1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
Date of the Report: January 21, 1994
----------------
Commission file number 1-5805
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CHEMICAL BANKING CORPORATION
---------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-2624428
---------------------------- --------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
270 Park Avenue, New York, NY 10172-2070
----------------------------- -----------
(Address of principal executive Offices) (Zip Code)
Registrant's telephone number, including area code (212) 270-6000
--------------
2
Item 5. Other Events
---------------------
1. Chemical Banking Corporation ("the Corporation") announced on
January 18, 1994, that fourth quarter 1993 earnings were $347
million, compared with $304 million in the same period a year
ago. For the full year, net income was $1,604 million, an
increase from $1,086 million for all of 1992.
Net income per common share in the fourth quarter of 1993 was
$1.23, compared with $1.09 per share in the same period a
year ago. Net income per common share for the full year was
$5.77 in 1993 compared with $3.90 in 1992.
A copy of the Corporation's Press Release announcing the
results of operations for the 1993 fourth quarter and the
full year is incorporated herein.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits
--------------------------------------------------------------
The following exhibits are filed with this Report:
Exhibit Number Description
-------------- -----------
99 Press Release - 1993 Fourth Quarter
Earnings.
3
SIGNATURE
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
CHEMICAL BANKING CORPORATION
(Registrant)
Dated January 21, 1994 by /s/Joseph L. Sclafani
---------------- ---------------------
Joseph L. Sclafani
Controller
[Principal Accounting Officer]
4
EXHIBIT INDEX
Exhibit Number Description Page at Which Located
-------------- ----------- ---------------------
99 Press Release 5
5
Press Contact: John Meyers
(212) 270-7454
Investor Contact: John Borden
(212) 270-7318
For Immediate Release
Tuesday, January 18, 1994
New York, January 18 -- Chemical Banking Corporation today
reported net income for the full year 1993 of $1.604 billion, an
increase of 48 percent from $1.086 billion for all of 1992. Net
income per common share for 1993 was $5.77, compared with $3.90 in
1992.
Net income for the fourth quarter of 1993 was $347 million, or
$1.23 per common share, versus $197 million, or $.64 per share, on a
comparable fully-taxed basis and $304 million, or $1.09 per share,
on a reported basis (including tax benefits) in the fourth quarter
of 1992.
"Higher earnings for both the quarter and the year reflected
strong revenue growth in our core businesses," said Walter V.
Shipley, chairman and chief executive officer. "The corporation
continued to benefit from positions of market leadership, with
strong performances from capital markets, corporate finance,
regional banking and national consumer activities. In addition, the
fourth quarter included significant revenues related to developing
markets restructurings, partially offset by investments in several
of the corporation's key businesses."
"Nonperforming assets declined by $607 million during the
fourth quarter and by $2.6 billion, or 42 percent, during the past
year," said Mr. Shipley. "This continued improvement in credit
quality confirms our expectations for significantly lower provisions
in the years ahead."
At December 31, total nonperforming assets were $3,525 million,
down from $6,092 million on the same date a year ago. Nonperforming
assets were 2.4 percent of total assets at the end of the fourth
quarter, compared with 4.4 percent a year ago. The non-LDC
allowance for losses at December 31 was 123 percent of non-LDC
nonperforming loans, compared with 64 percent a year ago.
The corporation's estimated Tier I risk-based capital ratio was
8.0 percent at December 31, compared with 7.3 percent a year ago.
At December 31, the estimated total risk-based capital ratio was
12.1 percent, up from 11.6 percent on the same date a year ago.
6
During 1993, the corporation increased the quarterly dividend
on its common stock by 27 percent to 38 cents per share. In March,
the quarterly dividend was increased to 33 cents per share, from 30
cents per share, and in December to 38 cents per share.
NET INTEREST INCOME
Net interest income for the fourth quarter was $1,149 million,
compared with $1,226 million in the same year-ago period. For the
full year, net interest income was $4,636 million, compared with
$4,598 million a year ago.
The net yield on interest-earning assets was 3.65 percent in
the fourth quarter, compared with 4.01 percent in the fourth quarter
of 1992. The net yield on interest earning assets for the full year
was 3.73 percent, compared with 3.82 percent for all of 1992.
Net interest income in the fourth quarter of both 1993 and 1992
included one-time cash payments of approximately $30 million
received in connection with developing country debt restructurings.
Average interest-earning assets for the fourth quarter were
$125.7 billion, compared with $122.4 billion in the same year-ago
period. For the year, average interest-earning assets were $124.9
billion, compared with $121.2 billion for 1992.
NONINTEREST REVENUE
Noninterest revenue for the fourth quarter was $1,053 million,
an increase of 47 percent from $717 million in the same period a
year ago. Noninterest revenue for the full year was $4,024 million,
up 33 percent from $3,026 million for all of 1992.
Combined revenues from all trading activities were $255 million
in the fourth quarter, up 11 percent from $229 million in the same
year-ago period. For the year, total trading revenues were a record
$1,073 million, up 26 percent from $853 million in 1992. The
results reflected the corporation's emphasis on market making and
client-driven businesses.
Corporate finance and syndication fees were $88 million in the
quarter, up 49 percent from $59 million a year ago. Such fees for
the full year 1993 were $338 million, up 28 percent from $265
million a year ago. The increase underscored the corporation's
leadership position in global loan origination and distribution as
well as growth in corporate advisory activities.
Trust and investment management fees in the fourth quarter were
$109 million, up from $94 million in the 1992 fourth quarter, and
$406 million for the full year, up from $361 million in all of 1992.
The improvement in the results primarily reflected growth in
Chemical's personal trust and asset management businesses.
7
Other noninterest revenue in the fourth quarter was $236
million, compared with $9 million in the same quarter a year ago.
For the full year, other noninterest revenue was $710 million, up
from $190 million in all of 1992. The 1993 fourth quarter results
included one-time net revenues of $139 million principally related
to restructured country debt, including the sale of a portion of the
past due interest bonds received from Argentina. The full year 1993
included $331 million from the sale of such bonds received from
Argentina and Brazil. Revenues from venture capital activities were
$90 million in the fourth quarter and $301 million for the full year
1993, versus $17 million and $100 million in the respective 1992
periods.
Securities gains were $16 million in the fourth quarter,
compared with securities losses of $2 million in the same year-ago
quarter. For the year, securities gains were $142 million, compared
with gains of $53 million in all of 1992.
NONINTEREST EXPENSE
Noninterest expense in the fourth quarter was $1,335 million,
compared with $1,294 million in the same year-ago quarter. For the
full year, noninterest expense was $5,293 million, versus $4,930
million a year ago.
Noninterest expense in the fourth quarter reflected
approximately $150 million in expense savings related to the
December 31, 1991 merger of Chemical Banking Corporation and
Manufacturers Hanover Corporation, up from $90 million in the fourth
quarter a year ago. Merger-related expense savings for all of 1993
were $525 million, compared with $280 million for all of 1992.
Noninterest expense for both the fourth quarter and full year
1993 reflected higher expenses associated with investments in
certain of the corporation's key businesses, including an expansion
of Section 20 securities capabilities, the acquisitions by Texas
Commerce Bancshares of Ameritrust Texas Corporation and major
components of First City Bancorporation of Texas, Inc., and $53
million in the fourth quarter related to the launch of a co-branded
MasterCard with Shell Oil Company.
Noninterest expense included foreclosed property expense of $61
million in the fourth quarter and $287 million for the year,
compared with $101 million and $283 million in the respective
periods of 1992. Noninterest expense for the full year 1993
included a third-quarter charge of $115 million ($67 million after-
tax) related to the completion of the corporation's assessment of
costs associated with the merger of Chemical and Manufacturers
Hanover. The fourth quarter of 1992 included a one-time charge of
$41 million related to costs incurred in combining the corporation's
employee benefits plans.
Excluding one-time charges, the ratio of noninterest expense to
total revenue improved to 60.6 percent in the fourth quarter, from
64.5 percent in the same year-ago quarter. On the same basis, this
ratio for the full year improved to 59.1 percent, from 63.7 percent
in 1992.
8
As of December 31, 1993, merger-related staff reductions
totaled 6,221 since July 15, 1991, when the merger was first
announced.
PROVISION AND ALLOWANCE FOR LOSSES
The provision for losses was $286 million in the fourth
quarter, compared with $298 million in the third quarter of 1993 and
$315 million in the fourth quarter of 1992. For the year, the
provision for losses was $1,259 million, versus $1,365 million in
1992.
Consumer net charge-offs were $89 million in the fourth
quarter, compared with $84 million in the third quarter of 1993 and
$86 million in the fourth quarter a year ago. Consumer net charge-
offs were $419 million for the year, versus $401 million in 1992.
Consumer net charge-offs for the full-year 1993 included $55 million
in the second quarter related to the disposition of nonperforming
residential mortgage assets arising from loans extended several
years ago under a reduced documentation mortgage program, which was
discontinued in 1990.
Commercial net charge-offs were $197 million in the fourth
quarter, compared with $214 million in the third quarter of 1993 and
$229 million in the fourth quarter a year ago. Commercial net
charge-offs were $840 million for the year, versus $964 million in
1992.
LDC net recoveries were $54 million in the fourth quarter,
compared with LDC net charge-offs, including losses on sales and
swaps, of $27 million in the third quarter of 1993 and $84 million
in the fourth quarter a year ago. Such net charge-offs were $22
million for the full year, compared with $244 million in all of
1992.
At December 31, the non-LDC allowance for losses was $2,423
million, compared with $2,206 million on the same date a year ago.
The LDC allowance at December 31 was $597 million, compared
with $819 million on the same date a year ago. Total LDC medium-
and long-term outstandings at December 31 were $2.3 billion, versus
$3.5 billion on the same date a year ago.
NONPERFORMING ASSETS
At December 31, total nonperforming assets were $3,525 million,
down $607 million from $4,132 million at September 30 and down
$2,567 million, or 42 percent, from $6,092 million on December 31 a
year ago.
Total non-LDC nonperforming assets at December 31 were $2,903
million, down from $3,365 million at September 30 and from $4,744
million a year ago. Non-LDC nonperforming loans at December 31 were
$1,969 million, down from $2,279 million at September 30 and down
from $3,468 million at December 31 a year ago. Assets acquired as
loan satisfactions were $934 million at year-end 1993, down from
$1,086 million at September 30 and down from $1,276 million at the
end of 1992.
9
LDC nonperforming loans were $622 million at December 31, down
from $767 million at September 30 and down from $1,348 million on
December 31 a year ago.
Nonperforming Assets
($ in millions) 12/31/93 9/30/93 12/31/92
-------- ------- --------
Non-LDC nonperforming loans $1,969 $2,279 $3,468
Assets acquired as loan satisfactions 934 1,086 1,276
------ ------ ------
Total non-LDC nonperforming assets 2,903 3,365 4,744
------ ------ ------
LDC nonperforming loans:
Brazil 403 483 713
Argentina 7 39 316
Other LDC countries 212 245 319
------ ------ ------
Total LDC nonperforming loans 622 767 1,348
------ ------ ------
Total nonperforming assets $3,525 $4,132 $6,092
====== ====== ======
Allowance for Losses ($ in millions) 12/31/93 12/31/92
-------- --------
Total allowance for losses $3,020 $3,025
As a % of total loans 4.0% 3.7%
Non-LDC allowance for losses $2,423 $2,206
As a % of non-LDC loans 3.3% 2.8%
LDC allowance for losses $597 $819
As a % of term outstandings including
previous charge-offs with claims retained 54% (a) 56%
(a) 26% excluding previous charge-offs with claims retained
10
STOCKHOLDERS' EQUITY AND CAPITAL RATIOS
($ in billions) 12/31/93 12/31/92
-------- --------
Total stockholders' equity $11.2 $9.9
Common stockholders' equity $9.5 $8.0
Ratios:
Total equity to assets 7.4% 7.1%
Common equity to assets 6.3% 5.7%
Tier I Leverage (a) 6.8% 6.6%
Risk-based capital: (a)
Tier I (4.0% required) 8.0%(b) 7.3%
Total (8.0% required) 12.1%(b) 11.6%
(a) Excludes from 1993 figures the net favorable impact on
stockholders' equity of $215 million resulting from adoption of
SFAS No. 115 on December 31, 1993.
(b) Estimated.
OTHER FINANCIAL DATA
Tax expense included income tax benefits totaling $331 million
for the full year 1993 and $278 million for all of 1992, including
$65 million in the 1992 fourth quarter. Because the corporation
recognized its remaining available Federal tax benefits in the third
quarter of 1993, the corporation's earnings beginning in the fourth
quarter of 1993 were reported on a fully-taxed basis.
On December 31, 1993, the corporation adopted SFAS No. 115,
"Accounting for Certain Investments in Debt and Equity Securities,"
which addresses the accounting for investments in debt and equity
securities that have readily determinable fair values. SFAS 115
requires that investments and certain loan assets must be identified
as held to maturity, held for current resale or available for sale.
Investments that are identified as available for sale are required
to be accounted for at their fair value with the related unrealized
gains and losses included as a separate component of stockholders'
equity. The adoption of this accounting standard resulted in a net
favorable impact of approximately $215 million after-tax to the
corporation's stockholders' equity.
11
The return on average common stockholders' equity (ROE) was
13.38 percent for the fourth quarter, versus 7.98 percent on a
comparable fully-taxed basis and 13.36 percent on a reported basis
in the year-ago fourth quarter. The ROE for the full year was 16.66
percent, compared with 12.36 percent for all of 1992.
The return on average total assets (ROA) was .94 percent for
the fourth quarter, versus .56 percent on a comparable fully-taxed
basis and .86 percent on a reported basis in the fourth quarter of
1992. The ROA for the full year was 1.11 percent, compared with .78
percent for all of 1992.
Total assets at December 31 were $149.9 billion, versus $139.7
billion on the same date a year ago. Total loans at the end of 1993
were $75.4 billion, compared with $82.0 billion a year ago. On
December 31, total deposits were $98.3 billion, compared with $94.2
billion at the end of 1992.
Book value per common share was $37.60 at December 31, versus
$32.43 per share on the same date a year ago.
TEXAS COMMERCE BANCSHARES
Texas Commerce Bancshares (TCB) reported net income of $39
million in the fourth quarter and $169 million for the year, versus
$46 million and $180 million in the similar year-ago periods.
Excluding the one-time restructuring charge of $43 million ($30
million after-tax) related to the First City acquisition and net
benefits of $9 million resulting from the adoption of two accounting
changes, earnings for the full year 1993 would have been $190
million. On a pre-tax basis, TCB's earnings were $64 million in the
fourth quarter and $226 million for the year, versus $47 million and
$184 million in the same periods of 1992.
12
UNAUDITED
CHEMICAL BANKING CORPORATION and Subsidiaries
(in millions, except per share and ratio data)
Three Months Ended For the Year Ended
December 31, December 31,
------------------ ------------------
1993 1992 1993 1992
------ ------ ------ ------
EARNINGS:
--------
Income Before Effect of Accounting Changes $ 347 $ 304 $ 1,569 $ 1,086
Net Effect of Changes in Accounting Principles -- -- 35 --
--------- --------- --------- ---------
Net Income $ 347 $ 304 $ 1,604 $ 1,086
========= ========= ========= =========
Net Income Applicable to Common Stock $ 309 $ 266 $ 1,449 $ 936
========= ========= ========= =========
PER COMMON SHARE:
----------------
Income Before Effect of Accounting Changes $ 1.23 $ 1.09 $ 5.63 $ 3.90
Net Effect of Changes in Accounting Principles -- -- .14 --
--------- --------- --------- ---------
Net Income $ 1.23 $ 1.09 $ 5.77 $ 3.90
========= ========= ========= =========
Book Value at December 31, $ 37.60 $ 32.43 $ 37.60 $ 32.43
Market Value at December 31, $ 40.13 $ 38.63 $ 40.13 $ 38.63
Common Stock Dividends Declared $ 0.38(a) $ 0.30 $ 1.37(a) $ 1.20
COMMON SHARES AND COMMON STOCK
EQUIVALENTS:
------------------------------
Average Outstanding 252.5 246.2 251.2 240.4
Period End Outstanding 252.9 246.8 252.9 246.8
BALANCE SHEET AVERAGES:
-----------------------
Loans $ 76,063 $ 81,458 $ 78,739 $ 82,173
Securities $ 23,727 $ 23,141 $ 23,654 $ 21,674
Interest-Earning Assets $125,714 $122,364 $124,934 $121,249
Total Assets $146,870 $140,653 $144,881 $139,329
Deposits $ 97,149 $ 95,118 $ 95,656 $ 92,750
Long-Term Debt $ 8,295 $ 6,707 $ 8,053 $ 6,220
Stockholders' Equity $ 11,032 $ 9,744 $ 10,583 $ 9,324
PERFORMANCE RATIOS: (Average balances) (b)
------------------
Return on Assets 0.94% 0.86% 1.11% 0.78%
Return on Common Stockholders' Equity 13.38% 13.36% 16.66% 12.36%
Return on Total Stockholders' Equity 12.48% 12.41% 15.16% 11.65%
CAPITAL RATIOS AT DECEMBER 31:
-----------------------------
Total Stockholders' Equity to Assets 7.4% 7.1%
Common Stockholders' Equity to Assets 6.3% 5.7%
Tier 1 Leverage 6.8% 6.6%
Risk-Based Capital (Final guidelines):
Tier 1 (4.0% required) 8.0% (c) 7.3%
Total (8.0% required) 12.1% (c) 11.6%
(a) In 1993, the Corporation increased its quarterly common stock
dividend from $0.30 per share to $0.33 per share in the first
quarter and from $0.33 per share to $0.38 per share in the
fourth quarter.
(b) Quarterly performance ratios are based on annualized net income
amounts.
(c) Estimated. Excludes from 1993 figures the net favorable impact
on stockholders' equity of $215 million resulting from adoption
of SFAS No. 115 on December 31, 1993.
13
UNAUDITED
CHEMICAL BANKING CORPORATION and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
(in millions, except per share data)
Three Months Ended
December 31,
------------------
1993 1992
---- ----
INTEREST INCOME:
Loans $1,350 $1,492
Securities 428 449
Trading Account Assets 135 92
Federal Funds Sold and Securities
Purchased Under Resale Agreements 94 77
Deposits with Banks 67 69
------ ------
Total Interest Income 2,074 2,179
------ ------
INTEREST EXPENSE:
Deposits 542 571
Short-Term and Other Borrowings 249 263
Long-Term Debt 134 119
------ ------
Total Interest Expense 925 953
------ ------
NET INTEREST INCOME 1,149 1,226
Provision for Losses 286 315
------ ------
NET INTEREST INCOME AFTER
PROVISION FOR LOSSES 863 911
------ ------
NONINTEREST REVENUE:
Trust and Investment Management Fees 109 94
Corporate Finance and Syndication Fees 88 59
Service Charges on Deposit Accounts 71 65
Fees for Other Banking Services 278 263
Trading Account and Foreign Exchange Profits 255 229
Securities Gains (Losses) 16 (2)
Other Revenue 236 9
------ ------
Total Noninterest Revenue 1,053 717
------ ------
NONINTEREST EXPENSE:
Salaries 522 505
Employee Benefits 95 79
Occupancy Expense 149 139
Equipment Expense 93 85
Foreclosed Property Expense 61 101
Other Expense 415 385
------ ------
Total Noninterest Expense 1,335 1,294
------ ------
INCOME BEFORE INCOME TAX EXPENSE 581 334
Income Tax Expense 234 30
------ ------
NET INCOME $ 347 $ 304
====== ======
NET INCOME APPLICABLE TO COMMON STOCK $ 309 $ 266
====== ======
NET INCOME PER COMMON SHARE $ 1.23 $ 1.09
====== ======
AVERAGE COMMON SHARES AND COMMON STOCK
EQUIVALENTS OUTSTANDING 252.5 246.2
Certain amounts in 1992 have been reclassified to conform with the
1993 presentation.
14
CHEMICAL BANKING CORPORATION and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
(in millions, except per share data)
For The Year Ended
December 31,
------------------
1993 1992
----- -----
INTEREST INCOME:
Loans $5,620 $6,353
Securities 1,727 1,753
Trading Account Assets 449 419
Federal Funds Sold and Securities Purchased
Under Resale Agreements 339 349
Deposits with Banks 268 274
------ ------
Total Interest Income 8,403 9,148
------ ------
INTEREST EXPENSE:
Deposits 2,241 2,868
Short-Term and Other Borrowings 992 1,228
Long-Term Debt 534 454
------ ------
Total Interest Expense 3,767 4,550
------ ------
NET INTEREST INCOME 4,636 4,598
Provision for Losses 1,259 1,365
------ ------
NET INTEREST INCOME AFTER
PROVISION FOR LOSSES 3,377 3,233
------ ------
NONINTEREST REVENUE:
Trust and Investment Management Fees 406 361
Corporate Finance and Syndication Fees 338 265
Service Charges on Deposit Accounts 288 264
Fees for Other Banking Services 1,067 1,040
Trading Account and Foreign
Exchange Profits 1,073 853
Securities Gains 142 53
Other Revenue 710 190
------ ------
Total Noninterest Revenue 4,024 3,026
------ ------
NONINTEREST EXPENSE:
Salaries 2,070 1,977
Employee Benefits 396 372
Occupancy Expense 587 566
Equipment Expense 337 316
Foreclosed Property Expense 287 283
Restructuring Charge 158 --
Other Expense 1,458 1,416
------ ------
Total Noninterest Expense 5,293 4,930
------ ------
INCOME BEFORE INCOME TAXES AND EFFECT
OF ACCOUNTING CHANGES 2,108 1,329
Income Tax Expense 539 243
------ ------
INCOME BEFORE EFFECT OF
ACCOUNTING CHANGES 1,569 1,086
Net Effect of Changes in
Accounting Principles 35(a) --
------ ------
NET INCOME $1,604 $1,086
====== ======
NET INCOME APPLICABLE TO COMMON STOCK $1,449 $ 936
====== ======
PER COMMON SHARE:
Income Before Effect of
Accounting Changes $ 5.63 $ 3.90
Net Effect of Changes in
Accounting Principles .14(a) --
------ ------
Net Income $ 5.77 $ 3.90
====== ======
AVERAGE COMMON SHARES AND COMMON STOCK
EQUIVALENTS OUTSTANDING 251.2 240.4
Certain amounts in 1992 have been reclassified to conform with the
1993 presentation.
(a) On January 1, 1993, the Corporation adopted SFAS 106 which
resulted in a charge of $415 million relating to postretirement
benefits and also adopted SFAS 109 which resulted in an income
tax benefit of $450 million.
CHEMICAL BANKING CORPORATION and Subsidiaries
CONSOLIDATED BALANCE SHEET
(in millions)
December 31, December 31,
1993 1992
------------ ------------
ASSETS
Cash and Due from Banks $ 6,852 $ 8,846
Deposits with Banks 6,030 1,846
Federal Funds Sold and Securities
Purchased under Resale Agreements 10,556 7,667
Trading Account Assets 11,679 4,496
Securities:
Held-to-Maturity 10,108 15,036
Available-for-Sale 15,840 8,390
Loans (Net of Unearned Income) 75,381 82,010
Allowance for Losses (3,020) (3,025)
Premises and Equipment 1,910 1,699
Due from Customers on Acceptances 1,077 1,392
Accrued Interest Receivable 1,106 1,086
Assets Acquired as Loan Satisfactions 934 1,276
Other Assets 11,435 8,936
-------- --------
TOTAL ASSETS $149,888 $139,655
======== ========
LIABILITIES
Deposits:
Demand (Noninterest Bearing) $ 23,443 $ 22,813
Time and Savings 51,940 51,353
Foreign 22,894 20,007
-------- --------
Total Deposits 98,277 94,173
Federal Funds Purchased and Securities
Sold Under Repurchase Agreements 12,857 15,051
Other Borrowed Funds 11,908 8,020
Acceptances Outstanding 1,099 1,443
Accounts Payable and Accrued Liabilities 2,607 1,951
Other Liabilities 3,784 2,368
Long-Term Debt 8,192 6,798
------- ---------
TOTAL LIABILITIES 138,724 129,804
-------- --------
STOCKHOLDERS' EQUITY
Preferred Stock 1,654 1,848
Common Stock 253 247
Capital Surplus 6,553 6,376
Retained Earnings 2,501 1,392
Net Unrealized Gain on Securities
Available-for-Sale (Net of Taxes) 215(a) --
Treasury Stock, at cost (12) (12)
-------- --------
TOTAL STOCKHOLDERS' EQUITY 11,164 9,851
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $149,888 $139,655
======== =========
(a) On December 31, 1993, the Corporation adopted SFAS 115.
Securities that are identified as available for sale are
accounted for at fair value with the related unrealized gains
and losses included in stockholders' equity. The adoption of
SFAS 115 resulted in a net favorable impact of $215 million on
stockholders' equity.
16
CHEMICAL BANKING CORPORATION and Subsidiaries
CONSOLIDATED STATEMENT OF CHANGES
IN STOCKHOLDERS' EQUITY
(in millions)
1993 1992
---- ----
BALANCE AT JANUARY 1, $ 9,851 $7,281
------- ------
Net Income 1,604 1,086
Dividends Declared:
Preferred Stock (155) (153)
Common Stock (345) (295)
Issuance of Preferred Stock 400 550
Redemption of Preferred Stock (594) (300)
Issuance of Common Stock 183 1,706(a)
Change in Treasury Stock -- 8
Net Unrealized Gain on Securities
Available-for-Sale (Net of Taxes) 215 --
Conversion of Class B Common Stock -- (34)
Accumulated Translation Adjustment 5 2
------- ------
Net Change in Stockholders' Equity 1,313 2,570
------- ------
BALANCE AT DECEMBER 31, $11,164 $9,851
======= ======
(a) Principally includes the issuance of 57.5 million shares through
public offerings in January 1992 which resulted in net proceeds
to the Corporation of $1.52 billion.
UNAUDITED
CHEMICAL BANKING CORPORATION and Subsidiaries
ALLOWANCE RELATED INFORMATION
(in millions, except ratios)
Three Months Ended For The Year Ended
Allowance for Losses December 31, December 31,
-------------------- ---------------------- -----------------------
1993 1992 1993 1992
---- ---- ---- ----
Non-LDC Allowance:
Balance at Beginning of Period $2,429 $ 2,210 $2,206 $2,012
Provision for Losses 286 315 1,259 (a) 1,365
Net Charge-Offs (286) (315) (1,259) (a) (1,365)
Transfer from LDC Allowance -- -- 200 200
Allowance related to purchased assets
of First City Banks -- -- 19 --
Other (6) (4) (2) (6)
------ ------ ------ ------
Balance at End of Period 2,423 2,206 2,423 2,206
------ ------ ------ ------
LDC Allowance:
Balance at Beginning of Period 543 903 819 1,263
Provision for Losses -- -- -- --
Net (Charge-Offs) Recoveries 60 (61) 130 (89)
Losses on Sales and Swaps (6) (23) (152) (155)
Transfer to Non-LDC Allowance -- -- (200) (200)
------ ------ ------ ------
Balance at End of Period 597 819 597 819
------ ------ ------ ------
Total Allowance for Losses $3,020 $ 3,025 $3,020 $3,025
====== ====== ====== ======
(a) The provision and non-LDC net charge-offs for the year-ended
December 31, 1993, included $55 million related to the decision
to accelerate the disposition of certain nonperforming
residential mortgages.
Allowance Coverage Ratios (at year-end):
Allowance to Total Loans 4.0% 3.7%
Allowance to Nonperforming Loans 117 63
Non-LDC Allowance to Non-LDC Nonperforming Loans 123 64
LDC Allowance to LDC Nonperforming Loans 96 61
LDC Allowance to:
Medium- and Long-Term LDC Outstandings 26 24
Total LDC Outstandings 17 19
LDC Allowance Adjusted for Prior
Charge-Offs with Claims Retained to
Medium- and Long-Term LDC Outstandings
and Claims Retained 54 56
18
UNAUDITED
CHEMICAL BANKING CORPORATION and Subsidiaries
Consolidated Net Interest Income and Average Balances
(Taxable-Equivalent Interest and Rates; in millions)
Three Months Ended Three Months Ended
December 31, 1993 December 31, 1992
------------------------------------ ------------------------------------
Average Rate Average Rate
Balance Interest (Annualized) Balance Interest (Annualized)
------- -------- ------------ ------- -------- ------------
ASSETS
Deposits with Banks $ 4,128 $ 67 6.52% $ 3,746 $ 69 7.33%
Federal Funds Sold and
Securities Purchased Under
Resale Agreements 11,491 94 3.23% 8,669 77 3.57%
Trading Account Assets 10,305 135 5.23% 5,350 92 6.88%
Securities 23,727 430 7.19% 23,141 450 7.75%
Loans 76,063 1,354 7.08% 81,458 1,498 7.31%
-------- ------ -------- ------
Total Interest-Earning Assets 125,714 2,080 6.58% 122,364 2,186 7.11%
Allowance for Losses (3,050) (3,227)
Cash and Due from Banks 8,886 8,563
Other Assets 15,320 12,953
-------- --------
Total Assets $146,870 $140,653
======== ========
LIABILITIES
Domestic Retail Time Deposits $ 46,986 $ 299 2.52% $ 44,381 $ 307 2.75%
Domestic Negotiable
Certificates of Deposit
and Other Deposits 5,756 45 3.07% 7,424 58 3.09%
Deposits in Foreign Offices 21,556 198 3.69% 22,606 206 3.65%
-------- ------ -------- ------
Total Time & Savings Deposits 74,298 542 2.90% 74,411 571 3.06%
-------- ------ -------- ------
Short-Term and Other Borrowings:
Federal Funds Purchased and
Securities Sold Under
Repurchase Agreements 14,191 100 2.79% 15,412 121 3.16%
Commercial Paper 2,363 18 3.17% 2,385 21 3.59%
Other 7,052 131 7.37% 5,078 121 9.60%
-------- ------ -------- ------
Total Short-Term and
Other Borrowings 23,606 249 4.20% 22,875 263 4.63%
Long-Term Debt 8,295 134 6.43% 6,707 119 7.11%
-------- ------ -------- ------
Total Interest-
Bearing Liabilities 106,199 925 3.47% 103,993 953 3.67%
-------- ------ -------- ------
Demand Deposits 22,851 20,707
All Other Liabilities 6,788 6,209
-------- --------
Total Liabilities 135,838 130,909
-------- --------
STOCKHOLDERS' EQUITY
Preferred Stock 1,852 1,839
Common Stockholders' Equity 9,180 7,905
-------- --------
Total Stockholders' Equity 11,032 9,744
-------- --------
Total Liabilities and
Stockholders' Equity $146,870 $140,653
======== ========
SPREAD ON INTEREST-BEARING
LIABILITIES 3.11% 3.44%
===== =====
NET INTEREST INCOME AND NET
YIELD ON INTEREST-EARNING
ASSETS $1,155 3.65% $1,233 4.01%
====== ===== ====== =====
UNAUDITED
CHEMICAL BANKING CORPORATION and Subsidiaries
Consolidated Net Interest Income and Average Balances
(Taxable-Equivalent Interest and Rates; in millions)
For the Year Ended For the Year Ended
December 31, 1993 December 31, 1992
------------------------------------- --------------------------------------
Average Rate Average Rate
Balance Interest (Annualized) Balance Interest (Annualized)
------- -------- ------------ ------- -------- ------------
ASSETS
Deposits with Banks $ 4,202 $ 268 6.39% $ 2,605 $ 274 10.52%
Federal Funds Sold and
Securities Purchased Under
Resale Agreements 10,300 339 3.29% 8,592 349 4.07%
Trading Account Assets 8,039 449 5.59% 6,205 419 6.76%
Securities 23,654 1,731 7.32% 21,674 1,758 8.11%
Loans 78,739 5,637 7.16% 82,173 6,379 7.76%
-------- ------ -------- ------
Total Interest-Earning Assets 124,934 8,424 6.74% 121,249 9,179 7.57%
Allowance for Losses (3,084) (3,327)
Cash and Due from Banks 8,537 8,051
Other Assets 14,494 13,356
-------- --------
Total Assets $144,881 $139,329
======== ========
LIABILITIES
Domestic Retail Deposits $ 46,598 $1,237 2.65% $ 44,538 $1,438 3.23%
Domestic Negotiable
Certificates of Deposit
and Other Deposits 6,242 191 3.05% 7,506 296 3.94%
Deposits in Foreign Offices 21,066 813 3.86% 21,717 1,134 5.22%
-------- ------ -------- ------
Total Time & Savings Deposits 73,906 2,241 3.03% 73,761 2,868 3.89%
-------- ------ -------- ------
Short-Term and Other Borrowings:
Federal Funds Purchased and
Securities Sold Under
Repurchase Agreements 15,461 472 3.05% 15,658 623 3.98%
Commercial Paper 2,438 83 3.42% 2,190 87 3.92%
Other 6,663 437 6.56% 6,376 518 8.17%
-------- ------ -------- ------
Total Short-Term and
Other Borrowings 24,562 992 4.04% 24,224 1,228 5.07%
Long-Term Debt 8,053 534 6.64% 6,220 454 7.31%
-------- ------ -------- ------
Total Interest-
Bearing Liabilities 106,521 3,767 3.54% 104,205 4,550 4.37%
-------- ------ -------- ------
Demand Deposits 21,750 18,989
All Other Liabilities 6,027 6,811
-------- --------
Total Liabilities 134,298 130,005
-------- --------
STOCKHOLDERS' EQUITY
Preferred Stock 1,887 1,751
Common Stockholders' Equity 8,696 7,573
-------- --------
Total Stockholders' Equity 10,583 9,324
-------- --------
Total Liabilities and
Stockholders' Equity $144,881 $139,329
======== ========
SPREAD ON INTEREST-BEARING
LIABILITIES 3.20% 3.20%
===== =====
NET INTEREST INCOME AND NET
YIELD ON INTEREST-EARNING
ASSETS $4,657 3.73% $4,629 3.82%
====== ===== ====== =====
20
UNAUDITED
TEXAS COMMERCE BANCSHARES, INC. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(in millions)
Three Months Ended For The Year Ended
December 31, December 31,
-------------------------- -------------------------
1993 1992 1993 1992
------ ------ ------ ------
NET INTEREST INCOME $ 169 $ 158 $ 692 $ 602
Provision for Losses (6) 6 -- 25
----- ----- ----- -----
Net Interest Income After Provision for Losses 175 152 692 577
NONINTEREST REVENUE 95 79 392 293
NONINTEREST EXPENSE 206 184 858(a) 686
----- ----- ----- -----
Income Before Income Taxes and Effect
of Accounting Changes 64 47 226 184
Income Tax Expense 20 1 66 4
----- ----- ----- -----
Income Before Effect of Accounting Changes 44 46 160 180
Net Effect of Changes in Accounting Principles (5) -- 9 --
----- ----- ----- -----
NET INCOME $ 39 $ 46 $ 169 $ 180
===== ===== ===== =====
(a) Includes $43 million restructuring charge related to the
acquisition of certain former First City assets.
TEXAS COMMERCE BANCSHARES, INC. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEET
(in millions)
December 31,
----------------------------
1993 1992
-------- --------
ASSETS
Cash and Due from Banks $ 2,160 $ 2,039
Deposits with Banks 5 28
Federal Funds Sold and Securities Purchased Under Resale Agreements 5,154 3,537
Trading Account Assets 16 488
Securities:
Held-to-Maturity 1,291 1,432
Available-for-Sale 1,455 497
Loans (Net of Unearned Income) 10,267 9,175
Allowance for Losses (344) (372)
Assets Acquired as Loan Satisfactions 95 200
All Other Assets 1,687 1,009
-------- --------
TOTAL ASSETS $ 21,786 $ 18,033
======== ========
LIABILITIES
Demand Deposits (Noninterest Bearing) $ 6,172 $ 5,363
Domestic and Foreign Interest Bearing Deposits 11,204 9,337
All Other Liabilities 2,663 2,053
-------- --------
TOTAL LIABILITIES 20,039 16,753
STOCKHOLDER'S EQUITY 1,747 1,280
-------- --------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 21,786 $ 18,033
======== ========
