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 Report: April 20, 1999 Commission file number 1-5805
THE CHASE MANHATTAN 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
1
Item 5. Other Events
- --------------------
The Chase Manhattan Corporation ("Chase") reported on April 20, 1999 operating
diluted earnings per share of $1.32 in the first quarter of 1999, compared to
$1.17 per share in the first quarter of 1998. Operating earnings and reported
net income in the quarter were each $1.17 billion compared with $1.05 billion
and $725 million, respectively, in the first quarter of 1998. Operating results
(revenues and earnings) exclude the impact of credit card securitizations,
restructuring costs and special items.
A copy of Chase's earnings press release is attached as an exhibit hereto. That
press release may contain statements that are forward-looking within the
meaning of the Private Securities Litigation Act of 1995. Such statements are
subject to risks and uncertainties and Chase's actual results may differ
materially from those set forth in such forward looking statements. Reference
is made to Chase's reports filed with the Securities and Exchange Commission,
in particular Chase's Annual Report on Form 10-K for the year ended December 31,
1998, for a discussion of factors that may cause such differences to occur.
2
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
The following exhibit is filed with this report:
Exhibit Number Description
99.1 Press Release - 1999 First Quarter Earnings.
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.
THE CHASE MANHATTAN CORPORATION
(Registrant)
Dated April 21, 1999 by /s/JOSEPH L. SCLAFANI
-------------- -----------------------
Joseph L. Sclafani
Executive Vice President and Controller
[Principal Accounting Officer]
4
EXHIBIT INDEX
Exhibit Number Description Page at Which Located
99.1 Press Release - 1999 First
Quarter Earnings 6
5
The Chase Manhattan Corporation
270 Park Avenue
New York, NY 10017-2070
{Chase Letterhead}
News Release
Chase Reports Record First Quarter 1999 Results;
Operating EPS Rises 13 Percent
New York, April 20, 1999 -- The Chase Manhattan Corporation (NYSE:CMB) today
reported operating diluted earnings per share of $1.32 in the first quarter of
1999, compared to $1.17 per share in the first quarter of 1998. Reported diluted
earnings per share were $1.32 in the 1999 first quarter and $.80 in the first
quarter of 1998. Operating earnings and reported net income in the quarter were
each $1.17 billion compared with $1.05 billion and $725 million, respectively,
in the first quarter of 1998.
First Quarter 1999 Financial Highlights
- - Operating revenues increased 10 percent to $5.4 billion.
- - Operating EPS increased by 13 percent to $1.32.
- - Shareholder value added (SVA) increased 17 percent to $501 million.
- - Return on common equity was 21 percent.
- - Chase repurchased approximately $885 million of common stock, on a
net basis, in the quarter. Even so, the estimated Tier 1 capital
ratio rose to 8.4 percent.
"First quarter results demonstrate the power of Chase's balanced business
portfolio, as well as the significant opportunities for profitable growth
ahead," said Walter V. Shipley, chairman and chief executive officer. "I am
confident that we have the right team and the right strategies in place to
translate the full potential of the franchise into consistent, long term value
for the shareholder."
----------------------------------------------
Investor contact: John Borden 212-270-7318
Press contact: Kathleen Baum 212-270-5089
Financial Performance
- --------------------------------------- ----------------------------------------
THE CHASE MANHATTAN CORP First Quarter
- --------------------------------------- --------------- --------------- --------
Dollars, in millions 1999 O(U) 1Q98 %
---- --------- ---
Operating Revenues $5,413 $498 10%
Cash Operating Earnings 1,246 132 12%
Shareholder Value Added 501 73 17%
Cash Return on Common Equity 22% --
- --------------------------------------- --------------- --------------- --------
Line-Of-Business Results
- --------------------------------------- ----------------------------------------
GLOBAL BANK First Quarter
- --------------------------------------- --------------- -------------- ---------
Dollars, in millions 1999 O(U) 1Q98 %
---- --------- ---
Operating Revenues $2,587 $202 8%
Cash Operating Earnings 844 83 11%
Shareholder Value Added 393 75 24%
Cash Return on Common Equity 25% --
- --------------------------------------- --------------- -------------- ---------
Cash operating earnings in Chase's Global Bank rose 11 percent to $844 million.
Revenues in the 1999 first quarter were $2.59 billion, an eight percent increase
from the prior year.
Trading revenues and related net interest income rose 21 percent to $837
million, a new record, benefiting from strong performance in traditional
products, including interest rate derivatives, and newer products, such as
equity derivatives. Securities gains realized in the quarter were $156 million,
compared to $83 million in the year-ago quarter.
Investment banking fees were $317 million, 12 percent lower than in the same
1998 quarter, reflecting the overall market decline in leveraged financings
offset in part by stronger fees in other areas. Chase continues to be the
world's leading provider of corporate debt, ranking first in global loan
syndications, while improving its market share in public debt underwriting. In
the first quarter of 1999, Chase rose to second in investment grade
underwriting, fourth in high yield bond underwriting and ninth in mergers and
acquisitions advisory.
Private equity-related investment gains in the 1999 first quarter were $325
million, 11 percent higher than in the first quarter of 1998, reflecting
continued strength in the equity markets and a more favorable environment for
IPOs, as well as the positive impact of maturing investments within the
portfolio.
- -------------------------------------- ---------------------------------------
GLOBAL SERVICES First Quarter
- --------------------------------------- --------------- -------------- --------
Dollars, in millions 1999 O(U) 1Q98 %
---- --------- ---
Operating Revenues $728 $58 9%
Cash Operating Earnings 114 (5) (4%)
Shareholder Value Added 23 (29) (56%)
Cash Return on Common Equity 16% --
- --------------------------------------- --------------- -------------- --------
Cash operating earnings within Global Services declined four percent to
$114 million. Operating revenues were $728 million, a nine percent increase
over the prior year quarter, driven by acquisitions and growth in core
custody products. Revenue growth was negatively affected by a decline in
balance-related revenues, the revaluation and reallocation of investment
portfolios from emerging to developed markets and by a reduction in structured
financings. Expenses in the quarter grew in excess of revenues, reflecting
ongoing investment spending and costs related to Year 2000.
- --------------------------------------- ---------------------------------------
NATIONAL CONSUMER SERVICES First Quarter
- --------------------------------------- --------------- -------------- --------
Dollars, in millions 1999 O(U) 1Q98 %
---- --------- ---
Operating Revenues $2,161 $230 12%
Cash Operating Earnings 350 63 22%
Shareholder Value Added 134 62 86%
Cash Return on Common Equity 21% --
- --------------------------------------- --------------- -------------- --------
National Consumer Services' cash operating earnings rose 22 percent from the
prior year quarter to $350 million. Operating revenues of $2.16 billion were
12 percent higher.
Operating revenues from cardmember services rose to $1.0 billion, an eight
percent increase from first quarter 1998 levels; cash operating earnings rose
three percent. These results reflect increased purchase volume and pricing
initiatives, partially offset by higher marketing costs. While credit costs
increased from first quarter 1998, the credit card charge-off rate declined from
fourth quarter 1998 levels.
Home finance revenues increased 13 percent to $272 million in the 1999 first
quarter. Higher origination volume and servicing balances were offset by a
decline in mortgage portfolio net interest income, and higher expenses stemming
from greater business volume and technology investment.
Regional consumer banking revenues were $577 million, a seven percent increase
over first quarter of 1998 levels. Results benefited from growth in managed
funds and increased fee income, primarily related to continued strong
performance of the Chase debit card. Cash operating earnings rose 25 percent.
Revenues from diversified consumer services increased 41 percent, driven by
strong growth in the auto finance business, with originations up 14 percent over
the prior year quarter, and in Chase's insurance and investment businesses.
Additional Financial Information
- - Total operating noninterest expenses were $2.94 billion in the first
quarter of 1999, 12 percent above the same 1998 quarter, reflecting
technology-related costs, incentive costs tied to higher market-sensitive
revenues and a change in the long term compensation program of the Global
Bank.
- - On a managed basis, credit costs were $655 million in the first quarter of
1999 compared with $628 million in the first quarter of 1998. Nonperforming
assets at March 31, 1999 were $1.67 billion compared with $1.61 billion at
December 31, 1998, and $1.34 billion at March 31, 1998. Net commercial
charge-offs in the first quarter of 1999 were $87 million, compared to $122
million in the fourth quarter of 1998 and $88 million in the first quarter
of 1998.
- - Total assets at March 31, 1999 were $361 billion compared with $366 billion
at both March 31, and December 31, 1998. Estimated risk-weighted assets
declined slightly to $288 billion from $289 billion at December 31, 1998.
Risk-weighted assets at March 31, 1998 were $281 billion. While the company
repurchased approximately $885 million, net, in common stock during the
quarter, the estimated Tier 1 capital ratio increased to 8.4 percent from
8.3 percent at December 31, 1998 and 8.1 percent at March 31, 1998.
Chase's target range for Tier 1 capital is 8 to 8.25 percent.
- - Operating results (revenues, expenses and earnings) exclude the impact of
credit card securitizations, restructuring costs and special items.
Restructuring costs in the 1998 first quarter included a charge of $320
million (after tax) in connection with initiatives to streamline support
functions and realign certain business units. There were no special items
in the 1999 first quarter.
Chase's news releases and quarterly financial results are available on the
Internet at www.chase.com.
THE CHASE MANHATTAN CORPORATION
SUMMARY OF SELECTED FINANCIAL HIGHLIGHTS
(in millions, except per share and ratio data)
As of or for the period ended First Quarter %
--------------------------- Over/(Under)
1999 1998 1QTR 98
----------- ------------ ----------
OPERATING BASIS (a)
Operating Revenue $ 5,413 $ 4,915 10%
Operating Noninterest Expense 2,940 2,616 12%
Credit Costs (b) 655 628 4%
Operating Earnings $ 1,173 $ 1,053 11%
Operating Earnings Per Common Share:
Basic $ 1.37 $ 1.21 13%
Diluted 1.32 1.17 13%
Cash Operating Earnings $ 1,246 $ 1,114 12%
Cash Operating Earnings Per Common Share -Diluted 1.41 1.25 13%
Shareholder Value Added (SVA) 501 428 17%
Operating Performance Ratios:
Return on Average Managed Assets (c) 1.24% 1.08%
Return on Average Common Equity (c) 20.6 20.3
Common Dividend Payout Ratio 30 30
Efficiency Ratio (d) 54 53
Selected Balance Sheet Items: (e)
Managed Loans $ 191,231 $ 186,067 3%
Total Managed Assets 379,640 383,838 (1%)
--------------------------------------------------------------------------------------------------
AS REPORTED BASIS
Revenue $ 5,144 $ 4,623 11%
Noninterest Expense (Excluding Restructuring Costs) 2,945 2,620 12%
Restructuring Costs - 521 NM
Provision for Loan Losses 381 332 15%
Net Income $ 1,173 $ 725 62%
Net Income Per Common Share:
Basic $ 1.37 $ 0.82 67%
Diluted 1.32 0.80 65%
Cash Dividends Declared 0.41 0.36 14%
Share Price at Period End 81.38 67.44 21%
Book Value at Period End 26.32 24.27 8%
Common Shares Outstanding:
Average Common Shares:
Basic 843.6 844.8
Diluted 871.9 867.4
Common Shares at Period End 845.0 851.7
Performance Ratios:
Return on Average Total Assets (c) 1.30% 0.78%
Return on Average Common Equity (c) 20.6 13.8
Selected Balance Sheet Items:
Loans $ 172,849 $ 167,944 3%
Total Assets 361,258 365,715 (1%)
Deposits 207,641 196,096 6%
Total Stockholders' Equity 23,268 22,041 6%
Capital Ratios:
Tier I Capital Ratio 8.4% (f) 8.1%
Total Capital Ratio 12.2 (f) 11.9
Tier I Leverage 6.6 (f) 6.0
Full-Time Equivalent Employees 73,322 70,259
(a) Excludes the impact of credit card securitizations, restructuring costs
and special items. For a reconciliation of Reported Results as shown on the
Consolidated Statement of Income to results on an Operating Basis, see page 9.
(b) Includes provision for loan losses, provision for risk management
instrument credit losses, foreclosed property expense and credit costs related
to the securitized credit card portfolio.
(c) Based on annualized amounts.
(d) Noninterest expense as a percentage of the total of net interest income
and noninterest revenue (excluding restructuring costs, foreclosed property
expense, provision for risk management instrument credit losses, special
items and costs associated with the REIT).
(e) Excludes the impact of credit card securitizations.
(f) Estimated
NM - Not meaningful
Unaudited
THE CHASE MANHATTAN CORPORATION
Lines of Business Results
(in millions, except ratios)
National Consumer
Global Bank (a) Services (a) Global Services (a) Total (b)
---------------------- ----------------------- ----------------------- ---------------------
Over / Over / Over / Over /
First Quarter 1999 (Under) 1998 1999 (Under) 1998 1999 (Under) 1998 1999 (Under)1998
---- ------------ ---- ----------- ---- ------------ ---- -----------
Operating Revenue $ 2,587 $ 202 8% $2,161 $ 230 12% $ 728 $ 58 9% $5,413 $ 498 10%
Cash Operating Earnings 844 83 11 350 63 22 114 (5) (4) 1,246 132 12
Average Common Equity 13,736 537 4 6,577 158 2 2,794 795 40 22,692 2,343 12
Average Managed Assets (c) 248,813 (22,966) (8) 112,176 7,081 7 15,507 2,736 21 384,896 (9,963) (3)
Shareholder Value Added (SVA) 393 75 24 134 62 86 23 (29) (56) 501 73 17
Cash Return on Common Equity 24.6% 180 bp 21.3% 370 bp 16.3% (730) bp 21.9% 40 bp
Cash Efficiency Ratio 45 (100) 48 (100) 76 500 53 100
GLOBAL BANK
KEY FINANCIAL MEASURES
First Quarter 1999 Over / (Under) 1Q98
--------------------------------------- ------------------------------------------
Cash Cash Cash Cash
Operating Operating Efficiency Operating Operating Efficiency
Revenues Earnings Ratio Revenues Earnings Ratio
--------- ---------- ---------- --------- --------- ---------
Global Markets $ 1,278 $ 490 40% 29% 46% (800)bp
Global Investment Banking 220 5 98 (37) (94) 4,000
Corporate Lending 397 146 26 8 24 (400)
Chase Capital Partners 271 151 12 -- 1 100
Global Private Bank 215 43 66 4 -- 100
Middle Markets 247 55 57 (1) (4) 300
Other Global Bank (41) (46) NM NM NM NM
--------- -------
Totals $ 2,587 $ 844 45% 8% 11% (100)bp
========= =======
Chase Texas (consolidated) (a) $ 391 $ 97 59% 9% 2% 200 bp
NATIONAL CONSUMER SERVICES
KEY FINANCIAL MEASURES
First Quarter 1999 Over / (Under) 1Q98
--------------------------------------- ------------------------------------------
Cash Cash Cash Cash
Operating Operating Efficiency Operating Operating Efficiency
Revenues Earnings Ratio Revenues Earnings Ratio
--------- ---------- ---------- --------- --------- ---------
Chase Cardmember Services $ 1,001 $ 117 34% 8% 3% 100 bp
Regional Consumer Banking 577 101 70 7 25 (400)
Chase Home Finance 272 64 58 13 (2) 900
Diversified Consumer Services 291 58 48 41 205 (1,000)
Other NCS 20 10 NM NM NM NM
-------- ------
Totals $ 2,161 $ 350 48% 12% 22% (100)bp
======== ======
Note: SVA is Chase's primary measure of business unit performance. SVA
represents operating earnings excluding the amortization of goodwill and
certain intangibles (i.e., cash operating earnings), less preferred
dividends and an explicit charge for allocated capital. Additional
refinements were made to the methodology for the allocation of capital to
businesses. Prior periods have been restated to reflect these changes.
(a) All product revenues and expenses for Chase Texas have been allocated
to the appropriate lines of business. Chase Texas (consolidated) is
presented as a memo item only.
(b) Total column includes Corporate results.
(c) Excludes the impact of credit card securitizations.
NM - Not meaningful
bp - basis points
Unaudited
THE CHASE MANHATTAN CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(in millions, except per share data)
First Quarter %
----------------------- Over/(Under)
1999 1998 1QTR 98
---------- --------- ---------
INTEREST INCOME
Loans $ 3,209 $ 3,405 (6%)
Securities 835 889 (6%)
Trading Assets 418 676 (38%)
Federal Funds Sold and Securities
Purchased Under Resale Agreements 381 671 (43%)
Deposits with Banks 184 152 21%
---------- ---------
Total Interest Income 5,027 5,793 (13%)
---------- ---------
INTEREST EXPENSE
Deposits 1,598 1,815 (12%)
Short-Term and Other Borrowings 914 1,509 (39%)
Long-Term Debt 311 305 2%
---------- ---------
Total Interest Expense 2,823 3,629 (22%)
---------- ---------
NET INTEREST INCOME 2,204 2,164 2%
Provision for Loan Losses 381 332 15%
NET INTEREST INCOME ---------- ---------
AFTER PROVISION FOR LOAN LOSSES 1,823 1,832 --
---------- ---------
NONINTEREST REVENUE
Investment Banking Fees 317 361 (12%)
Trust, Custody and Investment Management Fees 414 348 19%
Credit Card Revenue 379 300 26%
Fees for Other Financial Services 553 510 8%
Trading Revenue 618 480 29%
Provision for Risk Management Instrument Credit Losses -- (12) NM
Securities Gains 156 83 88%
Private Equity Gains 325 293 11%
Other Revenue 178 96 85%
---------- ---------
Total Noninterest Revenue 2,940 2,459 20%
---------- ---------
NONINTEREST EXPENSE
Salaries 1,384 1,254 10%
Employee Benefits 255 224 14%
Occupancy Expense 218 189 15%
Equipment Expense 243 209 16%
Other Expense 845 744 14%
---------- ---------
Total Noninterest Expense Before Restructuring Costs 2,945 2,620 12%
Restructuring Costs -- 521 NM
---------- ---------
Total Noninterest Expense 2,945 3,141 (6%)
---------- ---------
INCOME BEFORE INCOME TAX EXPENSE 1,818 1,150 58%
Income Tax Expense 645 425 52%
========== =========
NET INCOME $ 1,173 $ 725 62%
========== =========
NET INCOME APPLICABLE TO COMMON STOCK $ 1,155 $ 691 67%
========== =========
NET INCOME PER COMMON SHARE:
Basic $ 1.37 $ 0.82 67%
Diluted $ 1.32 $ 0.80 65%
NM - Not meaningful
Certain amounts have been reclassified to conform to the current
presentation.
Unaudited
THE CHASE MANHATTAN CORPORATION
NONINTEREST REVENUE AND NONINTEREST EXPENSE DETAIL
(in millions)
First Quarter %
------------------------ Over/(Under)
NONINTEREST REVENUE 1999 1998 1998
---------- ---------- ----------
Fees for Other Financial Services:
Service Charges on Deposit Accounts $ 89 $ 91 (2%)
Fees in Lieu of Compensating Balances 87 80 9%
Commissions on Letters of Credit and Acceptances 69 74 (7%)
Mortgage Servicing Fees 65 57 14%
Brokerage and Investment Services 43 32 34%
Insurance Fees (a) 39 31 26%
Loan Commitment Fees 31 38 (18%)
Other Fees 130 107 21%
---------- ----------
Total $ 553 $ 510 8%
========== ==========
Trading-Related Revenue: (b)
Interest Rate Contracts $ 322 $ 141 128%
Foreign Exchange Contracts 199 286 (30%)
Debt Instruments, Equities and Commodities 316 265 19%
---------- ----------
Total $ 837 $ 692 21%
========== ==========
Other Revenue:
Residential Mortgage Origination/Sales Activities $ 92 $ 52 77%
All Other Revenue 86 44 95%
========== ==========
Total $ 178 $ 96 85%
========== ==========
----------------------------------------------------------------------------------------------------------------------
NONINTEREST EXPENSE
Other Expense:
Professional Services $ 162 $ 142 14%
Marketing Expense 114 90 27%
Telecommunications 91 77 18%
Amortization of Intangibles 73 61 20%
Travel and Entertainment 50 52 (4%)
Minority Interest (c) 13 12 8%
Foreclosed Property Expense 5 4 25%
All Other 337 306 10%
========== ==========
Total $ 845 $ 744 14%
========== ==========
(a) Excludes certain insurance fees related to credit cards and mortgage
products, which are included in those revenue captions.
(b) Includes net interest income attributable to trading activities.
(c) Includes REIT minority interest expense of $11 million in each quarter.
Certain amounts have been reclassified to conform to the current presentation.
Unaudited
THE CHASE MANHATTAN CORPORATION
OPERATING INCOME RECONCILIATION
(in millions, except per share data)
-------------------------------------------------------------------------------------------------------------------------
FIRST QUARTER 1999
-------------------------------------------------------------------------------------------------------------------------
CREDIT
REPORTED CREDIT CARD SPECIAL OPERATING
RESULTS (a) COSTS (b) SECURITIZATIONS(c) ITEMS(d) BASIS
EARNINGS
Market-Sensitive Revenue $ 1,635 $ - $ - $ - $1,635
Less Market-Sensitive Revenue 3,509 - 269 - 3,778
----------- ---------- ---------- --------- ----------
Total Revenue 5,144 - 269 - 5,413
Noninterest Expense 2,945 (5) - - 2,940
----------- ---------- ---------- --------- ----------
Operating Margin 2,199 5 269 - 2,473
Credit Costs 381 5 269 - 655
----------- ---------- ---------- --------- ----------
Income Before Restructuring Costs 1,818 - - - 1,818
Restructuring Costs - - - - -
----------- ---------- ---------- --------- ----------
Income Before Income Tax Expense 1,818 - - - 1,818
Tax Expense 645 - - - 645
----------- ---------- ---------- --------- ----------
Net Income $ 1,173 $ - $ - $ - $1,173
----------- ---------- ---------- --------- ----------
NET INCOME PER COMMON SHARE
Basic $ 1.37 $ 1.37
Diluted $ 1.32 $ 1.32
-------------------------------------------------------------------------------------------------------------------------
FIRST QUARTER 1998
-------------------------------------------------------------------------------------------------------------------------
CREDIT
REPORTED CREDIT CARD SPECIAL OPERATING
RESULTS (a) COSTS (b) SECURITIZATIONS(c) ITEMS (d) BASIS
EARNINGS
Market-Sensitive Revenue $ 1,417 $ 12 $ - $ - $1,429
Less Market-Sensitive Revenue 3,206 - 280 - 3,486
----------- ---------- ---------- --------- ----------
Total Revenue 4,623 12 280 - 4,915
Noninterest Expense 2,620 (4) - - 2,616
----------- ---------- ---------- --------- ----------
Operating Margin 2,003 16 280 - 2,299
Credit Costs 332 16 280 - 628
----------- ---------- ---------- --------- ----------
Income Before Restructuring Costs 1,671 - - - 1,671
Restructuring Costs 521 - - (521) -
----------- ---------- ---------- --------- ----------
Income Before Income Tax Expense 1,150 - - 521 1,671
Tax Expense 425 - - 193 618
----------- ---------- ---------- --------- ----------
Net Income $ 725 $ - $ - $ 328 $1,053
----------- ---------- ---------- --------- ----------
NET INCOME PER COMMON SHARE
Basic $ 0.82 $ 1.21
Diluted $ 0.80 $ 1.17
-------------------------------------------------------------------------------------------------------------------------
(a) Represent results shown in Chase's financial statements, except that
revenues are categorized between market-sensitive revenue and less market-
sensitive revenue, and restructuring costs have been separately displayed.
Market-sensitive revenue includes investment banking fees, trading-related
revenue - including trading-related net interest income, securities gains
and private equity gains.
(b) For purposes of Operating Basis presentation, the provision for risk
management instrument credit losses is reclassified from noninterest
revenue to credit costs and foreclosed property expense is reclassified
from noninterest expense to credit costs.
(c) Excludes the impact of credit card securitizations.
(d) Includes restructuring costs and special items. There were no special
items in the first quarter of 1999. The first quarter of 1998 included a
$510 million pre-tax charge ($320 million after tax) taken in connection
with initiatives to streamline support functions, and merger-related
restructuring costs of $11 million pre-tax ($8 million after tax).
Unaudited
THE CHASE MANHATTAN CORPORATION
CONSOLIDATED BALANCE SHEET
(in millions)
%
March 31, Over/(Under)
----------------------------------- Mar. 31,
1999 1998 1998
--------------- --------------- ---------------
ASSETS
Cash and Due from Banks $ 18,306 $ 14,906 23%
Deposits with Banks 3,437 3,465 (1%)
Federal Funds Sold and Securities
Purchased Under Resale Agreements 24,867 23,739 5%
Trading Assets:
Debt and Equity Instruments 27,572 36,658 (25%)
Risk Management Instruments 28,362 34,587 (18%)
Securities 56,613 59,819 (5%)
Loans 172,849 167,944 3%
Allowance for Loan Losses (3,552) (3,622) (2%)
--------------- --------------
Net Loans 169,297 164,322 3%
Other Assets 32,804 28,219 16%
--------------- ---------------
TOTAL ASSETS $ 361,258 $ 365,715 (1%)
=============== ===============
LIABILITIES
Deposits:
Domestic:
Noninterest-Bearing $ 47,380 $ 45,091 5%
Interest-Bearing 81,885 77,373 6%
Foreign:
Noninterest-Bearing 4,221 3,289 28%
Interest-Bearing 74,155 70,343 5%
--------------- --------------
Total Deposits 207,641 196,096 6%
Federal Funds Purchased and Securities
Sold Under Repurchase Agreements 51,116 55,715 (8%)
Commercial Paper 4,965 5,125 (3%)
Other Borrowed Funds 5,982 6,503 (8%)
Trading Liabilities 35,675 48,411 (26%)
Accounts Payable, Accrued Expenses and Other Liabilities 13,695 14,979 (9%)
Long-Term Debt 16,178 14,355 13%
Guaranteed Preferred Beneficial Interests in Corporation's
Junior Subordinated Deferrable Interest Debentures 13%
2,188 1,940
--------------- ---------------
TOTAL LIABILITIES 337,440 343,124 (2%)
--------------- ---------------
PREFERRED STOCK OF SUBSIDIARY 550 550 --
--------------- ---------------
STOCKHOLDERS' EQUITY
Preferred Stock 1,028 1,368 (25%)
Common Stock 882 441 100%
Capital Surplus 9,542 10,141 (6%)
Retained Earnings 14,351 11,471 25%
Accumulated Other Comprehensive Income (99) 134 NM
Treasury Stock, at Cost (2,436) (1,514) 61%
--------------- ---------------
TOTAL STOCKHOLDERS' EQUITY 23,268 22,041 6%
--------------- ---------------
TOTAL LIABILITIES, PREFERRED STOCK OF SUBSIDIARY
AND STOCKHOLDERS' EQUITY $ 361,258 $ 365,715 (1%)
=============== ===============
NM - Not meaningful
Unaudited
THE CHASE MANHATTAN CORPORATION
CONSOLIDATED STATEMENT OF CHANGES
IN STOCKHOLDERS' EQUITY
(in millions)
For The Three Months Ended
March 31,
-----------------------------------
1999 1998
------------- -------------
Preferred Stock:
Balance at Beginning of Year $ 1,028 $ 1,740
Redemption of Stock - (372)
------------- -------------
Balance at End of Period $ 1,028 $ 1,368
------------- -------------
Common Stock:
Balance at Beginning and End of Period $ 882 $ 441
------------- -------------
Capital Surplus:
Balance at Beginning of Year $ 9,836 $ 10,360
Shares Issued and Commitments to Issue Common Stock
for Employee Stock-Based Awards and Related Tax Effects (294) (219)
------------- -------------
Balance at End of Period $ 9,542 $ 10,141
------------- -------------
Retained Earnings:
Balance at Beginning of Year $ 13,544 $ 11,086
Net Income 1,173 725
Cash Dividends Declared:
Preferred Stock (18) (34)
Common Stock (348) (306)
------------- -------------
Balance at End of Period $ 14,351 $ 11,471
------------- -------------
Accumulated Other Comprehensive Income:
Balance at Beginning of Year $ 392 $ 112
Other Comprehensive Income (491) 22
------------- -------------
Balance at End of Period $ (99) $ 134
------------- -------------
Treasury Stock, at Cost:
Balance at Beginning of Year $ (1,844) $ (1,997)
Purchase of Treasury Stock (1,661) (73)
Reissuance of Treasury Stock 1,069 556
------------- -------------
Balance at End of Period $ (2,436) $ (1,514)
------------- -------------
Total Stockholders' Equity $ 23,268 $ 22,041
============= =============
-----------------------------------------------------------------------------------------------------------
Comprehensive Income:
Net Income $ 1,173 $ 725
Other Comprehensive Income (Loss) (491) 22
============= =============
Comprehensive Income $ 682 $ 747
============= =============
Unaudited
THE CHASE MANHATTAN CORPORATION
CREDIT RELATED INFORMATION
(in millions, except ratios)
Credit-Related Assets % Nonperforming Assets %
--------------------------- Over/(Under) -------------------------- Over/(Under)
March 31, 1999 1998 1998 1999 1998 1998
------------------------------------ ------------ ------------ ---------- ------------ ----------- ---------
CONSUMER LOANS
Domestic Consumer:
1-4 Family Residential Mortgages $ 41,822 $ 42,629 (2%) $ 314 $ 376 (16%)
Credit Card - Reported 13,013 13,268 (2%) -- -- --
Credit Card Securitizations (a) 18,382 18,123 1% -- -- --
----------- ------------ ------------ -----------
Credit Card - Managed 31,395 31,391 -- -- -- --
Other Consumer 25,486 22,224 15% 59 29 103%
------------ ------------ ------------ -----------
Total Domestic Consumer 98,703 96,244 3% 373 405 (8%)
Total Foreign Consumer 3,933 4,017 (2%) 26 22 18%
------------ ------------ ------------ -----------
Total Consumer Loans 102,636 100,261 2% 399 427 (7%)
------------ ------------ ------------ -----------
COMMERCIAL LOANS
Domestic Commercial:
Commercial and Industrial 50,403 43,600 16% 383 368 4%
Commercial Real Estate 4,019 4,948 (19%) 59 66 (11%)
------------ ------------ ------------ -----------
Total Domestic Commercial 54,422 48,548 12% 442 434 2%
Total Foreign Commercial 34,173 37,258 (8%) 676 304 122%
------------ ------------ ------------ -----------
Total Commercial Loans 88,595 85,806 3% 1,118 738 51%
------------ ------------ ------------ -----------
Derivative and FX Contracts 28,850 35,362 (18%) 32 40 (20%)
------------ ------------ ------------ -----------
Total Commercial Credit-Related 117,445 121,168 (3%) 1,150 778 48%
------------ ------------ ------------ -----------
Total Managed Credit-Related $220,081 $ 221,429 (1%) 1,549 1,205 29%
============ ============ ------------ -----------
Assets Acquired as Loan Satisfactions 125 130 (4%)
------------ -----------
Total Nonperforming Assets $ 1,674 $ 1,335 25%
============ ===========
--------------------------------------------------------------------------------------------------------------------------------
Net Charge-Offs % Net Charge-Off Rate (b)
--------------------------- Over/(Under) -------------------------
First Quarter 1999 1998 1QTR 98 1999 1998
--------------------------------- ------------- ------------ ---------- ------------ -----------
CONSUMER LOANS
Domestic Consumer:
1-4 Family Residential Mortgages $ 1 $ 10 (90%) .01% .10%
Credit Card - Reported 216 179 21% 6.44 4.93
Credit Card Securitizations (a) 269 280 (4%) 5.99 6.49
------------ ------------
Credit Card - Managed 485 459 6% 6.18 5.77
Other Consumer 67 64 5% 1.06 1.09
------------ ------------
Total Domestic Consumer 553 533 4% 2.24 2.23
Total Foreign Consumer 9 3 200% .99 .30
------------ ------------
Total Consumer Loans 562 536 5% 2.20 2.15
------------ ------------
COMMERCIAL LOANS
Domestic Commercial:
Commercial and Industrial 45 9 400% .36 .08
Commercial Real Estate (9) (3) NM NM NM
------------ ------------
Total Domestic Commercial 36 6 500% .27 .05
Total Foreign Commercial 51 70 (27%) .58 .71
------------ ------------
Total Commercial Loans 87 76 14% .39 .34
------------ ------------
Derivative and FX Contracts -- 12 NM -- .12
------------ ------------
Total Commercial 87 88 (1%) .29 .27
------------ ------------
Total Managed Net Charge-offs $ 649 $ 624 4% 1.17% 1.09%
============ ============
(a) Represents the portion of Chase's credit card receivables that have been
securitized.
(b) Annualized
NM - Not meaningful
Unaudited
THE CHASE MANHATTAN CORPORATION
CREDIT RELATED INFORMATION (Continued)
As of or For The
Three Months Ended
March 31,
MANAGED CREDIT CARD PORTFOLIO * ----------------------
(in millions, except ratios) 1999 1998
------------------------------------------------ ---------- ----------
Average Credit Card Receivables $ 32,093 $32,430
Past Due 90 Days or More and Accruing $ 627 $ 656
As a Percentage of Average Credit Card Receivables 1.95% 2.02%
Net Charge-offs $ 490 $ 462
As a Percentage of Average Credit Card Receivables 6.11% 5.70%
* Includes domestic and international credit
card activity.
------------------------------------------------------------------------------------------------------------------------------
SELECTED COUNTRY EXPOSURE (a)
(in billions)
At Dec.31, At Mar.31,
At March 31, 1999 1998 1998
--------------------------------------------------------------------------- ---------- ----------
Net Total Total Total
Local Foreign Resale Cross- Cross- Cross-
Lending- Trading- Country Exchange and Agree- Border Border Border
LATIN AMERICA Related (b) Related (c) Assets (d) Derivatives(e) ments (f) Exposure Exposure Exposure
---------------------- --------- ---------- ---------- -------------- --------- -------- -------- --------
Brazil $ 1.4 $ 0.2 $ 0.5 $ 0.1 $ 1.0 $ 3.2 $ 3.2 $ 4.3
Argentina 2.0 0.3 0.1 0.1 0.6 3.1 2.8 3.3
Mexico 1.2 0.2 0.2 0.3 0.6 2.5 2.2 3.1
Chile 0.9 - - - - 0.9 0.9 0.9
Colombia 0.8 - - - - 0.8 0.8 0.8
Venezuela 0.2 0.1 - - - 0.3 0.4 0.7
All Other Latin America (g) 0.1 - - 0.2 0.1 0.4 1.0 0.9
----------- ---------- -------- ---------- ---------- ---------- ---------- ----------
Total Latin America $ 6.6 $ 0.8 $ 0.8 $ 0.7 $ 2.3 $ 11.2 $11.3 $14.0
----------- ---------- -------- ---------- ---------- ---------- ---------- ----------
ASIA
----------------------
South Korea $ 0.9 $ - $ 0.7 $ 0.3 $ 0.1 $ 2.0 $ 2.4 $ 3.8
Indonesia 1.0 - - 0.1 - 1.1 1.2 1.8
Thailand 0.1 - 0.7 0.1 - 0.9 0.9 1.2
----------- ---------- -------- ---------- ---------- ---------- ---------- ----------
Subtotal 2.0 - 1.4 0.5 0.1 4.0 4.5 6.8
Hong Kong 0.5 - - 0.2 - 0.7 0.8 1.0
Singapore 0.7 - - 0.1 - 0.8 0.8 1.4
Philippines 0.2 - 0.2 - - 0.4 0.6 0.8
Malaysia 0.2 - 0.5 - - 0.7 0.6 0.8
China 0.5 - 0.1 0.1 - 0.7 0.6 0.7
All Other Asia 0.4 - 0.2 - - 0.6 0.5 0.7
----------- ---------- -------- ---------- ---------- ---------- ---------- ----------
Total Asia excluding
Japan, Australia
and New Zealand $ 4.5 $ - $ 2.4 $ 0.9 $ 0.1 $ 7.9 $ 8.4 $12.2
----------- ---------- -------- ---------- ---------- ---------- ---------- ----------
Japan $ 3.1 $ 0.8 $ - $ 1.6 $ 0.5 $ 6.0 $ 6.9 $ 9.4
Australia 0.4 - 0.7 0.5 - 1.6 1.9 2.5
New Zealand 0.6 - - - - 0.6 0.6 -
---------- ---------- -------- ---------- ---------- ---------- ---------- ----------
Total Japan, Australia
and New Zealand $ 4.1 $ 0.8 $ 0.7 $ 2.1 $ 0.5 $ 8.2 $ 9.4 $11.9
---------- ---------- -------- ---------- ---------- ---------- ---------- ----------
(a) Estimated cross-border disclosure is based on the Federal Financial
Institutions Examination Council ("FFIEC") guidelines governing the
determination of cross-border risk.
(b) Includes loans and accrued interest, interest-bearing deposits with
banks, acceptances, other monetary assets, issued letters of credit and
undrawn commitments to extend credit.
(c) Includes cross-border trading debt and equity instruments.
(d) Represents local country assets less local country liabilities. At
March 31, 1999, the amounts of local country assets that have been netted
against local country liabilities in accordance with the FFIEC definition
of cross border exposure were $5.0 billion for Hong Kong, $2.0 billion
for Japan, $1.6 billion for Australia, $0.7 billion for Brazil, $0.6
billion for Panama, $0.4 billion for each of South Korea and Singapore
and $1.5 billion for the other countries presented above, none of which
exceed $0.3 billion.
(e) Represents mark-to-market exposure of foreign exchange and derivative
contracts. The amounts are presented after taking into account the impact
of legally enforceable master netting agreements.
(f) Approximately $0.8 billion (or 36%) of the exposure to Latin America
and approximately $0.4 billion (or 80%) of the exposure to Japan
represents resale agreements with investment grade counterparties from G-7
(Group of 7) countries. G-7 countries are the United States, United Kingdom,
Germany, Japan, Italy, France, and Canada.
(g) Excludes Bermuda and Cayman Islands.
Unaudited
THE CHASE MANHATTAN CORPORATION
Condensed Average Consolidated Balance Sheet, Interest and Rates
(Taxable-Equivalent Interest and Rates; in millions)
Three Months Ended Three Months Ended
March 31, 1999 March 31, 1998
-------------------------------------- --------------------------------------
Average Rate Average Rate
Balance Interest (Annualized) Balance Interest (Annualized)
ASSETS
Liquid Interest-Earning Assets $ 58,779 $ 983 6.78% $ 75,372 $ 1,499 8.07%
Securities 59,132 839 5.75% 55,587 894 6.52%
Loans 172,918 3,209 7.53% 170,491 3,405 8.10%
------- -------- -------- --------
Total Interest-Earning Assets 290,829 5,031 7.02% 301,450 5,798 7.80%
Noninterest-Earning Assets 76,100 76,142
-------- --------
Total Assets $366,929 $ 377,592
======== ========
LIABILITIES
Interest-Bearing Deposits $162,975 1,598 3.98% $151,310 1,815 4.86%
Short-Term and Long-Term Debt 88,247 1,225 5.63% 105,582 1,814 6.97%
-------- -------- -------- --------
Total Interest-Bearing Liabilities 251,222 2,823 4.56% 256,892 3,629 5.73%
Noninterest-Bearing Deposits 47,980 -------- 44,566
Other Noninterest-Bearing Liabilities 43,457 53,555
-------- ---------
Total Liabilities 342,659 355,013
-------- ---------
PREFERRED STOCK OF SUBSIDIARY 550 550
-------- ---------
STOCKHOLDERS' EQUITY
Preferred Stock 1,028 1,680
Common Stockholders' Equity 22,692 20,349
-------- ---------
Total Stockholders' Equity 23,720 22,029
-------- ---------
Total Liabilities, Preferred Stock of
Subsidiary and Stockholders' Equity $366,929 $377,592
======== =========
INTEREST RATE SPREAD 2.46% 2.07%
NET INTEREST INCOME AND NET YIELD ===== =====
ON INTEREST-EARNING ASSETS $2,208 3.08% $ 2,169 2.92%
====== ===== ======= =====
NET INTEREST INCOME AND NET YIELD
ON INTEREST-EARNING ASSETS (a) $2,535 3.33% $ 2,517 3.20%
====== ===== ======= =====
(a) Excludes the impact of the credit card securitizations.
Unaudited