SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 19, 2000
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FLEET BOSTON CORPORATION
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(Exact name of registrant as specified in its charter)
RHODE ISLAND
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(State or other jurisdiction of incorporation)
1-6366 05-0341324
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(Commission File Number) (IRS Employer Identification No.)
One Federal Street, Boston, MA 02210
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 617-346-4000
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
The Company has filed this amended current report to correct its legal
name, which was inadvertently reported as FLEETBOSTON FINANCIAL CORPORATION, and
to add certain dates previously omitted.
Pursuant to Form 8-K, General Instruction F, the Company hereby
incorporates by reference the press release attached hereto as Exhibit 99.
Item 7. Financial Statements and Other Exhibits.
Exhibit No. Description
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Exhibit 99 Press Release
Dated January 19, 2000
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed in its behalf
by the undersigned hereunto duly authorized.
FLEET BOSTON FINANCIAL CORPORATION
By /s/ William C. Mutterperl
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William C. Mutterperl
Executive Vice President,
Secretary and General Counsel
Dated: March 9, 2000
Contacts: Media: James Mahoney Investor: John Kahwaty
(617) 346-5472 (617) 434-3650
STRONG INCREASE IN OPERATING EARNINGS
1999 INCREASED 14% TO $2.8 BILLION, OR $2.91 PER SHARE
FOURTH QUARTER INCREASED 17% TO $726 MILLION, OR $.76 PER SHARE
Boston, Massachusetts, January 19, 2000: Fleet Boston Financial
(FBF-NYSE) today reported fourth quarter operating earnings of $726 million, or
$.76 per share, up 17% compared to net income of $622 million, or $.65 per
share, in the fourth quarter of 1998. Return on assets and return on equity, on
an operating basis, were 1.50% and 19.61%, respectively, compared with 1.40% and
18.19% for the fourth quarter of 1998.
1999 operating earnings were $2.8 billion, or $2.91 per share, a 14%
increase compared with $2.5 billion, or $2.55 per share, in 1998. Return on
assets and return on equity for the year, on an operating basis, were 1.48% and
19.52%, respectively, compared to 1.44% and 18.69% in 1998.
During the quarter, the corporation recorded merger and related
expenses of $760 million (after-tax) in connection with the merger of BankBoston
Corporation and Fleet Financial Group that closed on October 1, 1999. Including
the impact of these charges, net income was $2.0 billion in 1999, while a net
loss of $34 million was realized in the fourth quarter of 1999. Earnings (loss)
per share, including these charges, were $2.10 for 1999 and $(.05) for the
fourth quarter, compared to $2.41 for 1998 and $.65 for the fourth quarter of
1998.
Terrence Murray, chairman and chief executive officer of Fleet
commented, "The fourth quarter capped a truly remarkable year with great
accomplishments in attaining record operating earnings, merger progress, and
strategic positioning. Our continued strong results bear out the power of our
diversified franchise and the momentum sustained during the integration of two
great franchises. Our merger is very much on course. There is nothing we can do
of greater value to our shareholders than to achieve the considerable benefits
of this combination. We are creating a formidable financial services company
equipped to succeed in the rapidly changing competitive landscape. We approach
the coming year with great conviction, enthusiasm, and zeal."
Chad Gifford, president and chief operating officer said, "Our
businesses are coming together well, and afford us strong positions in growth
markets with compelling market shares and competitive advantages. We continue to
produce strong earnings growth with healthy returns. Our financial resources are
considerable as well, especially reserves and capital. We expect to generate
ample amounts of internal capital to further leverage our growth businesses and
enhance shareholder value. We remain confident in achieving our original merger
expectations and expect to distinguish ourselves as a consistent performer."
FINANCIAL HIGHLIGHTS
Revenues were up $468 million, or 15%, from the fourth quarter of 1998,
and $2.0 billion, or 17%, for the year, as strong growth was realized throughout
the franchise. These increases were driven by both earning asset growth and our
fee-based businesses, which generated 54% of total revenue in the fourth quarter
and 51% for the year.
Noninterest income was $1.9 billion for the fourth quarter, an increase
of $455 million, or 30%, over the fourth quarter of 1998. Significant growth was
noted in nearly all revenue categories, particularly capital markets and
investment services. Capital markets revenue more than doubled as very strong
growth was noted in investment banking fees, venture capital revenue (the
Principal Investing Group), market-making activities, as well as trading
revenue. Investment services revenue increased 22% from the fourth quarter of
1998, reflecting strong equity markets and higher transaction volume at both
Robertson Stephens and Quick & Reilly. In addition, credit card revenue
increased 36% over the fourth quarter of 1998 as reduced charge-offs and higher
securitization revenue bolstered this unit's performance.
Noninterest income totaled $6.9 billion for 1999, an increase of $1.7
billion, or 32%, from 1998 as our diversified business mix produced gains in
virtually all revenue categories. Capital markets revenue increased by nearly $1
billion, as nearly all components of this area, particularly the Principal
Investing Group and Robertson Stephens, had an exceptional year. Investment
services revenue increased 25% to $1.5 billion, driven by strong equity markets
and higher transaction volume.
Net interest income and net interest margin for the fourth quarter of
1999 were $1.7 billion and 4.12%, respectively, compared to $1.7 billion and
4.41% in the fourth quarter of 1998. The net interest margin decline of 29 basis
points primarily resulted from a higher level of low yielding earning assets
necessary to support an expanded investment banking operation, and was somewhat
offset by a 4% increase in average loans. Net interest income totaled $6.8
billion for 1999, up $345 million from 1998. The increase is principally
attributable to strong growth in the loan portfolio, particularly the commercial
and leasing portfolios, primarily as a result of our acquisition of Sanwa
Business Credit early in 1999.
Noninterest expense, excluding the impact of the merger and related
charges, was $2.2 billion during the quarter, a $306 million increase over the
fourth quarter of 1998, reflecting the impact of higher compensation expense
directly attributable to higher levels of revenue. Noninterest expense totaled
$8.2 billion in 1999, an increase of $1.4 billion over 1998, primarily the
result of business expansion and acquisitions, particularly Robertson Stephens
being included for the full year, as well as incentive compensation related to
the $2.0 billion revenue increase in 1999.
Nonperforming assets were $841 million, .70% of total loans, at
December 31, 1999. This increase of $55 million over the third quarter was the
result of additions in the commercial and industrial portfolio, as the new
corporation continues to migrate toward the application of uniform credit
standards to the combined portfolio, somewhat offset by a decline in the
consumer portfolio, both domestically and internationally. Net charge-offs and
the provision for credit losses were both $245 million in the fourth quarter,
down from $260 million and $254 million, respectively, in the fourth quarter of
1998. The provision for credit losses for 1999 and 1998 was $933 million and
$850 million, respectively, while net charge-offs totaled $896 million in 1999
and $834 million in 1998. The reserve for credit losses was $2.5 billion at
December 31, 1999, over 2% of total loans, compared to $2.3 billion at December
31, 1998.
Total assets at December 31, 1999 were $190.7 billion, up $12.8 billion
from December 31, 1998, driven by growth of $8 billion in the loan portfolio to
$119.7 billion. Stockholders' equity amounted to $15.3 billion at December 31,
1999.
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FLEET BOSTON FINANCIAL
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
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Three Months Ended Twelve Months Ended
December 31, December 31, December 31, December 31,
1999 1998 1999 1998
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FOR THE PERIOD ($ IN MILLIONS)
<S> <C> <C> <C>
$ 726 $ 622 Net Income - operating (a) $ 2,798 $ 2,459
760 ---- Merger and related charges, net of tax 760 135
(34) 622 Net Income - reported 2,038 2,324
3,636 3,168 Total Revenue 13,748 11,736
2,198 1,892 Total Expense (a) 8,231 6,833
245 260 Provision for Credit Losses 933 850
PER COMMON SHARE
$ .76 $ .65 Earnings per share - operating $ 2.91 $ 2.55
(.05) .65 Earnings per share - reported 2.10 2.41
.82 .71 Cash earnings per share - operating 3.15 2.76
.30 .27 Cash dividends declared 1.11 1.00
15.96 14.70 Book value (period-end) 15.96 14.70
AT PERIOD-END ($ IN BILLIONS)
$ 190.7 $ 177.9 Assets $ 190.7 $ 177.9
119.7 112.1 Loans 119.7 112.1
114.9 118.2 Deposits 114.9 118.2
15.3 14.2 Total stockholders' equity 15.3 14.2
RATIOS
1.50% 1.40% Return on average assets (a) 1.48% 1.44%
19.61 18.19 Return on common equity (a) 19.52 18.69
4.12 4.41 Net interest margin 4.23 4.40
60.5 59.7 Efficiency ratio (a) 60.0 58.2
8.0 8.0 Total equity/assets (period-end) 8.0 8.0
5.6 5.5 Tangible common equity/assets 5.6 5.5
6.7 7.1 Tier 1 risk-based capital ratio 6.7 7.1
11.0 11.5 Total risk-based capital ratio 11.0 11.5
ASSET QUALITY ($ IN MILLIONS)
$ 841 $ 684 Nonperforming assets $ 841 $ 684
2,488 2,306 Reserve for credit losses 2,488 2,306
.70% .61% Nonperforming assets as a % of loans .70% .61%
2.08 2.06 Reserve for credit losses to period-end loans 2.08 2.06
314 360 Reserve for credit losses to nonperforming loans 314 360
.82 .88 Net charge-offs/average loans .76 .75
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</TABLE>
(a) Excludes the impact of merger-related charges and other special items.
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FLEET BOSTON FINANCIAL
CONSOLIDATED INCOME STATEMENTS
($ in millions)
<TABLE>
<CAPTION>
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Three Months Ended Twelve Months Ended
December 31, December 31, December 31, December 31,
1999 1998 1999 1998
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<S> <C> <C> <C>
$ 1,688 $ 1,675 Net interest income (FTE) $ 6,799 $ 6,454
Noninterest income:
708 335 Capital markets revenue 2,079 1,140
405 331 Investment services revenue 1,513 1,212
386 356 Banking fees and commissions 1,501 1,339
196 144 Credit card revenue 737 455
152 140 Processing-related revenue 609 452
101 187 Other 510 684
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1,948 1,493 Total noninterest income 6,949 5,282
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3,636 3,168 Total Revenue 13,748 11,736
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Noninterest expense:
1,197 971 Employee compensation and benefits 4,392 3,468
141 137 Occupancy 566 529
125 122 Equipment 509 474
89 74 Intangible asset amortization 349 274
646 588 Other 2,415 2,088
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2,198 1,892 Total noninterest expense 8,231 6,833
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1,438 1,276 Earnings before income taxes and provision 5,517 4,903
245 260 Provision for credit losses 933 850
467 394 Income taxes and tax-equivalent adjustment 1,786 1,594
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726 622 Net income - Operating 2,798 2,459
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760 ---- Merger and related charges, net of tax 760 135
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$ (34) $ 622 Net income - Reported $ 2,038 $ 2,324
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$ .76 $ .65 Earnings per share - operating $ 2.91 $ 2.55
(.05) .65 Earnings per share - reported 2.10 2.41
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</TABLE>
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FLEET BOSTON FINANCIAL
CONSOLIDATION BALANCE SHEETS
($ in millions)
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December 31, December 31,
1999 1998
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ASSETS:
Cash and equivalents $ 12,980 $ 13,507
Securities 25,212 23,369
Trading assets 7,849 4,364
Loans and leases 119,700 112,094
Reserve for credit losses (2,488) (2,306)
Due from brokers/dealers 3,003 3,600
Mortgages held for resale 1,244 4,068
Other assets 23,192 19,198
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Total assets $ 190,692 $ 177,894
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LIABILITIES:
Deposits $ 114,896 $ 118,178
Short-term borrowings 18,106 19,176
Due to brokers/dealers 4,468 3,975
Long-term debt 25,349 14,411
Trading liabilities 3,807 2,326
Other liabilities 8,759 5,624
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Total liabilities 175,385 163,690
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STOCKHOLDERS' EQUITY:
Preferred stock 691 691
Common stock 14,616 13,513
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Total stockholders' equity 15,307 14,204
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Total liabilities and stockholders' equity $ 190,692 $ 177,894
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