-----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, IQ8A37xX9S3IY8y63Bt9rDx1udAQZTBmv0RWCiIthznQBBtmL8U1zbzCh8uazGsz NqCy2mSbeXnaqeSdCAqDqw== 0000908662-01-000007.txt : 20010123 0000908662-01-000007.hdr.sgml : 20010123 ACCESSION NUMBER: 0000908662-01-000007 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20001231 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20010117 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FLEETBOSTON FINANCIAL 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: 1510194 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) January 17, 2001 ------------------------------------------------------------------- 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 January 17, 2001 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: January 17, 2001 EX-99 2 0002.txt PRESS RELEASE Contacts: Media: James Mahoney Investor: John Kahwaty (617) 434-9552 (617) 434-3650 FLEETBOSTON FOURTH QUARTER NET INCOME OF $774 MILLION OR $.84 PER SHARE FULL YEAR OPERATING EPS UP 16% FROM 1999 NONPERFORMING ASSETS REDUCED BY 10% FROM SEPTEMBER 30 Boston, Massachusetts, January 17, 2001: FleetBoston Financial (FBF-NYSE) today reported fourth quarter earnings of $774 million, or $.84 per share, up 11% from earnings of $726 million, or $.76 per share, in the fourth quarter of 1999. Return on assets and return on equity for the quarter were 1.73% and 20.2%, respectively, compared with 1.50% and 19.6% a year ago. For year 2000, operating earnings were $3.14 billion, or $3.37 per share, up 16% from $2.80 billion, or $2.91 per share in 1999. Return on assets and return on equity in 2000, on an operating basis, were 1.69% and 21.2%, respectively, compared with 1.48% and 19.5%, in 1999. Net income for year 2000, which included divestiture gains and merger-related expenses, was $3.42 billion, or $3.68 per share. On this basis, full year earnings per share were up 75% compared with the prior year. As announced last week, the Corporation completed a sale of troubled loans, with a carrying value of nearly $1 billion. The assets sold included approximately $225 million of nonperforming loans, with the remainder principally comprised of other classified, but accruing, loans. A charge of approximately $75 million was taken against the Corporation's reserve for credit losses as a result of this transaction. The effect of this transaction was to improve the overall credit profile of the loan portfolio by reducing the level of classified loans and lowering nonperforming assets at December 31 by 10% from September 30. Loan loss reserves remain at approximately 2.2% of total loans at December 31. Terrence Murray, Chairman and Chief Executive Officer of FleetBoston commented, "The first full year at FleetBoston was one of great success. Most importantly, we comfortably exceeded the year 2000 earnings projections provided to shareholders at the time we announced the Fleet/BankBoston merger back in March 1999. This is a result of our diversified business mix and intense focus to deliver committed results. There was no better example of this than the fourth quarter where, despite an extremely tough capital markets environment that had a noticeable impact on the revenue produced by these businesses, we posted strong results. We also successfully completed the largest divestiture in the history of the U.S. banking industry and, at the same time, fully converted our combined customer base to common systems. Our integration schedule has been on track each step of the way and we have hit our cost savings targets without jeopardizing the revenue-generating capacity of our businesses. We now operate on a single operating platform across our northeast footprint. As we look towards 2001, we are energized by the fact that we are now truly one company." Chad Gifford, President and Chief Operating Officer said, "We will hit the ground running in 2001 with our new customer-focused organizational structure in place and business initiatives such as e-commerce well along. We are excited by the upcoming addition of Summit Bancorp to our company, which will further enhance our business mix and give us the number one position in the attractive New Jersey market. We will also continue to be very vigilant in monitoring and taking action on our credit portfolio as illustrated by last week's announcement of the sale of nearly $1 billion of troubled commercial loans. With capital and reserves approaching $20 billion, our overall franchise is very well positioned." Fourth Quarter Financial Highlights Total revenue in the current quarter was $3.37 billion. During the fourth quarter, the US economy continued to show signs of weakening and this created very difficult conditions for capital markets businesses. Compared to the fourth quarter of last year, capital markets revenue declined $172 million, mainly reflecting significantly lower levels of revenue from the Principal Investing business and Robertson Stephens. Total noninterest income, excluding the impact of divestitures, declined approximately $110 million from the fourth quarter of 1999, as the aforementioned drop in capital markets revenue was partially offset by growth in other areas, including cash management fees, investment management revenue, and credit card income. Noninterest income as a percentage of total revenue was 53% in the current quarter and 55% for the year. Net interest income, excluding the impact of divestitures, improved $16 million from the fourth quarter of 1999 reflecting an increase from Latin American operations. Net interest margin improved to 4.17% in the current quarter from 4.12% in the prior year despite divestitures totaling approximately $13 billion of low cost deposits and $9 billion of loans during 2000. For year 2000, total revenue improved 10% compared with 1999, excluding the impact of these divestitures. Noninterest expense was $1.85 billion during the quarter, down $348 million from the fourth quarter of 1999. In addition to declines from merger-related cost savings and the impact of divestitures, the drop in noninterest expense was also affected by lower compensation expense due, in part, to the previously discussed decline in capital markets revenue. On an annualized basis, the total amount of cost savings from merger integration activities is approximately $570 million and approximately $970 million from the combination of cost savings and divestitures. This represents 97% of the original target. The remaining reductions will be reflected in the first quarter of 2001 results bringing the total of reductions to our target of $1 billion. Nonperforming assets were $925 million, or .85% of total loans, at December 31, 2000. This represents a 10% reduction from $1,025 million, or .92% of total loans, at September 30, 2000. The decline in nonperforming assets was due to the previously announced sale of troubled commercial loans that took place during the fourth quarter. The year-end total included a $112 million loan to a large financial services company that, while still paying interest, was placed on nonaccrual status during the fourth quarter. The provision for credit losses and net charge-offs were each $285 million in the current quarter and $245 million in the fourth quarter of 1999. In addition, a charge of approximately $75 million was taken against the reserve for credit losses as a result of the aforementioned fourth quarter sale of troubled loans. The reserve for credit losses was $2.4 billion at December 31, 2000, representing 2.17% of total loans and leases. Total assets at December 31, 2000 were $179.5 billion, compared with $179.1 billion at September 30, 2000 and $190.7 billion at December 31, 1999. The decline in total assets from 1999 is due, in part, to the divestiture of loans during 2000. Stockholders' equity amounted to $16 billion at December 31, 2000, with a common equity to assets ratio of 8.70%. A detailed financial package containing supplemental information on the fourth quarter financial results can be found by accessing the Corporation's web site (http://www.fleet.com). Eugene M. McQuade, Vice-Chairman and Chief Financial Officer, will hold a conference at 8:00 AM on Thursday, January 18 to discuss the quarterly results. This conference will be broadcast live on the Corporation's web site. ************* This release contains forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from estimates. These risks and uncertainties include, among other things, (1) changes in general political and economic conditions, either domestically or internationally, or in the states in which the Corporation conducts its business; (2) interest rate and currency fluctuations, equity and bond market fluctuations and perceptions, the level of nonperforming assets and inflation; (3) changes in the competitive environment for financial services organizations and the Corporation's ability to manage those changes; (4) legislative or regulatory developments, including changes in laws concerning taxes, banking, securities, insurance and other aspects of the financial services industry; (5) technological changes, including the impact of the Internet on the Corporation's businesses; (6) the ability of the Corporation to fully realize expected cost savings and revenue enhancements from mergers and acquisitions or to realize those savings or revenue enhancements within the expected timeframes; (7) the level of costs related to the integration of acquired businesses; and (8) the impact of any divestitures required by regulatory authorities in connection with mergers or acquisitions. FleetBoston Financial Consolidated Income Statements ($ in millions)
- ---------------------------------------------------------------------------------------------------------------------- Three Months Ended Year Ended December 31, December 31, December 31, December 31, 2000 1999 2000 1999 - ---------------------------------------------------------------------------------------------------------------------- $ 1,571 $ 1,688 Net interest income (FTE) $ 6,582 $ 6,799 Noninterest income: 536 708 Capital markets revenue 3,157 2,079 379 405 Investment services revenue 1,704 1,513 357 381 Banking fees and commissions 1,423 1,485 200 196 Credit card revenue 707 737 152 152 Processing-related revenue 609 609 170 106 Other 581 526 - ---------------------------------------------------------------------------------------------------------------------- 1,794 1,948 Total noninterest income 8,181 6,949 - ---------------------------------------------------------------------------------------------------------------------- 3,365 3,636 Total Revenue 14,763 13,748 - ---------------------------------------------------------------------------------------------------------------------- 899 1,197 Employee compensation and benefits 4,513 4,392 113 141 Occupancy 515 566 127 125 Equipment 500 509 89 89 Intangible asset amortization 352 349 622 646 Other 2,526 2,415 - ---------------------------------------------------------------------------------------------------------------------- 1,850 2,198 Total noninterest expense 8,406 8,231 - ---------------------------------------------------------------------------------------------------------------------- 1,515 1,438 Earnings before provision and income taxes 6,357 5,517 285 245 Provision for credit losses 1,196 933 456 467 Income taxes and tax-equivalent adjustment 2,024 1,786 - ---------------------------------------------------------------------------------------------------------------------- 774 726 Net income - Operating 3,137 2,798 - ---------------------------------------------------------------------------------------------------------------------- - - Divestiture gain, net of tax 420 - - 760 Integration charges, net of tax 137 760 - ---------------------------------------------------------------------------------------------------------------------- 774 (34) Net income - Reported 3,420 2,038 ====================================================================================================================== $ .84 $ .76 Diluted earnings per share - operating $ 3.37 $ 2.91 .84 (.05) Diluted earnings per share - reported 3.68 2.10
FleetBoston Financial Consolidated Balance Sheets ($ in millions) - -------------------------------------------------------------------------------- December 31, December 31, 2000 1999 - -------------------------------------------------------------------------------- ASSETS: Cash and equivalents $ 13,460 $ 12,980 Securities 23,720 25,212 Trading assets 7,081 7,849 Loans and leases 109,372 119,700 Reserve for credit losses (2,378) (2,488) Due from brokers/dealers 2,986 3,003 Mortgages held for resale 2,077 1,244 Other assets 23,201 23,192 - -------------------------------------------------------------------------------- Total assets $ 179,519 $ 190,692 ================================================================================ LIABILITIES: Deposits $ 101,290 $ 114,896 Short-term borrowings 17,862 18,106 Due to brokers/dealers 4,121 4,468 Long-term debt 28,357 25,349 Trading liabilities 2,540 3,807 Other liabilities 9,177 8,759 - -------------------------------------------------------------------------------- Total liabilities 163,347 175,385 ================================================================================ STOCKHOLDERS' EQUITY: Preferred stock 566 691 Common stock 15,606 14,616 - -------------------------------------------------------------------------------- Total stockholders' equity 16,172 15,307 - -------------------------------------------------------------------------------- Total liabilities and stockholders' equity $ 179,519 $ 190,692 ================================================================================ Financial Highlights
- --------------------------------------------------------------------------------------------------------------------------------- Three Months Ended Year Ended December 31, December 31, December 31, December 31, 2000 1999 2000 1999 - --------------------------------------------------------------------------------------------------------------------------------- For the Period ($ in millions) $ 774 $ 726 Net Income - operating (a) $ 3,137 $ 2,798 - 760 Divestiture Gains/Integration charges, net of tax 283 760 774 (34) Net Income - reported 3,420 2,038 3,365 3,636 Total Revenue (a) 14,763 13,748 1,850 2,198 Total Expense (a) 8,406 8,231 285 245 Provision for Credit Losses 1,196 933 Per Common Share $ .84 $ .76 Earnings per share - operating (a) $ 3.37 $ 2.91 .84 (.05) Earnings per share - reported 3.68 2.10 .90 .82 Cash earnings per share - operating (a) 3.62 3.15 .33 .30 Cash dividends declared 1.23 1.11 17.21 15.96 Book value (period-end) 17.21 15.96 At Period-End ($ in billions) $ 179.5 $ 190.7 Assets $ 179.5 $ 190.7 109.4 119.7 Loans 109.4 119.7 101.3 114.9 Deposits 101.3 114.9 16.2 15.3 Total stockholders' equity 16.2 15.3 Ratios 1.73% 1.50% Return on average assets (a) 1.69% 1.48% 20.19 19.61 Return on common equity (a) 21.17 19.52 4.17 4.12 Net interest margin 4.24 4.23 55.0 60.5 Efficiency ratio (a) 56.9 60.0 9.0 8.0 Total equity/assets (period-end) 9.0 8.0 6.6 5.6 Tangible common equity/assets 6.6 5.6 7.9 6.8 Tier 1 risk-based capital ratio 7.9 6.8 12.2 11.5 Total risk-based capital ratio 12.2 11.5 Asset Quality ($ in millions) $ 925 $ 841 Nonperforming assets $ 925 $ 841 2,378 2,488 Reserve for credit losses 2,378 2,488 .85% .70% Nonperforming assets as a % of loans .85% .70% 2.17 2.08 Reserve for credit losses to period-end loans 2.17 2.08 269 314 Reserve for credit losses to nonperforming loans 269 314 1.01 .82 Net charge-offs/average loans (b) .99 .76 - ------------------------------------------------------------------------------------------------------------------------
(a) Excludes the impact of merger-related charges and other special items. (b) Excludes the impact of a reserve reduction of approximately $75 million related to the sale of troubled commercial loans in December 2000. -----END PRIVACY-ENHANCED MESSAGE-----