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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 Report: October 20, 1998 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 October 20, 1998 diluted operating earnings per share of $0.82 in the third quarter of 1998 compared with $1.19 in the same 1997 period. Third quarter operating earnings were $738 million in 1998 compared with $1.081 billion in the third quarter of 1997. Operating results (revenues and earnings) exclude the impact of credit card securitizations, restructuring costs and special items. Reported total net income was $837 million, or $0.94 per share, in the third quarter of 1998, compared with $982 million, or $1.08 per share, in 1997. A copy of Chase's earnings press release is attached as an exhibit hereto. This Current Report on Form 8-K may 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 Chase's actual results may differ materially from those set forth in such forward-looking statements. Factors that would affect the prospects of Chase's business are discussed in its Annual Report to Stockholders on Form 10-K for the year ended December 31, 1997. 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 - 1998 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. THE CHASE MANHATTAN CORPORATION (Registrant) Dated October 23, 1998 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 - 1998 Third Quarter Earnings 6 5
The Chase Manhattan Corporation
270 Park Avenue
New York, NY 10017-2070
[CHASE LETTERHEAD]
News Release
Chase Reports Third Quarter Operating Earnings of $738 million
New York, October 20, 1998 -- The Chase Manhattan Corporation (NYSE:CMB) today
reported third quarter operating earnings of $738 million, compared with
operating earnings of $1.081 billion in the same quarter of 1997. Diluted
operating earnings per share were $0.82 in the third quarter of 1998, compared
with $1.19 in the same 1997 period.
Reported total net income was $837 million, or $0.94 per share in the third
quarter. Reported total net income in the third quarter of 1997 was $982
million, or $1.08 per share.
Third Quarter 1998 Financial Highlights
- - Total operating revenues were down three percent from third quarter 1997
levels, as double-digit growth in Chase's National Consumer Services and
Global Services franchises offset a 20 percent revenue decline in Global
Banking.
- - Chase's Tier One capital ratio rose to 8.3 percent at September 30, 1998,
from 8.2 percent on June 30, 1998 and 7.8 percent on September 30, 1997.
During the quarter, the corporation repurchased a net amount of 7.4 million
shares under its repurchase program.
- - Total operating noninterest expenses rose four percent, with salary expense
lower than in the third quarter of 1997. Operating noninterest expenses
were approximately $100 million, or four percent, lower than in the second
quarter of 1998.
- - Total commercial net charge-offs were $200 million, as previously
estimated, primarily reflecting conditions in Asia and Russia.
"Difficult global market conditions affected third quarter earnings negatively.
At the same time, our broadly diversified revenue streams and sound risk
management systems have enabled Chase to differentiate itself in an adverse
environment," said Walter V. Shipley, chairman and chief executive officer.
"Looking ahead, we will continue to maximize the long-term growth potential of
this exceptional franchise by maintaining a disciplined approach to risk,
capital and expense management."
--------------------------
Investor contact: John Borden 212-270-7318
Press contact: Kathleen Baum 212-270-5089
Financial Performance
Shareholder Value Added (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 an
explicit charge for allocated capital. Additional refinements have been made to
the methodology for the allocation of capital to businesses. Prior periods have
been restated to reflect these changes.
- -----------------------------------------------------------------------------------------------------------
THE CHASE MANHATTAN CORP Third Quarter Nine Months
------------------------------------------- -----------------------
Dollars, in millions 1998 O(U)3Q97 O(U)2Q98 1998 O(U) %
---- --------- ---------- ------- ------
Operating Revenues $4,508 $(156) $(543) $14,474 8%
Cash Operating Earnings 801 (321) (342) 3,058 (2)
Shareholder Value Added 68 (390) (373) 936 (20)
Cash Return on Common Equity 14% -- -- 19% --
- -----------------------------------------------------------------------------------------------------------
Line-Of-Business Results
- -----------------------------------------------------------------------------------------------------------
GLOBAL BANK Third Quarter Nine Months
Dollars, in millions 1998 O(U)3Q97 O(U)2Q98 1998 O(U) %
---- --------- ---------- ------ ------
Operating Revenues $1,890 $(461) $(641) $6,918 3%
Cash Operating Earnings 451 (302) (334) 2,030 (4)
Shareholder Value Added (20) (321) (335) 632 (17)
Cash Return on Common Equity 12% -- -- 19% --
- -----------------------------------------------------------------------------------------------------------
Cash operating earnings in the Global Bank declined to $451 million in the third
quarter of 1998; revenues fell 20 percent to $1.890 billion. For the nine months
period, operating revenues rose three percent and cash return on common equity
was 19 percent.
A significant factor reducing Global Bank revenues and earnings in the third
quarter of 1998 was the decrease in equity-related investment gains to $60
million, from $370 million in the preceding period and $249 million in the
year-ago quarter.
Trading revenues and associated net interest income totaled $259 million for the
quarter, a 60 percent decline from last year's third quarter and a 50 percent
decline from the previous quarter. However, securities gains realized during the
quarter were $261 million, representing a portion of the increased value in
Chase's investment portfolio, which is managed as part of the corporation's
overall risk management process. Remaining unrealized gains in Chase's
investment portfolio were approximately $1 billion, before taxes, at September
30, 1998, up from approximately $150 million, before taxes, three months ago.
Investment banking fees were $322 million in the quarter, up 5 percent from the
year-ago quarter, although down by $116 million from second quarter levels.
Strong growth in fee income from loan syndications and merger and acquisition
advisory was offset by substantially reduced underwriting fees in high yield and
emerging markets.
- ---------------------------------------------------------------------------------------------------------
GLOBAL SERVICES Third Quarter Nine Months
------------------------------------------- -----------------------
Dollars, in millions 1998 O(U)3Q97 O(U)2Q98 1998 O(U) %
---- --------- ---------- ------ ------
Operating Revenues $666 $65 $24 $1,937 12%
Cash Operating Earnings 122 10 6 359 17
Shareholder Value Added 63 10 4 185 39
Cash Return on Common Equity 27% -- -- 27% --
- ---------------------------------------------------------------------------------------------------------
Third quarter results for Global Services were highlighted by double-digit
revenue growth in each of its three major business lines - Chase Treasury
Solutions, Global Investor Services and Global Trust. Despite significant
expenses required to prepare for Year 2000 and European Monetary Union,
shareholder value added increased sharply from the prior year period. Cash
return on common equity held steady at 27 percent for both the third quarter and
the nine month periods.
- ------------------------------------- --------------------------------------------- -------------------------------
NATIONAL CONSUMER SERVICES Third Quarter Nine Months
------------------------------------------- -----------------------
Dollars, in millions 1998 O(U)3Q97 O(U)2Q98 1998 O(U) %
------ --------- ---------- ------ ------
Operating Revenues $2,055 $201 $52 $5,989 11%
Cash Operating Earnings 302 (6) 4 894 7
Shareholder Value Added 78 (44) -- 226 (20)
Cash Return on Common Equity 18% -- -- 18% --
- --------------------------------------------------------------------------------------------------------------------
Cash operating earnings were $302 million in the third quarter, essentially flat
to year-ago levels and compared to the previous quarter. Cash operating earnings
for the nine month period were up seven percent and cash return on common equity
was 18 percent. Shareholder value added in the third quarter of 1998 declined by
$44 million from the prior-year quarter, as a result of increased capital from
recent acquisitions.
Revenues from cardmember services grew 16 percent in the quarter to $979
million, with growth primarily driven by portfolio acquisitions. As anticipated,
charge-offs rose in the quarter, reflecting the effect of newly-acquired
portfolios. These factors, combined with increased marketing costs, resulted in
a modest decline in cash operating earnings.
Regional consumer banking revenues rose five percent, as a result of deposit
growth in excess of $1.5 billion, and higher fee income from product and pricing
initiatives. Cash operating earnings rose seven percent from prior-year levels.
Home finance revenues grew by eight percent, benefiting from significantly
higher volume of mortgage originations partially offset by the impact of higher
levels of prepayments on the mortgage portfolio. Cash operating earnings grew
three percent in the third quarter.
Revenues from diversified consumer services rose 17 percent in the third
quarter, with continued strong growth in Chase's auto finance, insurance and
consumer investment businesses. Cash operating earnings rose 19 percent.
Additional Financial Information
- Operating results (revenues and earnings) exclude the impact of credit card
securitizations, restructuring costs and special items. Special items in
the third quarter of 1998 include $191 million in pre-tax interest income
($123 million after tax), resulting from tax refunds in prior years, and a
$37 million pre-tax charge ($24 million after tax) for the accelerated
vesting of stock-based awards. Special items in the same 1997 quarter
include an $85 million pre-tax charge ($54 million after tax) for the
accelerated vesting of stock-based awards and merger-related restructuring
costs.
- Credit exposure to hedge funds was $2.7 billion at September 30, 1998,
including loans, resale agreements, mark-to-market foreign exchange and
derivatives contracts and undrawn commitments to extend credit. Of this
amount, approximately $1.7 billion is secured by cash and treasury
securities, approximately $700 million by other securities, and
approximately $300 million is unsecured. Chase has made a $300 million
investment in Long-Term Capital Management. In addition, Chase has
approximately $400 million invested in other hedge funds with no single
investment larger than $25 million. These other investments are included in
trading assets, are marked-to-market and have produced a year-to-date
return of negative four percent.
- Chase's exposure to emerging markets in Asia and Latin America has declined
substantially in the past nine months, as detailed in the attached tables.
In addition, at September 30, 1998, Chase had approximately $200 million of
lending and trading-related exposure to Russia, a decline of over $250
million from August 31, 1998. Chase also had approximately $450 million in
resale agreements secured by non-ruble denominated Russian debt, at
September 30, 1998.
- The provision for credit losses in the third quarter of 1998 was $455
million, compared with $190 million in the year-ago quarter and $338
million in the second quarter of 1998. Nonperforming assets at September
30, 1998 were $1.533 billion compared with $1.036 billion at September 30,
1997 and $1.365 billion at June 30, 1998.
- Total assets at September 30, 1998 were $356 billion, down approximately
$10 billion from the second quarter of 1998 and from year-ago levels. As a
result, Chase was able to repurchase net $351 million of its stock during
the third quarter and still increase its Tier One capital ratio to 8.3
percent at the end of the quarter.
All per share results reflect a two-for-one stock split that became
effective June 15, 1998.
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 Third Quarter Over/ Nine Months Over/
(Under) (Under)
1998 1997 3QTR 97 1998 1997 YTD 97
----------- ----------- ---------- ----------- ---------- ---------
OPERATING BASIS (a)
Operating Revenue $4,508 $ 4,664 (3%) $14,474 $13,404 8%
Operating Noninterest Expense 2,614 2,505 4% 7,942 7,282 9%
Credit Costs (b) 749 445 68% 2,003 1,338 50%
Operating Net Income $ 738 $ 1,081 (32%) $ 2,870 $ 2,999 (4%)
Cash Operating Earnings $ 801 $ 1,122 (29%) $ 3,058 $ 3,122 (2%)
Shareholder Value Added (SVA) 68 458 (85%) 936 1,170 (20%)
Operating Net Income Per Common Share:
Basic $ 0.84 $ 1.23 (32%) $ 3.29 $ 3.35 (2%)
Diluted 0.82 1.19 (31%) 3.20 3.22 (1%)
Performance Ratios:
Return on Average Total Assets (annualized) 0.81% 1.19% 1.03% 1.15%
Return on Average Common Equity (annualized) 13.1 21.7 17.8 20.5
Common Dividend Payout Ratio 42 25 33 28
Efficiency Ratio (Excluding REIT Minority Interest) 58 53 55 54
Selected Balance Sheet Items: (c)
Loans $185,544 $178,892 4%
Total Assets 375,422 382,379 (2%)
------------------------------------------------------------------------------------------------------------------------------
AS REPORTED BASIS
Revenue $ 4,401 $ 4,415 -- $13,801 $12,718 9%
Noninterest Expense (Excluding Restructuring Costs) 2,647 2,596 2% 7,981 7,426 7%
Restructuring Costs -- 71 NM 529 172 208%
Provision for Credit Losses 455 190 139% 1,137 599 90%
Net Income $ 837 $ 982 (15%) $ 2,636 $ 2,834 (7%)
Per Common Share:
Net Income:
Basic $ 0.96 $ 1.11 (14%) $ 3.02 $ 3.15 (4%)
Diluted 0.94 1.08 (13%) 2.93 3.04 (4%)
Cash Dividends Declared 0.36 0.31 16% 1.08 0.93 16%
Book Value at Period End 26.24 23.10 14% 26.24 23.10 14%
Market Value at Period End 43.13 59.00 (27%) 43.13 59.00 (27%)
Common Shares:
Average Common Shares:
Basic 848.3 844.8 847.4 851.4
Diluted 871.1 869.4 871.2 884.4
Common Shares at Period End 845.5 841.1 845.5 841.1
Performance Ratios:
Return on Average Total Assets(annualized) 0.92% 1.08% 0.95% 1.08%
Return on Average Common Equity (annualized) 14.9 19.6 16.3 19.3
Selected Balance Sheet Items:
Loans $166,572 $163,087 2%
Total Assets 356,450 366,574 (3%)
Deposits 200,319 181,788 10%
Total Stockholders' Equity 23,218 21,166 10%
Capital Ratios:
Tier I Risk-Based Capital Ratio 8.3%(d) 7.8%
Total Risk-Based Capital Ratio 12.1 (d) 11.6
Tier I Leverage 6.6(d) 6.0
Full-Time Equivalent Employees 71,344 68,396
Note: Share-related data for all periods have been restated to reflect a 2
for 1 common stock split, effective June 15, 1998.
(a) Excludes the impact of credit card securitizations, restructuring costs
and special items.
(b) Includes provision for credit losses, foreclosed property expenses and
charge-offs related to the securitized credit card portfolio.
(c) Excludes the impact of credit card securitizations.
(d) Estimated
NM - Not meaningful
Unaudited
THE CHASE MANHATTAN CORPORATION
Lines of Business Results
(in millions, except ratios)
National Consumer
Global Banking (a) Services (a) Global Services (a) Total (b)
Three Months Ended Over/(Under)1997 Over/(Under)1997 Over/(Under)1997 Over/(Under)1997
September 30, 1998 $ % or 1998 $ % or 1998 $ % or 1998 $ % or
bp bp bp bp
Operating Revenues $1,890 $(461) (20%) $2,055 $201 11% $666 $ 65 11% $4,508 $(156) (3%)
Cash Operating Earnings 451 (302) (40%) 302 (6) (2%) 122 10 9% 801 (321) (29%)
Average Common Equity 13,919 948 7% 6,636 1,285 24% 1,734 56 3% 21,681 2,658 14%
Average Assets (c) 259,540 (7,084) (3%) 106,493 10,551 11% 8,928 (890) (9%) 381,327 6,591 2%
Shareholder Value Added (SVA) (20) (321) NM 78 (44) (36%) 63 10 19% 68 (390) (85%)
Cash Return on Common Equity 12.4% (980)bp 17.7% (440)bp 27.4% 170bp 14.3% (830)bp
Efficiency Ratio(Operating) 58% 1,300bp 52% 100bp 71% -- 58% 500bp
GLOBAL BANKING
KEY FINANCIAL MEASURES
Efficiency Ratio
Operating Revenue Cash Operating Earnings Over/
Three Months Ended Over/(Under)1997 Over/(Under)1997 (Under)
September 30, 1998 $ % 1998 $ % 1998 1997
Global Investment Banking $205 $(70) (26%) $ 22 $(52) (71%) 86% 3,100bp
Corporate Lending 402 24 6% 134 8 6% 31 100bp
Global Markets 749 (167) (18%) 180 (126) (41%) 59 1,300bp
Chase Capital Partners (29) (251) NM (35) (159) NM NM NM
Global Asset Management
and Private Banking 198 8 4% 34 (6) (16%) 71 700bp
Middle Market 197 (6) (3%) 43 (7) (14%) 57 700bp
Chase Bank of
Texas N.A. (Consolidated) 412 55 15% 118 22 23% 57 (100)bp
NATIONAL CONSUMER SERVICES
KEY FINANCIAL MEASURES
Efficiency Ratio
Operating Revenue Cash Operating Earnings Over/
Three Months Ended Over/(Under)1997 Over/(Under)1997 (Under)
September 30, 1998 $ % 1998 $ % 1998 1997
Cardmember Services $979 $139 16% $104 $(6) (5%) 38% 100bp
Regional Consumer Banking(a) 591 29 5% 97 6 7% 70 (100)bp
Chase Home Finance 262 20 8% 66 2 3% 56 400bp
Diversified Consumer Services 247 36 17% 58 9 19% 47 100bp
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 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) Only the global banking portion of Chase Bank of Texas, N.A. is reported in
the total Global Banking line of business results. The consumer- and global
services-related results for Chase Texas are reported as part of NCS and Global
Services lines of business results, respectively.
(b) Total column includes Corporate results.
(c) Excludes the impact of credit card securitizations.
bp - basis points
NM - Not meaningful
Unaudited
THE CHASE MANHATTAN CORPORATION
Lines of Business Results
(in millions, except ratios)
National Consumer
Global Banking (a) Services (a) Global Services (a) Total (b)
Nine Months Ended Over/(Under) 1997 Over/(Under) 1997 Over/(Under)1997 Over/(Under)1997
September 30, 1998 $ % or bp 1998 $ % or 1998 $ % or 1998 $ % or
bp bp bp
Operating Revenues $6,918 $210 3% $5,989 572 11% $1,937 $215 12% $14,474 $1,070 8%
Cash Operating Earnings 2,030 (80) (4%) 894 60 7% 359 51 17% 3,058 (64) (2%)
Average Common Equity 13,878 978 8% 6,641 1,338 25% 1,728 49 3% 20,999 2,416 13%
Average Assets (c) 268,669 10,052 4% 105,892 12,528 13% 9,182 72 1% 389,377 25,885 7%
Shareholder Value Added (SVA) 632 (132)(17%) 226 (56) (20%) 185 52 39% 936 (234) (20%)
Cash Return on Common Equity 19.1% (180)bp 17.5% (260)bp 27.3% 380bp 19.0% (240)bp
Efficiency Ratio (Operating) 49% 300bp 51% (100)bp 71% (100)bp 55% 100bp
GLOBAL BANKING
KEY FINANCIAL MEASURES
Efficiency Ratio
Operating Revenue Cash Operating Earnings Over/
Nine Months Ended Over/(Under) 1997 Over/(Under)1997 (Under)
September 30, 1998 $ % 1998 $ % 1998 1997
Global Investment Banking $951 $ 278 41% $226 $ 66 41% 60% --
Corporate Lending 1,169 22 2% 377 (2) -- 31 --
Global Markets 2,580 (128) (5%) 799 (144) (15%) 50 500bp
Chase Capital Partners 587 46 9% 316 22 8% 15 100bp
Global Asset Management
and Private Banking 594 64 12% 109 6 6% 68 100bp
Middle Market 587 (29) (5%) 130 (24) (15%) 55 600bp
Chase Bank of
Texas N.A. (Consolidated) 1,185 164 16% 325 62 24% 57 (300)bp
NATIONAL CONSUMER SERVICES
KEY FINANCIAL MEASURES
Efficiency Ratio
Operating Revenue Cash Operating Earnings Over/
Nine Months Ended Over/(Under) 1997 Over/(Under)1997 (Under)
September 30, 1998 $ % 1998 $ % 1998 1997
Cardmember Services $2,882 $ 459 19% $345 $ 80 30% 37% (200)bp
Regional Consumer Banking (a) 1,727 42 3% 268 (8) (3%) 72 100bp
Chase Home Finance 748 38 5% 189 7 4% 55 200bp
Diversified Consumer Services 686 81 13% 142 11 8% 49 200bp
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 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) Only the global banking portion of Chase Bank of Texas, N.A. is reported in
the total Global Banking line of business results. The consumer- and global
services-related results for Chase Texas are reported as part of NCS and Global
Services lines of business results, respectively.
(b) Total column includes Corporate results.
(c) Excludes the impact of credit card securitizations.
bp - basis points
Unaudited
THE CHASE MANHATTAN CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(in millions, except per share data)
% %
Third Quarter Over/(Under) Nine Months Over/(Under)
1998 1997 3QTR 97 1998 1997 YTD 97
INTEREST INCOME
Loans $3,287 $3,294 -- $10,008 $9,529 5%
Securities 874 720 21% 2,652 2,177 22%
Trading Assets 604 732 (17%) 1,996 2,063 (3%)
Federal Funds Sold and Securities
Purchased Under Resale Agreements 517 623 (17%) 1,742 1,879 (7%)
Deposits with Banks 150 149 1% 450 369 22%
------ ----- ------- -------
Total Interest Income 5,432 5,518 (2%) 16,848 16,017 5%
------ ----- ------- -------
INTEREST EXPENSE
Deposits 1,524 1,714 (11%) 5,123 4,797 7%
Short-Term and Other Borrowings 1,378 1,451 (5%) 4,365 4,263 2%
Long-Term Debt 324 284 14% 954 814 17%
------ ----- ------- -------
Total Interest Expense 3,226 3,449 (6%) 10,442 9,874 6%
------ ----- ------- -------
NET INTEREST INCOME 2,206 2,069 7% 6,406 6,143 4%
Provision for Credit Losses 455 190 139% 1,137 599 90%
NET INTEREST INCOME ------ ----- ------- -------
AFTER PROVISION FOR CREDIT LOSSES 1,751 1,879 (7%) 5,269 5,544 (5%)
NONINTEREST REVENUE ------ ----- ------- -------
Investment Banking Fees 322 308 5% 1,121 767 46%
Trust, Custody and Investment Management Fees 398 338 18% 1,129 969 17%
Credit Card Revenue 381 281 36% 1,046 766 37%
Fees for Other Financial Services 522 505 3% 1,541 1,466 5%
Trading Revenue 114 505 (77%) 927 1,401 (34%)
Securities Gains 261 58 350% 442 189 134%
Revenue from Equity-Related Investments 60 249 (76%) 723 605 20%
Other Revenue 137 102 34% 466 412 13%
------ ----- ------- -------
Total Noninterest Revenue 2,195 2,346 (6%) 7,395 6,575 12%
NONINTEREST EXPENSE ------ ----- ------- -------
Salaries 1,205 1,292 (7%) 3,729 3,526 6%
Employee Benefits 221 206 7% 660 647 2%
Occupancy Expense 198 194 2% 578 574 1%
EquipmentExpense 219 192 14% 640 575 11%
Other Expense 804 712 13% 2,374 2,104 13%
------ ----- ------- -------
Total Noninterest Expense Before Restructuring Costs 2,647 2,596 2% 7,981 7,426 7%
Restructuring Costs -- 71 NM 529 172 208%
------ ----- ------- -------
Total Noninterest Expense 2,647 2,667 (1%) 8,510 7,598 12%
------ ----- ------- -------
INCOME BEFORE INCOME TAX EXPENSE 1,299 1,558 (17%) 4,154 4,521 (8%)
Income Tax Expense 462 576 (20%) 1,518 1,687 (10%)
------ ----- ------- -------
NET INCOME $837 $ 982 (15%) $ 2,636 $ 2,834 (7%)
------ ----- ------- -------
NET INCOME APPLICABLE TO COMMON STOCK $ 815 $ 941 (13%) $ 2,556 $ 2,687 (5%)
------ ----- ------- -------
NET INCOME PER COMMON SHARE:
Basic $0.96 $1.11 (14%) $ 3.02 $ 3.15 (4%)
Diluted $0.94 $1.08 (13%) $ 2.93 $ 3.04 (4%)
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)
% %
Third Quarter Over/(Under) Nine Months Over/(Under)
NONINTEREST REVENUE 1998 1997 3QTR 97 1998 1997 YTD 97
Fees for Other Financial Services:
Service Charges on Deposit Accounts $ 92 $ 94 (2%) $ 275 $ 280 (2%)
Fees in Lieu of Compensating Balances 85 81 5% 256 236 8%
Commissions on Letters of Credit and Acceptances 72 78 (8%) 218 224 (3%)
Mortgage Servicing Fees 43 59 (27%) 149 177 (16%)
Loan Commitment Fees 31 30 3% 101 86 17%
Other Fees 199 163 22% 542 463 17%
------ ----- ------ ------
Total $ 522 $ 505 3% $1,541 $1,466 5%
------ ----- ------ ------
Trading-Related Revenue: (a)
Interest Rate Contracts $ 142 $ 157 (10%) $ 378 $ 539 (30%)
Foreign Exchange Revenue 263 226 16% 819 562 46%
Debt Instruments and Other (146) 264 NM 271 739 (63%)
------ ----- ------ ------
Total $ 259 $ 647 (60%) $1,468 $1,840 (20%)
------ ----- ------ ------
Other Revenue:
Residential Mortgage Origination/Sales Activities $ 105 $ 37 184% $ 241 $ 98 146%
Gains on Sale of Partially-Owned Investments -- -- -- -- 44 NM
All Other Revenue 32 65 (51%) 225 270 (17%)
------ ----- ------ ------
Total $ 137 $ 102 34% $ 466 $ 412 13%
------ ----- ------ ------
NONINTEREST EXPENSE
Other Expense:
Professional Services $ 180 $ 139 29% $ 483 $ 408 18%
Marketing Expense 108 90 20% 306 300 2%
Telecommunications 90 77 17% 258 225 15%
Travel and Entertainment 58 49 18% 177 161 10%
Amortization of Intangibles 63 41 54% 188 123 53%
Minority Interest (b) 12 19 (37%) 36 58 (38%)
Foreclosed Property Expense (4) 6 NM 2 9 (78%)
All Other 297 291 2% 924 820 13%
------ ----- ------ ------
Total $ 804 $ 712 13% $2,374 $2,104 13%
------ ----- ------ ------
(a) Includes net interest income attributable to trading activities.
(b) Includes minority interest related to the REIT of $11 million in each
quarter.
NM - Not meaningful
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)
THIRD QUARTER 1998
CREDIT
REPORTED CARD SPECIAL OPERATING
RESULTS SECURITIZATIONS ITEMS BASIS
EARNINGS
Total Revenue $ 4,401 $ 298 $ (191) $ 4,508
Noninterest Expense 2,651 (37) 2,614
-------- ------- ------- -------
Operating Margin 1,750 298 (154) 1,894
Credit Costs 451 298 - 749
-------- ------- ------- -------
Income Before Restructuring Costs 1,299 - (154) 1,145
Restructuring Costs - - - -
-------- ------- ------- -------
Income Before Taxes 1,299 - (154) 1,145
Tax Expense 462 - (55) 407
-------- ------- ------- -------
Net Income $ 837 $ - $ (99) $ 738
-------- ------- ------- -------
NET INCOME PER COMMON SHARE
Basic $ 0.96 $ 0.84
Diluted $ 0.94 $ 0.82
THIRD QUARTER 1997
CREDIT
REPORTED CARD SPECIAL OPERATING
RESULTS SECURITIZATIONS ITEMS BASIS
EARNINGS
Total Revenue $ 4,415 $ 249 $ - $ 4,664
Noninterest Expense 2,590 - (85) 2,505
-------- ------- ------- --------
Operating Margin 1,825 249 85 2,159
Credit Costs 196 249 - 445
-------- ------- ------- -------
Income Before Restructuring Costs 1,629 - 85 1,714
Restructuring Costs 71 - (71) -
-------- ------- ------- -------
Income Before Taxes 1,558 - 156 1,714
Tax Expense 576 - 57 633
-------- ------- ------- -------
Net Income $ 982 $ - $ 99 $ 1,081
-------- ------- ------- -------
NET INCOME PER COMMON SHARE
Basic $ 1.11 $ 1.23
Diluted $ 1.08 $ 1.19
NOTES:
Reported results represent amounts shown in Chase's financial statements,
except restructuring costs have been separately displayed and foreclosed
property expense is included in credit costs.
Credit Card Securitizations excludes the impact of credit card
securitizations.
1998 special items include $191 million pre-tax income ($123 million
after-tax) for prior years' tax refunds and a $37 million pre-tax charge
($24 million after-tax)for the accelerated vesting of stock-based awards.
1997 special items include an $85 million pre-tax charge ($54 million
after-tax) for the accelerated vesting of stock-based awards and merger-
related restructuring costs.
Unaudited
THE CHASE MANHATTAN CORPORATION
OPERATING INCOME RECONCILIATION (YEAR-TO-DATE)
(in millions, except per share data)
NINE MONTHS 1998
CREDIT
REPORTED CARD SPECIAL OPERATING
RESULTS SECURITIZATIONS ITEMS BASIS
EARNINGS
Total Revenue $ 13,801 $ 864 $(191) $ 14,474
Noninterest Expense 7,979 - (37) 7,942
-------- ------- ------- -------
Operating Margin 5,822 864 (154) 6,532
Credit Costs 1,139 864 - 2,003
-------- ------- ------- -------
Income Before Restructuring Costs 4,683 - (154) 4,529
Restructuring Costs 529 - (529) -
-------- ------- ------- -------
Income Before Taxes 4,154 - 375 4,529
Tax Expense 1,518 - 141 1,659
-------- ------- ------- -------
Net Income $ 2,636 $ - $ 234 $ 2,870
-------- ------- ------- -------
NET INCOME PER COMMON SHARE
Basic $ 3.02 $ 3.29
Diluted $ 2.93 $ 3.20
NINE MONTHS 1997
CREDIT
REPORTED CARD SPECIAL OPERATING
RESULTS SECURITIZATIONS ITEMS BASIS
EARNINGS
Total Revenue $ 12,718 $ 730 $ (44) $ 13,404
Noninterest Expense 7,417 - (135) 7,282
-------- ------- ------- -------
Operating Margin 5,301 730 91 6,122
Credit Costs 608 730 - 1,338
-------- ------- ------- -------
Income Before Restructuring Costs 4,693 - 91 4,784
Restructuring Costs 172 - (172) -
-------- ------- ------- -------
Income Before Taxes 4,521 - 263 4,784
Tax Expense 1,687 - 98 1,785
-------- ------- ------- -------
Net Income $ 2,834 $ - $ 165 $ 2,999
-------- ------- ------- -------
NET INCOME PER COMMON SHARE
Basic $ 3.15 $ 3.35
Diluted $ 3.04 $ 3.22
NOTES:
Reported results represent amounts shown in Chase's financial statements,
except restructuring costs have been separately displayed and foreclosed
property expense is included in credit costs.
Credit Card Securitizations excludes the impact of credit card
securitizations.
1998 special items include $191 million pre-tax income ($123 million
after-tax) for prior years' tax refunds, a $37 million pre-tax charge
($24 million after-tax) for the accelerated vesting of stock-based
awards, the $510 million pre-tax charge ($320 million after-tax) in the
first quarter, taken in connection with initiatives to streamline
support functions and realign certain business functions, and merger-
related restructuring costs of $19 million pre-tax ($13 million after-
tax).
1997 special items include a $44 million pre-tax gain ($28 million
after-tax) from the sale of a partially-owned foreign investment, $135
million pre-tax charge ($85 million after-tax) for the accelerated
vesting of stock-based awards, and merger-related restructuring costs.
Unaudited
THE CHASE MANHATTAN CORPORATION
CONSOLIDATED BALANCE SHEET
(in millions)
%
Over/(Under)
September 30, Sept. 30,
1998 1997 1997
ASSETS
Cash and Due from Banks $ 14,585 $ 14,367 2%
Deposits with Banks 3,877 4,152 (7%)
Federal Funds Sold and Securities
Purchased Under Resale Agreements 23,591 38,958 (39%)
Trading Assets:
Debt and Equity Instruments 28,491 42,456 (33%)
Risk Management Instruments 33,313 33,296 --
Securities 57,465 47,241 22%
Loans 166,572 163,087 2%
Allowance for Credit Losses (3,554) (3,462) 3%
--------- ---------
Net Loans 163,018 159,625 2%
Other Assets 32,110 26,479 21%
--------- ---------
TOTAL ASSETS $ 356,450 $ 366,574 (3%)
--------- ---------
LIABILITIES
Deposits:
Domestic:
Noninterest-Bearing $ 46,231 $ 39,131 18%
Interest-Bearing 76,115 69,587 9%
Foreign:
Noninterest-Bearing 3,877 3,777 3%
Interest-Bearing 74,096 69,293 7%
--------- ---------
Total Deposits 200,319 181,788 10%
Federal Funds Purchased and Securities
Sold Under Repurchase Agreements 43,156 65,453 (34%)
Commercial Paper 4,239 4,584 (8%)
Other Borrowed Funds 7,761 7,085 10%
Trading Liabilities 44,491 53,498 (17%)
Accounts Payable, Accrued Expenses and Other Liabilities 16,312 17,161 (5%)
Long-Term Debt 14,216 13,899 2%
Guaranteed Preferred Beneficial Interests in Corporation's
Junior Subordinated Deferrable Interest Debentures 2,188 1,390 57%
--------- ---------
TOTAL LIABILITIES 332,682 344,858 (4%)
--------- ---------
PREFERRED STOCK OF SUBSIDIARY 550 550 --
--------- ---------
STOCKHOLDERS' EQUITY
Preferred Stock 1,028 1,740 (41%)
Common Stock 882 441 100%
Capital Surplus 9,852 10,357 (5%)
Retained Earnings 12,722 10,508 21%
Accumulated Other Comprehensive Income 701 144 387%
Treasury Stock, at Cost (1,967) (2,024) (3%)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 23,218 21,166 10%
TOTAL LIABILITIES, PREFERRED STOCK OF SUBSIDIARY --------- ---------
AND STOCKHOLDERS' EQUITY $ 356,450 $ 366,574 (3%)
--------- ---------
Certain amounts have been reclassified to conform to the current
presentation.
Unaudited
THE CHASE MANHATTAN CORPORATION
CONSOLIDATED STATEMENT OF CHANGES
IN STOCKHOLDERS' EQUITY
(in millions)
Nine Months Ended
September 30,
1998 1997
Preferred Stock:
Balance at Beginning of Year $ 1,740 $ 2,650
Issuance of Stock 200 --
Redemption of Stock (912) (910)
--------- ---------
Balance at End of Period $ 1,028 $ 1,740
--------- ---------
Common Stock:
Balance at Beginning of Year $ 441 $ 441
Issuance of Common Stock for a Two-for-One Stock Split 441 --
--------- ---------
Balance at End of Period $ 882 $ 441
--------- ---------
Capital Surplus:
Balance at Beginning of Year $ 10,360 $ 10,459
Issuance of Common Stock for a Two-for-One Stock Split (441) --
Shares Issued and Commitments to Issue Common Stock
for Employee Stock-Based Awards and Related Tax Effects (67) (102)
--------- ---------
Balance at End of Period $ 9,852 $ 10,357
--------- ---------
Retained Earnings:
Balance at Beginning of Year $ 11,086 $ 8,610
Net Income 2,636 2,834
Cash Dividends Declared:
Preferred Stock (80) (147)
Common Stock (920) (789)
--------- ---------
Balance at End of Period $ 12,722 $ 10,508
--------- ---------
Accumulated Other Comprehensive Income: (a)
Balance at Beginning of Year $ 112 $ (271)
Other Comprehensive Income 589 415
--------- ---------
Balance at End of Period $ 701 $ 144
--------- ---------
Common Stock in Treasury, at Cost:
Balance at Beginning of Year $ (1,997) $ (895)
Purchase of Treasury Stock (1,038) (2,036)
Reissuance of Treasury Stock 1,068 907
--------- ---------
Balance at End of Period $ (1,967) $(2,024)
--------- ---------
Total Stockholders' Equity $ 23,218 $ 21,166
--------- ---------
- ------------------------------------------------------------------------------------------------------------------------------------
Comprehensive Income: (a)
Net Income $ 2,636 $ 2,834
Other Comprehensive Income 589 415
--------- ---------
Comprehensive Income $ 3,225 $ 3,249
--------- ---------
(a) Effective with the first quarter 1998, Chase adopted SFAS 130, which
defines and establishes the standards for reporting comprehensive income.
Comprehensive income for Chase includes net income as well as the change in
unrealized gains and losses on available-for-sale securities and foreign
currency translation adjustments.
Prior period amounts have been reclassified to conform to the current
presentation.
Unaudited
THE CHASE MANHATTAN CORPORATION
CREDIT RELATED INFORMATION
(in millions)
%
Over/(Under)
September 30, Sept. 30,
LOANS OUTSTANDING 1998 1997 1997
CONSUMER
Domestic Consumer:
1-4 Family Residential Mortgages $ 39,250 $ 38,730 1%
Credit Card 12,472 11,618 7%
Other Consumer 23,480 21,712 8%
------ ------
Total Domestic Consumer 75,202 72,060 4%
Total Foreign Consumer 3,951 3,692 7%
------ ------
Total Consumer 79,153 75,752 4%
COMMERCIAL ------ ------
Domestic Commercial:
Commercial and Industrial 48,011 43,908 9%
Commercial Real Estate 5,071 6,555 (23%)
------ ------
Total Domestic Commercial 53,082 50,463 5%
Total Foreign Commercial 34,337 36,872 (7%)
------ ------
Total Commercial 87,419 87,335 --
--------- --------
Total Loans $166,572 $163,087 2%
--------- --------
NONPERFORMING ASSETS
CONSUMER
Domestic Consumer:
1-4 Family Residential Mortgages $ 343 $ 324 6%
Credit Card -- -- --
Other Consumer 54 32 69%
------ ------
Total Domestic Consumer 397 356 12%
Total Foreign Consumer 21 21 --
------ ------
Total Consumer 418 377 11%
COMMERCIAL ------ ------
Domestic Commercial:
Commercial and Industrial 353 310 14%
Commercial Real Estate 53 119 (55%)
------ ------
Total Domestic Commercial 406 429 (5%)
Total Foreign Commercial 559 125 347%
------ ------
Total Commercial 965 554 74%
------ ------
Total Nonperforming Loans 1,383 931 49%
------ ------
Derivative and Foreign Exchange Contracts 19 -- NM
Assets Acquired as Loan Satisfactions 131 105 25%
--------- --------
Total Nonperforming Assets $ 1,533 $ 1,036 48%
--------- --------
% %
Third Quarter Over/(Under) Nine Months Over/(Under)
NET CHARGE-OFFS 1998 1997 3QTR 97 1998 1997 YTD 97
CONSUMER
Domestic Consumer:
1-4 Family Residential Mortgages $ 6 $ 8 (25%) $ 22 $ 21 5%
Credit Card 187 132 42% 550 403 36%
Other Consumer 56 56 -- 181 171 6%
--- --- --- ---
Total Domestic Consumer 249 196 27% 753 595 27%
Total Foreign Consumer 6 3 100% 14 9 56%
--- --- --- ---
Total Consumer 255 199 28% 767 604 27%
COMMERCIAL --- --- --- ---
Domestic Commercial:
Commercial and Industrial (59) 14 NM (77) 32 NM
Commercial Real Estate (3) (13) NM (9) (23) NM
--- --- --- ---
Total Domestic Commercial (62) 1 NM (86) 9 NM
Total Foreign Commercial 154 (10) NM 326 (14) NM
--- --- --- ---
Total Commercial 92 (9) NM 240 (5) NM
--- --- --- ---
Derivative and Foreign Exchange Contracts 108 -- NM 130 -- NM
--- --- --- ---
Total Net Charge-offs $ 455 $ 190 139% $1,137 $599 90%
--- --- --- ---
NM - Not meaningful
Unaudited
THE CHASE MANHATTAN CORPORATION
CREDIT RELATED INFORMATION (Continued)
CREDIT CARD PORTFOLIO (excluding As of or For The As of or For The
the impact of securitizations): * Three Months Ended Nine Months Ended
September 30, September 30,
(in millions, except ratios) 1998 1997 1998 1997
Average Credit Card Receivables $ 31,607 $ 27,630 $ 31,991 $ 26,527
Past Due 90 Days or More and Accruing $ 675 $ 528 $ 675 $ 528
As a Percentage of Average Credit Card Receivables 2.14% 1.91% 2.11% 1.99%
Net Charge-offs $ 489 $ 379 $ 1,425 $ 1,125
As a Percentage of Average Credit Card Receivables 6.19% 5.49% 5.94% 5.65%
* Includes domestic and international credit card activity.
SELECTED COUNTRY EXPOSURE
(in billions)
At Dec. 31,
At September 30, 1998 (a) 1997
------------------------------------------------------------- ------------
Foreign Total Total
Lending- Exchange Cross- Cross-
Related and Resale Border Border
ASIA and Other (b) Derivatives (c) Agreements (d) Exposure Exposure
-------------------
Japan $ 3.8 $ 1.9 $ 0.1 $ 5.8 $ 9.6
Australia 2.3 1.1 - 3.4 5.0
Korea 2.0 0.5 - 2.5 5.4
Hong Kong 2.0 0.3 - 2.3 3.6
Indonesia 1.2 0.2 - 1.4 2.6
Thailand 1.2 0.2 - 1.4 2.1
Singapore 1.1 0.3 - 1.4 1.8
Philippines 0.7 - - 0.7 1.1
Malaysia 0.5 0.1 - 0.6 1.1
All Other Asia 1.7 0.2 0.1 2.0 1.7
-------- ------- ------- ------- -------
Total Asia $ 16.5 $ 4.8 $ 0.2 $ 21.5 $ 34.0
-------- ------- ------- ------- -------
LATIN AMERICA
-------------------
Brazil $ 2.8 $ 0.1 $ 0.9 $ 3.8 $ 4.9
Argentina 2.3 0.1 0.5 2.9 3.3
Mexico 1.5 0.6 0.5 2.6 3.0
Chile 1.1 - - 1.1 1.6
Colombia 0.9 - - 0.9 0.8
Venezuela 0.4 - 0.1 0.5 1.0
All Other Latin America (e) 0.8 0.2 - 1.0 1.5
-------- ------- ------- ------- -------
Total Latin America $ 9.8 $ 1.0 $ 2.0 $ 12.8 $ 16.1
-------- ------- ------- ------- -------
(a)Estimated cross-border disclosure is based on Chase's credit risk
management policies in assessing Chase's cross-border risk.
(b)Includes loans and accrued interest, interest-bearing deposits with banks,
trading debt and equity instruments, acceptances, other monetary assets,
issued letters of credit, undrawn commitments to extend credit and local
currency assets, net of local currency liabilities.
(c)Foreign exchange largely represents the mark-to-market exposure of spot and
forward contracts. Derivatives largely represent the mark-to-market exposure
of risk management instruments. Mark-to-market exposure is a measure, at a
point in time, of the value of a foreign exchange or derivative contract in
the open market. The impact of legally enforceable master netting agreements
on these foreign exchange and derivative contracts reduced exposure by $16.7
billion at September 30, 1998 and $12.7 billion at December 31, 1997.
(d)A majority of this exposure 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.
(e)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
September 30, 1998 September 30, 1997
--------------------------------- ------------------------------
Average Rate Average Rate
Balance Interest (Annualized) Balance Interest (Annualized)
ASSETS
Liquid Interest-Earning Assets $ 63,853 $ 1,271 7.89% $ 83,331 $ 1,504 7.16%
Securities 56,897 879 6.13% 45,039 725 6.38%
Loans 166,134 3,288 7.86% 161,247 3,296 8.11%
------- ----- ------- -----
Total Interest-Earning Assets 286,884 5,438 7.52% 289,617 5,525 7.57%
Noninterest-Earning Assets 75,981 70,697
-------- --------
Total Assets $362,865 $360,314
-------- --------
LIABILITIES
Interest-Bearing Deposits $150,787 1,524(a) 4.01% $139,091 1,714 4.89%
Short-Term and Long-Term Debt 90,976 1,702 7.42% 108,245 1,735 6.36%
------- ----- -------- -----
Total Interest-Bearing Liabilities 241,763 3,226 5.29% 247,336 3,449 5.53%
Noninterest-Bearing Deposits 45,684 ----- 41,935 -----
Other Noninterest-Bearing Liabilities 52,021 49,493
------- -------
Total Liabilities 339,468 338,764
------- -------
PREFERRED STOCK OF SUBSIDIARY 550 550
STOCKHOLDERS' EQUITY ------- -------
Preferred Stock 1,166 1,977
Common Stockholders' Equity 21,681 19,023
------- -------
Total Stockholders' Equity 22,847 21,000
Total Liabilities, Preferred Stock of Subsidiary -------- --------
and Stockholders' Equity $362,865 $360,314
-------- --------
INTEREST RATE SPREAD 2.23% 2.04%
NET INTEREST INCOME AND NET YIELD ----- -----
ON INTEREST-EARNING ASSETS $ 2,212 3.06% $ 2,076 2.84%
------- ----- ------- -----
NET INTEREST INCOME AND NET YIELD
ON INTEREST-EARNING ASSETS (b) $ 2,586 3.36%(a) $ 2,395 3.12%
------- ----- ------- -----
- ------------------------------------------------------------------------------------------------------------------------------------
Nine Months Ended Nine Months Ended
September 30, 1998 September 30, 1997
---------------------------------- -------------------------------------
Average Rate Average Rate
Balance Interest (Annualized) Balance Interest (Annualized)
ASSETS
Liquid Interest-Earning Assets $ 71,187 $ 4,188 7.86% $ 79,828 $ 4,311 7.22%
Securities 56,511 2,668 6.31% 44,329 2,190 6.61%
Loans 168,128 10,012 7.96% 156,942 9,535 8.12%
------- ------ ------- ------
Total Interest-Earning Assets 295,826 16,868 7.62% 281,099 16,036 7.63%
Total Noninterest-Earning Assets 75,623 68,470
-------- --------
Total Assets $371,449 $349,569
-------- --------
LIABILITIES
Total Interest-Bearing Deposits $151,240 5,123 (a) 4.53% $135,332 4,797 4.74%
Short-Term and Long-Term Debt 100,300 5,319 7.09% 103,088 5,077 6.58%
-------- ------ -------- -----
Total Interest-Bearing Liabilities 251,540 10,442 5.55% 238,420 9,874 5.54%
Noninterest-Bearing Deposits 45,340 ------ 41,302 -----
Other Noninterest-Bearing Liabilities 51,655 48,343
------- -------
Total Liabilities 348,535 328,065
------- -------
PREFERRED STOCK OF SUBSIDIARY 550 550
STOCKHOLDERS' EQUITY ------- -------
Preferred Stock 1,365 2,371
Common Stockholders' Equity 20,999 18,583
------- -------
Total Stockholders' Equity 22,364 20,954
Total Liabilities, Preferred Stock of Subsidiary -------- --------
and Stockholders' Equity $371,449 $349,569
-------- --------
INTEREST RATE SPREAD 2.07% 2.09%
NET INTEREST INCOME AND NET YIELD ----- -----
ON INTEREST-EARNING ASSETS $ 6,426 2.90% $ 6,162 2.93%
NET INTEREST INCOME AND NET YIELD ------- ----- ------- -----
ON INTEREST-EARNING ASSETS (b) $ 7,519 3.20% (a) $ 7,075 3.20%
------- ----- ------- -----
(a) Includes $191 million pre-tax income for prior years' tax refunds.
Excluding this amount, the net yield on interest-earning assets excluding
the impact of credit card securitizations would be 3.11% for the 1998
third quarter and 3.12% for the 1998 first nine months.
(b) Excludes the impact of the credit card securitizations.
Unaudited