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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of the Report: October 15, 1996 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
Item 5. Other Events
- ---------------------
On October 15, 1996, The Chase Manhattan Corporation (the "Corporation")
reported that earnings for the third quarter of 1996 were $858 million, a 12%
increase when compared with 1995 third quarter earnings of $764 million. Primary
earnings per share were $1.80 for the 1996 third quarter, compared with $1.58
for the 1995 third quarter, and fully diluted earnings per share for each of the
1996 and 1995 third quarters were $1.78 and $1.55, respectively.
The Corporation's net income, including restructuring charges and merger-related
expenses of $1,060 million, after tax, was $1,625 million for the first nine
months of 1996, compared with $2,132 million for the first nine months of 1995.
Primary earnings per share and fully diluted earnings per share for the first
nine months of 1996 were $3.28 and $3.23, respectively, compared with $4.47 and
$4.30, respectively, for the same period in 1995.
The Corporation also announced that its Board of Directors had authorized a
common stock repurchase program for the Corporation. The Corporation is
authorized until December 31, 1998 to purchase up to $2.5 billion of its common
stock, in addition to such other number of common shares as may be necessary to
provide for expected issuances under its dividend reinvestment plan and its
various stock-based director and employee benefits plans.
In connection with reporting its 1996 third quarter earnings, the Corporation
stated that it generally expected to meet its previously-announced operating
goals for 1996, including its target for merger-related savings for the year.
Management of the Corporation also indicated that it currently expected the
Corporation to continue to realize annual revenue growth, on an operating basis,
of 5-7% into 1997, and that it continued to target as financial goals for the
Corporation double digit operating earnings per share growth in each of the next
two years, a return on average common equity of 18% or higher by 1998, and an
efficiency ratio in the low 50% range by 1998.
Management of the Corporation stated, however, that noninterest expense of the
Corporation would be approximately $100 million higher than the previously
targeted $9.1 billion, mostly due to higher incentive costs in line with higher
than expected revenues. Not included in this expense number are additional
expenses (approximately $40 million) related to the introduction of the
Corporation's co-branded Wal-Mart MasterCard and expenses (approximately $10
million) associated with preferred stock dividends issued by a newly
organized real estate investment trust subsidiary of the Corporation.
With respect to credit quality, management indicated that it believed that the
Corporation's credit card net charge-offs, as a percentage of average managed
credit card receivables, had begun to stabilize and would be lower than 5% for
the full year 1996. Management also indicated that it believed that the credit
quality of the Corporation's overall consumer and commercial and industrial
portfolio would remain relatively stable into 1997 and that it expected net
charge-offs and the provision for losses in 1997 to be modestly higher than in
1996, primarily as a result of an anticipated decline in recoveries in the
commercial portfolio and anticipated growth in assets, particularly in the
Corporation's national consumer receivables.
Copies of the Corporation's press releases are attached as exhibits hereto.
Those press releases and the Current Report on Form 8-K contain statements that
are forward-looking within the meaning of the Private Securities Litigation
Reform Act of 1995. Such statements are subject to risks and uncertainties and
the Corporation's actual results may differ materially form those set forth in
such forward-looking statements. Factors that would affect the prospects of the
Corporation's businesses are discussed in the Corporation's Current Report on
Form 8-K dated July 17, 1996, the Corporation's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1996 and the Corporation's Annual Report to
Stockholders (as filed with the Corporation's Current Report on Form 8-K dated
April 16, 1996), to all of which reference is hereby made.
- 2 -
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
- ---------------------------------------------------------------------------
The following exhibits are filed with this Report:
Exhibit Number Description
-------------- ----------------------------------------------
99.1 Press Release - 1996 Third Quarter Earnings.
99.2 Press Release - Chase Announces Stock Buyback Plan.
- 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 October 17, 1996 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 - 1996 Third
Quarter Earnings 6
99.2 Press Release - Chase Announces
Stock Buyback Plan 20
- 5 -
[CHASE LOGO]
The Chase Manhattan Corporation
270 Park Avenue
New York, NY 10017-2070
News Release
Investor Contact: John Borden Press Contacts: Kathleen Baum
212-270-7318 212-270-5089
John Stefans
For Immediate Release 212-270-7438
CHASE'S NET INCOME UP 12 PERCENT TO $858 MILLION IN THIRD QUARTER
New York, October 15, 1996 -- The Chase Manhattan Corporation today reported
third quarter 1996 net income of $858 million, a 12 percent increase from third
quarter 1995 net income of $764 million. Primary earnings per share were $1.80
compared with $1.58 in the prior year third quarter, and fully diluted earnings
per share were $1.78 compared with $1.55. Excluding merger-related expenses of
$20 million, after tax, net income for the quarter was $878 million, primary
earnings per share were $1.85 and fully diluted earnings per share were $1.83.
"We continued to demonstrate revenue growth across both our global wholesale
and nationwide consumer businesses," said Walter V. Shipley, chairman and chief
executive officer. "We also stuck to the basics, effectively managing our
operating and credit costs."
The corporation's return on average common stockholders' equity was 17.9
percent compared with 16.2 percent in the 1995 third quarter. The efficiency
ratio stood at 58 percent compared with 62 percent in the third quarter of 1995.
In the first nine months of 1996, the corporation's earnings, excluding
restructuring charges and merger-related expenses, rose 25 percent to $2,685
million from $2,152 million in the first nine months of 1995. Primary earnings
per share were $5.66 and fully diluted earnings per share were $5.57; primary
earnings per share were $4.51 and fully diluted earnings per share were $4.34 in
the same 1995 period.
(More)
- -------------------------------------------------------------------------------
NOTE: On March 31, 1996, The Chase Manhattan Corporation merged with and into
Chemical Banking Corporation. Upon consummation of the merger, Chemical changed
its name to The Chase Manhattan Corporation. The merger was accounted for as a
pooling-of-interests and, accordingly, the information included in this release
reports the combined results of Chase and Chemical as though the merger had been
in effect for all periods presented.
- 6 -
Reported net income, including restructuring charges and merger-related
expenses of $1,060 million, after-tax, was $1,625 million compared with $2,132
million in the first nine months of 1995. Primary earnings per share and fully
diluted earnings per share, on a reported basis, were $3.28 and $3.23, and $4.47
and $4.30, respectively.
REVENUES
Total revenue was $3,925 million, compared with $3,779 million in the third
quarter of 1995. For the first nine months of 1996, total revenue was $11,914
million versus $11,117 million in the same 1995 period.
Net interest income was $2,069 million in each of the 1996 and 1995 third
quarters. Average interest-earning assets were $263 billion, compared with $245
billion in the prior year quarter. The net yield on average interest-earning
assets was 3.14 percent, compared with 3.36 percent in the third quarter of
1995.
These results were affected by an increase in average securitizations of
approximately $7 billion in national consumer credit receivables, compared
with the 1995 quarter. On a managed basis, which includes securitizations, net
interest income was $2,313 million, average interest-earning assets were $275
billion, and the net yield on average interest-earning assets was 3.36
percent. On a managed basis for the third quarter of 1995, net interest
income was $2,161 million, average interest-earning assets were $250 billion
and the net yield on average interest-earning assets was 3.44 percent.
Total revenues from trading activities were $479 million in the third
quarter of 1996. This included $175 million of net interest income. In the third
quarter of 1995, total revenues from trading activities were $467 million,
including $125 million of net interest income.
Fees related to credit cards were $277 million, 32 percent higher than in
the third quarter of 1995, reflecting both increased receivables and the effect
of securitizations. Corporate finance and syndication fees rose 11 percent to
$234 million, the result of strong loan syndication, underwriting and advisory
activity. Trust and investment management fees rose 14 percent to $295 million,
reflecting the continued growth of Chase's global services and securities
processing activities, growth in the Vista mutual funds and higher trust fees
attributable to growth in assets under management.
Revenues from equity-related investments totaled $112 million in the third
quarter of 1996, compared with $106 million in the third quarter of 1995.
- 7 -
EXPENSES
Total noninterest expenses, before merger-related expenses and foreclosed
property costs, were $2,286 million in the 1996 third quarter, down from $2,339
million in the third quarter of 1995.
Merger savings in the quarter were $180 million. The Corporation expects to
achieve merger savings of $510 million in 1996.
The total number of employees was 67,828 at September 30, 1996 compared with
72,696 at December 31, 1995.
Merger-related expenses in the third quarter of 1996 were $32 million.
CREDIT COSTS
The provision for losses in the third quarter of 1996 was $220 million,
compared with $192 million in the third quarter of 1995.
Net charge-offs were $220 million in the third quarter of 1996, and $225
million in the same 1995 quarter.
Total domestic commercial net charge-offs were $2 million in the latest
quarter, and $6 million in the third quarter of 1995. Total domestic consumer
net charge-offs in the third quarter were $210 million, of which credit card
charge-offs, on retained receivables, accounted for $152 million. Total domestic
consumer net charge-offs in the third quarter of 1995 were $224 million, of
which credit card net charge-offs, on retained receivables, were $172 million.
Credit card net charge-offs were $296 million, or 4.95 percent of average
managed receivables, at September 30, 1996, compared with $215 million, or 3.98
percent of average managed receivables, as of September 30, 1995, reflecting
growth in managed receivables of 11 percent, year-over-year, and higher
bankruptcies.
Managed credit card receivables past due 90 days and over and accruing were
$469 million at September 30, 1996, or 1.96 percent of average credit card
receivables, compared with $440 million, or 2.04 percent at September 30, 1995.
OTHER FINANCIAL DATA
On September 18, 1996, Chase Preferred Capital Corporation, a subsidiary
organized as a real estate investment trust, issued $550 million of preferred
shares which will be treated as Tier I capital for the Corporation.
- 8 -
The corporation's effective tax rate was 38 percent in the third quarter of
1996, and 39 percent in the third quarter of 1995.
At September 30, 1996, the allowance for credit losses was $3,697 million,
compared with $3,809 million on the same date a year ago.
Nonperforming assets, at September 30, 1996, were $1,517 million, compared
with $1,639 million on June 30, 1996, and $1,886 million on September 30, 1995.
Total assets at September 30, 1996, were $323 billion, compared with $308
billion on the same date a year ago. Total loans at September 30, 1996, were
$150 billion, compared with $151 billion at September 30, 1995. At end of the
third quarter of 1996, total deposits stood at $165 billion; that figure was
$166 billion on September 30, 1995.
The return on average assets for the third quarter of 1996 was 1.06 percent,
compared with .99 percent for the third 1995 quarter.
At September 30, 1996, the estimated Tier I risk-based capital ratio was 8.3
percent, compared with 8.0 percent at September 30, 1995. The estimated Total
risk-based capital ratio was 12.1 percent at September 30, 1996, and September
30, 1995.
- 9 -
THE CHASE MANHATTAN CORPORATION AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(IN MILLIONS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------------- ------------------------------
1996 1995 1996 1995
-------- --------- ------------ ---------
EARNINGS:
Income Before Restructuring Charge $ 878 $ 764 $ 2,685 $ 2,152
Restructuring Charge (After-Tax) (20) (a) -- (1,060) (a) (9)(b)
------- ------- ---------- --------
Income After Restructuring Charge and
Before Effect of Accounting Change $ 858 $ 764 $ 1,625 $ 2,143
Effect of Change in Accounting Principle -- -- -- (11)(c)
-------- ------- ---------- --------
Net Income $ 858 $ 764 $ 1,625 $ 2,132
======== ======= ========== ========
Net Income Applicable to Common Stock $ 803 $ 708 $ 1,461 $ 1,959
======== ======= ========== ========
INCOME PER COMMON SHARE:
Primary:
Income Before Restructuring Charge $ 1.85 $ 1.58 $ 5.66 $ 4.51
Restructuring Charge (After-Tax) (0.05) (a) -- (2.38) (a) (0.02)(b)
------- -------- --------- --------
Income After Restructuring Charge and
Before Effect of Accounting Change $ 1.80 $ 1.58 $ 3.28 $ 4.49
Effect of Change in Accounting Principle -- -- -- (0.02)(c)
-------- -------- ---------- --------
Net Income $ 1.80 $ 1.58 $ 3.28 $ 4.47
======== ======== ========== ========
Assuming Full Dilution:
Income Before Restructuring Charge $ 1.83 $ 1.55 $ 5.57 $ 4.34
Restructuring Charge (After-Tax) (0.05) (a) -- (2.34) (a) (0.02)(b)
-------- -------- ---------- --------
Income After Restructuring Charge and
Before Effect of Accounting Change $ 1.78 $ 1.55 $ 3.23 $ 4.32
Effect of Change in Accounting Principle -- -- -- (0.02)(c)
-------- -------- ---------- --------
Net Income $ 1.78 $ 1.55 $ 3.23 $ 4.30
======== ======== ========== ========
PER COMMON SHARE:
Book Value at September 30, $ 42.03 $ 40.93 $ 42.03 $ 40.93
Market Value at September 30, $ 80.13 $ 60.88 $ 80.13 $ 60.88
Common Stock Dividends Declared (d) $ 0.56 $ 0.50 $ 1.68 $ 1.44
COMMON SHARES OUTSTANDING:
Average Common and Common Equivalent Shares 447.2 448.4 446.0 438.5
Average Common Shares Assuming Full Dilution 450.5 456.4 452.3 457.5
Common Shares at Period End 439.9 438.6 439.9 438.6
(a) Reflects merger-related restructuring charge of $1,022 million,
after-tax, which was recorded on March 31, 1996. In addition, $38 million,
after-tax, of merger-related expenses were incurred ($4 million in the first
quarter, $14 million in the second quarter and $20 million in the third
quarter) and recognized under a recently issued accounting pronouncement.
(b) Restructuring charge related to exiting from a futures brokerage
business.
(c) On January 1, 1995, the Corporation adopted SFAS 106 for the accounting
for other postretirement benefits relating to its foreign plans.
(d) The Corporation increased its quarterly common stock dividend from
$0.50 per share to $0.56 per share in the first quarter of 1996.
- 10 -
THE CHASE MANHATTAN CORPORATION AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS (CONTINUED)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------------- ---------------------------
1996 1995 1996 1995
----------- ---------- ---------- -----------
PERFORMANCE RATIOS: (AVERAGE BALANCES) (e)
Income Before Restructuring Charge:
Return on Assets 1.08% 0.99% 1.13% 0.94%
Return on Common Stockholders' Equity 18.35% 16.17% 18.96% 15.89%
Return on Total Stockholders' Equity 17.04% 15.14% 17.57% 14.83%
Net Income:
Return on Assets 1.06% 0.99% 0.68% 0.93%
Return on Common Stockholders' Equity 17.90% 16.17% 10.99% 15.73%
Return on Total Stockholders' Equity 16.65% 15.14% 10.63% 14.69%
Efficiency Ratio (f) 58% 62% 59% 64%
CAPITAL RATIOS AT SEPTEMBER 30:
Common Stockholders' Equity to Assets 5.7% 5.8%
Total Stockholders' Equity to Assets 6.6% 6.7%
Tier 1 Leverage 7.0% 6.6%
Risk-Based Capital:
Tier 1 (4.0% required) 8.3% * 8.0%
Total (8.0% required) 12.1% * 12.1%
(e) Performance ratios are based on annualized net income
amounts.
(f) Excludes restructuring charges, foreclosed property expense and
nonrecurring items.
* Estimated
- 11 -
THE CHASE MANHATTAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(IN MILLIONS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED
------------------------------------------
SEPT. 30, JUNE 30, SEPT. 30,
1996 1996 1995
------------ ------------ ---------
INTEREST INCOME
Loans $ 3,042 $ 3,028 $ 3,280
Securities 690 685 639
Trading Assets 525 406 360
Federal Funds Sold and Securities Purchased Under Resale Agreements 549 514 448
Deposits with Banks 112 156 194
----------- ---------- ---------
Total Interest Income 4,918 4,789 4,921
----------- ---------- ---------
INTEREST EXPENSE
Deposits 1,416 1,458 1,593
Short-Term and Other Borrowings 1,213 1,087 1,020
Long-Term Debt 220 221 239
---------- ---------- ----------
Total Interest Expense 2,849 2,766 2,852
---------- ---------- ----------
NET INTEREST INCOME 2,069 2,023 2,069
Provision for Losses 220 250 192
---------- ---------- ----------
NET INTEREST INCOME AFTER PROVISION FOR LOSSES 1,849 1,773 1,877
----------- ---------- ----------
NONINTEREST REVENUE
Corporate Finance and Syndication Fees 234 258 210
Trust and Investment Management Fees 295 302 258
Credit Card Revenue 277 233 210
Service Charges on Deposit Accounts 97 100 105
Fees for Other Financial Services 393 381 370
Trading Revenue 304 379 342
Securities Gains 34 24 53
Other Revenue 222 254 162
---------- ---------- ----------
Total Noninterest Revenue 1,856 1,931 1,710
----------- ---------- ----------
NONINTEREST EXPENSE
Salaries 1,040 1,046 1,074
Employee Benefits 211 225 213
Occupancy Expense 204 207 227
Equipment Expense 179 181 177
Foreclosed Property Expense 2 (8) (7)
Other Expense 652 651 648
----------- ----------- ---------
Total Noninterest Expense Before Restructuring Charge 2,288 2,302 2,332
Restructuring Charge and Expenses 32 22 --
---------- --------- ---------
Total Noninterest Expense 2,320 2,324 2,332
---------- --------- ---------
INCOME BEFORE INCOME TAX EXPENSE 1,385 1,380 1,255
Income Tax Expense 527 524 491
---------- --------- ----------
NET INCOME $ 858 $ 856 $ 764
========= ========= ========
NET INCOME APPLICABLE TO COMMON STOCK $ 803 $ 801 $ 708
========== ========= ========
NET INCOME PER COMMON SHARE:
Primary $ 1.80 $ 1.80 $ 1.58
========= ========= =========
Assuming Full Dilution $ 1.78 $ 1.79 $ 1.55
========= ========= =========
- 12 -
THE CHASE MANHATTAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(IN MILLIONS, EXCEPT PER SHARE DATA)
NINE MONTHS ENDED
SEPTEMBER 30,
---------------------------------------
1996 1995
------------------ ---------------
INTEREST INCOME
Loans $ 9,311 $ 9,590
Securities 2,095 1,873
Trading Assets 1,360 1,062
Federal Funds Sold and Securities Purchased Under Resale Agreements 1,564 1,398
Deposits with Banks 440 637
--------- --------
Total Interest Income 14,770 14,560
--------- --------
INTEREST EXPENSE
Deposits 4,518 4,689
Short-Term and Other Borrowings 3,326 3,036
Long-Term Debt 668 711
---------- ---------
Total Interest Expense 8,512 8,436
---------- ---------
NET INTEREST INCOME 6,258 6,124
Provision for Losses 715 572
---------- ---------
NET INTEREST INCOME AFTER PROVISION FOR LOSSES 5,543 5,552
---------- --------
NONINTEREST REVENUE
Corporate Finance and Syndication Fees 716 576
Trust and Investment Management Fees 882 741
Credit Card Revenue 743 588
Service Charges on Deposit Accounts 296 316
Fees for Other Financial Services 1,152 1,090
Trading Revenue 1,022 742
Securities Gains 110 107
Other Revenue 735 833
---------- --------
Total Noninterest Revenue 5,656 4,993
---------- --------
NONINTEREST EXPENSE
Salaries 3,162 3,078
Employee Benefits 741 693
Occupancy Expense 632 673
Equipment Expense 544 568
Foreclosed Property Expense (15) (60)
Other Expense 1,963 2,059
--------- --------
Total Noninterest Expense Before Restructuring Charge 7,027 7,011
Restructuring Charge and Expenses 1,710 15
--------- --------
Total Noninterest Expense 8,737 7,026
--------- --------
INCOME BEFORE INCOME TAX EXPENSE
AND EFFECT OF ACCOUNTING CHANGE 2,462 3,519
Income Tax Expense 837 1,376
--------- --------
INCOME BEFORE EFFECT OF ACCOUNTING CHANGE 1,625 2,143
Effect of Change in Accounting Principle -- (11)
--------- --------
NET INCOME $ 1,625 $ 2,132
========= =========
NET INCOME APPLICABLE TO COMMON STOCK $ 1,461 $ 1,959
========= =========
INCOME PER COMMON SHARE:
Primary:
Income Before Effect of Accounting Change $ 3.28 $ 4.49
Effect of Change in Accounting Principle -- (0.02)
-------- ---------
Net Income $ 3.28 $ 4.47
======== =========
Assuming Full Dilution:
Income Before Effect of Accounting Change $ 3.23 $ 4.32
Effect of Change in Accounting Principle -- (0.02)
-------- ---------
Net Income $ 3.23 $ 4.30
======== =========
- 13 -
THE CHASE MANHATTAN CORPORATION AND SUBSIDIARIES
NONINTEREST REVENUE DETAIL
(IN MILLIONS)
THREE MONTHS ENDED NINE MONTHS ENDED
----------------------------------------- ------------------------
SEPT. 30, JUNE 30, SEPT. 30, SEPT. 30, SEPT. 30,
1996 1996 1995 1996 1995
----------- ---------- ------------ ------------ ---------
FEES FOR OTHER FINANCIAL SERVICES:
Commissions on Letters of Credit and Acceptances $ 81 $ 82 $ 88 $ 252 $ 262
Fees in Lieu of Compensating Balances 75 74 73 223 213
Mortgage Servicing Fees 55 54 52 159 159
Loan Commitment Fees 32 30 31 92 96
Other Fees 150 141 126 426 360
-------- -------- -------- -------- --------
Total $ 393 $ 381 $ 370 $ 1,152 $ 1,090
======== ======== ========= ======== ========
TRADING REVENUE:
Interest Rate Contracts $ 106 $ 158 $ 67 $ 375 $ 211
Foreign Exchange Revenue 115 95 115 333 408
Debt Instruments and Other 83 126 160 314 123
-------- -------- -------- -------- --------
Total $ 304 $ 379 $ 342 $ 1,022 $ 742
======== ======== ======== ======== ========
OTHER REVENUE:
Revenue from Equity-Related Investments $ 112 $ 219 $ 106 $ 554 $ 495
Net Losses on Emerging Markets Securities Sales -- (30) (36) (65) (62)
Gain on Sale of Investment in Far East Bank
and Trust Co. -- -- -- -- 85
Residential Mortgage Origination/Sales Activities 15 (2) 17 41 112
Loss on Sale of a Building in Japan -- -- -- (60) --
All Other Revenue 95 67 75 265 203
-------- -------- -------- -------- --------
Total $ 222 $ 254 $ 162 $ 735 $ 833
======== ======== ======== ======== ========
- -----------------------------------------------------------------------------------------------------------------------------------
THE CHASE MANHATTAN CORPORATION AND SUBSIDIARIES
NONINTEREST EXPENSE DETAIL
(IN MILLIONS)
THREE MONTHS ENDED NINE MONTHS ENDED
---------------------------------------- -----------------------
SEPT. 30, JUNE 30, SEPT. 30, SEPT. 30, SEPT. 30,
1996 1996 1995 1996 1995
---------- ---------- --------- --------- --------
OTHER EXPENSE:
Professional Services $ 127 $ 141 $ 130 $ 397 $ 407
Marketing Expense 73 73 99 236 284
FDIC Assessments 6 (a,b) 1 (b) (5)(b) 8(b) 107
Telecommunications 82 82 84 249 249
Amortization of Intangibles 42 42 45 127 139
All Other 322 312 295 946 873
------- ------- ------- ------- -------
Total $ 652 $ 651 $ 648 $ 1,963 $ 2,059
======= ======= ======= ======= =======
(a) Includes a special assessment for Savings Association Insurance Fund-related deposits.
(b) Reflects the impact of a reduction in the FDIC assessment rate.
- 14 -
THE CHASE MANHATTAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(IN MILLIONS)
SEPTEMBER 30, SEPTEMBER 30,
1996 1995
------------------ ----------------
ASSETS
Cash and Due from Banks $ 13,729 $ 12,259
Deposits with Banks 4,433 9,488
Federal Funds Sold and Securities
Purchased Under Resale Agreements 26,586 24,307
Trading Assets:
Debt and Equity Instruments 32,952 20,906
Risk Management Instruments 26,883 27,751
Securities:
Available-for-Sale 42,477 31,400
Held-to-Maturity 3,956 9,974
Loans (Net of Unearned Income) 150,333 151,031
Allowance for Credit Losses (3,697) (3,809)
Premises and Equipment 3,636 3,898
Due from Customers on Acceptances 2,789 2,062
Accrued Interest Receivable 2,828 2,502
Other Assets 15,699 16,074
---------- ----------
TOTAL ASSETS $ 322,604 $ 307,843
========== ==========
LIABILITIES
Deposits:
Domestic:
Noninterest-Bearing $ 37,382 $ 32,059
Interest-Bearing 64,374 64,362
Foreign:
Noninterest-Bearing 3,591 3,258
Interest-Bearing 59,695 66,542
---------- ----------
Total Deposits 165,042 166,221
Federal Funds Purchased and Securities
Sold Under Repurchase Agreements 57,533 43,450
Other Borrowed Funds 17,624 14,500
Acceptances Outstanding 2,776 2,074
Trading Liabilities 32,972 36,569
Accounts Payable, Accrued Expenses and Other Liabilities 12,588 11,372
Long-Term Debt 12,379 13,055
---------- ---------
TOTAL LIABILITIES 300,914 287,241
---------- ---------
PREFERRED STOCK OF SUBSIDIARY 550 (a) --
---------- ---------
STOCKHOLDERS' EQUITY
Preferred Stock 2,650 2,650
Common Stock 440 457
Capital Surplus 10,444 10,988
Retained Earnings 8,091 7,430
Net Unrealized Loss on Securities Available-for-Sale, Net of Taxes (480) (130)
Treasury Stock, at Cost (5) (793)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 21,140 20,602
--------- ---------
TOTAL LIABILITIES, PREFERRED STOCK OF SUBSIDIARY
AND STOCKHOLDERS' EQUITY $ 322,604 $ 307,843
========= =========
(a) Reflects the issuance of preferred stock in September 1996 of Chase
Preferred Capital Corporation, a wholly-owned subsidiary of The Chase Manhattan
Bank, which qualifies as a real estate investment trust (REIT).
- 15 -
THE CHASE MANHATTAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES
IN STOCKHOLDERS' EQUITY
(IN MILLIONS)
NINE MONTHS ENDED
SEPTEMBER 30,
-----------------------------------------------
1996 1995
-------------------- ---------------
PREFERRED STOCK:
Balance at Beginning of Year $ 2,650 $ 2,850
Conversion of Stock -- (200)
--------- ---------
Balance at End of Period $ 2,650 $ 2,650
--------- ---------
COMMON STOCK:
Balance at Beginning of Year $ 458 $ 447
Retirement of Treasury Stock (20) (a) --
Issuance of Common Stock 2 10
--------- ---------
Balance at End of Period $ 440 $ 457
--------- ---------
CAPITAL SURPLUS:
Balance at Beginning of Year $ 11,075 $ 10,671
Retirement of Treasury Stock (433) (a) --
Issuance of Common Stock (114) 324
Restricted Stock Granted, Net of Amortization (84) (7)
--------- ---------
Balance at End of Period $ 10,444 $ 10,988
--------- ---------
RETAINED EARNINGS:
Balance at Beginning of Year $ 7,997 $ 6,045
Net Income 1,625 2,132
Retirement of Treasury Stock (557) (a) --
Cash Dividends Declared:
Preferred Stock (164) (173)
Common Stock (818) (584)
Accumulated Translation Adjustment 8 10
--------- ---------
Balance at End of Period $ 8,091 $ 7,430
--------- ---------
NET UNREALIZED LOSS ON SECURITIES AVAILABLE-FOR-SALE:
Balance at Beginning of Year $ (237) $ (473)
Net Change in Fair Value of Securities Available-for-Sale,
Net of Taxes (243) 343
-------- ---------
Balance at End of Period $ (480) $ (130)
-------- ---------
COMMON STOCK IN TREASURY, AT COST:
Balance at Beginning of Year $ (1,107) $ (667)
Retirement of Treasury Stock 1,010 (a) --
Purchase of Treasury Stock (1,007) (797)
Reissuance of Treasury Stock 1,099 671
--------- ---------
Balance at End of Period $ (5) $ (793)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY $ 21,140 $ 20,602
========= =========
(a) Under the terms of the merger agreement, on March 31, 1996, all of the
former Chase Manhattan Corporation's treasury stock was cancelled and retired.
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THE CHASE MANHATTAN CORPORATION AND SUBSIDIARIES
CREDIT RELATED INFORMATION
(IN MILLIONS)
LOANS OUTSTANDING NONPERFORMING ASSETS
--------------------------- -----------------------------
SEPTEMBER 30, SEPTEMBER 30,
1996 1995 1996 1995
----------- --------- -------------- -----------
Domestic Commercial:
Commercial Real Estate $ 6,078 $ 7,170 $ 430 $ 525
Other Commercial 38,368 36,758 459 467
--------- -------- ---------- ---------
Total Commercial Loans 44,446 43,928 889 992
--------- -------- ---------- ---------
Domestic Consumer:
Residential Mortgage 35,672 33,664 269 245
Credit Card 12,600 17,675 -- --
Other Consumer 22,176 19,458 28 34
--------- --------- ---------- ---------
Total Consumer Loans 70,448 70,797 297 279
--------- --------- ---------- ---------
Total Domestic Loans 114,894 114,725 1,186 1,271
Foreign 35,439 36,306 184 465
--------- --------- ---------- ---------
Total Loans $ 150,333 $ 151,031 1,370 1,736
========= =========
Assets Acquired as Loan Satisfactions 147 150
---------- ---------
Total Nonperforming Assets $ 1,517 $ 1,886
========== =========
Assets Held For Accelerated Disposition $ 133 $ 202
========== =========
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------- ---------------------------------
1996 1995 1996 1995
----------- ---------- ------------ -------------
Net Charge-Offs:
Domestic Commercial:
Commercial Real Estate $ 6 $ 8 $ 32 $ 22
Other Commercial (4) (2) 90 15
--------- -------- -------- ----------
Total Commercial 2 6 122 37
--------- -------- -------- ----------
Domestic Consumer:
Residential Mortgage 7 20 22 51
Credit Card 152 172 462 503
Other Consumer 51 32 128 91
-------- -------- -------- ----------
Total Consumer 210 224 612 645
-------- -------- -------- ----------
Total Domestic Net Charge-offs 212 230 734 682
Foreign 8 (5) (19) (28)
-------- -------- -------- ----------
Subtotal Net Charge-offs 220 225 715 654
Charge Related to Conforming Credit Card Charge-off
Policies -- -- 102 --
-------- -------- -------- ----------
Total Net Charge-offs $ 220 $ 225 $ 817 $ 654
======== ======== ======== ==========
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THE CHASE MANHATTAN CORPORATION AND SUBSIDIARIES
CREDIT CARD RELATED INFORMATION
(IN MILLIONS, EXCEPT RATIOS)
AS OF OR FOR THE AS OF OR FOR THE
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------------- ---------------------------
1996 1995 1996 1995
------------- ------------- ----------- ----------
MANAGED CREDIT CARD PORTFOLIO:
Average Managed Credit Card Receivables $ 23,936 $ 21,615 $ 23,457 $ 20,385
Past Due 90 Days & Over and Accruing $ 469 $ 440 $ 469 $ 440
As a Percentage of Average Credit Card Receivables 1.96% 2.04% 2.00% 2.16%
Net Charge-offs $ 296 (a) $ 215 $ 845 (a) $ 611
As a Percentage of Average Credit Card Receivables 4.95% 3.98% 4.80% 4.00%
(a) Excludes a charge related to conforming credit card charge-off policies.
FAVORABLE (UNFAVORABLE) IMPACT OF CREDIT CARD THREE MONTHS ENDED NINE MONTHS ENDED
SECURITIZATIONS ON REPORTED CONSOLIDATED SEPTEMBER 30, SEPTEMBER 30,
---------------------------- ----------------------------
STATEMENT OF INCOME LINE ITEMS: 1996 1995 1996 1995
------------ ---------- ----------- -----------
Net Interest Income $ (244) $ (92) $ (639) $ (226)
Provision for Losses 148 43 409 108
Credit Card Revenue 95 45 217 112
Other Revenue -- -- 11 17
-------- -------- -------- ---------
Pre-tax Income Impact of Securitizations $ (1) $ (4) $ (2) $ 11
======== ======== ======== =========
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THE CHASE MANHATTAN CORPORATION AND SUBSIDIARIES
CONDENSED AVERAGE CONSOLIDATED BALANCE SHEET, INTEREST AND RATES
(TAXABLE-EQUIVALENT INTEREST AND RATES; IN MILLIONS)
THREE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, 1996 SEPTEMBER 30, 1995
--------------------------------------------- ----------------------------------
AVERAGE RATE AVERAGE RATE
BALANCE INTEREST (ANNUALIZED) BALANCE INTEREST (ANNUALIZED)
---------- -------- ------------ --------- -------- -----------
ASSETS
Liquid Interest-Earning Assets $ 70,864 $ 1,186 6.66% $ 59,333 $ 1,002 6.70%
Securities 42,478 694 6.50% 36,305 644 7.04%
Loans 150,076 3,045 8.07% 149,856 3,285 8.70%
--------- ------- --------- -------
Total Interest-Earning Assets 263,418 4,925 7.44% 245,494 4,931 7.97%
Total Noninterest-Earning Assets 59,495 61,480
--------- ---------
Total Assets $ 322,913 $ 306,974
========= =========
LIABILITIES
Total Interest-Bearing Deposits $ 125,179 1,416 4.50% $ 129,494 1,593 4.88%
Total Short-Term and Other Borrowings 83,917 1,213 5.75% 64,117 1,020 6.31%
Long-Term Debt 12,454 220 7.05% 13,081 239 7.26%
--------- ------- --------- -------
Total Interest-Bearing Liabilities 221,550 2,849 5.12% 206,692 2,852 5.47%
--------- ---------
Noninterest-Bearing Deposits 41,628 37,816
Other Noninterest-Bearing Liabilities 39,162 42,441
--------- ---------
Total Liabilities 302,340 286,949
--------- ---------
PREFERRED STOCK OF SUBSIDIARY 78 --
--------- ---------
STOCKHOLDERS' EQUITY
Preferred Stock 2,650 2,650
Common Stockholders' Equity 17,845 17,375
--------- ---------
Total Stockholders' Equity 20,495 20,025
---------- ---------
Total Liabilities and Stockholders' Equity $ 322,913 $ 306,974
========= =========
INTEREST RATE SPREAD 2.32% 2.50%
===== =====
NET INTEREST INCOME AND NET YIELD
ON INTEREST-EARNING ASSETS $ 2,076 3.14% $ 2,079 3.36%
======== ===== ======= =====
NINE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 1996 SEPTEMBER 30, 1995
--------------------------------------------- ----------------------------------
AVERAGE RATE AVERAGE RATE
BALANCE INTEREST (ANNUALIZED) BALANCE INTEREST (ANNUALIZED)
--------- -------- ------------ --------- -------- ------------
ASSETS
Liquid Interest-Earning Assets $ 65,733 $ 3,364 6.84% $ 60,260 $ 3,097 6.87%
Securities 42,574 2,110 6.62% 35,203 1,892 7.18%
Loans 150,107 9,320 8.29% 145,959 9,607 8.80%
--------- ------- -------- -------
Total Interest-Earning Assets 258,414 14,794 7.65% 241,422 14,596 8.08%
Total Noninterest-Earning Assets 59,410 63,479
--------- --------
Total Assets $ 317,824 $ 304,901
========= ========
LIABILITIES
Total Interest-Bearing Deposits $ 129,878 4,518 4.65% $ 130,416 4,689 4.80%
Total Short-Term and Other Borrowings 74,710 3,326 5.95% 61,700 3,036 6.58%
Long-Term Debt 12,781 668 6.98% 13,051 711 7.29%
--------- ------- --------- -------
Total Interest-Bearing Liabilities 217,369 8,512 5.23% 205,167 8,436 5.49%
------- -------
Noninterest-Bearing Deposits 39,150 37,108
Other Noninterest-Bearing Liabilities 40,867 43,219
---------- ----------
Total Liabilities 297,386 285,494
--------- ----------
PREFERRED STOCK OF SUBSIDIARY 26 --
--------- ----------
STOCKHOLDERS' EQUITY
Preferred Stock 2,650 2,757
Common Stockholders' Equity 17,762 16,650
--------- ----------
Total Stockholders' Equity 20,412 19,407
--------- ----------
Total Liabilities and Stockholders'
Equity $ 317,824 $ 304,901
========= ==========
INTEREST RATE SPREAD 2.42% 2.59%
===== =====
NET INTEREST INCOME AND NET YIELD
ON INTEREST-EARNING ASSETS $ 6,282 3.25% $ 6,160 3.41%
======== ===== ======== =====
- 19 -
[CHASE LOGO]
The Chase Manhattan Corporation
270 Park Avenue
New York, NY 10017-2070
NEWS RELEASE
Investor Contact: John Borden Press Contact: Kathleen Baum
212-270-7318 212-270-5089
For Immediate Release John Stefans
212-270-7438
CHASE ANNOUNCES STOCK BUYBACK PLAN
New York, October 15, 1996 -- The Board of Directors of The Chase
Manhattan Corporation today authorized a common stock repurchase program for the
Corporation. The Corporation is authorized until December 31, 1998, to purchase
up to $2.5 billion of its common shares, in addition to such other number of
common shares as may be necessary to provide for expected issuances under the
Corporation's dividend reinvestment plan and its various stock-based director
and employee benefit plans.
At yesterday's closing price of $82.50, the $2.5 billion authorization
would represent 30,303,000 shares or approximately 6.9 percent of the
Corporation's common shares outstanding.
- 20 -