EXHIBIT 99.2
[LOGO]
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Memorandum
Date: February 18, 1997
To: Analysts and Investors
From: Stephen A. Swartz
Re: H.F. Ahmanson & Company Proposed Merger with
Great Western Financial Corporation
To offer you the opportunity to learn more about the proposed merger of H.F.
Ahmanson & Company with Great Western Financial Corporation, you are invited
to attend a meeting with Charles R. Rinehart, Chairman and CEO and Kevin Twomey,
Senior Executive Vice President and CFO of H.F. Ahmanson & Company on Tuesday,
February 18th, at 10:00 AM (EDT). The meeting will be held in the Cotillion Room
(Second Floor) of the Pierre Hotel - 2 E. 61st Street, New York City.
If you are unable to attend, you are welcome to participate via teleconference.
In order to be connected properly, please call (800) 231-9012 no later than 9:50
AM (EDT).
A recording of this meeting will be available for playback listening beginning
at 12:00 noon until Friday, February 21st at 12:00 noon, by dialing (800) 839-
1884.
Following are the slides for the analysts' and investors' presentation.
Thank you for your interest.
If you have any questions or if you need a copy of the press release and
investor package, please call Marion Theiss at (818) 814-7923.
THIS PRESENTATION CONTAINS CERTAIN FORWARD LOOKING STATEMENTS WITH RESPECT
TO THE FINANCIAL CONDITION, RESULTS OF OPERATIONS AND BUSINESS OF AHMANSON AND,
ASSUMING THE CONSUMMATION OF THE PROPOSED MERGER, A COMBINED AHMANSON/GREAT
WESTERN COMPANY, INCLUDING STATEMENTS RELATING TO: (A) THE COST SAVINGS AND
ACCRETION TO CASH EARNINGS AND REPORTED EARNINGS THAT WILL BE REALIZED FROM THE
PROPOSED MERGER; (B) THE IMPACT ON REVENUES OF THE PROPOSED MERGER, INCLUDING
THE POTENTIAL FOR ENHANCED REVENUES AND THE IMPACT ON REVENUES OF CONSOLIDATION
OF RETAIL BRANCHES AND OTHER OPERATIONS AS PLANNED; (C) AHMANSON'S STOCK
PURCHASE PROGRAM; AND (D) THE RESTRUCTURING CHARGES EXPECTED TO BE INCURRED IN
CONNECTION WITH 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) EXPECTED COST SAVINGS FROM THE
PROPOSED MERGER CANNOT BE FULLY REALIZED OR REALIZED WITHIN THE EXPECTED TIME
FRAME; (2) REVENUES FOLLOWING THE PROPOSED MERGER ARE LOWER THAN EXPECTED; (3)
COMPETITIVE PRESSURE AMONG DEPOSITORY INSTITUTIONS INCREASES SIGNIFICANTLY; (4)
COSTS OR DIFFICULTIES RELATED TO THE INTEGRATION OF THE BUSINESSES OF AHMANSON
AND GWF ARE GREATER THAN EXPECTED; (5) CHANGES IN THE INTEREST RATE ENVIRONMENT
REDUCE INTEREST MARGINS; (6) GENERAL ECONOMIC CONDITIONS, EITHER NATIONALLY OR
IN THE STATES IN WHICH THE COMBINED COMPANY WILL BE DOING BUSINESS, ARE LESS
FAVORABLE THAN EXPECTED; OR (7) LEGISLATION OR REGULATORY CHANGES ADVERSELY
AFFECT THE BUSINESSES IN WHICH THE COMBINED COMPANY WOULD BE ENGAGED. FURTHER
INFORMATION ON OTHER FACTORS WHICH COULD AFFECT THE FINANCIAL RESULTS OF
AHMANSON AFTER THE PROPOSED MERGER IS INCLUDED IN FILINGS BY AHMANSON WITH THE
SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION"), INCLUDING A REGISTRATION
STATEMENT ON FORM S-4 FILED WITH THE COMMISSION ON FEBRUARY 18, 1997, AND THE
COMMISSION FILINGS INCORPORATED BY REFERENCE THEREIN.
SHARES OF GREAT WESTERN CORPORATION ("GWF")
COMMON STOCK HELD BY H.F. AHMANSON & COMPANY
("AHMANSON"), ITS DIRECTORS AND EXECUTIVE OFFICERS
AND CERTAIN EMPLOYEES, OTHER REPRESENTATIVES OF AHMANSON
AND CERTAIN OTHER PERSONS WHO MAY SOLICIT PROXIES OR
CONSENTS, AND CERTAIN TRANSACTIONS BETWEEN ANY
OF THEM AND GWF
Ahmanson and certain other persons named below may solicit proxies (a) to
elect three nominees and one or more alternate nominees (the "Nominees") as
directors of GWF at the annual meeting of stockholders of GWF to be held on
April 22, 1997 (the "Annual Meeting") and (b) in favor of the adoption at the
Annual Meeting of a non-binding stockholder resolution and seven proposals to
amend the By-laws of GWF. Ahmanson and certain other persons named below may
also solicit consents from stockholders of GWF to approve proposals, without a
stockholders' meeting, to adopt a non-binding resolution of stockholders and an
amendment to the By-laws of GWF. The participants in this solicitation may
include Ahmanson; the directors of Ahmanson (Byron Allumbaugh, Harold A. Black,
Richard M. Bressler, David R. Carpenter, Phillip D. Matthews, Richard L. Nolan,
Della M. Reyes, Charles R. Rinehart, Frank M. Sanchez, Elizabeth A. Sanders,
Arthur W. Schmutz, William D. Shulte, and Bruce G. Willison); the following
executive officers and employees of Ahmanson or its subsidiaries: Kevin M.
Twomey (Senior Executive Vice President and Chief Financial Officer), Anne-Drue
M. Anderson (Executive Vice President and Treasurer), Madeleine A. Kleiner
(Senior Executive Vice President and General Counsel), Stephen Swartz (Senior
Vice President and Director of Investor Relations), Eric Warmstein (Senior Vice
President and Director of Corporate Development), Mary Trigg (Senior Vice
President and Director of Public Relations), Linda McCall (Senior Vice President
and Director of Corporate Taxes), Adrian Rodriguez (Vice President of Public
Relations), Samantha Davies (Vice President of Public Relations), Peter Bennett
(Assistant Vice President of Public Relations), Barbara Timmer (Senior Vice
President and Director of Government and Legislative Affairs), and Tim Glassett
(First Vice President and Assistant General Counsel); and the following
Nominees: Lawrence A. Del Santo, Robert T. Gelber, Wolfgang Schoellkopf, Hugh
M. Grant and John E. Merow.
As of the date of this communication, Ahmanson is the beneficial owner of
100 shares of GWF Common Stock. Other than Mr. Gelber, who owns 332 shares of
GWF Common Stock, none of the Nominees is the beneficial owner of any GWF Common
Stock.
Other than set forth herein, as of the date of this communication, neither
Ahmanson, nor any of its directors, executive officers or other representatives
or employees of Ahmanson, any Nominees or other persons known to Ahmanson, who
may solicit proxies has any security holdings in GWF. Ahmanson disclaims
beneficial ownership of any securities of GWF held by any pension plan or other
employee benefit plan of Ahmanson or by any affiliate of Ahmanson. Ahmanson
further disclaims beneficial ownership of any securities of GWF held by Ahmanson
or any of its subsidiaries for the benefit of third parties or in customer or
fiduciary accounts in the ordinary course of business.
Although Credit Suisse First Boston Corporation ("CSFB") and Montgomery
Securities ("Montgomery"), financial advisors to Ahmanson, do not admit that
they or any of their directors, officers, employees or affiliates is a
"participant," as defined in Schedule 14A promulgated under the Securities
Exchange Act of 1934 by the Securities and Exchange Commission, or that Schedule
14A requires the disclosure of certain information concerning CSFB or
Montgomery, CSFB and Montgomery may assist Ahmanson in such a solicitation. Each
of CSFB and Montgomery engages in a full range of investment banking, securities
trading, market-making and brokerage services for institutional and individual
clients. In the normal course of their respective businesses, each of CSFB and
Montgomery may trade securities of GWF for their own account and the account of
their customers and, accordingly, may at any time hold a long or short position
in such securities. As of the most recent practicable date prior to the date
hereof as such information was available, CSFB holds a net long position of 24
shares of GWF Common Stock and Montgomery does not hold any shares of GWF Common
Stock.
Except as disclosed above, to the knowledge of Ahmanson, none of Ahmanson,
the directors or executive officers of Ahmanson, the employees or other
representatives of Ahmanson or the Nominees named above has any interest, direct
or indirect, by security holdings or otherwise, in GWF.
[LOGO] [LOGO]
H.F. AHMANSON & COMPANY
PROPOSED MERGER WITH
GREAT WESTERN FINANCIAL CORPORATION
A POWERFUL COMBINATION
FEBRUARY 18, 1997
[LOGO] TRANSACTION SUMMARY [LOGO]
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Price per Great Western Share* $42.53
Exchange Ratio 1.05x, Fixed
Premium to Market 24% vs Friday, February 14 close
Multiple of Book 2.4X
Multiple of Tangible Book 2.7X
Accounting Method Purchase Accounting
100% stock, Tax Free Exchange
Projected Cost Savings 45%, Over 15 months
Over $400 million per year
Assumed Closing 3rd Quarter 1997
Accretion:
Reported Earnings (3)% in 1998
9% in 1999
Cash Earnings 15% in 1998
26% in 1999
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*Based on AHM closing price on 2/14/97
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[LOGO] TRANSACTION FUNDAMENTALS [LOGO]
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SIMPLE TRANSACTION, BASED ON PROVEN FORMULA
Significant Cost Savings Enhanced Shareholder Value:
[Inside Graphic Arrow]
+ = 1. Significant accretion
2. Accelerated Earnings Per Share
("EPS") growth
Accelerated Stock Repurchase
[Inside Graphic Arrow]
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[LOGO] STRATEGIC RATIONALE [LOGO]
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. Financially Powerful Combination
. Significant earnings accretion
. Accelerated EPS growth
. Pro forma market cap over $10 billion
. Compelling Strategic Fit
. First tier California consumer and small business bank
. 13% California market share
. #1, 2, or 3 position in top of 5 major California markets
. Accelerates consumer banking transformation
. Low Risk Transaction
. Cost savings
. Stock buybacks
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[LOGO] [LOGO]
WE ARE COMMITTED
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WE HOPE TO NEGOTIATE A FRIENDLY TRANSACTION BUT ARE PREPARED TO PROCEED IN THE
ABSENCE OF NEGOTIATIONS
. File acquisition of control applications immediately
. Shareholders meeting scheduled April 22, 1997
. Nomination of 3 directors
. Nominees already selected
. By-law amendments
. Consent solicitations
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[LOGO] [LOGO]
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AHM: THE FUTURE IS NOW
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[LOGO] AHM: THE FUTURE IS NOW [LOGO]
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ENHANCING SHAREHOLDER VALUE
. Lower credit costs
. Higher fee income
. Expense control
. Capital management
. Franchise consolidation and development
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[LOGO] AHM: THE FUTURE IS NOW [LOGO]
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LOWER GENERAL AND ADMINISTRATIVE ("G&A") EXPENSE
[GRAPH APPEARS HERE]
Quarters: 4Q95 1Q96 2Q96 3Q96* 4Q96
G&A
(Dollars in Millions): $199 $193 $190 $190 $188
HIGHER FEE INCOME
[GRAPH APPEARS HERE]
Quarters: 4Q95 1Q96 2Q96 3Q96 4Q96
Other Fee Income
(Dollars in Millions): $27 $27 $31 $34 $44
IMPROVED EFFICIENCY
[GRAPH APPEARS HERE]
Quarters: 1995 1Q96 2Q96 3Q96* 4Q96
Efficiency Ratio: 58.9% 53.8% 52.8% 53.1% 49.5%
POWER OF STOCK BUYBACK
[GRAPH APPEARS HERE]
$ Net Income Fully-Diluted Earnings per Share (EPS)
4Q96 Percent Increase
over 4Q95: 50% 85%
* 3Q96 excludes Savings Association Insurance Fund ("SAIF") recap and First
Interstate branch ("FIB") acquisition charges
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[LOGO] AHM: THE FUTURE IS NOW [LOGO]
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IMPROVING CREDIT
[GRAPH APPEARS HERE]
12/95 3/96 6/96 9/96 12/96
Nonperforming Assets
(Dollars in Millions): $949 $977 $954 $898 $846
DECREASING CREDIT COSTS*
[GRAPH APPEARS HERE]
Quarters: 4Q95 1Q96 2Q96 3Q96 4Q96
Credit Costs (Dollars in
Millions): $63 $72 $61 $61 $57
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* Loan loss provision and REO expenses
SINGLE FAMILY NONPERFORMING LOANS ("NPLs")
[GRAPH APPEARS HERE]
Monthly Change
(Dollars in Millions):
1/96 2/96 3/96 4/96 5/96 6/96 7/96 8/96 9/96 10/96 11/96 12/96 1/97
$ 29 $ 29 $(21) $(26) $(19) $(11) $(22) $(19) $(10) $(13) $ (8) $ (2) $(1)
SINGLE FAMILY REAL ESTATE OWNED ("REO")
[GRAPH APPEARS HERE]
Monthly Change
(Dollars in Millions):
1/96 2/96 3/96 4/96 5/96 6/96 7/96 8/96 9/96 10/96 11/96 12/96 1/97
$ 6 $ (1) $ (3) $ 8 $ 11 $ 6 $ 7 $ 7 $ 5 $ (1) $ (12) $ (13) $ (1)
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[LOGO] AHM: THE FUTURE IS NOW [LOGO]
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SIGNIFICANTLY IMPROVED RETURNS
CASH RETURN ON ASSETS
[GRAPH APPEARS HERE]
4Q96
Quarters: 1Q96 2Q96 3Q96 4Q96 (Reported)
0.53% 0.58% 0.62% 0.78% 0.73%
CASH RETURN ON EQUITY
[GRAPH APPEARS HERE]
4Q96
Quarters: 1Q96 2Q96 3Q96 4Q96 (Reported)
9.6% 10.8% 11.6% 16.6% 14.7%
- ------------------
3Q96 excludes SAIF recap and First Interstate branch acquisition charges
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[LOGO] AHM: THE FUTURE IS NOW [LOGO]
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DEPOSIT FRANCHISE CONSOLIDATION/(*)/
BOUGHT LOW, SOLD HIGH
[GRAPH APPEARS HERE]
Deposits Bought/Sold
(Dollars in Billions) Deposit Premium
Bought: $ 6.8 2.9%
Sold: $12.7 7.1%
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/(*)/ June 1992 - Present, excluding First Interstate acquisition.
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[LOGO] AHM: THE FUTURE IS NOW [LOGO]
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BANKING FRANCHISE ACQUIRED
. Acquired 61 former First Interstate branches in 1996
. Accretive to 4Q 1996 results
. Strengthened consumer and small business banking
. Successful conversion
. Achieved cost savings
. Added important new capabilities
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[LOGO] AHM: THE FUTURE IS NOW [LOGO]
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INITIATIVES CONTRIBUTED TO STRONG MARKET PERFORMANCE AND ENHANCED SHAREHOLDER
VALUE
[GRAPH APPEARS HERE]
AHM KBW Regional Thrift Index
Bank Index
January 1996 100% 100% 100%
March 1996 100 110 103
April 1996 105 112 106
May 1996 103 109 103
June 1996 115 112 108
July 1996 106 110 105
August 1996 112 120 108
September 1996 120 125 112
November 1996 135 135 135
December 1996 140 140 139
January 1997 143 142 140
February 1997 163 152 160
Note: Thrift Index comprised of top 11 thrifts based on market capitalization:
Wash. Mutual, Great Western, Golden West, Green Point, Charter One, Dime
Bancorp, TCF, Peoples Bank, Wash. Federal, First Financial and Glendale
Federal
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[LOGO] AHM: THE FUTURE IS NOW [LOGO]
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STREET ESTIMATES INDICATE CONTINUED ABOVE AVERAGE GROWTH
. Street Estimates CAGR (Cash Earnings)
- 1996 to 1998 = 24%
- 1996 to 1999 = 19%
[GRAPH APPEARS HERE]
Year: 1995 1996 1997E 1998E 1999E
$1.42 $2.31 $3.08/(1)/ $3.58/(1)/ $3.94/(2)/
- -----------------
/(1)/ Based on First Call estimates, adjusted for goodwill and Core Deposit
Intangible ("CDI") amortization
/(2)/ 1999E reflects 10% growth rate over 1998 First Call estimate
Note: 1995 excludes goodwill accounting change and gain on sale of New York
branches
1996 excludes SAIF recap and First Interstate branch acquisition charges
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[LOGO] AHM: THE FUTURE IS NOW [LOGO]
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FINANCIAL GOALS:
Return on Equity ("ROE") - 18%
Efficiency Ratio - below 50%
EPS Growth
Capital - "well capitalized"
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[LOGO] [LOGO]
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FINANCIALLY POWERFUL
COMBINATION
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[LOGO] FINANCIALLY POWERFUL COMBINATION [LOGO]
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ENHANCES SHAREHOLDER VALUE
. Immediate and substantial cash EPS accretion
-- 15% in 1998
-- 26% in 1999
. Reported EPS accretion
-- positive by 4Q98
-- 9% in 1999
. Improves operating performance
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[LOGO] FINANCIALLY POWERFUL COMBINATION [LOGO]
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KEY ASSUMPTIONS
. Achievable cost savings
. Revenue enhancements not reflected in projections
. Capital management strategy consistent with AHM's ongoing share
repurchases
. No divestitures
-18-
[LOGO] FINANCIALLY POWERFUL COMBINATION [LOGO]
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BASED ON STREET ESTIMATES - FULLY DILUTED
Years Ended December 31,
(Dollars in Millions - after tax) 1997/(1)/ 1998 1999
---- ---- ----
Projected Combined Net Income Available to Common $ 434 $ 774 $ 806
Cost Savings 22 184 255
Amortization of Net New Intangibles (37) (149) (149)
Other 1 6 11
New Preferred Dividends (1) (15) (24)
------ ------ ------
PROJECTED REPORTED NI AVAILABLE TO COMMON $ 419 $ 800 $ 899
Intangible Amortization 59 188 188
------ ------ ------
PROJECTED CASH EARNINGS AVAILABLE TO COMMON $ 478 $ 988 $1,087
Projected Average Shares (millions) 147.8 241.2 219.6
FULLY DILUTED EPS EFFECT:
- --------------------------------------------------------------------------------------
PROJECTED REPORTED EPS $ 2.84 $ 3.32 $ 4.10
ACCRETION/(DILUTION) (3)% (3)% 9%
PROJECTED CASH EPS $ 3.24 $ 4.10 $ 4.95
ACCRETION/(DILUTION) 5% 15% 26%
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(1) Excludes non-recurring and one time charges of up to $135 million after tax
Assumes transaction closes 9/30/97
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[LOGO] FINANCIALLY POWERFUL COMBINATION [LOGO]
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TRANSACTION SIGNIFICANTLY IMPROVES PROJECTED OPERATING PERFORMANCE
EFFICIENCY RATIO
[GRAPH APPEARS HERE]
Year: 1997 1998 1999
46% 41% 38%
CASH ROE
[GRAPH APPEARS HERE]
Year: 1997 1998 1999
18% 25% 28%
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[LOGO] FINANCIALLY POWERFUL COMBINATION [LOGO]
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PROJECTED EPS GROWTH SIGNIFICANTLY ACCELERATED
. Projected (Cash Earnings) CAGR
-- 1996 to 1998 = 33%
-- 1996 to 1999 = 29%
. Street Estimates
Year: 1996 1997E 1988E 1999E
$2.31 $3.08/(1)/ $3.58/(1)/ $3.94/(2)/
+5% +15% +26%
$3.24 $4.10 $4.95
(1) Based on First Call estimates, adjusted for goodwill and CDI amortization
(2) 1999E reflects 10% growth rate over 1998 First Call estimate
Note: 1996 excludes SAIF recap and First Interstate branch acquisition charges
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[LOGO] [LOGO]
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COMPELLING STRATEGIC FIT
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[LOGO] COMPELLING STRATEGIC FIT [LOGO]
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. Creates consumer banking powerhouse
. Solidifies, enhances and deepens position in California and
Florida
. Major market position in all key markets
. Creates 10th largest U.S. depository institution
. Provides additional scale in key businesses
. Mortgage banking/servicing
. Small business banking
. Retail banking and consumer lending
. Investment products
. Consistent with both AHM's and GWF's strategic plans
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[LOGO] COMPELLING STRATEGIC FIT [LOGO]
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AHM GWF Combined
--- --- --------
Assets $50 billion $43 billion $ 93 billion
Loans and MBS 46 39 85
Deposits 35 29 64
Loan Servicing 59 50/(1)/ 109
Branches 391 416 606/(2)/
Households 1.7 million 2.7 million/(1)/ 4.4 million
Business Customers 82,000 96,000/(1)/ 178,000
Checking Accounts 0.9 million 1.6 million/(1)/ 2.5 million
(1) Estimated
(2) After 201 consolidations in California and Florida
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[LOGO] COMPELLING STRATEGIC FIT [LOGO]
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STRENGTHEN AHM'S POSITION AS CA'S THIRD LARGEST INSTITUTION
CALIFORNIA'S MOST EFFICIENT DISTRIBUTION SYSTEM
Rank Institution Branches Deposits Deposits/Branch Share
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First Tier Institutions
1 BankAmerica 1,047 78.1 billion $74.6 million 21%
2 Wells Fargo 680/(1)/ 55.5 81.6 15
3 AHM & GWF 432/(2)/ 50.2 116.1 13
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* AHMANSON 316 28.4 89.8 8
* GREAT WESTERN 296 21.8 73.6 6
5 Union BanCal 261 17.9 68.4 5
6 First Nationwide 203 14.0 69.2 4
7 American 158 12.8 81.0 3
8 Glendale 162 9.2 56.6 2
(1) Estimated
(2) After consolidation of 180 California branches
Source: SNL Securities; as of 6/30/96 adjusted for announced acquisitions
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LOGO COMPELLING STRATEGIC FIT LOGO
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MARKET RANK IMPROVES IN 18 OF 21 OVERLAPPING MSAs
CA DEPOSIT MARKET SHARE PRO FORMA MARKET SHARE RANK
[GRAPH APPEARS HERE] [GRAPH APPEARS HERE]
Rank
B of A : 21% Top 5 CA MSAs*
Wells : 15% . #1 1 of 5
AHM + GWF : 13% . #2 3 of 5
. #3 1 of 5
-------
. #1, 2 or 3 5 of 5
Top 10 CA MSAs*
. #1 1 of 10
. #2 4 of 10
. #3 3 of 10
-------
. #1, 2 or 3 8 of 10
Source: SNL Securities; as of 6/30/96 adjusted for announced acquisitions
* Based on population.
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[LOGO] COMPELLING STRATEGIC FIT [LOGO]
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TOP 5 MSAS* REPRESENT 62% OF CALIFORNIA POPULATION AND 61% OF DEPOSITS
[GRAPH APPEARS HERE]
% of MSA Deposits
Los Angeles Riverside San Diego Orange County Oakland
Wells: 9% 10% 18% 13% 14%
AHM+GWF: 16% 18% 23% 17% 10%
B of A: 20% 20% 18% 18% 31%
Population (000) 9,324 3,024 2,702 2,615 2,234
Deposits (billions) $123.5 $18.2 $23.1 $31.8 $29.7
Source: SNL Securities; as of 6/30/96 adjusted for announced acquisitions
* Based on population
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[LOGO] COMPELLING STRATEGIC FIT [LOGO]
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CREATES SOUTHEAST FLORIDA'S 4TH LARGEST BANKING INSTITUTION
[GRAPH APPEARS HERE]
% of MSA Deposits
Miami Fort Lauderdale West Palm Beach
AHM+GWF: 10% 14% 15%
Barnett: 13% 18% 15%
NationsBank: 13% 17% 10%
First Union: 18% 18% 16%
Population (000) 2,061 1,434 991
Deposits (billions) $ 34.5 $ 22.0 $17.1
Source: SNL Securities; as of 6/30/96 adjusted for announced acquisitions
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[LOGO] COMPELLING STRATEGIC FIT [LOGO]
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SIGNIFICANTLY INCREASES AHM'S MORTGAGE BANKING BUSINESS
. Over $10 billion in annual originations, with $109 billion servicing
portfolio
. Enhances efficiency of origination and delivery system
. Low marginal cost of servicing
--------------------------------------------------
1996
PRO FORMA
RANK
---------
--------------------------------------------------
SINGLE FAMILY ORIGINATIONS
California 3rd
Florida 3rd
National 10th
SERVICING 7TH
--------------------------------------------------
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[LOGO] [LOGO]
COMPELLING STRATEGIC FIT
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ADDS SCALE TO KEY BUSINESS LINES AND LEVERAGES INVESTMENTS
AHM GWF
--- --------------
LINE OF BUSINESS
Consumer Lending X
Cash Management X
Business Lending X X
Consumer Finance X
Asset Management X Potential Sale
SYSTEMS
CPI - Loan Servicing X X
Project HOME Run X
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[LOGO] [LOGO]
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LOW RISK TRANSACTION
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[LOGO] LOW RISK TRANSACTION [LOGO]
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EXPERIENCED MANAGEMENT TEAM EXECUTING A LOW RISK TRANSACTION
. Cost savings
. Capital management
. Focused consumer banking strategy
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[LOGO] COST SAVINGS [LOGO]
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SIGNIFICANT BRANCH OVERLAP
BRANCHES WITHIN
0.5 MILES 1 MILE 2 MILES
CALIFORNIA 97 135 197
% of Total/(1)/ 33% 46% 67%
FLORIDA 10 14 27
% of Total/(2)/ 37% 52% 100%
(1) Reflects percent of GWF branches in California
(2) Reflects percent of AHM branches in Florida, after West Florida sale
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[LOGO] COST SAVINGS [LOGO]
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ASSUMES RESTRUCTURING CHARGE EQUAL TO 100% OF FULLY PHASED IN ANNUAL COST
SAVINGS
. Additional credit reserve up to $150 million
. Cost savings fully phased in by year-end 1998
(Dollars in Millions)
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Estimated 1997 % Projected Projected
Base Cost Savings Cost Savings
- ------------------------------------------------------------------------
Administration $141 73% $103
Data Processing and
Operations 124 52 64
Retail Banking 318 45 144
Lending 143 43 61
Loan Servicing 37 54 20
---- ----
SUB-TOTAL $763 51% $392
FDIC Assessment 17 0 0
Aristar 120 10 12
---- ----
TOTAL $900 45% $404
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[LOGO] COST SAVINGS [LOGO]
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ASSUMPTIONS CONSISTENT WITH PRIOR IN-MARKET TRANSACTIONS
TRANSACTION ASSUMED COST RESTRUCTURING
SAVINGS (%) CHARGE/
COST SAVINGS/(1)/
- --------------------------------------------------------------
Bank Boston/BayBanks 39% 74%
Chemical/Chase 40 112
Fleet/Shawmut 43 100
Mercantile/Roosevelt 37 107
NationsBank/BankSouth 60 49
Wells/First Interstate 46 90
AVERAGE 44% 89%
AHM/GWF 45% 99%
(1) Excludes credit provisions. Based on fully phased-in cost savings.
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[LOGO] [LOGO]
ADDITIONAL VALUE CREATION
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CURRENT ANALYSIS DOES NOT INCORPORATE POTENTIAL REVENUE GAINS
. First tier market position in all major markets
. Expanded franchise for new business initiatives
* Consumer banking
* Business banking
. Cross-selling opportunities
. Aristar
. Revenue enhancements more than offset potential revenue loss
CALIFORNIA'S CONSUMER AND SMALL BUSINESS BANKING ALTERNATIVE
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[LOGO] [LOGO]
PROJECTED CAPITAL STRUCTURE
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PROJECTED CAPITAL LEVELS REMAIN ABOVE WELL CAPITALIZED LEVELS
(Dollars in Millions)
- --------------------------------------------------------------------------------------------
At 12/31/96 Adjustments
--------------------------------------------------------------------
Projected
AHM GWF Other/(1)/ Acquisition/(2)/ at Closing
- --------------------------------------------------------------------------------------------
Intangibles $ 308 $ 286 $ (48) $3,805 $ 4,351
Total Assets 49,901 42,874 554 3,805 97,134
Trust Preferred 148 100 300 -- 548
Preferred Equity 482 165 -- -- 647
Common Equity 1,951 2,430 28 3,512 7,921
Total Equity 2,433 2,595 28 3,512 8,568
Ratios:
Equity/Assets 4.88% 6.05% 8.82%
Bank Core Capital 5.54% 5.85% 5.30%
(1) Reflects AHM and GWF estimated balance sheet changes from 12/31/96 to
9/30/97
(2) Reflects estimated purchase accounting adjustments and $325 million pre-tax
restructuring charges
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[LOGO] CAPITAL MANAGEMENT [LOGO]
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CAPITAL MANAGEMENT CONSISTENT WITH CURRENT PRACTICE
. Repurchasing over $2 billion of common through 1999
. Maintaining preferred to tangible equity ratio below 25%
(Dollars in Millions)
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Years Ended December 31,
------------------------
1997 1998 1999
Cash Earnings
Available to Common $ 478 $ 988 $1,087
Plus: Capital
Issuances
Options 15 15 15
Net Preferred (65) 63 0
----- ----- ------
(50) 78 15
Less: Dividends 170 200 186
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CASH GENERATED TO BUYBACK
COMMON $ 258 $ 866 $ 916
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[LOGO] [LOGO]
SUMMARY
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. Enhances shareholder value
. Financially and strategically powerful transaction
. We will remain financially disciplined
. We are committed
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