-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PqNgUJ650hUt7Iem/szvTKBKLL8PlZF6Na0We3oAaV5ngVhB5I1tmCFzF8cZnvpS EpfLY7dcAXvkAyCk5komaA== 0000908662-00-000047.txt : 20000203 0000908662-00-000047.hdr.sgml : 20000203 ACCESSION NUMBER: 0000908662-00-000047 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000131 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FLEET BOSTON CORP CENTRAL INDEX KEY: 0000050341 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 050341324 STATE OF INCORPORATION: RI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-06366 FILM NUMBER: 520110 BUSINESS ADDRESS: STREET 1: ONE FEDERAL STREET CITY: BOSTON STATE: MA ZIP: 02110 BUSINESS PHONE: 6173464000 MAIL ADDRESS: STREET 1: ONE FEDERAL STREET CITY: BOSTON STATE: MA ZIP: 02110 FORMER COMPANY: FORMER CONFORMED NAME: FLEET NORSTAR FINANCIAL GROUP INC DATE OF NAME CHANGE: 19920525 FORMER COMPANY: FORMER CONFORMED NAME: FLEET FINANCIAL GROUP INC DATE OF NAME CHANGE: 19880110 FORMER COMPANY: FORMER CONFORMED NAME: INDUSTRIAL NATIONAL CORP DATE OF NAME CHANGE: 19820512 8-K 1 FLEETBOSTON 8-K 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) January [ ], 2000 ------------------------------------------------------------------ FLEETBOSTON FINANCIAL CORPORATION --------------------------------------------------------------- (Exact name of registrant as specified in its charter) RHODE ISLAND --------------------------------------------------------------- (State or other jurisdiction of incorporation) 1-6366 05-0341324 --------------------------------------------------------------- (Commission File Number) (IRS Employer Identification No.) One Federal Street, Boston, MA 02210 ------------------------------------ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 617-346-4000 ------------ ------------------------------------------------------------- (Former name or former address, if changed since last report) Item 5. Other Events. 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 ----------- ----------- Exhibit 99 Press Release Dated January [ ], 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. FLEETBOSTON FINANCIAL CORPORATION By /s/ William C. Mutterperl ------------------------------------- William C. Mutterperl Executive Vice President, Secretary and General Counsel Dated: January [ ], 2000 EX-99 2 PRESS RELEASE 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: FleetBoston 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 $15.3 billion at December 31, 1999. FLEETBOSTON FINANCIAL FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------------------------------------------------------ Three Months Ended Twelve Months Ended December 31, December 31, December 31, December 31, 1999 1998 1999 1998 - ------------------------------------------------------------------------------------------------------------------------ FOR THE PERIOD ($ IN MILLIONS) $ 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 - ------------------------------------------------------------------------------------------------------------------
(a) Excludes the impact of merger-related charges and other special items. FLEETBOSTON FINANCIAL CONSOLIDATED INCOME STATEMENTS ($ in millions)
- ----------------------------------------------------------------------------------------------------------------------- Three Months Ended Twelve Months Ended December 31, December 31, December 31, December 31, 1999 1998 1999 1998 - ----------------------------------------------------------------------------------------------------------------------- $ 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 - ----------------------------------------------------------------------------------------------------------------------- 1,948 1,493 Total noninterest income 6,949 5,282 - ----------------------------------------------------------------------------------------------------------------------- 3,636 3,168 Total Revenue 13,748 11,736 - ----------------------------------------------------------------------------------------------------------------------- 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 - ---------------------------------------------------------------------------------------------------------------------- 2,198 1,892 Total noninterest expense 8,231 6,833 - ---------------------------------------------------------------------------------------------------------------------- 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 - ---------------------------------------------------------------------------------------------------------------------- 726 622 Net income - Operating 2,798 2,459 - ---------------------------------------------------------------------------------------------------------------------- 760 ---- Merger and related charges, net of tax 760 135 - ---------------------------------------------------------------------------------------------------------------------- $ (34) $ 622 Net income - Reported $ 2,038 $ 2,324 - ---------------------------------------------------------------------------------------------------------------------- $ .76 $ .65 Earnings per share - operating $ 2.91 $ 2.55 (.05) .65 Earnings per share - reported 2.10 2.41 - ----------------------------------------------------------------------------------------------------------------------
FLEETBOSTON FINANCIAL CONSOLIDATION BALANCE SHEETS ($ in millions) - -------------------------------------------------------------------------------- December 31, December 31, 1999 1998 - -------------------------------------------------------------------------------- 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 - -------------------------------------------------------------------------------- Total assets $ 190,692 $ 177,894 ================================================================================ 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 - -------------------------------------------------------------------------------- Total liabilities 175,385 163,690 - -------------------------------------------------------------------------------- STOCKHOLDERS' EQUITY: Preferred stock 691 691 Common stock 14,616 13,513 - -------------------------------------------------------------------------------- Total stockholders' equity 15,307 14,204 - -------------------------------------------------------------------------------- Total liabilities and stockholders' equity $ 190,692 $ 177,894 ================================================================================ -----END PRIVACY-ENHANCED MESSAGE-----