Filing pursuant to Rule 425 under the

Securities Act of 1933, as amended and

Deemed filed under Rule 14a-12 under the

Securities Exchange Act of 1934, as amended

 

Filer: Bank of America Corporation

 

Subject Company: FleetBoston Financial Corporation

 

Exchange Act File Number of

Subject Company: 1-6366

 

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Creating America’s Premier

 

Financial Services Company

 

Ken Lewis & Jim Hance

 

Bank of America

 

Chad Gifford & Gene McQuade

 

FleetBoston Financial

 

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Fleet Boston Financial   Bank of America Higher Standards


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Forward Looking Statements

 

This presentation contains forward-looking statements, including statements about the financial conditions, results of operations and earnings outlook of Bank of America Corporation and FleetBoston Financial. The forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results or earnings to differ materially from such forward-looking statements include, among others, the following: 1) projected business increases following process changes and other investments are lower than expected; 2) competitive pressure among financial services companies increases significantly; 3) general economic conditions are less favorable than expected; 4) political conditions and related actions by the United States military abroad may adversely affect the company’s businesses and economic conditions as a whole; 4) changes in the interest rate environment reduce interest margins and impact funding sources; 5) changes in foreign exchange rates increases exposure; 6) changes in market rates and prices may adversely impact the value of financial products and assets; 7) legislation or regulatory environments, requirements or changes adversely affect the businesses in which the company is engaged; 8) litigation and regulatory liabilities, including costs, expenses, settlements and judgments, may adversely affect the company or its businesses; and 9) decisions to downsize, sell or close units or otherwise change the business mix of any of the company. For further information regarding either company, please read the Bank of America and FleetBoston Financial reports filed with the SEC and available at www.sec.gov.

 

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Creating America’s Premier

 

Financial Services Company

 

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Unique Opportunity

 

Unrivaled presence in America’s growth and wealth markets

 

Increased earnings diversity and stability

 

Enhanced leverage of technology and process capabilities

 

Expanded distribution

 

Increased number of wealth advisors

 

Most talented and experienced management team in industry

 

Fortress franchise

 

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Diversified Business Mix

 

Bank of America YTD Revenue Mix   FleetBoston YTD Revenue Mix
[Pie Chart]   [Pie Chart]

 

New Bank of America

 

[Pie Chart]

 

 

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Unmatched Franchise

 

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Highly Compatible Philosophies

 

Passion to keep raising the customer experience
Valuing employees as our most critical resource
Ensuring risks and rewards are in sync
Setting high standards of accountability
Relentless focus on shareholder value creation

 

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The Long-Term Winners Possess. . . . . .

 

Dominant market shares
Superior products and services
Powerful brand
Energized employees
Culture of service and innovation
Operating leverage
Disciplined management
Excess capital generation

 

This Company has what it takes to win

 

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Superior Financial Strength

 

($ in billions)                        
     Bank of America    FleetBoston    Combined         

        

Market Cap (10/24/03)

   $121.9    $33.5    $155.4   è    #3 financial services worldwide

Earnings (2003 YTD)

   $8.1    $1.9    $10.0   è    4th most profitable company in world

Common Equity

   $50.4    $17.6    $68.0   è    #3 financial services worldwide

 

The financial strength and cash flow generation of the combined entity will mitigate risk while providing significant resources to support future growth

 

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The Businesses of Bank of America

 

[Pie Chart]

 

Based on 9 mo. YTD annualized revenue data

 

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Consumer & Small Business Highlights

 

($ in billions)  

Bank of America


 

FleetBoston


 

Combined


Revenue

  $  22.8   $  5.1   $  27.9

Income

      6.4     1.0        7.4

Loans

     131      48       179

Deposits

     277      79       356

 

Revenue and income represent 9 mo. YTD annualized data

 

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Consumer & Small Business Highlights

 

#1 Retail customers  –    33 million
#1 Deposit market share in US  –    9.8%
#1 Banking center locations  –    5,669
#1 ATM network  –    16,551
#1 Active online banking customers  –    8 million
#1 Small business lender  –    11,594 loans
#1 Debit card transactor  –    15% + market share
#5 Credit card managed receivables  –    $47 billion
#3 Retail mortgage originator  –    $80 billion YTD 03

 

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Unrivaled Market Presence

 

State ranking and deposit share

 

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Source: SNL Branch Data Source; Deposits as of June 2002, adjusted for pending transactions

 

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Increased Share of Domestic Deposit Base

($ in billions)

 

Rank

        Total
Deposits
6/30/02


   National
Deposit
Share (%)


1

   New Bank of America    $ 437    9.8

1

   Bank of America      326    7.3

2

   Wells Fargo      189    4.2

3

   Wachovia      173    3.9

4

   J.P. Morgan Chase      170    3.8

5

   Citigroup      166    3.7

6

   Bank One      146    3.3

7

   Washington Mutual      121    2.7

8

   FleetBoston      110    2.5

9

   U.S. Bancorp      107    2.4

10

   SunTrust      69    1.5
     U.S. Deposits    $ 4,478     

 

Source: Federal Reserve and SNL Financial Branch Data Source

 

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Presence Where Growth Matters

 

Deposit market share of Top 50 MSAs with largest expected population growth

 

[CHART]

 

Current deposit market share percentage of Top 50 MSAs with largest expected population growth from 2002 – 2007 taken from SNL securities data and Lehman Brothers research reports.

 

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Presence Where Wealth Matters

 

    Deposit market share of Top 50 MSAs with largest income concentration

 

[CHART]

 

Current deposit market share percentage of Top 50 MSAs with largest # of households with annual income of at least $50,000 taken from SNL Securities data and Lehman Brothers research reports.

 

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Enhancing Card Services

 

Fifth largest bank credit card issuer in the U.S.

 

  $47 Bn in managed outstandings and 35 MM accounts

 

#1 debit card transactor in U.S. with more than 15% market share

 

Top Bank Credit Card Issuers in the U.S.(1)

($ in Billions)

 

    

Issuer


     Outst.

     Charge
Volume


     Accounts (MM)
Total


     Cards
Outst. (MM)


  1.

   Citigroup/Sears (2)      $ 105.5      $ 104.0      71.8      102.4

  2.

   MBNA        80.8        68.8      39.4      52.2

  3.

   BankOne        74.3        78.8      42.7      50.4

  4.

   J.P. Morgan Chase        50.8        45.0      29.1      40.8

  5

   New Bank of America        47.0        42.6      35.2      41.5

  5.

   Capital One        43.4        32.3      36.6      44.7

  6.

   Bank of America        32.4        31.8      25.7      30.1

  7.

   Providian        17.8        8.4      12.0      13.8

  8.

   Household        16.6        17.8      20.1      24.0

  9.

   Fleet Boston        14.6        10.7      9.5      11.4

10.

   Wells Fargo        11.9        11.3      6.9      8.3

 

(1) Source: The Nilson Report – outstandings and charge volumes as of 6/30/03; accounts, cards and association as of 12/31/02

 

(2) Merger pending completion

 

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Leveraging Consumer Real Estate

 

First Mortgage Portfolio

 

[Bar Chart]

 

Home Equity Portfolio

 

[Bar Chart]

 

Third largest direct to consumer first mortgage originator
Fifth largest mortgage servicing portfolio ($246 billion)
Largest home equity lender ($52 billion)

 

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Small Business is Big Business

 

#1 small business lender in U.S. with 2.5 million clients
Full suite of products and services
Strong links to both retail delivery platform and the asset management franchise

 

Small business importance to the economy1

 

Provides approximately 75 percent of the net new jobs added to the economy.
Represents 99.7 percent of all employers.
Accounts for 39 percent of jobs in high technology sectors.
Represents 97 percent of all U.S. exporters.

 

1 Statistics provided by Small Business Lending Administration

 

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Middle Market & Corporate Banking

 

#1 in U.S. large corporate banking relationships
Leader in domestic and global cash management

 

  #1 in middle market in Northeast
  #1 in middle market in U.S.
  #1 in global cash management, serving more than 16,000 clients worldwide

 

#1 syndicated lender – U.S. leveraged loans by volume
Top tier fixed income solution provider
Leader in Equity and Equity Convertibles

 

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Wealth Management

 

9th largest wealth manager in U.S. – over $470 billion in AUM
Large customer base with access to over 1.6 million affluent households1 in U.S.
Complementary strengths and strategies

 

  Wealth management

 

  Active and passive investment management
  Diverse fund management styles – growth, value, balanced
  International diversity

 

  3rd largest bank-owned brokerage company
  Large high net worth client base

 

  growing share of wallet

 

4,500 Investment advisors and 1,900 brokers

 

1 Investable assets in excess of $100,000.

 

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Top U.S. Wealth Managers by AUM and Asset Class

 

($’s in billions)

       Total AUM

Company      Rank

     $ AUM

Fidelity Investments

     1      794

State Street Global Advisors

     2      763

Barclays Global Investors

     3      746

Capital Group Cos.

     4      552

Citigroup

     5      535

Mellon Financial Corporation

     6      522

J.P. Morgan Flemming Asset Mgmt

     7      516

Merrill Lynch Investment Managers

     8      462

New Bank of America

     9      456

Bank of America

     17      310

FleetBoston’s Columbia Mgmt Group

     37      146

 

Source: Institutional Investor, July 2003; data as of 12/31/02. Rankings only include top 40 asset mangers ranked by total assets under management.

 

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The NEW Bank of America

 

($ in billions as of 9/30/03)

 

     Bank of America

   FleetBoston

   Combined

Assets

   $ 737    $ 196    $ 933

Loans & leases

     373      126      499

Deposits

     409      133      542

Shareholder’s equity

     50      18      68

YTD Revenue

     28      9      37

YTD Earnings

     8      2      10

Employees

     132,749      47,969      180,718

Banking centers

     4,211      1,458      5,669

ATMs

     13,120      3,431      16,551

 

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Credit Quality

 

(as of 9/30/03)

     Bank of America

    FleetBoston

    Combined

 

% of Total Loans:

                  

Allowance for Loan Losses

   1.80 %   2.48 %   1.97 %

YTD Net Charge-Offs

   0.91 %   1.56 %   1.08 %

Non-Performing Assets

   0.98 %   1.85 %   1.20 %

Allowance for Loan Losses as a % of Non-performing Loans

   196 %   165 %   185 %

 

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Transaction Summary

 

Price Per Share:

   $45.00 per FBF share1

Fixed Exchange Ratio:

   .5553 BAC shares for each FBF share

Accounting Treatment:

   Purchase / tax-free exchange

Board Composition:

   (19) 12 from Bank of America
    

7 from FleetBoston

Expected Closing:

   Second Quarter 2004

Approvals:

  

Normal regulatory and shareholder

approvals of both companies

 

1 Based on closing BAC stock price as of 10/22/03.

 

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Financial Overview

 

($ in millions)

 

     2004

    2005

 

1 Bank of America projected net income

   $ 10,961     $ 11,947  

1 FleetBoston projected net income

     1,4872       3,148  
    


 


Total

   $ 12,448     $ 15,095  

Adjustments

                

Expense efficiencies

     250       1,100  

Higher intangible amortization

     (165 )     (330 )

Synergies

  

 

110

 

 

 

 

195

 

 

    


 


Projected net income for new Bank of America

   $ 12,643     $ 16,060  

Average projected diluted shares outstanding

     1,781       2,016  

Projected earnings per diluted share

   $ 7.10     $ 7.97  

1 Consensus First Call estimate for Bank of America

   $ 7.27     $ 7.92  

Projection vs. Consensus

     -2%       1%  
                  

Excludes after-tax restructuring charge of $800 million

                

1 2004 First Call consensus with 9% increase in 2005

                

2 2004 reflects only 6 months earnings as a result of purchase accounting

                

 

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Financial Assumptions

 

  Transaction closes in second quarter 2004

 

  Overall expense efficiencies of $1.1 billion after-tax, or 6% of combined expense base

 

  Higher intangible amortization of $330 million per year

 

  Synergies of approximately $195 million after-tax per year

 

  Restructuring charge of $800 million after-tax

 

  Net share repurchases of approximately 67 million in 2004 and 23 million in 2005

 

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Investment in BAC Today

 

  Stock with a 11x P/E valuation versus 12+ for peers and 13+ for industry

 

  Higher EPS expectations in out years versus current expectations

 

  Intense associate focus on customer satisfaction that shows in current revenue streams

 

  Much improved risk profile versus years ago when both stocks were at their highs

 

  Attractive dividend yield (4%) and history of double digit increases spanning a quarter century

 

  Strong cash flow to pay dividend and repurchase shares

 

  Franchise more diversified and unequalled in market share presence

 

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Management Team

 

 
   
   

Ken Lewis

Chief Executive Officer

 

Chad Gifford

Chairman

   
 
   
       

Jim Hance

Vice Chairman and Chief Financial Officer

 

Gene McQuade

President

       

Ed Brown

President Global Corporate and Investment Banking

 

Barbara Desoer

President Consumer Products

 

Liam McGee

President Consumer Banking

 

Brian Moynihan

President Wealth Management

 

Gene Taylor

President Commercial Banking

 

Brad Warner

President Small Business and Premier Banking


Amy Brinkley

Chief Risk Officer

 

Jay Sarles

Vice Chairman Special Advisor to CEO

  Steele Alphin
Principal Personnel Executive
 

Cathy Bessant

Chief Marketing

and Communications Officer

 

Milton Jones

Quality and Productivity Executive

   

   

 

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Additional Information About this Transaction

 

Bank of America Corporation (“Bank of America”) and FleetBoston Financial Corporation (“FleetBoston”) will file a Joint Proxy Statement/Prospectus and other documents regarding this transaction with the Securities and Exchange Commission (“SEC”). Bank of America and FleetBoston will mail the Joint Proxy Statement/Prospectus to their respective stockholders. These documents will contain important information about the transaction, and Bank of America and FleetBoston urge you to read these documents when they become available.

 

You may obtain copies of all documents filed with the SEC regarding this transaction, free of charge, at the SEC’s website (www.sec.gov). You may also obtain these documents, free of charge, from Bank of America’s website (www.bankofamerica.com) under the tab “About Bank of America” and then under the heading “SEC Documents”. You may also obtain these documents, free of charge, from FleetBoston’s website (www.fleet.com) under the tab “About Fleet” and then under the heading “Investor Relations” and then under the item “SEC Documents”.

 

Participants in this Transaction

 

Bank of America and FleetBoston and their respective directors and executive officers may be deemed participants in the solicitation of proxies from stockholders in connection with this transaction. Information about the directors and executive officers of Bank of America and FleetBoston and information about other persons who may be deemed participants in this transaction will be included in the Joint Proxy Statement/Prospectus. You can find information about Bank of America’s executive officers and directors in their definitive proxy statement filed with the SEC on March 27, 2003. You can find information about FleetBoston’s executive officers and directors in their definitive proxy statement filed with the SEC on March 17, 2003. You can obtain free copies of these documents from Bank of America and FleetBoston using the contact information above.

 

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