SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of the Report: October 18, 1995 Commission file number 1-5805
---------------- ------
CHEMICAL BANKING CORPORATION
----------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-2624428
- ---------------------------- -----------------
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
270 Park Avenue, New York, NY 10017
- ----------------------------- --------------
(Address of principal executive Offices) (Zip Code)
Registrant's telephone number, including area code (212) 270-6000
2
Item 5. Other Events
1. Chemical Banking Corporation (the "Corporation") announced on October 17,
1995, that its 1995 third quarter net income was $477 million, an increase
of 9 percent from net income of $439 million for the same period a year
ago. The Corporation's 1995 third quarter primary earnings per share
increased 9 percent to $1.74 per share, compared with $1.59 per share in
the third quarter of 1994. Fully diluted earnings per share for the 1995
third quarter were $1.70, compared with $1.56 in the prior year period.
For the first nine months of 1995, net income was $1,315 million, an
increase of 18 percent from $1,115 million in the first nine months of
1994. Primary earnings per share in the first nine months of 1995 increased
23 percent to $4.91 per share, compared with $3.98 per share in the first
nine months of 1994. Fully diluted earnings per share for the first nine
months of 1995 were $4.62, compared with $3.92 for the same period in 1994.
A copy of the Corporation's Press Release announcing the results of
operations for the 1995 third 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
-------------- -----------
99.1 Press Release - 1995 Third 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.
CHEMICAL BANKING CORPORATION
(Registrant)
Dated October 18, 1995 by /s/Joseph L. Sclafani
---------------- ---------------------------
Joseph L. Sclafani
Controller
[Principal Accounting Officer]
4
EXHIBIT INDEX
Exhibit Number Description Page at Which Located
- -------------- ----------- ---------------------
99.1 Press Release - 1995 Third
Quarter Earnings 5
5
Press Contact: Ken Herz
212- 270-4621
John Stefans
212- 270-7438
Investor Contact: John Borden
212- 270-7318
New York, October 17, 1995 -- Chemical Banking Corporation today
reported net income for the third quarter of $477 million, up 9 percent from net
income of $439 million in the same period of 1994. Primary earnings per share
increased 9 percent to $1.74, compared with $1.59 in the third quarter of 1994.
Fully diluted earnings per share were $1.70, compared with $1.56 a year ago.
For the first nine months of 1995, net income was $1.315 billion, an
increase of 18 percent from $1.115 billion in the first nine months of 1994.
Primary earnings per share were up 23 percent to $4.91 per share, compared with
$3.98 per share in the comparable period of 1994. Fully diluted earnings per
share were $4.62, compared with $3.92 a year ago.
"This was an excellent quarter, with core earnings up more than 20
percent," said Walter V. Shipley, chairman and chief executive officer. "Gains
in our global finance, regional banking and national consumer businesses led to
another increase in the operating margin and further improvement in our
efficiency ratio. We are solidly on track in achieving our announced performance
goals."
The corporation's return on average common stockholders' equity was
17.34 percent for the third quarter, compared with 16.92 percent a year ago. The
efficiency ratio was 58 percent, compared with 63 percent for the third quarter
of 1994. The corporation's estimated Tier I risk-based capital ratio was 7.9
percent at September 30, compared with 8.0 percent a year ago. At September 30,
the estimated total risk-based capital ratio was 11.6 percent, compared with
12.0 percent a year ago.
6
NET INTEREST INCOME
Net interest income for the third quarter was $1,197 million, compared
with $1,177 million last year. The increase in net interest income is
attributable to an increase in average interest-earning assets, to $143.2
billion, compared with $129.5 billion last year. The increase included $9.7
billion in loans, primarily to consumers.
The net yield on average interest-earning assets was 3.34 percent in
the third quarter, compared with 3.63 percent in the third quarter of 1994. The
decline reflected narrower loan spreads and the impact of higher interest rates,
partially offset by an increased contribution from noninterest-bearing funds.
NONINTEREST REVENUE
Noninterest revenue for the third quarter was $977 million, compared
with $984 million in the third quarter of 1994. The year-ago period included $80
million from the sale of emerging markets-related past-due interest bonds.
Trust and investment management fees were $96 million, compared with
$104 million last year, partly reflecting the accounting on an equity basis,
beginning in 1995, of the shareholder services joint venture with Mellon Bank
Corporation.
Corporate finance and syndication fees were a record $157 million, up
from $97 million in the third quarter a year ago, reflecting increases in global
investment banking activities, especially loan syndications and new issues of
high-yield securities. Fees for other financial services were $307 million,
compared with $285 million in the third quarter of 1994, reflecting higher
results from the credit card operation and increased brokerage fees.
Combined noninterest revenues from all trading activities were $213
million in the third quarter, compared with $212 million in 1994. Net interest
income related to trading activities in the third quarter of 1995 was $52
million, compared with $13 million in 1994.
Securities gains in the third quarter were $47 million, compared with
gains of $6 million in the third quarter of 1994, reflecting increased emphasis
on securities investment activities in available-for-sale portfolios.
Other noninterest revenue in the third quarter was $82 million,
compared with $202 million a year ago. Revenues from equity and equity-related
investments were $77 million, compared with $86 million in the same period a
year ago. Other noninterest revenue also included a loss of approximately $36
million related to the disposition of developing market loans.
7
NONINTEREST EXPENSE
Noninterest expense in the third quarter was $1,257 million, down 4
percent from $1,311 million in the third quarter of 1994, and compared with
$1,248 million in the second quarter of 1995. The lower expense level in the
third quarter reflects reduced FDIC premium expense of approximately $42 million
when compared with 1994. Incentive costs were higher in the third quarter than a
year ago as a result of stronger earnings and the vesting of various stock-based
incentive plans due to the improvement in the corporation's stock price.
Through the first nine months of 1995, the corporation is on target to
meet or exceed its goal of flat expenses this year, benefiting from its margin
improvement program.
PROVISION AND ALLOWANCE FOR CREDIT LOSSES
The provision for losses was $122 million in the third quarter,
compared with $100 million in the third quarter of 1994 and $120 million in the
second quarter of 1995.
Total net charge-offs were $147 million in the third quarter, compared
with $125 million in the third quarter of 1994 and $145 million in the second
quarter of 1995.
At September 30, the total allowance for credit losses was $2,405
million, compared with $2,650 million on the same date a year ago.
NONPERFORMING ASSETS
At September 30, total nonperforming assets were $1,047 million, down
from $1,118 million at June 30 and down $1,146 million, from $2,193 million on
September 30, 1994.
Nonperforming loans at September 30 were $991 million, compared with
$1,064 million at June 30 and $1,524 million a year ago. Assets acquired as loan
satisfactions were $56 million at September 30, compared with $54 million at
June 30 and down from $669 million on September 30, 1994.
OTHER FINANCIAL DATA
On October 6, the corporation sold its banking operations in southern
and central New Jersey to PNC Bank Corp. The transaction is not reflected in the
corporation's third quarter results. The sale did not include Chemical's
franchise in northeastern New Jersey, where it retains 39 branches and private
banking operations.
8
The corporation's effective tax rate was 40.0 percent and 41.5 percent
in the third quarters of 1995 and 1994, respectively.
The impact of marking "available for sale" securities to market
resulted in a net unfavorable impact of approximately $135 million after-tax on
the corporation's stockholders' equity at September 30, compared with a net
unfavorable impact of $216 million after-tax at June 30. The market valuation
does not include the impact of related funding sources.
Total assets at September 30 were $187.9 billion, compared with $169.3
billion on the same date a year ago. Total loans at September 30 were $85.6
billion, compared with $77.1 billion at September 30, 1994, reflecting improving
trends in loan growth, especially to consumers. At the end of the third quarter,
total deposits were $96.8 billion, compared with $93.0 billion at September 30,
1994.
The return on average total assets for the third quarter was 1.04
percent, compared with 1.03 percent in the same year-ago period.
Book value per share was $41.90 at September 30, versus $38.29 per
share on the same date a year ago.
# # #
9
UNAUDITED
CHEMICAL BANKING CORPORATION and Subsidiaries
(in millions, except per share and ratio data)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- ------------------
1995 1994 1995 1994
---- ---- ---- ----
EARNINGS:
- --------
Income Before Effect of Accounting Change $ 477 $ 439 $ 1,326 $ 1,115
Effect of Change in Accounting Principle -- -- (11)(b) --
----------- ----------- ----------- -----------
Net Income $ 477 $ 439 $ 1,315 $ 1,115
=========== =========== =========== ===========
Net Income Applicable to Common Stock $ 452 $ 396 $ 1,234 $ 1,007
=========== =========== =========== ===========
INCOME PER COMMON SHARE:(a)
- -----------------------
Primary:
Income Before Effect of Accounting Change $ 1.74 $ 1.59 $ 4.95 $ 3.98
Effect of Change in Accounting Principle -- -- (0.04)(b) --
----------- ----------- ----------- -----------
Net Income $ 1.74 $ 1.59 $ 4.91 $ 3.98
=========== =========== =========== ===========
Assuming Full Dilution:
Income Before Effect of Accounting Change $ 1.70 $ 1.56 $ 4.66 $ 3.92
Effect of Change in Accounting Principle -- -- (0.04)(b) --
----------- ----------- ----------- -----------
Net Income $ 1.70 $ 1.56 $ 4.62 $ 3.92
=========== =========== =========== ===========
Book Value at September 30, $ 41.90 $ 38.29 $ 41.90 $ 38.29
Market Value at September 30, $ 60.88 $ 35.00 $ 60.88 $ 35.00
Common Stock Dividends Declared(c) $ 0.50 $ 0.44 $ 1.44 $ 1.20
COMMON SHARES OUTSTANDING:
- -------------------------
Average Common and Common Equivalent Shares 260.1 248.6 251.3 253.0
Average Common Shares Assuming Full Dilution 266.1 256.3 268.8 260.6
Common Shares at Period End 252.5 244.4 252.5 244.4
PERFORMANCE RATIOS: (Average Balances)(d)
- ------------------
Return on Assets 1.04% 1.03% 0.98% 0.90%
Return on Common Stockholders' Equity 17.34% 16.92% 16.87% 14.36%
Return on Total Stockholders' Equity 16.33% 16.14% 15.79% 13.55%
CAPITAL RATIOS AT SEPTEMBER 30:
- ------------------------------
Common Stockholders' Equity to Assets 5.6% 5.5%
Total Stockholders' Equity to Assets 6.3% 6.4%
Tier 1 Leverage (e) 6.2% 6.3%
Risk-Based Capital:(e)
Tier 1 (4.0% required) 7.9% * 8.0%
Total (8.0% required) 11.6% * 12.0%
(a) Effective with the 1995 second quarter, the Corporation changed its
reporting of earnings per share ("EPS") for all periods from "simple" EPS (which
is based solely on the average number of common shares outstanding) to reporting
"primary" and "fully diluted" EPS (which are based on the average number of
common and common equivalent shares outstanding). Previously, the Corporation
reported simple EPS, since the differences between simple EPS and primary EPS or
simple EPS and fully diluted EPS were not material (less than 3%).
(b) On January 1, 1995, the Corporation adopted SFAS 106 for the accounting for
other postretirement benefits relating to the Corporation's foreign plans.
(c) The Corporation increased its quarterly common stock dividend to $0.50 per
share in the second quarter of 1995, and from $0.38 per share to $0.44 per share
in the third quarter of 1994.
(d) Performance ratios are based on annualized net income amounts.
(e) For all periods presented, risk-based capital and leverage ratios exclude
the assets and off-balance sheet financial instruments of the Corporation's
securities subsidiary, Chemical Securities Inc., as well as the Corporation's
investment in this subsidiary. These ratios also exclude the net unfavorable
impact on stockholder's equity of $135 million in 1995 and $296 million in 1994
resulting from the adoption of SFAS 115.
* Estimated
10
UNAUDITED
CHEMICAL BANKING CORPORATION and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
(in millions, except per share data)
Three Months Ended
---------------------------------------
Sept. 30, June 30, Sept. 30,
1995 1995 1994
--------- -------- ---------
INTEREST INCOME
Loans $ 1,844 $ 1,770 $ 1,473
Securities 535 513 422
Trading Assets 211 205 181
Federal Funds Sold and Securities Purchased Under Resale Agreements 181 212 151
Deposits with Banks 62 67 86
-------- -------- --------
Total Interest Income 2,833 2,767 2,313
-------- -------- --------
INTEREST EXPENSE
Deposits 943 931 597
Short-Term and Other Borrowings 559 536 405
Long-Term Debt 134 138 134
-------- -------- --------
Total Interest Expense 1,636 1,605 1,136
-------- -------- --------
NET INTEREST INCOME 1,197 1,162 1,177
Provision for Losses 122 120 100
-------- -------- --------
NET INTEREST INCOME AFTER PROVISION FOR LOSSES 1,075 1,042 1,077
-------- -------- --------
NONINTEREST REVENUE
Trust and Investment Management Fees 96 97 104
Corporate Finance and Syndication Fees 157 129 97
Service Charges on Deposit Accounts 75 76 78
Fees for Other Financial Services 307 290 285
Trading Revenue 213 171 212
Securities Gains 47 69 6
Other Revenue 82 129 202
-------- -------- --------
Total Noninterest Revenue 977 961 984
-------- -------- --------
NONINTEREST EXPENSE
Salaries 616 557 574
Employee Benefits 104 117 108
Occupancy Expense 131 129 145
Equipment Expense 97 97 100
Foreclosed Property Expense -- (14) 2
Other Expense 309 362 382
-------- -------- --------
Total Noninterest Expense 1,257 1,248 1,311
-------- -------- --------
INCOME BEFORE INCOME TAX EXPENSE 795 755 750
Income Tax Expense 318 302 311
-------- -------- --------
NET INCOME $ 477 $ 453 $ 439
========= ======== ========
NET INCOME APPLICABLE TO COMMON STOCK $ 452 $ 427 $ 396
========= ======== ========
INCOME PER COMMON SHARE:
Primary $ 1.74 $ 1.72 $ 1.59
========= ======== ========
Assuming Full Dilution $ 1.70 $ 1.68 $ 1.56
========= ======== ========
11
UNAUDITED
CHEMICAL BANKING CORPORATION and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
(in millions, except per share data)
Nine Months Ended
September 30,
-------------------
1995 1994
---- ----
INTEREST INCOME
Loans $ 5,275 $ 4,155
Securities 1,553 1,270
Trading Assets 615 545
Federal Funds Sold and Securities Purchased Under Resale Agreements 612 372
Deposits with Banks 211 280
--------- --------
Total Interest Income 8,266 6,622
--------- --------
INTEREST EXPENSE
Deposits 2,725 1,660
Short-Term and Other Borrowings 1,614 1,056
Long-Term Debt 412 401
--------- --------
Total Interest Expense 4,751 3,117
--------- --------
NET INTEREST INCOME 3,515 3,505
Provision for Losses 362 465
--------- --------
NET INTEREST INCOME AFTER PROVISION FOR LOSSES 3,153 3,040
--------- --------
NONINTEREST REVENUE
Trust and Investment Management Fees 284 322
Corporate Finance and Syndication Fees 405 272
Service Charges on Deposit Accounts 225 222
Fees for Other Financial Services 891 854
Trading Revenue 440 600
Securities Gains 98 65
Other Revenue 465 447
--------- --------
Total Noninterest Revenue 2,808 2,782
--------- --------
NONINTEREST EXPENSE
Salaries 1,719 1,634
Employee Benefits 328 329
Occupancy Expense 395 431
Equipment Expense 295 275
Foreclosed Property Expense (21) 39
Other Expense 1,035 1,160
--------- --------
Total Noninterest Expense Before Restructuring Charge 3,751 3,868
Restructuring Charge -- 48
--------- --------
Total Noninterest Expense 3,751 3,916
--------- --------
INCOME BEFORE INCOME TAX EXPENSE AND EFFECT
OF ACCOUNTING CHANGE 2,210 1,906
Income Tax Expense 884 791
--------- --------
INCOME BEFORE EFFECT OF ACCOUNTING CHANGE 1,326 1,115
Effect of Change in Accounting Principle (11) --
--------- --------
NET INCOME $ 1,315 $ 1,115
========= ========
NET INCOME APPLICABLE TO COMMON STOCK $ 1,234 $ 1,007
========= ========
PER COMMON SHARE:
Primary:
Income Before Effect of Accounting Change $ 4.95 $ 3.98
Effect of Change in Accounting Principle (0.04) --
---------- ---------
Net Income $ 4.91 $ 3.98
========== =========
Assuming Full Dilution:
Income Before Effect of Accounting Change $ 4.66 $ 3.92
Effect of Change in Accounting Principle (0.04) --
---------- ----------
Net Income $ 4.62 $ 3.92
========== ==========
12
UNAUDITED
CHEMICAL BANKING CORPORATION and Subsidiaries
NONINTEREST REVENUE DETAIL
(in millions)
Three Months Ended Nine Months Ended
---------------------------------------- ------------------------
Sept. 30, June 30, Sept. 30, September 30,
1995 1995 1994 1995 1994
-------- ------- -------- ---- ----
TRUST AND INVESTMENT MANAGEMENT FEES:
Personal Trust Fees $ 51 $ 53 $ 49 $ 154 $ 156
Corporate and Institutional Trust Fees 34 33 45 98 136
Other, primarily Foreign Asset Management 11 11 10 32 30
------ ------ ------ ------- -------
Total $ 96 $ 97 $ 104 $ 284 $ 322
====== ====== ====== ======= =======
FEES FOR OTHER FINANCIAL SERVICES:
Credit Card Services Revenue $ 87 $ 83 $ 79 $ 250 $ 229
Fees in Lieu of Compensating Balances 47 47 49 141 156
Commissions on Letters of Credit and Acceptances 40 36 40 117 116
Loan Commitment Fees 22 20 21 66 66
Mortgage Servicing Fees 24 23 23 70 57
Other Fees 87 81 73 247 230
------ ------ ------ ------- -------
Total $ 307 $ 290 $ 285 $ 891 $ 854
====== ====== ====== ======= =======
TRADING REVENUE:
Interest Rate Contracts $ 48 $ 38 $ 95 $ 105 $ 318
Foreign Exchange Revenue 70 66 56 211 156
Debt Instruments and Other 95 67 61 124 126
------ ------ ------ ------- -------
Total $ 213 $ 171 $ 212 $ 440 $ 600
====== ====== ====== ======= =======
OTHER REVENUE:
Revenue from Equity-Related Investments $ 77 $ 126 $ 86 $ 310 $ 235
Net Gains (Losses) on Emerging Markets Bond Sales (36) (50) 80 (86) 125
All Other Revenue 41 53 36 241 87
------ ------ ------ ------- -------
Total $ 82 $ 129 $ 202 $ 465 $ 447
====== ====== ====== ======= =======
CHEMICAL BANKING CORPORATION and Subsidiaries
NONINTEREST EXPENSE DETAIL
(in millions)
Three Months Ended Nine Months Ended
---------------------------------------- --------------------
Sept. 30, June 30, Sept. 30, September 30,
1995 1995 1994 1995 1994
-------- ------- -------- ---- ----
OTHER EXPENSE: (a)
Professional Services $ 50 $ 53 $ 55 $ 157 $ 160
Marketing Expense 44 51 45 138 142
FDIC Assessments (3)(b) 36 39 70 122
Telecommunications 37 39 44 114 116
Amortization of Intangibles 25 27 29 80 85
All Other 156 156 170 476 535
------ ------ ------ ------ ------
Total $ 309 $ 362 $ 382 $1,035 $1,160
====== ====== ====== ====== ======
(a) Certain prior period amounts have been reclassified to conform with the
September 30, 1995 presentation.
(b) Includes the impact of a FDIC refund due to a reduction in the assessment
rate.
13
UNAUDITED
CHEMICAL BANKING CORPORATION and Subsidiaries
CONSOLIDATED BALANCE SHEET
(in millions)
September 30, September 30,
1995 1994
------------ ------------
ASSETS
Cash and Due from Banks $ 7,118 $ 8,080
Deposits with Banks 3,690 5,256
Federal Funds Sold and Securities
Purchased Under Resale Agreements 13,348 13,173
Trading Assets:
Debt and Equity Instruments 14,080 11,467
Risk Management Instruments 19,750 18,711
Securities:
Held-to-Maturity 8,074 8,695
Available-for-Sale 26,017 16,271
Loans (Net of Unearned Income) 85,623 77,138
Allowance for Credit Losses (2,405) (2,650)
Premises and Equipment 2,134 2,114
Due from Customers on Acceptances 1,200 1,200
Accrued Interest Receivable 1,301 1,106
Assets Acquired as Loan Satisfactions 56 669
Assets Held for Accelerated Disposition 202 --
Other Assets 7,665 8,104
--------- ---------
TOTAL ASSETS $ 187,853 $ 169,334
========= =========
LIABILITIES
Deposits:
Demand (Noninterest Bearing) $ 18,482 $ 20,430
Time and Savings 45,826 46,338
Foreign 32,480 26,193
--------- ---------
Total Deposits 96,788 92,961
Federal Funds Purchased and Securities
Sold Under Repurchase Agreements 30,911 19,469
Other Borrowed Funds 14,690 14,969
Acceptances Outstanding 1,203 1,207
Accounts Payable and Accrued Liabilities 2,790 2,385
Other Liabilities 22,103 18,980
Long-Term Debt 7,537 8,555
--------- ---------
TOTAL LIABILITIES 176,022 158,526
--------- ---------
STOCKHOLDERS' EQUITY
Preferred Stock 1,250 1,450
Common Stock 255 254
Capital Surplus 6,444 6,545
Retained Earnings 4,153 3,221
Net Unrealized Loss on Securities Available-for-Sale, Net of Taxes (135) (296)
Treasury Stock, at Cost (136) (a) (366)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 11,831 10,808
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 187,853 $ 169,334
========= =========
(a) During the first nine months of 1995, the Corporation repurchased 8.3
million shares of its common stock in the open market under previously announced
common stock buyback plans.
14
UNAUDITED
CHEMICAL BANKING CORPORATION and Subsidiaries
CONSOLIDATED STATEMENT OF CHANGES
IN STOCKHOLDERS' EQUITY
(in millions)
Nine Months Ended
September 30,
---------------------------
1995 1994
---- ----
BALANCE AT JANUARY 1, $ 10,712 $ 11,164
---------- ---------
Net Income 1,315 1,115
Dividends Declared:
Preferred Stock (81) (96)
Common Stock (354) (299)
Issuance of Preferred Stock -- 200
Conversion of Preferred Stock (200)(a) --
Redemption of Preferred Stock -- (404)
Premium on Redemption of Preferred Stock -- (12)
Issuance of Common Stock 1 1
Net Change in Capital Surplus (93)(a) 15
Restricted Stock Granted, Net of Amortization (7) (11)
Net Change in Treasury Stock 225 (a) (354)
Net Change in the Fair Value of Available-for-Sale Securities, Net of Taxes 303 (511)
Accumulated Translation Adjustment 10 --
--------- ---------
Net Change in Stockholders' Equity 1,119 (356)
--------- ---------
BALANCE AT SEPTEMBER 30, $ 11,831 $ 10,808
========= =========
(a) During the second quarter of 1995, the Corporation called all of the
outstanding shares of its 10% convertible preferred stock for redemption.
Substantially all of the 10% convertible preferred stock was converted to common
stock. The common stock from the conversion was issued from treasury.
15
UNAUDITED
CHEMICAL BANKING CORPORATION and Subsidiaries
LOAN PORTFOLIO AND ALLOWANCE RELATED INFORMATION
(in millions, except ratios)
Loans Outstanding Nonperforming Assets
------------------------- ------------------------
September 30, September 30,
1995 1994 1995 1994
---- ---- ---- ----
Domestic Commercial:
Commercial Real Estate $ 5,229 $ 6,361 $ 215 $ 570
Other Commercial 25,864 23,867 307 474
--------- ---------- ---------- ----------
Total Commercial Loans 31,093 30,228 522 1,044
--------- ---------- ---------- ----------
Domestic Consumer:
Residential Mortgage 18,170 13,152 132 147
Credit Card 10,737 8,329 -- --
Other Consumer 7,766 6,990 4 23
--------- ---------- ---------- ----------
Total Consumer Loans 36,673 28,471 136 170
--------- ---------- ---------- ----------
Total Domestic Loans 67,766 58,699 658 1,214
Foreign 17,857 18,439 333 310
---------- ---------- ---------- ----------
Total Loans $ 85,623 $ 77,138 991 1,524
========= ==========
Assets Acquired as Loan Satisfactions 56 669
---------- ----------
Total Nonperforming Assets $ 1,047 $ 2,193
========== ==========
ASSETS HELD FOR ACCELERATED DISPOSITION $ 202 $ --
========== ==========
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------- ------------------------
1995 1994 1995 1994
---- ---- ---- ----
ALLOWANCE FOR CREDIT LOSSES:
Balance at Beginning of Period $ 2,430 $ 2,676 $ 2,480 $ 3,020
Provision for Losses 122 100 362 465
Net Charge-Offs:
Domestic Commercial:
Commercial Real Estate (11) (20) (39) (143)
Other Commercial (1) (9) (33) (96)
---------- ---------- ---------- ----------
Total Commercial (12) (29) (72) (239)
---------- ---------- ---------- ----------
Domestic Consumer:
Residential (18) (12) (45) (24)
Credit Card (110) (84) (307) (247)
Other Consumer (9) (4) (24) (13)
---------- ---------- ---------- ----------
Total Consumer (137) (100) (376) (284)
---------- ---------- ---------- ----------
Total Domestic Net Charge-offs (149) (129) (448) (523)
Foreign 2 4 11 (314)
---------- ---------- ---------- ----------
Total Net Charge-offs (147) (125) (437) (837)
Other -- (1) -- 2
---------- ---------- ---------- ----------
Total Allowance for Credit Losses $ 2,405 $ 2,650 $ 2,405 $ 2,650
========== ========== ========== ==========
ALLOWANCE COVERAGE RATIOS:
Allowance for Credit Losses to:
Loans at Period-End 2.81% 3.44%
Average Loans 2.95% 3.55%
Nonperforming Loans 242.68% 173.88%
16
UNAUDITED
CHEMICAL BANKING CORPORATION and Subsidiaries
Condensed Average Consolidated Balance Sheet, Interest and Rates
(Taxable-Equivalent Interest and Rates; in millions)
Three Months Ended Three Months Ended
September 30, 1995 September 30, 1994
--------------------------------------- -------------------------------------
Average Rate Average Rate
Balance Interest (Annualized) Balance Interest (Annualized)
------- -------- ------------ ------- -------- ------------
ASSETS
Liquid Interest-Earning Assets $ 28,576 $ 454 6.30% $ 28,350 $ 418 5.85%
Securities 29,531 537 7.21% 25,717 425 6.56%
Loans 85,057 1,849 8.61% 75,387 1,477 7.78%
--------- ------- --------- -------
Total Interest-Earning Assets 143,164 2,840 7.87% 129,454 2,320 7.11%
Total Noninterest-Earning Assets 38,362 39,525
--------- ---------
Total Assets $ 181,526 $ 168,979
========= =========
LIABILITIES
Total Interest-Bearing Deposits $ 76,611 943 4.88% $ 71,480 597 3.31%
Total Short-Term and Other Borrowings 38,302 559 5.78% 32,049 405 5.02%
Long-Term Debt 7,510 134 7.09% 8,546 134 6.22%
--------- ------- --------- -------
Total Interest-Bearing Liabilities 122,423 1,636 5.30% 112,075 1,136 4.02%
------- -------
Total Noninterest-Bearing Liabilities 47,511 46,110
--------- ---------
Total Liabilities 169,934 158,185
--------- ---------
STOCKHOLDERS' EQUITY
Preferred Stock 1,250 1,511
Common Stockholders' Equity 10,342 9,283
--------- ---------
Total Stockholders' Equity 11,592 10,794
--------- ---------
Total Liabilities and Stockholders'
Equity $ 181,526 $ 168,979
========= =========
INTEREST RATE SPREAD 2.57% 3.09%
===== =====
NET INTEREST INCOME AND NET YIELD
ON INTEREST-EARNING ASSETS $ 1,204 3.34% $ 1,184 3.63%
======== ===== ======== =====
Nine Months Ended Nine Months Ended
September 30, 1995 September 30, 1994
--------------------------------------- -------------------------------------
Average Rate Average Rate
Balance Interest (Annualized) Balance Interest (Annualized)
------- -------- ------------ ------- -------- ------------
ASSETS
Liquid Interest-Earning Assets $ 29,322 $ 1,438 6.56% $ 28,546 $ 1,197 5.61%
Securities 28,408 1,563 7.35% 26,238 1,276 6.50%
Loans 81,645 5,286 8.65% 74,674 4,165 7.45%
--------- -------- --------- --------
Total Interest-Earning Assets 139,375 8,287 7.94% 129,458 6,638 6.85%
Total Noninterest-Earning Assets 39,774 36,292
--------- ---------
Total Assets $ 179,149 $ 165,750
========= =========
LIABILITIES
Total Interest-Bearing Deposits $ 75,814 2,725 4.80% $ 72,702 1,660 3.05%
Total Short-Term and Other Borrowings 36,519 1,614 5.90% 30,242 1,056 4.67%
Long-Term Debt 7,634 412 7.22% 8,472 401 6.33%
--------- -------- --------- --------
Total Interest-Bearing Liabilities 119,967 4,751 5.29% 111,416 3,117 3.74%
-------- --------
Total Noninterest-Bearing Liabilities 48,046 43,335
--------- ---------
Total Liabilities 168,013 154,751
--------- ---------
STOCKHOLDERS' EQUITY
Preferred Stock 1,357 1,623
Common Stockholders' Equity 9,779 9,376
--------- ---------
Total Stockholders' Equity 11,136 10,999
--------- ---------
Total Liabilities and Stockholders'
Equity $ 179,149 $ 165,750
========= =========
INTEREST RATE SPREAD 2.65% 3.11%
===== =====
NET INTEREST INCOME AND NET YIELD
ON INTEREST-EARNING ASSETS $ 3,536 3.39% $ 3,521 3.63%
======== ===== ======== =====
