Strategic Differentiation

Transcription

1 Strategic Differentiation Lehman Brothers 2005 Financial Services Conference The Hilton New York September 14, 2005 Copyright 2005 by Corporation

2 Forward Looking Statement This presentation may include forward-looking statements such as statements that relate to s financial goals, dividend policy, expansion and business development plans, anticipated expense levels and projected profit improvements, business prospects and positioning with respect to market and pricing trends, strategic initiatives, re-engineering engineering and outsourcing activities, new business results and outlook, changes in securities market prices, credit quality including reserve levels, planned capital expenditures and technology spending, and d the effects of any extraordinary events and various other matters (including developments in litigation and regulation involving and changes in accounting g policies, standards and interpretations) on s business and results. These statements speak of s plans, goals, strategies, beliefs, b and expectations, and refer to estimates or use similar terms. Actual results could differ materially from those indicated by these statements because the realization of those results is subject to many risks and uncertainties. Our 2004 annual nual report and periodic reports to the SEC contain information about specific factors that could cause actual results to differ, and you are urged to read them. PAGE 2 2

3 Strategic Differentiation A Consistent, Focused Strategy Personal Financial Services Corporate & Institutional Services Two Client Distribution Channels Asset Servicing Asset Administration Asset Management Information Services One Core Business Worldwide Operations and Technology Single Global Securities Processing and Information Platform PAGE 3 3

4 Financial Highlights Reflect Excellent Performance Second Quarter 2005 % Change vs. Prior Year Reported excl. FSG* Assets Under Custody Global Custody Assets Assets Under Management $2.7 Trillion +22% +22% $1.1 Trillion +35% +35% $590 Billion +12% +12% Trust, Inv. & Other Servicing Fees Net Interest Income Total Revenues Noninterest Expenses Net Income $402 Million +20% +10% $180 Million +23% +23% $687 Million +17% +11% $442 Million +17% +8% $150 Million +15% +15% Earnings Per Share $ % +15% * Excludes impact of the Financial Services Group acquisition PAGE 4 4

5 Client Assets at Record Levels in stark contrast to equity markets $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 Assets Under Custody $2.7 Trillion 5 Year CAGR (6/30/00 6/30/05) +11% R E C O R D $1.2 $1.0 $0.8 $0.6 $0.4 $0.2 Global Custody Assets $1.1 Trillion 5 Year CAGR (6/30/00 6/30/05) +25% R E C O R D $700 $600 $500 $400 $300 $200 $100 Assets Under Management $590 Billion 5 Year CAGR (6/30/00 6/30/05) +13% R E C O R D $ Q05 $ Q05 $ Q05 5 Year CAGR: Dow Jones S&P 500 NASDAQ EAFE 0% -4% -12% -3% PAGE 5 5

6 Personal Financial Services Industry Leader in Serving the Affluent Market Largest Personal Trust Bank in U.S. SOURCE: SNL Financial Wealth Management The recognized leader in providing sophisticated financial solutions to high net worth families. Target market: Individuals or families with $75+ million in investable assets Wealth Advisory Delivering comprehensive, investment solutions through a multi-manager manager investment program. Target market: Individuals or families with $25 to $75 million in investable assets Private Client Delivering high-touch trust, investment management and banking solutions to individuals through 84 offices in 18 states. Target market: Affluent individuals with at least $1 million in investable assets $1 Million $25 Million $75 Million C L I E N T I N V E S T A B L E A S S E T S PAGE 6 6

7 Personal Financial Services Strong Demographic Tailwinds Washington (1) 84 Offices in 18 States 40% of millionaire market resides within a 45 minute drive of offices. Minnesota (1) Projected Millionaire Household Growth (Within PFS Footprint, Millions) 1.6 California (11) Nevada (1) Colorado (1) Wisconsin (1) Illinois (18) Missouri (1) Michigan (3) Ohio (1) Massachusetts (1) Connecticut (1) New York (1) Delaware (1) % Increase Arizona (8) Georgia (1) Texas (7) Florida (25) Source: Claritas PAGE 7 7

8 Personal Financial Services Strategically Differentiated to achieve growth objectives Event Marketing & Strategic Philanthropy Sophisticated Solutions Integrated Local Delivery Model PAGE 8 8

9 Personal Financial Services Event Marketing & Strategic Philanthropy Philanthropic Educational Entertainment PAGE 9 9

10 Personal Financial Services Sophisticated Solutions Breadth of Services Brokerage Full Service Brokerage Managed Account 10b5-1 Plans Money Market Instruments Safekeeping Private Passport Online access to banking, trust, investment management, mutual funds, and brokerage information Comprehensive Trust Services Family Business Services Real Estate and Farm Management Minerals Management Charitable Services Trust and Estate Settlement Services Guardianship Services Financial Consulting Retirement Planning Estate Planning Tax Planning Asset Allocation Stock Option Planning Client Retirement Services Qualified Plan Services Defined Benefit Plans Defined Contribution Plans IRA Rollovers Investment Management Individual 401(k) Plans Corporate Banking Working Capital and General Corporate Loans Secured and Cash Flow Lending Acquisition Financing Industrial Development Bonds Equipment Finance and Leasing Investment Management Structured Investment Services Asset Allocation Equity Investing Fixed-Income Investing Short-Term Asset Management Indexing Alternative Investments Single Stock Strategies Private Banking Checking & Deposit Services Personal Loans Real Estate Development Loans Margin Loans Stock Option Lending Home Mortgages Equity Credit Lines PAGE 10 10

11 Personal Financial Services Integrated Service Delivery Model : Integrated Local Delivery Competitors Virtual Integration Regional HQ Local Office Local Office National HQ Broker Trust Administrator Fiduciary Specialist Broker/ Financial Advisor Private Banker Portfolio Manager Portfolio Manager Wealth Strategist Private Banker Client Client PAGE 11 11

12 Personal Financial Services Spotlight: Wealth Management Group Serves 24% of the Forbes 400 Assets Under Custody ($Billions) $82 3 Year CAGR: 16% $101 $106 $65 $ Q05 Penetration 1 9% 11% 11% 13% Total Investable Assets 2 U.S. Households $75 MM+ $700 BN $581 BN $715 BN $792 BN 1 Penetration equals AUC divided by total investable assets, U.S. ultra high net worth households 2 Source: The VIP Forum PAGE 12 12

13 Corporate & Institutional Services Positioned for Success and Profitability Asset Management Risk Management Information Services Asset Servicing CashCash ActiveActive PassivePassive Securities Lending Attribution Analysis Value at Risk Cross-Border Pension Pooling Accounting Reporting Valuation Safekeeping Settlement Investment Operations Outsourcing Manager Manager of Managers Foreign Foreign Exchange Transition Management Commission Recapture Compliance Monitoring Market Market Event Analytics Rates of Return Fund Services Multinational HQ Reporting Income Income Collection Corporate Actions PAGE 13 13

14 Corporate & Institutional Services Positioned to Attract Global Opportunities 16 Locations Worldwide Staff Outside U.S.: 1,750+ FTE Clients in 39 Countries Trade Settlement ~90 Markets Toronto Chicago Isle of Man Dublin London Luxembourg Beijing Tokyo San Francisco Los Angeles Detroit New York Guernsey Jersey Hong Kong Singapore PAGE 14 14

15 Corporate & Institutional Services Compelling Performance in Target Segments 25% - 38% Across Target Segments Top 200 U.S. Pension Funds Top 100 U.S. Public Funds Top 25 Taft- Hartley Plans U.K. Local Authority Market 34% 31% 32% 28% Top 100 U.S. Corporate Plans Top 50 U.S. Foundations Top 50 U.S. Endowments Top 200 U.K. Pension Funds 38% 32% 28% 25% Sources: Pensions & Investments, Investment & Pensions Europe, Pension Funds & Their Advisors, S&P Money Market Directory, Nelson Marketplace, and WM Company Local Authority Pension Fund Universe PAGE 15 15

16 Corporate & Institutional Services Strategically Differentiated to achieve growth objectives Client Service Heritage Innovative Solutions Organic Growth Complemented by Strategic Acquisitions PAGE 16 16

17 Corporate & Institutional Services Servicing Philosophy Centers on Clients Competition s Approach Product Product Product Product Relationship Product Client Product Client Focus Product Product Capabilities PAGE 17 17

18 Corporate & Institutional Services Client Service is the Heritage of Client Satisfaction Survey Melior Group Assessment (Reported January, 2005) Overall Client Satisfaction 93% Expectations Are Met / Exceeded 96% 95% Would Hire Again 95% 50% 60% 70% 80% 90% 100% PAGE 18 18

19 Corporate & Institutional Services Innovative Solution in the Nordic Region In the Past: Solution: Custodian Svenska Handelsbanken Pension Funds as Custodian Swedish Custodian Pension Funds Mutual Funds Mutual Funds PAGE 19 19

20 Corporate & Institutional Services Innovation Fuels Growth in the Nordic Region $100 Nordic Region Client Assets ($Billions) $97 $80 $60 $86 $19 $67 $40 $20 $0 $0.02 $ Q05 PAGE 20 20

21 Corporate & Institutional Services Organic Growth Complemented by Strategic Acquisitions Acquisition strategy continues to focus on enhancement of capabilities and access to new geographies, as exemplified by most recent transactions: Price Acquisition Year ($ mil) Capability Geography ANB IMC 1997 $ 53.0 Trustbank Financial Corp Carl Domino Associates, LP Ulster Bank Investment Services Deutsche Bank Index Business Legacy South Financial Services Group (FSG) PAGE 21 21

22 Corporate & Institutional Services FSG Acquisition Fuels Growth Opportunities Expanding Relationships Traditional Asset Servicing Products Hedge Fund Administration Property Fund Administration Private Trustee Offshore Private Banking FSG Clients Clients Private Equity Administration New Relationships New Wins New Geographies PAGE 22 22

23 Global Investments World Class Investment Manager $590 Billion Assets Under Management as of June 30, 2005 A Diversified Asset Manager Across Asset Classes Across Styles Short Duration $253 Billion (43%) $231 Billion (39%) Equities $101 Billion (17%) Fixed Income Active $360 Billion (61%) $199 Billion (34%) Quantitative Other $5 Billion (1%) (Alternative Asset Classes) Manager of Managers $31 Billion (5%) PAGE 23 23

24 Global Investments Established Industry Leader $590 Billion Assets Under Management as of June 30, th th largest worldwide asset manager 1,2 4 th largest U.S. tax-exempt asset manager 2 3 rd largest institutional index manager 2 6 th largest bank-managed mutual fund family 3 1 Global Investor GI Pension & Investments 3 FRC Monitor; based on long-term funds PAGE 24 24

25 Global Investments Broad Client Base $590 Billion Assets Under Management as of June 30, 2005 Total AUM Equities 39% Fixed Income 17% Short Duration and Other 44% Personal Institutional Equities 37% Fixed Income 13% Short Duration 50% $478 Billion $112 Billion Equities 50% Fixed Income 35% Short Duration 12% Other 3% PAGE 25 25

26 Global Investments Excellent Growth in Assets Under Management ($ Billions) $600 12/31/98 to 6/30/05 % Change CAGR Assets Under Management +153% +15% Excluding Index Acquisition +121% +13% S&P 500-3% -0.5% $572 $590 $500 $400 $300 $233 $292 $326 $320 $303 $479 Acquired Index Assets $404 $200 $100 $ Q05 PAGE 26 26

27 Global Investments Spotlight: Manager of Managers Program $ Billions $30 $25 $20 $15 $10 $5 Global Advisors Assets Under Management $30.7 Billion $12.4 $17.7 $26.8 $30.7 NTGA Highlights: AUM have more than doubled in last two years Capabilities include: Emerging and Minority Managers Hedge Funds Private Equity Investment Program Outsourcing Strategic Sub-Advisory Specialized U.S. and international equity programs $ Q05 PAGE 27 27

28 : A Compelling Investment Proposition Rich History 116 Year Heritage Undiluted by Mergers & Acquisitions Focused Strategy Exclusively Focused on the Management and Administration of Client Assets Conservative Culture One of only 5 independent U.S. Bank Holding Companies Rated AA- by S&P Seasoned Management Team Bill Osborn - Chairman, President & CEO Steve Fradkin - Executive Vice President & CFO Bill Morrison - President - PFS Tim Theriault - President - WWOT Terry Toth - President - NTGI Rick Waddell - President - C&IS Industry 35 Years 35 Years 20 Years 20 Years 9 Years 32 Years 22 Years 26 Years 16 Years 23 Years 30 Years 30 Years PAGE 28 28