<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: April 19, 2000 Commission file number 1-5805
THE CHASE MANHATTAN CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-2624428
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
270 Park Avenue, New York, NY 10017
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 270-6000
1
<PAGE>
Item 5. Other Events
- --------------------
On April 19, 2000, The Chase Manhattan Corporation ("Chase") reported
diluted operating earnings of $1.59 per share for the first quarter of 2000, 20%
higher than the $1.32 per share reported in the first quarter of 1999. Operating
earnings and reported net income in the first quarter of 2000 were each $1.36
billion, compared with $1.17 billion each in the first quarter of 1999. A copy
of the press release announcing Chase's first quarter earnings is attached as an
exhibit hereto.
In describing first quarter earnings, Chase management noted:
- It intended to suspend stock repurchases under its buyback program in
order to accumulate capital to support Chase's proposed acquisition of Robert
Fleming Holdings Ltd. ("Flemings"). Stock repurchases are planned to resume
after the Flemings acquisition is completed and Chase's Tier 1 capital ratio
returns to management's target range of 8-8.25%, which is anticipated to occur
by year-end 2000.
- During the period from April 1, 2000 through April 18, 2000, the quoted
market value of the publicly-traded securities held by Chase Capital Partners
("CCP") had declined by approximately $930 million. The carrying value of
Chase's interest in these securities (which excludes the interests of investors
other than Chase and which reflects the liquidity discounts applied by Chase)
had declined by approximately $480 million during this period. This decline does
not take into account the previously disclosed private sale of CCP's holdings in
Triton Cellular Partners L.P., which closed on April 3, 2000, for a net gain to
Chase of approximately $130 million. Management also noted that approximately
70% of the carrying value of CCP's portfolio ( or approximately 90% of the
portfolio on a cost basis ) consists of privately-held securities generally
carried at cost and that the recent volatility in the prices of public
securities had no impact on the carrying value of this portion of the portfolio.
- Chase and Flemings have agreed upon a retention arrangement for key
employees in an aggregate amount of approximately $240 million (after-tax),
which will be expensed over the two years following the Flemings acquisition.
- Results for NCS over the remainder of 2000 are expected to reflect the
benefits of expense management, good credit quality and moderating revenue
growth. However, after taking into account NCS's operating results for the first
quarter of 2000, management currently believes that it is unlikely that NCS will
achieve its target of double digit earnings growth for full year 2000.
The above contains statements that are forward looking within the meaning
of the Private Securities Litigation Act of 1995. Such statements are subject to
risks and uncertainties and Chase's actual result may differ materially from
those set forth in the forward-looking statements. Those uncertainties may
include, among others, the risk of adverse impacts from an economic downturn;
increased competition; unfavorable political or other developments in foreign
markets, governmental or regulatory policies; market volatility in securities
markets, interest or foreign exchange rates; other factors impacting Chase's
operational plans or the adequacy of Chase's allowance for credit losses; the
fact that the anticipated cost-savings and revenue synergies from the Flemings
transaction may not be fully realized or may take longer to realize than
expected; or that there may be changes in general economic, financial, monetary
or other business indicators that adversely affect Flemings and the markets in
which it operates. For a more detailed discussion of those uncertainties,
reference is made to Chase's reports filed with the Securities and Exchange
Commission, in particular Chase's Annual Report on Form 10-K for the year ended
December 31, 1999.
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
The following exhibit is filed with this report:
Exhibit Number Description
99.1 Press Release - 2000 First Quarter Earnings.
3
<PAGE>
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)
Dated April 19, 2000 by /s/JOSEPH L. SCLAFANI
- -------------------- ----------------------------------
Joseph L. Sclafani
Executive Vice President and Controller
[Principal Accounting Officer]
4
<PAGE>
EXHIBIT INDEX
Exhibit Number Description Page at Which Located
99.1 Press Release - 2000 First
Quarter Earnings 6
5
<PAGE>
<PAGE>
The Chase Manhattan Corporation
270 Park Avenue
New York, NY 10017-2070
Investor Contact: John Borden Press Contact: Jon Diat
212-270-7318 212-270-5089
{Chase Letterhead}
News Release
Chase Earnings Per Share Increased 20 Percent in the First Quarter
New York, April 19, 2000 - The Chase Manhattan Corporation (NYSE:CMB) today
reported diluted operating earnings per share of $1.59 in the first quarter, 20
percent higher than the $1.32 per share reported in the first quarter of 1999.
Operating earnings and reported net income in the first quarter of 2000 were
each $1.36 billion, compared with $1.17 billion, in the first quarter of 1999.
Diluted cash earnings per share increased 20 percent to $1.69 in the first
quarter, compared with $1.41 in the first quarter of 1999.
First Quarter 2000 Highlights
- - Global Bank momentum led to 19 percent increase in earnings
- - Global Services rebounded with 39 percent earnings growth
- - Return on common equity was 24 percent
- - Dividend was raised 17 percent
- - Repurchased $675 million of common stock, on a net basis, while Tier 1
capital ratio rose to 8.5 percent
- - Announced three-for-two stock split, subject to shareholder approval
"These results once again demonstrate the strength of the Chase franchise,"
said William B. Harrison, Jr., Chairman and Chief Executive Officer. "Growth
continues to be driven by the power of our leadership positions and the
diversity of our businesses within a framework of financial discipline. We
continue to position ourselves for growth, especially with opportunities
presented by the New Economy and the rapidly changing global economy."
Financial Performance
- ------------------------------------- ------------------------------------------
THE CHASE MANHATTAN CORP First Quarter
- ------------------------------------- ------------------------------------------
(dollars in millions) 2000 O(U)1Q99
Operating Revenues $6,179 $766 14%
Cash Operating Earnings 1,445 199 16
Cash Earnings Per Share - Diluted 1.69 0.28 20
Shareholder Value Added 701 200 40
Cash Return on Common Equity 25.5% 360bp --
- ------------------------------------- ---------------- ------------- -----------
Line-Of-Business Results
- ------------------------------------- ------------------------------------------
GLOBAL BANK First Quarter
- ------------------------------------- ------------------------------------------
(dollars in millions) 2000 O(U)1Q99 O(U)4Q1999
Operating Revenues $3,018 26% (5)%
Cash Operating Earnings 942 19 (20)
Shareholder Value Added 432 21 (39)
Cash Return on Common Equity 24.2% 10bp (880)bp
- ------------------------------------- ----------- -------------- ---------------
Cash operating earnings in the first quarter of 2000 in the Global Bank
were up 19 percent from the first quarter of 1999. Operating revenues and
Shareholder Value Added were up 26 percent and 21 percent, respectively, from
the first quarter of 1999, reflecting strong results in all businesses. Revenues
and income were lower than in the fourth quarter of 1999 due to lower private
equity-related investment gains.
- Total trading revenues, including related net interest income, rose 25
percent to $1.05 billion, a new record, benefiting from strong results in all
business segments, including foreign exchange, international fixed income
products, market-making activity in emerging markets, equity derivatives, and
equity trading at Chase H&Q.
- Investment banking fees increased to $648 million, a 104 percent increase
from the first quarter of 1999 and 30 percent higher than the fourth quarter of
1999. Revenues reflect strong underwriting fees at Chase H&Q, a doubling of the
amount of merger and acquisition advisory fees compared to the first quarter of
1999, and a 39 percent increase in syndication fees. On a proforma basis, if
Chase had owned Hambrecht & Quist since the beginning of 1999, the growth rate
of investment banking fees would have been 69 percent, when compared to the
first quarter of 1999.
- Private equity-related investment gains in the first quarter of 2000 were
$500 million, up 54 percent from $325 million in the first quarter of 1999, but
down from the record $1.31 billion reported in the fourth quarter. First quarter
revenues are the result of sales of securities in both the private and public
portfolio; from appreciation in market values of public companies; and initial
public offerings of portfolio investments. In the first quarter, $341 million of
total revenues were from gains realized through sales versus $426 million in the
first quarter of 1999 and $348 million in the fourth quarter.
- Global Private Bank revenues, including Executive Financial Services at
Chase H&Q, increased to $331 million, a 58 percent increase from the same period
a year ago, and 41 percent over proforma 1999 first quarter including H&Q's
results. The Global Private Bank has over $160 billion in client assets.
- ------------------------------------ ------------------------------------------
GLOBAL SERVICES First Quarter
- ------------------------------------- ------------------------------------------
(dollars in millions) 2000 O(U)1Q99 O(U)4Q1999
Operating Revenues $851 17% 5%
Cash Operating Earnings 151 39 15
Shareholder Value Added 62 377 94
Cash Return on Common Equity 22.1% 740bp 480bp
- ------------------------------------- ----------- -------------- ---------------
In the first quarter of 2000, Global Services' operating revenues were $851
million, a 17 percent increase over the prior year quarter, reflecting strong
growth in its securities processing businesses. Global Investor Services,
Chase's custody business, experienced a 28 percent rise in operating revenues in
the first quarter from the same period a year ago. Total assets under custody
grew 17 percent during the first quarter, with cross-border assets under custody
increasing 33 percent. Operating revenues at Capital Markets Fiduciary Services,
Chase's institutional trust business, increased 28 percent for the quarter,
reflecting continued growth through expansion into new markets. Cash operating
earnings for Global Services increased 39 percent to $151 million from the first
quarter of 1999. Shareholder value added was $62 million, an increase of 377
percent over the prior year quarter.
Chase is the largest global custodian, with $5.7 trillion in assets under
custody worldwide, and has a leadership franchise in processing and information
services for financial and banking markets with a global client base of
financial institutions, large and middle market corporations, and governments.
Global Services is ranked number one in U.S. dollar funds transfers worldwide,
Fedwire, ACH and CHIPS volume, and is number one in trust, agency and other
fiduciary products for publicly traded and privately placed debt.
- -------------------------------------- -----------------------------------------
NATIONAL CONSUMER SERVICES First Quarter
- -------------------------------------- -----------------------------------------
(dollars in millions) 2000 O(U)1Q99 O(U)4Q1999
Operating Revenues $2,396 0% (5)%
Cash Operating Earnings 348 (12) (19)
Shareholder Value Added 76 (46) (52)
Cash Return on Common Equity 16.7% (360)bp (400)bp
- -------------------------------------- ---------- -------------- ---------------
Operating revenues of $2.4 billion for National Consumer Services were flat
when compared to the first quarter of 1999. Cash operating earnings declined 12
percent from the same period a year ago. Strong results in regional banking,
middle market banking, and the retail investment business, plus solid
performance in mortgage finance was not enough to offset pressures on credit
card margins due to rising interest rates, and a $100 million increase in auto
lease residual losses, which is accounted for as a reduction in net interest
income.
- Cash operating earnings for cardmember services decreased seven percent
in the first quarter. Revenues declined four percent reflecting reduced net
interest spreads due to rising interest rates, and a lower level of late and
overlimit fees, partly offset by higher consumer purchase volume. Credit quality
improved driven by lower bankruptcy filings, while expenses were higher due to
investments in e-commerce and technology.
- Home finance revenues increased to $324 million, a 17 percent increase
from first quarter of 1999, and cash operating earnings rose four percent,
primarily as a result of growth in mortgage servicing balances and margins, home
equity originations, insurance revenue and mortgage portfolio levels. Offsetting
these positive factors was the impact of rising interest rates that led to
significant declines in mortgage production volumes and secondary marketing
sales, and higher reported expenses as a result of a smaller percentage of costs
allocated to the loan origination process.
- Revenues from diversified consumer services were $193 million in the
first quarter, down 24 percent from the same 1999 quarter, due mainly to a $100
million increase in auto lease residual losses. This increase addressed exposure
to potential losses on future lease terminations as a result of a decline in the
market value of leased autos. Separately, revenue growth at Brown & Co., Chase's
online trading business, increased 67 percent to $60 million, compared with $36
million from the first quarter a year ago. Brown & Co. averaged over 55,000
trades per day during the first quarter of 2000 versus 31,000 trades per day
during the same period in 1999. Revenues in the rest of the retail investment
business increased 17 percent to $62 million, compared to $53 million in the
same quarter last year.
- Regional banking group revenues were $626 million, a 10 percent increase
from the first quarter of 1999. Cash operating earnings grew by 24 percent over
the same period reflecting significantly higher deposit volumes, particularly in
the small business sector, the benefit from higher interest rates, and growth in
banking fees.
- Middle Market revenues were $268 million, up 10 percent from the first
quarter of 1999. Cash operating earnings increased 26 percent over the prior
year quarter. The results reflect growth in financing and new business activity,
along with disciplined expense management.
Additional Financial Information
- On a managed basis, including securitizations, net charge-offs were $596
million in the first quarter of 2000, down from $810 million in the fourth
quarter of 1999 and down from $649 million from the first quarter of 1999.
Consumer net charge-offs, on a managed basis, were $524 million, compared with
$523 million in the fourth quarter of 1999 and $562 million in the first quarter
of 1999, primarily reflecting a decline in the 2000 first quarter in the credit
card net charge-off ratio to 5.41 percent. Commercial net charge-offs in the
first quarter of 2000 were $72 million, compared with $287 million in the fourth
quarter of 1999 and $87 million in the first quarter of 1999. For the first
quarter of 2000, total net charge-offs on a reported basis were $342 million and
the provision for loan losses was $342 million. The allowance for loan losses
remained at $3.46 billion at the end of the first quarter, unchanged from
year-end. Nonperforming assets at March 31, 2000 were $1.70 billion compared
with $1.80 billion at December 31, 1999 and $1.67 billion at March 31, 1999.
- Total operating noninterest expenses increased 19 percent to $3.49
billion in the first quarter of 2000, reflecting higher incentives related to
revenue increases in global banking businesses and to the acquisition of
Hambrecht & Quist in the fourth quarter of 1999. On a proforma basis, if Chase
had owned Hambrecht & Quist for all of 1999, expense growth would have been 14
percent.
- Total assets at March 31, 2000 were $391 billion compared with $406
billion at December 31, 1999 and $361 billion a year ago. While the company
repurchased approximately $675 million, net, in common stock during the first
quarter, the estimated Tier 1 capital ratio increased to 8.5 percent at March
31, 2000, compared with 8.4 percent at December 31, 1999 and 8.4 percent at
March 31, 1999.
- Operating results (revenues, expenses and earnings) exclude the impact of
credit card securitizations, restructuring costs and special items.
- During the first quarter, Chase announced that its Board of Directors
approved a 17 percent increase in the quarterly common stock dividend to $0.48,
or $1.92 on an annual basis. The increase will be effective for the dividend
payable on April 30, 2000 to stockholders of record at the close of business on
April 6, 2000.
- In addition, the Board of Directors also approved a three-for-two stock
split, subject to shareholder approval at the corporation's annual meeting on
May 16, 2000. If approved by the shareholders, the record date for the split
will be May 17, 2000 and the additional shares issued as a result of the split
will be distributed on June 9, 2000.
- On April 11, Chase announced that it had agreed to terms for an offer for
Robert Fleming Holdings Ltd. After the expected receipt of proceeds of $780
million from the sale of Fleming's interest in its joint venture with T. Rowe
Price Associates, Inc., Chase's cost for the Fleming acquisition will be
approximately $6.9 billion, of which approximately $3.6 billion will be in Chase
common stock. Fleming is a global asset management and investment banking group,
based in London, with approximately $100 billion in assets under management and
research coverage and trading activities in over 40 countries. The transaction,
which is recommended by the Board of Flemings, is expected to be completed in
three to four months. Following its acquisition, the company will be called
Chase Flemings.
The Chase Manhattan Corporation (www.chase.com) is a premier global
financial services firm with assets in excess of $390 billion. Chase combines
the best of commercial and investment banking, offers world-class information
and transaction processing services, and has a leading U.S. consumer franchise
that serves 32 million customers. Through its newly formed business unit
Chase.com, Chase is successfully creating innovative business models for the New
Economy. Chase, with offices in more than 45 countries, has a presence in all of
the principal financial centers around the world. A live audio webcast of
Chase's first quarter analyst presentation will be available in the investor
relations site of www.chase.com at 11 a.m. on April 19, 2000.
---------------
This press release contains forward-looking statements. Those statements
are based on management's current expectations or beliefs and are subject to a
number of factors and uncertainties that could cause actual results to differ
materially from those described in the forward-looking statements. For a
discussion of certain factors that could cause actual results to differ
materially from those described in the forward-looking statements, please refer
to Chase's filings with the Securities and Exchange Commission, particularly the
section entitled "Important Factors that may Affect Future Results" in Chase's
Annual Report on Form 10-K for the year ended December 31, 1999.
<PAGE>
THE CHASE MANHATTAN CORPORATION
SUMMARY OF SELECTED FINANCIAL HIGHLIGHTS
(in millions, except per share and ratio data)
<TABLE>
<CAPTION>
As of or for the period ended First Quarter Over/(Under)
-----------------------------
2000 1999 1999
------------ ------------ ----------
OPERATING BASIS (a)
<S> <C> <C> <C>
Operating Revenue $ 6,179 $ 5,413 14%
Operating Noninterest Expense 3,490 2,945 19%
Credit Costs (b) 596 650 (8%)
Operating Earnings $ 1,360 $ 1,173 16%
Operating Earnings Per Share:
Basic $ 1.65 $ 1.37 20%
Diluted 1.59 1.32 20%
Cash Operating Earnings $ 1,445 $ 1,246 16%
Cash Operating Earnings Per Share - Diluted 1.69 1.41 20%
Shareholder Value Added (SVA) 701 501 40%
Operating Performance Ratios:
Return on Average Managed Assets (c) 1.34 % 1.24 %
Return on Average Common Equity (c) 24.0 20.6
Common Dividend Payout Ratio 30 30
Overhead Ratio (d) 56 54
Selected Balance Sheet Items at Period End: (e)
Managed Loans $ 194,268 $ 191,231 2%
Total Managed Assets 410,295 379,640 8%
- ------------------------------------------------------------------------------------------------------------------------------------
AS REPORTED BASIS
Revenue $ 5,925 $ 5,144 15%
Noninterest Expense 3,490 2,945 19%
Provision for Loan Losses 342 381 (10%)
Net Income $ 1,360 $ 1,173 16%
Net Income Per Share:
Basic $ 1.65 $ 1.37 20%
Diluted 1.59 1.32 20%
Cash Dividends Declared 0.48 0.41 17%
Share Price at Period End 87.19 81.38 7%
Book Value at Period End 27.96 26.32 6%
Common Shares Outstanding:
Average Common Shares:
Basic 813.8 843.6 (4%)
Diluted 843.9 871.9 (3%)
Common Shares at Period End 824.2 845.0 (2%)
Performance Ratios:
Return on Average Total Assets (c) 1.40 % 1.30 %
Return on Average Common Equity (c) 24.0 20.6
Selected Balance Sheet Items at Period End:
Loans $ 175,457 $ 172,849 2%
Total Assets 391,484 361,258 8%
Deposits 211,661 207,641 2%
Total Stockholders' Equity 23,973 23,268 3%
Capital Ratios:
Tier I Capital Ratio 8.5 %(f) 8.4 %
Total Capital Ratio 12.2 (f) 12.2
Tier I Leverage 6.6 (f) 6.6
(a) Excludes the impact of credit card securitizations, restructuring costs and special items. For a reconciliation of Reported
Results as shown on the Consolidated Statement of Income to results on an Operating Basis, see page 11.
(b) Includes provision for loan losses and credit costs related to the securitized credit card portfolio.
(c) Based on annualized amounts.
(d) Noninterest expense as a percentage of the total of net interest income and noninterest revenue (excluding restructuring costs,
special items and costs associated with the REIT).
(e) Excludes the impact of credit card securitizations.
(f) Estimated
Unaudited
</TABLE>
<PAGE>
THE CHASE MANHATTAN CORPORATION
LINES OF BUSINESS RESULTS
(in millions, except ratios)
<TABLE>
<CAPTION>
Global Bank National Consumer Services Global Services Total (a)
--------------------- ---------------------------- -------------------- -------------------------
First Quarter Over/ Over/ Over/ Over/
2000 (Under) 1999 2000 (Under) 1999 2000 (Under) 1999 2000 (Under) 1999
____________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Operating Revenue $ 3,018 $ 629 26% $ 2,396 $ (8) - % $ 851 $ 125 17% $ 6,179 $ 766 14%
Operating Earnings 922 143 18 311 (43) (12) 136 42 45 1,360 187 16
Cash Operating Earnings 942 153 19 348 (48) (12) 151 42 39 1,445 199 16
Average Common Equity 15,465 2,334 18 8,279 513 7 2,724 (217) (7) 22,518 (174) (1)
Average Managed Assets (b) 248,976 15,287 7 140,845 15,409 12 15,857 (1,097) (6) 409,368 24,452 6
Shareholder Value Added (SVA) 432 74 21 76 (65) (46) 62 49 377 701 200 40
Cash Return on Common Equity 24.2% 10bp 16.7% (360)bp 22.1% 740bp 25.5% 360bp
Cash Overhead Ratio 48 400 54 400 72 (400) 55 200
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
GLOBAL BANK
KEY FINANCIAL MEASURES
<TABLE>
<CAPTION>
First Quarter 2000 Over/(Under) 1999
------------------------------------------ -----------------------------------------
Operating Cash Cash Operating Cash Cash
Revenues Operating Overhead Revenues Operating Overhead
Earnings Ratio Earnings Ratio
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Global Markets $ 1,233 $ 418 47% (4)% (13)% 700bp
Chase Capital Partners 354 192 16 17 12 400
Global Investment Banking 751 164 63 NM (c) NM (c) NM (c)
Corporate Lending and Portfolio Management 375 136 27 (1) - 100
Global Private Bank 331 76 61 58 85 (600)
Other Global Bank (26) (44) NM NM NM NM
----------- ----------
Totals $ 3,018 $ 942 48% 26% 19% 400bp
=========== ==========
(c) For the 1999 first quarter, Global Investment Banking operating revenues were $226 million, cash operating earnings were
$2 million and the cash overhead ratio was 98%.
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NATIONAL CONSUMER SERVICES
KEY FINANCIAL MEASURES
<TABLE>
<CAPTION>
First Quarter 2000 Over/(Under) 1999
------------------------------------------ ------------------------------------------
Operating Cash Cash Operating Cash Cash
Revenues Operating Overhead Revenues Operating Overhead
Earnings Ratio Earnings Ratio
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Chase Cardmember Services $ 944 $ 107 36% (4)% (7)% 200bp
Regional Banking Group 626 118 66 10 24 (400)
Chase Home Finance 324 70 62 17 4 300
Diversified Consumer Services 193 (9) 80 (24) (124) 2,500
Middle Markets 268 63 54 10 26 (500)
Other NCS 41 (1) NM NM NM NM
============ ============
Totals $ 2,396 $ 348 54% - % (12)% 400bp
============ ============
- -----------------------------------------------------------------------------------------------------------------------------------
Note: SVA is Chase's primary measure of business unit performance. SVA represents operating earnings excluding the impact of
amortization of goodwill and certain other intangibles (i.e., cash operating earnings), minus preferred dividends and an
explicit charge for capital.
(a) Total column includes Support Units (Chase.com, Chase Business Services and Technology Solutions) and the effects
remaining at the Corporate level after the implementation of management accounting policies.
(b) Excludes the impact of credit card securitizations.
NM - Not meaningful
bp - basis points
Unaudited
</TABLE>
<PAGE>
THE CHASE MANHATTAN CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(in millions, except per share data)
<TABLE>
<CAPTION>
%
First Quarter Over/(Under)
--------------------------
---------- ----------
2000 1999 1999
---------- ---------- ---------
INTEREST INCOME
<S> <C> <C> <C>
Loans $ 3,480 $ 3,209
Securities 933 835
Trading Assets 416 418
Federal Funds Sold and Securities Purchased Under Resale Agreements 446 381
Deposits with Banks 134 184
---------- ----------
Total Interest Income 5,409 5,027
---------- ----------
INTEREST EXPENSE
Deposits 1,965 1,598
Short-Term and Other Borrowings 1,129 914
Long-Term Debt 354 311
---------- ----------
Total Interest Expense 3,448 2,823
---------- ----------
NET INTEREST INCOME 1,961 2,204 (11%)
Provision for Loan Losses 342 381 (10%)
---------- ----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 1,619 1,823 (11%)
---------- ----------
NONINTEREST REVENUE
Investment Banking Fees 648 317 104%
Trust, Custody and Investment Management Fees 509 414 23%
Credit Card Revenue 397 379 5%
Fees for Other Financial Services 731 553 32%
Trading Revenue 1,021 618 65%
Securities Gains 14 156 (91%)
Private Equity Gains 500 325 54%
Other Revenue 144 178 (19%)
---------- ----------
Total Noninterest Revenue 3,964 2,940 35%
---------- ----------
NONINTEREST EXPENSE
Salaries 1,753 1,384 27%
Employee Benefits 287 255 13%
Occupancy Expense 226 218 4%
Equipment Expense 285 243 17%
Other Expense 939 845 11%
---------- ----------
---------- ----------
Total Noninterest Expense 3,490 2,945 19%
---------- ----------
INCOME BEFORE INCOME TAX EXPENSE 2,093 1,818 15%
Income Tax Expense 733 645 14%
---------- ----------
NET INCOME $ 1,360 $ 1,173 16%
========== ==========
========== ==========
NET INCOME APPLICABLE TO COMMON STOCK $ 1,344 $ 1,155 16%
========== ==========
NET INCOME PER COMMON SHARE:
Basic $ 1.65 $ 1.37 20%
Diluted $ 1.59 $ 1.32 20%
Unaudited
</TABLE>
<PAGE>
THE CHASE MANHATTAN CORPORATION
NONINTEREST REVENUE AND NONINTEREST EXPENSE DETAIL
(in millions)
<TABLE>
<CAPTION>
%
First Quarter Over/(Under)
-------------------------
----------- ----------
NONINTEREST REVENUE 2000 1999 1999
----------- ---------- ----------
Fees for Other Financial Services:
<S> <C> <C> <C>
Mortgage Servicing Fees $ 150 $ 65 131%
Service Charges on Deposit Accounts 99 89 11%
Fees in Lieu of Compensating Balances 87 87 --
Commissions on Letters of Credit and Acceptances 67 69 (3%)
Brokerage and Investment Services 107 43 149%
Insurance Fees 49 39 26%
Loan Commitment Fees 34 31 10%
Other Fees 138 130 6%
----------- ----------
Total $ 731 $ 553 32%
=========== ==========
Trading-Related Revenue: (a)
Interest Rate Contracts $ 306 $ 322 (5%)
Foreign Exchange Revenue 279 199 40%
Equities and Commodities 225 83 171%
Debt Instruments and Other 235 233 1%
----------- ----------
Total $ 1,045 $ 837 25%
=========== ==========
Other Revenue:
Residential Mortgage Origination/Sales Activities $ 44 $ 92 (52%)
All Other Revenue 100 86 16%
----------- ----------
Total $ 144 $ 178 (19%)
=========== ==========
- -----------------------------------------------------------------------------------------------------------------------------------
NONINTEREST EXPENSE
Other Expense:
Professional Services $ 171 $ 162 6%
Marketing Expense 100 114 (12%)
Telecommunications 105 91 15%
Amortization of Intangibles 85 73 16%
Travel and Entertainment 62 50 24%
Minority Interest (b) 12 13 (8%)
Foreclosed Property Expense -- 5 NM
All Other 404 337 20%
----------- ----------
Total $ 939 $ 845 11%
=========== ==========
(a) Trading-related revenue includes net interest income attributable to trading activities.
(b) Includes REIT minority interest of $11 million in each quarter.
NM - Not meaningful
Unaudited
</TABLE>
<PAGE>
THE CHASE MANHATTAN CORPORATION
OPERATING INCOME RECONCILIATION
(in millions, except per share data)
<TABLE>
<CAPTION>
FIRST QUARTER 2000 FIRST QUARTER 1999
---------------------------------------- ----------------------------------------
REPORTED CREDIT SPECIAL OPERATING REPORTED CREDIT SPECIAL OPERATING
RESULTS CARD ITEMS BASIS RESULTS CARD ITEMS BASIS
(a) (b) (c) (a) (b) (c)
-------- ------- ------- -------- -------- -------- ------- --------
EARNINGS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Market-Sensitive Revenue $ 2,207 $ - $ - $ 2,207 $ 1,635 $ - $ - $ 1,635
Less Market-Sensitive Revenue 3,718 254 - 3,972 3,509 269 - 3,778
-------- ------- ------- -------- -------- -------- ------- --------
Total Revenue 5,925 254 - 6,179 5,144 269 - 5,413
Noninterest Expense 3,490 - - 3,490 2,945 - - 2,945
-------- ------- ------- -------- -------- -------- ------- --------
Operating Margin 2,435 254 - 2,689 2,199 269 - 2,468
Credit Costs 342 254 - 596 381 269 - 650
-------- ------- ------- -------- -------- -------- ------- --------
Income Before Income Tax Expense 2,093 - - 2,093 1,818 - - 1,818
Tax Expense 733 - - 733 645 - - 645
-------- ------- ------- -------- -------- -------- ------- --------
Net Income $ 1,360 $ - $ - $ 1,360 $ 1,173 $ - $ - $ 1,173
-------- ------- ------- -------- -------- -------- ------- --------
NET INCOME PER COMMON SHARE
Basic $ 1.65 $ 1.65 $ 1.37 $ 1.37
Diluted $ 1.59 $ 1.59 $ 1.32 $ 1.32
- ----------------------------------------------------------------------------------------------------------------------------
(a) Represent results as reported in Chase's financial statements. The only exception is that revenues are categorized between
market-sensitive and less market-sensitive revenues. Market-sensitive revenue includes investment banking fees, trading-related
revenue (including trading-related net interest income), securities gains and private equity gains.
(b) This column excludes the impact of credit card securitizations. For securitized receivables, amounts that previously would have
been reported as net interest income and as provision for loan losses are instead reported as components of noninterest revenue.
(c) Includes restructuring costs and special items. There were no restructuring costs or special items in either quarter.
Unaudited
</TABLE>
<PAGE>
THE CHASE MANHATTAN CORPORATION
CONSOLIDATED BALANCE SHEET
(in millions)
<TABLE>
<CAPTION>
%
March 31, Over/(Under)
----------------------------------
2000 1999 1999
-------------- -------------- ---------------
ASSETS
<S> <C> <C> <C>
Cash and Due from Banks $ 16,258 $ 18,306 (11%)
Deposits with Banks 2,992 3,437 (13%)
Federal Funds Sold and Securities
Purchased Under Resale Agreements 28,469 24,867 14%
Trading Assets:
Debt and Equity Instruments 32,352 27,572 17%
Risk Management Instruments 31,064 28,362 10%
Securities 63,475 56,613 12%
Loans (Net of Allowance for Loan Losses of $3,457 in 2000
and $3,552 in 1999) 172,000 169,297 2%
Other Assets 44,874 32,804 37%
-------------- --------------
TOTAL ASSETS $ 391,484 $ 361,258 8%
============== ==============
LIABILITIES
Deposits:
Domestic:
Noninterest-Bearing $ 49,014 $ 47,380 3%
Interest-Bearing 79,427 81,885 (3%)
Foreign:
Noninterest-Bearing 4,920 4,221 17%
Interest-Bearing 78,300 74,155 6%
Total Deposits 211,661 207,641 2%
Federal Funds Purchased and Securities
Sold Under Repurchase Agreements 64,879 51,116 27%
Commercial Paper 6,297 4,965 27%
Other Borrowed Funds 6,131 5,982 2%
Trading Liabilities 36,855 35,675 3%
Accounts Payable, Accrued Expenses and Other Liabilities, Including
the Allowance for Credit Losses of $170 in 2000 and 1999 17,960 13,695 31%
Long-Term Debt 20,640 16,178 28%
Guaranteed Preferred Beneficial Interests in Corporation's
Junior Subordinated Deferrable Interest Debentures 2,538 2,188 16%
-------------- --------------
TOTAL LIABILITIES 366,961 337,440 9%
-------------- --------------
PREFERRED STOCK OF SUBSIDIARY 550 550 --
-------------- --------------
STOCKHOLDERS' EQUITY
Preferred Stock 928 1,028 (10%)
Common Stock 882 882 --
Capital Surplus 9,323 9,542 (2%)
Retained Earnings 18,494 14,351 29%
Accumulated Other Comprehensive Loss (1,369) (99) NM
Treasury Stock, at Cost (4,285) (2,436) 76%
-------------- --------------
TOTAL STOCKHOLDERS' EQUITY 23,973 23,268 3%
-------------- --------------
TOTAL LIABILITIES, PREFERRED STOCK OF SUBSIDIARY
AND STOCKHOLDERS' EQUITY $ 391,484 $ 361,258 8%
============== ==============
NM - Not meaningful
Unaudited
</TABLE>
<PAGE>
THE CHASE MANHATTAN CORPORATION
CONSOLIDATED STATEMENT OF CHANGES
IN STOCKHOLDERS' EQUITY
(in millions)
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------------
------------ -------------
2000 1999
------------ -------------
Preferred Stock
<S> <C> <C>
Balance at Beginning and End of Period $ 928 $ 1,028
------------ -------------
Common Stock
Balance at Beginning and End of Period $ 882 $ 882
------------ -------------
Capital Surplus
Balance at Beginning of Year $ 9,714 $ 9,836
Shares Issued and Commitments to Issue Common Stock for
Employee Stock-Based Awards and Related Tax Effects (391) (294)
------------ -------------
Balance at End of Period $ 9,323 $ 9,542
------------ -------------
Retained Earnings
Balance at Beginning of Year $ 17,547 $ 13,544
Net Income 1,360 1,173
Cash Dividends Declared:
Preferred Stock (16) (18)
Common Stock (397) (348)
------------ -------------
Balance at End of Period $ 18,494 $ 14,351
------------ -------------
Accumulated Other Comprehensive Loss
Balance at Beginning of Year $(1,454) $ 392
Other Comprehensive Income (Loss) 85 (491)
------------ -------------
Balance at End of Period $(1,369) $ (99)
------------ -------------
Treasury Stock, at Cost
Balance at Beginning of Year $(4,000) $(1,844)
Purchase of Treasury Stock (1,072) (1,661)
Reissuance of Treasury Stock 787 1,069
------------ -------------
Balance at End of Period $(4,285) $(2,436)
------------ -------------
Total Stockholders' Equity $ 23,973 $ 23,268
============ =============
- ------------------------------------------------------------------------------------------------------------------------------
Comprehensive Income
Net Income $ 1,360 $ 1,173
Other Comprehensive Income (Loss) 85 (491)
------------ -------------
Comprehensive Income $ 1,445 $ 682
============ =============
Unaudited
</TABLE>
<PAGE>
THE CHASE MANHATTAN CORPORATION
CREDIT RELATED INFORMATION
(in millions)
<TABLE>
<CAPTION>
% %
Credit-Related Assets Over/(Under) Nonperforming Assets Over/(Under)
------------------------- -------------------------
March 31, 2000 1999 1999 2000 1999 1999
- ------------------------------------------- ------------ ------------ ---------- ------------ ----------- ----------
CONSUMER LOANS
Domestic Consumer:
<S> <C> <C> <C> <C> <C> <C>
1-4 Family Residential Mortgages $ 44,573 $41,822 7% $ 284 $ 314 (10%)
Credit Card - Reported 13,407 13,013 3% 37 (a) -- NM
Credit Card Securitizations (b) 18,811 18,382 2% -- -- NM
------------ ------------ ------------ -----------
Credit Card - Managed 32,218 31,395 3% 37 -- NM
Auto Financings 18,520 17,575 5% 74 51 45%
Other Consumer 6,866 7,911 (13%) 6 8 (25%)
------------ ------------ ------------ -----------
Total Domestic Consumer 102,177 98,703 4% 401 373 8%
Total Foreign Consumer 2,817 2,841 (1%) 19 26 (27%)
------------ ------------ ------------ -----------
Total Consumer Loans 104,994 101,544 3% 420 399 5%
------------ ------------ ------------ -----------
COMMERCIAL LOANS
Domestic Commercial:
Commercial and Industrial 54,398 50,403 8% 398 383 4%
Commercial Real Estate 3,169 4,019 (21%) 52 59 (12%)
------------ ------------ ------------ -----------
Total Domestic Commercial 57,567 54,422 6% 450 442 2%
Total Foreign Commercial 31,707 35,265 (10%) 692 676 2%
------------ ------------ ------------ -----------
Total Commercial Loans 89,274 89,687 -- 1,142 1,118 2%
Derivative and FX Contracts 31,979 28,850 11% 35 32 9%
------------ ------------ ------------ -----------
Total Commercial Credit-Related 121,253 118,537 2% 1,177 1,150 2%
------------ ------------ ------------ -----------
Total Managed Credit-Related $226,247 $220,081 3% 1,597 1,549 3%
============ ============ ------------ -----------
Assets Acquired as Loan Satisfactions 106 125 (15%)
------------ -----------
Total Nonperforming Assets $ 1,703 $ 1,674 2%
============ ===========
</TABLE>
<TABLE>
<CAPTION>
%
First Quarter Over/(Under)
------------ ------------
Net Charge-Offs 2000 1999 1999
- ------------------------------------------- ------------ ------------ ----------
CONSUMER LOANS
Domestic Consumer:
<S> <C> <C> <C>
1-4 Family Residential Mortgages $ 9 $ 1 NM
Credit Card - Reported 188 216 (13%)
Credit Card Securitizations (b) 254 269 (6%)
------------ ------------
Credit Card - Managed 442 485 (9%)
Auto Financings 21 19 11%
Other Consumer 43 48 (10%)
------------ ------------
Total Domestic Consumer 515 553 (7%)
Total Foreign Consumer 9 9 --
------------ ------------
Total Consumer Loans 524 562 (7%)
------------ ------------
COMMERCIAL LOANS
Domestic Commercial:
Commercial and Industrial 44 45 (2%)
Commercial Real Estate (2) (9) NM
------------ ------------
Total Domestic Commercial 42 36 17%
Total Foreign Commercial 30 51 (41%)
------------ ------------
Total Commercial Loans 72 87 (17%)
------------ ------------
Total Managed Net Charge-offs $ 596 $ 649 (8%)
============ ============
(a) Includes currently performing loans placed on a cash basis because of concerns as to collectibility.
(b) Represents the portion of Chase's credit card receivables that have been securitized.
NM - Not meaningful
Unaudited
</TABLE>
<PAGE>
THE CHASE MANHATTAN CORPORATION
CREDIT RELATED INFORMATION (Continued)
<TABLE>
<CAPTION>
As of or For The
Three Months Ended
MANAGED CREDIT CARD PORTFOLIO * March 31,
-----------------------
----------- ----------
(in millions, except ratios) 2000 1999
- ----------------------------------------------- ----------- ----------
<S> <C> <C>
Average Credit Card Receivables $33,290 $32,093
Past Due 90 Days or More and Accruing $ 585 $ 627
As a Percentage of Average Credit Card Receivables 1.76% 1.95%
Net Charge-offs $ 450 $ 490
As a Percentage of Average Credit Card Receivables 5.41% 6.11%
* Includes domestic and international consumer and commercial activity.
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE CHASE MANHATTAN CORPORATION
CONDENSED AVERAGE CONSOLIDATED BALANCE SHEET, INTEREST AND RATES
(Taxable-Equivalent Interest and Rates; in millions)
<TABLE>
First Quarter 2000 First Quarter 1999
--------------------------------------- --------------------------------------
Average Rate Average Rate
Balance Interest (Annualized) Balance Interest (Annualized)
ASSETS
<S> <C> <C> <C> <C> <C> <C>
Liquid Interest-Earning Assets $ 66,227 $ 997 6.05% $ 58,779 $ 983 6.78%
Securities 62,178 939 6.08% 59,132 839 5.75%
Loans 177,038 3,480 7.91% 172,918 3,209 7.53%
Total Interest-Earning Assets 305,443 5,416 7.13% 290,829 5,031 7.02%
Noninterest-Earning Assets 85,696 76,100
Total Assets $ 391,139 $ 366,929
LIABILITIES
Interest-Bearing Deposits $ 172,895 1,965 4.57% $ 162,975 1,598 3.98%
Short-Term and Long-Term Debt 102,319 1,483 5.83% 88,247 1,225 5.63%
Total Interest-Bearing Liabilities 275,214 3,448 5.04% 251,222 2,823 4.56%
Noninterest-Bearing Deposits 50,877 47,980
Other Noninterest-Bearing Liabilities 41,052 43,457
Total Liabilities 367,143 342,659
PREFERRED STOCK OF SUBSIDIARY 550 550
STOCKHOLDERS' EQUITY
Preferred Stock 928 1,028
Common Stockholders' Equity 22,518 22,692
Total Stockholders' Equity 23,446 23,720
Total Liabilities, Preferred Stock of Subsidiary
and Stockholders' Equity $ 391,139 $ 366,929
INTEREST RATE SPREAD 2.09% 2.46%
NET INTEREST INCOME AND NET YIELD
ON INTEREST-EARNING ASSETS $1,968 2.59% $ 2,208 3.08%
NET INTEREST INCOME AND NET YIELD
ON INTEREST-EARNING ASSETS (a) $ 2,296 2.85% $ 2,535 3.33%
(a) Excludes the impact of the credit card securitizations.
Unaudited
</TABLE>
<PAGE>
THE CHASE MANHATTAN CORPORATION
Chase Capital Partners (including Chase H&Q)
(in millions)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
March 31, 2000 December 31, 1999
-------------------------- -----------------------------
Carrying Carrying
Value Cost Value Cost
------------ ------------ ------------- ------------
<S> <C> <C> <C> <C>
Total Public Securities (181 companies) $ 2,963 $ 725 $ 2,735 $ 741
Total Private Direct Investments (800 companies) 5,279 5,404 4,275 4,406
Total Private Fund Investments (357 funds) 2,190 2,192 1,881 1,899
------------ ------------ ------------- ------------
Total Investment Portfolio $ 10,432 $ 8,321 $ 8,891 $ 7,046
============ ============ ============= ============
- ---------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
Public Securities Investments at March 31, 2000 *
(dollars and shares in millions)
Quoted
Public
Symbol Shares Value Cost
--------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
TRITON PCS HOLDING, INC. TPCS 11.7 $ 698 $ 50
TELECORP PCS TLCP 12.4 640 8
STARMEDIA NETWORK, INC. STRM 11.1 334 28
SEAT - PATINE GIALLE SPA SPG IM ** 328 12
AMERICAN TOWER SYSTEMS AMT 6.2 304 18
IXL ENTERPRISES, INC. IIXL 7.6 211 28
ITXC CORP. ITXC 3.9 185 6
FISHER SCIENTIFIC FSH 4.1 182 39
DIGITAL ISLAND ISLD 2.3 138 10
COBALT NETWORKS, INC. COBT 2.0 95 5
------------ -------------
Top Ten Public Securities $ 3,115 $ 204
Other Public Securities (171 companies) 1,286 521
============ =============
Total Public Securities (181 companies) $ 4,401 $ 725
============ =============
* - Publicly traded positions only.
** - Owned through a limited partnership.
-------------------------------------------------------------------------------------------------
</TABLE>
Policy:
Public securities held by Chase Capital Partners and Chase H&Q are
marked-to-market at the quoted public value less liquidity discounts, with the
resulting unrealized gains/losses included in the income statement. Chase's
valuation policy for public securities incorporates the use of these liquidity
discounts and price averaging methodologies in certain circumstances to take
into account the fact that Chase can not immediately realize such public quoted
values due to the numerous regulatory, corporate and contractual sales
restrictions. Private investments are carried at cost, with the exception of
holdings in which a subsequent investment by an unaffiliated party indicates a
valuation in excess of cost and holdings for which evidence of an
other-than-temporary decline in value exists.
