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: April 20, 1994 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 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
April 19, 1994, that 1994 first quarter net income was $319
million, compared with $374 million in the same period a year
ago. Net income per common share in the first quarter of
1994 was $1.13, compared with $1.35 per share in the same
period a year ago.
A copy of the Corporation's Press Release announcing the
results of operations for the 1994 first quarter 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 - 1994 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.
CHEMICAL BANKING CORPORATION
(Registrant)
Dated April 20, 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
CHEMICAL BANKING CORPORATION NEWS RELEASE
Press Contact: Ken Herz
212- 270-4621
John Stefans
212- 270-7438
Investor Contact: John Borden
212- 270-7318
New York, April 19 -- Chemical Banking Corporation said
today that continued good performance in its core businesses and
a sharp decline in credit costs in the first quarter led to net
income of $319 million, or $1.13 per common share. These results
were 16 percent higher than earnings on a comparable basis of
$276 million in the first quarter of 1993, before accounting
changes and tax benefits.
Reported net income in last year's first quarter was $374
million, or $1.35 per share, when the corporation benefited from
$98 million in one-time gains, including a net favorable impact
of $35 million from the adoption of new accounting standards and
an income tax benefit of $63 million.
Results for the first quarter of 1994 included a
restructuring charge of $48 million ($28 million after-tax)
related to the previously reported closing of 50 New York
branches and a staff reduction of 650. On an annualized basis,
Chemical expects to save $44 million pre-tax through this
rationalization of its branch system, part of an ongoing,
corporate-wide program to improve productivity.
"The quarter was characterized by major progress in
achieving key financial objectives -- growth in fee-based income,
a lower risk profile, productivity initiatives and a Double A
credit rating," said Walter V. Shipley, chairman and chief
executive officer.
Earlier this month, Moody's Investors Service raised its
rating on long-term deposits and other senior obligations of
Chemical Bank to Aa3 from A1. It also raised Chemical Banking
Corporation's ratings on commercial paper, senior debt,
subordinated debt and preferred stock. Chemical Bank's
subordinated debt rating was also upgraded.
Total stockholders' equity at March 31 was $11.0 billion,
up $490 million from $10.5 billion a year ago. The corporation's
estimated Tier I risk-based capital ratio was 8.2 percent at
March 31, compared with 7.5 percent a year ago. At March 31, the
estimated total risk-based capital ratio was 12.3 percent, up
from 11.8 percent a year ago.
6
NET INTEREST INCOME
Net interest income for the first quarter was $1.143
billion, compared with $1.149 billion in the same year-ago
period. The net yield on interest-earning assets was 3.59
percent in the first quarter, compared with 3.82 percent in the
year-ago first quarter.
Average interest-earning assets for the first quarter were
$129.8 billion, compared with $122.6 billion in the year-ago
period. The composition of average earning assets continued to
shift in response to growth in liquid assets to support trading
businesses and securities, more than offsetting declines in
loans. While net interest income was only slightly below the
1993 level, the shift to lower-spread liquid assets has exerted
downward pressure on the net yield on interest-earning assets.
In the latest quarter, liquid assets and securities averaged
$55.3 billion, compared with $41.2 billion in 1993. Total loans
averaged $74.5 billion in the first quarter versus $81.4 billion
a year ago.
NONINTEREST REVENUE
Noninterest revenue for the first quarter was $931 million,
up from $925 million in the same period a year ago, despite a $67
million decline in trading revenue.
The results reflected increases in revenues from corporate
finance fees, revolving credit fees, and trust and investment
management fees.
Fees for revolving credit products were $75 million, up 42
percent from $53 million, reflecting the launch of the Shell
MasterCard in the fourth quarter of 1993. Trust and investment
management fees were $110 million, up 12 percent from $98 million
a year ago, as a result of investments made in the personal trust
business.
Combined revenues from all trading activities were $185
million in the first quarter, compared with $252 million in the
same year-ago period. Results from foreign exchange, risk
management products and securities trading were mixed in a
challenging environment, while emerging markets trading was weak.
Corporate finance fees were $82 million, up from $71 million
in the first quarter a year ago.
Other noninterest revenue in the first quarter was $149
million, compared with $116 million in the first quarter a year
ago. The 1994 first quarter included $45 million in net gains
from the sale of LDC-related past due interest and other bonds.
The 1993 first quarter included $56 million in revenue from the
sale of such bonds.
Venture capital revenue increased to $84 million in the
first quarter of 1994 compared with $28 million a year ago.
Securities gains in the first quarter were $46 million, compared
with $70 million in the first quarter of 1993.
7
NONINTEREST EXPENSE
Noninterest expense in the first quarter, including the $48
million restructuring charge, was $1.324 billion, compared with
$1.276 billion in the first quarter of 1993. The 1993 first
quarter results included a one-time restructuring charge of $43
million related to the federally-assisted acquisition in February
1993 of major components of First City Bancorporation of Texas,
Inc. by Chemical's affiliate, Texas Commerce Bancshares.
Excluding the one-time charges, the 3.5 percent increase in
year-over-year non-interest expense is primarily attributable to
approximately $26 million in additional operating expenses
associated with 1993 acquisitions in Texas and approximately $32
million of operating expenses related to the Shell MasterCard.
Foreclosed property expense in the first quarter decreased
51 percent to $35 million from the 1993 first quarter period
level of $71 million, reflecting significant progress in managing
the corporation's real estate portfolio. Real estate owned
totaled $791 million as of March 31, 1994 compared with $1.119
billion on March 31, 1993.
For the first quarter, the ratio of noninterest expense
(excluding one-time charges) to total revenue was 61.5 percent,
compared with 59.5 percent in the first quarter a year ago.
PROVISION AND ALLOWANCE FOR LOSSES
The provision for losses was $205 million in the first
quarter, compared with $286 million in the fourth quarter of 1993
and $312 million in the first quarter of 1993.
Consumer net charge-offs were $90 million in the first
quarter, compared with $89 million in the fourth quarter and $97
million in the first quarter a year ago. Commercial net charge-
offs were $140 million in the first quarter, compared with $197
million in the fourth quarter and $215 million in the first
quarter of 1993.
Total non-LDC net charge-offs were $230 million in the first
quarter, compared with $286 million in the fourth quarter of 1993
and $312 million in the first quarter a year ago. LDC net
charge-offs, including losses on sales and swaps, were $6 million
in the first quarter, compared with $51 million in the same
period a year ago.
The provision for losses in the first quarter of 1994 was
lower than non-LDC net charge-offs as a result of management's
evaluation of continuing improvement in the corporation's credit
environment. As a result of the ongoing decline in nonperforming
assets, reserve coverage reached 126 percent of nonperforming
loans as of March 31, 1994.
At March 31, the non-LDC allowance for losses was $2.400
billion, compared with $2.220 billion on the same date a year
ago.
8
The LDC allowance at March 31 was $591 million, compared
with $768 million on the same date a year ago. Total LDC medium-
and long-term outstandings at March 31 were $1.8 billion, versus
$3.2 billion on the same date a year ago.
NONPERFORMING ASSETS
At March 31, total nonperforming assets were $3.203 billion,
down $322 million, or 9 percent, from $3.525 billion at December
31 and down $2.503 billion, or 44 percent, from $5.706 billion on
March 31 a year ago. Nonperforming assets have declined by
$3.384 billion, or 51 percent, since the peak in the third
quarter of 1992. Based on the current view of the portfolio, the
corporation expects that nonperforming assets will continue to
decline in coming quarters.
Total non-LDC nonperforming assets at March 31 were $2.679
billion, down from $2.903 billion at December 31 and from $4.476
billion a year ago. Non-LDC nonperforming loans at March 31 were
$1.845 billion, down from $1.969 billion at December 31 and down
from $3.218 billion at March 31, 1993. Assets acquired as loan
satisfactions were $834 million at March 31, down from $934
million at December 31 and down $424 million from $1.258 billion
on March 31 a year ago.
LDC nonperforming loans were $524 million at March 31,
compared with $1.230 billion on the same date a year ago.
9
Nonperforming Assets
---------------------
($ in millions) 3/31/94 12/31/93 3/31/93
------- -------- -------
Non-LDC nonperforming loans $1,845 $1,969 $3,218
Assets acquired as loan satisfactions 834 934 1,258
------ ------ ------
Total non-LDC nonperforming assets 2,679 2,903 4,476
------ ------ ------
LDC nonperforming loans:
Brazil 307 403 594
Argentina 6 7 316
Other LDC countries 211 212 320
------ ------ ------
Total LDC nonperforming loans 524 622 1,230
------ ------ ------
Total nonperforming assets $3,203 $3,525 $5,706
====== ====== ======
Allowance for Losses ($ in millions) 3/31/94 3/31/93
------------------------------------ ------- -------
Total allowance for losses $2,991 $2,988
As a % of total loans 4.0% 3.7%
Non-LDC allowance for losses $2,400 $2,220
As a % of non-LDC loans 3.3% 2.9%
LDC allowance for losses $591 $768
As a % of term outstandings including
previous charge-offs with claims retained 59%* 56%
* 32% excluding previous charge-offs with claims retained
10
Stockholders' Equity and Capital Ratios
---------------------------------------
($ in billions) 3/31/94 3/31/93
------- -------
Total stockholders' equity $11.0 $10.5
Common stockholders' equity $9.3 $8.4
Ratios:
Total equity to assets 6.6%(a) 7.1%
Common equity to assets 5.6%(a) 5.7%
Tier I Leverage 6.2%(a,b) 6.7%
Risk-based capital:
Tier I (4.0% required) 8.2%(b,c) 7.5%
Total (8.0% required) 12.3%(b,c) 11.8%
(a) On January 1, 1994, the corporation adopted FASI 39, which
increased total assets approximately $14.5 billion at March 31,
1994 and total average assets by approximately $13.1 billion for
the 1994 first quarter.
(b) The 1994 ratios exclude the net unfavorable impact on
stockholders' equity of $192 million resulting from adoption of
SFAS No. 115 on December 31, 1993.
(c) Estimated
OTHER FINANCIAL DATA
The corporation's effective tax rate was 41.5 percent and
30.3 percent in the first quarter of 1994 and 1993, respectively.
Tax expense for the first quarter of 1993 included an income tax
benefit of approximately $63 million. 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.
SFAS No. 115 resulted in a net unfavorable impact of
approximately $192 million after-tax on the corporation's
stockholders' equity at March 31, 1994 compared with a favorable
impact of $215 million at December 31, 1993. The net change from
the 1993 year-end was primarily the result of the higher interest
rate environment and the declining value of Brady bonds.
11
On January 1, 1994, the corporation adopted FASB
Interpretation No. 39, "Offsetting of Amounts Related to Certain
Contracts," which changes the reporting of unrealized gains and
losses on interest rate and foreign exchange contracts on the
balance sheet. The Interpretation requires that gross unrealized
gains be reported as assets and gross unrealized losses be
reported as liabilities. The Interpretation, however, permits
netting of such unrealized gains and losses with the same
counterparty when master netting agreements have been executed.
The adoption of this Interpretation has resulted in an increase
in assets and liabilities of $14.5 billion at March 31, 1994,
with unrealized gains reported as Trading Account-Risk Management
Instruments and the unrealized losses reported in Other
Liabilities.
Total assets at March 31 were $166.0 billion, versus $147.5
billion on the same date a year ago. Total loans at March 31
were $74.7 billion, compared with $81.2 billion a year ago. At
the end of the first quarter, total deposits were $95.1 billion,
compared with $93.2 billion at March 31, 1993.
The return on average total assets for the first quarter was
.79 percent, compared with 1.06 percent in the same year-ago
period. The return on average common stockholders' equity was
12.24 percent for the first quarter, compared with 16.47 percent
in the first quarter of 1993.
Book value per common share was $36.74 at March 31, versus
$33.50 per share on the same date a year ago.
TEXAS COMMERCE BANCSHARES
Texas Commerce Bancshares (TCB) earned $51 million in the
first quarter, versus $29 million in the year-ago first quarter.
Excluding the one-time restructuring charge of $43 million ($30
million after-tax) and net benefits of $14 million resulting from
the previously-mentioned accounting changes, income for the first
quarter of 1993 would have been $45 million.
The net yield on interest-earning assets was 3.86 percent in
the first quarter, versus 4.18 percent in the 1993 first quarter.
At March 31, total assets of TCB were $21.2 billion, versus
$21.0 billion a year ago.
# # #
12
UNAUDITED
CHEMICAL BANKING CORPORATION and Subsidiaries
(in millions, except per share and ratio data)
Three Months Ended
March 31,
------------------------------------------
Pro-Forma(a)
1994 1993 1993
------- ------- ---------
EARNINGS:
--------
Income Before Effect of Accounting Changes $ 319 $ 339 $ 276
Net Effect of Changes in Accounting Principles --- 35 35
------- ------- -------
Net Income $ 319 $ 374 $ 311
======= ======= =======
Net Income Applicable to Common Stock $ 287 $ 335 $ 272
======= ======= =======
PER COMMON SHARE:
----------------
Income Before Effect of Accounting Changes $ 1.13 $ 1.21 $ .95
Net Effect of Changes in Accounting Principles --- .14 .14
------- ------- -------
Net Income $ 1.13 $ 1.35 $ 1.09
======= ======= =======
Book Value at March 31, $36.74 $ 33.50
Market Value at March 31, $36.38 $ 40.38
Common Stock Dividends Declared $ 0.38(b) $ 0.33
COMMON SHARES:
-------------
Average Outstanding 253.2 248.5
Period End Outstanding 253.3 251.5
BALANCE SHEET AVERAGES:
----------------------
Loans $ 74,481 $ 81,423
Securities $ 26,406 $ 23,307
Total Assets $164,152(c) $142,613
Deposits $ 97,093 $ 94,785
Long-Term Debt $ 8,498 $ 7,470
Stockholders' Equity $ 11,166 $ 10,113
PERFORMANCE RATIOS: (Average Balances) (d)
------------------
Return on Assets 0.79%(c) 1.06%
Return on Common Stockholders' Equity 12.24% 16.47%
Return on Total Stockholders' Equity 11.59% 15.00%
CAPITAL RATIOS AT MARCH 31:
--------------------------
Total Stockholders' Equity to Assets 6.6%(c) 7.1%
Common Stockholders' Equity to Assets 5.6%(c) 5.7%
Tier 1 Leverage 6.2%(c)(e) 6.7%
Risk-Based Capital:
Tier 1 (4.0% required) 8.2%(e)* 7.5%
Total (8.0% required) 12.3%(e)* 11.8%
(a) The Corporation recognized its remaining available Federal tax
benefits in the third quarter of 1993 and as a result the
Corporation's earnings beginning in the fourth quarter of 1993
are reported on a fully-taxed basis. The pro-forma column
assumes that the Corporation's 1993 first quarter results are
reported on a fully-taxed basis.
(b) In the fourth quarter of 1993, the Corporation increased its
quarterly common stock dividend to $0.38 per share.
(c) On January 1, 1994, the Corporation adopted FASI 39, which
increased total assets by approximately $14.5 billion at March
31, 1994 and total average assets by approximately $13.1 billion
for the 1994 first quarter.
(d) Quarterly performance ratios are based on annualized net income
amounts.
(e) The 1994 amounts exclude the net unfavorable impact on
stockholders' equity of $192 million resulting from the adoption
of SFAS No. 115.
* Estimated.
13
UNAUDITED
CHEMICAL BANKING CORPORATION and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
(in millions, except per share data)
Three Months Ended
March 31,
---------------------
1994 1993
---- ----
INTEREST INCOME
Loans $1,307 $ 1,465
Securities 416 428
Trading Assets 173 94
Federal Funds Sold and Securities
Purchased Under Resale Agreements 100 76
Deposits with Banks 94 61
------- -------
Total Interest Income 2,090 2,124
------- -------
INTEREST EXPENSE
Deposits 520 593
Short-Term and Other Borrowings 292 252
Long-Term Debt 135 130
------- -------
Total Interest Expense 947 975
------- -------
NET INTEREST INCOME 1,143 1,149
Provision for Losses 205 312
------- -------
NET INTEREST INCOME AFTER
PROVISION FOR LOSSES 938 837
------- -------
NONINTEREST REVENUE
Trust and Investment Management Fees 110 98
Corporate Finance and Syndication Fees 82 71
Service Charges on Deposit Accounts 69 67
Fees for Other Banking Services 290 251
Trading Account and Foreign Exchange Revenue 185 252
Securities Gains 46 70
Other Revenue 149 116
------- -------
Total Noninterest Revenue 931 925
------- -------
NONINTEREST EXPENSE
Salaries 518 501
Employee Benefits 119 102
Occupancy Expense 146 145
Equipment Expense 84 75
Foreclosed Property Expense 35 71
Restructuring Charge 48 43
Other Expense 374 339
------- -------
Total Noninterest Expense 1,324 1,276
------- -------
INCOME BEFORE INCOME TAX EXPENSE AND EFFECT
OF ACCOUNTING CHANGES 545 486
Income Tax Expense 226 147
------- -------
INCOME BEFORE EFFECT OF ACCOUNTING CHANGES 319 339
Net Effect of Changes in
Accounting Principles -- 35(a)
------- -------
NET INCOME $ 319 $ 374
======= =======
NET INCOME APPLICABLE TO COMMON STOCK $ 287 $ 335
======= =======
PER COMMON SHARE:
Income Before Effect of Accounting Changes $ 1.13 $ 1.21
Net Effect of Changes in
Accounting Principles -- .14
------- -------
Net Income $ 1.13 $ 1.35
======= =======
AVERAGE COMMON SHARES OUTSTANDING 253.2 248.5
[FN]
(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.
14
UNAUDITED
CHEMICAL BANKING CORPORATION and Subsidiaries
CONSOLIDATED BALANCE SHEET
(in millions)
March 31, March 31,
1994 1993
--------- ---------
ASSETS
Cash and Due from Banks $ 8,286 $ 7,440
Deposits with Banks 3,886 4,137
Federal Funds Sold and Securities
Purchased Under Resale Agreements 11,722 9,962
Trading Assets:
Debt and Equity Instruments 13,357 7,374
Risk Management Instruments 17,136(a) ---
Securities:
Held-to-Maturity 10,149 17,053
Available-for-Sale 17,237 7,234
Loans (Net of Unearned Income) 74,661 81,227
Allowance for Losses (2,991) (2,988)
Premises and Equipment 2,004 1,717
Due from Customers on Acceptances 1,109 1,246
Accrued Interest Receivable 986 1,013
Assets Acquired as Loan Satisfactions 834 1,258
Other Assets 7,661 10,822
-------- --------
TOTAL ASSETS $166,037 $ 147,495
======== ========
LIABILITIES
Deposits:
Demand (Noninterest Bearing) $ 21,473 $ 20,357
Time and Savings 49,939 52,288
Foreign 23,709 20,529
-------- --------
Total Deposits 95,121 93,174
Federal Funds Purchased and Securities
Sold Under Repurchase Agreements 16,016 16,071
Other Borrowed Funds 13,348 12,952
Acceptances Outstanding 1,112 1,297
Accounts Payable and Accrued Liabilities 2,158 2,832
Other Liabilities 18,874(a) 2,960
Long-Term Debt 8,447 7,738
-------- --------
TOTAL LIABILITIES 155,076 137,024
-------- --------
STOCKHOLDERS' EQUITY
Preferred Stock 1,654 2,048
Common Stock 254 252
Capital Surplus 6,565 6,538
Retained Earnings 2,692 1,645
Net Unrealized Loss on Securities
Available-for-Sale (Net of Taxes) (192)(b) ---
Treasury Stock, at Cost (12) (12)
-------- --------
TOTAL STOCKHOLDERS' EQUITY 10,961 10,471
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $166,037 $147,495
======== ========
[FN]
(a) On January 1, 1994, the Corporation adopted FASB Interpretation
No. 39. As a result, assets and liabilities increased by $14.5
billion at March 31, 1994 with unrealized gains reported as
Trading Assets-Risk Management Instruments and the unrealized
losses reported in Other Liabilities. Prior to adoption,
unrealized gains and losses were reported net in Other Assets.
(b) 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.
15
UNAUDITED
CHEMICAL BANKING CORPORATION and Subsidiaries
CONSOLIDATED STATEMENT OF CHANGES
IN STOCKHOLDERS' EQUITY
(in millions)
1994 1993
-------- -------
BALANCE AT JANUARY 1, $11,164 $ 9,851
------- -------
Net Income 319 374
Dividends Declared:
Preferred Stock (32) (39)
Common Stock (96) (83)
Issuance of Preferred Stock --- 200
Issuance of Common Stock 13 167
Net Unrealized Loss on Securities
Available-for-Sale (Net of Taxes) (407) ---
Accumulated Translation Adjustment --- 1
------- -------
Net Change in Stockholders' Equity (203) 620
------- -------
BALANCE AT MARCH 31, $10,961 $10,471
======= =======
16
UNAUDITED
CHEMICAL BANKING CORPORATION and Subsidiaries
ALLOWANCE RELATED INFORMATION
(in millions, except ratios)
Three Months Ended
Allowance for Losses March 31,
-----------------------
1994 1993
-------- --------
Non-LDC Allowance:
Balance at Beginning of Period $2,423 $ 2,206
Provision for Losses 205 312
Net Charge-Offs (230) (312)
Allowance Related to Purchased Assets --- 19(a)
Other 2 (5)
------- -------
Balance at End of Period 2,400 2,220
------- -------
LDC Allowance:
Balance at Beginning of Period 597 819
Provision for Losses -- --
Net Charge-Offs and Losses on
Sales and Swaps (6) (51)
------- -------
Balance at End of Period 591 768
------- -------
Total Allowance for Losses $2,991 $ 2,988
======= =======
Allowance Coverage Ratios (at period-end):
Allowance to Total Loans 4.0% 3.7%
Allowance to Nonperforming Loans 126 67
Non-LDC Allowance to Non-LDC
Nonperforming Loans 130 69
LDC Allowance to LDC Nonperforming Loans 113 62
LDC Allowance to:
Medium- and Long-Term LDC Outstandings 32 24
Total LDC Outstandings 16 19
LDC Allowance Adjusted for Prior
Charge-Offs with Claims Retained to
Medium- and Long-Term Outstandings and
Claims Retained 59 56
[FN]
(a) Related to the First City Banks acquisition.
17
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
March 31, 1994 March 31, 1993
----------------------------------- ------------------------------------
Average Rate Average Rate
Balance Interest (Annualized) Balance Interest (Annualized)
-------- ---------- ----------- ------- ---------- ------------
ASSETS
Deposits with Banks $ 5,153 $ 94 7.37% $ 3,521 $ 61 7.04%
Federal Funds Sold and
Securities Purchased Under
Resale Agreements 11,887 100 3.42% 8,711 76 3.52%
Trading Assets 11,877 173 5.92% 5,638 94 6.75%
Securities 26,406 417 6.40% 23,307 429 7.47%
Loans 74,481 1,311 7.14% 81,423 1,469 7.32%
-------- ------ -------- ------
Total Interest-
Earning Assets $129,804 $2,095 6.54% $ 122,600 2,129 7.04%
------ ------
Allowance for Losses (3,086) (3,115)
Cash and Due from Banks 8,833 8,376
Risk Management Instruments 15,393 --
Other Assets 13,208 14,752
-------- --------
Total Assets $164,152 $ 142,613
======== ========
LIABILITIES
Domestic Retail Time Deposits $ 46,047 $ 248 2.18% $ 45,705 $ 308 2.73%
Domestic Negotiable
Certificates of Deposit
and Other Deposits 5,450 46 3.43% 6,550 49 3.05%
Deposits in Foreign Offices 22,971 226 3.99% 21,519 236 4.45%
-------- ------ -------- ------
Total Interest-Bearing
Deposits 74,468 520 2.83% 73,774 593 3.26%
-------- ------ -------- ------
Short-Term and Other Borrowings:
Federal Funds Purchased and
Securities Sold Under
Repurchase Agreements 16,060 137 3.47% 16,189 138 3.46%
Commercial Paper 2,408 21 3.55% 2,385 22 3.66%
Other 9,665 134 5.61% 5,818 92 6.45%
-------- ------ -------- ------
Total Short-Term and
Other Borrowings 28,133 292 4.21% 24,392 252 4.19%
Long-Term Debt 8,498 135 6.43% 7,470 130 7.04%
-------- ------ -------- ------
Total Interest-
Bearing Liabilities 111,099 947 3.46% 105,636 975 3.74%
-------- ------ -------- -------
Demand Deposits 22,625 21,011
Risk Management Instruments 13,068 --
Other Liabilities 6,194 5,853
-------- --------
Total Liabilities 152,986 132,500
-------- --------
STOCKHOLDERS' EQUITY
Preferred Stock 1,654 1,865
Common Stockholders' Equity 9,512 8,248
-------- --------
Total Stockholders' Equity 11,166 10,113
Total Liabilities and -------- --------
Stockholders' Equity $164,152 $142,613
======== ========
SPREAD ON INTEREST-BEARING
LIABILITIES 3.08% 3.30%
===== =====
NET INTEREST INCOME AND NET
YIELD ON INTEREST-EARNING
ASSETS $1,148 3.59% $1,154 3.82%
====== ===== ====== =====
18
UNAUDITED
TEXAS COMMERCE BANCSHARES, INC. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(in millions)
Three Months Ended
March 31,
-----------------
1994 1993
---- ----
NET INTEREST INCOME $ 162 $ 170
Provision for Losses (10) 6
------- -------
Net Interest Income After Provision
for Losses 172 164
NONINTEREST REVENUE 106 93
NONINTEREST EXPENSE 197 240(a)
------- -------
Income Before Income Tax Expense
and Effect of Accounting Changes 81 17
Income Tax Expense 30 2
------- -------
Income Before Effect of
Accounting Changes 51 15
Net Effect of Changes in Accounting
Principles -- 14
------- -------
NET INCOME $ 51 $ 29
======= =======
[FN]
(a) Includes a $43 million restructuring charge associated with the
First City Banks acquisition.
TEXAS COMMERCE BANCSHARES, INC. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEET
(in millions)
Three Months Ended
March 31,
------------------
1994 1993
----- -----
ASSETS
Cash and Due from Banks $ 2,235 $ 1,880
Deposits with Banks 5 15
Federal Funds Sold and Securities Purchased
Under Resale Agreements 5,093 4,776
Trading Assets 29(a) 17
Securities:
Held-to-Maturity 1,391 1,816
Available-for-Sale 1,452 465
Loans (Net of Unearned Income) 9,550 10,721
Allowance for Losses (338) (389)
Assets Acquired as Loan Satisfactions 80 168
All Other Assets 1,675 1,575
------- -------
TOTAL ASSETS $21,172 $ 21,044
======= =======
LIABILITIES
Demand Deposits (Noninterest Bearing) $ 5,872 $ 5,415
Domestic and Foreign Interest
Bearing Deposits 10,665 11,816
All Other Liabilities 2,857 2,103
------- -------
TOTAL LIABILITIES 19,394 19,334
STOCKHOLDER'S EQUITY 1,778 1,710
------- -------
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY $21,172 $ 21,044
======= =======
[FN]
(a) Includes $23 million of risk management instruments as a result
of the adoption of FASB Interpretation No. 39.
