<PAGE>
FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 19, 1999
----------------------------
BANK ONE CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 333-60313 31-0738296
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1 Bank One Plaza, Chicago, IL 60670
- --------------------------------------------------------------------------------
(Address of principal executive offices) (ZIP Code)
Registrant's telephone number, including area code 312-732-4000
------------
<PAGE>
Item 5. Other Events
- ------
On October 19, 1999, the Registrant issued a press release announcing its
third quarter 1999 earnings. A copy of such press release, including unaudited
financial information released as a part thereof, is attached as Exhibit 99(a)
to this Current Report on Form 8-K and incorporated by reference herein.
On October 19, 1999 the Registrant also issued a press release announcing
certain management and organizational changes. A copy of such press release is
attached as Exhibit 99(b) to this Current Report on Form 8-K and incorporated by
reference herein.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
- ------
(c) Exhibits.
Exhibit Number Description of Exhibits
-------------- -----------------------
99(a) Registrant's October 19, 1999 Press Release
regarding 3rd Quarter 1999 earnings.
99(b) Registrant's October 19, 1999 Press Release
regarding certain management and organizational
changes.
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.
BANK ONE CORPORATION
--------------------
(Registrant)
Date: October 19, 1999 By: /s/ M. Eileen Kennedy
----------------- ---------------------------
Title: Treasurer
2
<PAGE>
EXHIBIT INDEX
Exhibit Number Description of Exhibits
- -------------- -----------------------
99(a) Registrant's October 19, 1999 Press Release regarding
3rd Quarter 1999 earnings.
99(b) Registrant's October 19, 1999 Press Release regarding
certain management and organizational changes.
3
<PAGE>
[BANK ONE CORPORATION Press Release Letterhead] Exhibit 99(a)
FOR IMMEDIATE RELEASE
- ---------------------
BANK ONE ANNOUNCES
THIRD QUARTER OPERATING EARNINGS OF $0.86 PER SHARE
CHICAGO, October 19, 1999 - BANK ONE CORPORATION (NYSE: ONE) today announced
third quarter operating earnings of $1.014 billion, excluding merger-related and
restructuring costs, or $0.86 per diluted share. Operating earnings in 1998's
third quarter were $1.005 billion, or $0.84 per share. Reported net income for
the 1999 third quarter was $925 million, or $0.79 per share.
"As expected, earnings from our credit card business declined," said John B.
McCoy, president and chief executive officer. "We continue to be highly focused
on stabilizing returns at First USA and generating fundamental growth for the
future.
"In addition, noninterest expense declined for the third consecutive quarter, a
clear indication that we are delivering on promised merger synergies," McCoy
said. "Merger integration continued on track, with the consolidation of our
Illinois banks and of the First Card customers into First USA in the third
quarter. All major integrations and systems conversions scheduled for this year
have been successfully completed."
Merger-related and restructuring charges in the third quarter were $132 million
pre-tax, or $0.07 per share. The 1998 third quarter included gains on sales of
banking centers of $69 million.
For the nine months ended September 30, 1999, Bank One's operating earnings were
$3.172 billion, or $2.67 per diluted share, up 13% from $2.37 per share in the
1998 period. Return on equity was 20.7% for the nine months.
1999 Third Quarter Highlights
The operating highlights of the third quarter included:
. Managed revenue rose 6% from 1998's third quarter.
. Managed net interest income increased 4% from the prior year's quarter,
driven by average loan growth of 11%. The managed net interest margin
was 5.32% in the third quarter, compared to 5.63% in the year-ago
quarter and 5.55% in this year's second quarter.
(more)
<PAGE>
-2-
. Managed noninterest income increased 9% from the 1998 third quarter.
. Noninterest expense decreased for the third consecutive quarter and was
only 2% higher than in the year-ago quarter. The managed efficiency
ratio was 49.6% in the third quarter. At the end of the third quarter,
Bank One had achieved 97% of 1999's expected expense synergies.
. Return on common equity was 19.9%, excluding merger-related costs.
THIRD QUARTER PERFORMANCE REVIEW
The following discussion is on a managed basis, excluding merger-related and
restructuring costs as well as gains on banking center sales noted above, in
order to better describe underlying operating trends. Managed information has
been adjusted to include credit card loans that were securitized and removed
from the balance sheet. The net earnings on securitized credit card loans are
reclassified from noninterest income to net interest income and provision for
credit losses as if the securitization had not occurred.
Net Interest Income and Margin
Managed net interest income was $3.624 billion on a tax equivalent basis in the
third quarter, compared with $3.485 billion in the 1998 third quarter. This 4%
increase reflected earning asset growth partially offset by the lower net
interest margin. Average managed earning assets were up 10% from the 1998 third
quarter, with loans up 11%. The net interest margin was 5.32% in the third
quarter, down from 5.63% in the year-ago quarter. The lower effective yield on
credit card loans was the principal cause of margin compression.
The third quarter's managed net interest income was down $51 million from the
prior quarter. This reflected a 23 basis point decline in the net interest
margin from the second quarter primarily related to credit card margin
compression, which was only partially offset by average managed earning asset
growth of 7% on an annualized basis. Compared with the 1999 second quarter,
average managed loans increased 8% on an annualized basis, or 11% excluding
average credit card loans, which increased only slightly.
Noninterest Income
Managed noninterest income was $1.583 billion in the third quarter, up 9% from
1998's third quarter, excluding gains on the sale of banking centers related to
the Retail Delivery Initiative.
Market-driven revenue was $122 million in the third quarter. This compares with
only $55 million in the year-ago quarter when capital markets were in turmoil.
(more)
<PAGE>
-3-
Fee-based revenue increased 3% from the year-ago quarter to $1.264 billion.
Credit card fees were up 2% related to growth of transaction volumes, partially
from the acquisition of the Chevy Chase portfolio at the end of 1998's third
quarter. Gains related to securitization activity declined to $12 million in
this year's quarter from last year's $87 million because there were no material
new securitizations during the quarter. Loan service fees and deposit account
fees showed strong growth from the year-ago quarter.
Noninterest Expense
Noninterest expense was $2.581 billion in the third quarter, excluding merger-
related charges, up 2% from the 1998 third quarter. Merger-related expenses were
$132 million in the third quarter, compared to $179 million in the second
quarter.
Merger-related expense synergies continue to reduce operating expenses, which
were partially offset by higher volumes and increased marketing expenses,
principally related to the credit card business. Salaries and benefits declined
10% from 1998's third quarter, reflecting fewer employees and reduced senior
management incentive compensation. Marketing expenses increased 29%, principally
at First USA. Outside service fees were up 44%, related to higher volumes and
additional outsourcing.
Noninterest expense declined $46 million from this year's second quarter,
reflecting additional merger expense synergies of $50 million, as well as lower
salaries and benefits expense. Higher marketing and consulting expenses
partially offset the decreases. The cumulative merger savings for 1999 are $450
million, or 97% of the target for 1999.
Provision for Credit Losses and Credit Quality
The managed net charge-off ratio was 2.01% in the third quarter, up from 1.91%
in the 1998 third quarter and 1.99% in the second quarter. Managed net charge-
offs were $1.105 billion, an increase from $1.075 billion in the second quarter
and $943 million in 1998's third quarter. The managed provision was $1.115
billion for the quarter, $10 million more than related net charge-offs.
Credit card managed net charge-offs decreased to 5.33% in the third quarter from
5.43% in the year-ago quarter, but increased slightly from the previous
quarter's 5.25%. Commercial net charge-offs were 0.40%, up from 0.21% in 1998's
third quarter and 0.36% in the second quarter. Consumer net charge-offs of 0.62%
for the third quarter were down slightly from 0.68% in the 1998 third quarter
but essentially unchanged from 0.61% in the second quarter.
Nonperforming assets were $1.140 billion at the end of the third quarter,
essentially unchanged from $1.137 billion at June 30, 1999. The nonperforming
assets ratio was 0.72% at September 30, 1999, and the allowance for credit
losses to loans was 1.42%.
(more)
<PAGE>
-4-
Credit Card Update
As announced on August 24, 1999, growth of credit card outstandings slowed
significantly in the third quarter. Total managed loans were $70.0 billion at
September 30, 1999, a 7% increase from one year ago and up 1% from June 30,
1999. Additionally, the net interest margin declined an estimated 40 basis
points in the third quarter from the second quarter.
The results for the third quarter were consistent with the expectations
announced on August 24, 1999. Actions are being taken that are expected to
reduce customer attrition and stabilize returns at First USA in coming periods.
Capital
The common equity to assets ratio was 7.5% at September 30, 1999. Tier 1 and
total capital ratios were 7.7% and 10.7%, respectively. A 65 million share
repurchase program was authorized in the 1999 second quarter. Since the
inception of this program 37 million shares have been repurchased, including 32
million shares in the third quarter.
BANK ONE CORPORATION, headquartered in Chicago, is the nation's fifth largest
bank holding company, with assets of more than $264 billion. Bank One offers a
full range of financial services to commercial and business customers and
consumers. It is the world's largest VISA issuer, the third largest bank lender
to small businesses, a leading national automotive lender, and one of the top 25
managers of mutual funds. A leader in the retail market, Bank One operates
approximately 1,900 banking centers and a nationwide network of ATMs. In
addition, it is a major commercial bank in the United States and in select
international markets.
Information about Bank One's financial results can be accessed on the Internet
at www.bankone.com or through fax-on-demand at 877-ONE-FACT. The telephone
---------------
number for the recorded message discussing the third quarter's results is 888-
203-1112 (domestic) or 719-457-0820 (international), access code 802060.
###
Investor Contacts:
Jay S. Gould (312) 732-5771
Holly E. Hobson (312) 732-5782
Sandra A. Catanzaro (312) 732-8013
Media Contact:
Thomas A. Kelly (312) 732-7007
<PAGE>
BANK ONE CORPORATION and Subsidiaries
<TABLE>
<CAPTION>
Three Months
Financial Highlights Three Months Ended Sep 30 Ended
--------------------------------
($ millions, except per-share amounts) 1999 1998 % Change Jun 30, 1999
- --------------------------------------------------------- -------- -------- -------- -------------
<S> <C> <C> <C> <C>
PER SHARE DATA
- --------------
Earnings -- Basic $ 0.79 $ 0.90 (12) $ 0.84
-- Diluted 0.79 0.89 (11) 0.83
Dividends 0.42 0.38 11 0.42
INCOME STATEMENT DATA
- ---------------------
Net income $ 925 $ 1,054 (12) $ 992
Net interest income (FTE) 2,271 2,402 (5) 2,341
Provision for credit losses 277 345 (20) 275
Noninterest income 2,098 1,999 5 2,222
Restructuring charges and merger-related costs 132 - N/M 179
Operating expense(1) 2,581 2,539 2 2,627
FINANCIAL PERFORMANCE RATIOS
- ----------------------------
Net interest margin -- managed 5.32% 5.63% 5.55%
-- reported 4.04 4.61 4.26
Return on assets 1.44 1.77 1.57
Return on common equity 18.2 20.7 19.1
Efficiency -- managed 52.1 50.8 52.3
-- reported 62.1 57.7 61.5
BALANCE SHEET DATA
- ------------------
Average: Loans -- managed $220,215 $197,978 11 $215,923
-- reported 157,967 154,466 2 155,496
Earning assets -- managed 270,279 245,422 10 265,488
-- reported 223,205 206,736 8 220,505
Total assets 254,643 236,573 8 253,266
Deposits 155,612 148,393 5 153,315
Common equity 20,142 20,098 - 20,744
End of Period: Loans -- managed 222,117 203,443 9 218,795
-- reported 158,143 154,057 3 157,464
Total assets 264,135 238,658 11 256,033
Deposits 156,900 148,924 5 156,454
Common equity 19,860 20,428 (3) 20,860
<CAPTION>
Financial Highlights Nine Months Ended Sep 30
---------------------------------
($ millions, except per-share amounts) 1999 1998 % Change
- --------------------------------------------------------- -------- -------- --------
<S> <C> <C> <C>
PER SHARE DATA
- --------------
Earnings -- Basic $ 2.60 $ 2.46 6
-- Diluted $ 2.58 2.42 7
Dividends 1.26 1.14 11
INCOME STATEMENT DATA
- ---------------------
Net income $ 3,068 $ 2,882 6
Net interest income (FTE) 6,921 7,101 (3)
Provision for credit losses 833 1,136 (27)
Noninterest income 6,910 6,003 15
Restructuring charges and merger-related costs 515 182 N/M
Operating expense(1) 7,945 7,507 6
FINANCIAL PERFORMANCE RATIOS
- ----------------------------
Net interest margin -- managed 5.51% 5.52%
-- reported 4.20 4.56
Return on assets 1.62 1.62
Return on common equity 20.0 19.9
Efficiency -- managed 52.2 51.5
-- reported 61.2 58.7
BALANCE SHEET DATA
- ------------------
Average: Loans -- managed $216,531 $197,290 10
-- reported 155,595 156,909 (1)
Earning assets -- managed 266,046 245,658 8
-- reported 220,559 208,202 6
Total assets 253,616 238,535 6
Deposits 154,363 150,146 3
Common equity 20,415 19,319 6
</TABLE>
(1) Noninterest expense reduced by restructuring charges and merger-related
costs, including certain merger integration costs.
5
<PAGE>
BANK ONE CORPORATION and Subsidiaries
<TABLE>
<CAPTION>
Three Months Ended
-------------------------------------------------
Consolidated Statement of Income Sep 30 Jun 30 Mar 31 Dec 31 Sep 30
($ millions, except per-share amounts) 1999 1999 1999 1998 1998
- ----------------------------------------------------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Interest income $4,356 $4,236 $4,196 $4,326 $4,412
Interest expense 2,114 1,925 1,916 1,989 2,039
------------------------------------------------
Net interest income 2,242 2,311 2,280 2,337 2,373
Provision for credit losses 277 275 281 272 345
------------------------------------------------
Net interest income after provision for credit losses 1,965 2,036 1,999 2,065 2,028
------------------------------------------------
Noninterest Income
Trading profits 30 33 67 (2) 18
Equity securities gains(losses) 86 133 96 61 (4)
Investment securities gains 6 34 52 32 41
------------------------------------------------
Market-driven revenue 122 200 215 91 55
Credit card revenue 907 920 952 1,078 867
Fiduciary and investment management fees 201 197 179 199 207
Service charges and commissions 671 723 690 680 639
------------------------------------------------
Fee-based revenue 1,779 1,840 1,821 1,957 1,713
Other income 197 182 554 20 231
------------------------------------------------
Total noninterest income 2,098 2,222 2,590 2,068 1,999
------------------------------------------------
Noninterest Expense
Salaries and benefits 970 1,073 1,147 1,167 1,080
Net occupancy and equipment expense 220 219 227 217 217
Depreciation and amortization 167 169 175 180 167
Outside services and processing 458 420 406 410 318
Marketing and development 341 302 315 340 264
Communication and transportation 205 208 200 214 192
Merger-related and restructuring charges 56 145 164 935 -
Other expense 296 270 307 393 301
------------------------------------------------
Total noninterest expense 2,713 2,806 2,941 3,856 2,539
------------------------------------------------
Income before income taxes 1,350 1,452 1,648 277 1,488
Provision for income taxes 425 460 497 51 434
------------------------------------------------
Net income $ 925 $ 992 $1,151 $ 226 $1,054
================================================
Net income attributable to common stockholders' equity $ 922 $ 989 $1,148 $ 223 $1,051
================================================
Earnings per common share
--Basic $ 0.79 $ 0.84 $ 0.97 $ 0.19 $ 0.90
--Diluted $ 0.79 $ 0.83 $ 0.96 $ 0.19 $ 0.89
Average common shares outstanding(millions)
--Basic 1,167 1,180 1,178 1,175 1,172
--Diluted 1,177 1,195 1,193 1,188 1,188
</TABLE>
6
<PAGE>
BANK ONE CORPORATION and Subsidiaries
<TABLE>
<CAPTION>
Nine Months Ended
------------------------------
Consolidated Statement of Income Sep 30 Sep 30
($ millions, except per-share amounts) 1999 1998
- ------------------------------------------------------------- ------------ -------------
<S> <C> <C>
Interest income $ 12,788 $ 13,198
Interest expense 5,955 6,188
Net interest income 6,833 7,010
Provision for credit losses 833 1,136
----------------------------
Net interest income after provision for credit losses 6,000 5,874
----------------------------
Noninterest Income
Trading profits 130 143
Equity securities gains(losses) 315 189
Investment securities gains 92 123
----------------------------
Market-driven revenue 537 455
Credit card revenue 2,779 2,198
Fiduciary and investment management fees 577 608
Service charges and commissions 2,084 1,965
----------------------------
Fee-based revenue 5,440 4,771
Other income 933 777
----------------------------
Total noninterest income 6,910 6,003
----------------------------
Noninterest Expense
Salaries and benefits 3,190 3,310
Net occupancy and equipment expense 666 628
Depreciation and amortization 511 500
Outside services and processing 1,284 939
Marketing and development 958 684
Communication and transportation 613 567
Merger-related and restructuring charges 365 127
Other expense 873 934
----------------------------
Total noninterest expense 8,460 7,689
----------------------------
Income before income taxes 4,450 4,188
Provision for income taxes 1,382 1,306
----------------------------
Net income $ 3,068 $ 2,882
============================
Net income attributable to common stockholders' equity $ 3,059 $ 2,871
============================
Earnings per common share
--Basic $ 2.60 $ 2.46
--Diluted $ 2.58 $ 2.42
Average common shares outstanding(millions)
--Basic 1,175 1,169
--Diluted 1,188 1,189
</TABLE>
7
<PAGE>
BANK ONE CORPORATION and Subsidiaries
<TABLE>
<CAPTION>
Consolidated Balance Sheet Sep 30 Jun 30 Mar 31 Dec 31 Sep 30
($ millions) 1999 1999 1999 1998 1998
- ------------------------------------------------------------ ------- ----- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Assets
Cash and due from banks $ 15,325 $ 15,336 $ 13,854 $ 19,878 $ 14,109
Interest bearing due from banks 5,145 3,953 4,130 4,642 4,621
Federal funds sold and securities under resale agreements 13,257 10,633 9,209 9,862 10,066
Trading assets 6,561 5,157 5,660 5,345 5,770
Derivative product assets 3,746 4,270 4,510 6,954 4,600
Investment securities (1) 47,971 45,197 44,565 44,852 32,658
Loans
Commercial 93,183 89,723 87,581 88,438 81,895
Consumer 58,944 59,613 57,869 57,926 56,379
Credit Card 6,016 8,128 9,400 9,034 15,783
-----------------------------------------------------------------
Total loans 158,143 157,464 154,850 155,398 154,057
Allowance for credit losses (2,252) (2,250) (2,270) (2,271) (2,751)
-----------------------------------------------------------------
Loans, net 155,891 155,214 152,580 153,127 151,306
Other assets:
Bank premises and equipment, net 3,279 3,253 3,235 3,340 3,431
Other 12,960 13,020 12,659 13,496 12,097
-----------------------------------------------------------------
Total other assets 16,239 16,273 15,894 16,836 15,528
-----------------------------------------------------------------
Total assets $264,135 $256,033 $250,402 $261,496 $238,658
=================================================================
Liabilities
Deposits
Demand $ 29,979 $ 33,881 $ 35,110 $ 39,854 $ 34,757
Savings 65,906 64,511 63,378 62,645 58,813
Time 35,136 33,613 34,844 36,302 36,694
Foreign offices 25,879 24,449 20,367 22,741 18,660
-----------------------------------------------------------------
Total deposits 156,900 156,454 153,699 161,542 148,924
Federal funds purchased and repurchase agreements 20,493 19,710 20,111 23,164 20,619
Other short-term borrowings 19,405 16,649 16,780 16,937 13,223
Long-term borrowings 33,157 26,725 23,985 21,295 21,138
Guaranteed preferred beneficial interest in the
Corporation's junior subordinated debt 1,578 1,003 1,003 1,003 1,003
Derivative product liabilities 3,902 4,619 4,772 7,147 4,749
Other liabilities 8,650 9,823 8,992 9,848 8,384
-----------------------------------------------------------------
Total liabilities 244,085 234,983 229,342 240,936 218,040
-----------------------------------------------------------------
Stockholders' Equity
Preferred stock 190 190 190 190 190
Common stock 12 12 12 12 12
Surplus 10,740 10,762 10,734 10,769 12,488
Retained earnings 11,099 10,673 10,179 9,528 9,750
Accumulated other adjustments to stockholders' equity (258) (146) 96 239 244
Deferred compensation (128) (137) (151) (94) (157)
Treasury stock (1,605) (304) - (84) (1,909)
-----------------------------------------------------------------
Total stockholders' equity 20,050 21,050 21,060 20,560 20,618
-----------------------------------------------------------------
Total liabilities and stockholders' equity $264,135 $256,033 $250,402 $261,496 $238,658
=================================================================
Common Shares -- period-end (millions)
Common shares issued 1,182 1,182 1,180 1,179 1,223
Treasury shares 35 5 - 2 47
----------------------------------------------------------------
Common shares outstanding 1,147 1,177 1,180 1,177 1,176
================================================================
</TABLE>
(1) Includes the Corporation's undivided interest in securitized credit card
receivables. As part of conforming accounting practices, the Corporation's
undivided interest in such receivables was reclassified from loans to
investment securities in 1998.
8
<PAGE>
BANK ONE CORPORATION and Subsidiaries
<TABLE>
<CAPTION>
Third Quarter 1999 Second Quarter 1999
--------------------------------------- --------------------------------
Average Balance Sheet, Yields, & Rates Average Income/ Yield/ Average Income/ Yield/
($ millions) Balance Expense Rate Balance Expense Rate
- ----------------------------------------------- --------- --------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Short-term investments $ 13,164 $ 159 4.79% $ 12,602 $ 142 4.52%
Trading assets (1) 6,185 110 7.06 6,046 98 6.50
Investment securities: (1)
U.S. government and federal agency 15,111 224 5.88 15,395 275 7.16
States and political subdivisions 1,765 32 7.19 1,909 34 7.14
Other (2) 29,013 515 7.04 29,057 500 6.90
---------------------- -------------------
Total investment securities 45,889 771 6.67 46,361 809 7.00
Loans (1) (3)
Commercial 91,186 1,814 7.89 88,911 1,649 7.44
Consumer 59,876 1,285 8.51 58,065 1,240 8.57
Credit Card (2) 6,905 246 14.13 8,520 328 15.44
---------------------- -------------------
Total loans, net 157,967 3,345 8.40 155,496 3,217 8.30
Total earning assets 223,205 4,385 7.79 220,505 4,266 7.76
Allowance for credit losses (2,283) (2,260)
Other assets 33,721 35,021
-------- --------
Total assets $254,643 $253,266
======== ========
Deposits -- interest-bearing
Savings $ 19,705 $ 74 1.49% $ 20,843 $ 110 2.12%
Money market 46,526 366 3.12 42,903 316 2.95
Time 34,842 426 4.85 34,097 428 5.03
Foreign offices 25,350 296 4.63 22,548 245 4.36
---------------------- -------------------
Total deposits -- interest-bearing 126,423 1,162 3.65 120,391 1,099 3.66
Federal funds purchased and securities
under repurchase agreements 17,557 213 4.81 20,354 231 4.55
Other short-term borrowings 17,337 279 6.38 17,655 210 4.77
Long-term debt 31,326 460 5.83 26,417 385 5.85
---------------------- -------------------
Total interest-bearing liabilities 192,643 2,114 4.35 184,817 1,925 4.18
Demand deposits 29,189 32,924
Other liabilities 12,479 14,591
Preferred stock 190 190
Common stockholders' equity 20,142 20,744
-------- --------
Total liabilities and equity $254,643 $253,266
======== ========
Interest income/earning assets $4,385 7.79% $4,266 7.76%
Interest expense/earning assets 2,114 3.75 1,925 3.50
------------------ ----------------
Net interest margin $2,271 4.04% $2,341 4.26%
================== ================
<CAPTION>
Third Quarter 1998
----------------------------
Average Balance Sheet, Yields, & Rates Average Income/ Yield/
($ millions) Balance Expense Rate
- ----------------------------------------------- ---------- ------- -------
<S> <C> <C> <C>
Short-term investments $ 12,936 $ 178 5.46%
Trading assets (1) 6,470 99 6.07
Investment securities: (1)
U.S. government and federal agency 16,069 267 6.59
States and political subdivisions 2,168 41 7.50
Other (2) 14,627 250 6.78
------------------
Total investment securities 32,864 558 6.74
Loans (1) (3)
Commercial 81,255 1,591 7.77
Consumer 57,633 1,362 9.38
Credit Card (2) 15,578 653 16.63
------------------
Total loans, net 154,466 3,606 9.26
Total earning assets 206,736 4,441 8.52
Allowance for credit losses (2,714)
Other assets 32,551
--------
Total assets $236,573
========
Deposits -- interest-bearing
Savings $ 20,523 $ 117 2.26%
Money market 38,857 370 3.78
Time 37,285 497 5.29
Foreign offices 18,384 246 5.31
------------------
Total deposits -- interest-bearing 115,049 1,230 4.24
Federal funds purchased and securities
under repurchase agreements 20,792 278 5.30
Other short-term borrowings 13,652 181 5.26
Long-term debt 21,771 350 6.38
------------------
Total interest-bearing liabilities 171,264 2,039 4.72
Demand deposits 33,344
Other liabilities 11,676
Preferred stock 191
Common stockholders' equity 20,098
--------
Total liabilities and equity $236,573
========
Interest income/earning assets $4,441 8.52%
Interest expense/earning assets 2,039 3.91
--------------
Net interest margin $2,402 4.61%
==============
</TABLE>
(1) Includes tax-equivalent adjustments based on a 35% federal income tax rate.
(2) As part of conforming accounting practices, the Corporation's undivided
interest in securitized credit card receivables was reclassified from loans
to investment securities in 1998. Such amounts averaged $15.2 billion for
the third quarter of 1999, $15.4 billion for the second quarter of 1999,
and $4.8 billion for the third quarter of 1998.
(3) Nonperforming loans are included in balances used to determine the average
rate.
9
<PAGE>
BANK ONE CORPORATION and Subsidiaries
<TABLE>
<CAPTION>
Nine Months Ended
------------------------------------------------------------------------------
Sep 30, 1999 Sep 30, 1998
-------------------------------------- ------------------------------------
Average Balance Sheet, Yields, & Rates Average Income Yield/ Average Income Yield/
($ millions) Balance Expense Rate Balance Expense Rate
- ---------------------------------------------- ---------------- ----------- --------- -------------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Short-term investments $ 13,299 $ 463 4.65% $ 14,215 $ 577 5.43%
Trading assets (1) 5,964 304 6.82 6,285 281 5.98
Investment securities: (1)
U.S. government and federal agency 15,290 744 6.51 17,338 859 6.62
States and political subdivisions 1,898 105 7.40 2,253 133 7.89
Other (2) 28,513 1,498 7.02 11,202 533 6.36
-------------------------- ---------------------
Total investment securities 45,701 2,347 6.87 30,793 1,525 6.62
Loans (1) (3)
Commercial 89,067 5,045 7.57 81,139 4,749 7.83
Consumer 58,382 3,808 8.72 57,527 4,076 9.47
Credit card (2) 8,146 909 14.92 18,243 2,081 15.25
-------------------------- ---------------------
Total loans, net 155,595 9,762 8.39 156,909 10,906 9.29
Total earning assets 220,559 12,876 7.81 208,202 13,289 8.53
Allowance for credit losses (2,289) (2,742)
Other assets 35,346 33,075
------------ ---------
Total assets $253,616 $238,535
============ =========
Deposits -- interest-bearing
Savings $ 20,173 $ 267 1.77% $ 21,199 $ 365 2.30%
Money market 44,280 1,039 3.14 38,458 1,096 3.81
Time 34,905 1,303 4.99 38,690 1,570 5.43
Foreign offices 23,100 774 4.48 18,029 711 5.27
-------------------------- ---------------------
Total deposits -- interest-bearing 122,458 3,383 3.69 116,376 3,742 4.30
Federal funds purchased and securities
under repurchase agreements 19,909 690 4.63 21,184 830 5.24
Other short-term borrowings 17,286 687 5.31 13,771 556 5.40
Long-term debt 27,243 1,195 5.86 22,049 1,060 6.43
-------------------------- ---------------------
Total interest-bearing liabilities 186,896 5,955 4.26 173,380 6,188 4.77
Demand deposits 31,905 33,770
Other liabilities 14,210 11,832
Preferred stock 190 234
Common stockholders' equity 20,415 19,319
------------ ---------
Total liabilities and equity $253,616 $238,535
============ =========
Interest income/earning assets $12,876 7.81% $13,289 8.53%
Interest expense/earning assets 5,955 3.61 6,188 3.97
----------------- ----------------
Net interest margin $ 6,921 4.20% $ 7,101 4.56%
================= ================
</TABLE>
(1) Includes tax-equivalent adjustments based on a 35% federal income tax rate.
(2) As part of conforming accounting practices, the Corporation's undivided
interest in securitized credit card receivables was reclassified from loans
to investment securities in 1998. Such amounts averaged $15.4 billion for
the first nine months of 1999 and $2.9 billion for the first nine months of
1998.
(3) Nonperforming loans are included in balances used to determine the average
rate.
10
<PAGE>
BANK ONE CORPORATION and Subsidiaries
<TABLE>
<CAPTION>
Three months Ended
--------------------------------------------------------
Credit Quality Sep 30 Jun 30 Mar 31 Dec 31 Sep 30
($ millions) 1999 1999 1999 1998 1998
- ----------------------------------------- --------------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Provision for credit losses $ 277 $ 275 $ 281 $ 272 $ 345
Gross charge-offs $ 342 $ 354 $ 367 $ 377 $ 443
Recoveries 75 79 86 80 98
------------------------------------------------------
Net charge-offs $ 267 $ 275 $ 281 $ 297 $ 345
Net charge-offs
Commercial $ 91 $ 81 $ 63 $ 80 $ 43
Consumer 93 89 120 104 98
Credit card 83 105 98 113 204
------------------------------------------------------
Total net charge-offs $ 267 $ 275 $ 281 $ 297 $ 345
Total net charge-offs -- managed $1,105 $1,075 $1,028 $ 976 $ 943
Net charge-off ratios
Commercial 0.40% 0.36% 0.29% 0.38% 0.21%
Consumer 0.62 0.61 0.84 0.74 0.68
Credit card 4.81 4.93 4.34 5.75 5.24
Total net charge-off ratio 0.68 0.71 0.73 0.80 0.89
Total net charge-off ratio -- managed 2.01 1.99 1.93 1.88 1.91
Allowance for credit losses -- period-end $2,252 $2,250 $2,270 $2,271 $2,751
Nonperforming assets -- period-end
Nonperforming loans $1,027 $1,032 $1,031 $ 729 $ 718
Other, including other real estate owned 113 105 117 90 87
------------------------------------------------------
Total nonperforming assets $1,140 $1,137 $1,148 $ 819 $ 805
Allowance to ending loans 1.42% 1.43% 1.47% 1.46% 1.79%
Allowance to nonperforming loans 219 218 220 312 383
Nonperforming assets ratio 0.72 0.72 0.74 0.53 0.52
Capital
($ millions, except per-share amounts)
- -----------------------------------------
Common equity/assets ratio 7.5% 8.1% 8.3% 7.8% 8.6%
Tier 1 capital ratio 7.7 8.1 8.2 7.9 8.6
Total risk adjusted capital ratio 10.7 11.4 11.7 11.3 12.4
Regulatory leverage ratio 7.9 8.1 8.0 8.0 8.5
Book value of common equity per share $17.32 $17.73 $17.68 $17.31 $17.37
Intangibles -- period-end
Goodwill $ 955 $ 973 $1,048 $1,075 $1,094
Other intangibles 1,315 1,340 1,407 1,621 1,125
------------------------------------------------------
Total intangibles $2,270 $2,313 $2,455 $2,696 $2,219
</TABLE>
11
<PAGE>
BANK ONE CORPORATION and Subsidiaries
<TABLE>
<CAPTION>
Managed Income Statement Statistics(1) Sep 30 Jun 30 Mar 31 Dec 31 Sep 30
($ millions) 1999 1999 1999 1998 1998
- ------------------------------------------------------- ----------- ----------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Reported
- ---------------------------------------------------------------
Net interest income -- FTE $ 2,271 $ 2,341 $ 2,309 $ 2,368 $ 2,402
Provision for credit losses 277 275 281 272 345
Noninterest income 2,098 2,222 2,590 2,068 1,999
Noninterest expense 2,713 2,806 2,941 3,856 2,539
Net income 925 992 1,151 226 1,054
Securitized
- ---------------------------------------------------------------
Net interest income -- FTE $ 1,353 $ 1,334 $ 1,352 $ 1,314 $ 1,083
Provision for credit losses $ 838 800 747 679 598
Noninterest income (515) (534) (605) (635) (484)
Noninterest expense - - - - 1
Net income - - - - -
Managed
- ---------------------------------------------------------------
Net interest income -- FTE $ 3,624 $ 3,675 $ 3,661 $ 3,682 $ 3,485
Provision for credit losses $ 1,115 1,075 1,028 951 943
Noninterest income $ 1,583 1,688 1,985 1,433 1,515
Noninterest expense 2,713 2,806 2,941 3,856 2,540
Net income $ 925 992 1,151 226 1,054
Managed balance sheet and net interest margin
- ---------------------------------------------------------------
Total average loans $220,215 $215,923 213,379 $207,471 $197,978
Total average earning assets 270,279 265,488 262,283 257,413 245,422
Total average assets 301,717 298,249 297,296 287,517 275,259
Net interest margin 5.32% 5.55% 5.66% 5.67% 5.63%
</TABLE>
(1) Managed data only adjusted for credit card securitization activity
12
<PAGE>
BANK ONE CORPORATION and Subsidiaries
<TABLE>
<CAPTION>
Managed Credit Card Detail Sep 30 Jun 30 Mar 31 Dec 31 Sep 30
($ millions) 1999 1999 1999 1998 1998
- ------------------------------------------------------ --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Period-end loans - managed $ 69,990 $ 69,459 $ 68,364 $ 70,027 $ 65,169
- securitized (63,974) (61,331) (58,964) (60,993) (49,386)
- reported 6,016 8,128 9,400 9,034 15,783
Average loans - managed $ 69,153 $ 68,947 $ 69,144 $ 66,190 $ 59,090
- securitized (62,248) (60,427) (60,108) (58,325) (43,512)
- reported 6,905 8,520 9,036 7,865 15,578
Net charge-offs -- amount - managed $ 921 $ 905 $ 845 $ 792 $ 802
- securitized (838) (800) (747) (679) (598)
- reported 83 105 98 113 204
Net charge-offs -- rate - managed 5.33% 5.25% 4.89% 4.79% 5.43%
- securitized 5.38 5.30 4.97 4.66 5.50
- reported 4.81 4.93 4.34 5.75 5.24
Delinquency rate -- 30+ days - managed 4.74% 4.30% 4.51% 4.47% 4.50%
- securitized 4.80 4.42 4.67 4.64 4.49
- reported 4.06 3.37 3.51 3.34 4.54
Delinquency rate -- 90+ days - managed 2.07% 1.96% 2.06% 1.98% 1.90%
- securitized 2.10 2.03 2.15 2.06 1.94
- reported 1.81 1.47 1.51 1.41 1.79
Credit card charge volume - managed $ 29,577 $ 28,912 $ 26,863 $ 29,237 $ 25,106
New accounts opened (thousands) - managed 1,835 2,287 2,910 2,919 2,538
Cardmembers (thousands) - managed 64,523 65,620 64,863 63,079 63,562
</TABLE>
13
<PAGE>
[BANK ONE CORPORATION Press Release Letterhead] Exhibit 99(b)
FOR IMMEDIATE RELEASE Contact: Thomas Kelly
- ---------------------
(312) 732-7007
BANK ONE APPOINTS McCOY CHAIRMAN,
ISTOCK PRESIDENT IN MANAGEMENT REALIGNMENT
CHICAGO, Oct. 19, 1999 - BANK ONE CORPORATION (NYSE: ONE) today announced
that the board of directors has unanimously endorsed a series of management and
organizational changes. They include the appointment of John B. McCoy as
chairman while also retaining his title of chief executive officer, and the
naming of Verne G. Istock as president.
These new alignments are intended to strengthen the day-to-day management
of businesses across the corporation. Reporting now to McCoy are the credit card
and consumer lending businesses as well as major staff areas. Reporting to
Istock are most of the operating areas, including commercial banking, investment
management, corporate investments, retail banking, consumer finance and
operations. Previously, most of the operating areas reported to McCoy and most
staff areas reported to Istock.
"We are nearing the successful completion of our merger integration, which
has resulted in continuing management changes in our organization," McCoy said.
"Dick Vague, head of First USA, has decided to resign to pursue other interests.
Following Vague's decision, Bill Boardman has been elected chairman and head of
First USA. Bill brings a wealth of banking, card, and electronic payment systems
experience to his new position.
(more)
<PAGE>
-2-
"The First USA businesses, with their powerful information systems and
direct marketing expertise, remain key competitive strengths of the company,"
McCoy said. "As announced earlier, some marketing, pricing and customer service
issues in the card business have temporarily slowed First USA's overall
momentum. With his added experience as chairman of Visa International and past
chairman of Visa U.S.A., Bill is uniquely qualified to address these issues and
capitalize on future growth opportunities.
"Verne and I are moving forward on several strategic initiatives regarding
corporate direction, future earnings expectations, and cost structure and intend
to report more fully to our shareholders at the previously announced analyst
meeting in November," McCoy said.
BANK ONE CORPORATION (NYSE: ONE) is the nation's fifth-largest bank holding
company, with assets of more than $260 billion. Bank One offers a full range of
financial services to commercial and business customers and consumers. It can
be found on the Internet at www.bankone.com.
---------------
###
Note to Editors: A list of management reporting responsibilities follows.
<PAGE>
Reporting to McCoy are:
. Marvin W. Adams Executive vice president, chief technology officer
. William P. Boardman Senior executive vice president, credit card and
consumer lending
. Gerald E. Buldak Senior vice president, public affairs
. Sherman I. Goldberg Executive vice president, general counsel and
secretary
. Timothy P. Moen Executive vice president, human resources
. Robert A. Rosholt Executive vice president, chief financial officer
Reporting to Istock are:
. W. G. Jurgensen Executive vice president, commercial products
. David J. Kundert Executive vice president, investment management
. Susan S. Moody Executive vice president, commercial relationships
. Robert A. O'Neill Jr. Executive vice president, chief auditor
. Ronald G. Steinhart Executive vice president, commercial banking
. Kenneth T. Stevens Executive vice president, retail banking
. Geoffrey L. Stringer Executive vice president, corporate investments
. Edward Tinsley Senior vice president, consumer finance
. Richard R. Wade Executive vice president, chief risk management
officer
. R. Neil Williams Senior vice president, national enterprise
operations
<PAGE>
David P. Bolger, executive vice president and head of merger integration, will
continue to report to both McCoy and Istock.
<PAGE>
[Letterhead of BANK ONE CORPORATION]
Mail Code IL1-0287
Telephone: (312) 732-4223
Telecopier: (312) 732-9753
Michael Lipsitz
Assistant Secretary and Counsel
October 19, 1999
VIA EDGAR
- ---------
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: BANK ONE CORPORATION
Form 8-K
-----------------
Ladies and Gentlemen:
Attached please find a Form 8-K, dated October 19, 1999, for BANK ONE
CORPORATION which is being filed electronically via the EDGAR system.
If you have any questions concerning this filing, please contact the
undersigned at (312) 732-4223.
Very truly yours,
/s/ Michael Lipsitz
Michael Lipsitz
ML/as
attachment
