EX-99.4 5 0005.txt EXHIBIT 99.4 - INVESTOR PRESENTATION MATERIALS Exhibit 99.4 [FLEETBOSTON LOGO] [SUMMIT LOGO] OCTOBER 2, 2000 Leveraging the Franchise Strategic Rationale: Compelling Fit with FleetBoston's Franchise o COMMANDING SHARE IN HIGHLY ATTRACTIVE MARKET o ACCELERATES FEE INCOME GROWTH RATE: o Bringing FleetBoston's Products to Summit Customers o MAINTAINS DIVERSIFIED BUSINESS MIX AND EARNINGS CONSISTENCY o LEVERAGES SCALE CREATED BY FLEET/BKB MERGER o ATTRACTIVE SHAREHOLDER ECONOMICS -2- Why Summit.... ? New Jersey - A Highly Attractive Market o # 1 in Population Density o # 2 in Household Income o 9 of the Top 100 Wealthiest Counties in the U.S. o 25% of all Households in Northeast with $1MM+ of Investable Assets o Small Business Base - Equals MA and CT Combined o 50% of Fortune 500 have HQ's or Operations in N.J. ... Great Opportunity to Leverage Our Franchise -3- Northeast Powerhouse FleetBoston will have Sizable Lead Positions in Three of the Wealthiest States FBF DEPOSIT HOUSEHOLD INCOME RANK STATE SHARE RANK -------------------------------------------------------------------------------- #1 Conn. 27% #1 -------------------------------------------------------------------------------- #2 N.J. 21% (pro forma) #1 -------------------------------------------------------------------------------- #6 Mass. 37% #1 -4- Ability to Cross-Sell Synergies Emerging From Fleet/Summit Merger On-Line Banking Customers (000s) 12/98: 510 (12% penetration) 9/00: 1,023 (26% penetration) On-Line Brokerage Customer (000s) 12/98: 230 9/00: 950 Cash Management Revenues ($ billions) 1999: $0.8 2000 Annualized: $1.0 -5- Accelerating Summit's Growth Rate Huge Opportunity to Leverage Summit's Customers with FleetBoston's Stronger Product Mix Commercial: o Small Business (#1 SBA Lender) o Global services (Forex, Trade) o Cash Management (Top 5 Provider) o Capital Markets (equity & debt, principal Inv.) o Comm'l Finance (leasing, asset based) Consumer: o E-commerce initiatives o On-Line Banking (Home Link) o On-Line Brokerage (Quick & Reilly) o Invest Mgmt ($130B AUM) -6- Compelling Fit Summit Brings Features Unique to the Combination o PENNSYLVANIA PRESENCE o $3B Deposits o 115 Branches o $11B AUM o Includes High-Performing Pillar Funds o INSURANCE BROKERAGE o # 1 in N.J. o 3rd Largest Among Banks o MERCHANT BANKCARD PROCESSING o # 1 in N.J. o 16,000+ Merchants -7- How This Transforms our Strategy Circle of Value Creation Move Customers in Highly Attractive Markets -> Greater Penetration Growth & Scale -> Free Cash Flow and Capital -> Reinvestment in Growth Businesses -8- PPT SLIDE Attractive Shareholder Economics o ACCRETIVE TO OPERATING EARNINGS IN 2001 o 3% ACCRETIVE IN 2002 AND BEYOND o IRR: 19% o 30% COST SAVES o GENERATES $1B OF EXCESS CAPITAL THROUGH BALANCE SHEET REPOSITIONING -9- Transaction Summary STRUCTURE: - POOLING - TAX-FREE EXCHANGE FIXED EXCHANGE RATIO: - 1.02 FBF SHARES FOR EACH SUB SHARE PRICE: - $39.78 PER SHARE (BASED ON FBF CLOSE ON 9/29) - $7B AGGREGATE TRANSACTION VALUE - 15.7% PREMIUM TO MARKET TIMING: - SUBJECT TO REGULATORY AND SUMMIT SHAREHOLDER APPROVAL - TARGETED TO CLOSE Q1'01 BOARD OF DIRECTORS - 2 SUMMIT DIRECTORS INCLUDING T. JOSEPH SEMROD, CHAIRMAN & CEO, TO JOIN FBF BOARD DIVESTITURES - $250MM - PRIMARILY SOUTHERN NEW JERSEY -10- PPT SLIDE Low-Risk Integration o FBF: AN EXCELLENT OPERATOR & CONSOLIDATOR o NATURAL EXTENSION OF CURRENT GEOGRAPHY o EACH COMPANY ALREADY ON A SINGLE OPERATING PLATFORM o MANY COMMON VENDOR SYSTEMS o VAST MAJORITY OF FLEETBOSTON BUSINESSES NOT AFFECTED o EXPECT TO COMPLETE WITHIN 6 MONTHS -11- We've Delivered Fleet/BKB Merger Completed E.P.S. Expectations Pre-Merger We've Delivered Announcement -------------------------------- 1999 $2.85 $2.91 -------------------------------- 2000 $3.19 $3.39 -------------------------------- 1% accretion 7% accretion -------------------------------------------------------------------------------- Cost Savings $1 Billion Achieved by year end -------------------------------- -$600mm -$800mm (merger) annualized -------------------------------- -$400mm Thru 3Q 100 (divestiture) -------------------------------------------------------------------------------- Divestitures $13B Deposits Done -------------------------------- 12% premium $13B & 315 Branches to Sovereign & Community Banking -12- Financial Assumptions COST SAVINGS: $275 MILLION (60% IN 2001 / 100% IN 2002) BALANCE SHEET $15B OF LOW-MARGIN ASSET DISPOSITIONS REPOSITIONING - $10B INVESTMENT SECURITIES - $ 5B Loans $175 million after-tax cost RESTRUCTURING CHARGES: $250 MILLION AFTER-TAX AT CLOSE $ 60 MILLION AFTER-TAX IN SUBSEQUENT PERIODS REVENUE ENHANCEMENTS: NONE ASSUMED -13- Estimated Cost Savings Personnel $ 150MM Facilities and Equipment 60 Other 65 Total $ 275MM -14- E.P.S. Accretion ------------ ----------- 2001E 2002E ------------ ----------- FBF EPS $ 3.72 $ 4.09 FBF Net Income 3,440 3,775 Summit Net Income 560 600 Combined Net Income 4,000 4,375 Cost Savings (after-tax) 100 175 Balance Sheet Restructuring (25) (35) Earnings on Reinvested Capital 50 110 -------------------------------------------------------------------------------- Incremental Earnings 125 250 -------------------------------------------------------------------------------- Pro Forma Earnings 4,125 4,625 Pro Forma E.P.S. $ 3.73 $ 4.20 -------------------------------------------------------------------------------- E.P.S. Accretion $ $ .01 $ .11 % 0.3% 3% -------------------------------------------------------------------------------- Note: Above figures are derived from First Call earnings consensus for both companies and assumes after-tax earnings of 8.5% in 1001 and 8% in 2002 on reinvested capital. Excludes merger-related charges -15- Balance Sheet June 30, 2000 $ IN BILLIONS Balance Sheet FleetBoston Summit Restruct ProForma* Net Loans $ 110.0 $ 24.7 $ (5.0) $ 129.7 Securities 22.8 11.3 (10.0) 24.1 Other Asset 48.5 3.0 - 51.5 ------------ ---------- ----------- ---------- Total Assets $ 181.3 $ 39.0 $ (15.0) $ 205.3 Deposits $ 104.7 $ 26.1 $ - $ 130.8 Borrowings 51.5 9.5 (15.0) 46.0 Other Liabilities 9.8 0.4 - 10.2 ----------- ---------- ----------- ---------- Total Assets $ 166.0 $ 36.0 $ (15.0) $ 187.0 Preferred Stock 0.6 - - 0.6 Common Stock 14.7 2.9 - 17.6 ----------- ---------- ----------- ----------- Total Liab & Equity $ 181.3 $ 39.0 $ (15.0) $ 205.3 ----------- ---------- ---------- ----------- -16-
Loan Composition $ IN BILLIONS FleetBoston Summit Balance Sheet Pro Forma Restruct Q2'00 % of Q2'00 % of Q2'00 % of Avg Total Avg Total Avg Total C&I/ Lease Financing $ 66.0 57% $ 8.5 35% $ 74.5 55% Commercial Real Estate 8.0 7% 3.2 13% 11.2 8% Residential Real Estate 9.1 8% 5.8 24% (5.0) 9.9 7% Consumer 18.5 16% 6.4 27% 24.9 18% International 15.1 13% - 0% 15.1 11% ------- ---- ----- ---- ------------- ------ ------ Gross Loans $116.7 100% $24.0 100% $ (5.0) 136.7 100%
-17- Deposit Composition $ IN BILLIONS FleetBoston Summit Pro Forma Q2'00 % of Q2'00 % of Q2'00 % of Avg Total Avg Total Avg Total Demand $ 25.7 24% $ 4.9 20% $ 30.6 23% Savings NOW 44.0 41% 11.8 47% 55.8 42% CDs 22.0 20% 8.3 33% 30.3 23% Foreign 16.0 15% - 0% 16.0 12% ------- ------- ------ ------- ------ ------ Total $ 107.7 100% $ 25.1 100% $ 132.8 100% * Excludes Expected Divestitures of $250MM -18- Credit Quality June 30, 2000 $ IN BILLIONS ----------- ----------- ------------------ --------- Avg Loans FBF SUB Balance Sheet Pro Forma Restruct ----------- ----------- ------------------ --------- Gross Loans $112,476 $25,048 $(5,000) $132,524 Loan Loss Reserve 2,472 335 2,807 Non-Performing Assets 950 120 1,070 NPAs/Loans 0.84% 0.48% 0.81% NCOs/Avg Loans 0.96% 0.36% 0.89% Reserve/Loans 2.20% 1.34% 2.12% -19- Compelling Fit with FleetBoston's Franchise o COMMANDING SHARE IN HIGHLY ATTRACTIVE MARKET o ACCELERATES FEE INCOME GROWTH RATE: o Bringing FleetBoston's Products to Summit Customers o MAINTAINS DIVERSIFIED BUSINESS MIX AND EARNINGS CONSISTENCY o LEVERAGES SCALE CREATED BY FLEET/BKB MERGER o ATTRACTIVE SHAREHOLDER ECONOMICS Strategic Rationale -20- APPENDIX -21- FORWARD LOOKING INFORMATION This presentation contains forward looking statements with respect to the financial condition, results of operations and business of FleetBoston Financial Corporation ("Fleet") and Summit Bancorp ("Summit"), 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. -22-