[WACHOVIA LOGO]
MERGER WITH
[OFFITBANK LOGO]
The Wealth Management Bank
MAY 13, 1999
FORWARD LOOKING INFORMATION
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THIS PRESENTATION CONTAINS CERTAIN FORWARD LOOKING STATEMENTS WITH RESPECT TO
THE FINANCIAL CONDITION, RESULTS OF OPERATIONS AND BUSINESS OF WACHOVIA AFTER
ITS MERGER WITH OFFITBANK INCLUDING STATEMENTS RELATING TO: (A) THE REPORTED
EARNINGS THAT WILL BE REALIZED FROM THE PROPOSED MERGER; AND (B) THE IMPACT ON
REVENUES OF THE PROPOSED MERGER. THESE FORWARD LOOKING STATEMENTS INVOLVE
CERTAIN RISKS AND UNCERTAINTIES. FACTORS THAT MAY CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE CONTEMPLATED BY SUCH FORWARD LOOKING STATEMENTS INCLUDE,
AMONG OTHERS, THE FOLLOWING POSSIBILITIES: (1) COSTS OR DIFFICULTIES RELATED TO
THE INTEGRATION OF THE BUSINESSES OF WACHOVIA AND OFFITBANK ARE GREATER THAN
EXPECTED; (2) REVENUES FOLLOWING THE PROPOSED MERGER ARE LOWER THAN EXPECTED;
(3) COMPETITIVE PRESSURE AMONG FINANCIAL INSTITUTIONS INCREASES SIGNIFICANTLY;
(4) GENERAL ECONOMIC CONDITIONS, OR CONDITIONS IN SECURITIES MARKETS ARE LESS
FAVORABLE THAN EXPECTED; OR (5) LEGISLATION OR REGULATORY CHANGES ADVERSELY
AFFECT THE BUSINESSES IN WHICH WACHOVIA WILL BE ENGAGED.
1
STRATEGIC RATIONALE
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o Creates leading wealth management/private banking franchise:
o Over $19 billion in pro forma AUM for affluent and high net worth
individuals
o High quality franchise with superior investment capability in a wealth
management culture
o Allows for clear and immediate revenue synergies:
o Value-added Wachovia products into OFFITBANK's client base
particularly trust and lending facilities
o Provide OFFITBANK with unparalleled access to Southeastern based high
net worth ("HNW") client base
o Provide OFFITBANK with a platform to expand its current national
franchise
o HNW market represents a compelling market opportunity for Wachovia
o Relatively underserved marketplace - no dominant national or global
franchises
o Consistent with Wachovia's culture and client relationship focus
o Highest growth segment of the investment management market - a $25
trillion market by 2000
2
TRANSACTION SUMMARY
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FIXED EXCHANGE RATIO: 0.2284 WACHOVIA Shares per OFFITBANK Share
PURCHASE PRICE: $200 Million Plus $3.5 Million Retention Pool
STRUCTURE: Purchase Accounting / Tax-free Exchange
DUE DILIGENCE: Completed On-Site Due Diligence, Including Y2K Review
EXPECTED CLOSING: 3rd Quarter 1999
BOARD COMPOSITION: Morris W. Offit to be Added to Board
WALK AWAY PROVISION: Triggered by 15% or Greater Loss of Fixed Fee Accounts
(Net of Market Movements)
DEAL PROTECTION: Voting Agreements Plus $10 Million Break-Up Fee
3
OVERVIEW OF OFFITBANK
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o Founded in 1983 as a registered investment advisor, OFFITBANK converted to
a New York state trust bank in 1990.
o OFFITBANK has established itself as a premier provider of high net worth
services and is well known nationally as a high quality, wealth management
franchise for the upper tier of the wealth management market.
o OFFITBANK's business model targets the upper tier of the wealth management
market, with a focus on high net worth individuals and families:
o 60% of portfolio assets are managed account relationships of $30
million or more
o 95% of portfolio assets are managed account relationships of $5
million or more
o Employs seasoned high net worth wealth management professionals.
o OFFITBANK is specifically recognized for fixed income management, with
$10.8 billion AUM. Portfolio products include investment grade, high yield,
municipal, emerging markets, bond products plus liquidity/cash management.
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TRACK RECORD OF GROWTH AND PROFITABILITY
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-------------------------------
[GRAPH]
Assets Under
Management
(Dollars in Billions)
1991 $3.8
1992 $4.5
1993 $6.1
1994 $5.9
1995 $6.7
1996 $8.0
1997 $9.3
1998 $10.3
CAGR 15.3%
-------------------------------
-------------------------------
[GRAPH]
Revenues
(Dollars in
Millons)
1991 $15.5
1992 $20.3
1993 $32.3
1994 $31.3
1995 $25.9
1996 $31.4
1997 $36.1
1998 $41.2
CAGR 15.0%
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-------------------------------
[GRAPH]
Net Income
(Dollars in Millions)(1)
1991 $1.6
1992 $2.0
1993 $4.7
1994 $2.8
1995 $1.4
1996 $3.1
1997 $4.4
1998 $5.4
CAGR 19.0%
- ----------
(1) excludes non-recurring items
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SUPERIOR INVESTMENT PERFORMANCE
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OFFITBANK'S SUCCESS IS PREDICATED UPON ITS REPUTATION FOR PROFESSIONALISM,
CLIENT FOCUS AND SUPERIOR INVESTMENT PERFORMANCE:
FIXED INCOME PERFORMANCE:
================================================================================
1 YEAR 3 YEARS 5 YEARS
--------------- --------------- ---------------
OFFIT INDEX OFFIT INDEX OFFIT INDEX
- --------------------------------------------------------------------------------
U.S. Government 9.3% 8.4% 7.4% 6.8% 7.1% 6.6%
High Yield 5.3 3.7 9.8 9.1 9.7 9.0
Municipal 6.2 5.8 6.0 5.5 5.6 5.3
Total Return 7.9 8.7 8.2 7.3 8.0 7.3
- --------------------------------------------------------------------------------
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HIGH NET WORTH MARKET
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THE MARKET REPRESENTS A SIGNIFICANT OPPORTUNITY FOR WACHOVIA:
o Fast growing, relatively underserved marketplace
o High growth/high margin product set
o Marketplace is highly dispersed, with no established national or global
brand names
o Represents a large market with significant revenue potential
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NEW BUSINESS INITIATIVES - OFFITBANK'S
FRANCHISE
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o Expand product offering to existing OFFITBANK clients:
o Core Equity Management o Collateralized Lending
o Deposit Services o Mortgage Lending
o Trust Services o Philanthropy Management
o Insurance Products
o Leverage Wachovia's franchise by introducing OFFITBANK services in
Wachovia's existing footprint to serve high net worth clients.
o Expand national franchise of OFFITBANK to serve target clients.
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COMPELLING STRATEGIC RATIONALE
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OFFITBANK REPRESENTS A UNIQUE ACQUISITION OPPORTUNITY FOR WACHOVIA:
o High net worth market represents a compelling market opportunity for
Wachovia.
o Provides Wachovia with a leadership position in a highly dispersed, high
growth market.
o Wachovia's ability to add value to OFFITBANK's businesses is significant
o Transaction is financially affordable, while having the potential for
meaningful value creation
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CREATES SHAREHOLDER VALUE
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TRANSACTION CREATES VALUE FOR WACHOVIA'S SHAREHOLDERS:
o Minimal initial EPS impact
o Significant shareholder value creation
o Returns in excess of cost of capital without initiatives
o IRR in excess of 25% including future initiatives
o Enhances Wachovia's underlying growth rate
o Addition of high growth business model
o Accelerated growth with additional opportunities from future
initiatives
o Low risk strategy takes advantage of operating leverage
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