only as of the date on which such
statements were made, and Fleet undertakes no obligation to update any
forward-looking statement to reflect events or circumstances after the date on
which any such statement is made to reflect the occurrence of unanticipated
events.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired.
- Not Applicable
(b) Pro forma financial information.
- Not Applicable
(c) Exhibits.
99.1 Joint press release, dated March 14, 1999, issued by Fleet
Financial Group, Inc. and BankBoston Corporation
99.2 Investor Presentation Materials, dated March 15, 1999,
regarding the Merger.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunder duly authorized.
FLEET FINANCIAL GROUP, INC.
By: /s/ William C. Mutterperl
Name: William C. Mutterperl
Title: Secretary and General Counsel
Date: March 17, 1999
<PAGE>
EXHIBIT INDEX
99.1 Joint press release, dated March 14, 1999, issued by Fleet Financial
Group, Inc. and BankBoston Corporation.
99.2 Investor Presentation Materials, dated March 15, 1999, regarding the
Merger.
Exhibit 99.1
[FLEET LOGO] [BANKBOSTON LOGO]
Contacts: James Mahoney
Fleet Financial Group
(617) 346-5472
Ira Jackson
BankBoston
(617) 434-5470
FOR IMMEDIATE RELEASE
FLEET AND BANKBOSTON TO COMBINE $16 BILLION
STOCK TRANSACTION
--Strategic Merger Creates Nation's 8th Largest Bank With
Assets of Approximately $180 Billion and 20 Million Customers--
BOSTON, MA, March 14, 1999 - Fleet Financial Group (NYSE:FLT) and
BankBoston (NYSE:BKB) today announced a strategic combination of the two
companies through the merger of BankBoston and Fleet. The combined company,
which will be called Fleet Boston Corporation, brings together two highly
complementary institutions to create a strategically, operationally and
financially stronger and more competitive company with a commitment to make its
Northeast base of operations the springboard for domestic and global growth.
The transaction creates the nation's 8th largest bank with assets of
approximately $180 billion, powerful consumer and commercial platforms serving
20 million customers, and a diversified portfolio of superior financial products
and services. Fleet Boston will also have a market capitalization of $40
billion, ranking it 7th in the industry by this measure.
Under the terms of the agreement, BankBoston shareholders will receive
1.1844 shares of Fleet for each BankBoston share they own. Based on the closing
<PAGE>
prices of each company's stock on Friday, March 12, 1999, the transaction values
BankBoston shares at $53.00, or in the aggregate at $16 billion. The
transaction, which has been unanimously approved by the Boards of Directors of
both companies, is expected to close during the fourth quarter of 1999 subject
to regulatory approval. It is expected to be accretive to earnings in the first
year following the closing.
Terrence Murray, currently Chairman and Chief Executive Officer of Fleet,
will become Fleet Boston Corporation's Chairman and Chief Executive Officer, and
Chad Gifford, currently BankBoston's Chairman and Chief Executive Officer, will
serve as President and Chief Operating Officer of the new entity. Mr. Gifford
will become Chief Executive Officer at year-end 2001 and will become Chairman
one year later.
Robert J. Higgins, Fleet's President and Chief Operating Officer, and
Henrique C. Meirelles, BankBoston's President and Chief Operating Officer, will
manage the new corporation's businesses. The Latin American bank will retain the
name BankBoston. The name of the domestic bank will be determined at a later
date following a market and operations review.
Mr. Murray said, "This transaction is driven by and meets our strategic
objectives of achieving the requisite size and scope to compete effectively in
our industry while diversifying and improving the range of business lines we
have to serve our customers. The combined company will have a healthy mix of
earnings streams, with greater emphasis on higher growth businesses and less
reliance on core banking activities. On a combined basis, no line of business
will contribute more than 20% of total earnings, and higher-growth business
areas, like commercial finance, asset management and investment banking, will
contribute a greater percentage to earnings than they do today."
Mr. Gifford said, "As the oldest commercial bank in the nation, founded
and deeply rooted in New England, BankBoston joins Fleet to become a financial
services powerhouse based in Boston and leading the way globally as we enter the
next century. Terry and I are convinced that our new company will create
superior shareholder value through innovative products provided by talented and
committed professionals. Together, we will build a new company with a new
culture for a new century."
Mr. Higgins said, "As close neighbors, BankBoston and Fleet are well aware
of each other's complementary strengths and cross-selling opportunities
<PAGE>
they offer. Once we combine the strong technology and retail platforms of both
companies, we intend to build our electronic banking and brokerage services to
become one of the world's premier financial services companies. BankBoston's
capabilities will strengthen the product lines available to Fleet's commercial
customers. Just as important, we will offer our retail customers a stronger
banking platform throughout the Northeast."
Mr. Meirelles said, "One of the most exciting aspects of this transaction
is the increased size and scope of operations that the new entity can use to
support BankBoston's established and successful international operations. We
have done business in Latin America for over 80 years, and we expect to continue
that tradition while pursuing opportunities in other global markets. We also
have a tremendous opportunity to achieve synergies in our product capabilities
which will benefit our combined customer base."
The transaction will create a strong, growth oriented company
well-positioned in key business segments. In particular, the combination:
- Creates a world-class competitor with large, diverse business lines
capable of competing against global competition;
- Provides additional scale to invest in core areas like technology,
information management, product development and staff;
- Improves the combined company's competitive position in key consumer
and asset management markets;
- Creates a top-three national commercial lender with full service product
capabilities such as loans, debt underwriting, equity underwriting, cash
management, and foreign trade services; and
- Provides a stronger platform for international activities with the
capital base and earnings mix that can accommodate future growth.
Mr. Gifford said, "This transaction also allows BankBoston shareholders to
retain a significant ongoing interest in the combined enterprise which, as a
world-class company with large and diverse business lines, will be able to
compete more effectively and create greater value for shareholders than either
company could on its own. In addition, both BankBoston and Fleet employees are
becoming part of a larger, stronger company with increased opportunities."
<PAGE>
Mr. Murray said, "One important feature of this transaction is that it
preserves a world-class financial institution. The new Fleet Boston Corporation
will be an exemplary corporate citizen that will continue the best traditions of
both companies' support for and investment in the communities we serve. We will
maintain or increase the current level of contributions by both companies and
seek opportunities to leverage our strengths for the benefit of communities
throughout the Northeast."
Following the transaction, which will be accounted for on a pooling basis,
Fleet shareholders will own 62% of the combined company and BankBoston
shareholders will own 38%. On a pro forma basis, the combined company in 1998
would have generated net income of approximately $2.5 billion and at year-end
would have had total assets of approximately $180 billion. The combined market
capitalization of Fleet Boston Corporation will be approximately $40 billion.
Following the close of the transaction, Fleet Boston's Board of Directors will
have 22 members, including 12 directors from the current Fleet Board and 10
directors from the current BankBoston Board.
The companies said that they expect to divest a significant number of
branches, customers and ATMs in order to receive regulatory approval for the
transaction. The companies have developed a divestiture proposal which they
believe is consistent with the policies and precedent of both the Department of
Justice and the Federal Reserve.
Goldman Sachs and Donaldson, Lufkin and Jenrette acted as financial
advisors and provided fairness opinions to Fleet. Merrill Lynch and Morgan
Stanley Dean Witter acted as financial advisors and provided fairness opinions
to BankBoston.
Fleet Financial Group, headquartered in Boston and listed on the New York
Stock Exchange, is a diversified financial services company with $104.4 billion
in assets and more than $84 billion in assets under management. Fleet is the
nation's sixth largest commercial lender and New England's leading small
business lender. Fleet's products and services include consumer banking,
government banking, mortgage banking, private banking, corporate finance,
commercial real estate lending, credit cards, insurance services, cash
management, capital markets, equipment leasing and asset-based lending. Fleet
also provides a wide array of investment management services for both
individuals and institutional clients and operates the nation's third largest
discount
<PAGE>
brokerage firm through its Quick & Reilly, Inc. subsidiary. With nearly
1,200 branches and 2,500 ATMs, Fleet also provides 24-hour telephone banking as
well as on-line banking services through the internet and its PC Banking
software for individuals and businesses.
BankBoston, with assets of $73.5 billion and some 25,000 employees, is the
nation's oldest commercial bank. BankBoston is engaged in consumer and business
banking in New England; delivering sophisticated solutions to corporations and
governments nationally and internationally; and full-service banking in leading
Latin American markets. The Corporation's common stock is listed on the New York
and Boston stock exchanges.
[Fleet logo] [BankBoston logo]
================================================================================
CREATING AN EXCEPTIONAL COMPANY
BUILDING SHAREHOLDER VALUE
================================================================================
FLEET BOSTON CORPORATION
March 15, 1999
<PAGE>
===============================================================================
CREATING AN EXCEPTIONAL COMPANY . . .
===============================================================================
- - Broader Product Platform Delivering Value-Added Products to Wholesale and
Retail Customers
- - Greater Diversified Income Streams - Strength in High Return Businesses
- - Pre-eminent Northeast Banking Franchise - Leading Choice for Financial
Services
- - Compatible and Disciplined Management - Shareholder Focused
- - Accelerates Earnings Growth and Enhances Strong and Sustainable ROE
. . . Building Shareholder Value
1
[Fleet logo]--------------------------------------------------[BankBoston logo]
<PAGE>
===============================================================================
TRANSACTION SUMMARY
===============================================================================
Name: - Fleet Boston Corporation
Headquarters: - Boston, MA
Pro Forma Size: - $180 Billion in Assets
- $40 Billion in Market Capitalization
Structure: - Merger of Equals
- Pooling of Interests
- Tax-Free Exchange
Fixed Exchange Ratio: - 1.1844 Fleet Shares for each BankBoston Share
Price: - $53.00 per share (Based on FLT close on
3/12/99)
- $16 Billion Aggregate Transaction Value
Divestitures: - Approximately $13 Billion in Deposits
Cross Options: - 19.9% Cross Option Agreement
2
[Fleet logo]--------------------------------------------------[BankBoston logo]
<PAGE>
===============================================================================
TRANSACTION SUMMARY (CONT'D)
===============================================================================
Timing: - Subject to Regulatory and Shareholder Approvals
- Targeted to Close Fourth Quarter 1999
Due Diligence: - Completed, Including Y2K Review
Senior Management: - Chairman & CEO Terry Murray
- President & COO Chad Gifford
CEO on Dec 31, 2001
Chairman on Dec. 31, 2002
Board of Directors: - 12 Members from Fleet Financial
- 10 Members from BankBoston
3
[Fleet logo]--------------------------------------------------[BankBoston logo]
<PAGE>
===============================================================================
. . . BUILDING SHAREHOLDER VALUE - ATTRACTIVE ECONOMICS
===============================================================================
- Accelerates Earnings Growth
- 1% Accretive to 2000 EPS
- 6% Accretive to 2001 EPS
- Generates Investable Excess Capital
4
[Fleet logo]--------------------------------------------------[BankBoston logo]
<PAGE>
===============================================================================
ORGANIZATIONAL STRUCTURE
===============================================================================
Murray
Chairman & CEO
|
------------------|
| |
| Gifford
| President & COO------------|
| |
| |
| |
- -------------------------------------------------------------------------------
STAFF REPORTS | BUSINESS LINE REPORTS
|
MCQUADE EYLES | MEIRELLES
Chief Financial Chief Risk | HIGGINS International Banking
Officer Officer | Commercial Banking Corporate/Investment
| Retail Banking Banking (Hogan)
SARLES ZUCCHINI | Investment
Chief Administrative SMIALOWSKI | Services (Warner)
Officer Technology/ |
Operations |
- -------------------------------------------------------------------------------
5
[Fleet logo]--------------------------------------------------[BankBoston logo]
<PAGE>
===============================================================================
A FORMIDABLE FINANCIAL SERVICES COMPANY
===============================================================================
WHOLESALE FINANCIAL SERVICES COMBINED
- ---------------------------- --------
Commercial Loans $47B
Commercial Finance Assets $20B
# of Customers 55,000
RETAIL FINANCIAL SERVICES
- -------------------------
Distribution Outlets 5,750
Households 20MM
Small Business Customers 450,000
Deposits $71B
Electronic Banking Customers 500,000
INVESTMENT SERVICES
- -------------------
Assets Under Management $110B
Mutual Funds $30B
Assets Under Administration (Quick & Reilly) $28B
Electronic Brokerage Customers 250,000
INTERNATIONAL BANKING
- ---------------------
Loans $14B
Branches 200+
Countries 20
6
[Fleet logo]--------------------------------------------------[BankBoston logo]
<PAGE>
===============================================================================
CREATING AN EXCEPTIONAL COMPANY: 1 + 1 > 2
===============================================================================
- - More Customers; More Products; Deeper Penetration
- - The Premier Northeast Financial Services Franchise
- - Greater Capital Base to Grow Profitable Businesses
- - Power of Scale - Technology; Talent; Marketing; Distribution
- - Broader Diversification Reduces Earnings Volatility
7
[Fleet logo]--------------------------------------------------[BankBoston logo]
<PAGE>
===============================================================================
[ 1 + 1 > 2 ]
COMPLEMENTARY STRENGTHS FOR OUR CUSTOMERS
===============================================================================
CORPORATIONS
[2 separate dark boxes for titles below w/empty clear box underneath
all remaining text]
Fleet BKB Together
Lending/Syndications X X X
Asset-Based Finance X X X
Cash Management X X X
Debt X X X
Equity X X
M&A X X
Global X X
INDIVIDUALS
Deposit Services X X X
Credit Cards X X
Mortgage Banking X X
Private Banking X X X
Mutual Funds X X X
Brokerage X X
E-Commerce X X X
8
[Fleet logo]--------------------------------------------------[BankBoston logo]
<PAGE>
===============================================================================
[ 1 + 1 > 2 ]
CREATES THE PREMIER NORTHEAST BANKING FRANCHISE
===============================================================================
- Fleet
- BankBoston Northeast Franchise
Footprint includes:
- 4 of the 6 wealthiest states in U.S.
[Map of New England, New York
and New Jersey showing locations of - 8 million combined households
Fleet and BankBoston branches.]
- 5,750 retail outlets
- 500,000 on-line banking customers
Before divestitures
9
[Fleet logo]--------------------------------------------------[BankBoston logo]
<PAGE>
===============================================================================
[ 1 + 1 > 2 ]
NATIONAL CONSUMER FRANCHISE
===============================================================================
PRODUCTS CHANNELS
- ----------------- ------------------------
| |
Brokerage | | Direct Mail
|-------> 20 Million <------|
Credit Cards | Consumers | Internet
| [Text surrounded |
Mortgages | by map of the | Investor Centers
| United States |
Mutual Funds | | Tele-Banking
| |
Private Banking | |
- ---------------- -------------------------
10
[Fleet logo]--------------------------------------------------[BankBoston logo]
<PAGE>
===============================================================================
[ 1 + 1 > 2 ]
WHOLESALE BANKING POWERHOUSE
===============================================================================
- - #3 National C & I Lender
- - #1 Bank Commercial Finance Provider
- - A Leading Middle Market Lender in Northeast
- - Full Service Investment Banking Capability
- - Top 5 Cash Management Provider
- - Top Tier Private Equity Franchise
11
[Fleet logo]--------------------------------------------------[BankBoston logo]
<PAGE>
===============================================================================
[ 1 + 1 > 2 ]
BROADER PRODUCT SET FOR BROADER CUSTOMER BASE
===============================================================================
Cash Commercial Forex/
Management Lending/ Risk
Leasing Protection
[Arrow from each group of text
points to text in center]
Investment Commercial Private
Banking Customers Equity
Institutional Global
Asset Banking
Management Services
12
[Fleet logo]--------------------------------------------------[BankBoston logo]
<PAGE>
===============================================================================
[1 + 1 > 2]
HIGH GROWTH LATIN AMERICAN FRANCHISE*
===============================================================================
($ in Millions)
$350
- Pre-Tax Income $333
$300
$262
$250
$222
$200
$150 $156
$100
$92
$50
$0
1994 1995 1996 1997 1998
Real Plan Tequila Crises Argentine Asian Turmoil Emerging
Elections Mkts. Crises
* Results from Argentina and Brazil. Before corporate overhead.
13
[Fleet logo]--------------------------------------------------[BankBoston logo]
<PAGE>
===============================================================================
[ 1 + 1 > 2 ]
EARNINGS DIVERSIFICATION
===============================================================================
[Pie chart containing the following information]
<TABLE>
<CAPTION>
Credit Cards/
Latin Retail Mortgage Investment Commercial Private Commercial Investment
America Banking Banking Services Other Finance Equity Banking Banking
- ------- ------- ------- -------- ----- ------- ------ ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
9% 18% 10% 12% 14% 16% 6% 8% 7%
</TABLE>
1999 Pro Forma Earnings Mix (a)
(a) Post divestitures
14
[Fleet logo]--------------------------------------------------[BankBoston logo]
<PAGE>
===============================================================================
REVENUE SYNERGIES
===============================================================================
QUICK & REILLY / ROBERTSON STEPHENS WHOLESALE
- ----------------------------------- ---------
Retail Distribution for Securities Capital Markets /
Derivatives
Internet IPO Capabilities Small to Large Ticket
Leasing
Equity Research Access Trade Finance / Global
Network
M&A / High Yield / Equity
Underwriting
INVESTMENT SERVICES RETAIL
- ------------------- ------
Expanded Mutual Fund/Annuity Offerings Credit Card
Institutional Asset Management Data Base Mining
Discount Brokerage Mortgages
15
[Fleet logo]--------------------------------------------------[BankBoston logo]
<PAGE>
===============================================================================
FINANCIAL ASSUMPTIONS
===============================================================================
- - Cost Savings: $360 million after-tax
(60% in 2000 / 100% by 2001)
- - Impact of Divestitures:
- Divested Income $160 million after-tax
- Capital Released $1.5 - $2.0 billion
- - Restructuring Charge: $650 million after-tax in 1999
$60 million after-tax in
subsequent periods
- - Revenue Enhancements: None Assumed
16
[Fleet logo]--------------------------------------------------[BankBoston logo]
<PAGE>
===============================================================================
ESTIMATED PRE-TAX COST SAVINGS
===============================================================================
<TABLE>
<CAPTION>
Total
($ in millions)
---------------
<S> <C>
Personnel $ 300
Facilities and Equipment 100
Other 200
-----
Total $ 600
======
</TABLE>
17
[Fleet logo]--------------------------------------------------[BankBoston logo]
<PAGE>
===============================================================================
SUCCESSFUL INTEGRATION EXPERIENCE
===============================================================================
<TABLE>
<CAPTION>
PROMISED PRE-TAX
COST SAVINGS
ACQUIRED INSTITUTION YEAR ($MM) RESULTS
- -------------------- ---- ------------------- -------
<S> <C> <C>
Bank of New England 1991 $350 Achieved
Shawmut National 1995 400 Achieved
NatWest USA 1996 200 Achieved
BayBanks 1996 230 Achieved
</TABLE>
10 Major Acquisitions Completed Over Past Five Years
18
[Fleet logo]--------------------------------------------------[BankBoston logo]
<PAGE>
================================================================================
ONE TIME AFTER TAX RESTRUCTURING CHARGE
================================================================================
<TABLE>
<CAPTION>
TOTAL
($ IN MILLIONS)
---------------
<S> <C>
Personnel $ 300
Technology & Operations 150
Facilities 75
Branches 25
Other 100
------
Total $ 650
======
</TABLE>
19
[Fleet logo]--------------------------------------------------[BankBoston logo]
<PAGE>
================================================================================
EPS ACCRETION
================================================================================
<TABLE>
<CAPTION>
($ in millions except per share data) 2000E 2001E
- ------------------------------------- ----- -----
<S> <C> <C>
Fleet EPS (a) $3.16 $3.48
Fleet Net Income (a) 1,855 2,040
BankBoston Net Income (a) 1,040 1,145
----- -----
Combined Net Income 2,895 3,185
Cost Savings (after tax) 216 360
Divestitures (after tax) (120) (160)
Earnings on Reinvested Capital (after tax) (b) 40 112
------ ------
Pro Forma Earnings $3,031 $3,467
====== ======
Pro-Forma EPS $3.19 $3.68
====== ======
- ----------------------------------------------------------------------------
EPS Accretion $.03/1% $.20/6%
- ----------------------------------------------------------------------------
</TABLE>
(a) IBES Consensus estimates for 2000 and grown at 10% thereafter.
(b) Assumes after tax earnings of 5% on reinvested capital
20
[Fleet logo]--------------------------------------------------[BankBoston logo]
<PAGE>
================================================================================
HIGH PERFORMING COMPANY
================================================================================
FLEET BOSTON GOALS
1998 (A) 2001+
------------ -----
PROFITABILITY
ROA 1.39% 1.6 - 1.75%
ROE 18% 18-20%
Efficiency Ratio 58.6% mid 50%
EPS Growth - 10%+
(a) Pro forma 1998 operating earnings
21
[Fleet logo]--------------------------------------------------[BankBoston logo]
<PAGE>
================================================================================
COMPATIBLE AND DISCIPLINED MANAGEMENT
================================================================================
- Focused on growth
- Performance-Driven
- Strong Credit/Risk Culture
- Willingness to Exit Low-Return Assets & Businesses
- Extensive Consolidation Experience
- Demonstrated Shareholder Orientation
22
[Fleet logo]--------------------------------------------------[BankBoston logo]
<PAGE>
================================================================================
CREATING AN EXCEPTIONAL COMPANY
================================================================================
- Creates One of the Nation's Premier Financial Services Providers
- Attractive and Complementary Business Lines
- Generates Economies of Scale Across All Major Businesses
- Enhances Capital and Strategic Flexibility
- Creates a Broader, More Stable and Diversified Earnings Base
- Financially Attractive to Shareholders
Building Shareholder Value
23
[Fleet logo]--------------------------------------------------[BankBoston logo]
<PAGE>
================================================================================
APPENDIX
================================================================================
24
<PAGE>
================================================================================
BALANCE SHEET
================================================================================
December 31, 1998
(Dollars in Millions)
<TABLE>
<CAPTION>
Fleet BankBoston Pro Forma
----- ---------- ----------
<S> <C> <C> <C>
Net Loans $67,844 $42,052 $109,896
Securities 10,792 12,534 23,326
Other Assets 25,746 18,927 44,673
------- -------- ---------
Total Assets $104,382 $73,513 $177,895
======== ======== =========
Deposits $69,678 $48,500 $118,178
Borrowings 17,278 16,609 33,887
Other Liabilities 7,163 2,592 9,755
Capital Securities 854 995 1,849
--------- -------- ---------
Total Liabilities $94,973 $68,696 $163,669
Preferred Stock 691 0 691
Common Equity 8,718 4,817 13,535
--------- -------- --------
Total Liabilities $104,382 $73,513 $177,895
and Equity ========= ======== ========
</TABLE>
25
[Fleet logo]--------------------------------------------------[BankBoston logo]
<PAGE>
================================================================================
PRO FORMA CAPITAL RATIOS
================================================================================
12/31/98
--------
Tier 1 7.1%
Leverage 7.2%
Tangible Common 5.5%
26
[Fleet logo]--------------------------------------------------[BankBoston logo]
<PAGE>
================================================================================
LOAN COMPOSITION
================================================================================
<TABLE>
(Dollars in Millions)
<CAPTION>
BankBoston Fleet* Pro Forma
----------------------- ------------------------ ------------------------
Total % of Total Total % of Total Total % of Total
12/31/98 Loans 12/31/98 Loans Loans
-------- ---------- -------- ---------- ------- ----------
<S> <C> <C> <C> <C> <C> <C>
Commercial & Industrial $16,294 38.06% $336,682 52.86% 52,976 47.21%
Lease Financing 1,526 3.56 4,225 6.09 5,751 5.13
Commercial Real Estate 4,086 9.54 5,374 7.74 9,460 8.43
Residential Real Estate 4,329 10.11 9,314 13.42 13,643 12.16
Consumer 2,936 6.86 13,316 19.19 16,252 14.48
International 13,635 31.85 485 0.70 14,120 12.58
------- ------ --------
$42,806 100.00% $69,396 100.00% $112,202 100.00%
====== ====== =======
Loan Loss Reserve (754) (1,552) (2,306)
------- ------- ---------
Net Loans $42,052 $67,844 $109,896
======= ======= ========
(*) Excludes $5.0B of loans and $175MM of loan loss
reserves acquired with Sanwa Business Credit in
February 1999; Excludes
$10B of securitized receivables.
</TABLE>
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<PAGE>
================================================================================
DEPOSIT COMPOSITION
================================================================================
<TABLE>
(Dollars in Millions)
<CAPTION>
BankBoston Fleet Pro Forma
-------------------------- ------------------------ ---------------------------
Total % of Total Total % of Total Total % of Total
12/31/98 Deposits 12/31/98 Deposits 12/31/98 Deposits
-------- ---------- -------- ----------- --------- -----------
Deposits:
<S> <C> <C> <C> <C> <C> <C>
Demand $6,554 13.51% $13,400 19.23% $19,954 16.88%
Savings, NOW 17,694 36.48 34,696 49.79 52,390 44.33
CDs 10,752 22.17 17,764 25.49 28,516 24.13
Foreign 13,500 27.84 3,818 5.48 17,318 14.65
------- --------- -------- ---------- -------- -------
$48,500 100.00% $69,678 100.00% $118,178 100.00%
======= ========= ======== ========== ======== =======
</TABLE>
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<PAGE>
================================================================================
CREDIT QUALITY
================================================================================
At or for the Year Ended December 31, 1998
(Dollars in Millions)
<TABLE>
<CAPTION>
BankBoston Fleet (a) Pro Forma
---------- --------- ---------
<S> <C> <C> <C>
Total Loans (Gross) $42,806 $69,396 $112,202
Loan Loss Reserve 754 1,552 2,306
Non-Performing Assets 402 282 684
NPAs/Loans 0.94% 0.41% 0.61%
NCOs/Avg. Loans 0.81% 0.71% 0.75%
Reserves/Loans 1.76% 2.24% 2.06%
Reserves/NPLs 201% 586% 360%
Reserves/NPAs 188% 550% 337%
(a) Excludes $5B of loans and $175 million of loan
loss reserves acquired with Sanwa Business Credit
on February 1, 1999.
</TABLE>
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<PAGE>
================================================================================
A LEADING U.S. BANK IN ALL FINANCIAL CATEGORIES
================================================================================
Net Income Market Capitalization (b)
1. BankAmerica $6.5 1. Citigroup $150
2. Citigroup 5.8 2. BankAmerica 125
3. Chase 4.0 3. Chase 75
4. Bank One 3.9 4. Bank One 65
5. First Union 3.7 5. Wells Fargo 64
6. Wells Fargo 2.9 6. First Union 52
- - Pro Forma Combined (a) 2.5 - Pro Forma Combined 40
7. Fleet 1.6 7. Bank of New York 30
8. U.S. Bancorp 1.5 8. U.S. Bancorp 26
9. Bank of New York 1.2 9. Fleet 25
10. PNC 1.1 10. National City 23
17. BankBoston 0.9 20. BankBoston 14
Assets Common Equity
1. Citigroup $669 1. BankAmerica $46
2. BankAmerica 618 2. Citigroup 40
3. Chase 366 3. Chase 23
4. Bank One 261 4. Bank One 20
5. J.P. Morgan 261 5. Wells Fargo 20
6. First Union 237 6. First Union 17
7. Wells Fargo 202 - Pro Forma Combined 14
- - Pro Forma Combined 180 7. J.P. Morgan 11
8. Fleet 109 8. Fleet 9
9. Sun Trust 93 9. Sun Trust 8
10. National City 88 10. National City 7
14. BankBoston 74 16. BankBoston 5
Notes: (a) Represents 1998 combined net income; does not take into
account synergies or other pro forma adjustments.
(b) Market information as of 03/12/99.
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<PAGE>
================================================================================
FORWARD LOOKING INFORMATION
================================================================================
This presentation contains forward looking statements with respect to the
financial condition, results of operations and business of Fleet ("Fleet") and
BankBoston ("BankBoston"), and assuming the consummation of the merger, a
combined Fleet and BankBoston, including statements relating to: (i) the cost
savings and revenue enhancements and accretion to reported earnings that will be
realized from the merger; and (ii) the restructuring charges expected to be
incurred in connection with the merger. These forward looking statements involve
certain risks and uncertainties. Factors that may cause actual results to differ
materially from those contemplated by such forward looking statements include,
among other things, the following possibilities: (i) expected cost savings from
the merger cannot be fully realized or realized within the expected time; (ii)
revenues following the merger are lower than expected; (iii) competitive
pressure among depository institutions increases significantly; (iv) costs
related to the integration of the business of Fleet and BankBoston are greater
than expected; (v) changes in the interest rate environment reduce interest
margins; (vi) general economic conditions, either internationally or
domestically in those regions in which the combined company will be doing
business, are less favorable than expected; (vii) legislation or regulatory
requirements or changes adversely affect the business in which the combined
company will be engaged; and (viii) changes which may occur in the securities
market.
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