<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
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 16, 1996
THE CHASE MANHATTAN CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-5945 13-2633613
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1 Chase Manhattan Plaza, 10081
New York, New York (Zip Code)
(Address of principal executive offices)
(212) 552-2222
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
<PAGE> 2
Item 5. Other Events
On January 16, 1996 The Chase Manhattan Corporation issued a news
release announcing its earnings for the quarter ended December 31,
1995. A copy of the news release is attached hereto as Exhibit 99 and
is incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
Exhibit 99: News Release dated January 16, 1996.
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE CHASE MANHATTAN CORPORATION
(Registrant)
DATE: January 16, 1996 By: /s/LESTER J. STEPHENS, JR.
Lester J. Stephens, Jr.
(Senior Vice President and Controller)
<PAGE> 4
EXHIBIT INDEX
Exhibit No. Document
99 News Release Dated January 16, 1996
<PAGE> 1
- --------------------------------------------------------------------------------
Exhibit 99
THE CHASE MANHATTAN CORPORATION NEWS RELEASE
Public Affairs Division
1 Chase Manhattan Plaza
New York, New York 10081
- --------------------------------------------------------------------------------
January 16, 1996
Press Contact: John M. Anderson (212) 552-6224
Investor Contact: William Maletz (212) 552-5329
CHASE REPORTS EARNINGS OF $340 MILLION FOR FOURTH QUARTER 1995,
$1,165 MILLION FOR FULL YEAR 1995
The Chase Manhattan Corporation today reported fourth quarter 1995 net
income of $340 million ($1.70 per share), up 48% from $229 million ($1.10 per
share) for the same period in 1994 and up 20% from $283 million ($1.40 per
share) for third quarter 1995.
Thomas G. Labrecque, Chase Chairman, said "Growing momentum in several of our
core businesses generated strong results for the quarter and an ROE of 16.5%,
meeting our corporate target. Investment banking fees were at a record level.
Credit cards as well as other consumer lending activities showed good growth.
In addition, lower expenses supported an improvement in productivity. With
this solid platform of business momentum and financial strength, we look
forward to the challenge of building a premier financial services franchise in
partnership with Chemical Banking Corporation."
Chase reported full year 1995 net income of $1,165 million ($5.76 per share),
compared with $1,205 million ($5.87 per share) reported for full year 1994.
Business Highlights:
- - Investment banking fees were at a record level, up 42% over fourth
quarter 1994.
- - Equity gains were up 26% over the same quarter of 1994.
- - Strong net interest revenue was driven by growth in interest-earning
assets.
- - Operating expenses, on a comparable basis, were down 5% from fourth
quarter 1994.
- - Managed credit card receivables increased approximately $2 billion
over fourth quarter 1994.
- - Asset quality continues strong. The credit loss provision declined to
$70 million from $90 million in the same period last year, benefiting
from net recoveries on commercial loans.
<PAGE> 2
2
The financial results of BUSINESS OPERATIONS are summarized below.
<TABLE>
<CAPTION>
======================================================================================================================
- ----------------------------------------------------------------------------------------------------------------------
Net Income Return On
($ in millions) Allocated Equity
- ----------------------------------------------------------------------------------------------------------------------
4TH QTR 3rd Qtr 4th Qtr 4TH QTR 3rd Qtr 4th Qtr
1995 1995 1994 1995 1995 1994
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Global Financial Services $ 158 $ 170 $ 35 13.4% 15.0% 2.2%
Retail Businesses 137 113 120 17.0 14.6 19.5
Corporate Items 45* - 74 N/M N/M N/M
- ----------------------------------------------------------------------------------------------------------------------
Total $ 340 $ 283 $ 229 16.5% 13.9% 11.3%
======================================================================================================================
</TABLE>
Prior periods restated to reflect certain modifications to internal allocation
methodologies and current organizational structure.
* Includes discontinued Real Estate Finance ($28 million), LDC Portfolio
Management ($16 million) and other corporate items ($1 million).
N/M - not meaningful
================================================================================
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
NET INTEREST REVENUE AND MARGIN * 4TH QTR 3rd Qtr 4th Qtr Full Year
- ----------------------------------------------------------------------------------------------------------------------
($ in millions) 1995 1995 1994 1995 1994
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Interest Revenue $ 926 $ 892 $ 911 $ 3,597 $ 3,714
- ----------------------------------------------------------------------------------------------------------------------
Net Interest Margin 3.49% 3.46% 3.62% 3.50% 3.82%
- Adjusted for Credit Card
Securitization Impact 3.65 3.65 3.75 3.66 3.96
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
* Taxable equivalent basis
For fourth quarter 1995, net interest revenue, on a taxable equivalent basis,
was $926 million, compared with $911 million for fourth quarter 1994. The net
interest margin was 3.49%, compared with 3.62% for the same quarter of 1994.
Average interest-earning assets were $105.3 billion, compared with $99.8
billion for fourth quarter 1994.
Net interest revenue reflected the impact of prior period credit card
securitizations. These securitizations resulted in lower net interest revenue,
offset by a lower provision for credit losses and higher fee revenue, compared
with fourth quarter 1994.
Net interest revenue in the current quarter benefited from continued growth in
consumer loans and from net interest revenue associated with trading and
transaction processing businesses. Average loans were $66.0 billion for the
current quarter, compared with $61.2 billion for fourth quarter 1994.
For 1995, net interest revenue, on a taxable equivalent basis, was $3,597
million, compared with $3,714 for 1994. The net interest margin was 3.50%,
compared with 3.82%. For full year 1995, average loans were $64.3 billion,
compared with $60.8 billion reported for 1994. For 1995, average
interest-earning assets were $102.8 billion, compared with $97.1 billion for
1994.
<PAGE> 3
3
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
FEES AND COMMISSIONS 4TH QTR 3rd Qtr 4th Qtr Full Year
- ----------------------------------------------------------------------------------------------------------------------
($ in millions) 1995 1995 1994 1995 1994
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Consumer Banking $ 175 $ 180 $ 167 $ 680 $ 638
Trust and Fiduciary 166 147 145 575 567
Investment Banking 102 62 72 309 233
Other 108 105 108 434 438
- ----------------------------------------------------------------------------------------------------------------------
Total Fees and Commissions $ 551 $ 494 $ 492 $ 1,998 $ 1,876
======================================================================================================================
</TABLE>
Fees and commissions of $551 million increased in all major categories from
fourth quarter 1994. Investment banking fees reached a record level of $102
million, reflecting increased syndications and capital raising activity for
clients around the world. Trust and fiduciary fee revenue increased from both
the fourth quarter of 1994 and the previous quarters of 1995, reflecting three
months of revenue from the business acquired from U.S. Trust.
For 1995, fees and commissions were $1,998 million, up from $1,876 million for
1994, primarily due to higher fees from investment banking and consumer banking
activities.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
COMBINED TRADING AND RELATED NET INTEREST REVENUE *
- ----------------------------------------------------------------------------------------------------------------------
4TH QTR 3rd Qtr 4th Qtr Full Year
- ----------------------------------------------------------------------------------------------------------------------
($ in millions) 1995 1995 1994 1995 1994
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenue by Product:
Foreign Exchange $ 58 $ 71 $ 58 $ 293 $ 274
Interest Rate and Commodity Derivatives 44 65 10 227 140
Securities Trading and Underwriting 62 74 9 157 288
- ----------------------------------------------------------------------------------------------------------------------
Total $ 164 $ 210 $ 77 $ 677 $ 702
======================================================================================================================
Foreign Exchange $ 44 $ 45 $ 67 $ 241 $ 280
Interest Rate and Commodity Derivatives 39 42 1 178 97
Securities Trading and Underwriting 13 50 (36) (7) 174
Net Interest Revenue 68 73 45 265 151
- ----------------------------------------------------------------------------------------------------------------------
Total $ 164 $ 210 $ 77 $ 677 $ 702
======================================================================================================================
</TABLE>
* Prior period amounts have been reclassified to conform with current
presentation.
Combined trading and related net interest revenue of $164 million for fourth
quarter 1995 was down from third quarter of 1995, and up from fourth quarter
1994. Foreign exchange revenue of $58 million was lower than third quarter
1995, due to relative stability in the currency markets during the fourth
quarter of 1995. Interest rate and commodity derivatives revenue of $44
million was down from third quarter 1995, which had reflected strong customer
commodity business, but showed improvement over fourth quarter 1994, which
reflected weakness in derivative markets in general. Securities trading and
underwriting revenue of $62 million was lower than the strong 1995 third
quarter, due to reduced market activity, and higher than fourth quarter 1994,
which reflected the impact of the Mexican peso devaluation in December 1994.
For 1995, combined trading revenue of $677 million was lower than $702 million
for 1994. Foreign exchange and derivative revenues increased over last year
due to improved market conditions and customer demand. This improvement was
offset by a decline in securities trading and underwriting, principally caused
by the December 1994 Mexican peso devaluation that adversely impacted first
quarter 1995 results.
<PAGE> 4
4
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
OTHER REVENUE 4TH QTR 3rd Qtr 4th Qtr Full Year
- ----------------------------------------------------------------------------------------------------------------------
($ in millions) 1995 1995 1994 1995 1994
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Equity Gains $ 63 $ 28 $ 50 $ 248 $ 215
Accelerated Disposition Portfolio Gains - - 21 - 104
Investment Securities Gains 18 6 11 50 105
Other 60 52 66 219 202
- ----------------------------------------------------------------------------------------------------------------------
Total Other Revenue $ 141 $ 86 $ 148 $ 517 $ 626
======================================================================================================================
</TABLE>
For the fourth quarter of 1995, total other revenue was $141 million, up from
$86 million for third quarter 1995 and slightly lower than $148 million for the
same period of 1994. Equity gains for fourth quarter 1995 were $63 million, an
increase over both third quarter 1995 and the same quarter of 1994. Fourth
quarter 1994 other revenue included approximately $30 million from the sale of
the retail deposit-taking business of Chase Florida.
Total other revenue for 1995 was $517 million, down from $626 million for 1994.
The 1994 period included significant gains from the liquidation of real estate
assets held for accelerated disposition and investment securities gains
resulting from Chase's program of reducing its cross-border Brady exposures in
its available for sale investment portfolio. Additionally, 1995 included a
loss from the sale of Chase Maryland, compared with gains in 1994 from the sale
of Chase Arizona and Chase Florida.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
TOTAL OPERATING EXPENSES 4TH QTR 3rd Qtr 4th Qtr Full Year
- ----------------------------------------------------------------------------------------------------------------------
($ in millions) 1995 1995 1994 1995 1994
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Salaries and Benefits $ 634 $ 585 $ 756 $ 2,414 $ 2,422
Other Expenses 489 501 547 2,009 2,043
ORE Expenses / (Revenue) (13) (7) (28) (52) 7
- ----------------------------------------------------------------------------------------------------------------------
Total Operating Expenses $ 1,110 $ 1,079 $ 1,275 $ 4,371 $ 4,472
======================================================================================================================
</TABLE>
Total operating expenses, excluding ORE, of $1,123 million for fourth quarter
1995 were down 5% from fourth quarter 1994, adjusting for fourth quarter 1995
U.S. Trust related expenses of approximately $30 million, and the fourth
quarter 1994 voluntary retirement program and other productivity initiatives of
$157 million.
Total headcount was 33,365 at December 31, 1995. Excluding 1,090 of U.S. Trust
personnel, productivity initiatives continue to result in reductions, with
total headcount down approximately 4,415 during the year.
For 1995, total operating expenses were $4,371 million, compared with $4,472
million for 1994. Operating expenses for 1995, on a comparable basis, were
essentially level with 1994, adjusting for acquisition related expenses,
restructuring charges, as well as ORE.
INCOME TAXES
For the fourth quarter of 1995, the provision for income taxes was $190
million, compared with $172 million for third quarter 1995, and an $18 million
income tax benefit for fourth quarter 1994, which reflected a $70 million
reduction of the deferred federal income tax valuation allowance. The
effective tax rates were 36% for fourth quarter 1995, compared with 38% for
third quarter 1995.
For 1995, the provision for income taxes was $689 million, compared with $565
million for 1994. The effective tax rates were 37% for 1995, compared with 32%
for 1994.
<PAGE> 5
5
================================================================================
ASSET QUALITY
During the fourth quarter of 1995, asset quality remained strong.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
PROVISION FOR POSSIBLE CREDIT LOSSES & NET LOAN CHARGE-OFFS
- ----------------------------------------------------------------------------------------------------------------------
4TH QTR 3rd Qtr 4th Qtr Full Year
- ----------------------------------------------------------------------------------------------------------------------
($ in millions) 1995 1995 1994 1995 1994
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PROVISION FOR POSSIBLE CREDIT LOSSES $ 70 $ 70 $ 90 $ 280 $ 500
======================================================================================================================
NET LOAN CHARGE-OFFS:
Domestic:
- Consumer $ 96 $ 87 $ 96 $ 366 $ 370
- Commercial & Other (24) (6) (1) (60) 144
- ----------------------------------------------------------------------------------------------------------------------
Total Domestic 72 81 95 306 514
- ----------------------------------------------------------------------------------------------------------------------
Total International (2) (3) - (19) 3
- ----------------------------------------------------------------------------------------------------------------------
Total Net Loan Charge-Offs $ 70 $ 78 $ 95 $ 287 $ 517
======================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
NONACCRUAL OUTSTANDINGS AND ORE DECEMBER 31, September 30, June 30, December 31,
- ----------------------------------------------------------------------------------------------------------------------
($ in millions) 1995 1995 1995 1994
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Domestic:
- Commercial Real Estate $ 125 $ 169 $ 195 $ 266
- Other Loans 325 303 290 244
- ----------------------------------------------------------------------------------------------------------------------
Total Domestic 450 472 485 510
- ----------------------------------------------------------------------------------------------------------------------
Total International 113 132 142 150
- ----------------------------------------------------------------------------------------------------------------------
Total Nonaccrual Outstandings $ 563 $ 604 $ 627 $ 660
======================================================================================================================
Total ORE $ 130 $ 163 $ 200 $ 257
======================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
DECEMBER 31, September 30, June 30, December 31,
- ----------------------------------------------------------------------------------------------------------------------
($ in millions) 1995 1995 1995 1994
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
RESERVE FOR POSSIBLE CREDIT LOSSES $ 1,405 $ 1,404 $ 1,416 $ 1,414
======================================================================================================================
</TABLE>
================================================================================
INVESTMENT SECURITIES
During the fourth quarter of 1995, Chase transferred all of its $1.6 billion
held to maturity investment securities to available for sale under recently
revised accounting rules. The impact of this transfer was to increase
shareholders' equity by approximately $10 million after-tax.
<PAGE> 6
6
================================================================================
KEY FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
SUMMARY OF RESULTS & SELECTED STATISTICAL DATA
- ----------------------------------------------------------------------------------------------------------------------
4TH QTR 3rd Qtr 4th Qtr Full Year
- ----------------------------------------------------------------------------------------------------------------------
($ in millions, except per share data) 1995 1995 1994 1995 1994
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET INCOME $ 340 $ 283 $ 229 $ 1,165 $ 1,205
PER COMMON SHARE
- Net Income
- Primary $1.70 $1.40 $1.10 $5.76 $5.87
- Fully diluted 1.69 1.38 $1.10 5.72 5.84
- Book Value (period-end) 43.60 42.35 39.28
- Closing Stock Price (period-end) 60.38 61.13 34.38
PROFITABILITY RATIOS
- Return on Average Common
Stockholders' Equity 16.5% 13.9% 11.3% 14.5% 15.8%
- Return on Average Assets 1.04 .89 .74 .92 1.00
NET INTEREST REVENUE
(Fully Taxable Basis) $926 $892 $911 $3,597 $3,714
- Net Interest Margin 3.49% 3.46% 3.62% 3.50% 3.82%
CAPITAL RATIOS (period-end)
- Common Stockholders' Equity 6.38% 6.31% 6.10%
- Total Stockholders' Equity 7.54 7.48 7.33
- Risk-Based Capital
- Tier 1 Capital 8.12 8.24 8.30
- Total Capital 12.68 13.01 12.78
- Tier 1 Leverage 7.23 7.47 7.37
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
SELECTED AVERAGE BALANCES 4TH QTR 3rd Qtr 4th Qtr Full Year
- ----------------------------------------------------------------------------------------------------------------------
($ in billions) 1995 1995 1994 1995 1994
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Loans:
Domestic Offices $ 48.0 $ 46.7 $ 45.0 $ 47.0 $ 44.0
Overseas Offices 18.0 17.5 16.2 17.3 16.8
- ----------------------------------------------------------------------------------------------------------------------
Total Loans $ 66.0 $ 64.2 $ 61.2 $ 64.3 $ 60.8
======================================================================================================================
Interest-Earning Assets $ 105.3 $ 102.2 $ 99.8 $ 102.8 $ 97.1
======================================================================================================================
Total Assets $ 129.6 $ 125.6 $ 122.6 $ 126.8 $120.5
======================================================================================================================
Deposits:
Domestic Offices $ 34.2 $ 32.7 $ 35.3 $ 33.5 $ 37.4
Overseas Offices 39.3 37.7 36.4 38.5 34.5
- ----------------------------------------------------------------------------------------------------------------------
Total Deposits $ 73.5 $ 70.4 $ 71.7 $ 72.0 $ 71.9
======================================================================================================================
Common Stockholders' Equity $ 7.4 $ 7.2 $ 6.9 $ 7.2 $ 6.8
======================================================================================================================
Total Stockholders' Equity $ 8.8 $ 8.6 $ 8.3 $ 8.6 $ 8.3
======================================================================================================================
======================================================================================================================
</TABLE>
<PAGE> 7
<TABLE>
<CAPTION>
THE CHASE MANHATTAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CONDITION
DEC 31, Dec 31,
($ in millions) 1995 1994
- ---------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Cash and Due from Banks $ 5,717 $ 4,713
Interest-Bearing Deposits Placed with Banks 5,802 6,791
Federal Funds Sold and Securities Purchased
Under Resale Agreements 9,428 7,280
Trading Account Assets 16,017 15,109
Investment Securities:
Held to Maturity - 2,084
Available for Sale Carried at Fair Value 7,401 5,135
- ---------------------------------------------------------------------------
Total Investment Securities 7,401 7,219
Loans 67,573 63,038
Reserve for Possible Credit Losses (1,405) (1,414)
Customers' Liability on Acceptances 717 520
Accrued Interest Receivable 1,213 1,276
Premises and Equipment 1,829 1,895
Other Assets 6,881 7,611
- ---------------------------------------------------------------------------
Total Assets $ 121,173 $ 114,038
===========================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Domestic Offices:
Noninterest-Bearing $ 13,741 $ 11,990
Interest-Bearing 20,149 21,264
Overseas Offices:
Noninterest-Bearing 3,555 2,320
Interest-Bearing 35,672 34,382
- ---------------------------------------------------------------------------
Total Deposits 73,117 69,956
Federal Funds Purchased and Securities Sold
Under Repurchase Agreements 11,588 9,312
Commercial Paper 1,423 1,766
Other Short-Term Borrowings 3,275 2,884
Trading Account Liabilities 10,071 9,664
Acceptances Outstanding 722 525
Accrued Interest Payable 748 651
Accounts Payable, Accrued Expenses and Other
Liabilities 5,599 5,851
Intermediate- and Long-Term Debt 5,496 5,070
- ---------------------------------------------------------------------------
Total Liabilities 112,039 105,679
- ---------------------------------------------------------------------------
Stockholders' Equity:
Nonredeemable Preferred Stock (Without Par Value, 1,400 1,400
56,000,000 Shares Outstanding)
Common Stock ($2.00 Par Value):
12/31/95 12/31/94
------------ ------------
Number of Shares:
Authorized 500,000,000 500,000,000
Issued 194,862,280 185,674,178
Outstanding 177,392,669 177,174,178 390 371
Surplus 4,409 3,949
Net Unrealized Gains (Losses) on Investment
Securities - Available for Sale 66 (35)
Retained Earnings 3,714 2,980
- ---------------------------------------------------------------------------
Total 9,979 8,665
Less: Treasury Stock at Cost (17,469,611 and 845 306
8,500,000 Shares, Respectively)
- ---------------------------------------------------------------------------
Total Stockholders' Equity 9,134 8,359
- ---------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity $ 121,173 $ 114,038
===========================================================================
</TABLE>
<PAGE> 8
<TABLE>
<CAPTION>
THE CHASE MANHATTAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
QUARTER ENDED 12 MONTHS ENDED
DEC 31, DEC 31,
--------------------------------
($ in millions, except per share data) 1995 1994 1995 1994
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INTEREST REVENUE
Interest and Fees on Loans $1,510 $1,341 $ 5,834 $5,270
Interest on Deposits Placed with Banks 129 133 555 498
Interest and Dividends on Investment
Securities:
Held to Maturity 24 32 119 144
Available for Sale 97 92 359 525
Interest on Federal Funds Sold and Securities
Purchased Under Resale Agreements 318 228 1,104 1,277
Interest on Trading Account Assets 106 121 438 420
- -------------------------------------------------------------------------------
TOTAL INTEREST REVENUE 2,184 1,947 8,409 8,134
INTEREST EXPENSE
Deposits 670 609 2,634 2,326
Federal Funds Purchased and Securities Sold
Under Repurchase Agreements 342 256 1,244 759
Commercial Paper 22 23 100 68
Other Short-Term Borrowings 131 72 457 980
Intermediate- and Long-Term Debt 97 83 396 312
- -------------------------------------------------------------------------------
TOTAL INTEREST EXPENSE 1,262 1,043 4,831 4,445
- -------------------------------------------------------------------------------
NET INTEREST REVENUE 922 904 3,578 3,689
Provision for Possible Credit Losses 70 90 280 500
- -------------------------------------------------------------------------------
NET INTEREST REVENUE AFTER PROVISION FOR
POSSIBLE CREDIT LOSSES 852 814 3,298 3,189
OTHER OPERATING REVENUE
Fees and Commissions 551 492 1,998 1,876
Foreign Exchange Trading Revenue 44 67 241 280
Trading Account Revenue 52 (35) 171 271
Investment Securities Gains 18 11 50 105
Other Revenue 123 137 467 521
- -------------------------------------------------------------------------------
TOTAL OTHER OPERATING REVENUE 788 672 2,927 3,053
OTHER OPERATING EXPENSES
Salaries and Employee Benefits:
Salaries 517 475 1,879 1,773
Employee Benefits 117 281 535 649
- -------------------------------------------------------------------------------
634 756 2,414 2,422
Net Occupancy 99 98 377 395
Equipment Rentals, Depreciation
and Maintenance 79 85 328 307
Other Expenses 298 336 1,252 1,348
- -------------------------------------------------------------------------------
TOTAL OTHER OPERATING EXPENSES 1,110 1,275 4,371 4,472
Income Before Taxes 530 211 1,854 1,770
Applicable Income Taxes (Benefits) 190 (18) 689 565
- -------------------------------------------------------------------------------
NET INCOME $ 340 $ 229 $ 1,165 $1,205
===============================================================================
NET INCOME APPLICABLE TO COMMON STOCK $ 310 $ 198 $ 1,043 $1,078
===============================================================================
Average Common and Common Equivalent Shares
Outstanding (in millions) 182.2 179.8 181.0 183.6
Primary Earnings Per Common Share $ 1.70 $ 1.10 $ 5.76 $ 5.87
Cash Dividends Declared Per Common Share $ 0.45 $ 0.40 $ 1.75 $ 1.46
===============================================================================
</TABLE>
<PAGE> 9
<TABLE>
<CAPTION>
THE CHASE MANHATTAN CORPORATION AND SUBSIDIARIES
SUMMARY OF CHANGES IN STOCKHOLDERS' EQUITY
12 MONTHS ENDED
DEC 31,
----------------
($ in millions) 1995 1994
- -------------------------------------------------------------------------------
<S> <C> <C>
BALANCE AT BEGINNING OF PERIOD $ 8,359 $8,122
ADDITIONS:
Net Income 1,165 1,205
Shares Issued Pursuant to:
Nonredeemable Preferred Stock Offering - 228
Dividend Reinvestment and Stock Purchase Plan 10 18
Exercise of Stock Options 104 18
Acquisition of US Trust 363 -
Net Change In Unrealized Gains (Losses) on Investment
Securities - Available for Sale (Net of Deferred
Tax (Benefits) of $59 and ($204), Respectively) 101 (299)
- -------------------------------------------------------------------------------
10,102 9,292
Deductions:
Cash Dividends:
Nonredeemable Preferred Stock 122 127
Common Stock 308 266
Redemption of Nonredeemable Preferred Stock Offering - 227
Treasury Stock, Net 539 306
Other (1) 7
- -------------------------------------------------------------------------------
BALANCE AT END OF PERIOD $ 9,134 $8,359
===============================================================================
</TABLE>
<PAGE> 10
<TABLE>
<CAPTION>
THE CHASE MANHATTAN BANK, N.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CONDITION
DEC 31, Dec 31,
($ in millions) 1995 1994
- ----------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Cash and Due from Banks $ 5,576 $ 4,518
Interest-Bearing Deposits Placed with Banks 5,950 7,002
Federal Funds Sold and Securities Purchased
Under Resale Agreements 3,385 3,824
Trading Account Assets 12,969 13,088
Investment Securities:
Held to Maturity - 1,760
Available for Sale Carried at Fair Value 6,731 4,502
- ----------------------------------------------------------------------------
Total Investment Securities 6,731 6,262
Loans 56,844 50,607
Reserve for Possible Credit Losses (1,114) (1,092)
Customers' Liability on Acceptances 717 520
Accrued Interest Receivable 918 966
Premises and Equipment 1,723 1,759
Other Assets 6,458 6,525
- ----------------------------------------------------------------------------
Total Assets $ 100,157 $ 93,979
============================================================================
LIABILITIES AND STOCKHOLDER'S EQUITY
Deposits:
Domestic Offices:
Noninterest-Bearing $ 13,704 $ 11,648
Interest-Bearing 18,779 17,888
Overseas Offices:
Noninterest-Bearing 3,555 2,320
Interest-Bearing 34,030 33,645
- ----------------------------------------------------------------------------
Total Deposits 70,068 65,501
Federal Funds Purchased and Securities Sold
Under Repurchase Agreements 2,079 2,580
Other Short-Term Borrowings 2,264 2,308
Trading Account Liabilities 9,146 8,066
Acceptances Outstanding 722 525
Accrued Interest Payable 647 574
Accounts Payable, Accrued Expenses and Other
Liabilities 4,813 4,620
Intermediate- and Long-Term Debt 2,353 2,803
- ----------------------------------------------------------------------------
Total Liabilities 92,092 86,977
- ----------------------------------------------------------------------------
Stockholder's Equity:
Capital Stock ($15 Par Value):
12/31/95 12/31/94
------------ ------------
Number of Shares:
Authorized 81,744,445 81,744,445
Outstanding 61,425,980 61,038,415 921 916
Surplus 5,285 4,656
Net Unrealized Gains (Losses) on Investment
Securities - Available for Sale 7 (65)
Undivided Profits 1,852 1,495
- ----------------------------------------------------------------------------
Total Stockholder's Equity 8,065 7,002
- ----------------------------------------------------------------------------
Total Liabilities and Stockholder's Equity $ 100,157 $ 93,979
============================================================================
</TABLE>
Member Federal Deposit Insurance Corporation
<PAGE> 11
COMBINED FINANCIAL DATA
CHEMICAL BANKING CORPORATION
AND THE CHASE MANHATTAN CORPORATION
UNAUDITED PRO FORMA COMBINED FINANCIAL DATA
(In millions, except per share data)
The following unaudited pro forma combined financial data combines the
historical financial data of Chemical and Chase giving effect to the merger,
which will be accounted for as a pooling of interests, as if the merger had
occurred on the dates indicated herein, after giving effect to certain pro
forma adjustments.
The pro forma financial data does not give effect to the anticipated cost
savings in connection with the merger. The pro forma financial data is not
necessarily indicative of the results that actually would have occurred had the
merger been consummated on the dates indicated or that may be obtained in the
future.
<PAGE> 12
UNAUDITED
THE NEW CHASE MANHATTAN CORPORATION AND SUBSIDIARIES
(IN MILLIONS, EXCEPT PER SHARE AND RATIO DATA)
PRO FORMA
<TABLE>
<CAPTION>
THREE MONTHS ENDED FOR THE YEAR ENDED
DECEMBER 31, DECEMBER 31,
---------------------------------- ---------------------------------
PRO- PRO-
FORMA(a) FORMA(a)
1995 1994 1994 1995 1994 1994
-------- -------- ------ -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
EARNINGS:
- ---------
Income Before Effect of Accounting Change $ 827 $ 403 $ 582 $ 2,970 $ 2,486 $2,665
Effect of Change in Accounting Principle -- -- -- (11) (b) -- --
-------- -------- ------ -------- -------- ------
Net Income $ 827 $ 403 $ 582 $ 2,959 $ 2,486 $2,665
======== ======== ====== ======== ======== ======
Net Income Applicable to Common Stock $ 773 $ 342 $ 521 $ 2,732 $ 2,221 $2,400
======== ======== ====== ======== ======== ======
INCOME PER COMMON SHARE:
- ------------------------
Primary:
Income Before Effect of Accounting Change $ 1.73 $ 0.79 $ 1.20 $ 6.23 $ 5.02 $ 5.43
Effect of Change in Accounting Principle -- -- -- (0.03) (b) -- --
-------- -------- ------ -------- -------- ------
Net Income $ 1.73 $ 0.79 $ 1.20 $ 6.20 $ 5.02 $ 5.43
======== ======== ====== ======== ======== ======
Assuming Full Dilution:
Income Before Effect of Accounting Change $ 1.73 $ 0.79 $ 1.19 $ 6.07 $ 4.97 $ 5.37
Effect of Change in Accounting Principle -- -- -- (0.03) (b) -- --
-------- -------- ------ -------- -------- ------
Net Income $ 1.73 $ 0.79 $ 1.19 $ 6.04 $ 4.97 $ 5.37
======== ======== ====== ======== ======== ======
Book Value at December 31, $ 41.81 $ 37.37 $ 41.81 $ 37.37
COMMON SHARES OUTSTANDING:
- --------------------------
Average Common and Common Equivalent Shares 448.0 433.3 440.8 442.2
Average Common Shares Assuming Full Dilution 447.7 441.7 453.5 450.9
Common Shares at Period End 435.0 428.8 435.0 428.8
BALANCE SHEET AVERAGES:
- -----------------------
Loans $148,217 $138,560 $146,528 $136,713
Total Interest-Earning Assets $253,660 $231,564 $244,507 $227,270
Total Assets $314,757 $291,952 $307,385 $287,073
Deposits $170,650 $166,958 $168,312 $166,702
Common Stockholders' Equity $ 17,695 $ 16,141 $ 16,913 $ 16,022
Total Stockholders' Equity $ 20,345 $ 18,991 $ 19,643 $ 19,042
PERFORMANCE RATIOS: (AVERAGE BALANCES) (c)
- -------------------
Return on Assets 1.04% 0.55% 0.79% 0.96% 0.87% 0.93%
Return on Common Stockholders' Equity 17.33% 8.41% 12.81% 16.15% 13.86% 14.98%
Return on Total Stockholders' Equity 16.13% 8.42% 12.16% 15.06% 13.06% 14.00%
Net Yield on Total Interest-Earnings Assets 3.30% 3.58% 3.40% 3.70%
CAPITAL RATIOS AT DECEMBER 31:
- ------------------------------
Common Stockholders' Equity to Assets 6.0% 5.6%
Total Stockholders' Equity to Assets 6.9% 6.6%
Tier 1 Leverage (d) 6.7% 6.6%
Risk-Based Capital: (d)
Tier 1 (4.0% required) 8.2%* 8.1%
Total (8.0% required) 12.3%* 12.2%
</TABLE>
(a) The pro-forma columns exclude the impact of the $260 million
restructuring charge ($152 million after-tax) recorded by Chemical and
$157 million in restructuring charges ($97 million after-tax) recorded
by Chase in the fourth quarter of 1994. The pro-forma columns also
exclude the impact of deferred Federal tax benefits of $70 million
recognized by Chase in the 1994 fourth quarter.
(b) On January 1, 1995, the Corporation adopted SFAS 106 for the accounting
for other postretirement benefits relating to the Corporation's foreign
plans.
(c) Performance ratios for three months ended December 31, 1995 and 1994 are
based on annualized amounts.
(d) For all periods presented, risk-based capital and leverage ratios exclude
the assets and off-balance sheet financial instruments of each of
Chemical and Chase's U.S. underwriting and dealing subsidiaries as well
as their respective investment in such subsidiaries. These ratios also
exclude the net unfavorable impact on stockholders' equity resulting
from the adoption of SFAS 115.
* Estimated
<PAGE> 13
UNAUDITED
THE NEW CHASE MANHATTAN CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
---------------------------------------------------
DEC. 31, SEPT. 30, DEC. 31,
1995 1995 1994
-------- --------- --------
<S> <C> <C> <C>
INTEREST INCOME
Loans $3,271 $3,296 $2,927
Securities 718 639 558
Trading Assets 369 331 297
Federal Funds Sold and Securities Purchased Under Resale
Agreements 491 448 407
Deposits with Banks 187 194 224
------ ------ ------
Total Interest Income 5,036 4,908 4,413
------ ------ ------
INTEREST EXPENSE
Deposits 1,602 1,593 1,327
Short-Term and Other Borrowings 1,106 991 795
Long-Term Debt 231 239 218
------ ------ ------
Total Interest Expense 2,939 2,823 2,340
------ ------ ------
NET INTEREST INCOME 2,097 2,085 2,073
Provision for Losses 186 192 175
------ ------ ------
NET INTEREST INCOME AFTER PROVISION FOR LOSSES 1,911 1,893 1,898
------ ------ ------
NONINTEREST REVENUE
Trust and Investment Management Fees 261 243 243
Corporate Finance and Syndication Fees 228 219 204
Service Charges on Deposit Accounts 101 105 106
Fees for Other Financial Services 591 563 543
Trading Revenue 281 349 77
Securities Gains 25 53 (2)
Other Revenue 259 162 316
------ ------ ------
Total Noninterest Revenue 1,746 1,694 1,487
------ ------ ------
NONINTEREST EXPENSE
Salaries 1,130 1,074 1,046
Employee Benefits 219 228 241
Occupancy Expense 224 227 241
Equipment Expense 187 177 203
Foreclosed Property Expense (15) (7) (25)
Other Expense 619 633 752
------ ------ ------
Total Noninterest Expense Before Restructuring Charge 2,364 2,332 2,458
Restructuring Charge -- -- 417
------ ------ ------
Total Noninterest Expense 2,364 2,332 2,875
------ ------ ------
INCOME BEFORE INCOME TAX EXPENSE 1,293 1,255 510
Income Tax Expense 466 491 107
------ ------ ------
NET INCOME $ 827 $ 764 $ 403
====== ====== ======
NET INCOME APPLICABLE TO COMMON STOCK $ 773 $ 708 $ 342
====== ====== ======
INCOME PER COMMON SHARE:
Primary $ 1.73 $ 1.58 $ 0.79
====== ====== ======
Assuming Full Dilution $ 1.73 $ 1.55 $ 0.79
====== ====== ======
</TABLE>
<PAGE> 14
UNAUDITED
THE NEW CHASE MANHATTAN CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE YEAR
ENDED
DECEMBER 31,
----------------------------
1995 1994
------- -------
<S> <C> <C>
INTEREST INCOME
Loans $12,907 $11,055
Securities 2,591 2,329
Trading Assets 1,316 1,142
Federal Funds Sold and Securities Purchased Under Resale Agreements 1,889 1,827
Deposits with Banks 824 869
------- -------
Total Interest Income 19,527 17,222
------- -------
INTEREST EXPENSE
Deposits 6,291 4,704
Short-Term and Other Borrowings 4,027 3,307
Long-Term Debt 942 848
------- -------
Total Interest Expense 11,260 8,859
------- -------
NET INTEREST INCOME 8,267 8,363
Provision for Losses 758 1,050
------- -------
NET INTEREST INCOME AFTER PROVISION FOR LOSSES 7,509 7,313
------- -------
NONINTEREST REVENUE
Trust and Investment Management Fees 954 988
Corporate Finance and Syndication Fees 840 638
Service Charges on Deposit Accounts 417 408
Fees for Other Financial Services 2,222 2,116
Trading Revenue 1,036 1,196
Securities Gains 132 65
Other Revenue 1,092 1,239
------- -------
Total Noninterest Revenue 6,693 6,650
------- -------
NONINTEREST EXPENSE
Salaries 4,209 3,978
Employee Benefits 955 929
Occupancy Expense 897 968
Equipment Expense 755 724
Foreclosed Property Expense (75) 50
Other Expense 2,635 2,888
------- -------
Total Noninterest Expense Before Restructuring Charge 9,375 9,537
Restructuring Charge 15 465
------- -------
Total Noninterest Expense 9,390 10,002
------- -------
INCOME BEFORE INCOME TAX EXPENSE AND EFFECT
OF ACCOUNTING CHANGE 4,812 3,961
Income Tax Expense 1,842 1,475
------- -------
INCOME BEFORE EFFECT OF ACCOUNTING CHANGE 2,970 2,486
Effect of Change in Accounting Principle (11) --
------- -------
NET INCOME $ 2,959 $ 2,486
======= =======
NET INCOME APPLICABLE TO COMMON STOCK $ 2,732 $ 2,221
======= =======
PER COMMON SHARE:
Primary:
Income Before Effect of Accounting Change $ 6.23 $ 5.02
Effect of Change in Accounting Principle (0.03) --
------- -------
Net Income $ 6.20 $ 5.02
======= =======
Assuming Full Dilution:
Income Before Effect of Accounting Change $ 6.07 $ 4.97
Effect of Change in Accounting Principle (0.03) --
------- -------
Net Income $ 6.04 $ 4.97
======= =======
</TABLE>
<PAGE> 15
UNAUDITED
THE NEW CHASE MANHATTAN CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
(IN MILLIONS)
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1995 1994
------------- --------------
<S> <C> <C>
ASSETS
Cash and Due from Banks $ 14,794 $ 13,545
Deposits with Banks 8,468 12,440
Federal Funds Sold and Securities
Purchased Under Resale Agreements 17,461 20,077
Trading Assets:
Debt and Equity Instruments 26,212 17,926
Risk Management Instruments 25,825 25,985
Securities:
Held-to-Maturity 4,628 10,650
Available-for-Sale 37,141 23,140
Loans (Net of Unearned Income) 150,207 142,231
Allowance for Credit Losses (3,784) (3,894)
Premises and Equipment 3,757 3,951
Due from Customers on Acceptances 1,896 1,608
Accrued Interest Receivable 2,541 2,466
Assets Acquired as Loan Satisfactions 171 537
Assets Held for Accelerated Disposition 412 526
Other Assets 14,260 14,195
-------- --------
TOTAL ASSETS $303,989 $285,383
======== ========
LIABILITIES
Deposits:
Domestic Noninterest Bearing $ 35,414 $ 33,389
Domestic Interest Bearing 64,640 68,063
Foreign 71,480 65,010
-------- --------
Total Deposits 171,534 166,462
Federal Funds Purchased and Securities
Sold Under Repurchase Agreements 37,263 32,410
Other Borrowed Funds 13,936 11,780
Acceptances Outstanding 1,915 1,629
Trading Liabilities 34,341 30,356
Accounts Payable, Accrued Expenses and Other Liabilities 11,339 10,812
Long-Term Debt 12,825 13,061
-------- --------
TOTAL LIABILITIES 283,153 266,510
-------- --------
STOCKHOLDERS' EQUITY
Preferred Stock 2,650 2,850
Common Stock 439 438
Capital Surplus 10,625 10,474
Retained Earnings 7,621 5,945
Net Unrealized Loss on Securities Available-for-Sale, Net of Taxes (237) (473)
Treasury Stock, at Cost (262) (361)
-------- --------
TOTAL STOCKHOLDERS' EQUITY 20,836 18,873
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $303,989 $285,383
======== ========
</TABLE>
<PAGE> 16
UNAUDITED
PRO FORMA
THE NEW CHASE MANHATTAN CORPORATION AND SUBSIDIARIES
LOAN PORTFOLIO AND ALLOWANCE RELATED INFORMATION
(IN MILLIONS, EXCEPT RATIOS)
<TABLE>
<CAPTION>
LOANS OUTSTANDING NONPERFORMING ASSETS
--------------------------- -------------------------
DECEMBER 31, DECEMBER 31,
1995 1994 1995 1994
---------- --------- ------- -------
<S> <C> <C> <C> <C>
Domestic Commercial:
Commercial Real Estate $ 6,588 $ 7,705 $ 375 $ 422
Other Commercial 40,500 36,810 498 474
-------- -------- ------ ------
Total Commercial Loans 47,088 44,515 873 896
-------- -------- ------ ------
Total Domestic Consumer 66,993 62,549 277 232
-------- -------- ------ ------
Total Domestic Loans 114,081 107,064 1,150 1,128
Foreign 36,126 35,167 343 461
-------- -------- ------ ------
Total Loans $150,207 $142,231 1,493 1,589
======== ========
Assets Acquired as Loan Satisfactions 171 537
====== ======
Total Nonperforming Assets $1,664 $2,126
====== ======
ASSETS HELD FOR ACCELERATED DISPOSITION $ 412 $ 526
====== ======
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED FOR THE YEAR ENDED
DECEMBER 31, DECEMBER 31,
--------------------------- -------------------------
1995 1994 1995 1994
---------- --------- ------- -------
<S> <C> <C> <C> <C>
ALLOWANCE FOR CREDIT LOSSES:
Balance at Beginning of Period $3,809 $4,066 $3,894 $4,445
Provision for Losses 186 175 758 1,050
Net Charge-Offs:
Domestic Commercial:
Commercial Real Estate (9) (24) (31) (290)
Other Commercial 31 19 16 (96)
-------- -------- ------ ------
Total Commercial 22 (5) (15) (386)
-------- -------- ------ ------
Domestic Consumer:
Residential Mortgage (11) (29) (62) (60)
Credit Card (192) (168) (755) (672)
Other Consumer (11) (10) (42) (36)
-------- -------- ------ ------
Total Consumer (214) (207) (859) (768)
-------- -------- ------ ------
Total Domestic Net Charge-offs (192) (212) (874) (1,154)
Foreign 6 7 34 (310)
-------- -------- ------ ------
Total Net Charge-offs (186) (205) (840) (1,464)
Charge for Assets Held for Accelerated Disposition -- (148) -- (148)
Other (25) 6 (28) 11
-------- -------- ------ ------
Total Allowance for Credit Losses $3,784 $3,894 $3,784 $3,894
======== ======== ====== ======
ALLOWANCE COVERAGE RATIOS:
Allowance for Credit Losses to:
Loans at Period-End 2.52% 2.74%
Average Loans 2.58% 2.85%
Nonperforming Loans 253.45% 245.06%
</TABLE>
