-----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, RxwpxPw8tod7FayrKivWo6PQT2CY1FL5V8WVaSDy03SrvbSnXmTcRpqQHCOU2EEt Z2Hq0MEt+l5R88VjoqZQqg== 0001047469-99-013476.txt : 19990405 0001047469-99-013476.hdr.sgml : 19990405 ACCESSION NUMBER: 0001047469-99-013476 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990402 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990402 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FLEET FINANCIAL GROUP INC 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: 99586785 BUSINESS ADDRESS: STREET 1: ONE FEDERAL STREET CITY: BOSTON STATE: MA ZIP: 02211 BUSINESS PHONE: 6173464000 MAIL ADDRESS: STREET 1: ONE FEDERAL STREET CITY: BOSTON STATE: MA ZIP: 02211 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 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) April 2, 1999 -------------------------------------------------------------- FLEET FINANCIAL GROUP, INC. ------------------------------------------------------ (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 02211 ---------------------------------------- ---------- (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. On March 14, 1999, Fleet Financial Group, Inc. ("Fleet") and BankBoston Corporation ("BankBoston") announced that they had entered into an Agreement and Plan of Merger (the "Merger Agreement") providing for the merger of BankBoston with and into Fleet (the "Merger"). Fleet hereby files its Unaudited Pro Forma Condensed Combined Financial Statements and Notes thereto in connection with the Merger. Fleet also hereby files the consolidated balance sheets of BankBoston at December 31, 1998 and 1997 and the related consolidated statements of income, of changes in common stockholders' equity and of cash flows for each of the three years in the period ended December 31, 1998. For additional information regarding the Merger, see the Registrant's Current Report on Form 8-K dated March 14, 1999. Item 7. FINANCIAL STATEMENTS AND OTHER EXHIBITS. The following exhibits are filed as part of this report: Exhibit No. Description ----------- ----------- 23 Consent of PricewaterhouseCoopers LLP 99(a) Unaudited Pro Forma Condensed Combined Financial Statements and Notes thereto 99(b) Consolidated Financial Statements of BankBoston (incorporated by reference to pages 60-89 of Item 8 of the BankBoston Annual Report on Form 10-K for the year ended December 31, 1998 [Commission File Number 1-6522]). 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. FLEET FINANCIAL GROUP, INC. Registrant By: /s/ William C. Mutterperl ------------------------- William C. Mutterperl Executive Vice President, Secretary & General Counsel Dated: April 2, 1999 EX-23 2 EXHIBIT 23 EXHIBIT 23 CONSENT OF INDEPENDENT ACCOUNTANTS To The Board of Directors Fleet Financial Group, Inc. We consent to the inclusion in the Fleet Financial Group, Inc. Form 8-K dated April 2, 1999, and to the incorporation by reference in the registration statements on Form S-3 (Registration Nos. 333-37231, 333-43625, 33-36707, 333-48043 and 333-62905), Form S-4 (Registration Nos. 33-58573 and 33-58933) and Form S-8 (Registration Nos. 33-19425, 33-25872, 33-65230, 33-48818, 33-56061, 33-62367, 33-58933, 33-64635, 33-59139, 333-16037, 333-44517 and 333-68153) of our report dated January 21, 1999 on our audits of the consolidated financial statements of BankBoston Corporation and subsidiaries as of December 31, 1998 and 1997 and for each of the years in the three-year period ended December 31, 1998. /s/ PricewaterhouseCoopers LLP Boston, Massachusetts April 2, 1999 EX-99.A 3 EXHIBIT 99.A EXHIBIT 99(a) UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS The following unaudited pro forma condensed combined balance sheet as of December 31, 1998, and the unaudited pro forma condensed combined statements of income for each of the years in the three year period ended December 31, 1998 give effect to the pending merger (the "Merger") of Fleet Financial Group, Inc. ("Fleet") and BankBoston Corporation ("BankBoston"), accounted for as a pooling of interests. The Merger, anticipated to be consummated in the fourth quarter of 1999, is subject to shareholder and regulatory approval. The unaudited pro forma condensed combined financial information is based on the historical consolidated financial statements of Fleet and BankBoston under the assumptions and adjustments set forth in the accompanying notes to the unaudited pro forma condensed combined financial statements, and gives effect to the Merger as if the Merger had been consummated at the beginning of the earliest period presented. The unaudited pro forma condensed combined financial statements do not give effect to the anticipated cost savings in connection with the Merger or the effects of any regulatory required divestitures. The unaudited pro forma condensed combined financial statements should be read in conjunction with the consolidated historical financial statements of Fleet and BankBoston, including the respective notes thereto. The pro forma information is not necessarily indicative of the combined financial position or the results of operations in the future or of the combined financial position or the results of operations which would have been realized had the Merger been consummated during the periods or as of the dates for which the pro forma information is presented. Pro forma per share amounts for the combined Fleet and BankBoston entity are based on the Common Exchange Ratio of 1.1844 shares of Fleet common stock, par value $.01 per share, for each share of BankBoston common stock, par value $1.00 per share. FLEET FINANCIAL GROUP, INC. AND BANKBOSTON CORPORATION UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET AS OF DECEMBER 31, 1998
PRO FORMA PRO FORMA (DOLLARS IN MILLIONS) FLEET BANKBOSTON ADJUSTMENTS COMBINED --------- ---------- ----------- ---------- ASSETS: Cash, due from banks and interest-bearing deposits $ 5,635 $ 5,306 $ -- $ 10,941 Federal funds sold and securities purchased under agreements to resell 103 2,463 -- 2,566 Securities 10,902 12,534 -- 23,436 Trading assets 562 3,802 -- 4,364 Loans and leases 69,396 42,806 -- 112,202 Reserve for credit losses (1,552) (754) -- (2,306) Due from brokers/dealers 3,600 265 -- 3,865 Mortgages held for resale 3,960 -- -- 3,960 Premises and equipment 1,229 1,319 -- 2,548 Mortgage servicing rights 1,405 -- -- 1,405 Intangible assets 3,117 787 -- 3,904 Other assets 6,025 4,985 -- 11,010 --------- -------- ------- --------- Total assets $ 104,382 $ 73,513 $ -- $ 177,895 ========= ======== ======= ========= LIABILITIES and STOCKHOLDERS' EQUITY: Deposits: Domestic: Noninterest-bearing $ 18,646 $ 6,554 $ -- $ 25,200 Interest-bearing 47,214 28,371 -- 75,585 Overseas: Noninterest-bearing -- 1,144 -- 1,144 Interest-bearing 3,818 12,431 -- 16,249 --------- -------- ------- --------- Total deposits 69,678 48,500 -- 118,178 --------- -------- ------- --------- Federal funds purchased and securities sold under agreements to repurchase 4,456 5,241 -- 9,697 Funds borrowed 5,033 6,775 -- 11,808 Due to brokers/dealers 3,975 241 -- 4,216 Notes payable 8,820 5,588 -- 14,408 Accrued expenses and other liabilities 3,011 2,351 650 (4b) 6,012 --------- -------- ------- --------- Total liabilities 94,973 68,696 650 164,319 --------- -------- ------- --------- Stockholders' equity: Preferred stock 691 -- -- 691 Common stock 6 307 (304)(4a) 9 Common surplus 3,284 1,118 (203)(4a) 4,199 Retained earnings 5,337 3,895 (650)(4b) 8,582 Accumulated other comprehensive income 128 (33) -- 95 Treasury stock, at cost (37) (470) 507 (4a) -- --------- -------- ------- --------- Total stockholders' equity 9,409 4,817 (650) 13,576 --------- -------- ------- --------- Total liabilities and stockholders' equity $ 104,382 $ 73,513 $ -- $ 177,895 ========= ======== ======= =========
See Notes To Unaudited Pro Forma Condensed Combined Financial Statements FLEET FINANCIAL GROUP, INC. AND BANKBOSTON CORPORATION UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 1998
PRO FORMA PRO FORMA (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA) FLEET BANKBOSTON ADJUSTMENTS COMBINED --------- ---------- ----------- ---------- Interest income: Interest and fees on loans $ 5,878 $ 4,259 $ -- $ 10,137 Interest on securities and trading assets 673 892 -- 1,565 Other 214 426 -- 640 --------- -------- ------- --------- Total interest income 6,765 5,577 -- 12,342 --------- -------- ------- --------- Interest expense: Deposits 1,835 1,871 -- 3,706 Funds borrowed 400 859 -- 1,259 Notes payable 448 320 -- 768 Other 213 -- -- 213 --------- -------- ------- --------- Total interest expense 2,896 3,050 -- 5,946 --------- -------- ------- --------- Net interest income 3,869 2,527 -- 6,396 --------- -------- ------- --------- Provision for credit losses 470 380 -- 850 --------- -------- ------- --------- Net interest income after provision for credit losses 3,399 2,147 -- 5,546 --------- -------- ------- --------- Noninterest income: Banking fees and commissions 748 580 -- 1,328 Investment services revenue 851 388 -- 1,239 Credit card revenue 391 64 -- 455 Venture capital revenue 149 233 -- 382 Securities gains 74 41 -- 115 Gains on sales of businesses -- 254 -- 254 Other 1,024 472 -- 1,496 --------- -------- ------- --------- Total noninterest income 3,237 2,032 -- 5,269 --------- -------- ------- --------- Noninterest expense: Employee compensation and benefits 1,927 1,630 -- 3,557 Occupancy and equipment 605 398 -- 1,003 Intangible asset amortization 227 47 -- 274 Merger-related charges 73 -- -- 73 Other 1,297 835 -- 2,132 --------- -------- ------- --------- Total noninterest expense 4,129 2,910 -- 7,039 --------- -------- ------- --------- Income before income taxes 2,507 1,269 -- 3,776 Applicable income taxes 975 477 -- 1,452 --------- -------- ------- --------- Net income $ 1,532 $ 792 $ -- $ 2,324 ========= ======== ======= ========= Net income applicable to common shares $ 1,481 $ 783 $ -- $ 2,264 ========= ======== ======= ========= Weighted average common shares outstanding: (in thousands) Basic 568,059 293,873 -- 916,122 (4d) Diluted 587,769 296,663 -- 939,137 (4d) Per Common Share: Basic $ 2.61 $ 2.66 $ -- $ 2.47 (4d) Diluted 2.52 2.64 -- 2.41 (4d)
See Notes To Unaudited Pro Forma Condensed Combined Financial Statements FLEET FINANCIAL GROUP, INC. AND BANKBOSTON CORPORATION UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 1997
PRO FORMA PRO FORMA (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA) FLEET BANKBOSTON ADJUSTMENTS COMBINED --------- ---------- ----------- ---------- Interest income: Interest and fees on loans $ 5,357 $ 3,954 $ -- $ 9,311 Interest on securities and trading assets 570 809 -- 1,379 Other 164 401 -- 565 --------- -------- ------- --------- Total interest income 6,091 5,164 -- 11,255 --------- -------- ------- --------- Interest expense: Deposits 1,654 1,685 -- 3,339 Funds borrowed 247 805 -- 1,052 Notes payable 338 245 -- 583 Other 152 -- -- 152 --------- -------- ------- --------- Total interest expense 2,391 2,735 -- 5,126 --------- -------- ------- --------- Net interest income 3,700 2,429 -- 6,129 --------- -------- ------- --------- Provision for credit losses 322 200 -- 522 --------- -------- ------- --------- Net interest income after provision for credit losses 3,378 2,229 -- 5,607 --------- -------- ------- --------- Noninterest income: Banking fees and commissions 708 487 -- 1,195 Investment services revenue 696 294 -- 990 Venture capital revenue 71 221 -- 292 Securities gains 33 80 -- 113 Credit card revenue 62 36 -- 98 Gains on sales of businesses 175 68 -- 243 Other 886 377 -- 1,263 --------- -------- ------- --------- Total noninterest income 2,631 1,563 -- 4,194 --------- -------- ------- --------- Noninterest expense: Employee compensation and benefits 1,752 1,279 -- 3,031 Occupancy and equipment 611 350 -- 961 Intangible asset amortization 169 37 -- 206 Merger-related charges 25 -- -- 25 Other 1,158 658 -- 1,816 --------- -------- ------- --------- Total noninterest expense 3,715 2,324 -- 6,039 --------- -------- ------- --------- Income before income taxes 2,294 1,468 -- 3,762 --------- -------- ------- --------- Applicable income taxes 927 589 -- 1,516 --------- -------- ------- --------- Net income $ 1,367 $ 879 $ -- $ 2,246 ========= ======== ======= ========= Net income applicable to common shares $ 1,305 $ 848 $ -- $ 2,153 ========= ======== ======= ========= Weighted average common shares outstanding: (in thousands) Basic 551,956 295,918 -- 902,441 (4d) Diluted 568,605 300,080 -- 924,020 (4d) Per Common Share: Basic $ 2.37 $ 2.86 $ -- $ 2.39 (4d) Diluted 2.30 2.82 -- 2.33 (4d)
See Notes To Unaudited Pro Forma Condensed Combined Financial Statements FLEET FINANCIAL GROUP, INC. AND BANKBOSTON CORPORATION UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 1996
PRO FORMA PRO FORMA (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA) FLEET BANKBOSTON ADJUSTMENTS COMBINED --------- ---------- ----------- ---------- Interest income: Interest and fees on loans $ 5,169 $ 3,863 $ -- $ 9,032 Interest on securities and trading assets 723 724 -- 1,447 Other 136 306 -- 442 --------- -------- ------- --------- Total interest income 6,028 4,893 -- 10,921 --------- -------- ------- --------- Interest expense: Deposits 1,754 1,680 -- 3,434 Funds borrowed 311 679 -- 990 Notes payable 390 194 -- 584 Other 111 -- -- 111 --------- -------- ------- --------- Total interest expense 2,566 2,553 -- 5,119 --------- -------- ------- --------- Net interest income 3,462 2,340 -- 5,802 --------- -------- ------- --------- Provision for credit losses 213 231 -- 444 --------- -------- ------- --------- Net interest income after provision for credit losses 3,249 2,109 -- 5,358 --------- -------- ------- --------- Noninterest income: Banking fees and commissions 601 455 -- 1,056 Investment services revenue 634 251 -- 885 Venture capital revenue 106 209 -- 315 Credit card revenue 59 36 -- 95 Securities gains 43 23 -- 66 Gains on sales of businesses -- 153 -- 153 Other 890 217 (18) (4c) 1,089 --------- -------- ------- --------- Total noninterest income 2,333 1,344 (18) 3,659 --------- -------- ------- --------- Noninterest expense: Employee compensation and benefits 1,735 1,178 -- 2,913 Occupancy and equipment 593 341 -- 934 Intangible asset amortization 140 34 -- 174 Merger-related charges -- 180 -- 180 Other 1,044 587 -- 1,631 --------- -------- ------- --------- Total noninterest expense 3,512 2,320 -- 5,832 --------- -------- ------- --------- Income before income taxes 2,070 1,133 (18) 3,185 Applicable income taxes 849 483 (7) 1,325 --------- -------- ------- --------- Net income $ 1,221 $ 650 $ (11) $ 1,860 ========= ======== ======= ========= Net income applicable to common shares $ 1,149 $ 613 $ (11) $ 1,751 ========= ======== ======= ========= Weighted average common shares outstanding: (in thousands) Basic 568,896 307,058 -- 932,575 (4d) Diluted 580,026 312,224 -- 949,824 (4d) Per Common Share: Basic $ 2.02 $ 2.00 $ -- $ 1.88 (4d) Diluted 1.98 1.96 -- 1.84 (4d)
See Notes To Unaudited Pro Forma Condensed Combined Financial Statements NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS Note 1. Basis of Presentation The pro forma information presented is not necessarily indicative of the results of operations or the combined financial position that would have resulted had the Merger been consummated at the beginning of the periods indicated, nor is it necessarily indicative of the results of operations in future periods or the future financial position of the combined entity. It is anticipated that the Merger will be consummated in the fourth quarter of 1999. Under generally accepted accounting principles, the transaction will be accounted for as a pooling of interests and, as such, the assets and liabilities of BankBoston will be combined with those of Fleet at book value. In addition, the statements of income of BankBoston will be combined with the statements of income of Fleet as of the earliest period presented. The unaudited pro forma condensed combined statements of income give effect to the Merger as if the Merger occurred at the beginning of the earliest period presented. The unaudited pro forma condensed combined balance sheet assumes the Merger was consummated on December 31, 1998. Certain reclassifications have been included in the unaudited pro forma condensed combined balance sheet and unaudited pro forma condensed combined statements of income to conform presentation. Fleet and BankBoston anticipate that, in order to obtain regulatory approval for the Merger, the companies will be required to divest approximately $13 billion of deposits and approximately $5 billion of loans, primarily in the Massachusetts, Connecticut and Rhode Island markets. No adjustment has been included in the unaudited pro forma condensed combined financial statements for the anticipated divestitures, however, the reduction in net income related to such divestitures is estimated to be $160 million. Note 2. Accounting Policies and Financial Statement Classifications The accounting policies of both companies are in the process of being reviewed for consistency. As a result of this review, certain conforming accounting adjustments may be necessary. The nature and extent of such adjustments have not been determined but are not expected to be significant. Transactions between Fleet and BankBoston that are not material in relation to the pro forma financial information have not been eliminated from the pro forma combined amounts. Note 3. Merger and Restructuring Related Charges A liability of $1 billion (pre-tax) has been recorded in the unaudited pro forma condensed combined balance sheet to reflect management's best estimate of merger and restructuring related charges in connection with the Merger. This liability resulted in a $650 million post-tax charge to retained earnings in the unaudited pro forma condensed combined balance sheet. The following table provides detail of the estimated charges by type, post-tax:
ESTIMATED COSTS (POST-TAX) TYPE OF COST ($ IN MILLIONS) ------------ --------------- Personnel $300 Technology and operations 150 Facilities 75 Branches 25 Transaction costs and other 100 ---- Total $650 ---- ----
Personnel related costs consist primarily of charges related to employee severance, termination of certain employee benefits plans and employee assistance costs for separated employees. Technology and operations costs relate to the elimination of duplicate systems. Facilities charges consist of lease termination costs and other facilities related exit costs resulting from consolidation of duplicate headquarters and operational facilities. Branch related costs are primarily related to the cost of exiting branches anticipated to be closed, including lease terminations and equipment write-offs. The effect of the proposed charge has been reflected in the unaudited pro forma condensed combined balance sheet as of December 31, 1998; however, since the proposed charge is nonrecurring, it has not been reflected in the unaudited pro forma condensed combined statements of income. In addition, it is estimated that $60 million (post-tax) in other expenses related to the Merger will be recognized in future periods as they are incurred. These charges have not been reflected in the unaudited pro forma condensed combined balance sheet as of December 31, 1998. Note 4. Pro Forma Adjustments (a) Pro forma adjustments to common stock, treasury stock and common surplus at December 31, 1998, reflect the Merger accounted for as a pooling of interests, through: (i) the exchange of 349.4 million shares of Fleet common stock (using the Common Exchange Ratio of 1.1844) for the 295.0 million outstanding shares of BankBoston common stock at December 31, 1998, (ii) the reclassification adjustment from surplus to common stock to reflect the $.01 par value of Fleet common stock and (iii) an adjustment for $507 million to reflect the retirement of BankBoston treasury stock and the reissuance of Fleet treasury stock. (b) Pro forma adjustments to accrued expenses and other liabilities and retained earnings reflect the $1 billion merger and restructuring related charge and a $350 million reduction in the deferred tax liability for the anticipated tax benefit of such charge. For additional information on the merger and restructuring related charges see Note 3. (c) Pro forma adjustment reflects the elimination of gains on the sale of BankBoston common stock realized by Fleet in 1996. (d) The pro forma combined weighted average common shares outstanding for each of the years in the three year period ended December 31, 1998 reflect Fleet weighted average common shares plus the converted BankBoston weighted average common shares outstanding. Each share of BankBoston common stock was converted into 1.1844 shares of Fleet common stock. Note 5. Other Securities and Exchange Commission Filings In connection with its proposed merger with BankBoston, Fleet will file a Registration Statement on Form S-4 with the Securities and Exchange Commission (the "Commission") registering Fleet common stock to be issued in connection therewith. This registration statement, which will be subject to review and comment by the Staff of the Commission, will include pro forma financial information for Fleet and BankBoston. Such pro forma financial information may differ from the pro forma financial information included herein. -----END PRIVACY-ENHANCED MESSAGE-----