FleetBoston - Slide Presentation
Filing pursuant to Rule 425 under the
Securities Act of 1933, as amended and
Deemed filed under Rule 14a-12 under the
Securities Exchange Act of 1934, as amended
Filer: FleetBoston Financial Corporation
Subject Company: FleetBoston Financial Corporation
Commission File Number: 1-6366
On October 27, 2003, FleetBoston Financial Corporation, a Rhode Island
corporation, and Bank of America Corporation, a Delaware corporation, made the
following presentation:
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CREATING AMERICA'S PREMIER
FINANCIAL SERVICES COMPANY
KEN LEWIS & JIM HANCE
BANK OF AMERICA
CHAD GIFFORD & GENE MCQUADE
FLEETBOSTON FINANCIAL
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[FLEETBOSTON LOGO] [BANK OF AMERICA LOGO]
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FORWARD LOOKING STATEMENTS
This presentation contains forward-looking statements, including statements
about the financial conditions, results of operations and earnings outlook of
Bank of America Corporation and FleetBoston Financial. The forward-looking
statements involve certain risks and uncertainties. Factors that may cause
actual results or earnings to differ materially from such forward-looking
statements include, among others, the following: 1) projected business increases
following process changes and other investments are lower than expected;
2) competitive pressure among financial services companies increases
significantly; 3) general economic conditions are less favorable than expected;
4) political conditions and related actions by the United States military abroad
may adversely affect the company's businesses and economic conditions as a
whole; 4) changes in the interest rate environment reduce interest margins and
impact funding sources; 5) changes in foreign exchange rates increases exposure;
6) changes in market rates and prices may adversely impact the value of
financial products and assets; 7) legislation or regulatory environments,
requirements or changes adversely affect the businesses in which the company is
engaged; 8) litigation and regulatory liabilities, including costs, expenses,
settlements and judgments, may adversely affect the company or its businesses;
and 9) decisions to downsize, sell or close units or otherwise change the
business mix of any of the company. For further information regarding either
company, please read the Bank of America and FleetBoston Financial reports filed
with the SEC and available at www.sec.gov.
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[FLEETBOSTON LOGO] 2 [BANK OF AMERICA LOGO]
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CREATING AMERICA'S PREMIER
FINANCIAL SERVICES COMPANY
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[FLEETBOSTON LOGO] 3 [BANK OF AMERICA LOGO]
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UNIQUE OPPORTUNITY
o Unrivaled presence in America's growth and wealth markets
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o Increased earnings diversity and stability
o Enhanced leverage of technology and process capabilities
o Expanded distribution
o Increased number of wealth advisors
o Most talented and experienced management team in industry
o Fortress franchise
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[FLEETBOSTON LOGO] 4 [BANK OF AMERICA LOGO]
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DIVERSIFIED BUSINESS MIX
BANK OF AMERICA YTD REVENUE MIX [PIE GRAPH]
Consumer & Commercial Banking 66%
Global Corporate & Investment Banking 24%
Asset Management 6%
Other 5%
Equity Investing -1%
FLEETBOSTON YTD REVENUE MIX [PIE GRAPH]
Personal Financial Services 46%
Regional CFS & Inv. Mgmt 21%
National Commercial Financial Services 21%
Int'l Banking 8%
Capital Markets 2%
Other 2%
NEW BANK OF AMERICA [PIE GRAPH]
Consumer & Small Business 56%
Global Corporate & Investment Banking 25%
Commercial Banking 11%
Wealth Management 8%
Other 0%
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[FLEETBOSTON LOGO] 5 [BANK OF AMERICA LOGO]
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UNMATCHED FRANCHISE
[GRAPHIC DEPICTING MAP OF UNITED STATES OF AMERICA WITH SHADED REGIONS]
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HIGHLY COMPATIBLE PHILOSOPHIES
o Passion to keep raising the customer experience
o Valuing employees as our most critical resource
o Ensuring risks and rewards are in sync
o Setting high standards of accountability
o Relentless focus on shareholder value creation
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[FLEETBOSTON LOGO] 7 [BANK OF AMERICA LOGO]
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THE LONG-TERM WINNERS POSSESS ......
o Dominant market share
o Superior products and services
o Powerful brand
o Energized employees
o Culture of service and innovation
o Operating leverage
o Disciplined management
o Excess capital generation
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THIS COMPANY HAS WHAT IT TAKES TO WIN
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[FLEETBOSTON LOGO] 8 [BANK OF AMERICA LOGO]
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SUPERIOR FINANCIAL STRENGTH
($ in billions)
Bank of America FleetBoston Combined
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Market Cap (10/24/03) $121.9 $33.5 $155.4 --> #3 financial
services worldwide
Earnings (2003 YTD) $8.1 $1.9 $10.0 --> 4th most profitable
company in world
Common Equity $50.4 $17.6 $68.0 --> #3 financial
services worldwide
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THE FINANCIAL STRENGTH AND CASH FLOW GENERATION OF THE COMBINED ENTITY WILL
MITIGATE RISK WHILE PROVIDING SIGNIFICANT RESOURCES TO SUPPORT FUTURE GROWTH
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[FLEETBOSTON LOGO] 9 [BANK OF AMERICA LOGO]
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THE BUSINESSES OF BANK OF AMERICA
[PIE GRAPH]
Consumer & Small Business 56%
Global Corporate & Investment Banking 25%
Commercial Banking 11%
Wealth Management 8%
Other 0%
Based on 9 mo. YTD annualized revenue data
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[FLEETBOSTON LOGO] 10 [BANK OF AMERICA LOGO]
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CONSUMER & SMALL BUSINESS HIGHLIGHTS
($ IN BILLIONS) BANK OF AMERICA FLEETBOSTON COMBINED
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Revenue $22.8 $5.1 $27.9
Income 6.4 1.0 7.4
Loans 131 48 179
Deposits 277 79 356
Revenue and income represent 9 mo. YTD annualized data
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[FLEETBOSTON LOGO] 11 [BANK OF AMERICA LOGO]
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CONSUMER & SMALL BUSINESS HIGHLIGHTS
#1 Retail customers - 33 million
#1 Deposit market share in US - 9.8%
#1 Banking center locations - 5,669
#1 ATM network - 16,551
#1 Active online banking customers - 8 million
#1 Small business lender - 11,594 loans
#1 Debit card transactor - 15% + market share
#5 Credit card managed receivables - $47 billion
#3 Retail mortgage originator - $80 billion YTD 03
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UNRIVALED MARKET PRESENCE
[Graphic depicting State ranking and deposit share]
AR #3 (6%)
AZ #2 (21%)
CA #1 (21%)
CT #1 (22%)
DC #3 (17%)
FL #1 (20%)
GA #3 (12%)
IA #7 (2%)
ID #4 (4%)
IL #13 (1%)
KS #2 (7%)
MA #1 (23%)
MD #1 (17%)
ME #3 (8%)
MO #2 (11%)
NC #2 (21%)
NH #4 (6%)
NJ #1 (19%)
NM #2 (16%)
NV #3 (19%)
NY #5 (3%)
OK #5 (5%)
OR #4 (11%)
PA #10 (2%)
RI #2 (23%)
SC #2 (12%)
TN #5 (6%)
TX #2 (12%)
VA #5 (10%)
WA #1 (22%)
Source: SNL Branch Data Source; Deposits as of June 2002, adjusted for pending
transactions
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[FLEETBOSTON LOGO] 13 [BANK OF AMERICA LOGO]
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INCREASED SHARE OF DOMESTIC DEPOSIT BASE
($ IN BILLIONS)
TOTAL NATIONAL
DEPOSITS DEPOSIT
RANK 6/30/02 SHARE (%)
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1 NEW BANK OF AMERICA $437 9.8
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1 BANK OF AMERICA 326 7.3
2 Wells Fargo 189 4.2
3 Wachovia 173 3.9
4 J.P. Morgan Chase 170 3.8
5 Citigroup 166 3.7
6 Bank One 146 3.3
7 Washington Mutual 121 2.7
8 FLEETBOSTON 110 2.5
9 U.S. Bancorp 107 2.4
10 SunTrust 69 1.5
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U.S. Deposits $ 4,478
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Source: Federal Reserve and SNL Financial Branch Data Source
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PRESENCE WHERE GROWTH MATTERS
Deposit market share of Top 50 MSAs with largest expected POPULATION growth
[BAR GRAPH]
Bank of America/Fleet 14.3% + 0.5% = 14.8%
Wells Fargo 7.4%
Washington Mutual 5.5%
Wachovia 5.3%
Citigroup 2.6%
Bank One 2.4%
US Bancorp 2.1%
Current deposit market share percentage of Top 50 MSAs with largest expected
population growth from 2002-2007 taken from SNL securities data and Lehman
Brothers research reports.
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[FLEETBOSTON LOGO] 15 [BANK OF AMERICA LOGO]
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PRESENCE WHERE WEALTH MATTERS
Deposit market share of Top 50 MSAs with largest INCOME concentration
[BAR GRAPH]
Bank of America/Fleet 8.6% + 2.9% = 11.5%
Citigroup 5.3%
Wells Fargo 4.2%
Washington Mutual 3.9%
Bank One 3.3%
Wachovia 3.3%
US Bancorp 2.2%
Current deposit market share percentage of TOP 50 MSAs with largest # of
households with annual income of at least $50,000 taken from SNL Securities data
and Lehman Brothers research reports.
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[FLEETBOSTON LOGO] 16 [BANK OF AMERICA LOGO]
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ENHANCING CARD SERVICES
* Fifth largest bank credit card issuer in the U.S.
- $47 Bn in managed outstandings and 35 MM accounts
* #1 debit card transactor in U.S. with more than 15% market share
TOP BANK CREDIT CARD ISSUERS IN THE U.S. (1)
($ in Billions)
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CHARGE ACCOUNTS (MM) CARDS
ISSUER OUTST. VOLUME TOTAL OUTST. (MM)
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1. Citigroup/Sears (2) $ 105.5 $ 104.0 71.8 102.4
2. MBNA 80.8 68.8 39.4 52.2
3. BankOne 74.3 78.8 42.7 50.4
4. J.P. Morgan Chase 50.8 45.0 29.1 40.8
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5 NEW BANK OF AMERICA 47.0 42.6 35.2 41.5
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5. Capital One 43.4 32.3 36.6 44.7
6. BANK OF AMERICA 32.4 31.8 25.7 30.1
7. Providian 17.8 8.4 12.0 13.8
8. Household 16.6 17.8 20.1 24.0
9. FLEET BOSTON 14.6 10.7 9.5 11.4
10. Wells Fargo 11.9 11.3 6.9 8.3
(1) Source: The Nilson Report - outstandings and charge volumes as of 6/30/03;
accounts, cards and association as of 12/31/02
(2) Merger pending completion
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LEVERAGING CONSUMER REAL ESTATE
[BAR GRAPH] [BAR GRAPH]
FIRST MORTGAGE PORTFOLIO HOME EQUITY PORTFOLIO
$162 BILLION $52 BILLION
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FleetBoston $16 FleetBoston $29
Bank of America $146 Bank of America $23
* Third largest direct to consumer first mortgage originator
* Fifth largest mortgage servicing portfolio ($246 billion)
* Largest home equity lender ($52 billion)
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SMALL BUSINESS IS BIG BUSINESS
* #1 small business lender in U.S. with 2.5 million clients
* Full suite of products and services
* Strong links to both retail delivery platform and the asset management
franchise
Small business importance to the economy (1)
* Provides approximately 75 percent of the net new jobs added to the economy.
* Represents 99.7 precent of all employers.
* Accounts for 39 percent of jobs in high technology sectors.
* Represents 97 percent of all U.S. exporters.
(1) Statistics provided by Small Business Lending Administration
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MIDDLE MARKET & CORPORATE BANKING
* #1 in U.S. large corporate banking relationships
* Leader in domestic and global cash management
- #1 in middle market in Northeast
- #1 in middle market in U.S.
- #1 in global cash management, serving more than 16,000 clients worldwide
* #1 syndicated lender - U.S. leveraged loans by volume
* Top tier fixed income solution provider
* Leader in Equity and Equity Convertibles
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[FLEETBOSTON LOGO] 20 [BANK OF AMERICA LOGO]
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WEALTH MANAGEMENT
o 9TH LARGEST WEALTH MANAGER IN U.S. - OVER $470 BILLION IN AUM
o LARGE CUSTOMER BASE WITH ACCESS TO OVER 1.6 MILLION AFFLUENT
HOUSEHOLDS (1) IN U.S.
o COMPLEMENTARY STRENGTHS AND STRATEGIES
- Wealth mangagement
o Active and passive investment management
o Diverse fund management styles - growth, value, balanced
o International diversity
- 3rd largest bank-owned brokerage company
- Large hight net worth client base
o growing share of wallet
o 4,500 INVESTMENT ADVISORS AND 1,900 BROKERS
(1) Investable assets in excess of $100,000.
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[FLEETBOSTON LOGO] 21 [BANK OF AMERICA LOGO]
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TOP U.S. WEALTH MANAGERS BY AUM AND ASSET CLASS
($'s in billions)
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Total AUM
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Company Rank $ AUM
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Fidelity Investments 1 794
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State Street Global Advisors 2 763
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Barclays Global Investors 3 746
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Capital Group Cos. 4 552
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Citigroup 5 535
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Mellon Financial Corporation 6 522
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J.P. Morgan Flemming Asset Mgmt 7 516
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Merrill Lynch Investment Managers 8 462
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NEW BANK OF AMERICA 9 456
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BANK OF AMERICA 17 310
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FLEETBOSTON'S COLUMBIA MGMT GROUP 37 146
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Source: Institutional Investor, July 2003; data as of 12/21/02. Rankings only
include top 40 asset managers ranked by total assets under management.
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[FLEETBOSTON LOGO] 22 [BANK OF AMERICA LOGO]
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THE NEW BANK OF AMERICA
($ in billions as of 9/30/03)
Bank of America FleetBoston Combined
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Assets $ 737 $ 196 $ 933
Loans & leases 373 126 499
Deposits 409 133 542
Shareholder's equity 50 18 68
YTD Revenue 28 9 37
YTD Earnings 8 2 10
Employees 132,749 47,969 180,718
Banking Centers 4,211 1,458 5,669
ATMs 13,120 3,431 16,551
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[FLEETBOSTON LOGO] 23 [BANK OF AMERICA LOGO]
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CREDIT QUALITY
(as of 9/30/03)
Bank of America FleetBoston Combined
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% of Total Loans:
Allowance for Loan Losses 1.80% 2.48% 1.97%
YTD Net Charge-Offs 0.91% 1.56% 1.08%
Non-Performing Assets 0.98% 1.85% 1.20%
Allowance for Loan Losses
as a % of Non-performing Loans 196% 165% 185%
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TRANSACTION SUMMARY
Price Per Share: $45.00 per FBF share (1)
Fixed Exchange Ratio: .5553 BAC shares for each FBF share
Accounting Treatment: Purchase/tax-free exchange
Board Composition: (19) 12 from Bank of America
7 from FleetBoston
Expected Closing: Second Quarter 2004
Approvals: Normal regulatory and shareholder
approvals of both companies
(1) Based on closing BAC stock price as of 10/22/03.
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FINANCIAL OVERVIEW
($ in millions)
2004 2005
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(1) Bank of America projected net income $ 10,961 $ 11,947
(1) FleetBoston projected net income 1,487 (2) 3,148
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Total $ 12,448 $ 15,095
Adjustments
Expense efficiencies 250 1,100
Higher intangible amortization (165) (330)
Synergies 110 195
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Projected net income for new Bank of America $ 12,643 16,060
Average projected diluted shares outstanding 1,781 2,016
Projected earnings per diluted share $ 7.10 $ 7.97
(1) Consensus First Call estimate for Bank of America $ 7.27 $ 7.92
Projection vs. Consensus -2% 1%
Excludes after-tax restructuring charge of $800 million
(1) 2004 First Call consensus with 9% increase in 2005
(2) 2004 reflects only 6 months earnings as a result of purchase accounting
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FINANCIAL ASSUMPTIONS
o Transaction closes in second quarter 2004
o Overall expense efficiencies of $1.1 billion after-tax, or 6% of
combined expense base
o Higher intangible amortization of $330 million per year
o Synergies of approximately $195 million after-rax per year
o Restructuring charge of $800 million after-tax
o Net share repurchases of approximately 67 million in 2004 and 23
million in 2005
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[FLEETBOSTON LOGO] 27 [BANK OF AMERICA LOGO]
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INVESTMENT IN BAC TODAY
o Stock with a 11x P/E valuation versus 12+ for peers and 13+ for industry
o Higher EPS expectations in out years versus current expectations
o Intense associate focus on customer satisfaction that shows in current
revenue streams
o Much improved risk profile versus years ago when both stocks were at their
highs
o Attractive dividend yield (4%) and history of double digit increases
spanning a quarter century
o Strong cash flow to pay dividend and repurchase shares
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o Franchise more diversified and unequalled in market share presence
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MANAGEMENT TEAM
KEN LEWIS CHAD GIFFORD
Chief Executive Officer Chairman
JIM HANCE GENE MCQUADE
Vice Chairman and Chief President
Financial Officer
ED BROWN BARBARA DESOER LIAM MCGEE BRIAN MOYNIHAN GENE TAYLOR BRAD WARNER
President President President President President President
Global Corporate Consumer Consumer Wealth Commercial Small Business
and Investment Products Banking Management Banking and Premier
Banking Banking
AMY BRINKLEY JAY SARLES STEELE ALPHIN CATHY BESSANT MILTON JONES
Chief Risk Vice Chairman Principal Chief Marketing Quality and
Officer Special Advisor Personnel and Productivity
to CEO Executive Communications Executive
Officer
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BANK OF AMERICA [LOGO] HIGHER STANDARDS
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ADDITIONAL INFORMATION ABOUT THIS TRANSACTION
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Bank of America Corporation ("Bank of America") and FleetBoston Financial
Corporation ("FleetBoston") will file a Joint Proxy Statement/Prospectus and
other documents regarding this transaction with the Securities and Exchange
Commission ("SEC"). Bank of America and FleetBoston will mail the Joint Proxy
Statement/Prospectus to their respective stockholders. These documents will
contain important information about the transaction, and Bank of America and
FleetBoston urge you to read these documents when they become available.
You may obtain copies of all documents filed with the SEC regarding this
transaction, free of charge, at the SEC's website (www.sec.gov). You may also
obtain these documents, free of charge, from Bank of America's website
(www.bankofamerica.com) under the tab "About Bank of America" and then under the
heading "SEC Documents". You may also obtain these documents, free of charge,
from FleetBoston's website (www.fleet.com) under the tab "About Fleet" and then
under the heading "Investor Relations" and then under the item "SEC Documents"-
PARTICIPANTS IN THIS TRANSACTION
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Bank of America and FleetBoston and their respective directors and
executive officers may be deemed participants in the solicitation of proxies
from stockholders in connection with this transaction. Information about the
directors and executive officers of Bank of America and FleetBoston and
information about other persons who may be deemed participants in this
transaction will be included in the Joint Proxy Statement/Prospectus. You can
find information about Bank of America's executive officers and directors in
their definitive proxy statement filed with the SEC on March 27, 2003. You can
find information about FleetBoston's executive officers and directors in their
definitive proxy statement filed with the SEC on March 17, 2003. You can obtain
free copies of these documents from Bank of America and FleetBoston using the
contact information above.