<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended: March 31, 1997 Commission file number: 1-12151
CHASE PREFERRED CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-3899576
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
270 Park Avenue, New York, New York 10017
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 270-6000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes {X} No { }
Common Stock, $300 Par Value
572,500
Number of shares outstanding of each of the issuer's classes of common stock
on March 31, 1997.
<PAGE> 2
<TABLE>
FORM 10-Q INDEX
<CAPTION>
Part I Page
<S> <C> <C>
Item 1. Financial Statements - Chase Preferred
Capital Corporation:
Balance Sheet at March 31, 1997 and
December 31, 1996. 3
Statement of Income for the Quarter
Ended March 31, 1997. 4
Statement of Changes in Stockholders'
Equity for the Quarter Ended March 31, 1997. 5
Statement of Cash Flows for the
Quarter Ended March 31, 1997. 6
Notes to Financial Statements. 7-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations. 9-13
Part II
Item 1. Legal Proceedings 14
Item 6. Exhibits and Current Reports on Form 8-K. 15-18
</TABLE>
-2-
<PAGE> 3
Part I
Item 1.
<TABLE>
CHASE PREFERRED CAPITAL CORPORATION
BALANCE SHEET
(in thousands)
<CAPTION>
ASSETS: 3/31/97 12/31/96
<S> <C> <C>
Residential mortgage loans $ 993,910 $ 958,411
Commercial mortgage loans 104,042 101,570
---------- ----------
1,097,952 1,059,981
Less: allowance for loan losses (3,305) (3,150)
---------- ---------
1,094,647 1,056,831
Cash 9,153 31,091
Due from affiliates 14,041 18,743
Accrued interest receivable 6,909 6,733
--------- --------
TOTAL ASSETS $ 1,124,750 $ 1,113,398
LIABILITIES:
Accounts payable $ 403 $ 430
Due to affiliates 2,834 242
----- ---
TOTAL LIABILITIES 3,237 672
STOCKHOLDERS' EQUITY:
Preferred stock, par value $25 per
share; 50,000,000 shares authorized,
22,000,000 issued and outstanding 550,000 550,000
Common stock, par value $300 per
share; 5,000,000 shares authorized,
572,500 shares issued and outstanding 171,750 171,750
Additional paid in capital 381,637 381,637
Retained earnings 18,126 9,339
-------- --------
TOTAL STOCKHOLDERS' EQUITY 1,121,513 1,112,726
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 1,124,750 $ 1,113,398
</TABLE>
The Notes to Financial Statements are an integral part of these Statements.
-3-
<PAGE> 4
Part I
Item 1. (continued)
CHASE PREFERRED CAPITAL CORPORATION
STATEMENT OF INCOME
For the Quarter Ended March 31, 1997
(in thousands, except per share data)
<TABLE>
<CAPTION>
INTEREST INCOME:
<S> <C>
Residential mortgage loans $ 17,666
Commercial mortgage loans 2,386
Interest on overnight investments 689
------
20,741
Less: servicing fees (665)
-------
Net interest income 20,076
NONINTEREST EXPENSE:
Advisory fees 62
Other administrative expenses 90
----
Total noninterest expense 152
----
NET INCOME $19,924
--------
NET INCOME APPLICABLE TO COMMON SHARES $8,787
NET INCOME PER COMMON SHARE $ 15.35
</TABLE>
The Notes to Financial Statements are an integral part of these Statements.
-4-
<PAGE> 5
Part I
Item 1. (continued)
CHASE PREFERRED CAPITAL CORPORATION
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the Quarter Ended March 31, 1997
(in thousands)
<TABLE>
<CAPTION>
PREFERRED STOCK:
<S> <C>
Balance at beginning of year $ 550,000
Balance at end of quarter $ 550,000
COMMON STOCK:
Balance at beginning of year $ 171,750
Balance at end of quarter $ 171,750
ADDITIONAL PAID IN CAPITAL:
Balance at beginning of year $ 381,637
Balance at end of quarter $ 381,637
RETAINED EARNINGS:
Balance at beginning of year $ 9,339
Net Income 19,924
Preferred dividends (11,137)
----------
Balance at end of quarter $ 18,126
TOTAL STOCKHOLDERS' EQUITY $ 1,121,513
</TABLE>
The Notes to Financial Statements are an integral part of these Statements.
-5-
<PAGE> 6
Part I
Item 1. (continued)
CHASE PREFERRED CAPITAL CORPORATION
STATEMENT OF CASH FLOWS
For the Quarter Ended March 31, 1997
(in thousands)
<TABLE>
<CAPTION>
OPERATING ACTIVITIES:
<S> <C>
Net income $ 19,924
Adjustments to reconcile net income to net cash
provided by operating activities:
Net change In:
Due from affiliates 4,702
Accrued interest receivable 237
Accounts payable (27)
Due to affiliates 2,592
Net cash provided by operating activities 27,428
INVESTING ACTIVITIES:
Purchase of net mortgage loans (74,693)
Principal payments received 36,877
Purchase of accrued interest receivable (413)
---------
Net cash used by investing activities (38,229)
---------
FINANCING ACTIVITIES:
Dividends paid (11,137)
Net cash provided by financing activities (11,137)
NET INCREASE/(DECREASE) IN CASH (21,938)
CASH AT BEGINNING OF PERIOD 31,091
CASH AT MARCH 31, 1997 $ 9,153
</TABLE>
The Notes to Financial Statements are an integral part of these Statements.
-6-
<PAGE> 7
Part I
Item 1. (continued)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION
Chase Preferred Capital Corporation (the "Company") is a Delaware corporation
incorporated on June 28, 1996 and created for the purpose of acquiring,
holding and managing real estate assets. The Company is a wholly-owned
subsidiary of The Chase Manhattan Bank (the "Bank"), a banking corporation
organized under the laws of the State of New York.
On September 18, 1996, the Company commenced its operations upon consummation
of an initial public offering of 22,000,000 shares of the Company's 8.10%
Cumulative Preferred Stock, Series A, $25 par value per share (the "Series A
Preferred Shares"), and the sale to the Bank of 572,500 shares of the
Company's Common Stock, $300 par value per share (the "Common Stock"). These
offerings raised net capital of $1,103,386,000. All shares of Common Stock
are held by the Bank. The Series A Preferred Shares are traded on the New
York Stock Exchange.
The Company used the proceeds raised from the initial public offering of the
Series A Preferred Shares and the sale of the Common Stock to the Bank to pay
expenses incurred during the offering and the formation of the Company and to
purchase from the Bank the Company's initial portfolio of residential and
commercial mortgage loans ("Mortgage Loans") at their estimated fair values.
The Mortgage Loans were recorded in the accompanying financial statements at
the Bank's historical cost basis which approximated their estimated fair
values.
The unaudited financial statements of the Company are prepared in accordance
with generally accepted accounting principles for interim financial
information. In the opinion of management, all adjustments (consisting only
of normal recurring adjustments) necessary for a fair presentation of the
financial position and the results of operations for the interim period
presented have been included.
For further discussion of the Company's accounting policies, reference is
made to Note Two of the Company's Annual Report on Form 10-K for the year
ended December 31, 1996 (the "1996 Annual Report").
NOTE 2 - RELATED PARTY TRANSACTIONS
The Company has entered into an Advisory Agreement (the "Advisory Agreement")
with the Bank (the "Advisor") requiring an annual payment of $250,000. The
Advisor provides advice to the Board of Directors and manages the operations
of the Company as defined in the Agreement. The Agreement has an initial term
of five years commencing on September 18, 1996 and automatically renews for
an additional five years unless the Company delivers a notice of nonrenewal
to the Advisor as defined in the Advisory Agreement.
The Company also entered into two servicing agreements with the Bank for the
servicing of the commercial and residential mortgage loans. (The Bank in its
role as servicer under the terms of the servicing agreements is herein
referred to as the "Servicer"). Pursuant to each servicing agreement, the
Servicer performs the actual servicing of the Mortgage Loans held by the
Company, in accordance with normal industry practice. The Servicing
Agreements can be terminated without cause with at least thirty days notice
to the Servicer. The servicing fee is 0.25% of the outstanding principal
balance for the residential mortgage loans and ranges from 0.08% - 0.30% of
the outstanding principal balances for the commercial mortgage loans
depending upon the outstanding principal amount.
The Bank has entered into sub-servicing agreements ("Sub-Agreements") with
Chase Manhattan Mortgage Corporation ("CMMC"), a wholly-owned subsidiary of
Chase Manhattan Bank USA, N.A., an indirect wholly-owned subsidiary of The
Chase Manhattan Corporation.
Advisory fees and servicing fees for the quarter ended March 31, 1997 totaled
approximately $727,000.
-7-
<PAGE> 8
Part I
Item 1. (Continued)
In its capacity as Sub-Servicer, CMMC owes the Company approximately
$14,041,000, primarily consisting of mortgage loan payments received on
behalf of the Company. Pursuant to the terms of the servicing and
subservicing agreements, the Company receives mortgage loan payments
collected by the Servicer (and sub-servicer) in the month immediately
following its collection.
The Company maintains its cash in an overnight deposit account with the Bank
and earns a market rate of interest. Interest income on these deposits
amounted to approximately $689,000 for the quarter ended March 31, 1997.
NOTE 3 - FAIR VALUE OF FINANCIAL INSTRUMENTS
For further discussion on the methodology for determining the fair value of
the Mortgage Loans, reference is made to Note Six of the Company's 1996
Annual Report.
Loans:
The book value and fair value of Mortgage Loans at March 31, 1997 are as
follows (in thousands):
<TABLE>
<CAPTION>
Book Value Fair Value
<S> <C> <C>
Residential Mortgage Loans $ 993,910 $ 991,325
Commercial Mortgage Loans 104,042 103,226
</TABLE>
Assets and liabilities in which fair value approximates carrying value:
The fair values of certain financial assets and liabilities carried at cost,
including cash, due from affiliates, accrued interest receivable, accounts
payable, due to affiliates and dividends payable, are considered to
approximate their respective carrying value due to their short-term nature
and negligible credit losses.
-8-
<PAGE> 9
Part I
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CHASE PREFERRED CAPITAL CORPORATION
FINANCIAL HIGHLIGHTS
For the Quarter Ended March 31, 1997
(in thousands, except per share, unit and ratio data)
<TABLE>
<CAPTION>
INCOME STATEMENT:
<S> <C>
Interest income $ 20,741
Net interest income 20,076
Net income 19,924
Average number of common shares outstanding 572,500
Net income applicable to common shares 8,787
Income per common share $ 15.35
BALANCE SHEET:
Mortgage loans $ 1,097,952
Total assets 1,124,750
Preferred stock outstanding 550,000
Total stockholders' equity $ 1,121,513
OTHER DATA:
Dividends paid on preferred shares $ 11,137
Number of preferred shares outstanding 22,000,000
Number of common shares outstanding 572,500
Average yield on mortgage loans 7.6%
</TABLE>
-9-
<PAGE> 10
Part I
Item 2. (continued)
OVERVIEW
The principal business of the Company is to acquire, hold and manage
residential and commercial mortgage loans ("Mortgage Loans") that will
generate net income for distribution to stockholders. The Company currently
intends to continue to acquire all its Mortgage Loans from The Chase
Manhattan Bank (the "Bank"), a banking corporation organized under the laws
of the State of New York, or from affiliates of the Bank as whole loans
secured by first mortgages or deeds of trust on single-family (one to four-
unit) residential real estate properties or on commercial real estate
properties. The Company may also from time to time acquire securities that
qualify as real estate assets under Section 856(c)(6)(B) of the Internal
Revenue Code of 1986 (the "Code") that are rated by at least one nationally
independent rating organization and that represent interests in or
obligations backed by pools of mortgage loans ("Mortgage-Backed Securities").
Mortgage loans underlying the Mortgaged-Backed Securities will be secured by
single-family residential, multifamily or commercial real estate properties
located in the United States.
On September 18, 1996, the Company commenced its operations upon the initial
public offering of 22,000,000 shares of the Company's 8.10% Cumulative
Preferred Stock, Series A, $25 par value per share (the "Series A Preferred
Shares"), and the sale to the Bank of 572,500 shares of the Company's Common
Stock, $300 par value per share (the "Common Stock"). These offerings raised
net capital of $1,103,386,000. All shares of Common Stock are held by the
Bank. The Series A Preferred Shares are traded on the New York Stock
Exchange.
The Bank and its affiliates are involved in virtually every aspect of the
Company's existence. The Bank administers the day-to-day activities of the
Company in its role as Advisor under the Advisory Agreement. The Bank also
services the Company's Mortgage Loans in its role as Servicer under
each of the Servicing Agreements.
The Bank and its affiliates may have interests which are not identical to
those of the Company. Consequently, conflicts of interest may arise with
respect to transactions, including without limitation, future acquisitions of
Mortgage Loans from the Bank or its affiliates; servicing of Mortgage Loans,
particularly with respect to Mortgage Loans that become classified or placed
in nonaccrual status or which have been, more than once during the preceding
twelve months, more than 30 days past due in the payment of principal and
interest; future dispositions of Mortgage Loans to The Chase Manhattan
Corporation ("CMC") or any of its nonbank subsidiaries; and the modification
of the Advisory Agreement or the Servicing Agreements.
It is the intention of the Company, CMC and the Bank that any agreements and
transactions between the Company, on the one hand, and CMC, the Bank or their
affiliates, on the other hand, are fair to all parties and consistent with
market terms, including the price paid and received for Mortgage Loans,
including those in the initial portfolio, on their acquisition or disposition
by the Company or in connection with the servicing of such Mortgage Loans.
The requirement in the Certificate of Designation establishing the Series A
Preferred Shares that certain actions of the Company be approved by a
majority of the Independent Directors (as defined in the Certificate of
Designation) is also intended to ensure fair dealing between the Company and
CMC, the Bank and their respective affiliates. However, there can be no
assurance that such agreements or transactions will be on terms as favorable
to the Company as those that could have been obtained from unaffiliated third
parties.
RESULTS OF OPERATIONS
The Company reported net interest income of approximately $20,076,000.
Interest income from residential and commercial mortgage loans was
$17,666,000 and $2,386,000, respectively, representing a total average yield
of 7.6%. After a deduction of approximately $62,000 and $90,000 in advisory
fees and other administrative expenses, respectively, the Company reported
net income of approximately $19,924,000.
The Company paid $11,137,500 in Preferred Stock dividends and reported net
income per common share of $15.35 for the quarter ended March 31, 1997. As of
this date, all dividend payments on Series A Preferred Shares are current.
-10-
<PAGE> 11
Part I
Item 2. (continued)
MORTGAGE LOANS
Mortgage loans consist of both residential and commercial mortgage loans.
Residential mortgage loans consist of Six-Month Prime Rate Adjustable Rate
Mortgages ("ARMs"); Six-Month Treasury ARMs; One-Year ARMs; Three-Year, Five-
Year, Seven-Year and Ten-Year Fixed Rate Loans with an automatic conversion
to One-Year ARMs; and Fixed Rate Loans. The commercial mortgage loans consist
of Fixed and Variable Rate loans, a majority of which have balloon payments.
Reinvestments in Mortgage Loans have been and will continue to be consistent
in maintaining an approximate 90% and 10% ratio between residential and
commercial mortgage loans, respectively. All Mortgage Loans were purchased
from the Bank or its affiliates. Each of the Mortgage Loans are secured by a
mortgage, deed of trust or other security instrument which created a first
lien on the residential dwellings and/or commercial property located in their
respective jurisdictions.
For the quarter ended March 31, 1997, the Company purchased Mortgage Loans
having an outstanding principal balance of $74,848,000 from the Bank. In
addition, the Company received $36,877,000 of principal payments on the
entire portfolio from the Servicer (and sub-servicer).
The following table reflects the composition of interest-earning assets as a
percentage of total interest-earning assets:
<TABLE>
<CAPTION>
Interest-Earning Asset Mix At March 31, 1997 At December 31, 1996
(in thousands)
Amount Percent Amount Percent
<S> <C> <C> <C> <C>
Residential mortgage loans $ 993,910 90.5% $ 958,411 90.4%
Commercial mortgage loans 104,042 9.5% 101,570 9.6%
Total interest-earning assets $ 1,097,952 100% $ 1,059,981 100%
</TABLE>
For further discussion on the Company's acquisition and disposition policies
for Mortgage Loans, reference is made to page 7 of the Company's 1996 Annual
Report.
There were $460,457 of nonaccruing residential mortgage loans at March 31,
1997, compared with $236,012 of nonaccruing residential mortgage loans at
December 31, 1996. There were no nonaccruing commercial loans for either
period. At March 31, 1997 and December 31,1996, nonaccruing loans represent
.04% and .02%, respectively, of the total loan portfolio. There have been no
sales of past due loans to any affiliate or unrelated third parties during
the first quarter of 1997.
ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses is available to absorb potential credit losses
from the entire Mortgage Loan portfolio. The Company deems its allowance for
loan losses as of March 31, 1997 to be adequate. Although the Company
considers that it has sufficient reserves to absorb losses that currently may
exist in the portfolio, but are not yet identifiable, the precise loss
content is subject to continuing review based on quality indicators, industry
and geographic concentrations, changes in business conditions, and other
external factors such as competition, legal and regulatory requirements. The
Company will continue to reassess the adequacy of the allowance for loan
losses.
-11-
<PAGE> 12
Part I
Item 2. (continued)
The accompanying table reflects the activity
in the Company's allowance for loan losses:
<TABLE>
<CAPTION>
Allowance for Loan Losses
(in thousands) At March 31, 1997 At December 31, 1996
<S> <C> <C>
Total allowance at
beginning of period $ 3,150 $ 0
Acquired allowance 155 3,150
Provision for losses 0 0
Charge-offs 0 0
Recoveries 0 0
Total allowance at
end of period $ 3,305 $ 3,150
</TABLE>
At March 31, 1997 and December 31, 1996, the Company's allowance for loan
losses as a percentage of total loans was .30%.
INTEREST RATE RISK
The Company's income consists primarily of interest payments on Mortgage
Loans. Currently, the Company does not use any derivative products to manage
its interest rate risk. If there is a decline in interest rates (as measured
by the indices upon which the interest rates of the Mortgage Loans are
based), then the Company will experience a decrease in income available to be
distributed to its shareholders. There can be no assurance that an interest
rate environment in which there is a significant decline in interest rates
over an extended period of time would not adversely affect the Company's
ability to pay dividends on the Series A Preferred Shares.
SIGNIFICANT CONCENTRATION OF CREDIT RISK
Concentration of credit risk arises when a number of customers engage in
similar business activities, or activities in the same geographical region,
or have similar economic features that would cause their ability to meet
contractual obligations to be similarly affected by changes in economic
conditions. Concentration of credit risk indicates the relative sensitivity
of the Company's performance to both positive and negative developments
affecting a particular industry.
The Company's balance sheet exposure to geographic concentrations directly
affects the credit risk of the Mortgage Loans within the portfolio. The
following table shows the Mortgage Loan portfolio by geographical area as of
March 31, 1997:
<TABLE>
<CAPTION>
Geographical Breakout
(in thousands) Amount Percent
<S> <C> <C>
Residential Mortgage Loans:
California $ 512,074 46.6%
Florida 59,191 5.4%
Other States (no State has more than 4%) 422,645 38.5%
-------- ------
Total Residential Mortgage Loans $ 993,910 90.5%
Commercial Mortgage Loans:
New York Metropolitan Tri-State Area 99,722 9.1%
Other States (no State has more than 3%) 4,320 .4%
Total Commercial Mortgage Loans 104,042 9.5%
Total $ 1,097,952 100.0%
</TABLE>
-12-
<PAGE> 13
Part I
Item 2. (continued)
Approximately 46.6% of the Company's total Mortgage Loan portfolio are loans
secured by residential real estate properties located in California.
Consequently, these residential mortgage loans may be subject to a greater
risk of default than other comparable residential mortgage loans in the event
of adverse economic, political or business developments and natural hazards
(earthquakes, for example) in California that may affect the ability of
residential property owners in California to make payments of principal and
interest on the underlying mortgages.
In addition, the majority of the commercial mortgage properties underlying
the Company's commercial mortgage loans are located in the New York
metropolitan tri-state area. Substantially all of these mortgaged properties
were, at the time of their origination, at least 70% occupied by the
borrowers or their affiliates. Consequently, these commercial mortgage loans
may be subject to greater risk of default than other comparable commercial
mortgage loans in the event of adverse economic, political or business
developments in the New York metropolitan tri-state areas that may affect the
ability of businesses in that area to make payments of principal and interest
on the underlying mortgages.
LIQUIDITY RISK MANAGEMENT
The objective of liquidity management is to ensure the availability of
sufficient cash flows to meet all of the Company's financial commitments and
to capitalize on opportunities for the Company's business expansion. In
managing liquidity, the Company takes into account various legal limitations
placed on a real estate investment trust ("REIT") as discussed below in Other
Matters.
The Company's principal liquidity needs are to maintain the current portfolio
size through the acquisition of additional Mortgage Loans as Mortgage Loans
currently in the portfolio mature or prepay and to pay dividends on the
Series A Preferred Shares. The acquisition of additional Mortgage Loans is
intended to be funded with the proceeds obtained from repayment of principal
balances by individual borrowers. The Company does not have and does not
anticipate having any material capital expenditures.
For further discussion on liquidity risk management, reference is made to page
9 of the Company's 1996 Annual Report.
OTHER MATTERS
As of March 31, 1997, the Company believed that it was in full compliance
with the REIT tax rules and that it will continue to qualify as a REIT under
the provisions of the Code. The Company calculates:
o its Qualified REIT Assets, as defined in the Code, to be 100% of its
total assets, as compared to the federal tax requirements that at least 75%
of its total assets must be Qualified REIT assets.
o that 97% of its revenues qualify for the 75% source of income test and
100% of its revenues qualify for the 95% source of income test under the REIT
rules.
o none of the revenues were subject to the 30% income limitation under the
REIT rules.
The Company also met all REIT requirements regarding the ownership of its
common and preferred stocks and anticipates meeting the 1997 annual
distribution and administrative requirements.
-13-
<PAGE> 14
Part II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not the subject of any material litigation. None of the
Company, the Advisor, the Bank or any of its affiliates is currently involved
in nor, to the Company's knowledge, currently threatened with any material
litigation with respect to the Mortgage Loans included in the portfolio which
litigation would have a material adverse effect on the business or operations
of the Company.
Item 6. Exhibits and Current Reports on Form 8-K
(A) Exhibits:
11 - Computation of net income per share.
12(a) - Computation of ratio of earnings to fixed charges.
12(b) - Computation of ratio of earnings to fixed charges and
preferred stock dividend requirements.
27 - Financial Data Schedule.
(B) Reports on Form 8-K -- None.
-14-
<PAGE> 15
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 thereunto duly authorized.
CHASE PREFERRED CAPITAL CORPORATION
(Registrant)
Date: May 15, 1997 By /s/ Don B. Taggart
-----------------------
Don B. Taggart
Treasurer and Director
-15-
<PAGE> 16
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBITS
<S> <C>
11 Computation of net income
per share
12(a) Computation of ratio of earnings
to fixed charges
12(b) Computation of ratio of earnings to
fixed charges and preferred stock
dividend requirements
27 Financial Data Schedule
</TABLE>
<PAGE> 1
EXHIBIT 11
CHASE PREFERRED CAPITAL CORPORATION
Computation of net income per share
Net income for primary earnings per share are computed by
subtracting from the applicable earnings the dividend
requirements on preferred stock to arrive at earnings
applicable to common stock and dividing this amount by the
weighted average number of common outstanding during the
period.
<TABLE>
<CAPTION>
For the Quarter Ended March 31, 1997
(in thousands, except per share amounts):
<S> <C>
Earnings:
Net income $ 19,924
Less: preferred stock
dividend requirements 11,137
Net income applicable to
common stock $ 8,787
Shares:
Average common shares outstanding 572,500
Net income per share: $ 15.35
</TABLE>
<PAGE> 1
EXHIBIT 12(a)
<TABLE>
CHASE PREFERRED CAPITAL CORPORATION
Computation of ratio of earnings to fixed charges
<CAPTION>
For the Quarter Ended
March 31, 1997
(in thousands, except ratio):
<S> <C>
Net income $ 19,924
Fixed charges:
Advisory fees 62
Total fixed charges 62
Earnings before fixed charges $ 19,986
Fixed charges, as above $ 62
Ratio of earnings to fixed charges 322.35
</TABLE>
<PAGE> 1
EXHIBIT 12(b)
CHASE PREFERRED CAPITAL CORPORATION
Computation of ratio of earnings to fixed charges
and preferred stock dividend requirements
<TABLE>
<CAPTION>
For the Quarter Ended
March 31, 1997
(in thousands, except ratio):
<S> <C>
Net income $ 19,924
Fixed charges:
Advisory fees 62
Total fixed charges 62
Earnings before fixed charges $ 19,986
Fixed charges, as above $ 62
Preferred stock dividend
requirements 11,137
Fixed charges including preferred
stock dividends $ 11,199
Ratio of earnings to fixed charges
and preferred stock dividend
requirements 1.78
</TABLE>
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 9
<CIK> 0001018450
<NAME> CHASE PREFERRED
CAPITAL CORPORATION
<MULTIPLIER> 1,000
<CURRENCY> UNITED STATES DOLLAR
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1
<CASH> 9,153
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 1,097,952
<ALLOWANCE> 3,305
<TOTAL-ASSETS> 1,124,750
<DEPOSITS> 0
<SHORT-TERM> 3,237
<LIABILITIES-OTHER> 0
<LONG-TERM> 0
0
550,000
<COMMON> 171,750
<OTHER-SE> 399,763
<TOTAL-LIABILITIES-AND-EQUITY> 1,124,750
<INTEREST-LOAN> 20,052
<INTEREST-INVEST> 0
<INTEREST-OTHER> 689
<INTEREST-TOTAL> 20,741
<INTEREST-DEPOSIT> 0
<INTEREST-EXPENSE> 665
<INTEREST-INCOME-NET> 20,076
<LOAN-LOSSES> 0
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<INCOME-PRETAX> 19,924
<INCOME-PRE-EXTRAORDINARY> 19,924
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<EPS-PRIMARY> 15.35
<EPS-DILUTED> 15.35
<YIELD-ACTUAL> 7.60
<LOANS-NON> 460,457
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<ALLOWANCE-CLOSE> 3,305
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<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
