SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of the Report: July 20, 1995 Commission file number 1-5805
------------- ------
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 10017
- ---------------------------- -----------------
(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
July 18, 1995, that its 1995 second quarter net income was $453
million, an increase of 27 percent from net income of $357
million for the same period a year ago. The Corporation's 1995
second quarter primary earnings per share increased 35 percent
to $1.72 per share, compared with $1.27 per share in the second
quarter of 1994.
For the first six months of 1995, net income was $838 million,
an increase of 24 percent from $676 million in the first six
months of 1994. Primary earnings per share in the first six
months of 1995 increased 33 percent to $3.17 per share compared
with $2.39 per share in the 1994 first six months.
2.On July 18, 1995, the Corporation announced that its Board of
Directors had authorized the repurchase of up to $1.2 billion of
its outstanding common stock on the open market over the next 24
months. In total, this amount would represent approximately 25
million shares based on a closing price of $48.125 at July 17,
1995, or approximately 10 percent of the Corporation's
outstanding common shares.
The buyback expands a program announced on December 1, 1994, for
the repurchase of 6 million shares. At the end of the 1995
first quarter, 4 million shares had been repurchased under this
earlier program. The remaining 2 million shares are included in
the $1.2 billion repurchase plan announced on July 18, 1995.
Copies of the Corporation's Press Releases dated July 18, 1995
are incorporated herein.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
- -------------------------------------------------------------------------
The following exhibits are filed with this Report:
Exhibit Number Description
-------------- -----------
99.1 Press Release - 1995 Second
Quarter Earnings.
99.2 Press Release - Chemical Announces
Expanded Stock Buyback
3
SIGNATURE
Pursuant to the requirements of the Securities 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 July 20, 1995 by /s/Joseph L. Sclafani
------------- ------------------------
Joseph L. Sclafani
Controller
[Principal Accounting Officer]
4
EXHIBIT INDEX
Exhibit Number Description Page at Which Located
- -------------- ----------- ---------------------
99.1 Press Release - 1995 Second
Quarter Earnings 5
99.2 Press Release - Chemical Announces
Expanded Stock Buyback 18
5
Press Contact: Ken Herz
212- 270-4621
John Stefans
212- 270-7438
Investor Contact: John Borden
212- 270-7318
New York, July 18, 1995 -- Chemical Banking Corporation today
reported net income for the second quarter of $453 million, up 27
percent from net income of $357 million in the same period of 1994.
Primary earnings per share increased 35 percent to $1.72, compared
with $1.27 in the second quarter of 1994.
For the first six months of 1995, net income was $838 million,
an increase of 24 percent from $676 million in the first half of
1994. Primary earnings per share were up 33 percent to $3.17 per
share compared with $2.39 per share in the comparable period of
1994.
"We had an excellent quarter, delivering on our performance
initiatives for increased earnings per share, a higher return on
shareholders' equity and an improved efficiency ratio," said Walter
V. Shipley, chairman and chief executive officer. "Core earnings
continued to improve, led by strong revenue growth in our
nationwide consumer and corporate finance businesses. By managing
expenses in line with revenue opportunities, we also achieved an 11
percent improvement in our operating margin."
In June, the corporation announced an increase in the
quarterly common stock dividend to 50 cents per share, up 14
percent from 44 cents per share. The increase marked the fourth
time the dividend has been increased since March 1993, for a total
increase of 67 percent.
The corporation's return on average common stockholders'
equity was 17.67 percent for the second quarter, compared with
13.90 percent a year ago. The efficiency ratio was 59.4 percent,
compared with 62.3 percent for the second quarter of 1994. The
corporation's estimated Tier I risk-based capital ratio was 8.0
percent at June 30, compared with 8.7 percent a year ago. At June
30, the estimated total risk-based capital ratio was 11.9 percent,
compared with 12.8 percent a year ago.
6
NET INTEREST INCOME
Net interest income for the second quarter was $1,162 million,
compared with $1,185 million last year. Average interest-earning
assets were $139.1 billion, compared with $129.1 billion last year.
The net yield on average interest-earning assets was 3.36
percent in the second quarter, compared with 3.69 percent in the
second quarter of 1994. The declines primarily reflect narrower
loan spreads.
NONINTEREST REVENUE
Noninterest revenue for the second quarter was $961 million,
up 11 percent from $867 million in the second quarter of 1994.
Trust and investment management fees were $97 million,
compared with $108 million last year, partly reflecting the
accounting on an equity basis, beginning in 1995, of the
shareholder services joint venture with Mellon Bank Corporation.
Corporate finance and syndication fees were $129 million, up
from $93 million in the second quarter a year ago, reflecting
increases in both loan syndication activity and public debt
underwritings. Fees for other banking services were $290 million,
compared with $279 million in the second quarter of 1994,
reflecting higher results from credit card and mortgage servicing
operations.
Combined revenues from all trading activities were $171
million in the second quarter, compared with $203 million in 1994,
but up from $56 million in the first quarter of 1995. Compared
with the year-ago quarter, second quarter performance reflected
slightly lower results across a range of fixed income activities,
partly offset by an improved emerging markets environment. The
increase from the first quarter resulted largely from improved
performance in emerging markets trading, as well as greater
stability of European interest rates.
Securities gains in the second quarter were $69 million,
compared with gains of $13 million in the second quarter of 1994.
Other noninterest revenue in the second quarter was $129
million, compared with $96 million in the second quarter a year
ago. Revenues from equity and equity-related investments were $126
million, compared with $66 million in the same period a year ago.
Other noninterest revenue also included a loss of approximately $50
million related to the disposition of developing market loans
previously recorded as "available for sale."
7
NONINTEREST EXPENSE
Noninterest expense in the second quarter was $1,248 million,
down 3 percent from $1,281 million in the second quarter of 1994,
and compared with $1,246 million in the first quarter of 1995.
Through the first six months of 1995, the corporation has exceeded
its goal of flat expenses this year, benefiting from the
acceleration of its margin improvement program.
Foreclosed property expense in the second quarter was a
credit of $14 million, compared with 1994 second quarter expense of
$2 million, reflecting significant progress in managing the
corporation's real estate portfolio.
PROVISION AND ALLOWANCE FOR CREDIT LOSSES
The provision for losses was $120 million in the second
quarter, compared with $160 million in the second quarter of 1994
and $120 million in the first quarter of 1995.
Total net charge-offs were $145 million in the second quarter,
compared with $476 million in the second quarter of 1994 and $145
million in the first quarter of 1995 .
At June 30, the total allowance for credit losses was $2,430
million, compared with $2,676 million on the same date a year ago.
NONPERFORMING ASSETS
At June 30, total nonperforming assets were $1,118 million,
down from $1,130 million at March 31 and down $1,375 million, from
$2,493 million on June 30, 1994.
Nonperforming loans at June 30 were $1,064 million, compared
with $1,069 million at March 31 and $1,758 million a year ago.
Assets acquired as loan satisfactions were $54 million at June 30,
compared with $61 million at March 31 and down from $735 million on
June 30, 1994.
OTHER FINANCIAL DATA
In the second quarter of 1995, the corporation adopted SFAS
122 related to the accounting for originated mortgage servicing
rights, and as a result the corporation recognized an immaterial
gain during the quarter.
The corporation's effective tax rate was 40.0 percent and 41.5
percent in the second quarters of 1995 and 1994, respectively.
8
The impact of marking "available for sale" securities to
market resulted in a net unfavorable impact of approximately $216
million after-tax on the corporation's stockholders' equity at June
30, compared with a net unfavorable impact of $472 million after-
tax at March 31. The market valuation does not include the impact
of related funding sources.
Total assets at June 30 were $178.5 billion, compared with
$168.9 billion on the same date a year ago. Total loans at June 30
were $84.7 billion, compared with $74.7 billion at June 30, 1994,
reflecting improving trends in loan growth, especially to
consumers. At the end of the second quarter, total deposits were
$94.9 billion, compared with $92.0 billion at June 30, 1994.
The return on average total assets for the second quarter was
1.01 percent, compared with .87 percent in the same year-ago
period.
Book value per share was $40.62 at June 30, versus $37.17 per
share on the same date a year ago.
9
UNAUDITED
CHEMICAL BANKING CORPORATION and Subsidiaries
(in millions, except per share and ratio data)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
1995 1994 1995 1994
------ ------ ------ ------
EARNINGS:
- --------
Income Before Effect of Accounting Change $ 453 $ 357 $ 849 $ 676
Effect of Change in Accounting Principle -- -- (11)(b) --
------ ------ ------ ------
Net Income $ 453 $ 357 $ 838 $ 676
====== ====== ====== ======
Net Income Applicable to Common Stock $ 427 $ 324 $ 782 $ 611
====== ====== ====== ======
PER COMMON SHARE:
- ----------------
Primary: (a)
Income Before Effect of
Accounting Change $ 1.72 $ 1.27 $ 3.21 $ 2.39
Effect of Change in Accounting
Principle -- -- (0.04)(b) --
------- ------- ------- ------
Net Income $ 1.72 $ 1.27 $ 3.17 $ 2.39
======= ======= ======= ======
Assuming Full Dilution:
Income Before Effect of Accounting
Change $ 1.68 $ 1.25 $ 3.12 $ 2.36
Effect of Change in Accounting
Principle -- -- (0.04)(b) --
------- ------- ------- ------
Net Income $ 1.68 $ 1.25 $ 3.08 $ 2.36
======= ======= ======= ======
Book Value at June 30, $40.62 $ 37.17 $ 40.62 $37.17
Market Value at June 30, $47.25 $ 38.50 $ 47.25 $38.50
Common Stock Dividends Declared $ 0.50(c) $ 0.38 $ 0.94(c) $ 0.76
COMMON SHARES OUTSTANDING:
- -------------------------
Average Common and Common Equivalent
Shares 248.3 255.1 246.8 255.2
Average Common Shares Assuming
Full Dilution 254.8 263.0 255.8 263.0
Common Shares at Period End 249.4 250.9 249.4 250.9
PERFORMANCE RATIOS: (Average Balances)(d)
- ------------------
Return on Assets 1.01% 0.87% 0.95% 0.83%
Return on Common Stockholders' Equity 17.67% 13.90% 16.61% 13.07%
Return on Total Stockholders' Equity 16.42% 12.96% 15.50% 12.28%
CAPITAL RATIOS AT JUNE 30:
- -------------------------
Common Stockholders' Equity to Assets 5.7% 5.5%
Total Stockholders' Equity to Assets 6.4% 6.6%
Tier 1 Leverage (e) 5.8% 6.4%
Risk-Based Capital: (e)
Tier 1 (4.0% required) 8.0%* 8.7%
Total (8.0% required) 11.9%* 12.8%
(a)Primary Earnings Per Share (EPS) is based on net income after
preferred dividends divided by average common and common
equivalent shares outstanding. Previously, the Corporation
reported earnings per share based on the number of average
common shares outstanding (Simple EPS) since the difference
between Simple EPS and Primary EPS or Fully Diluted EPS was not
significant (less than 3%). Primary and Fully Diluted EPS are
now reported for all periods presented.
(b)On January 1, 1995, the Corporation adopted SFAS 106 for
the accounting for other postretirement benefits relating
to the Corporation's foreign plans.
(c)The Corporation increased its quarterly common stock
dividend to $0.50 per share in the second quarter of 1995,
and from $0.38 per share to $0.44 per share in the third
quarter of 1994.
(d)Performance ratios are based on annualized net income
amounts.
(e)The amounts exclude the net unfavorable impact on
stockholders' equity of $216 million in 1995 and $291
million in 1994, resulting from the adoption of SFAS 115.
*Estimated
10
UNAUDITED
CHEMICAL BANKING CORPORATION and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
(in millions, except per share data)
Three Months Ended
---------------------------------------
June 30, March 31, June 30,
1995 1995 1994
-------- --------- --------
INTEREST INCOME
Loans $ 1,770 $ 1,661 $ 1,375
Securities 513 505 432
Trading Assets 205 199 191
Federal Funds Sold and Securities Purchased
Under Resale Agreements 212 219 121
Deposits with Banks 67 82 100
------- ------- -------
Total Interest Income 2,767 2,666 2,219
------- ------- -------
INTEREST EXPENSE
Deposits 931 851 543
Short-Term and Other Borrowings 536 519 359
Long-Term Debt 138 140 132
------- ------- -------
Total Interest Expense 1,605 1,510 1,034
------- ------- -------
NET INTEREST INCOME 1,162 1,156 1,185
Provision for Losses 120 120 160
------- ------- -------
NET INTEREST INCOME AFTER PROVISION FOR LOSSES 1,042 1,036 1,025
------- ------- -------
NONINTEREST REVENUE
Trust and Investment Management Fees 97 91 108
Corporate Finance and Syndication Fees 129 119 93
Service Charges on Deposit Accounts 76 74 75
Fees for Other Banking Services 290 294 279
Trading Revenue 171 56 203
Securities Gains (Losses) 69 (18) 13
Other Revenue 129 254 96
------- ------- -------
Total Noninterest Revenue 961 870 867
------- ------- -------
NONINTEREST EXPENSE
Salaries 557 546 542
Employee Benefits 117 107 102
Occupancy Expense 129 135 140
Equipment Expense 97 101 91
Foreclosed Property Expense (14) (7) 2
Other Expense 362 364 404
------- ------- -------
Total Noninterest Expense 1,248 1,246 1,281
------- ------- -------
INCOME BEFORE INCOME TAX EXPENSE AND EFFECT
OF ACCOUNTING CHANGE 755 660 611
Income Tax Expense 302 264 254
------- ------- -------
INCOME BEFORE EFFECT OF ACCOUNTING CHANGE 453 396 357
Effect of Change in Accounting Principle -- (11) --
------- ------- -------
NET INCOME $ 453 $ 385 $ 357
======= ======= =======
NET INCOME APPLICABLE TO COMMON STOCK $ 427 $ 355 $ 324
======= ======= =======
PER COMMON SHARE:
Primary:
Income Before Effect of Accounting Change $ 1.72 $ 1.49 $ 1.27
Effect of Change in Accounting Principle -- (0.04) --
------- -------- -------
Net Income $ 1.72 $ 1.45 $ 1.27
======= ======== =======
Assuming Full Dilution:
Income Before Effect of Accounting Change $ 1.68 $ 1.46 $ 1.25
Effect of Change in Accounting Principle -- (0.04) --
------- -------- -------
Net Income $ 1.68 $ 1.42 $ 1.25
======= ======== =======
11
UNAUDITED
CHEMICAL BANKING CORPORATION and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
(in millions, except per share data)
Six Months Ended
---------------------
June 30, June 30,
1995 1994
-------- --------
INTEREST INCOME
Loans $ 3,431 $ 2,682
Securities 1,018 848
Trading Assets 404 364
Federal Funds Sold and Securities Purchased
Under Resale Agreements 431 221
Deposits with Banks 149 194
------- -------
Total Interest Income 5,433 4,309
------- -------
INTEREST EXPENSE
Deposits 1,782 1,063
Short-Term and Other Borrowings 1,055 651
Long-Term Debt 278 267
------- -------
Total Interest Expense 3,115 1,981
------- -------
NET INTEREST INCOME 2,318 2,328
Provision for Losses 240 365
------- -------
NET INTEREST INCOME AFTER
PROVISION FOR LOSSES 2,078 1,963
------- -------
NONINTEREST REVENUE
Trust and Investment Management Fees 188 218
Corporate Finance and Syndication Fees 248 175
Service Charges on Deposit Accounts 150 144
Fees for Other Banking Services 584 569
Trading Revenue 227 388
Securities Gains 51 59
Other Revenue 383 245
------- -------
Total Noninterest Revenue 1,831 1,798
------- -------
NONINTEREST EXPENSE
Salaries 1,103 1,060
Employee Benefits 224 221
Occupancy Expense 264 286
Equipment Expense 198 175
Foreclosed Property Expense (21) 37
Other Expense 726 778
------- -------
Total Noninterest Expense Before
Restructuring Charge 2,494 2,557
Restructuring Charge -- 48
------- -------
Total Noninterest Expense 2,494 2,605
------- -------
INCOME BEFORE INCOME TAX EXPENSE AND EFFECT
OF ACCOUNTING CHANGE 1,415 1,156
Income Tax Expense 566 480
------- -------
INCOME BEFORE EFFECT OF ACCOUNTING CHANGE 849 676
Effect of Change in Accounting Principle (11) --
------- -------
NET INCOME $ 838 $ 676
======= =======
NET INCOME APPLICABLE TO COMMON STOCK $ 782 $ 611
======= =======
PER COMMON SHARE:
Primary:
Income Before Effect of Accounting Change $ 3.21 $ 2.39
Effect of Change in Accounting Principle (0.04) --
------- -------
Net Income $ 3.17 $ 2.39
======= =======
Assuming Full Dilution:
Income Before Effect of Accounting Change $ 3.12 $ 2.36
Effect of Change in Accounting Principle (0.04) --
------- -------
Net Income $ 3.08 $ 2.36
======= =======
12
UNAUDITED
CHEMICAL BANKING CORPORATION and Subsidiaries
NONINTEREST REVENUE DETAIL
(in millions)
Three Months Ended Six Months Ended
-------------------------------- --------------------
June 30, March 31, June 30, June 30, June 30,
1995 1995 1994 1995 1994
-------- -------- -------- -------- --------
TRUST AND INVESTMENT MANAGEMENT FEES:
Personal Trust Fees $ 53 $ 50 $ 54 $ 103 $ 107
Corporate and Institutional Trust Fees 33 31 45 64 91
Other, primarily Foreign
Asset Management 11 10 9 21 20
------ ------ ------- ------ -----
Total $ 97 $ 91 $ 108 $ 188 $ 218
====== ====== ======= ====== =====
FEES FOR OTHER BANKING SERVICES:
Credit Card Services Revenue $ 83 $ 80 $ 75 $ 163 $ 150
Fees in Lieu of Compensating Balances 47 47 49 94 107
Commissions on Letters of Credit
and Acceptances 36 41 39 77 76
Loan Commitment Fees 20 24 23 44 45
Mortgage Servicing Fees 23 23 18 46 34
Other Fees 81 79 75 160 157
------ ------ ------- ------ -----
Total $ 290 $ 294 $ 279 $ 584 $ 569
====== ====== ======= ====== =====
TRADING REVENUE:
Interest Rate Contracts $ 38 $ 19 $ 135 $ 57 $ 223
Foreign Exchange Revenue 66 75 55 141 100
Debt Instruments and Other 67 (38) 13 29 65
------ ------ ------- ------ -----
Total $ 171 $ 56 $ 203 $ 227 $ 388
====== ====== ======= ====== =====
OTHER REVENUE:
Revenue from Equity-Related Investments $ 126 $ 107 $ 66 $ 233 $ 149
Net Gains (Losses) on Emerging Markets
Bond Sales (50) -- -- (50) 45
All Other Revenue 53 147 30 200 51
------ ------ ------- ------ -----
Total $ 129 $ 254 $ 96 $ 383 $ 245
====== ====== ======= ====== =====
CHEMICAL BANKING CORPORATION and Subsidiaries
NONINTEREST EXPENSE DETAIL
(in millions)
Three Months Ended Six Months Ended
-------------------------------- --------------------
June 30, March 31, June 30, June 30, June 30,
1995 1995 1994 1995 1994
-------- -------- -------- -------- --------
OTHER EXPENSE: (a)
Professional Services $ 53 $ 54 $ 59 $ 107 $ 105
Marketing Expense 51 43 57 94 97
FDIC Assessments 36 37 41 73 83
Telecommunications 39 38 37 77 72
Amortization of Intangibles 27 28 27 55 56
All Other 156 164 183 320 365
------ ------ ------- ------ -----
Total Other Expense $ 362 $ 364 $ 404 $ 726 $ 778
====== ====== ======= ====== =====
(a)Certain prior period amounts have been reclassified to
conform with the June 30, 1995 presentation.
13
UNAUDITED
CHEMICAL BANKING CORPORATION and Subsidiaries
CONSOLIDATED BALANCE SHEET
(in millions)
June 30, June 30,
1995 1994
-------- --------
ASSETS
Cash and Due from Banks $ 7,756 $ 9,463
Deposits with Banks 2,903 4,461
Federal Funds Sold and Securities
Purchased Under Resale Agreements 12,883 12,803
Trading Assets:
Debt and Equity Instruments 12,059 10,935
Risk Management Instruments 18,412 20,632
Securities:
Held-to-Maturity 8,287 8,923
Available-for-Sale 19,965 16,606
Loans (Net of Unearned Income) 84,675 74,685
Allowance for Credit Losses (2,430) (2,676)
Premises and Equipment 2,138 2,034
Due from Customers on Acceptances 1,156 1,202
Accrued Interest Receivable 1,197 1,029
Assets Acquired as Loan Satisfactions 54 735
Assets Held for Accelerated Disposition 240 --
Other Assets 9,236 8,089
-------- --------
TOTAL ASSETS $178,531 $168,921
======== ========
LIABILITIES
Deposits:
Demand (Noninterest Bearing) $ 21,387 $ 22,066
Time and Savings 45,860 47,737
Foreign 27,642 22,153
-------- --------
Total Deposits 94,889 91,956
Federal Funds Purchased and Securities
Sold Under Repurchase Agreements 23,557 20,764
Other Borrowed Funds 15,780 12,604
Acceptances Outstanding 1,162 1,205
Accounts Payable and Accrued Liabilities 2,585 1,998
Other Liabilities 21,976 20,878
Long-Term Debt 7,202 8,336
-------- --------
TOTAL LIABILITIES 167,151 157,741
-------- --------
STOCKHOLDERS' EQUITY
Preferred Stock 1,250 1,854
Common Stock 255 254
Capital Surplus 6,476 6,557
Retained Earnings 3,826 2,920
Net Unrealized Loss on Securities
Available-for-Sale, Net of Taxes (216) (291)
Treasury Stock, at Cost (211)(a) (114)
-------- --------
TOTAL STOCKHOLDERS' EQUITY 11,380 11,180
-------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $178,531 $168,921
======== ========
[FN]
(a) During the first half of 1995, the Corporation repurchased
4.0 million shares of its common stock in the open market
under a previously announced plan to repurchase up to 6
million shares in 1995.
14
UNAUDITED
CHEMICAL BANKING CORPORATION and Subsidiaries
CONSOLIDATED STATEMENT OF CHANGES
IN STOCKHOLDERS' EQUITY
(in millions)
Six Months Ended
June 30,
--------------------
1995 1994
-------- --------
BALANCE AT JANUARY 1, $ 10,712 $ 11,164
-------- --------
Net Income 838 676
Dividends Declared:
Preferred Stock (56) (65)
Common Stock (229) (192)
Issuance of Preferred Stock -- 200
Conversion of Preferred Stock (200)(a) --
Issuance of Common Stock 1 1
Net Change in Capital Surplus (58)(a) 15
Restricted Stock Granted,
Net of Amortization (10) (11)
Net Change in Treasury Stock 150 (a) (102)
Net Change in the Fair Value of
Available-for-Sale Securities,
Net of Taxes 222 (506)
Accumulated Translation Adjustment 10 --
-------- --------
Net Change in Stockholders' Equity 668 16
-------- --------
BALANCE AT JUNE 30, $ 11,380 $ 11,180
======== ========
[FN]
(a) During the second quarter of 1995, the Corporation called
all of the outstanding shares of its 10% convertible
preferred stock for redemption. Substantially all of the
10% convertible preferred stock was converted to common
stock. The common stock from the conversion was issued
from treasury.
15
UNAUDITED
CHEMICAL BANKING CORPORATION and Subsidiaries
LOAN PORTFOLIO AND ALLOWANCE RELATED INFORMATION
(in millions, except ratios)
Loans Outstanding Nonperforming Assets
------------------ ---------------------
June 30, June 30,
1995 1994 1995 1994
-------- -------- -------- --------
Domestic Commercial:
Commercial Real Estate $ 5,425 $ 6,706 $ 209 $ 645
Other Commercial 25,723 22,985 388 584
------- ------- ------- -------
Total Commercial Loans 31,148 29,691 597 1,229
------- ------- ------- -------
Domestic Consumer:
Residential Mortgage 17,138 12,361 117 144
Credit Card 10,121 7,774 -- --
Other Consumer 7,481 6,538 4 21
------- ------- ------- -------
Total Consumer Loans 34,740 26,673 121 165
------- ------- ------- -------
Total Domestic Loans 65,888 56,364 718 1,394
Foreign 18,787 18,321 346 364
------- ------- ------- -------
Total Loans $84,675 $74,685 1,064 1,758
======= =======
Assets Acquired as Loan Satisfactions 54 735
------- -------
Total Nonperforming Assets $1,118 $2,493
======= =======
ASSETS HELD FOR ACCELERATED DISPOSITION $ 240 $ --
======= =======
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- ---------------------------
1995 1994 1995 1994
------ ------ ------- ------
Allowance for Credit Losses:
Balance at Beginning of Period $2,455 $2,991 $2,480 $3,020
Provision for Losses 120 160 240 365
Net Charge-Offs:
Domestic Commercial:
Commercial Real Estate (27) (48) (28) (123)
Other Commercial 6 (37) (32) (87)
------- ------- ------- -------
Total Commercial (21) (85) (60) (210)
------- ------- ------- -------
Domestic Consumer:
Residential (16) (9) (27) (12)
Credit Card (106) (81) (197) (163)
Other Consumer (6) (4) (15) (9)
------- ------- ------- -------
Total Consumer (128) (94) (239) (184)
------- ------- ------- -------
Total Domestic Charge-offs (149) (179) (299) (394)
Foreign 4 (297) 9 (318)
------- ------- ------- -------
Total Net Charge-offs (145) (476) (290) (712)
Other -- 1 -- 3
------- ------- ------- -------
Total Allowance for Credit Losses $2,430 $2,676 $2,430 $2,676
======= ======= ======= =======
ALLOWANCE COVERAGE RATIOS:
Allowance for Credit Losses to:
Loans at Period-End 2.87% 3.58%
Average Loans 3.04% 3.60%
Nonperforming Loans 228.38% 152.22%
16
UNAUDITED
CHEMICAL BANKING CORPORATION and Subsidiaries
Average Consolidated Balance Sheet, Interest and Rates
(Taxable-Equivalent Interest and Rates; in millions)
Three Months Ended Three Months Ended
June 30, 1995 June 30, 1994
------------------------------- ------------------------------------
Average Rate Average Rate
Balance Interest (Annualized) Balance Interest (Annualized)
------- -------- ------------ ------- -------- ------------
ASSETS
Deposits with Banks $ 3,157 $ 67 8.34% $ 4,606 $ 100 8.66%
Federal Funds Sold and
Securities Purchased
Under Resale Agreements 14,774 212 5.74% 11,732 121 4.13%
Trading Assets 11,389 205 7.17% 12,042 191 6.32%
Securities:
Held-to-Maturity 8,390 142 6.80% 9,309 164 7.08%
Available-for-Sale 19,548 375 7.66% 17,285 270 6.25%
Loans 81,846 1,772 8.67% 74,144 1,377 7.44%
------- ------- ------- -------
Total Interest-Earning
Assets 139,104 2,773 7.98% 129,118 2,223 6.89%
Allowance for Credit Losses (2,471) (3,027)
Cash and Due from Banks 7,593 8,618
Risk Management Instruments 23,212 15,984
Other Assets 12,950 13,373
------- -------
Total Assets $ 180,388 $ 164,066
======= =======
LIABILITIES
Domestic Retail Deposits $ 41,287 392 3.80% $ 44,308 273 2.48%
Domestic Negotiable
Certificates of Deposit
and Other Deposits 5,945 82 5.55% 5,202 44 3.45%
Deposits in Foreign Offices 28,239 457 6.43% 22,680 226 3.94%
------- ------- ------- -------
Total Time & Savings
Deposits 75,471 931 4.93% 72,190 543 3.01%
------- ------- ------- -------
Short-Term and Other Borrowings:
Federal Funds Purchased and
Securities Sold Under
Repurchase Agreements 24,525 342 5.57% 18,546 189 4.08%
Commercial Paper 3,729 55 5.92% 2,566 25 3.81%
Other Borrowings 8,225 139 6.82% 9,391 145 6.20%
------- ------- ------- -------
Total Short-Term and
Other Borrowings 36,479 536 5.89% 30,503 359 4.71%
Long-Term Debt 7,542 138 7.32% 8,370 132 6.34%
------- ------- ------- -------
Total Interest-
Bearing Liabilities 119,492 1,605 5.37% 111,063 1,034 3.73%
------- ------- ------- -------
Demand Deposits 20,034 21,788
Risk Management Instruments 24,087 14,148
Other Liabilities 5,708 6,015
------- -------
Total Liabilities 169,321 153,014
------- -------
STOCKHOLDERS' EQUITY
Preferred Stock 1,373 1,704
Common Stockholders' Equity 9,694 9,348
------- -------
Total Stockholders' Equity 11,067 11,052
------- -------
Total Liabilities and
Stockholders' Equity $ 180,388 $ 164,066
======= =======
INTEREST RATE SPREAD 2.61% 3.16%
====== ======
NET INTEREST INCOME AND NET
YIELD ON INTEREST-EARNING
ASSETS $ 1,168 3.36% $ 1,189 3.69%
======== ===== ========= ======
17
UNAUDITED
CHEMICAL BANKING CORPORATION and Subsidiaries
Average Consolidated Balance Sheet, Interest and Rates
(Taxable-Equivalent Interest and Rates; in millions)
Six Months Ended Six Months Ended
June 30, 1995 June 30, 1994
------------------------------ ------------------------------------
Average Rate Average Rate
Balance Interest (Annualized) Balance Interest (Annualized)
------- -------- ------------ ------- -------- ------------
ASSETS
Deposits with Banks $ 3,942 $ 149 7.57% $ 4,878 $ 194 7.98%
Federal Funds Sold and
Securities Purchased
Under Resale Agreements 14,608 431 5.94% 11,809 221 3.77%
Trading Assets 11,151 404 7.28% 11,960 364 6.12%
Securities:
Held-to-Maturity 8,459 291 6.94% 9,735 339 7.02%
Available-for-Sale 19,379 735 7.63% 16,765 512 6.15%
Loans 79,911 3,437 8.67% 74,312 2,688 7.29%
------- ------- ------- -------
Total Interest-Earning
Assets 137,450 5,447 7.98% 129,459 4,318 6.72%
Allowance for Credit Losses (2,479) (3,057)
Cash and Due from Banks 7,566 8,725
Risk Management Instruments 22,415 15,690
Other Assets 12,989 13,292
------- -------
Total Assets $ 177,941 $ 164,109
======= =======
LIABILITIES
Domestic Retail Deposits $ 41,313 760 3.71% $ 45,173 521 2.32%
Domestic Negotiable
Certificates of Deposit
and Other Deposits 5,928 164 5.59% 5,325 90 3.44%
Deposits in Foreign Offices 28,168 858 6.11% 22,825 452 3.97%
------- ------- ------- -------
Total Time & Savings
Deposits 75,409 1,782 4.75% 73,323 1,063 2.92%
------- ------- ------- -------
Short-Term and Other Borrowings:
Federal Funds Purchased and
Securities Sold Under
Repurchase Agreements 23,863 675 5.70% 17,310 326 3.80%
Commercial Paper 3,527 102 5.84% 2,488 46 3.69%
Other Borrowings 8,223 278 6.82% 9,526 279 5.90%
------- ------- ------- -------
Total Short-Term and
Other Borrowings 35,613 1,055 5.97% 29,324 651 4.47%
Long-Term Debt 7,697 278 7.28% 8,434 267 6.39%
------- ------- ------- -------
Total Interest-
Bearing Liabilities 118,719 3,115 5.28% 111,081 1,981 3.59%
------- ------- ------- -------
Demand Deposits 20,241 22,204
Risk Management Instruments 22,396 13,611
Other Liabilities 5,681 6,110
------- -------
Total Liabilities 167,037 153,006
------- -------
STOCKHOLDERS' EQUITY
Preferred Stock 1,412 1,679
Common Stockholders' Equity 9,492 9,424
------- -------
Total Stockholders' Equity 10,904 11,103
------- -------
Total Liabilities and
Stockholders' Equity $ 177,941 $ 164,109
======= =======
INTEREST RATE SPREAD 2.70% 3.13%
===== =====
NET INTEREST INCOME AND NET
YIELD ON INTEREST-EARNING
ASSETS $ 2,332 3.42% $ 2,337 3.64%
======= ===== ======= =====
18
Press Contact: John Stefans
(212) 270-7438
Ken Herz
(212) 270-4621
Investor Contact: John Borden
(212) 270-7318
For Immediate Release
Tuesday, July 18, 1995
CHEMICAL ANNOUNCES EXPANDED STOCK BUYBACK
NEW YORK, July 18, 1995 -- The Board of Directors of Chemical
Banking Corporation today authorized the repurchase of up to $1.2
billion of the company's outstanding common shares over the next 24
months. In total, this would represent approximately 25 million
shares at yesterday's closing price of $48.125, or approximately 10
percent of the corporation's outstanding common shares.
The buyback expands a program announced on December 1, 1994,
for the repurchase of 6 million shares. At the end of the first
quarter, 4 million shares had been repurchased under this earlier
program. The remaining 2 million shares are included in the $1.2
billion repurchase plan announced today.
Chemical said that the expanded program reflects the
corporation's strong capital position and the fact that retained
earnings and the planned sale of non-strategic businesses would
generate capital in excess of that needed to support its core
business franchises.
