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EXHIBIT 99.2
FIRST AMERICAN'S ACQUISITION OF
DEPOSIT GUARANTY
[LOGO]
LEVERAGING THE JOINT STRENGTHS TO BUILD ONE
OF THE NATION'S BEST PERFORMING COMPANIES
December 8, 1997
[LOGO] FORWARD LOOKING INFORMATION
TO THE EXTENT THAT STATEMENTS IN THIS PRESENTATION RELATE TO THE PLANS,
OBJECTIVES OR FUTURE PERFORMANCE OF FIRST AMERICAN CORPORATION, DEPOSIT
GUARANTY CORP. AND THE COMBINED COMPANY FOLLOWING THE MERGER, THESE STATEMENTS
ARE CONSIDERED TO BE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH STATEMENTS ARE BASED ON
MANAGEMENT'S CURRENT EXPECTATIONS AND THE CURRENT ECONOMIC ENVIRONMENT. ACTUAL
STRATEGIES AND RESULTS IN FUTURE PERIODS MAY DIFFER MATERIALLY FROM THOSE
CURRENTLY EXPECTED DUE TO VARIOUS RISKS AND UNCERTAINTIES. ADDITIONAL
DISCUSSION OF FACTORS AFFECTING FIRST AMERICAN'S, DEPOSIT GUARANTY'S OR THE
COMBINED COMPANY'S BUSINESS AND PROSPECTS IS CONTAINED IN THE COMPANY'S
PERIODIC FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION.
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[LOGO] AGENDA
[]ATTRACTIVE COMBINATION
[]OVERVIEW OF TRANSACTION
[]BUILDING SHAREHOLDER VALUE
[]CONCLUSION
[LOGO] AGENDA
[]ATTRACTIVE COMBINATION
[]OVERVIEW OF TRANSACTION
[]BUILDING SHAREHOLDER VALUE
[]CONCLUSION
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[LOGO] ATTRACTIVE ACQUISITION
[]SIGNIFICANTLY ACCRETIVE TO EARNINGS
[]SUBSTANTIALLY IMPROVES PROFITABILITY
[]MINIMAL INTEGRATION RISK
[]COMPLEMENTARY STRENGTHS
[]BROADENS MANAGEMENT TEAM
[LOGO] SUBSTANTIALLY ACCRETIVE
TO EARNINGS
[]NEUTRAL IN 1998
[]6% ACCRETIVE IN 1999 - $0.18/SHARE
- EARNINGS ON EXCESS CAPITAL NOT INCLUDED ABOVE
[]10% ACCRETIVE IF EARNINGS ON EXCESS CAPITAL
ARE ASSUMED
NOTE:
(1) BASED ON IBES ESTIMATE
(2) ASSUMES SYNERGIES ARE FULLY RECOGNIZED
(3) EXCLUSIVE OF ONE-TIME CHARGES
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[LOGO] SUBSTANTIALLY IMPROVES
PROFITABILITY
PRO FORMA
FATN DEP COMBINED
PERFORMANCE MEASURE 3Q97 3Q97 3Q97
- ------------------------------------------------------
ROE 16.8% 15.1% 19 - 20 %
ROA 1.4% 1.4% 1.6 - 1.8%
NIM 4.1% 4.9% 4.4 - 4.5%
EFFICIENCY 54.8% 60.8% <50.0%
(BANKING BUSINESS)
[LOGO] MINIMAL
INTEGRATION RISK
Common Strategies
- - Business line organization
- - Centralized operations and technology
- - Centralized staff
- - Standardized products
- - Superior credit quality
- - Shared commitment to customer
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[LOGO] COMPLEMENTARY
STRENGTHS
[] FIRST AMERICAN
- Majority of franchise serves attractive growth
markets
- Rapidly growing non-bank fee businesses
(Enterprises)
- State-of-the-art customer information
[] DEPOSIT GUARANTY
- Market source for low cost funding
- Excess liquidity
- Mortgage servicing efficiency
[LOGO] BROADENS
MANAGEMENT TEAM
PRE-ACQUISITION POST-ACQUISITION RESPONSIBILITIES
Dennis C. Bottorff Chairman & CEO - Chairman & CEO -
FAC FAC
E.B. Robinson, Jr. Chairman & CEO - Vice Chairman - FAC Banking Operations
Deposit Guaranty President-FANB
Chief Oper. Officer
Dale W. Polley President - FAC/FANB President - FAC Administrative
Functions
Robert A. McCabe, Jr. Vice Chairman - FAC Vice Chairman - FAC Non-banking
President - FAE President - FAE Operation
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[LOGO] AGENDA
[] Attractive Combination
[] Overview of Transaction
[] Building Shareholder Value
[] Conclusion
[LOGO] TERMS OF TRANSACTION
Fixed Exchange Ratio: - 1.17 shares of First American
stock for each share of Deposit Guaranty
- Tax Free Exchange
Purchase Price Per Share: $64.06 (based on FATN 12/5/97 closing price)
Other Terms: 19.9% Stock option from DEP to FATN
Transaction Value: $2.7 Billion
Accounting: Pooling of Interests
Expected Closing 2nd Quarter of 1998
Expected Conversion Within 12 months
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[LOGO] ACCRETIVE TO EARNINGS
----- -----
1998 1999
----- -----
First American -- IBES $2.68 $2.97
Deposit Guaranty -- IBES $2.51 $2.71
- --------------------------------------------------
ESTIMATED AFTER-TAX ADJ. ($MM) ($MM)
- ------------------------ ----- -----
Expense Efficiencies $19.9 $39.8
Revenue Enhancements $ 6.0 $12.0
---------------
Total Adjustments $25.9 $51.8
- --------------------------------------------------
EPS EPS
---- ----
TOTAL EARNINGS OF COMBINED $2.68 $3.15
ACCRETION TO EPS $0.00 $0.18
[LOGO] SYNERGY OPPORTUNITIES
[] Expected Cost Savings of $68MM
- 25% of Deposit Guaranty's expense base
- Synergies start in 1998
[] Projected Revenue Enhancements of $20MM
- 7.5% of Deposit Guaranty's expense base
- Synergies start in 1998
[] Potential Earnings from Excess Capital
- $10 million - 1998
- $19 million - 1999
- Not included in synergies or EPS calculation
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[LOGO] RESTRUCTURING AND
MERGER-RELATED COSTS
($millions)
Severance/Retention $ 27
Systems Conversions 13
Facilities Contracts 18
Other 29
Sub-Total $ 87
Charitable Foundation 15
Total $102
[LOGO] PRO FORMA ANALYSIS
SIZE($MM)
- ---- ------- ------ -------
Market Value (12/5/97) $ 3,197 $2,138 $ 5,335
Assets 10,562 6,839 17,401
Loans 7,152 4,353 11,505
Deposits 7,701 5,283 12,985
Common Equity 889 624 1,513
PROFITABILITY
- -------------
ROA 1.4% 1.4% 1.7%
ROE 16.8% 15.1% 19.6%
Net. Int. Margin 4.1% 4.9% 4.4%
Efficiency 54.8% 60.8% <50.0%
Fees/Revenues 40% 33% 40%
ASSET QUALITY
- -------------
NPA Ratio 0.31% 0.65% 0.45%
NCO Ratio 0.18% 0.65%(3) 0.37%(3)
Note:
(1) Financial information for the quarter ending 9/30/97.
(2) Includes cost savings and revenue enhancements of 32.5%.
(3) Exclusive of one large DEP loan = 0.16%; Pro Forma = .017%.
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[LOGO] TRANSACTION PRICING
COMPARISON
--------------------------
[] Significant increases in bank stock trading multiples, including First
American's, make Deposit Guaranty transaction multiples appear higher than
recent market transactions
[] Relative multiples compare favorably
[LOGO] TRANSACTION PRICING
COMPARISON
--------------------------
As a % of Buyer's
Multiple
--------------
Transaction Buyer's Transaction
Transaction Forward Year Forward Year Forward Year
Forward Year EPS Multiple EPS EPS Multiple
Acquiror/Acquiree EPS Multiple with Synergies Multiple w/Synergies
- ----------------- ------------ -------------- ------------ -------------
NB/BOAT 15.2x 10.3x 10.3x 100%
ONE/FCOM 20.1 12.9 13.7 94
FTU/SBK 20.5 9.8 12.5 78
NB/BBI 20.8 9.6 12.6 76
FTU/FFB 10.9 7.6 7.7 98
FTU/CFL 19.6 11.4 13.2 87
NCC/FOA 22.3 12.0 16.6 72
- -------------------------------------------------------------------------------
FATN/DEP 25.3x 16.9x 20.4x 83%
- -------------------------------------------------------------------------------
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[LOGO] FAVORABLE
GIVE/GET RATIO
LAST OWNERSHIP
QUARTER BOOK SELLER'S PREMIUM TO
ACQUIROR/ACQUIREE EARNINGS ASSETS VALUE OWNERSHIP EARNINGS
ONE/FCOM 6.4% 7.5% 7.2% 8.6% 34.8%
FTU/SBK 7.0 7.7 8.6 10.8 53.2
NB/BBI 17.1 15.5 15.1 23.9 39.8
FTU/FFB 32.3 31.3 32.6 39.9 23.5
FTU/CFL 26.6 23.4 20.9 34.8 30.8
NCC/FOA 27.9 29.2 29.6 32.7 17.2
FATN/DEP 38.7% 39.7% 41.6% 45.7% 18.1%
[LOGO] GEOGRAPHIC PRESENCE
PRO FORMA
#OF DEPOSITS %MARKET
RANK STATE BRANCHES (MM) SHARE
2 Tennessee 150 $ 6,996 12.0%
2 Mississippi 105 3,438 14.1
5 Louisiana 52 1,757 4.3
31 Virginia 19 305 0.4
14 Arkansas 6 272 1.0
31 Kentucky 4 194 0.5
TOTALS 336 $12,962
[MAP]
[ ] First American
[ ] Deposit Guaranty
[ ] Overlap
[Appearing here is a map portraying the pro forma geographic layout
of the combined company's branch system.]
Note: (1) Deposits as of 6/30/96. Includes all pending and completed
transactions through 11/21/97.
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[LOGO]
GEOGRAPHIC PRESENCE
DEPOSITS % OF
MARKETS ($MM) FRANCHISE DEP.
DEP
Fast Growing Mkts $2.3 42%
Slow Growing Mkts w/High Mkt Share $1.9 35%
Other Mkts $1.3 23%
FATN
Fast Growing Mkts $5.2 71%
Slow Growing Mkts w/High Mkt Share $ .9 12%
Other Mkts $1.2 17%
PRO FORMA
Fast Growing Mkts $7.5 60%
Slow Growing Mkts w/High Mkt Share $2.8 21%
Other Mkts $2.5 19%
[LOGO]
NON-BANK ACTIVITIES
[]INVEST
-Largest third-party marketer of investment and insurance products
-400+clients in 43 states
-1900 registered reps selling $3 billion of investment products
[]SSI
-Third largest processor of hospital healthcare claims in the U.S.
-550 hospital clients in 44 states
-$29 billion of claims processed annually
[]MORTGAGE SERVICING
-Approximately $5 billion servicing portfolio
-Eight States
-Very efficient cost of service
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[LOGO] AGENDA
[]ATTRACTIVE COMBINATION
[]OVERVIEW OF TRANSACTION
[]BUILDING SHAREHOLDER VALUE
[]CONCLUSION
[LOGO] BENEFITS OF ACQUISITION:
MOVES FIRST AMERICAN CLOSER TO ITS
GOAL OF "SWEET 16"
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[LOGO] FIRST AMERICAN'S GOAL
TO PRODUCE RESULTS CONSISTENT WITH THE HIGHEST PERFORMING, MOST HIGHLY VALUED
COMPANIES IN THE INDUSTRY - "SWEET 16"
"SWEET-16" PERFORMANCE
- - Current Median ROE = 20.1%
- - Current Median ROA - 1.64%
- - Current Median Price-to-Book Multiple = 4.4X
[LOGO] FIRST AMERICAN GOALS
(end of 2000)
- - Soundness:
- remain conservative
- - Profitability
-ROE > 19.50%
-
-ROA > 1.60%
-
- - Efficiency in the banking business < 50%
-
- - Growth
- EPS growth 10-15% (CAGR)
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[LOGO] FIRST AMERICAN
PERFORMANCE
[] First American is Closing the Gap on "Sweet 16" Performance
ROA ROE
[GRAPH] [GRAPH]
Represents the median of each group in each year.
Appearing here is a graph showing the ROA for the High Performing
peer group and First American for years 1991-1996 and third quarter 1997.
Appearing here is a graph showing the ROE for the High Performing
peer group and First American for years 1991-1996 and third quarter 1997.
[LOGO] ACQUISITION WILL
ACCELERATE PROGRESS:
[] Increased Profitability
[] Enhanced Earnings Growth
- Neutral to 1998
- Accretive to 1999
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[LOGO] FINANCIAL BENEFITS
OF THE ACQUISITION:
[] Increased Profitability
- ROA
- ROE
- Margin
- Cost of Deposits
- Liquidity
- Efficiency
[LOGO] INCREASED
PROFITABILITY
ROA
[GRAPH]
Appearing here is a graph showing historical ROA for "Sweet-16" and
First American plus the proforma results of the combined company's
ROA for the third quarter of 1997.
Note: Assumes synergies are fully recognized
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[LOGO] INCREASED
PROFITABILITY
[GRAPH]
Appearing here is a graph showing historical ROE for "Sweet-16" and
First American plus the proforma results of the combined company's
ROE for the third quarter of 1997.
[LOGO] INCREASED MARGIN
[GRAPH]
Appearing here is a graph showing 1996 and third quarter 1997
net interest margin for FATN and DEP.
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[LOGO] LOWER COST OF DEPOSITS
[GRAPH]
Appearing here is a graph showing the historical cost of deposits for
FATN and DEP for 1995, 1996, and the third quarter 1997.
[LOGO] LOWER COST OF DEPOSITS
[GRAPH]
Appearing here is a graph showing historical cost of deposits for the U.S.,
Tennessee, and Mississippi for 1995 and 1996.
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[LOGO] INCREASED LIQUIDITY
[GRAPH]
Appearing here is a graph showing historical loan-to-deposit ratios for
FATN and DEP for 1995, 1996, and third quarter 1997.
[LOGO] IMPROVED EFFICIENCY
[GRAPH]
Appearing here is a graph showing third quarter 1997 efficiency ratios for
FATN, DEP, and the proforma combined company.
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[LOGO] IMPROVED EFFICIENCY
[] Efficiency Will Improve As A Result Of:
- A wider margin
- Lower Costs & Higher Revenue
> Traditional consolidation cost savings
> Leveraging First American's expertise in executing three of its key
strategies
[LOGO] FIRST AMERICAN
STRATEGIC FOCUS
[] Focus the Bank on Targeted Profitable Segments Where we can Maintain
Competitiveness by Offering a "Tailored Solution" Value Proposition
[] Continually Lower the Cost of Distribution in the Bank
[] Transform the Organization from a Bank to a Financial Services Company
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[LOGO] TRANSITION TEAM
[] E. B. Robinson, Jr. - Operations
[] Dale W. Polley - Administration
[LOGO] AGENDA
[] Attractive Combination
[] Overview of Transaction
[] Building Shareholder Value
-Recognizing the Synergies
[] Conclusion
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[LOGO] TRADITIONAL COST
SYNERGIES
[] Traditional Cost Synergies Related To:
- Executive & Administration - $23MM
> Represents approximately 42% of Finance, Human Resources, Facilities,
Credit Policy, and Executive and Administration Costs
- Operations/Technology - $16MM
> Represents approximately 38% of total Ops/Tech costs
[LOGO] STRATEGIC SYNERGIES
[] Focus the Bank on Targeted Profitable Segments...
- Enhanced customer profitability focus $11MM
- Proactive small business focus - $4MM
[] Lower the Cost of Distribution...
- Retail, corporate asset mgmt. and mortgage - $29MM
- Represents approximately 18% of total retail, corporate and mortgage costs
[] Transform From Bank to Financial Services Company
- Asset management group (increased investment sales) - $5MM
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[LOGO] SYNERGIES
[] Cost:
- Executive & Administration - $23MM
- Operations/Technology - $16MM
- Retail, Corporate, Asset Mgmt. and Mortgage - $29MM
[] Revenue:
- Enhanced Customer Profitability Information $11MM
- Asset Mgmt. Group (Increased Investment Sales) - $5MM
- Proactive Small Business Focus - $4MM
[] Total:
- $88MM
[LOGO] CONCLUSION
GIANT STEP TOWARD HIGH
PERFORMANCE