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 One Corporation
Subject Company: Bank One Corporation
Exchange Act File Number of Subject Company: 001-15323
January 15, 2004
-------------------------
| J.P. MORGAN CHASE & CO. |
-------------------------
CREATING SCALE, BALANCE AND
SHAREHOLDER VALUE
[JPMorgan Chase Logo] [Bank One Logo]
REGULATION MA DISCLOSURE
--------------------------------------------------------------------------------
This investor presentation contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Such statements
include, but are not limited to, statements about the benefits of the merger
between JPMorgan Chase and Bank One, including future financial and operating
results, the new company's plans, objectives, expectations and intentions and
other statements that are not historical facts. Such statements are based upon
the current beliefs and expectations of Bank One's and JPMorgan Chase's
management and are subject to significant risks and uncertainties. Actual
results may differ from those set forth in the forward-looking statements.
The following factors, among others, could cause actual results to differ from
those set forth in the forward-looking statements: the ability to obtain
governmental approvals of the merger on the proposed terms and schedule; the
failure of JPMorgan Chase and Bank One stockholders to approve the merger; the
risk that the businesses will not be integrated successfully; the risk that the
cost savings and any revenue synergies from the merger may not be fully realized
or may take longer to realize than expected; disruption from the merger making
it more difficult to maintain relationships with clients, employees or
suppliers; increased competition and its effect on pricing, spending,
third-party relationships and revenues; the risk of new and changing regulation
in the U.S. and internationally. Additional factors that could cause JPMorgan
Chase's and Bank One's results to differ materially from those described in the
forward-looking statements can be found in the 2002 Annual Reports on Forms 10-K
of JPMorgan Chase and Bank One, and in the Quarterly Reports on Form 10-Q of
JPMorgan Chase and Bank One, filed with the Securities and Exchange Commission
and available at the Securities and Exchange Commission's internet site
(http://www.sec.gov).
STOCKHOLDERS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS REGARDING
THE PROPOSED TRANSACTION WHEN IT BECOMES AVAILABLE, BECAUSE IT WILL CONTAIN
IMPORTANT INFORMATION. Stockholders will be able to obtain a free copy of the
joint proxy statement/prospectus, as well as other filings containing
information about JPMorgan Chase and Bank One, without charge, at the Securities
and Exchange Commission's internet site (http://www.sec.gov). Copies of the
joint proxy statement/prospectus and the filings with the Securities and
Exchange Commission that will be incorporated by reference in the joint proxy
statement/prospectus can also be obtained, without charge, by directing a
request to J.P. Morgan Chase & Co., 270 Park Avenue, New York, NY 10017,
Attention: Office of the Secretary, 212-270-6000, or to Bank One Corporation, 1
Bank One Plaza IL1-0738, Chicago, IL 60670-0738, Attention: Investor Relations,
312-336-3013. The respective directors and executive officers of JPMorgan Chase
and Bank One and other persons may be deemed to be participants in the
solicitation of proxies in respect of the proposed merger. Information regarding
JPMorgan Chase's directors and executive officers is available in its proxy
statement filed with the Securities and Exchange Commission by JPMorgan Chase on
March 28, 2003, and information regarding Bank One's directors and executive
officers is available in its proxy statement filed with the Securities and
Exchange Commission by Bank One on March 5, 2003. Other information regarding
the participants in the proxy solicitation and a description of their direct and
indirect interests, by security holdings or otherwise, will be contained in the
joint proxy statement/prospectus and other relevant materials to be filed with
the Securities and Exchange Commission when they become available.
1
[JPMorgan Chase Logo] [Bank One Logo]
CREATING VALUE FOR SHAREHOLDERS AND CUSTOMERS
--------------------------------------------------------------------------------
-------------- ------------------- ---------------
| | | Market | | Scale & |
| Balanced | + | leadership across | + | financial |
| business mix | | business lines | | strength |
| | | | | |
-------------- ------------------- ---------------
| |
| |
| |
| |
\ /
\ /
\ /
------------------------------
| Consistent earnings growth |
------------------------------
|| VALUE OF COST SAVINGS EXCEEDS PREMIUM
|| DEEP AND PROVEN MANAGEMENT TEAM TO HANDLE INTEGRATION
|| STRONG BALANCE SHEET AND SIGNIFICANT EXCESS CAPITAL GENERATION
2
[JPMorgan Chase Logo] [Bank One Logo]
MERGER SUMMARY
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NAME: J.P. Morgan Chase & Co.
HEADQUARTER: Corporate - New York
Retail & Middle Market - Chicago
MANAGEMENT: Chairman & CEO, Bill Harrison
President & COO, Jamie Dimon
BOARD: 8 JPMorgan Chase / 8 Bank One
EXCHANGE RATIO: 1.32 JPMorgan Chase shares for each Bank One share
DIVIDEND: JPMorgan Chase's dividend post-closing; Bank One raises dividend
to $0.45
TIMING: Expected closing mid-2004, subject to normal approvals
OTHER: 4% cash break-up fee
3
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DEEP AND PROVEN MANAGEMENT TEAM
--------------------------------------------------------------------------------
------------------------ --------------------------
| Office of the Chairman | | New Management Positions |
------------------------ --------------------------
|| Bill Harrison - Chairman & CEO || Lines of business:
- Card - Campbell (Chairman),
|| Jamie Dimon - President & COO Srednicki (CEO)
- Middle Market - Boshart
|| Don Layton - Vice Chairman - Retail - Scharf
(Finance, Risk & Technology) - T&SS - Miller
- Other business unchanged
|| David Coulter - Vice Chairman
(Investment Bank & IMPB) || Finance/Risk/Technology:
- Finance - Dublon (CFO)
- Risk - Wilson & Bammann
(Deputy)
- Technology - Adams & Schmidlin
|| Other:
- Strategy - Mandelbaum
- Human Resources/Admin. -
Farrell
- Legal - Guggenheimer & McDavid
4
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STRATEGIC RATIONALE
A FINANCIAL SERVICES LEADER WITH DIVERSITY & SCALE
--------------------------------------------------------------------------------
-------------- || Balanced earnings
| Balanced | - Retail/wholesale
| business mix | - Annuity/market sensitive
-------------- || Lower volatility
-------------- || Top tier positions in:
| Market | - U.S. retail and middle amrket financial services
| leadership | - Global wholesale financial services
--------------
-------------- || Over $10bn net income
| Scale & | || $132bn market capitalization
| financial | || $53bn tangible common equity
| strength |
--------------
-------------- || Substantial value from cost savings
| Value | || Cash EPS accretive
| Creation | || EPS accretive after repurchases
--------------
Note: Financial data presented are on a combined basis as of September 30, 2003,
market capitalization as of January 14, 2004, before any transaction
adjustments, cost savings and merger related costs
5
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BALANCED BUSINESS MIX
--------------------------------------------------------------------------------
-------------------------------------
| Combined pre-tax income - $18bn (1) |
-------------------------------------
(ANNUALIZED AS OF 9/30/03)
[Pie Chart]
Cards: 16%
Retail: 33%
Inv Mgmt & Pvt banking: 5%
Investment Bank: 39%
Treasury & Securities Services: 7%
|| MORE CONSISTENT EARNINGS GROWTH FROM BALANCED BUSINESS MIX
- RETAIL REPRESENTS CONSUMER BANKING AND LENDING, MORTGAGE, AUTO, SMALL
BUSINESS AND MIDDLE MARKET
|| UPSIDE POTENTIAL FROM PRIVATE EQUITY PORTFOLIO
6
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MARKET LEADERSHIP IN RETAIL FINANCIAL SERVICES
A LEADER WITH MULTIPLE CUSTOMER TOUCH POINTS
--------------------------------------------------------------------------------
RANK SIZE CUSTOMER METRICS
---- ---- ----------------
BRANCH NETWORK #4 2,300 BRANCHES 6,000 ATMS
OVER 7MM DEBIT CARDS
CORE DEPOSITS #2 $285BN OVER 7MM DEMAND ACCOUNTS
CREDIT CARDS #2 $125BN OUTSTANDING OVER 90MM CARDS ISSUED
MIDDLE MARKET #2 6% MARKET SHARE 30,000 CUSTOMERS
AUTO (NON-CAPTIVE) #1 OVER $50BN OUTSTANDING OVER 3MM LOANS OUTSTANDING
MORTGAGE #4 OVER $250BN OF ORIGINATIONS / OVER 4MM SERVICING CUSTOMERS
$500BN SERVICING
HOME EQUITY #2 OVER $40BN OUTSTANDING OVER 800,000 LOANS
Source: Internal company data, SNL Financial as of 6/30/03 for branches and as
of 9/30/03 for deposits, R.L. Polk, SMR Research, Inside Mortgage Finance and
Barlo Research
7
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MARKET LEADERSHIP IN RETAIL FINANCIAL SERVICES
EXTENSIVE, REGIONALLY DISTRIBUTED BRANCH NETWORK
--------------------------------------------------------------------------------
-------------------- ------------------------ ----------------------------
| NORTHEAST | | MIDWEST | | SOUTHWEST |
-------------------- ------------------------ ----------------------------
New York #1 Illinois #1 Texas #1
Connecticut #8 Indiana #1 Arizona #1
New Jersey #12 Michigan #3 Louisiana #2
Ohio #4 Utah #3
Wisconsin #4 Colorado #5
West Virginia #4 Oklahoma #6
Kentucky #4
% OF COMBINED 40% 28% 32%
DEPOSITS
Combined branch network reaches nearly 50% of the U.S. population, with
significant concentration in urban areas
Note: Excludes California, Delaware and Florida
Source: SNL Financial as of 6/30/03
8
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MARKET LEADERSHIP IN RETAIL FINANCIAL SERVICES
RETAIL BRANCH BANKING
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---------------- --------------------
| Branch network | | Core deposits (1) |
---------------- --------------------
Rank Institution Branches Rank Institution Core dep
($bn)
------------------------------- ---------------------------------
1 Bank of America 5,628 1 Bank of America $447
2 Wells Fargo 3,008 ---------------------------------
3 Wachovia 2,573 (2) COMBINED 285
------------------------------- ---------------------------------
(4) COMBINED 2,295 2 Wells Fargo 225
------------------------------- 3 Wachovia 186
4 U.S. Bancorp 2,257 4 Citigroup 155
5 BANK ONE 1,756 5 JPMORGAN CHASE 148
... 6 BANK ONE 137
18 JPMORGAN CHASE 539
------------------------------- ---------------------------------
|| Total combined deposits ($bn):
$477
(1) Excludes foreign deposits and CDs greater than $100K
Note: Pro forma for pending acquisitions
Source: SNL Financial as of 6/30/03 for branches and as of 9/30/03 for deposits
9
[JPMorgan Chase Logo] [Bank One Logo]
MARKET LEADERSHIP IN RETAIL FINANCIAL SERVICES
TOP POSITIONS IN MAJOR MARKETS
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COMBINED MSA STATISTIC
------------------------------------------ ------------------------------------
------------- ---------------- ------------- ----------------------------------
| MSA NAME | | DEPOSITS ($BN) | | RANK IN MSA | | AVERAGE HOUSEHOLD INCOME ($000S) |
------------- ---------------- ------------- ----------------------------------
NEW YORK $124 #1 $69
CHICAGO 42 #1 77
HOUSTON 39 #1 69
DALLAS 15 #1 75
DETROIT 14 #3 72
PHOENIX 11 #1 67
COLUMBUS 10 #1 65
LONG ISLAND (1) 10 #1 95
INDIANAPOLIS 6 #1 66
FORT WORTH 4 #1 67
COMBINED WTD. AVG. $71
U.S. AVG. $63
(1) Represents the Nassau-Suffolk MSA
Note: Deposit data as of 6/30/03; average household income is for 2003
Source: SNL Financial as of 6/30/03 and Claritas
10
[JPMorgan Chase Logo] [Bank One Logo]
MARKET LEADERSHIP IN RETAIL FINANCIAL SERVICES
SECOND LARGEST U.S. CREDIT CARD ISSUER
--------------------------------------------------------------------------------
--------------------------------------
| Top 10 credit card issuers - Q2 2003 |
--------------------------------------
OUTST. || 95mm cards issued
RANK INSTITUTION ($BN)
---------------------------------
1 Citigroup $131
---------------------------------
(2) COMBINED 125 || $228bn annual charge volume
---------------------------------
2 MBNA 81
3 BANK ONE 74
4 American Express 55 || More than 500 co-brand
5 JPMORGAN CHASE 51 partnerships
6 Discover 49
7 Bank of America 48
8 Capital One 43
9 Household 30
10 GE Capital 28
----------------------------------
Note: Pro forma for recent and pending transactions
Source: Nilson Report as of 6/30/03 and internal company data
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[JPMorgan Chase Logo] [Bank One Logo]
MARKET LEADERSHIP IN WHOLESALE FINANCIAL SERVICES
BROAD CLIENT BASE BENEFITS FROM COMBINED PRODUCTS
--------------------------------------------------------------------------------
CLIENTS (1) PRODUCTS
--------------------------------------------------- ------------------
Advisory
JPMORGAN CHASE BANK ONE COMBINED Capital-raising
-------------- -------- -------- Market-raising
Risk management
Corporate 8,000 3,000 11,000 Cash management
Securities processing
Middle Market 10,000 20,000 30,000
Significant opportunity to offer expanded product set to a larger client base
(1) Approximate numbers, combined number may contain duplicate customers
12
[JPMorgan Chase Logo] [Bank One Logo]
MARKET LEADERSHIP IN WHOLESALE FINANCIAL SERVICES
INVESTMENT BANK
--------------------------------------------------------------------------------
--------------------------------------- -----------------------------------------------------------------------------------
| MARKET LEADERSHIP | | HIGHLIGHTS |
--------------------------------------- -----------------------------------------------------------------------------------
|| Premier global investment bank with a complete, integrated product offering
#1 in Global Syndicated Loans
|| Leadership positions in all key markets
#1 Derivatives House || Global scale - Combined client revenues equal to highest on the street (1)
|| Broad corporate and investor client base covering 95% of Fortune 100 companies
#2 U.S. Investment Grade Corporate Debt and equivalent global penetration
|| Proven ability to provide innovative solutions
#4 in Global Equity and Equity-related
|| Cross sell opportunities with a leading middle market client franchise
#5 in Global Announced M&A
(1) Based on 9/30/03 YTD IB revenues versus C, GS, LEH, MER and MWD
Source: Thomson Financial and internal company data
13
[JPMorgan Chase Logo] [Bank One Logo]
MARKET LEADERSHIP IN WHOLESALE FINANCIAL SERVICES
TREASURY & SECURITIES SERVICES
--------------------------------------------------------------------------------
-------------------------------------- --------------------------------------------------------------------------------------
| MARKET LEADERSHIP | | HIGHLIGHTS |
-------------------------------------- --------------------------------------------------------------------------------------
|| Cash Management: Combined JPMorgan Chase/Bank One doubles revenue to $4bn
#1 in U.S. Dollar Clearing
- Largest global player
- "Best in class" product expertise applied to much larger client base
#1 U.S. Corporate Trustee || Securities Processing
- Custody - $7tn in assets
- Trustee/transaction agency - $5tn of debt issues
#1 in CHIPS, Fedwire, ACH origination || Cross sell opportunities in cash management, custody and trust to a broader client
base
Source: Thomson Financial, Globalcustody.net, Ernst & Young, NACHA and internal
company data
14
[JPMorgan Chase Logo] [Bank One Logo]
MARKET LEADERSHIP IN WHOLESALE FINANCIAL SERVICES
INVESTMENT MANAGEMENT & PRIVATE BANKING
--------------------------------------------------------------------------------
------------------------------------- ------------------------------------------------------------------------
| MARKET LEADERSHIP | | HIGHLIGHTS |
------------------------------------- ------------------------------------------------------------------------
|| Second largest global active asset manager with over $700bn in AUM
#1 U.S. / #3 Global Private Bank
|| Scale increased to over $300bn of client assets in the private bank
#2 U.S. Active Asset Manager || Mutual fund family grows significantly to $200bn in AUM
|| Broader wealth management product range serving a larger client base
#2 Global Money Market Asset Manager
#4 U.S. Mutual Fund Company
Source: Company filings, Pensions & Investments, iMoneyNet, Financial Research
and internal company data
15
[JPMorgan Chase Logo] [Bank One Logo]
SCALE & FINANCIAL STRENGTH
A LEADING GLOBAL FINANCIAL SERVICES FIRM
--------------------------------------------------------------------------------
-----------------------------
| Market capitalization ($bn) |
-----------------------------
RANK INSTITUTION
---------------------------------------------
1 Citigroup $260
2 HSBC 171
3 Bank of America 169
---------------------------------------------
(4) COMBINED (1) 132
---------------------------------------------
4 Wells Fargo 95
5 RBS 92
6 UBS 82
7 JPMORGAN CHASE 81
8 Morgan Stanley 65
9 Wachovia 63
10 Amex 63
11 Merrill Lynch 58
12 BANK ONE 51
13 Goldman Sachs 51
14 Credit Suisse 47
15 Deutsche Bank 45
-----------------------
| Tangible equity ($bn) |
-----------------------
RANK INSTITUTION
---------------------------------------------
1 Citigroup $64
---------------------------------------------
(2) COMBINED (1) 53
---------------------------------------------
2 Bank of America 51
3 HSBC 44
4 JPMORGAN CHASE 33
5 RBS 30
6 Morgan Stanley 24
7 Wells Fargo 22
8 Merrill Lynch 22
9 Wachovia 20
10 Credit Suisse 20
11 BANK ONE 20
12 UBS 19
13 Deutsche Bank 19
14 Goldman Sachs 17
15 Amex 13
--------------------------
| 2004 GAAP earnings ($bn) |
--------------------------
RANK INSTITUTION
---------------------------------------------
1 Citigroup $20
2 Bank of America 15
---------------------------------------------
(3) COMBINED (1) 10
---------------------------------------------
3 HSBC 10
4 RBS 8
5 Wells Fargo 7
6 JPMORGAN CHASE 7
7 UBS 6
8 Wachovia 5
9 Morgan Stanley 5
10 Merrill Lynch 4
11 BANK ONE 4
12 Credit Suisse 4
13 Amex 3
14 Goldman Sachs 3
15 Deutsche Bank 3
(1) Before transaction adjustments, cost savings and merger related costs
Note: Market data as of January 14, 2004; financial data as of September 30,
2003; pro forma for recent transactions; excludes insurance companies and
government agencies
Source: I/B/E/S and SNL Financial
16
[JPMorgan Chase Logo] [Bank One Logo]
SCALE & FINANCIAL STRENGTH
STRONG BALANCE SHEET WITH EXCESS CAPITAL GENERATION
--------------------------------------------------------------------------------
BANK ONE (1) JPMORGAN CHASE (1) PRO FORMA (2)
--------------------------------------------------------------------------------------------------------
Tier 1 ratio 9.8% 8.7% 8.9%
Tier 1 capital above 8.5% ($bn) $3.0 $0.8 $2.9
--------------------------------------------------------------------------------------------------------
------------------------------------------------
| Cumulative excess capital generation (3) ($bn) |
------------------------------------------------
[Bar Graph]
2004: $6.1
2005: $9.8
2006: $14.8
(1) As of September 30, 2003
(2) Estimated as of December 31, 2003; assumes effect of $3.0bn pre-tax merger
related costs
(3) Assuming an 8.5% Tier 1 ratio
Note: Does not include effect of any share repurchases
17
[JPMorgan Chase Logo] [Bank One Logo]
VALUE CREATION
CONSERVATIVE, ACHIEVABLE COST SAVINGS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
ESTIMATED SAVINGS
AREA ($MM)
--------------------------------------------------------------------------------
Wholesale $700
Card & Retail 800
Corporate and other 700
TOTAL PRE-TAX $2,200
% OF COMBINED NON-INTEREST EXPENSE 7%
--------------------------------------------------------------------------------
|| Combined management team has extensive experience integrating large
transactions
|| Integration plan will emphasize best practices
|| Phase-in over 3 years, 100% achieved by 2007
18
[JPMorgan Chase Logo] [Bank One Logo]
VALUE CREATION
IMPACT ON EARNINGS PER SHARE
--------------------------------------------------------------------------------
------------------------------
| 2005E % accretion/(dilution) |
------------------------------
ESTIMATED PHASE-IN (65%) FULL PHASE-IN (100%)
--------------------------------------------------------------------------------
EPS (3.2%) 1.0%
CASH EPS 1.5% 5.6%
--------------------------------------------------------------------------------
------------------
| Accretive to EPS |
------------------
Note: 2005 earnings based on 2004 I/B/E/S median, grown at I/B/E/S long term
growth rate
19
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VALUE CREATION
KEY FINANCIAL ASSUMPTIONS
--------------------------------------------------------------------------------
|| I/B/E/S median EPS estimates for 2004 of $3.35 and $3.15 for Bank One and
JPMorgan Chase, respectively
|| 2005 earnings consistent with I/B/E/S growth estimates
|| Cost savings of $2.2bn (pre-tax)
|| Savings phased-in over 3 years: 33% in 2004, 65% in 2005 and 85% in 2006
|| Net revenue synergies expected but not included
|| Merger related costs of $3bn (pre-tax)
|| $3.5bn of share repurchases assumed in both 2004 and 2005
|| Assumes transaction closes mid-2004
20
[JPMorgan Chase Logo] [Bank One Logo]
VALUE CREATION
A COMPELLING VALUE PROPOSITION FOR SHAREHOLDERS
--------------------------------------------------------------------------------
|| Leading global financial services firm with a balanced focus on retail and
wholesale clients
|| Improves risk profile and decreases volatility of earnings
|| Strong management team + integration experience + achievable cost savings =
lower execution risk
|| Potential for multiple expansion given earnings growth and excess capital
generation
|| Value creation for all shareholders
21
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APPENDIX: EARNINGS IMPACT
--------------------------------------------------------------------------------
$MM EXCEPT PER SHARE
COST SAVINGS PHASE-IN
------------------------------------
65% 100%
------------------------------------
2005 2005
------------------------------------
JPMorgan Chase net income(1) $7,154 $7,154
Bank One net income (1) 4,142 4,142
------------------------------------
Subtotal 11,296 11,296
Cost savings 930 1,430
Amortization (597) (597)
Other (68) (68)
------------------------------------
Combined net income $11,560 $12,061
Avg. projected diluted shares 3,450 3,450
Pro forma earnings per diluted share $3.35 $3.50
Estimate for JPMorgan Chase (1) $3.46 $3.46
EPS accretion/(dilution) (3.2%) 1.0%
Cash EPS accretion/(dilution) 1.5% 5.6%
------------------------------------
(1) EPS based on 2004 I/B/E/S median estimates, grown at I/B/E/S long term
growth rate. Net income numbers based on EPS
Note: Figures are shown on an after-tax basis
22
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APPENDIX: COMBINED SELECTED FINANCIALS
--------------------------------------------------------------------------------
$MM (EXCEPT EMPLOYEES); YTD AS OF 9/30/03
---------------- ---------- ----------
| JPMORGAN CHASE | | BANK ONE | | COMBINED |
---------------- ---------- ----------
Gross loans $236,201 $141,710 $377,911
Assets 792,700 290,006 1,082,706
Managed assets 827,015 326,769 1,153,784
Deposits $313,626 $163,411 $477,037
Total liabilities 747,743 267,595 1,015,338
Shareholder's equity 44,957 22,411 67,368
Net income (9 months) $4,855 $2,532 $7,387
Revenues (9 months) 26,596 14,568 41,164
Employees 92,900 71,200 164,100
Note: Does not reflect transaction adjustments, cost savings and merger related
costs
Source: Company filings
23
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APPENDIX: COMBINED CREDIT QUALITY
--------------------------------------------------------------------------------
YTD AS OF 9/30/03
---------------- ---------- ----------
| JPMORGAN CHASE | | BANK ONE | | COMBINED |
---------------- ---------- ----------
Total allowance for loan losses /
Total on-balance sheet loans (1) 2.01% 3.09% 2.42%
Total managed net charge-offs /
Total avg. managed loans (1) 1.72% 2.54% 2.08%
Total non-performing loans /
Total on-balance sheet loans 1.32% 1.91% 1.54%
Total allowance for loan losses /
Total non-performing loans 153% 162% 157%
(1) YTD 9/30/03 annualized Source: Company filings
24
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