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that these factors, among others, will allow NOVA to liabilities of $39 million at the closing date. Included in
generate sufficient positive cash flows from new business in total assets were contract and other intangibles with a fair
future periods to support the goodwill recorded in value of $225 million and goodwill of $444 million. The
connection with the acquisition. goodwill reflected the strategic value of the combined
On December 31, 2002, the Company acquired the organization’s leadership position in the corporate trust
corporate trust business of State Street Bank and Trust business and processing economies of scale resulting from
Company (‘‘State Street Corporate Trust’’) in a cash the transaction. As part of the purchase price, $75 million
transaction valued at $725 million. State Street Corporate was placed in escrow for up to eighteen months with
Trust was a leading provider, particularly in the Northeast, payment contingent on the successful transition of business
of corporate trust and agency services to a variety of relationships. Concurrent with the system conversion
municipalities, corporations, government agencies and other expected in 2003, certain State Street Corporate Trust assets
financial institutions serving approximately 20,000 client under administration will be transferred to the Company or
issuances representing over $689 billion of assets under its affiliated mutual funds.
administration. With this acquisition, the Company is In addition to these mergers and business acquisitions,
among the nation’s leading providers of a full range of the Company completed several strategic acquisitions to
corporate trust products and services. The transaction enhance its presence in certain markets and businesses.
represented total assets acquired of $681 million and total
The following table summarizes acquisitions by the Company completed since January 1, 2000, treating Firstar as the
original acquiring company:
Goodwill
and Other Cash Paid/ Accounting
(Dollars and Shares in Millions) Date Assets (a) Deposits Intangibles (Received) Shares Issued Method
Corporate Trust business of State
Street Bank and Trust Company ***** December 2002 $ 13 $ — $ 669 $ 642 — Purchase
Bay View Bank branches ************* November 2002 362 3,305 483 (2,483) — Purchase
The Leader Mortgage Company, LLC ** April 2002 517 — 190 85 — Purchase
Pacific Century Bank ***************** September 2001 570 712 134 (43) — Purchase
NOVA Corporation ******************* July 2001 949 — 2,231 842 57.0 Purchase
U.S. Bancorp************************ February 2001 86,602 51,335 — — 952.4 Pooling
First Union branches ***************** December 2000 450 1,779 347 (1,123) — Purchase
Scripps Financial Corporation ********* October 2000 650 618 113 — 9.4 Purchase
Lyon Financial Services, Inc. ********* September 2000 1,289 — 124 307 — Purchase
Oliver-Allen Corporation, Inc. ********** April 2000 280 — 68 — 4.5 Purchase
Peninsula Bank ********************** January 2000 491 452 71 — 5.1 Purchase
(a) Assets acquired do not include purchase accounting adjustments.
Separate results of operations as originally reported on Merger and Restructuring-Related Items
a condensed basis of Firstar and USBM, for the period prior The Company recorded pre-tax merger and restructuring-
to the merger, were as follows: related charges of $324.1 million, $1,266.4 million, and
Year Ended December 31 (Dollars in Millions) 2000 $348.7 million in 2002, 2001, and 2000, respectively. In
2002, merger-related items were primarily incurred in
Net interest income
Firstar **************************************** $ 2,699 connection with the Firstar/USBM merger, the NOVA
USBM **************************************** 3,471 acquisition and the Company’s various other acquisitions
Total ************************************** $ 6,170 primarily including BayView and State Street Corporate
Trust. In 2001, merger-related items included costs
Net income
associated with integrating USBM, NOVA, Mercantile and
Firstar **************************************** $ 1,284
USBM **************************************** 1,592 other smaller acquisitions noted below and in Note 4 —
Business Combinations. In response to significant changes in
Total ************************************** $ 2,876
the securities markets during 2001, including increased
Total assets at period end volatility, declines in equity valuations and the increasingly
Firstar **************************************** $ 77,585
competitive environment for the securities industry, the
USBM **************************************** 87,336
Company incurred a charge to restructure its subsidiary,
Total ************************************** $164,921
U.S. Bancorp Piper Jaffray Inc. (‘‘Piper’’).
Refer to Note 12 of the Notes to Consolidated
Financial Statements for additional information regarding
goodwill and other intangible assets.
72 U.S. Bancorp
Note 5