-----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, T0ljD9nFmw+MDVD4LJzF1sLMmKA556hgP+N7UUMk9TqeOH75q4N8xmGZ9ZVLc4g2 Ryvm7bCxcDYpFSfWrkz4fA== /in/edgar/work/0000908662-00-000227/0000908662-00-000227.txt : 20001025 0000908662-00-000227.hdr.sgml : 20001025 ACCESSION NUMBER: 0000908662-00-000227 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20001017 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20001024 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FLEETBOSTON FINANCIAL CORP CENTRAL INDEX KEY: 0000050341 STANDARD INDUSTRIAL CLASSIFICATION: [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: 744628 BUSINESS ADDRESS: STREET 1: 100 FEDERAL STREET CITY: BOSTON STATE: MA ZIP: 02110 BUSINESS PHONE: 6173464000 MAIL ADDRESS: STREET 1: 100 FEDERAL STREET CITY: BOSTON STATE: MA ZIP: 02210 FORMER COMPANY: FORMER CONFORMED NAME: FLEET BOSTON CORP DATE OF NAME CHANGE: 19991001 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 8-K 1 0001.txt FORM 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) October 17, 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.) 100 Federal Street, Boston, MA 02110 ----------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 617-434-2200 ------------ ----------------------------------------------------------- (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 October 17, 2000 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Company 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: October 17, 2000 EX-99 2 0002.txt PRESS RELEASE Contacts: Media: James Mahoney Investor: John Kahwaty (617) 434-9552 (617) 434-3650 FLEETBOSTON REPORTS NET INCOME OF $841 MILLION OR $.90 PER SHARE OPERATING EPS $.84, UP 14% FROM PRIOR YEAR Boston, Massachusetts, October 17, 2000: FleetBoston Financial (FBF-NYSE) today reported third quarter operating earnings of $782 million, or $.84 per share, up 14% on an earnings per share basis from $711 million, or $.74 per share, in the third quarter of 1999. Return on assets and return on equity for the quarter, on an operating basis, were 1.74% and 20.80%, respectively, compared with 1.50% and 19.55%, a year ago. In addition, the corporation realized divestiture gains, net of merger-related expenses, of $59 million (after-tax) related to the third quarter divestitures of approximately $5 billion of deposits and $2 billion of loans, as well as expenses related to the merger of BankBoston and Fleet. Including the impact of these items, net income was $841 million, or $.90 per share, in the third quarter of 2000, up 22% on an earnings per share basis from the third quarter of 1999. Return on assets and return on equity for the quarter were 1.88% and 22.41%, respectively. For the first nine months of 2000, operating earnings were $2.4 billion, or $2.53 per share, up 18% on an earnings per share basis from $2.1 billion, or $2.15 per share in the first nine months of 1999. Net income for the first nine months of 2000, which included divestiture gains and merger-related expenses, was $2.6 billion, or $2.84 per share, up 32% on an earnings per share basis from $2.1 billion, or $2.15 per share in the first nine months of 1999. Terry Murray, Chairman and Chief Executive Officer of FleetBoston commented, "We celebrate the one year anniversary of the Fleet/BankBoston merger with a terrific earnings report which highlights the strength and diversity of our businesses. We have spent the past year hard at work putting the company together and ensuring that we met the original promises made to our shareholders. I am pleased to report successes across the board on these initiatives and that our integration work is essentially complete. As our company shifts to a more offensive-minded strategy, we are delighted to have announced our pending acquisition of Summit Bancorp earlier this month. Summit enhances the value of our franchise by giving us the number one position in the attractive New Jersey market. In addition, this transaction will provide an opportunity to distribute our asset management and capital markets products to a broadened customer base." Chad Gifford, President and Chief Operating Officer said, "Echoing Terry's comments, we also celebrate our first anniversary by launching a major branding campaign. We are very excited about the prospects of leveraging our strong market positions and attracting new customers to our company. It is important to note that even as we launch this initiative, our earnings this quarter and for the past year have been quite strong. Despite the inevitable distraction that comes with putting together two large companies, we saw revenues grow 13% over the first nine months of 1999. Our overall franchise is very well positioned, given the growth nature of our underlying businesses coupled with a strong balance sheet." Third Quarter Financial Highlights - ---------------------------------- Noninterest income, excluding divestiture gains, was $2.0 billion in the third quarter, an increase of $294 million, or 17%, over the third quarter of 1999. This growth was mainly due to higher levels of capital markets and investment services revenue. Noninterest income as a percentage of total revenue grew to 55% in the current quarter from 50% in the third quarter of last year. Net interest income for the third quarter was $1.6 billion, down $113 million from the third quarter of last year due to lost revenue from divestitures, as the Corporation has divested approximately $13 billion of low cost deposits and $9 billion of loans during the past year. The net interest margin improved 4 basis points from last year's quarter to 4.25% due, in part, to the elimination of the regulatory requirement to maintain certain levels of low yielding assets to support revenue from Robertson Stephens, partially offset by the impact of divestitures. Noninterest expense, excluding the impact of the merger and related charges, was $2.0 billion during the quarter, down slightly from the third quarter of 1999. Declines from merger-related cost savings and the impact of divestitures more than offset an increase in incentive compensation expense directly attributable to higher levels of revenue, particularly from capital markets-related businesses. On an annualized basis, the total amount of cost savings from merger integration activities is approximately $470 million and approximately $800 million from the combination of cost savings and divestitures. This represents 80% of the original target and the Corporation remains on track to achieve our $1 billion target by the end of the year. Nonperforming assets were $1,025 million, or .92% of total loans, at September 30, 2000, including a $48 million credit that filed for bankruptcy early in the fourth quarter. Nonperforming assets were $950 million, or .84% of loans, at June 30, 2000. The provision for credit losses and net charge-offs were $300 million and $296 million, respectively, in the current quarter and $228 million for both in the third quarter of 1999. The reserve for credit losses was $2.5 billion at September 30, 2000, representing 2.22% of total loans and leases. Total assets at September 30, 2000 were $179.1 billion, compared with $181.3 billion at June 30, 2000 and $185.3 billion at September 30, 1999. The decline in total assets is due, in part, to the divestiture of loans during the first nine months of 2000. Stockholders' equity amounted to $15.6 billion at September 30, 2000, with a common equity to assets ratio of 8.37%. A detailed financial package containing supplemental information on the third quarter financial results can be found by accessing the Corporation's web site (http://www.fleet.com). Eugene M. McQuade, Vice-Chairman and Chief Financial Officer, will hold a conference at 8:00 AM on Wednesday, October 18 to discuss the quarterly results. This conference will be broadcast live on the Corporation's web site (listen only mode). ************* This release contains forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from estimates. These risks and uncertainties include, among other things, (1) changes in general political and economic conditions, either domestically or internationally, or in the states in which the Corporation conducts its business; (2) interest rate and currency fluctuations, equity and bond market fluctuations and perceptions, the level of personal and corporate customers' bankruptcies, and inflation; (3) changes in the competitive environment for financial services organizations and the Corporation's ability to manage those changes; (4) legislative or regulatory developments, including changes in laws concerning taxes, banking, securities, insurance and other aspects of the financial services industry; (5) technological changes including the impact of the Internet on the Corporation's businesses; (6) the ability of the Corporation to fully realize expected cost savings and revenue enhancements from mergers and acquisitions or to realize those savings or revenue enhancements within the expected timeframes; (7) the level of costs related to the integration of acquired businesses; and (8) the impact of any divestitures required by regulatory authorities in connection with mergers or acquisitions. FleetBoston Financial Consolidated Income Statements ($ in millions)
- ----------------------------------------------------------------------------------------------------------------------- Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2000 1999 2000 1999 - ----------------------------------------------------------------------------------------------------------------------- $ 1,601 $ 1,714 Net interest income (FTE) $ 5,010 $ 5,111 Noninterest income: 749 471 Capital markets revenue 2,621 1,371 399 362 Investment services revenue 1,324 1,108 351 388 Banking fees and commissions 1,065 1,104 178 193 Credit card revenue 507 542 151 146 Processing-related revenue 457 457 158 132 Other 413 419 - ------------------------------------------------------------------------------------------------------------------- 1,986 1,692 Total noninterest income 6,387 5,001 - ------------------------------------------------------------------------------------------------------------------- 3,587 3,406 Total Revenue 11,397 10,112 - ------------------------------------------------------------------------------------------------------------------- Noninterest expense: 1,062 1,053 Employee compensation and benefits 3,614 3,196 128 143 Occupancy 401 425 122 128 Equipment 374 384 87 88 Intangible asset amortization 263 259 608 604 Other 1,902 1,768 - ------------------------------------------------------------------------------------------------------------------- 2,007 2,016 Total noninterest expense 6,554 6,032 - ------------------------------------------------------------------------------------------------------------------- 1,580 1,390 Earnings before provision and income taxes 4,843 4,080 300 228 Provision for credit losses 911 688 498 451 Income taxes and tax-equivalent adjustment 1,570 1,320 - ------------------------------------------------------------------------------------------------------------------- 782 711 Net income - Operating 2,362 2,072 - ------------------------------------------------------------------------------------------------------------------- 84 - Divestiture gain, net of tax 420 - 25 - Integration charges, net of tax 137 - - ------------------------------------------------------------------------------------------------------------------- 841 711 Net income - Reported 2,645 2,072 - ------------------------------------------------------------------------------------------------------------------- $ .84 $ .74 Diluted earnings per share - operating $ 2.53 $ 2.15 .90 .74 Diluted earnings per share - reported 2.84 2.15
FleetBoston Financial Consolidated Balance Sheets ($ in millions) - -------------------------------------------------------------------------------- September 30, September 30, 2000 1999 - -------------------------------------------------------------------------------- ASSETS: Cash and equivalents $ 10,359 $ 11,333 Securities 24,133 24,708 Trading assets 7,459 6,050 Loans and leases 111,097 119,772 Reserve for credit losses (2,463) (2,515) Due from brokers/dealers 3,293 2,856 Mortgages held for resale 1,212 1,052 Other assets 24,003 22,039 - -------------------------------------------------------------------------------- Total assets $ 179,093 $ 185,295 ================================================================================ LIABILITIES: Deposits $ 98,850 $ 113,184 Short-term borrowings 18,654 17,289 Due to brokers/dealers 4,627 3,884 Long-term debt 29,682 25,240 Trading liabilities 1,740 3,358 Other liabilities 9,990 6,883 - -------------------------------------------------------------------------------- Total liabilities 163,543 169,838 ================================================================================ STOCKHOLDERS' EQUITY: Preferred stock 566 691 Common stock 14,984 14,766 - -------------------------------------------------------------------------------- Total stockholders' equity 15,550 15,457 - -------------------------------------------------------------------------------- Total liabilities and stockholders' equity $ 179,093 $ 185,295 ================================================================================ FleetBoston Financial Financial Highlights
====================================================================================================================== Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2000 1999 2000 1999 - ---------------------------------------------------------------------------------------------------------------------- For the Period ($ in millions) $ 782 $ 711 Net Income - operating (a) $ 2,362 $ 2,072 59 - Divestiture Gains/Integration charges, net of tax 283 - 841 711 Net Income - reported 2,645 2,072 3,587 3,406 Total Revenue (a) 11,397 10,112 2,007 2,016 Total Expense (a) 6,554 6,032 300 228 Provision for Credit Losses 911 688 Per Common Share $ .84 $ .74 Earnings per share - operating (a) $ 2.53 $ 2.15 .90 .74 Earnings per share - reported 2.84 2.15 .90 .80 Cash earnings per share - operating (a) 2.72 2.33 .30 .27 Cash dividends declared .90 .81 16.56 16.01 Book value (period-end) 16.56 16.01 At Period-End ($ in billions) $ 179.1 $ 185.3 Assets $ 179.1 $ 185.3 111.1 119.8 Loans 111.1 119.8 98.9 113.2 Deposits 98.9 113.2 15.6 15.5 Total stockholders' equity 15.6 15.5 Ratios 1.74% 1.50% Return on average assets (a) 1.68% 1.47% 20.80 19.55 Return on common equity (a) 21.59 19.42 4.25 4.21 Net interest margin 4.26 4.27 56.0 59.2 Efficiency ratio (a) 57.5 59.8 8.7 8.3 Total equity/assets (period-end) 8.7 8.3 6.3 5.8 Tangible common equity/assets 6.3 5.8 7.4 7.1 Tier 1 risk-based capital ratio 7.4 7.1 11.7 11.3 Total risk-based capital ratio 11.7 11.3 Asset Quality ($ in millions) $ 1,025 $ 786 Nonperforming assets $ 1,025 $ 786 2,463 2,515 Reserve for credit losses 2,463 2,515 .92% .66% Nonperforming assets as a % of loans .92% .66% 2.22 2.10 Reserve for credit losses to period-end loans 2.22 2.10 1.05 .76 Net charge-offs/average loans .98 .74 ===============================================================================================================
(a) Excludes the impact of merger-related charges and other special items. -----END PRIVACY-ENHANCED MESSAGE-----