<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) January 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.)
One First National 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 January 19, 1999, the Registrant issued a press release announcing its
fourth quarter 1998 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.
In addition, on January 19, 1999, the Registrant issued a press release
announcing an increase in its common stock dividend. 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.
<TABLE>
<CAPTION>
Exhibit Number Description of Exhibits
-------------- -----------------------
<S> <C>
99(a) Registrant's January 19, 1999 Press Release
regarding 4th Quarter 1998 earnings.
99(b) Registrant's January 19, 1999 Press Release
regarding common stock dividend increase.
</TABLE>
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: January 19, 1999 By: /s/ M. Eileen Kennedy
------------------ ------------------------------------
Title: Treasurer
2
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description of Exhibits
- -------------- -----------------------
<S> <C>
99(a) Registrant's January 19, 1999 Press Release regarding
4th Quarter 1998 earnings.
99(b) Registrant's January 19, 1999 Press Release regarding
common stock dividend increase.
</TABLE>
3
<PAGE>
[BANK ONE CORPORATION News Release Letterhead] Exhibit 99(a)
Media Contact:
Thomas A. Kelly (312) 732-7007
Investor Contacts:
Jay S. Gould (312) 732-5771
Holly E. Hobson (312) 732-5782
Sandra M. Catanzaro (312) 732-8013
FOR IMMEDIATE RELEASE
BANK ONE CORPORATION ANNOUNCES 17% INCREASE
IN 1998 FOURTH QUARTER EARNINGS EXCLUDING CHARGES
CHICAGO, January 19, 1999 - BANK ONE CORPORATION (NYSE: ONE) today announced
1998 fourth quarter earnings of $1.041 billion, or $0.88 per diluted share,
excluding one-time charges, up 17% from the 1997 fourth quarter. As previously
announced, the 1998 fourth quarter was impacted by charges for the merger with
First Chicago NBD Corporation and other one-time charges. These charges totaled
$1.159 billion pre-tax, or $0.69 per diluted share. Reported net income for the
1998 fourth quarter was $226 million, or $0.19 per diluted share compared, with
1997's $890 million, or $0.75 per diluted share.
The 1998 full-year earnings were $3.869 billion, or $3.25 per diluted share, an
18% increase over 1997, excluding merger-related charges, branch sale gains, and
other one-time items from both years. Reported net income for 1998 was $3.108
billion, or $2.61 per diluted share, compared with $2.960 billion, or $2.43 per
diluted share, in 1997.
"The fundamental performance in our first quarter as a merged company
demonstrates BANK ONE's earnings power," said John B. McCoy, President and Chief
Executive Officer. "Operating earnings were driven by 11% revenue growth and
sound credit quality. Our return on common equity exceeded our 20% target. This
gives us an excellent earnings base going into 1999."
1998 Fourth Quarter Highlights - Operating Results
Highlights for the 1998 fourth quarter, compared with the prior year's quarter
and excluding merger-related expenses and other charges, were:
. A 17% increase in both earnings per share and net income supported by
strong fundamental operating trends.
(more)
<PAGE>
-2-
. A 20.5% return on average common equity and 1.70% return on average
assets.
. A 13% increase in managed net interest income with a managed net
interest margin of 5.67%, up from 5.36% in the year-ago quarter and
5.63% in 1998's third quarter. Average managed loans grew 7%, with
credit cards as the strongest contributor.
. An 11% increase in managed fee-based revenue and 28% increase in market-
driven revenue.
Merger-Related Expenses and Other Charges
The 1998 fourth quarter included the following charges:
<TABLE>
<CAPTION>
Pre-tax Per share
------- ----------
(millions)
<S> <C> <C>
Restructuring and merger-related costs $ 984 $0.59
Other charges 175 0.10
------ -----
$1,159 $0.69
</TABLE>
The restructuring charge included expenses for items such as severance and
facilities and equipment write-offs while merger-related costs reflected the
ongoing costs of integrating various business units. Other charges primarily
reflected a valuation adjustment related to auto lease residual values ($102
million in other noninterest income) and Rapid Cash business restructuring costs
($65 million in operating expense).
PERFORMANCE REVIEW - OPERATING RESULTS
The following detailed discussion is on a managed basis and excludes one-time
items in order to better describe underlying operating trends. Managed
information has been adjusted to include credit card loans that have been
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 loan losses as if the securitization had not occurred.
Net Interest Income and Margin
Managed net interest income on a tax equivalent basis was $3.682 billion in
1998's fourth quarter, 13% higher than 1997's fourth quarter, reflecting the
higher managed net interest margin and loan growth. The managed net interest
margin increased 31 basis points from 1997's fourth quarter to 5.67% in 1998's
fourth quarter. An improved mix of earning assets and a lower cost of funds led
to the wider net interest margin. Compared with the 1998 third quarter, managed
net interest income rose 23% on an annualized basis, while the margin improved
four basis points. These increases were principally related to the Chevy Chase
credit card acquisition and overall margin improvements.
(more)
<PAGE>
-3-
Loan growth was particularly strong during the 1998 fourth quarter. Average
commercial loans increased 9% from 1997's fourth quarter. Average consumer
loans, excluding credit cards, were down slightly, reflecting the planned
decrease in residential mortgages offset by growth of other types of consumer
loans.
Average managed credit card loans were 15% higher in the 1998 fourth quarter
than one year earlier and included the positive impact of the acquired Chevy
Chase portfolio. On an end-of-period basis, balances in the VISA/MasterCard
portion of the credit card portfolio, which represents 99% of credit card loans,
were up 21%. As of December 31, 1998, managed credit card loans were $70.0
billion, up 7% from September 30, 1998.
First USA also added a record 2.9 million new accounts in the 1998 fourth
quarter. Cardmembers at year-end totaled 56.6 million, down from 57.2 million
at the end of the third quarter, the net change related to a joint venture
established for the private label business. First USA's results demonstrate
continued success with its growth strategy, which includes both portfolio
acquisitions and new account generation.
Noninterest Income
Managed noninterest income was $1.543 billion in the fourth quarter, excluding
asset valuation adjustments of $110 million. Market-driven revenue on an
operating basis totaled $98 million, up from $71 million in the year-ago quarter
and $55 million in the 1998 third quarter, reflecting improving capital markets
conditions in December.
Fee-based revenue on a managed basis totaled $1.323 billion during the quarter,
up 11% from a year earlier and included a 17% increase in credit card fee
income, a 9% increase in service charges and commissions, and a 5% increase in
fiduciary and investment management fees. Fees for other business lines were
little changed from 1997's fourth quarter.
Noninterest Expense
Noninterest expense for the 1998 fourth quarter totaled $2.807 billion,
excluding $1.049 billion in merger-related and other charges. This was 15%
higher than the 1997 fourth quarter.
Outstanding growth in the credit card business continues to drive higher
spending. The most significant expense increases were related to credit card
marketing, expansion into international markets, and the addition of credit card
operational capacity domestically which was part of the Chevy Chase acquisition,
and overall growth of credit card accounts and transaction volumes.
(more)
<PAGE>
-4-
Provision for Credit Losses and Credit Quality
The managed provision for credit losses was $951 million in the 1998 fourth
quarter, compared with $970 million for the year-ago quarter and $943 million in
the third quarter of 1998.
The managed net charge-off ratio for credit cards was 4.79%, including charge-
off policy conformance changes. The net charge-off ratios for all other loan
categories changed only slightly and remained near historic lows.
Capital
Capital ratios remain strong, with common equity to assets of 7.8%. Tangible
common equity to assets was 6.8%. Tier 1 and total risk-based capital ratios
were 8.0% and 11.5%, respectively.
BANK ONE CORPORATION, headquartered in Chicago, is the nation's fifth largest
bank holding company with assets of more than $260 billion. BANK ONE offers a
full range of financial services to commercial and business customers and
consumers. It is one of the nation's largest credit card lenders, the second-
largest consumer and commercial finance company, the third-largest bank lender
to small businesses, and the third-largest bank mutual fund company. BANK ONE
operates more than 2,000 offices and a nationwide network of ATMs. It is a
major commercial bank in the United States and in selected international
markets.
Information about BANK ONE's financial results can be accessed on the Internet
at www.bankone.com and www.investquest.com or through fax-on-demand at 614-844-
3860. A telephone recording discussing the fourth quarter results is available
by calling 800-625-5288 (domestic) or 303-804-1855 (international), conference
ID #459222.
###
<PAGE>
<TABLE>
<CAPTION>
BANK ONE CORPORATION and Subsidiaries
FINANCIAL HIGHLIGHTS Three Months Ended December 31 Three Months
--------------------------------- Ended
($ millions, except per share amounts) 1998 1997 % Change Sep 30, 1998
- ----------------------------------------------- --------- --------- -------- ------------
<S> <C> <C> <C> <C>
PER SHARE DATA
- --------------
Earnings - Basic $ 0.19 $ 0.76 (75) $ 0.90
- Diluted $ 0.19 $ 0.75 (75) $ 0.89
Dividends 0.38 0.35 10 0.38
INCOME STATEMENT DATA
- ---------------------
Net income $ 226 $ 890 (75) $ 1,054
Net interest income (FTE) 2,368 2,332 2 2,402
Provision for credit losses 272 448 (39) 345
Noninterest income 2,068 1,866 11 1,999
Noninterest expense 3,856 2,448 58 2,539
FINANCIAL PERFORMANCE RATIOS
- ----------------------------
Net interest margin - managed 5.67% 5.36% 5.63%
- reported 4.40 4.55 4.61
Return on assets 0.37 1.52 1.77
Return on common equity 4.4 19.1 20.7
Operating efficiency - managed 57.1 51.9 50.8
- reported 65.8 58.3 57.7
BALANCE SHEET DATA
- ------------------
Average: Loans - managed $ 207,471 $ 193,076 7 197,978
- reported 149,146 156,908 (5) 154,466
Earning assets 213,411 203,459 5 206,736
Total assets 243,515 232,561 5 236,573
Deposits 150,247 149,344 1 148,393
Common equity 20,067 18,313 10 20,098
End of Period: Loans - managed 216,391 196,993 10 $ 203,443
- reported 155,398 159,579 (3) 154,057
Total assets 261,496 239,372 9 238,658
Deposits 161,542 153,726 5 148,924
Common equity 20,370 18,724 9 20,428
<CAPTION>
Year Ended December 31
---------------------------------
1998 1997 % Change
--------- --------- --------
<S> <C> <C> <C>
PER SHARE DATA
- --------------
Earnings - Basic $ 2.65 $ 2.48 7
- Diluted $ 2.61 $ 2.43 7
Dividends 1.52 1.38 10
INCOME STATEMENT DATA
- ---------------------
Net income $ 3,108 $ 2,960 5
Net interest income (FTE) 9,469 9,619 (2)
Provision for credit losses 1,408 1,988 (29)
Noninterest income 8,071 6,694 21
Noninterest expense 11,545 9,740 19
FINANCIAL PERFORMANCE RATIOS
- ----------------------------
Net interest margin - managed 5.56% 5.61%
- reported 4.52 4.75
Return on assets 1.30 1.29
Return on common equity 15.9 15.8
Operating efficiency - managed 52.3 51.3
- reported 59.8 57.6
BALANCE SHEET DATA
- ------------------
Average: Loans - managed $ 199,856 $ 187,918 6
- reported 154,952 155,926 (1)
Earning assets 209,514 202,334 4
Total assets 239,790 229,882 4
Deposits 150,172 146,542 2
Common equity 19,508 18,460 6
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
BANK ONE CORPORATION and Subsidiaries
Three Months Ended
-----------------------------------------------
Consolidated Statement of Income Dec 31 Sep 30 Jun 30 Mar 31 Dec 31
($ millions, except per share amounts) 1998 1998 1998 1998 1997
- ------------------------------------------------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Interest income $ 4,326 $ 4,412 $ 4,432 $ 4,354 $ 4,375
Interest expense 1,989 2,039 2,084 2,065 2,075
-----------------------------------------------
Net interest income 2,337 2,373 2,348 2,289 2,300
Provision for credit losses 272 345 400 391 448
-----------------------------------------------
Net interest income after provision for credit losses 2,065 2,028 1,948 1,898 1,852
-----------------------------------------------
Noninterest Income
Trading profits (losses) (2) 18 65 60 (1)
Equity securities gains (losses) 61 (4) 121 72 52
Investment securities gains (losses) 32 41 49 33 20
-----------------------------------------------
Market-driven revenue 91 55 235 165 71
Credit card fees 1,078 867 630 701 778
Fiduciary and investment management fees 199 207 203 198 190
Service charges and commissions 680 639 666 660 625
-----------------------------------------------
Fee-based revenue 1,957 1,713 1,499 1,559 1,593
Other income 20 231 354 192 202
-----------------------------------------------
Total noninterest income 2,068 1,999 2,088 1,916 1,866
Noninterest Expense
Salaries and benefits 1,167 1,080 1,123 1,107 1,096
Net occupancy and equipment expense 217 217 209 202 189
Depreciation and amortization 180 167 167 166 181
Outside services and processing 410 318 348 273 334
Marketing and development 340 264 221 199 170
Communication and transportation 214 192 190 185 196
Other expense 393 301 334 299 282
-----------------------------------------------
Operating expenses 2,921 2,539 2,592 2,431 2,448
Merger-related and restructuring costs 935 - 127 - -
-----------------------------------------------
Total noninterest expense 3,856 2,539 2,719 2,431 2,448
-----------------------------------------------
Income before income taxes 277 1,488 1,317 1,383 1,270
Provision for Income Taxes 51 434 422 450 380
-----------------------------------------------
Net income $ 226 $ 1,054 $ 895 $ 933 $ 890
===============================================
Net income attributable to common stockholders' equity $ 223 $ 1,051 $ 891 $ 929 $ 883
===============================================
Earnings per common share
--Basic $ 0.19 $ 0.90 $ 0.76 $ 0.80 $ 0.76
--Diluted 0.19 0.89 0.75 0.78 0.75
Average common shares outstanding (millions)
--Basic 1,175 1,172 1,169 1,165 1,169
--Diluted 1,188 1,188 1,189 1,191 1,196
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
BANK ONE CORPORATION and Subsidiaries
Year Ended
--------------------
Consolidated Statement of Income Dec 31 Dec 31
($ millions, except per share amounts) 1998 1997
- ------------------------------------------------------- -------- --------
<S> <C> <C>
Interest income $ 17,524 $ 17,545
Interest expense 8,177 8,084
--------------------
Net interest income 9,347 9,461
Provision for credit losses 1,408 1,988
--------------------
Net interest income after provision for credit losses 7,939 7,473
--------------------
Noninterest Income
Trading profits (losses) 141 117
Equity securities gains (losses) 250 334
Investment securities gains (losses) 155 101
--------------------
Market-driven revenue 546 552
Credit card fees 3,276 2,508
Fiduciary and investment management fees 807 746
Service charges and commissions 2,645 2,391
--------------------
Fee-based revenue 6,728 5,645
Other income 797 497
--------------------
Total noninterest income 8,071 6,694
Noninterest Expense
Salaries and benefits 4,477 4,224
Net occupancy and equipment expense 845 739
Depreciation and amortization 680 693
Outside services and processing 1,349 1,145
Marketing and development 1,024 837
Communication and transportation 781 711
Other expense 1,327 1,054
--------------------
Operating expenses 10,483 9,403
Merger-related and restructuring costs 1,062 337
--------------------
Total noninterest expense 11,545 9,740
--------------------
Income before income taxes 4,465 4,427
Provision for income taxes 1,357 1,467
--------------------
Net income $ 3,108 $ 2,960
====================
Net income attributable to common stockholders' equity $ 3,094 $ 2,921
====================
Earnings per common share
--Basic $ 2.65 $ 2.48
--Diluted 2.61 2.43
Average common shares outstanding (millions)
--Basic 1,170 1,176
--Diluted 1,189 1,213
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
BANK ONE CORPORATION and Subsidiaries
Consolidated Balance Sheet Dec 31 Sep 30 Jun 30 Mar 31 Dec 31
($ millions) 1998 1998 1998 1998 1997
- --------------------------------------------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Assets
Cash and due from banks $ 19,878 $ 14,109 $ 16,217 $ 15,142 $ 15,380
Interest bearing due from banks 4,642 4,621 5,590 5,167 6,910
Federal funds sold and securities under resale agreements 9,862 10,066 9,040 9,121 9,168
Trading assets 5,345 5,770 5,342 5,250 5,246
Derivative product assets 6,954 4,600 4,342 4,373 4,623
Investment securities (1) 44,852 32,658 31,863 31,388 26,039
Loans
Commercial 88,438 81,895 83,279 81,152 79,306
Consumer 57,926 56,379 58,737 58,173 57,608
Credit Card 9,034 15,783 18,007 19,062 22,665
----------------------------------------------------------------
Total loans 155,398 154,057 160,023 158,387 159,579
Allowance for credit losses (2,271) (2,751) (2,752) (2,794) (2,817)
----------------------------------------------------------------
Loans, net 153,127 151,306 157,271 155,593 156,762
Other assets:
Bank premises and equipment, net 3,340 3,431 3,433 3,454 3,426
Customer acceptance liability 333 434 405 595 741
Other 13,163 11,663 10,675 10,477 11,077
----------------------------------------------------------------
Total other assets 16,836 15,528 14,513 14,526 15,244
----------------------------------------------------------------
Total assets $261,496 $238,658 $244,178 $240,560 $239,372
================================================================
Liabilities
Deposits:
Demand $ 39,854 $ 34,757 $ 38,551 $ 36,706 $ 35,954
Savings 62,645 58,813 59,542 60,561 58,946
Time 36,302 36,694 37,887 39,716 40,144
Foreign offices 22,741 18,660 18,527 16,834 18,682
----------------------------------------------------------------
Total deposits 161,542 148,924 154,507 153,817 153,726
Federal funds purchased and repurchase agreements 23,164 20,619 19,088 19,818 20,346
Other short-term borrowings 16,937 13,223 15,768 14,079 12,806
Long-term borrowings 21,295 21,138 21,245 21,286 20,543
Guaranteed preferred beneficial interest in the
Corporation's junior subordinated debt 1,003 1,003 1,003 1,003 1,003
Acceptances outstanding 333 434 405 595 741
Derivative product liabilities 7,147 4,749 4,327 4,143 4,629
Other liabilities 9,515 7,950 8,070 6,584 6,528
----------------------------------------------------------------
Total liabilities 240,936 218,040 224,413 221,325 220,322
----------------------------------------------------------------
Stockholders' Equity
Preferred stock 190 190 190 290 326
Common stock 12 12 12 12 12
Surplus 11,042 12,488 12,549 12,583 12,584
Retained earnings 9,255 9,750 9,094 8,602 8,063
Deferred compensation (94) (157) (182) (162) (137)
Accumulated other adjustments to stockholders' equity 239 244 177 208 209
Treasury stock (84) (1,909) (2,075) (2,298) (2,007)
----------------------------------------------------------------
Total stockholders' equity 20,560 20,618 19,765 19,235 19,050
----------------------------------------------------------------
Total liabilities and stockholders' equity $261,496 $238,658 $244,178 $240,560 $239,372
================================================================
Common Shares - period end (millions)
Common shares issued 1,179 1,223 1,222 1,221 1,219
Treasury shares 2 47 52 56 51
----------------------------------------------------------------
Common shares outstanding 1,177 1,176 1,170 1,165 1,168
</TABLE>
(1) Includes the Corporation's undivided interest in securitized credit card
receivables. As part of conforming accounting practices, First Chicago
NBD's undivided interest in such receivables was reclassified from Loans to
Investment Securities on 10/1/98.
8
<PAGE>
BANK ONE CORPORATION and Subsidiaries
<TABLE>
<CAPTION>
Fourth Quarter 1998 Third Quarter 1998
----------------------------- -----------------------------
Average Balance Sheet, Yields, & Rates Average Income Yield/ Average Income Yield/
($ millions) Balance Expense Rate Balance Expense Rate
- -------------------------------------- -------- ------- ------ -------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Short-term investments $ 15,871 $ 177 4.42% $ 12,936 $ 178 5.46%
Trading assets (1) 5,961 85 5.66 6,470 99 6.07
Investment securities: (1)
U.S. government and federal agency 14,739 243 6.54 16,069 267 6.59
States and political subdivisions 2,086 43 8.18 2,168 41 7.50
Other (2) 25,608 568 8.80 14,627 250 6.78
------------------- -------------------
Total investment securities 42,433 854 7.98 32,864 558 6.74
Loans: (1) (3)
Commercial 85,018 1,633 7.62 81,255 1,591 7.77
Consumer 56,263 1,284 9.05 57,633 1,362 9.38
Credit card 7,865 324 16.34 15,578 653 16.63
------------------- -------------------
Total loans, net 149,146 3,241 8.62 154,466 3,606 9.26
Total earning assets 213,411 4,357 8.10 206,736 4,441 8.52
Allowance for credit losses (2,700) (2,714)
Other assets 32,804 32,551
-------- --------
Total assets $243,515 $236,573
======== ========
Deposits -- interest bearing:
Savings $ 19,260 $ 105 2.16% $ 20,523 $ 117 2.26%
Money market 41,064 362 3.50 38,857 370 3.78
Time 36,790 496 5.35 37,285 497 5.29
Foreign offices 19,853 238 4.76 18,384 246 5.31
------------------- -------------------
Total deposits -- interest bearing 116,967 1,201 4.07 115,049 1,230 4.24
Federal funds purchased and securities
under repurchase agreements 23,171 260 4.45 20,792 278 5.30
Other short-term borrowings 13,847 181 5.19 13,652 181 5.26
Long-term debt 22,208 347 6.20 21,771 350 6.38
------------------- -------------------
Total interest-bearing liabilities 176,193 1,989 4.48 171,264 2,039 4.72
Demand deposits 33,280 33,344
Other liabilities 13,784 11,676
Preferred stock 191 191
Common stockholders' equity 20,067 20,098
-------- --------
Total liabilities and equity $243,515 $236,573
======== ========
Interest income/earning assets $4,357 8.10% $4,441 8.52%
Interest expense/earning assets 1,989 3.70 2,039 3.91
---------------- ----------------
Net interest margin $2,368 4.40% $2,402 4.61%
================ ================
</TABLE>
<TABLE>
<CAPTION>
Fourth Quarter 1997
-----------------------------
Average Balance Sheet, Yields, & Rates Average Income Yield/
($ millions) Balance Expense Rate
- -------------------------------------- -------- ------- ------
<S> <C> <C> <C>
Short-term investments $ 15,613 $ 220 5.59%
Trading assets (1) 5,828 91 6.19
Investment securities: (1)
U.S. government and federal agency 17,233 304 7.00
States and political subdivisions 2,477 50 8.01
Other (2) 5,400 42 3.09
-------------------
Total investment securities 25,110 396 6.26
Loans: (1) (3)
Commercial 77,995 1,560 7.94
Consumer 57,589 1,358 9.36
Credit card 21,324 782 14.55
-------------------
Total loans, net 156,908 3,700 9.36
Total earning assets 203,459 4,407 8.59
Allowance for credit losses (2,797)
Other assets 31,899
--------
Total assets $232,561
========
Deposits -- interest bearing:
Savings $ 21,329 $ 126 2.34%
Money market 36,550 352 3.82
Time 40,865 569 5.52
Foreign offices 17,957 238 5.26
-------------------
Total deposits -- interest bearing 116,701 1,285 4.37
Federal funds purchased and securities
under repurchase agreements 18,512 247 5.29
Other short-term borrowings 13,464 196 5.78
Long-term debt 21,750 347 6.33
-------------------
Total interest-bearing liabilities 170,427 2,075 4.83
Demand deposits 32,643
Other liabilities 10,793
Preferred stock 385
Common stockholders' equity 18,313
--------
Total liabilities and equity $232,561
========
Interest income/earning assets $4,407 8.59%
Interest expense/earning assets 2,075 4.04
----------------
Net interest margin $2,332 4.55%
================
</TABLE>
(1) Includes tax-equivalent adjustments based on a 35% federal income tax rate
(2) As part of conforming accounting practices, First Chicago NBD's undivided
interest in securitized credit card receivables was reclassified from loans
to investment securities on 10/1/98. Such amounts averaged $8.211 billion
for the fourth quarter of 1998.
(3) Nonperforming loans are included in balances used to determine the average
rate
9
<PAGE>
<TABLE>
<CAPTION>
BANK ONE CORPORATION and Subsidiaries
Year Ended December 31, 1998 Year Ended December 31, 1997
---------------------------- ----------------------------
Average Balance Sheet, Yields, & Rates Average Income Yield/ Average Income Yield/
($ millions) Balance Expense Rate Balance Expense Rate
- ----------------------------------------------- -------- ------- ------ -------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Short-term investments $ 14,632 $ 754 5.15% $ 14,412 $ 801 5.56%
Trading assets (1) 6,203 366 5.90 5,616 331 5.89
Investment securities: (1)
U.S. government and federal agency 16,683 1,102 6.61 18,851 1,273 6.75
States and political subdivisions 2,211 176 7.96 2,648 220 8.31
Other (2) 14,833 1,101 7.42 4,881 246 5.04
------------------- -------------------
Total investment securities 33,727 2,379 7.05 26,380 1,739 6.59
Loans: (1)(3)
Commercial 82,118 6,382 7.77 76,636 6,108 7.97
Consumer 57,206 5,360 9.37 56,410 5,324 9.44
Credit card 15,628 2,405 15.39 22,880 3,400 14.86
------------------- -------------------
Total loans, net 154,952 14,147 9.13 155,926 14,832 9.51
Total earning assets 209,514 17,646 8.42 202,334 17,703 8.75
Allowance for credit losses (2,731) (2,751)
Other assets 33,007 30,299
-------- --------
Total assets $239,790 $229,882
======== ========
Deposits -- interest bearing:
Savings $ 20,710 $ 470 2.27% $ 22,408 $ 519 2.32%
Money market 39,115 1,458 3.73 34,565 1,302 3.77
Time 38,211 2,066 5.41 41,894 2,315 5.53
Foreign offices 18,489 949 5.13 16,476 855 5.19
------------------- -------------------
Total deposits -- interest bearing 116,525 4,943 4.24 115,343 4,991 4.33
Federal funds purchased and securities
under repurchase agreements 21,685 1,090 5.03 20,430 1,073 5.25
Other short-term borrowings 13,790 737 5.34 14,129 786 5.56
Long-term debt 22,089 1,407 6.37 18,945 1,234 6.51
------------------- -------------------
Total interest-bearing liabilities 174,089 8,177 4.70 168,847 8,084 4.79
Demand deposits 33,647 31,199
Other liabilities 12,323 10,889
Preferred stock 223 487
Common stockholders' equity 19,508 18,460
-------- --------
Total liabilities and equity $239,790 $229,882
======== ========
Interest income/earning assets $17,646 8.42% $17,703 8.75%
Interest expense/earning assets 8,177 3.90 8,084 4.00
---------------- ----------------
Net interest margin $ 9,469 4.52% $ 9,619 4.75%
================ ================
</TABLE>
(1) Includes tax-equivalent adjustments based on a 35% federal income tax rate.
(2) As part of conforming accounting practices, First Chicago NBD's undivided
interest in securitized credit card receivables was reclassified from loans
to investment securities on 10/1/98. Such amounts averaged $2.070 billion
for 1998.
(3) Nonperforming loans are included in balances used to determine the average
rate.
10
<PAGE>
<TABLE>
<CAPTION>
BANK ONE CORPORATION and Subsidiaries
Three Months Ended
----------------------------------------------------------------
Credit Quality Dec 31 Sep 30 Jun 30 Mar 31 Dec 31
($ millions) 1998 1998 1998 1998 1997
- --------------------------------------------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Provision for credit losses $ 272 $ 345 $ 400 $ 391 $ 448
Gross charge-offs $ 377 $ 443 $ 560 $ 565 $ 600
Recoveries 80 98 118 151 133
----------------------------------------------------------------
Net charge-offs $ 297 $ 345 $ 442 $ 414 $ 467
Net charge-offs:
Commercial $ 80 $ 43 $ 80 $ 19 $ 33
Consumer 104 98 95 116 107
Credit card 113 204 267 279 327
----------------------------------------------------------------
Total net charge-offs $ 297 $ 345 $ 442 $ 414 $ 467
Total net charge-offs -- managed $ 976 $ 943 $ 1,065 $ 1,020 $ 989
Net charge-off ratios:
Commercial 0.38% 0.21% 0.39% 0.10% 0.17%
Consumer 0.74 0.68 0.66 0.80 0.74
Credit card 5.75 5.24 5.75 5.41 6.13
Total net charge-off ratio 0.80 0.89 1.12 1.05 1.19
Total net charge-off ratio -- managed 1.88 1.91 2.15 2.08 2.05
Allowance for credit losses - period end $ 2,271 $ 2,751 $ 2,752 $ 2,794 $ 2,817
Nonperforming assets - period end:
Nonperforming loans $ 729 $ 718 $ 640 $ 725 $ 609
Other real estate owned 90 87 70 63 61
----------------------------------------------------------------
Total nonperforming assets $ 819 $ 805 $ 710 $ 788 $ 670
Allowance to ending loans 1.46% 1.79% 1.72% 1.76% 1.77%
Allowance to nonperforming loans 312 383 430 385 463
Nonperforming assets ratio 0.53 0.52 0.44 0.50 0.42
Capital
($ millions, except per share amounts)
- ---------------------------------------------------------
Common equity/assets ratio 7.8% 8.6% 8.0% 7.9% 7.8%
Tier 1 capital ratio 8.0 8.6 8.3 8.3 8.2
Total risk adjusted capital ratio 11.5 12.4 12.3 12.5 12.3
Regulatory leverage ratio 8.1 8.5 8.0 7.9 7.8
Tangible common equity to net assets 6.8 7.7 7.4 7.2 7.2
Book value of common equity per share $ 17.31 $ 17.37 $ 16.72 $ 16.26 $ 16.03
Intangibles--period end
Goodwill $ 1,075 $ 1,094 $ 1,117 $ 1,095 $ 1,120
Other intangibles 1,622 1,125 631 700 582
----------------------------------------------------------------
Total intangibles $ 2,697 $ 2,219 $ 1,748 $ 1,795 $ 1,702
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
BANK ONE CORPORATION and Subsidiaries
Managed Income Statement Statistics(1) Dec 31 Sep 30 Jun 30 Mar 31 Dec 31
($ millions) 1998 1998 1998 1998 1997
- --------------------------------------------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Reported:
- ---------------------------------------------------------
Net interest income - FTE $ 2,368 $ 2,402 $ 2,379 $ 2,320 $ 2,332
Provision for credit losses 272 345 400 391 448
Noninterest income 2,068 1,999 2,088 1,916 1,866
Noninterest expense 3,856 2,539 2,719 2,431 2,448
Net income 226 1,054 895 933 890
Securitized:
- ---------------------------------------------------------
Net interest income - FTE $ 1,314 $ 1,083 $ 962 $ 1,000 $ 925
Provision for credit losses 679 598 623 606 522
Noninterest income (635) (484) (339) (394) (402)
Noninterest expense - 1 - - 1
Net income - - - - -
Managed:
- ---------------------------------------------------------
Net interest income - FTE $ 3,682 $ 3,485 $ 3,341 $ 3,320 $ 3,257
Provision for credit losses 951 943 1,023 997 970
Noninterest income 1,433 1,515 1,749 1,522 1,464
Noninterest expense 3,856 2,540 2,719 2,431 2,449
Net income 226 1,054 895 933 890
Managed balance sheet and net interest margin:
- ---------------------------------------------------------
Total average loans $207,471 $197,978 $197,867 $196,002 $193,076
Total average earning assets 257,413 245,422 247,152 244,387 240,927
Net interest margin 5.67% 5.63% 5.42% 5.51% 5.36%
</TABLE>
(1) Managed data only adjusted for credit card securitization activity
12
<PAGE>
<TABLE>
<CAPTION>
BANK ONE CORPORATION and Subsidiaries
Managed Credit Card Detail Dec 31 Sep 30 Jun 30 Mar 31 Dec 31
($ millions) 1998 1998 1998 1998 1997
- --------------------------------------------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Period end loans - managed $ 70,027 $ 65,169 $ 58,710 $ 57,742 $ 60,079
- securitized (60,993) (49,386) (40,703) (38,680) (37,414)
- reported 9,034 15,783 18,007 19,062 22,665
Average loans - managed $ 66,190 $ 59,090 $ 58,233 $ 58,544 $ 57,492
- securitized (58,325) (43,512) (39,660) (37,911) (36,168)
- reported 7,865 15,578 18,573 20,633 21,324
Net charge-offs - amount - managed $ 792 $ 802 $ 890 $ 885 $ 849
- securitized (679) (598) (623) (606) (522)
- reported 113 204 267 279 327
Net charge-offs - rate - managed 4.79% 5.43% 6.11% 6.05% 5.91%
- securitized 4.66 5.50 6.28 6.39 5.77
- reported 5.75 5.24 5.75 5.41 6.13
Delinquency rate - 30+ days - managed 4.47% 4.50% 4.34% 4.82% 4.90%
- securitized 4.64 4.49 4.34 4.91 5.07
- reported 3.34 4.54 4.34 4.65 4.61
Delinquency rate - 90+ days - managed 1.98% 1.90% 1.97% 2.19% 2.11%
- securitized 2.06 1.94 2.02 2.24 2.22
- reported 1.41 1.79 1.85 2.09 1.94
Credit card charge volume - managed $ 29,237 $ 25,106 $ 24,091 $ 22,701 $ 25,166
New accounts opened (thousands) - managed 2,919 2,538 2,271 2,330 2,840
Cardmembers (thousands) - managed 56,568 57,204 52,805 51,155 51,890
</TABLE>
13
<PAGE>
[BANK ONE CORPORATION News Release Letterhead] Exhibit 99(b)
FOR IMMEDIATE RELEASE CONTACT: Thomas A. Kelly
(312) 732-7007
BANK ONE INCREASES COMMON STOCK
DIVIDEND 10.5%, TO 42 CENTS PER SHARE
CHICAGO, January 19, 1999 - The Board of Directors of BANK ONE CORPORATION
today declared a cash dividend of 42 cents per share on outstanding common
stock, payable April 1, 1999, to shareholders of record on March 15, 1999. This
dividend represents a 10.5% increase from the dividend declared in the previous
quarter.
"The dividend increase reflects our confidence in the earnings outlook for
the new company," said John B. McCoy, President and Chief Executive Officer.
"It also is consistent with a targeted payout ratio in the range of 35% to 40%
of operating earnings over time."
BANK ONE CORPORATION, with assets of more than $260 billion, is the
nation's 5th largest bank holding company.
###
