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[CHASE LOGO]
1995
Third Quarter
Report
3
The Chase Manhattan Corporation
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Financial Highlights
The Chase Manhattan Corporation and Subsidiaries
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
September 30, September 30,
<S> <C> <C> <C> <C>
($ in millions, except
per share data) 1995 1994 1995 1994
Net Income $ 283 $ 305 $ 825 $ 976
Total Assets
(Period-End) 120,092 117,065
Common Stockholders'
Equity (Period-End) 7,578 7,040
Per Common Share
Net Income $ 1.40 $ 1.49 $ 4.07 $ 4.76
Cash Dividends
Declared .45 .40 1.30 1.06
Common Stockholders'
Equity (Period-End
Book Value) 42.35 38.83
Market Price
(Period-End) 61.125 34.625
Average Common
Shares Outstanding
(in thousands) 181,075 184,417 179,991 185,039
Financial Ratios
Return on Average
Common Stockholders'
Equity 13.9% 15.8% 13.8% 17.3%
Return on Average
Total Assets .89 .98 .88 1.09
Capital Ratios (Period
- -End)Common Stock-
holders' Equity as
% of Total Assets 6.31% 6.01%
Total Stockholders'
Equity as % of
Total Assets 7.48 7.21
Risk-Based Capital
Tier 1 Capital as
% of Net Risk-
Weighted Assets 8.24 8.51
Total Capital as
% of Net Risk-
Weighted Assets 13.01 13.22
Tier 1 Leverage 7.47 7.31
</TABLE>
To Our Shareholders,
Customers and Colleagues:
On August 28, The Chase Manhattan Corporation and Chemical
Banking Corporation announced a definitive agreement to merge - a
pivotal step toward materially enhancing value for our
shareholders, customers and employees. Chase also continued to
enhance value in the third quarter by demonstrating substantial
progress in executing its core business strategies.
The New Chase
The combination of Chase and Chemical - which will adopt the
Chase name - will be the largest banking institution in the U.S.,
with operations in 51 countries and 39 states, and about $300
billion in assets and $20 billion in shareholders' equity. More
important than size, however, are the strong leadership positions
the new Chase will have in both the wholesale and retail
businesses.
On the wholesale side, the combination of Chase and Chemical
would rank among the top institutions in global custody, U.S.
dollar clearing worldwide and global loan syndications.
In retail, the new Chase would rank number one nationally in
mortgage servicing and luxury auto financing, and number one in
regional banking in the New York metropolitan area. The new
institution will also be a leader in credit cards and mortgage
originations, and a leader among banks in the mutual fund
business.
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The merger, which is expected to be completed in the first
quarter of 1996, is subject to approval by the shareholders of
both institutions and by federal and state regulatory
authorities.
The merger agreement provides for a pooling of interests, in
which 1.04 shares of Chemical common stock will be exchanged for
each share of Chase common stock on a tax-free basis. All of
Chase's series of preferred stock will be exchanged for similar
Chemical preferred stock.
Chase and Chemical are estimating that annual cost savings from
the merger will be $1.5 billion, or about 16% of combined 1995
operating expenses, to be achieved within three years. The
companies are projecting a pre-tax merger charge of $1.5 billion
in order to help pave the way for these future cost reductions.
Third Quarter Progress
The Chase-Chemical combination will have a unique strategic fit,
bringing together complementary capabilities. Many of Chase's
capabilities are reflected in our third quarter 1995 business
highlights, which include:
- - Earnings of $283 million ($1.40 per share) for the quarter, up
from $281 million ($1.38 per share) in the previous quarter and
down from $305 million ($1.49 per share) for the same period last
year which included sizable gains related to dispositions of real
estate assets and LDC investment securities.
- - Substantial progress executing our business strategies. Third
quarter Global Financial Services net income grew 11%, and Retail
net income grew 8% over the same period last year.
- - Strong investment banking fee growth 35% over third quarter
1994.
- - Significantly higher credit card receivables. Managed credit
card receivables grew approximately $2 billion over the same
period last year. Credit quality, as measured by loss and
delinquency ratios, improved. However, net interest revenue
continued to be negatively impacted by narrower loan spreads.
- - Outstanding asset quality. The credit loss provision declined
to $70 million from $100 million in the same period last year,
benefiting from net recoveries on commercial loans and the impact
of credit card securitizations completed earlier this year.
- - Significantly enhanced scale and scope in our market-leading
custody business. Trust and custody assets increased to about $2
trillion, following the completion of the acquisition of the US
Trust securities processing business.
- - Disciplined expense management. On a comparable basis,
operating expenses declined from the previous quarter and were
flat compared with third quarter 1994.
Looking Ahead
The financial services industry around the world
is undergoing profound changes. What will not change is Chase's
focused commitment to deliver integrated financial solutions -
from across product lines and geographic borders - to meet our
clients' needs. This commitment and the proposed historic merger
between Chase and Chemical will enable us to thrive as we bring
together capabilities to enhance the value of our company for
shareholders, customers and employees.
Thomas G. Labrecque
Chairman and Chief Executive Officer
October 25, 1995
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Consolidated Statement of Income
The Chase Manhattan Corporation and Subsidiaries
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
September 30, September 30,
<S> <C> <C> <C> <C>
($ in millions, except
per share data) 1995 1994 1995 1994
Interest Revenue
Interest and Fees
on Loans $ 1,440 $ 1,252 $ 4,323 $ 3,929
Interest on Deposits
Placed with Banks 133 108 426 365
Interest and Dividends on
Investment Securities:
Held to Maturity 32 29 96 112
Available for Sale 82 90 262 433
Interest on Federal Funds
Sold and Securities
Purchased Under Resale
Agreements 268 233 786 1,048
Interest on Trading
Account Assets 119 89 332 300
Total Interest Revenue 2,074 1,801 6,225 6,187
Interest Expense
Deposits 651 538 1,964 1,717
Federal Funds Purchased
and Securities Sold
Under Repurchase
Agreements 302 203 902 503
Commercial Paper 24 16 79 45
Other Short-Term
Borrowings 105 52 326 908
Intermediate- and
Long-Term Debt 105 76 299 229
Total Interest Expense 1,187 885 3,570 3,402
Net Interest Revenue 887 916 2,655 2,785
Provision for Possible
Credit Losses 70 100 210 410
Net Interest Revenue
After Provision for
Possible Credit Losses 817 816 2,445 2,375
Other Operating Revenue
Fees and Commissions 494 458 1,447 1,384
Foreign Exchange
Trading Revenue 45 50 196 213
Trading Account Revenue 92 138 119 306
Investment Securities
Gains 6 15 32 95
Other Revenue 80 66 345 383
Total Other Operating
Revenue 717 727 2,139 2,381
Other Operating Expenses
Salaries and Employee
benefits:
Salaries 458 464 1,362 1,298
Employee benefits 127 122 418 369
585 586 1,780 1,667
Net Occupancy 95 98 278 296
Equipment Rentals, Depre-
ciation and Maintenance 82 77 249 222
Other Expenses 317 306 954 1,012
Total Other Operating
Expenses 1,079 1,067 3,261 3,197
Income Before Taxes 455 476 1,323 1,559
Applicable Income Taxes 172 171 498 583
Net Income $ 283 $ 305 $ 825 $ 976
Net Income Applicable
to Common Stock $ 253 $ 274 $ 733 $ 880
Average Common Shares
Outstanding (in millions) 181.1 184.4 180.0 185.0
Primary Earnings Per
Common Share $ 1.40 $ 1.49 $ 4.07 $ 4.76
Cash Dividends Declared
Per Common Share $ .45 $ .40 $ 1.30 $ 1.06
</TABLE>
<PAGE> 5
Consolidated Statement of Condition
The Chase Manhattan Corporation and Subsidiaries
<TABLE>
<CAPTION>
September 30, September 30,
($ in millions) 1995 1994
<S> <C> <C>
Assets
Cash and Due from Banks $ 5,141 $ 5,559
Interest-Bearing Deposits Placed with Banks 5,798 7,055
Federal Funds Sold and Securities Purchased
Under Resale Agreements 10,959 7,712
Trading Account Assets 14,827 19,302
Investment Securities:
Held to Maturity 1,900 2,018
Available for Sale Carried at
Fair Value 5,807 5,813
Total Investment Securities 7,707 7,831
Loans 64,821 61,405
Reserve for Possible Credit Losses (1,404) (1,416)
Customers' Liability on Acceptances 862 599
Accrued Interest Receivable 1,201 1,033
Premises and Equipment 1,866 1,871
Other Assets 8,314 6,114
Total Assets $120,092 117,065
Liabilities and Stockholders Equity
Deposits:
Domestic Offices:
Noninterest-Bearing $ 12,196 $ 11,131
Interest-Bearing 19,917 22,389
Overseas Offices:
Noninterest-Bearing 3,258 2,533
Interest-Bearing 34,062 32,869
Total Deposits 69,433 68,922
Federal Funds Purchased and Securities Sold
Under Repurchase Agreements 12,539 11,959
Commercial Paper 1,564 1,459
Other Short-Term Borrowings 3,192 3,508
Trading Account Liabilities 10,959 11,841
Acceptances Outstanding 871 603
Accrued Interest Payable 734 568
Accounts Payable, Accrued Expenses
and Other Liabilities 6,304 4,734
Intermediate- and Long-Term Debt 5,518 5,031
Total Liabilities 111,114 108,625
Stockholders' Equity:
Nonredeemable Preferred Stock (Without
Par Value, 56,000,000 Shares Outstanding) 1,400 1,400
Common Stock ($2.00 Par Value):
9/30/95 9/30/94
Number of Shares:<C> <C>
Authorized 500,000,000 500,000,000
Issued 194,449,931 185,289,886
Outstanding 178,956,076 181,289,886 389 371
Surplus 4,357 3,939
Net Unrealized Gains on Investment
Securities Available for Sale 5 23
Retained Earnings 3,484 2,853
Total 9,635 8,586
Less: Treasury Stock at Cost
(15,493,855 and 4,000,000 Shares,
Respectively) 657 146
Total Stockholders' Equity 8,978 8,440
Total Liabilities and Stockholders' Equity $120,092 $ 117,065
</TABLE>
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Summary of Changes in Stockholders' Equity
The Chase Manhattan Corporation and Subsidiaries
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
($ in millions) 1995 1994
<S> <C> <C>
Balance at Beginning of Period $ 8,359 $ 8,122
Additions:
Net Income 825 976
Shares Issued Pursuant to:
Nonredeemable Preferred Stock Offering - 228
Dividend Reinvestment and Stock
Purchase Plan 10 14
Acquisition of US Trust 363 -
Exercise of Stock Options 52 13
Net Change in Unrealized Gains (Losses)
on Investment Securities Available for
Sale
[Net of Deferred Tax (benefits) of
$19 and $(167), Respectively] 40 (241)
9,649 9,112
Deductions:
Cash Dividends:
Nonredeemable Preferred Stock 92 96
Common Stock 229 196
Redemption of Nonredeemable
Preferred Stock Offering - 227
Treasury Stock 351 146
Other (1) 7
Balance at End of Period $ 8,978 $ 8,440
</TABLE>
Additional Financial Information
For additional financial data about the third quarter of 1995,
a copy of Chase's report on Form 10-Q may be obtained by writing
to Investor Relations, The Chase Manhattan Corporation, 1 Chase
Manhattan Plaza, 30th floor, New York, NY 10081-0001, or by
calling Investor Relations on 212-552-4237.
To request fax copies of Chase's quarterly earnings releases,
quarterly reports and Chase at a Glance (a factual summary),
please call 1-800-CHASE06.
Dividend Reinvestment and
Stock Purchase Plan
For complete details on Chase's Dividend Reinvestment
and Stock Purchase Plan and for enrollment material, write to
Mellon Securities Transfer Services, Dividend Reinvestment
Services, P.O. Box 750, Pittsburgh, PA 15230-0750, or call
1-800-284-4262.
<PAGE> 7
Board of Directors
The Chase Manhattan Corporation
Thomas G. Labrecque
Chairman and Chief Executive Officer of The Chase Manhattan
Corporation and The Chase Manhattan Bank, N.A.
Donald L. Boudreau
Vice Chairman of the
Board of The Chase Manhattan Corporation and The Chase Manhattan
Bank, N.A.
Richard J. Boyle
Vice Chairman of the
Board of The Chase Manhattan Corporation and The Chase Manhattan
Bank, N.A.
E. Michel Kruse
Vice Chairman of the
Board of The Chase Manhattan Corporation and The Chase Manhattan
Bank, N.A.
Susan V. Berresford
Executive Vice President of
The Ford Foundation
M. Anthony Burns
Chairman of the Board,
President and Chief Executive Officer of Ryder System, Inc.
James L. Ferguson
Retired Chairman and
Chief Executive Officer of
General Foods Corporation
H. Laurance Fuller
Chairman and Chief Executive Officer of Amoco Corporation
William H. Gray III
President and Chief Executive Officer of the United Negro
College Fund, Inc.
David T. Kearns
Retired Chairman and
Chief Executive Officer of
The Xerox Corporation
Delano E. Lewis
President and Chief
Executive Officer of
National Public Radio
Paul W. MacAvoy
Williams Brothers
Professor of Management Studies Yale School of Management
John H. McArthur
Professor of the Harvard Graduate School of Business
Administration
David T. McLaughlin
Chairman of the Board,
Chief Executive Officer of
The Aspen Institute
Edmund T. Pratt, Jr.
Chairman Emeritus of Pfizer Inc.
Henry B. Schacht
Member of the Board
of Directors of
Cummins Engine Company, Inc.
Donald H. Trautlein
Retired Chairman and
Chief Executive Officer of Bethlehem Steel Corporation
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