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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES ACT OF 1934
Date of Report: April 18, 1997 Commission file number 1-5805
-------------- ------
THE CHASE MANHATTAN CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-2624428
(State or other jurisdiciton (I.R.S. Employer
of incorporation) Indentification 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
1
Item 5. Other Events
- --------------------
On April 15, 1997, The Chase Manhattan Corporation (the "Corporation")
reported net income of $927 million, including merger-related restructuring
costs, compared with a loss of $89 million in the 1996 first quarter (which
included the merger-related charge of $1.026 billion). On an operating basis,
net income in the 1997 first quarter was $946 million, compared with $867
million in the 1996 first quarter.
In connection with reporting its 1997 first quarter results, management of
the Corporation reaffirmed its operating performance targets for 1997. These
include: (i) annual growth in operating earnings per share of 15%; (ii) return
on average common equity of 19%; (iii) an efficiency ratio of 54%-55%; (iv)
annual operating revenue growth of 6%-8%; (v) annual growth in underlying
operating non-interest expense (that is, operating non-interest expense before
giving effect to any merger-related cost savings) of 5%-6%; (vi) incremental
merger savings of approximately $635-$680 million; and (vii) substantial
completion of its previously announced common stock buy-back program.
With respect to credit quality, management stated that it expected credit
card net charge-offs to increase in the second quarter of 1997 and to decline
thereafter. Management also indicated that it currently projected credit card
net charge-offs, as a percentage of average managed credit card receivables, to
be approximately 5.6% for full year 1997.
With respect to capital policies, management indicated that it intended to
redeem certain series of preferred stock which become callable in the second
quarter of the year. Finally, management indicated that it had taken actions to
reduce the Corporation's interest rate sensitivity, and that as of March 31,
1997, the Corporation's earnings at risk to an immediate 100 basis point rise in
interest rates is estimated to be approximately 2% of the Corporation's
projected after-tax net income. An immediate 100 basis point rise in interest
rates is an hypothetical rate scenario, used to measure risk, and does not
necessarily represent management's current view of future market developments.
A copy of the Corporation's press release is attached as an exhibit hereto.
That press release and this Current Report on Form 8-K contain statements that
are forward-looking within the meaning of the Private Securities Litigation
Reform Act of 1995. Such statements are subject to risks and uncertainties
and the Corporation's actual results may differ materially from those set forth
in such forward-looking statements. Factors that would affect the prospects
of the Corporation's business are discussed in the Annual Report to Stockholders
on Form 10-K for the year ended December 31, 1996.
2
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 - 1997 First 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.
THE CHASE MANHATTAN CORPORATION
(Registrant)
Dated April 18, 1997 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 - 1997 First
Quarter Earnings 6
5
Investor Contact: John Borden Press Contacts: Kathleen Baum
212-270-7318 212-270-5089
John Stefans
For Immediate Release 212-270-7438
Chase's Operating Income Rises to $946 million in the 1997 First Quarter
------------------------------------------------------------------------
New York, April 15, 1997 - The Chase Manhattan Corporation today reported fully
diluted earnings per share of $2.01, before merger-related restructuring costs,
an eleven percent increase from $1.81 in the first quarter of 1996. Primary
earnings per share were $2.02 compared with $1.82 in the same 1996 quarter.
Operating net income in the 1997 first quarter rose nine percent to $946 million
from $867 million in the same 1996 quarter.
First Quarter 1997 Highlights
-----------------------------
- Revenue on a managed basis grew five percent, led by strong global markets,
credit card and mortgage banking revenues, and higher custody, trust and
asset management fees
- Expenses declined two percent, reflecting incremental merger savings of
$205 million and underlying growth of six percent
- Return on average common stockholders' equity rose to 19.5 percent,
compared with 18.0 percent
- The efficiency ratio on a managed basis improved to 54.5 percent from 58.0
percent
- The Corporation repurchased $609 million of its common equity during the
quarter
"First quarter earnings reflect the benefits of Chase's balanced business
portfolio, with key wholesale and retail areas contributing solid results," said
Walter V. Shipley, chairman and chief executive officer. "While revenue growth
in the quarter was lower than our 1997 target, financial performance continues
to be strong, as demonstrated by the significant improvement in the efficiency
ratio and a higher return on equity."
Including merger-related restructuring costs, net income in the 1997 first
quarter was $927 million, compared with a loss of $89 million in the prior-year
first quarter, which included a merger related charge of $1,026 million, net of
taxes, and special items totaling $70 million, net of taxes.
6
LINE OF BUSINESS RESULTS
Global Wholesale Banking
- ------------------------
Operating net income for Global Wholesale Banking in the first quarter of
1997 rose five percent from the first quarter of 1996, due primarily to
significant revenue growth throughout Chase's global markets businesses. Total
trading revenues were $586 million, including $173 million of trading-related
net interest income, reflecting higher foreign exchange, derivatives and
securities results worldwide. Global markets also benefited from higher treasury
revenues in the 1997 first quarter in keeping with the Corporation's policy of
managing this function on a total return basis. Revenues from Chase Capital
Partners, while in line with the last eight quarters, declined from extremely
strong first quarter 1996 levels.
Net income from global services rose by 21 percent in the 1997 first
quarter. Revenues within global investor services and global trust were
particularly strong, reflecting active new business pipelines. Net income for
global asset management and private banking increased eight percent, due to
higher assets under management and increased client activity.
Global investment banking and corporate lending results declined, compared
with first quarter 1996 levels. While loan syndication volume increased and
Chase maintained its lead position in the market, a change in the mix of
business within the quarter led to lower transaction fees than in the prior-year
quarter. Revenues from securities underwriting increased, particularly in the
high yield area where Chase's market share grew substantially.
Regional and Nationwide Consumer Banking
- ----------------------------------------
Regional and Nationwide Consumer Banking operating net income rose four
percent in the 1997 first quarter, reflecting a six percent increase in revenues
and flat expenses, offset in part by higher loan losses, primarily in the credit
card business.
Credit card results were lower in the first quarter of 1997 than the
year-ago quarter, reflecting higher credit card charge-offs and increased
spending related to the launch of the Wal-Mart co-branded credit card. Credit
card revenues grew 15 percent, benefiting from an increase of over $2 billion in
average managed receivables and the effect of higher fees and risk-based pricing
initiatives.
Mortgage banking net income more than doubled in the first quarter of 1997.
Revenues increased 13 percent, reflecting higher levels of servicing assets and
mortgage loans and sharply lower expenses due to the reengineering of Chase's
mortgage originations business.
7
Net income for national consumer finance declined 21 percent in the first
quarter of 1997, the result of several one-time items. These factors offset
solid revenue and income growth in a number of Chase's consumer finance
businesses, particularly in auto finance, where managed receivables increased by
$5 billion from 1996 first quarter levels.
Net income for Chase's deposit and investment business increased 25
percent, the result of significant expense reductions from branch consolidations
and other initiatives.
Net income for Texas Commerce Bank, Middle Market and International
Consumer were relatively stable with last year's levels.
CORPORATE FINANCIAL RESULTS
Asset Quality
- -------------
Total managed consumer net charge-offs in the first quarter of 1997 were
$422 million, of which $209 million were related to assets retained on the
balance sheet. That compared with net charge-offs of $315 million in the first
quarter of 1996, of which $210 million were related to retained assets.
Managed credit card net charge-offs were $358 million in the 1997 first
quarter or 5.66 percent of average managed receivables. That compared with $270
million, and 4.66 percent of average managed receivables in the prior-year first
quarter.
Total commercial net charge-offs were $10 million in the first quarter of
1997 compared with $44 million in the first quarter of 1996.
Nonperforming assets, at March 31, 1997, were $1,126 million, compared with
$1,151 million on December 31, 1996, and $1,686 million on March 31, 1996.
At March 31, 1997, the aggregate allowances for credit losses were $3,695
million and $3,683 million on the same date a year ago.
Other Financial Data
- --------------------
Total revenue in the 1997 first quarter was $4,150 million, which included
a $44 million gain on the sale of a non-strategic foreign investment, compared
with $4,035 million in the first 1996 quarter.
Total noninterest expense of $2,417 million in the first quarter of 1997,
included $50 million of costs due to the accelerated vesting of stock-based
incentive awards.
8
During the 1997 first quarter, the Corporation purchased approximately 6.1
million common shares as part of a stock repurchase plan announced in October of
1996. The Corporation reissued approximately 3.6 million treasury shares under
the Corporation's employee benefit plans, resulting in a net repurchase of 2.5
million shares ($279 million) of its common stock.
# # #
Note: On March 31, 1996, The Chase Manhattan Corporation merged with and
into Chemical Banking Corporation. Upon consummation of the merger,
Chemical changed its name to The Chase Manhattan Corporation. The merger
was accounted for as a pooling-of-interests and, accordingly, the
information included in this release reports the combined results of Chase
and Chemical as though the merger had been in effect for all periods
presented.
9
THE CHASE MANHATTAN CORPORATION and Subsidiaries
FINANCIAL HIGHLIGHTS
(in millions, except per share, ratio and unit data)
Three Months Ended
March 31,
-------------------------------
1997 1996
--------- --------
EARNINGS:
Income Before Restructuring Costs $ 946 $ 937
Restructuring Costs (After-Tax) (19)(a) (1,026)(a)
-------- ------
Net Income (Loss) $ 927 $ (89)
======== =======
Net Income (Loss) Applicable to Common Stock $ 872 $ (143)
======== =======
INCOME PER COMMON SHARE:
Primary:
Income Before Restructuring Costs $ 2.02 $ 1.98
Restructuring Costs (After-Tax) (0.04)(a) (2.30)(a)
-------- --------
Net Income (Loss) $ 1.98 $ (0.32)
======== ========
Assuming Full Dilution:
Income Before Restructuring Costs $ 2.01 $ 1.97
Restructuring Costs (After-Tax) (0.04)(a) (2.29)(a)
-------- --------
Net Income (Loss) $ 1.97 $ (0.32)
======== ========
PER COMMON SHARE:
Book Value at March 31, $ 42.59 $ 39.41
Market Value at March 31, $ 93.88 $ 70.50
Common Stock Dividends Declared (b) $ 0.62 $ 0.56
COMMON SHARES OUTSTANDING:
Average Common and Common Equivalent Shares 441.0 446.1
Average Common Shares Assuming Full Dilution 442.6 449.1
Common Shares at Period End 428.3 434.3
PERFORMANCE RATIOS: (Average Balances)(c)
Income Before Restructuring Costs:
Return on Assets 1.13% 1.20%
Return on Common Stockholders' Equity 19.54% 19.53%
Return on Total Stockholders' Equity 18.15% 18.09%
Net Income:
Return on Assets 1.11% NM
Return on Common Stockholders' Equity 19.12% NM
Return on Total Stockholders' Equity 17.78% NM
Efficiency Ratio (d) 58% 60%
Efficiency Ratio - Excluding Securitizations(d) 55% 58%
CAPITAL RATIOS AT MARCH 31:
Common Stockholders' Equity to Assets 5.4% 5.7%
Total Stockholders' Equity to Assets 6.1% 6.5%
Tier 1 Leverage (e) 6.9% 6.4%
Risk-Based Capital: (e)
Tier 1 (4.0% required) 8.4% * 7.9%
Total (8.0% required) 12.1% * 12.0%
FULL-TIME EQUIVALENT EMPLOYEES AT MARCH 31, 67,877 71,311
(a) Reflects merger-related restructuring charge of $1,022 million,
after-tax, which was recorded on March 31, 1996. In addition, after-tax
merger-related expenses were incurred ($4 million in the first quarter of
1996 and $19 million in the first quarter of 1997) and recognized under an
existing accounting pronouncement.
(b) The Corporation increased its quarterly common stock dividend to $0.62
per share, from $0.56 per share, in the first quarter of 1997.
(c) Performance ratios are based on annualized amounts.
(d) Excludes restructuring costs, foreclosed property expense and nonrecurring
items.
(e) The 1997 ratios include the impact of the issuance of $550 million of
preferred stock (the "Series A Preferred Shares")of Chase Preferred Capital
Corporation, and the issuance of $1,390 million of Guaranteed Preferred
Beneficial Interests in Corporation's Junior Subordinated Deferrable
Interest Debentures (the "Capital Securities").
*Estimated
NM - As a result of the loss, these ratios are not meaningful.
10
THE CHASE MANHATTAN CORPORATION and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
(in millions, except per share data)
Three Months Ended
------------------------------------------------
Mar. 31, Dec. 31, Mar. 31,
1997 1996 1996
------------- -------------- -----------
INTEREST INCOME
Loans $ 3,112 $ 3,048 $ 3,241
Securities 722 767 720
Trading Assets 626 615 413
Federal Funds Sold and Securities Purchased Under Resale Agreements 559 571 501
Deposits with Banks 106 97 172
--------- -------- -------
Total Interest Income 5,125 5,098 5,047
======== ======== =======
INTEREST EXPENSE
Deposits 1,515 1,520 1,644
Short-Term and Other Borrowings 1,302 1,304 1,026
Long-Term Debt 257 233 227
--------- --------- --------
Total Interest Expense 3,074 3,057 2,897
--------- --------- --------
NET INTEREST INCOME 2,051 2,041 2,150(a)
Provision for Credit Losses 220 182 245
--------- --------- --------
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 1,831 1,859 1,905
--------- --------- --------
NONINTEREST REVENUE
Corporate Finance and Syndication Fees 168 213 224
Trust, Custody, and Investment Management Fees 310 294 285
Credit Card Revenue 278 320 233
Service Charges on Deposit Accounts 91 98 99
Fees for Other Financial Services 383 377 378
Trading Revenue 422 289 355
Securities Gains 101 25 52
Revenue from Equity-Related Investments 164 172 223
Other Revenue 182(b) 109 36(c)
---------- --------- --------
Total Noninterest Revenue 2,099 1,897 1,885
---------- --------- --------
NONINTEREST EXPENSE
Salaries 1,124(d) 1,070 1,076
Employee Benefits 222 185 305(e)
Occupancy Expense 187 192 221
Equipment Expense 190 180 184
Foreclosed Property Expense 3 (1) (9)
Other Expense 691 677 660
---------- --------- --------
Total Noninterest Expense Before Restructuring Charge 2,417 2,303 2,437
Restructuring Charge and Expenses 30 104 1,656
---------- --------- --------
Total Noninterest Expense 2,447 2,407 4,093
---------- --------- --------
INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT) 1,483 1,349 (303)
Income Tax Expense (Benefit) 556 513 (214)(f)
---------- ---------- ---------
NET INCOME (LOSS) $ 927 $ 836 $ (89)
========= ========== ========
NET INCOME (LOSS) APPLICABLE TO COMMON STOCK $ 872 $ 781 $ (143)
========= ========== ========
NET INCOME (LOSS) PER COMMON SHARE:
Primary $ 1.98 $ 1.74 $ (0.32)
========= ========== ========
Assuming Full Dilution $ 1.97 $ 1.74 $ (0.32)
========= ========== ========
(a) Includes $54 million of interest related to tax audit settlements.
(b) Includes $44 million gain on the sale of a partially-owned foreign
investment.
(c) Includes $60 million loss on the sale of a building in Japan.
(d) Includes $50 million of costs for the accelerated vesting of stock-based
incentive awards as a result of the improvement in the Corporation's stock
price.
(e) Includes $40 million charge related to combining the Corporation's foreign
retirement plans.
(f) Includes tax benefits related to the restructuring charge as well as
aggregate tax benefits and refunds.
Certain amounts have been reclassfied to conform to current presentation.
11
THE CHASE MANHATTAN CORPORATION and Subsidiaries
NONINTEREST REVENUE DETAIL
(in millions)
Three Months Ended
------------------------------------------
Mar. 31, Dec. 31, Mar. 31,
1997 1996 1996
----------- ---------- ----------
FEES FOR OTHER FINANCIAL SERVICES:
Fees in Lieu of Compensating Balances $ 81 $ 72 $ 74
Commissions on Letters of Credit and Acceptances 72 78 89
Mortgage Servicing Fees 56 45 50
Loan Commitment Fees 27 28 30
Other Fees 147 154 135
-------- ------- -------
Total $ 383 $ 377 $ 378
======== ======= =======
TRADING-RELATED REVENUE: (a)
Interest Rate Contracts $ 183 $ 85 $ 146
Foreign Exchange Revenue 169 103 140
Debt Instruments and Other 243 269 230
------- ------- -------
Total $ 595 $ 457 $ 516
======= ======= =======
OTHER REVENUE:
Residential Mortgage Origination/Sales Activities $ 31 $ 22 $ 28
Net Losses on Emerging Markets Securities Sales -- (15) (35)
Gain on Sale of a Partially-owned Foreign Investment 44 -- --
Loss on Sale of a Building in Japan -- -- (60)
All Other Revenue 107 102 103
------- ------- -------
Total $ 182 $ 109 $ 36
======= ======= =======
(a) Includes net interest income attributable to trading activities.
- -------------------------------------------------------------------------------
THE CHASE MANHATTAN CORPORATION and Subsidiaries
NONINTEREST EXPENSE DETAIL
(in millions)
Three Months Ended
------------------------------------------
Mar. 31, Dec. 31, Mar. 31,
1997 1996 1996
----------- ---------- ----------
OTHER EXPENSE:
Professional Services $ 133 $ 133 $ 129
Marketing Expense 103 110 90
Telecommunications 75 77 85
Amortization of Intangibles 41 42 43
Minority Interest 19(a) 18(a) 9
All Other 320 297 304
------- ------- -------
Total $ 691 $ 677 $ 660
======= ======= =======
(a) Includes minority interest related to the Series A Preferred Shares of
$11 million in the first quarter 1997 and $13 million in the fourth quarter
1996.
12
THE CHASE MANHATTAN CORPORATION and Subsidiaries
CONSOLIDATED BALANCE SHEET
(in millions)
March 31, March 31,
1997 1996
---------- ----------
ASSETS
Cash and Due from Banks $ 14,349 $ 10,846
Deposits with Banks 3,298 6,257
Federal Funds Sold and Securities
Purchased Under Resale Agreements 34,554 19,292
Trading Assets:
Debt and Equity Instruments 34,753 24,804
Risk Management Instruments 32,725(a) 23,641
Securities:
Available-for-Sale 40,372 38,646
Held-to-Maturity 3,603 4,398
Loans (Net of Allowance for Loan Losses of $3,550 in 1997 and $3,683 in 1996) 152,332(a) 145,648
Premises and Equipment 3,640 3,801
Due from Customers on Acceptances 2,280 2,053
Accrued Interest Receivable 3,215 2,489
Other Assets 15,217 20,109
---------- ---------
TOTAL ASSETS $ 340,338 $ 301,984
========== =========
LIABILITIES
Deposits:
Domestic:
Noninterest-Bearing $ 39,932 $ 32,984
Interest-Bearing 66,685 63,619
Foreign:
Noninterest-Bearing 4,066 4,100
Interest-Bearing 65,347 68,231
---------- --------
Total Deposits 176,030 168,934
Federal Funds Purchased and Securities
Sold Under Repurchase Agreements 55,939 37,369
Commercial Paper 3,780 4,867
Other Borrowed Funds 7,819 7,879
Acceptances Outstanding 2,280 2,060
Trading Liabilities 46,147 33,025
Accounts Payable, Accrued Expenses and Other Liabilities 13,242(a) 15,106
Long-Term Debt 12,419 12,977
Guaranteed Preferred Beneficial Interests in Corporation's
Junior Subordinated Deferrable Interest Debentures 1,390(b) --
---------- --------
TOTAL LIABILITIES 319,046 282,217
---------- --------
PREFERRED STOCK OF SUBSIDIARY 550(c) --
---------- --------
STOCKHOLDERS' EQUITY
Preferred Stock 2,500 2,650
Common Stock 441 438
Capital Surplus 10,299 10,558
Retained Earnings 9,235 6,969
Net Unrealized Loss on Securities Available-for-Sale, Net of Taxes (559) (610)
Treasury Stock, at Cost (1,174) (238)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 20,742 19,767
--------- ---------
TOTAL LIABILITIES, PREFERRED STOCK OF SUBSIDIARY
AND STOCKHOLDERS' EQUITY $ 340,338 $ 301,984
========= =========
(a) At March 31, 1997, in accordance with a recently issued accounting
pronouncement, the allowance for credit losses has been allocated into
three components: a $3,550 million allowance for loan losses, which is
reported net in Loans; an allowance for credit losses on derivative and
foreign exchange financial instruments of $75 million, which is reported
net in Trading Assets - Risk Management Instruments; and an allowance for
credit losses on letters of credit and guarantees of $70 million, which is
reported in Other Liabilities. Prior period amounts have not been
reclassified due to immateriality.
(b) Reflects issuances, by subsidiaries of the Corporation, in the fourth
quarter 1996 and first quarter 1997 of Capital Securities which qualify as
Tier l Capital for the Corporation.
(c) Reflects the issuance in September 1996 of Series A Preferred Shares, which
qualify as Tier I Capital for the Corporation.
13
THE CHASE MANHATTAN CORPORATION and Subsidiaries
CONSOLIDATED STATEMENT OF CHANGES
IN STOCKHOLDERS' EQUITY
(in millions)
Three Months Ended
March 31,
--------------------------------
1997 1996
------------- ------------
PREFERRED STOCK:
Balance at Beginning of Year $ 2,650 $ 2,650
Redemption of Stock (150) --
--------- ---------
Balance at End of Period $ 2,500 $ 2,650
--------- ---------
COMMON STOCK:
Balance at Beginning of Year $ 441 $ 458
Retirement of Treasury Stock -- (20)
--------- ---------
Balance at End of Period $ 441 $ 438
--------- ---------
CAPITAL SURPLUS:
Balance at Beginning of Year $ 10,459 $ 11,075
Retirement of Treasury Stock -- (433)
Shares Issued for Employee Stock-Based
Awards and Certain Related Tax Benefits (160) (84)
--------- ---------
Balance at End of Period $ 10,299 $ 10,558
--------- ---------
RETAINED EARNINGS:
Balance at Beginning of Year $ 8,627 $ 7,997
Net Income (Loss) 927 (89)
Retirement of Treasury Stock -- (557)
Cash Dividends Declared:
Preferred Stock (55) (54)
Common Stock (265) (328)(a)
Accumulated Translation Adjustment 1 --
--------- ---------
Balance at End of Period $ 9,235 $ 6,969
--------- ---------
NET UNREALIZED LOSS ON SECURITIES AVAILABLE-FOR-SALE:
Balance at Beginning of Year $ (288) $ (237)
Net Change in Fair Value of Securities Available-for-Sale,
Net of Taxes (271) (373)
--------- ---------
Balance at End of Period $ (559) $ (610)
--------- ---------
COMMON STOCK IN TREASURY, AT COST:
Balance at Beginning of Year $ (895) $ (1,107)
Retirement of Treasury Stock -- 1,010
Purchase of Treasury Stock (609) (708)
Reissuance of Treasury Stock 330 567
--------- ---------
Balance at End of Period $ (1,174) $ (238)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY $ 20,742 $ 19,767
========= =========
(a) Includes fourth quarter 1995 common stock dividends of $80 million declared
and paid by old Chase in the 1996 first quarter.
14
THE CHASE MANHATTAN CORPORATION and Subsidiaries
CREDIT RELATED INFORMATION
(in millions)
Loans Outstanding Nonperforming Assets
-------------------------- ----------------------------
March 31, March 31,
1997 1996 1997 1996
---------- ---------- -------- --------
DOMESTIC COMMERCIAL:
Commercial Real Estate $ 5,751 $ 6,514 $ 206 $ 442
Other Commercial 42,484 38,101 368 476
--------- --------- ------- --------
Total Commercial Loans 48,235 44,615 574 918
--------- --------- ------- --------
Domestic Consumer:
Residential Mortgage 36,586 35,908 267 246
Credit Card 11,145 13,704 -- --
Other Consumer 21,020 19,449 36 37
--------- -------- ------- --------
Total Consumer Loans 68,751 69,061 303 283
--------- -------- ------- --------
Total Domestic Loans 116,986 113,676 877 1,201
Foreign 38,896 35,655 121 336
--------- --------- ------- --------
Total Loans $ 155,882 $ 149,331 998 1,537
========= =========
Assets Acquired as Loan Satisfactions 128 149
------- -------
Total Nonperforming Assets $ 1,126 $ 1,686
======= =====
Assets Held For Accelerated Disposition $ 229 $ 212
======= ========
Three Months Ended
March 31,
----------------------------
1997 1996
-------- --------
NET CHARGE-OFFS:
Domestic Commercial:
Commercial Real Estate $ (4) $ (4)
Other Commercial 14 48
------- -------
Total Commercial 10 44
------- -------
Domestic Consumer:
Residential Mortgage 7 8
Credit Card 150 165
Other Consumer 52 37
------- -------
Total Consumer 209 210
------- -------
Total Domestic Net Charge-offs 219 254
Foreign 1 (9)
------- -------
Subtotal Net Charge-offs 220 245
Charge Related to Conforming Credit Card Charge-off Policies -- 102
------- -------
Total Net Charge-offs $ 220 $ 347
======= =======
15
THE CHASE MANHATTAN CORPORATION and Subsidiaries
CREDIT CARD RELATED INFORMATION
(in millions, except ratios)
As of or For The
Three Months Ended
March 31,
-------------------------------
1997 1996
------------- ------------
MANAGED CREDIT CARD PORTFOLIO:
Average Managed Credit Card Receivables $ 25,318 $ 23,183
Past Due 90 Days & Over and Accruing $ 622 $ 495
As a Percentage of Average Credit Card Receivables 2.46% 2.15%
Net Charge-offs $ 358(a) $ 270(a)
As a Percentage of Average Credit Card Receivables 5.66% 4.66%
(a) Excludes a charge related to conforming credit card charge-off policies.
FAVORABLE (UNFAVORABLE) IMPACT OF CREDIT CARD Three Months Ended
SECURITIZATIONS ON REPORTED CONSOLIDATED March 31,
STATEMENT OF INCOME LINE ITEMS: -------------------------------
1997 1996
------------ ------------
Net Interest Income $ (298) $ (187)
Provision for Credit Losses 214 105
Credit Card Revenue 68 75
Other Revenue (2) 3
---------- ------------
Pre-tax Income (Loss) Impact of Securitizations $ (18) $ (4)
========== ============
16
THE CHASE MANHATTAN CORPORATION and Subsidiaries
Condensed Average Consolidated Balance Sheet, Interest and Rates
(Taxable-Equivalent Interest and Rates; in millions)
Three Months Ended Three Months Ended
March 31, 1997 March 31, 1996
------------------------------------ ------------------------------------
Average Rate Average Rate
Balance Interest (Annualized) Balance Interest (Annualized)
---------- -------- ------------ --------- -------- ------------
ASSETS
Liquid Interest-Earning Assets $ 72,778 $ 1,291 7.19% $ 62,321 $ 1,086 7.01%
Securities 43,547 726 6.76% 42,706 725 6.83%
Loans 153,030 3,114 8.25% 149,634 3,241 8.71%
--------- -------- --------- --------
Total Interest-Earning Assets 269,355 5,131 7.73% 254,661 5,052 7.98%
Total Noninterest-Earning Assets 69,914 58,264
--------- ---------
Total Assets $ 339,269 $ 312,925
========= =========
LIABILITIES
Total Interest-Bearing Deposits $ 132,121 1,515 4.65% $ 133,778 1,644 4.94%
Total Short-Term and Other Borrowings 81,135 1,302 6.51% 66,742 1,026 6.20%
Long-Term Debt 13,523 257 7.70% 12,976 227 7.05%
--------- -------- --------- --------
Total Interest-Bearing Liabilities 226,779 3,074 5.50% 213,496 2,897 5.46%
-------- --------
Noninterest-Bearing Deposits 40,897 38,747
Other Noninterest-Bearing Liabilities 49,901 39,844
--------- ---------
Total Liabilities 317,577 292,087
--------- ---------
PREFERRED STOCK OF SUBSIDIARY 550 --
--------- ---------
STOCKHOLDERS' EQUITY
Preferred Stock 2,648 2,650
Common Stockholders' Equity 18,494 18,188
--------- ---------
Total Stockholders' Equity 21,142 20,838
--------- ---------
Total Liabilities and Stockholders' Equity $ 339,269 $ 312,925
========= =========
INTEREST RATE SPREAD 2.23% 2.52%
==== ====
NET INTEREST INCOME AND NET YIELD
ON INTEREST-EARNING ASSETS $ 2,057 3.10% $ 2,155 3.41%
======== ==== ======== ====
NET INTEREST INCOME AND NET YIELD
ON INTEREST-EARNING ASSETS -
MANAGED BASIS (a) $ 2,355 3.38% $ 2,342 3.59%
======== ==== ======== ====
(a) Excludes the impact of the credit card securitizations.
17
The Chase Manhattan Corporation and Subsidiaries
Lines of Business Results
(in millions, except ratios)
Global Regional and Nationwide
Three Months Ended Wholesale Banking Consumer Banking Total (a)
March 31, ------------------------ ------------------------- -------------------------
1997 1996 1997 1996 1997 1996
- --------------------------- ---------- ---------- ------------ ---------- ----------- -----------
Revenues $ 2,329 $ 2,225 $ 2,129 $ 2,005 $ 4,150 $ 4,041
Operating Net Income 657 623 331 317 946 867
Average Common Equity 9,527 9,769 6,555 6,353 18,494 18,188
Average Assets 233,449 211,279 116,766 109,357 339,269 312,925
Return on Common Equity (ROCE) 26.8% 24.4% 19.3% 18.9% 19.5% 18.0%
Efficiency Ratio 51% 52% 53% 57% 58% 60%
GLOBAL WHOLESALE BANKING
KEY FINANCIAL MEASURES
1997 1996
--------------------------------------------- ---------------------------------------------
Three Months Ended Net Efficiency Net Efficiency
March 31, Revenue Income ROCE Ratio Revenue Income ROCE Ratio
- ------------------- ------- ------ ---- ----- ------- ------ ---- -----
Global Investment Banking
and Corporate Lending $ 448 $ 115 12.5% 45% $ 531 $ 175 19.5% 35%
Global Markets 904 317 58.4 44 622 175 28.4 58
Chase Capital Partners 135 73 25.6 13 248 146 57.1 6
Global Asset Management
and Private Banking 202 41 32.2 65 192 38 28.9 64
Global Services 509 76 27.7 76 480 63 22.7 78
Terminal Businesses (b) 3 (17) NM NM 10 (9) NM NM
REGIONAL and NATIONWIDE CONSUMER BANKING
KEY FINANCIAL MEASURES
1997 1996
--------------------------------------------- ---------------------------------------------
Three Months Ended Net Efficiency Net Efficiency
March 31, Revenue Income ROCE Ratio Revenue Income ROCE Ratio
- ------------------- ------- ------ ---- ----- ------- ------ ---- -----
Credit Cards $ 730 $ 56 14.8% 39% $ 635 $ 72 19.4% 40%
Deposits and Investments (c) 477 69 26.0 74 476 55 21.0 79
Middle Market 230 62 23.9 46 237 59 22.6 50
Mortgage Banking 186 46 14.6 56 165 22 6.6 72
National Consumer Finance 155 27 23.1 43 150 34 30.1 42
International Consumer 65 15 80.6 58 61 15 76.2 60
Texas Commerce 320 66 17.5 63 308 68 19.3 62
(a) Total column includes Corporate results.
(b) Represents discontinued portfolios, primarily the remaining refinancing
country debt and commercial real estate problem asset and nonperforming
portfolio.
(c) Insurance products managed within Deposits and Investments, but included
for reporting purposes in Credit Cards, Mortgage Banking, and National
Consumer Finance, generated revenues of $24 million and $19 million in
1997 and 1996, respectively.
18