<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For The Quarterly Period Ended September 30, 1994.
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 1-8552
BANC ONE CORPORATION
--------------------
(Exact name of registrant as specified in its charter)
Ohio 31-0738296
---- ----------
(State or other jurisdiction of incorporation or (IRS Employer I.D. Number)
organization)
100 East Broad Street, Columbus, Ohio 43271-0251
-----------------------------------------------------
(Address of principal executive offices) (Zip Code)
(614) 248-5944
--------------
(Registrant's telephone number, including area code)
N/A
---
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS;
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes No N/A
APPLICABLE ONLY TO CORPORATE ISSUERS;
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common stock, no par value, $5 stated value, shares outstanding at
October 31, 1994 405,925,602
<PAGE> 2
BANC ONE CORPORATION AND SUBSIDIARIES
PART I
FINANCIAL INFORMATION
<PAGE> 3
<TABLE>
BANC ONE CORPORATION and Subsidiaries
- - - - -----------------------------------------------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET
<CAPTION>
September 30, December 31, September 30,
$(thousands, except share amounts) (unaudited) 1994 1993 1993
- - - - -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Cash and due from banks........................................ $ 5,070,208 $ 5,009,889 $ 4,827,816
Short-term investments......................................... 905,726 1,049,715 1,235,596
SECURITIES
Securities held to maturity.................................... 5,013,878 17,403,888 16,682,348
Securities held for sale....................................... 815,941 933,461
Securities available for sale (at fair value,
cost $12,470,672 at September 30, 1994)...................... 12,141,021
----------- ----------- -----------
TOTAL SECURITIES (fair value approximates
$17,191,000 at September 30, 1994)....................... 17,154,899 18,219,829 17,615,809
Loans and leases............................................... 61,647,354 57,520,375 54,577,075
Reserve for loan and lease losses.............................. 955,157 967,254 964,254
----------- ----------- -----------
NET LOANS AND LEASES....................................... 60,692,197 56,553,121 53,612,821
Other assets:
Bank premises and equipment, net............................. 1,491,350 1,459,611 1,427,009
Interest earned, not collected............................... 628,848 657,030 621,726
Other real estate owned...................................... 90,475 153,260 169,416
Excess of cost over net assets of affiliates purchased....... 238,260 266,723 271,391
Other........................................................ 1,891,760 1,465,478 1,527,111
----------- ----------- -----------
Total other assets......................................... 4,340,693 4,002,102 4,016,653
----------- ----------- -----------
TOTAL ASSETS............................................... $88,163,723 $84,834,656 $81,308,695
=========== =========== ===========
LIABILITIES
DEPOSITS
Non-interest bearing......................................... $13,739,282 $14,493,954 $13,367,464
Interest bearing............................................. 52,170,419 50,528,446 49,719,182
----------- ----------- -----------
TOTAL DEPOSITS............................................. 65,909,701 65,022,400 63,086,646
Federal funds purchased and repurchase agreements.............. 6,737,521 6,965,626 5,825,348
Other short-term borrowings.................................... 4,589,177 2,091,574 1,597,975
Long-term borrowings........................................... 1,837,147 1,805,272 1,812,721
Accrued interest payable....................................... 292,702 239,101 233,949
Other liabilities.............................................. 1,034,358 1,277,513 1,603,922
----------- ----------- -----------
TOTAL LIABILITIES.......................................... 80,400,606 77,401,486 74,160,561
----------- ----------- -----------
STOCKHOLDERS' EQUITY
Preferred stock, 35,000,000 shares authorized:
Series C convertible, no par value, 4,998,000, 4,998,000 and
5,000,000 shares issued and outstanding, respectively...... 249,900 249,900 250,000
Common stockholders' equity:
Common stock, no par value, $5 stated value, 600,000,000 shares
authorized, 408,631,080, 405,431,665 (December 31, 1993
shares reflect the 10% common stock dividend, effective
February 10, 1994), 365,521,241 shares issued, respectively 2,043,155 2,027,158 1,827,606
Capital in excess of aggregate stated value of common stock.. 3,790,432 3,836,443 2,641,708
Retained earnings............................................ 1,985,178 1,319,669 2,428,820
Net unrealized holding losses on securities available for sale (207,661)
----------- ----------- -----------
TOTAL STOCKHOLDERS' EQUITY BEFORE TREASURY STOCK........... 7,861,004 7,433,170 7,148,134
Less: treasury stock (2,900,700 shares), at cost......... 97,887
----------- ----------- -----------
TOTAL STOCKHOLDERS' EQUITY................................. 7,763,117 7,433,170 7,148,134
----------- ----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY................. $88,163,723 $84,834,656 $81,308,695
=========== =========== ===========
<FN>
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE> 4
<TABLE>
BANC ONE CORPORATION and Subsidiaries
- - - - ----------------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF INCOME
<CAPTION>
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
------------------------ ---------------------
$(thousands, except per share amounts) (unaudited) 1994 1993 1994 1993
- - - - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans and leases................ $1,365,782 $1,257,467 $3,986,468 $3,765,900
Interest and dividends on:
Taxable securities................................. 228,300 194,740 669,492 644,757
Tax exempt securities.............................. 33,963 32,358 103,224 99,485
Other interest income................................ 8,326 10,301 24,113 33,231
---------- ---------- ---------- ----------
TOTAL INTEREST INCOME.............................. 1,636,371 1,494,866 4,783,297 4,543,373
INTEREST EXPENSE
Interest on deposits:
Demand and savings deposits........................ 186,683 157,680 517,772 485,720
Time deposits...................................... 254,101 201,499 667,108 640,464
Interest on borrowings............................... 165,644 77,136 411,052 214,544
---------- ---------- ---------- ----------
TOTAL INTEREST EXPENSE............................. 606,428 436,315 1,595,932 1,340,728
---------- ---------- ---------- ----------
NET INTEREST INCOME................................ 1,029,943 1,058,551 3,187,365 3,202,645
Provision for loan and lease losses.................... 75,940 99,659 206,650 275,560
---------- ---------- ---------- ----------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN AND LEASE LOSSES........................ 954,003 958,892 2,980,715 2,927,085
NON-INTEREST INCOME
Income from fiduciary activities..................... 53,449 56,150 171,746 167,787
Service charges on deposit accounts.................. 125,029 112,416 355,739 334,411
Loan processing and servicing income................. 116,729 121,592 338,102 336,433
Securities gains (losses)............................ (12,975) 2,971 (6,785) 11,593
Income from management of Collection pools, net...... 6,272 6,527 16,218 16,322
Other................................................ 165,406 96,554 359,881 274,471
---------- ---------- ---------- ----------
TOTAL NON-INTEREST INCOME.......................... 453,910 396,210 1,234,901 1,141,017
NON-INTEREST EXPENSE
Salaries and related costs........................... 427,290 430,317 1,294,518 1,266,588
Net occupancy expense, exclusive of depreciation..... 44,849 40,800 127,094 117,818
Equipment expense.................................... 29,293 28,300 87,608 83,004
Taxes other than income and payroll.................. 21,275 20,972 43,766 63,883
Depreciation and amortization........................ 94,507 63,123 233,052 207,631
Outside services and processing...................... 137,050 121,590 385,783 375,975
Marketing and development............................ 35,215 35,509 109,884 109,880
Communication and transportation..................... 60,811 57,018 180,147 170,190
Other................................................ 128,605 111,046 321,784 353,667
---------- ---------- ---------- ----------
TOTAL NON-INTEREST EXPENSE......................... 978,895 908,675 2,783,636 2,748,636
---------- ---------- ---------- ----------
INCOME BEFORE INCOME TAXES AND CUMULATIVE EFFECT
OF CHANGE IN ACCOUNTING PRINCIPLE.................... 429,018 446,427 1,431,980 1,319,466
Income tax (provision) benefit
Income excluding securities transactions............. (150,347) (149,087) (493,623) (443,547)
Securities transactions.............................. 4,541 (1,126) 2,375 (4,057)
---------- ---------- ---------- ----------
Provision for income taxes......................... (145,806) (150,213) (491,248) (447,604)
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE................................. 283,212 296,214 940,732 871,862
Cumulative effect of change in method of accounting
for income taxes................................... 19,391
---------- ---------- ---------- ----------
NET INCOME........................................... $283,212 $296,214 $940,732 $891,253
========== ========== ========== ==========
NET INCOME PER COMMON SHARE
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE............................... $.68 $.73 $2.27 $2.14
Cumulative effect of change in method of accounting
for income taxes................................. .05
---------- ---------- ---------- ----------
NET INCOME PER COMMON SHARE............................ $.68 $.73 $2.27 $2.19
========== ========== ========== ==========
Weighted average common shares outstanding (000)..... 408,963 401,411 408,115 400,864
========== ========== ========== ==========
<FN>
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE> 5
Banc One Corporation
Consolidated Statement of Cash Flows
For the nine months ended ended September 30, 1994 and 1993
$ (thousands) (unaudited)
<TABLE>
<CAPTION>
1994 1993
----------- -----------
<S> <C> <C>
Cash provided by (used in) operating activities:
Net Income $ 940,732 $ 891,253
Adjustments:
Provision for loan and lease losses 206,650 275,560
Depreciation and amortization 327,907 271,579
Net decrease in trading account 100,140 29,610
Net decrease (increase) in warehoused mortgage loans 967,997 (272,827)
Net change in deferred loan fees and costs (12,818) (10,396)
Securities (gains) losses 6,785 (11,593)
Gain on sale of loans and other assets (69,986) (20,290)
Net (increase) decrease in other assets (367,090) 19,510
Net decrease in other liabilities (96,933) (143,949)
Net change in deferred income taxes 121,069 8,976
Cummulative effect of change in accounting principle (19,391)
------------ -----------
Net cash provided by operating activities 2,124,453 1,018,042
------------ -----------
Cash provided by (used in) investing activities:
Purchases of securities available/held for sale (7,528,764) (350,000)
Purchases of securities held to maturity (790,150) (4,152,437)
Maturities of securities available/held for sale 1,521,421 315,665
Maturities of securities held to maturity 2,054,876 4,885,555
Proceeds from the sales of securities available/held for sale 5,295,836 759,609
Proceeds from the sales of securities held to maturity 115,352
Net increase in loans, excluding sales and purchases (5,822,061) (2,453,520)
Proceeds from the sales of loans and other assets 1,416,447 204,389
Purchases of loans and related premiums (558,037) (507,247)
Net decrease in short-term investments 183,589 1,212,214
Additions to bank premises and equipment (223,692) (217,749)
Net cash acquired in acquisitions 1,180,497 0
All other investing activities - net 1,539 12,095
------------ -----------
Net cash used in investing activities (3,268,499) (176,074)
------------ -----------
Cash provided by (used in) financing activities:
Net decrease in demand deposit, money market
and savings accounts (2,362,724) (1,040,317)
Net increase (decrease) in time deposits 1,812,413 (1,437,025)
Net increase in short-term borrowings 2,262,022 1,029,587
Proceeds from issuance of long-term borrowings 55,642 475,813
Repayment of long-term borrowings (23,767) (59,895)
Cash dividends paid (492,335) (387,891)
Other, net decrease (46,886) (34,111)
------------ ------------
Net cash provided by (used in) financing activities 1,204,365 (1,453,839)
------------ ------------
Increase (decrease) in cash and cash equivalents 60,319 (611,871)
Cash and cash equivalents at January 1, 5,009,889 5,439,687
------------ ------------
Cash and cash equivalents at September 30, $ 5,070,208 $ 4,827,816
============ ============
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE> 6
Supplemental Disclosures for Statement of Cash Flows
Supplemental disclosures of noncash investing and financing activities, and
additional disclosures for the nine months ended September 30, 1994 and
1993, are as follows:
<TABLE>
<CAPTION>
$(thousands)(unaudited) 1994 1993
- - - - ---------------------------------------------------------------------------- ------------- ----------
<S> <C> <C>
Common stock issued in purchase acquisitions $ $ 9,518
============ ===========
Transfer from Other Assets to securities $ 3,330 $
============ ===========
Transfer from loans to other real estate owned $ 48,915 $ 122,539
============ ===========
Net increase (decrease) in Trade Date Accounting entries for securities
transactions $ (117,344) 524,478
============ ===========
Loans issued to facilitate the sale of OREO Properties $ 22,879 $ 17,178
============ ===========
Net Unrealized holding losses on securities available for sale (retained
earnings effect, net of taxes ($207,350)) $ 329,652 $
============ ===========
Additional Disclosures:
- - - - ----------------------
Interest Paid $ 1,546,045 $ 1,382,970
============ ===========
Income Taxes Paid $ 399,537 $ 410,973
============ ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 7
<TABLE>
BANC ONE CORPORATION and Subsidiaries
- - - - ------------------------------------------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<CAPTION>
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
-------------------------- --------------------------
$(thousands, except per share amounts) (unaudited) 1994 1993 1994 1993
- - - - ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BALANCE, BEGINNING OF PERIOD....................... $7,688,899 $6,969,918 $7,433,170 $6,594,813
Net income......................................... 283,212 296,214 940,732 891,253
Exercise of stock options,
net of shares purchased.......................... (769) (3,914) (4,558) (44,160)
Shares issued in acquisitions...................... 3,609 33,824
Pooled affiliate stock issuance and other.......... 230 338 377 19,763
Cash dividends:
Corporation:
Common ($.31 and $.28 per share for the
three months and $.93 and $.79 per share
for the nine months ended September 30,
1994 and 1993)................................. (126,105) (105,721) (363,292) (282,361)
Class B Preferred ($.75 per share)................. (216)
Series C Preferred ($.88 per share for the
three months and $2.63 per share for the
nine months ended September 30, 1994 and 1993)... (4,373) (4,375) (13,119) (13,125)
Pooled affiliates................................ (4,326) (10,040) (17,833)
Sale of stock to employee benefit plans............ 7,802 51,571
Net unrealized holding losses on securities
available for sale............................... (16,884) (207,661)
Purchase of treasury stock......................... (72,504) (97,887)
---------- ---------- ---------- ----------
BALANCE, SEPTEMBER 30.............................. $7,763,117 $7,148,134 $7,763,117 $7,148,134
========== ========== ========== ==========
<FN>
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
- - - - ------------------------------------------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF RESERVE FOR LOAN AND LEASE LOSSES
<CAPTION>
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
-------------------------- --------------------------
$(thousands, except per share amounts) (unaudited) 1994 1993 1994 1993
- - - - ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BALANCE, BEGINNING OF PERIOD....................... $955,078 $968,108 $967,254 $952,174
Acquired reserves, net............................. 349 1,558 6,381 4,721
Provision for loan and lease losses................ 75,940 99,659 206,650 275,560
Losses charged to the reserve...................... (126,470) (146,203) (379,359) (421,224)
Recoveries......................................... 50,260 41,132 154,231 153,023
-------- -------- -------- --------
Net losses charged to the reserve.................. (76,210) (105,071) (225,128) (268,201)
-------- -------- -------- --------
BALANCE, SEPTEMBER 30.............................. $955,157 $964,254 $955,157 $964,254
======== ======== ======== ========
<FN>
The accompanying notes are an integral part of the financial statements.
- - - - ------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTES TO THE FINANCIAL STATEMENTS
1. The accompanying financial statements are unaudited. However, in the opinion
of management, they contain the adjustments (all of which are normal and
recurring in nature) necessary to present fairly the financial position and the
results of operations. The notes to the financial statements contained in the
Annual Report for December 31, 1993 should be read in conjunction with these
financial statements. "The Corporation" is defined as parent company only.
"BANC ONE" is defined as the Corporation and all significant majority-owned
subsidiaries.
2. The year-to-date provision for income taxes is at a rate which management
believes will approximate the effective rate for the year.
3. On August 15, 1994, the Corporation acquired all of the outstanding shares
of Liberty National Bancorp, Inc. ("Liberty") of Louisville, Kentucky, in
exchange for 24.8 million shares of BANC ONE common stock. Liberty had total
assets of approximately $5.3 billion at August 15, 1994. This acquisition has
been accounted for as a pooling of interests and accordingly, the accompanying
financial statements have been restated.
Pre-tax merger expenses of $39 million related to the Liberty acquisition were
charged to expense during 1994. The after tax impact of these expenses on
earnings per share was $.06 for the first nine months of 1994. As of September
30, 1994, BANC ONE had two pending acquisitions which had combined assets of
approximately $373 million at June 30, 1994.
On September 8, 1994, the Corporation signed a definitive agreement for
the sale of its four Michigan banks to Citizens Banking Corporation of Flint,
Michigan. The sale pending approval from the regulators, is expected to close
in the first quarter of 1995, and is expected to result in a gain that will be
recognized upon closing.
4. In January 1994, the Board of Directors approved the purchase of up to 10
million shares of BANC ONE common stock for use in the acquisition of Premier
Bancorp, Inc., in Baton Rouge, Louisiana. As of September 30, 1994, the
Corporation had acquired and held 2.9 million of its shares for this purpose.
BANC ONE has an option to purchase Premier Bancorp between June 30, 1995 and
March 31, 1997. Premier Bancorp had assets of approximately $4.2 billion at
December 31, 1993.
5. In January 1994, BANC ONE adopted Statement of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and Equity
Securities" (SFAS 115), which specifies the accounting for investments in
securities that have readily determinable fair values. Upon adoption, the
Corporation transferred approximately $11 billion of securities at amortized
cost from the held to maturity and held for sale portfolios to the available
for sale portfolio. Securities available for sale were adjusted to fair value,
as required, and a net unrealized gain of $84 million, after tax, was recorded
as a separate component of common stockholders' equity. At September 30, 1994,
the net unrealized loss in this separate component of equity was $208 million.
6. Mortgage loans held for sale were $324 million, $1.3 billion and $1.1
billion at September 30, 1994, December 31, 1993 and September 30, 1993,
respectively. Such loans are carried at the lower of cost or market determined
on an aggregate basis. Mortgage loans held for sale were adjusted on this
basis, resulting in a loss of $1 million at September 30, 1994. Credit card
loans of approximately $2 billion were held for sale at September 30, 1994.
7. Certain prior period amounts have been reclassified to compare with current
presentation.
<PAGE> 8
<TABLE>
- - - - -----------------------------------------------------------------------------------------------------------------
AVERAGE BALANCES, INCOME AND EXPENSE, YIELDS AND RATES(1)(2)
<CAPTION>
1994
--------------------------------------------------------------------------------
3rd Quarter 2nd Quarter
----------------------------------- ------------------------------------
Average Income/ Yield/ Average Income/ Yield/
$(thousands) (unaudited) Balance Expense Rate Balance Expense Rate
- - - - -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Short-term investments........ $ 725,473 $ 9,114 4.98% $ 785,754 $ 8,260 4.22%
Securities(3)
Taxable..................... 16,533,740 228,440 5.48 18,121,937 244,988 5.42
Tax exempt.................. 2,350,704 50,274 8.48 2,383,837 51,330 8.64
----------- ---------- ----------- ----------
Total securities............ 18,884,444 278,714 5.86 20,505,774 296,318 5.80
Loans and leases(4)
Commercial.................. 15,576,172 294,848 7.51 15,442,813 288,728 7.50
Real estate................. 18,240,188 388,841 8.46 17,673,768 372,144 8.45
Consumer, net............... 19,353,980 406,106 8.32 18,745,464 386,025 8.26
Credit card................. 6,569,145 259,612 15.68 6,192,301 241,969 15.67
Leases, net................. 1,183,974 21,471 7.19 1,142,610 21,237 7.45
Reserve for loan and lease
losses.................... (959,563) (975,393)
----------- ---------- ----------- ----------
Net loans and leases.......... 59,963,896 1,370,878 9.07 58,221,563 1,310,103 9.03
----------- ---------- ----------- ----------
Total earning assets.......... 79,573,813 1,658,706 8.27 79,513,091 1,614,681 8.15
Other assets.................. 8,680,130 8,835,774
----------- -----------
Total assets.................. $88,253,943 $88,348,865
=========== ===========
LIABILITIES
Deposits
Non-interest bearing demand. $13,396,649 $13,337,867
Interest bearing demand..... 9,221,459 43,028 1.85 9,391,993 40,556 1.73
Savings..................... 7,719,171 50,136 2.58 7,995,612 46,917 2.35
Money market savings
accounts.................. 12,342,637 93,519 3.01 12,319,317 84,504 2.75
Time deposits:
CDs less than $100,000...... 18,126,913 201,933 4.42 17,171,010 169,341 3.96
CDs $100,000 and over:
Domestic.................. 3,593,945 38,314 4.23 3,548,580 34,382 3.89
Foreign................... 1,260,777 13,854 4.36 1,231,561 12,162 3.96
----------- ---------- ----------- ----------
Total deposits.............. 65,661,551 440,784 2.66 64,995,940 387,862 2.39
Borrowed funds:
Short-term.................. 11,603,887 128,415 4.39 12,478,527 120,229 3.86
Long-term................... 1,839,595 37,229 8.03 1,843,993 29,070 6.32
----------- ---------- ----------- ----------
Total borrowed funds........ 13,443,482 165,644 4.89 14,322,520 149,299 4.18
----------- ---------- ----------- ----------
Total interest bearing
liabilities................. 65,708,384 606,428 3.66 65,980,593 537,161 3.27
Other liabilities............. 1,433,934 1,429,629
----------- -----------
Total liabilities............. 80,538,967 80,748,089
Preferred stock............... 249,900 249,900
Common stockholders' equity... 7,465,076 7,350,876
----------- -----------
Total liabilities, common
equity and preferred stock.. $88,253,943 $88,348,865
=========== ===========
Net interest income(5)........ 1,052,278 5.25 1,077,520 5.43
Provision for loan and
lease losses(5)............. (75,940) (.38) (50,538) (.25)
---------- ----- ---------- -----
Net funds function(5)......... $ 976,338 4.87% $1,026,982 5.18%
========== ===== ========== =====
<FN>
(1) Fully taxable equivalent basis.
(2) Yields and rates are annualized based on actual days in reporting period.
(3) As a percent of average earning assets.
(4) Nonaccrual loans are included in loan balances.
(5) Average balance is based on amortized historical cost (excluding SFAS 115 adjustments to market value).
</TABLE>
<PAGE> 9
<TABLE>
1994
- - - - ----------------------------------------------------------------------------
1st Quarter
- - - - ----------------------------------------------------------------------------
Average Income/ Yield/
Balance Expense Rate
- - - - ----------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Short-term investments $ 1,062,206 $ 9,386 3.58%
Securities(5)
Taxable 15,316,104 196,458 5.20
Tax exempt 2,345,403 51,547 8.91
----------- ----------
Total securities 17,661,507 248,005 5.69
Loans and leases(4)
Commercial 15,014,691 288,171 7.78
Real estate 17,542,980 365,481 8.45
Consumer, net 17,901,530 409,930 9.29
Credit card 6,081,136 235,239 15.69
Leases, net 1,113,538 20,835 7.59
Reserve for loan and lease losses (973,954)
-----------
Net loans and leases 56,679,921 1,319,656 9.44
----------- ----------
Total earning assets 75,403,634 1,577,047 8.48
Other assets 9,038,031
-----------
Total assets $84,441,665
===========
LIABILITIES
Deposits
Non-interest bearing demand $13,433,100
Interest bearing demand 9,356,794 38,649 1.68
Savings 7,796,079 42,580 2.22
Money market savings accounts 12,215,832 77,883 2.59
Time deposits:
CDs less than $100,000 16,903,025 154,940 3.72
CDs $100,000 and over:
Domestic 3,884,504 34,320 3.58
Foreign 954,627 7,862 3.34
----------- ----------
Total deposits 64,543,961 356,234 2.24
Borrowed funds:
Short-term 9,016,547 69,697 3.13
Long-term 1,811,111 26,412 5.91
----------- ----------
Total borrowed funds 10,827,658 96,109 3.60
----------- ----------
Total interest bearing liabilities 61,938,519 452,343 2.96
Other liabilities 1,476,229
-----------
Total liabilities 76,847,848
Preferred stock 249,900
Common stockholders' equity 7,343,917
-----------
Total liabilities, common equity
and preferred stock $84,441,665
===========
Net interest income(3) 1,124,704 6.05
Provision for loan and lease losses(3) (80,172) (.43)
----------
Net funds function(3) $1,044,532 5.62%
========== ====
</TABLE>
<TABLE>
<CAPTION>
1993
-----------------------------------------------------------------------------------
4th Quarter 3rd Quarter
------------------------------------- --------------------------------------
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate
- - - - ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Short-term investments $ 918,293 $ 8,163 3.53% $ 1,317,449 $ 11,558 3.48%
Securities(5)
Taxable 15,230,986 200,273 5.22 14,185,992 194,953 5.45
Tax exempt 2,149,255 48,902 9.03 2,009,638 47,993 9.47
---------- ---------- ----------- ----------
Total securities 17,380,241 249,175 5.69 16,195,630 242,946 5.95
Loans and leases(4)
Commercial 14,744,284 289,690 7.79 14,488,883 294,650 8.07
Real estate 17,371,366 373,725 8.54 16,949,075 372,822 8.73
Consumer, net 16,820,915 368,413 8.69 15,995,901 357,878 8.88
Credit card 5,561,646 224,533 16.02 5,199,257 217,686 16.61
Leases, net 1,076,880 21,591 7.95 1,005,729 20,543 8.10
Reserve for loan and lease losses (962,971) (971,016)
---------- ---------- ----------- -----------
Net loans and leases 54,612,120 1,277,952 9.28 52,667,829 1,263,579 9.52
---------- ---------- ----------- -----------
Total earning assets 72,910,654 1,535,290 8.35 70,180,908 1,518,083 8.58
Other assets 8,994,776 8,805,357
---------- -----------
Total assets $81,905,430 $78,986,265
=========== ===========
LIABILITIES
Deposits
Non-interest bearing demand $13,650,953 $12,794,723
Interest bearing demand 9,056,531 34,720 1.52 8,719,058 33,306 1.52
Savings 7,599,390 44,464 2.32 7,353,674 45,290 2.44
Money market savings accounts 11,940,696 78,133 2.60 12,010,347 79,085 2.61
Time deposits:
CDs less than $100,000 17,064,647 150,318 3.49 17,592,365 166,750 3.76
CDs $100,000 and over:
Domestic 3,693,441 36,280 3.90 3,259,043 28,624 3.48
Foreign 927,120 7,592 3.25 722,830 6,124 3.36
---------- ---------- ----------- -----------
Total deposits 63,932,778 351,507 2.18 62,452,040 359,179 2.28
Borrowed funds:
Short-term 7,567,546 56,085 2.94 6,474,240 50,350 3.09
Long-term 1,808,817 27,431 6.02 1,689,976 26,786 6.29
---------- ---------- ----------- -----------
Total borrowed funds 9,376,363 83,516 3.53 8,164,216 77,136 3.75
---------- ---------- ----------- ----------
Total interest bearing liabilities 59,658,188 435,023 2.89 57,821,533 436,315 2.99
Other liabilities 1,498,022 1,353,727
---------- -----------
Total liabilities 74,807,163 71,969,983
Preferred stock 249,969 250,000
Common stockholders' equity 6,848,298 6,766,282
---------- -----------
Total liabilities, common equity
and preferred stock $81,905,430 $78,986,265
=========== ===========
Net interest income(3) 1,100,267 5.98 1,081,768 6.11
Provision for loan and lease losses(3) (112,701) (.61) (99,659) (.56)
---------- ----------
Net funds function(3) $ 987,566 5.37% $ 982,109 5.55%
========== ==== ========== ====
</TABLE>
<PAGE> 10
<TABLE>
- - - - -----------------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED QUARTERLY FINANCIAL DATA
<CAPTION>
Quarters
--------------------------------------------------------
1994 1993
-------------------------------- ------------------ Last 12
$(millions, except per share amounts) (unaudited) Third Second First Fourth Third Months
- - - - -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
KEY RATIOS
Return on average assets(1)......................... 1.27% 1.50% 1.57% 1.45% 1.49% 1.45%
Return on average common equity(1).................. 14.82 17.80 17.81 17.14 17.11 16.89
Return on average total equity(1)................... 14.56 17.44 17.46 16.78 16.75 16.56
Average common equity to assets..................... 8.46 8.32 8.70 8.36 8.57 8.46
Average total equity to assets...................... 8.74 8.60 8.99 8.67 8.88 8.75
MARGIN ANALYSIS(1),(2),(3)
Interest income................................... 8.27 8.15 8.48 8.35 8.58 8.31
Interest expense.................................. 3.02 2.72 2.43 2.37 2.47 2.63
------ ------ ------ ------ ------ ------
Net interest income............................... 5.25 5.43 6.05 5.98 6.11 5.68
Provision for loan and lease losses............... .38 .25 .43 .61 .56 .42
------ ------ ------ ------ ------ ------
Net funds function................................ 4.87 5.18 5.62 5.37 5.55 5.26
CREDIT ANALYSIS
Net charge-offs to average loans and leases(1)...... .50 .49 .54 .87 .78 .60%
Ending reserves to loans and leases................. 1.55% 1.58% 1.66% 1.68% 1.77%
Nonperforming assets:
Total............................................. $524.2 $523.7 $600.2 $643.2 $698.2
Percent of total loans and leases................. .85% .87% 1.02% 1.12% 1.28%
Loans deliquent over 90 days(4):
Total............................................. $195.4 $211.9 $189.0 207.8 $220.3
Percent of total loans and leases................. .32% .35% .32% .36% .40%
PER SHARE DATA
Net income(5)....................................... $ .68 $ .80 $ .79 $ .74 $ .73 $ 3.01
Cash dividends(5)................................... .31 .31 .31 .28 .28 1.21
Book value(5)....................................... 18.52 18.25 18.12 17.72 17.26
Common stock price(5):
High.............................................. $35.50 $38.00 $35.47 $39.77 $42.19 $39.77
Low............................................... 29.50 30.75 31.88 32.27 34.55 29.50
Close............................................. $30.00 $34.25 $33.00 $35.57 $37.73
Preferred Series C stock price:
High.............................................. $63.75 $68.25 $68.75 $74.63 $73.25 $74.63
Low............................................... 57.00 57.50 60.50 66.63 72.75 57.00
Close............................................. $57.50 $62.50 $61.00 $68.75 $73.25
SHARES TRADED (000)
Common............................................ 46,939 55,251 68,124 54,635 39,072 224,949
Preferred Series C................................ 892 1,200 2,851 2,082 1,712 7,025
<FN>
(1) Ratios presented on an annualized basis.
(2) Fully taxable equivalent basis.
(3) As a percent of average earning assets.
(4) Excluding nonperforming loans.
(5) Applicable amounts have been restated for the 10% common stock dividend, effective February 10, 1994.
</TABLE>
<PAGE> 11
<TABLE>
BANC ONE CORPORATION and Subsidiaries
- - - - ------------------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED QUARTERLY FINANCIAL DATA
<CAPTION>
Quarters
----------------------------------------------------------
1994 1993
--------------------------------- --------------------- Last 12
$(millions) (unaudited) Third Second First Fourth Third Months
- - - - --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PERIOD END BALANCES
Loans and leases (net of unearned)................ $61,647.4 $60,512.5 $58,631.8 $57,520.4 $54,577.1
Earning assets.................................... 78,752.8 80,334.2 79,614.5 75,822.7 72,464.2
Total assets...................................... 88,163.7 89,812.7 88,453.4 84,834.7 81,308.7
Total deposits.................................... 65,909.7 66,218.5 64,187.1 65,022.4 63,086.6
Long-term debt.................................... 1,837.1 1,844.4 1,844.3 1,805.3 1,812.7
Reserve for loan and lease losses................. 955.2 955.1 970.9 967.3 964.3
Total stockholders' equity........................ 7,763.1 7,688.9 7,613.4 7,433.2 7,148.1
CONDENSED INCOME STATEMENT
Net interest income(1)............................ 1,052.28 1,077.52 1,124.70 1,100.27 1,081.77 $4,354.77
Provision for loan and lease losses............... 75.94 50.54 80.17 112.70 99.66 319.35
-------- -------- -------- -------- -------- ---------
Net funds function(1)............................. 976.34 1,026.98 1,044.53 987.57 982.11 4,035.42
NON-INTEREST INCOME
Fiduciary income.................................. 53.45 59.28 59.01 57.71 56.15 229.45
Service charges on deposits....................... 125.03 116.64 114.07 116.59 112.42 472.33
Loan processing and service income................ 116.73 114.16 107.22 128.29 121.59 466.40
Securities transactions........................... (12.98) 2.74 3.45 5.52 2.97 (1.27)
Income from management of Collection pools, net... 6.27 4.61 5.34 6.46 6.53 22.68
Other non-interest income......................... 165.41 95.75 98.72 98.46 96.55 458.34
-------- -------- -------- -------- -------- ---------
TOTAL NON-INTEREST INCOME.......................... 453.91 393.18 387.81 413.03 396.21 1,647.93
NON-INTEREST EXPENSE
Salaries and benefits............................. 427.29 425.24 441.99 421.19 430.32 1,715.71
Other non-interest expense........................ 551.61 477.66 459.85 506.12 478.36 1,995.24
-------- -------- -------- -------- -------- ---------
TOTAL NON-INTEREST EXPENSE......................... 978.90 902.90 901.84 927.31 908.68 3,710.95
Taxable equivalent adjustment...................... 22.33 22.81 21.99 22.04 23.22 89.17
-------- -------- -------- -------- -------- ---------
Income before income taxes......................... 429.02 494.45 508.51 451.25 446.42 1,883.23
Income tax provision............................... 145.81 163.88 181.56 151.01 150.21 642.26
-------- -------- -------- -------- -------- ---------
Net income..................................... $ 283.21 $ 330.57 $ 326.95 $ 300.24 $ 296.21 $1,240.97
======== ======== ======== ======== ======== =========
Net income available to common stockholders........ $ 278.84 $ 326.20 $ 322.58 $ 295.87 $ 291.84 $1,223.49
======== ======== ======== ======== ======== =========
<FN>
(1) Fully taxable equivalent basis.
</TABLE>
<PAGE> 12
- - - - --------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS
BANC ONE reported net income of $283 million and $941 million for the three and
nine months ended September 30, 1994, respectively. This represents a decrease
of 4% and an increase of 6% from the same periods in 1993. This discussion
should be read in conjunction with the financial statements, notes and tables
included elsewhere in this report.
BANC ONE's return on average assets was 1.27% and 1.45% for the three and nine
months ended September 30, 1994, compared to 1.49% and 1.52% for the same
periods in 1993. BANC ONE's return on average common equity was 14.82% and
16.79% for the three and nine months ended September 30, 1994, compared to
17.11% and 17.82% for the same periods in 1993.
NET INTEREST INCOME
BANC ONE's net interest income on a fully taxable equivalent (FTE) basis
decreased $29 million and $16 million for the three and nine months ended
September 30, 1994 from the same periods in 1993. Interest income on earning
assets increased $141 million and $240 million over the comparable periods,
while average balances increased $9.4 billion and $8.3 billion. Interest
expense on interest bearing liabilities increased $170 million and $255 million
for the three and nine months ended September 30, 1994, compared to 1993, while
average balances increased $7.9 billion and $6.7 billion for the same periods.
The above income and expense amounts for the third quarter were negatively
affected by BANC ONE's interest rate swaps as described in this section.
The continued growth in average loan balances, primarily consumer and credit
card, combined with the continued increase in market interest rates, resulted
in increases of $107 million and $218 million in fully taxable equivalent
interest income on loans and leases for the three and nine months ended
September 30, 1994. In addition, fully taxable equivalent interest income on
investment securities increased $36 million and $31 million for the three and
nine month periods ended September 30, 1994, due primarily to the purchase of
$3.2 billion of United States Treasury and Agency securities late in the first
quarter. Approximately $2 billion of securities and $1 billion in student loans
were sold during the third quarter of 1994. Reductions in mortgage loan
originations due to rising interest rates have resulted in a decline in
mortgage loans held-for-sale to $324 million at September 30, 1994 compared to
$1.1 billion at September 30, 1993. The average balance of mortgage loans
held-for-sale decreased to $378 million and $663 million for the three and nine
months ended September 30, 1994 from $1 billion and $797 million for the same
periods in 1993, resulting in a reduction in net interest income. As interest
rates move higher, the averqage balance of mortgage loans held-for-sale will
continue at lower levels.
Interest expense on deposits increased $82 million and $59 million for the
three and nine months ended September 30, 1994, compared to 1993, due primarily
to increases in short-term interest rates and increases of $3.2 billion and
$2.4 billion in average deposit balances for the comparable periods.
Additionally, interest expense on borrowed funds increased for the three and
nine months ended September 30, 1994, compared to 1993, due to increases of
$5.2 billion in average year-to-date other borrowed funds balances and the
effects of the current rising interest rate environment.
Earning asset yields declined 31 and 52 basis points for the three and nine
months ended September 30, 1994, as compared to 1993. Funding costs increased
67 and 21 basis points for the three and nine months ended September 30, 1994.
These changes are a result of lower spreads on new loan originations due to
increasingly competitive pricing, contractual repricing lags of earning
assets, the purchase of United States Treasury and Agency securities and the
issuance of bank notes in the first quarter. Should interest rates continue to
increase, a further decline in the net interest margin can be expected as
increased funding costs outpace the increase in yields on earning assets.
In a flat or declining rate environment, it is usually prudent to be liability
sensitive in an effort to protect future earnings. In a rising rate
environment, it is usually prudent to adjust the sensitivity profile to one
which is less liability sensitive. Decisions regarding appropriate sensitivity
levels are made as part of BANC ONE's ongoing asset liability management
process. BANC ONE has entered into programs in both the local and the capital
markets to reduce its liability sensitivity. During the third quarter, BANC ONE
sold approximately $2 billion in fixed rate United States Treasury and Agency
securities, purchased $2 billion in interest rate caps which limit the exposure
to future increases in interest rates and continued to promote BANC ONE's fixed
rate certificates of deposits. These transactions and programs accounted for
approximately one-third of the decrease in the margin for the third quarter.
BANC ONE expects to continue to enter into transactions to reduce its
sensitivity in future periods.
BANC ONE manages its interest rate sensitivity using both on-balance sheet
and off-balance sheet investment products. Off-balance sheet investment
products, primarily interest rate swaps, decreased interest income by $10
million for the three month period and increased interest income by $50
million for the nine month period ended September 30, 1994, as compared to
increases of $55 million and $168 million for the same periods in 1993.
Off-balance sheet investment products decreased deposit and other borrowing
costs $5 million and $83 million for the three and nine month periods ended
September 30, 1994, as compared to decreases of $61 million and $156 million
for the same periods in 1993. The decrease in the contribution to net interest
income from off-balance sheet investment products is primarily the result of
BANC ONE being in a net receive fixed
<PAGE> 13
- - - - --------------------------------------------------------------------------------
position which results in variable interest payments based on increasingly
higher rates in a rising rate environment. Table 1 summarizes the notional
amount (an agreed upon amount on which calculations of payments to be exchanged
are based) of BANC ONE's derivative portfolio by type. BANC ONE has no credit
exposure on the notional amount; the exposure is generally limited to the net
difference between the pay and receive amounts on each transaction. These
amounts are generally netted and paid quarterly. BANC ONE and the
counterparties to its interest rate swap contracts exchange collateral to
minimize credit risk. The swaps used consist of those where payments based on
fixed rates or variable rates are received in exchange for payment of amounts
based on variable or fixed rates, basis swaps where variable interest payments
based on different indices are exchanged and forward-starting contracts, where
payments are exchanged beginning on some future date. BANC ONE also purchases
interest rate caps. Payments are received under cap agreements when interest
rates exceed specified maximums. Premiums paid when caps are purchased are
typically amortized over the life of the cap. BANC ONE is not a dealer in
derivative contracts.
Table 1
- - - - ---------------------------------------------------------------------------
OFF-BALANCE SHEET INVESTMENT PRODUCTS
<TABLE>
<CAPTION>
Sept. 30, June 30, March 31, Dec. 31,
$(millions) 1994 1994 1994 1993
- - - - ---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receive fixed (includes
forward starting)......... $24,521 $26,114 $28,090 $29,292
Receive floating
(includes pay fixed
and caps)................ 10,217 8,382 8,598 1,619
------- ------- ------- -------
Net receive fixed
position................ $14,304 $17,732 $19,492 $27,673
Basis swaps............... 8,103 8,103 7,854 5,556
Other..................... $ 3,785 $ 2,414 $ 2,924 $ 2,598
</TABLE>
The 1993 BANC ONE CORPORATION Annual Report provided certain fair value
information based on interest rates at December 31, 1993. Since that date,
interest rates have increased and, as a result, the estimated fair value of
fixed rate financial instruments has changed. The unrealized loss on long-term
debt declined to $24 million at September 30, 1994, as compared to $267
million at December 31, 1993. There was a $938 million net unrealized loss on
off-balance sheet investment products at September 30, 1994. This unrealized
loss represents the cost that would have been incurred had these positions been
liquidated at September 30, 1994. This cost is based on the markets'
expectations of future interest rate changes that may or may not be realized.
BANC ONE's off-balance sheet investment products generally are used to hedge or
synthetically alter balance sheet amounts and, therefore, unrealized gains and
losses are not recognized in earnings. If the hedged or altered balance sheet
financial instrument amounts were marked to market, the resulting unrealized
balance sheet gains (losses) could be expected to partially compensate for
unrealized off-balance sheet investment product (losses) gains.
ASSET QUALITY
BANC ONE's process for monitoring asset quality includes detailed, monthly
analyses of delinquencies, nonperforming assets and potential problem loans
from each affiliate bank. Management extensively monitors and improves credit
policies, including policies related to appraisals, assessing the financial
condition of borrowers, restrictions on out-of-area lending and avoidance of
loan concentrations. The loan portfolio consists of many small credits in
diverse businesses located throughout the markets served by BANC ONE
affiliates. Only 13 customers had borrowings or commitments greater than $50
million at September 30, 1994, with the largest outstanding being $90 million.
BANC ONE maintained strong credit quality during the quarter ended September
30, 1994. BANC ONE reported total nonperforming assets of $524 million at
September 30, 1994, a decrease of $174 million from a year ago. Nonperforming
assets were .85% of ending loans, down significantly from 1.28% at September
30, 1993. The decrease is primarily a result of accelerated
Table 2
- - - - --------------------------------------------------------------------------
CREDIT QUALITY
<TABLE>
<CAPTION>
Sept. 30, Dec. 31, Sept. 30,
$(millions) 1994 1993 1993
- - - - --------------------------------------------------------------------------
<S> <C> <C> <C>
NONPERFORMING ASSETS
Nonaccrual loans.............. $429.6 $482.3 $521.6
Renegotiated loans............ 4.1 7.6 7.2
OREO.......................... 90.5 153.3 169.4
------ ------ ------
Total nonperforming
assets..................... $524.2 $643.2 $698.2
====== ====== ======
Loans delinquent
over 90 days................. $195.4 $207.8 $220.3
Doubtful loans................ 48.8 60.0 45.0
Ending reserve for loan
and lease lossses............ 955.2 967.3 964.3
Net charge-offs............... $ 76.2 $121.3 $105.1
KEY RATIOS
Reserve to ending loans....... 1.55% 1.68% 1.77%
Nonperforming assets
to ending loans.............. .85 1.12 1.28
90 days delinquent to
ending loans................. .32 .36 .40
Net charge-offs to
average loans................ .50% .87% .78%
</TABLE>
<PAGE> 14
<TABLE>
Table 3
- - - - ------------------------------------------------------------------
NONPERFORMING ASSETS ACTIVITY
<CAPTION>
Three Months Nine Months
Ended Ended
$(millions) Sept. 30, 1994 Sept. 30, 1994
- - - - ------------------------------------------------------------------
<S> <C> <C>
Balance at beginning of
quarter/year ....................... $417.7 482.3
NONACCRUAL LOAN ACTIVITY
Nonaccrual additions ............... 98.4 245.9
Loans returned to accrual
and payments received ............. (63.4) (234.2)
Reduction due to transfers
to OREO ........................... (4.8) (16.0)
Charge-offs ....................... (12.6) (44.0)
Other, net ........................ (5.7) (4.4)
------ ------
Nonaccrual loans .................... $429.6 $429.6
====== ======
OREO, beginning of period ........... $100.6 $153.3
OREO ACTIVITY
Repossession of collateral ......... 15.4 48.9
Write-downs ........................ (3.6) (11.6)
Sales and other .................... (21.9) (100.1)
------ ------
OREO ................................ $ 90.5 $ 90.5
====== ======
</TABLE>
asset disposition and receipt of payments. Table 3 details the activity in
nonaccrual loans and other real estate owned (OREO) from December 31, 1993 to
September 30, 1994.
The decrease in loans delinquent greater than 90 days from December 31, 1993
to September 30, 1994 is due primarily to the higher than average delinquencies
included in the sale of $1 billion of student loans during the third quarter of
1994 and a general improvement in the commercial loan portfolio.
The reserve for loan and lease losses decreased as a percentage of ending
loans from 1.68% at December 31, 1993 to 1.55% at September 30, 1994. The
reserve continues to indicate strong nonperforming loan coverage, increasing to
220% at September 30, 1994, compared with 182% at September 30, 1993. The
provision for loan and lease losses was approximately equal to net charge offs
during the third quarter of 1994. The adequacy of the reserve and provision for
loan and lease losses is consistent with the composition of the portfolio and
recent credit quality history.
NON-INTEREST INCOME, NON-INTEREST
EXPENSE AND INCOME TAXES
Total non-interest income, excluding securities transactions, increased $74
million, or 18.7%, and $112 million, or 9.9%, for the three and nine months
ended September 30, 1994, compared to 1993.
Service charges on deposit accounts increased $13 million, or 11.2%, and $21
million, or 6.4%, for the three and nine months ended September 30, 1994,
compared to the same periods in 1993. Increases in service charges on deposit
accounts are primarily due to an increase in fees from overdrafts and an
overall increase in deposits. The increase in other non-interest income for the
three and nine months ended September 30, 1994 is primarily due to a $49
million gain recognized on the sale of $1 billion of student loans and a $13
million gain on the sale of mortgage loan servicing rights during the three
months ended September 30, 1994. The gain recorded on the student loan sale
represents the present value of future net cash flows. The related asset will
be assessed on a periodic basis for impairment with changes, if any, recognized
in future periods. Other income also increased for the year-to-date period due
to a $13 million increase in insurance income, a $3 million increase in income
earned on the cash surrender value of Corporate-owned life insurance and a $2
million gain on sale of fixed assets.
The loss on sale of securities both quarter-to-date and year-to-date is
primarily due to the sale of United States Treasury and Agency securities.
During the three months ended September 30, 1994, United States Treasury and
Agency securities were sold, resulting in a $32 million net loss, partially
offset by a $17 million gain on the sale of equity securities. BANC ONE expects
that during the fourth quarter, it will sell additonal U.S. Treasury and Agency
securities from its available for sale portfolio as part of a continued effort
to reduce liability sensitivity.
Total non-interest expense, excluding Liberty merger-related expenses,
increased $31 million, or 3.5%, and decreased $4 million, or .14%, for the
three and nine months ended September 30, 1994, compared to 1993.
Salaries and related costs increased $28 million, or 2.2%, for the nine months
ended September 30, 1994. This increase was primarily due to an increase in pay
rates, merger-related expenses of approximately $2 million relating to the
acquisition of Liberty and approximately $5 million in charges relating to the
consolidation of mortgage loan and data processing operations. Taxes other than
income and payroll decreased $20 million, or 31.5%, for the nine months ended
September 30, 1994, due to settlement of prior year franchise taxes.
Depreciation and amortization increased $31 million, or 49.7%, and $25 million,
or 12.2%, for the three and nine months ended September 30, 1994. These
increases were primarily attributable to $21 million of merger-related expenses
relating to the Liberty acquisition and depreciation expense on data processing
equipment purchased during 1994 to support branch automation and provide
technological enhancements of existing equipment.
Outside services and processing increased $15 million, or 12.7%, for the three
months ended September 30, 1994, primarily due to $6 million in Liberty
merger-related expenses, an increase of $7 million in expenses related to new
credit card programs and an increase in expenses relating to processing costs.
These increases were partially offset by a decrease in consulting expenses.
Outside services and processing increased $10 million, or 2.6%, for the nine
months ended September 30, 1994,
<PAGE> 15
primarily due to an increase of $22 million in credit card-related activities,
an increase of $3 million in the use of temporary employees and $12 million
relating to leased equipment, loan production and other miscellaneous costs.
These increases were partially offset by a reduction in consulting expenses of
$27 million relating to completed projects. The increase in other non-interest
expense of $18 million for the quarter-to-date period ended September 30, 1994
was primarily due to $13 million of litigation settlements, restructuring
charges of $4 million related to the consolidation of regional processing
centers and merger-related expenses of $5 million relating to the Liberty
acquisition. These increases were offset by a $10 million decrease in OREO
expense. The decrease in other non-interest expense of $32 million, or 9.0%,
for the nine months ended September 30, 1994, as compared to 1993, was
primarily due to decreases in OREO expense of approximately $34 million,
merger-related expenses of approximately $8 million related to a decrease in
acquisition activity and insurance expense of $3 million. The decreases were
partially offset by an increase of $17 million in litigation reserves.
Due to the factors mentioned above, annualized net non-interest expense (total
non-interest expense less total non-interest income excluding securities
transactions) as a percent of average assets decreased to 2.3% in the third
quarter of 1994 from 2.6% in the third quarter of 1993.
Earlier this year, BANC ONE announced its plans to consolidate certain
deposit and loan operations and standardize back-office functions.
Implementation of this consolidation will occur over the next several years.
During the fourth quarter and subsequent quarters, certain one-time charges
may be incurred, such as severance-related payments and lease termination
penalties.
The provision for income taxes increased to 34% of pretax income in the
third quarter of 1994 in comparison with 33.6% in the third quarter of 1993.
The effective income tax rate for the nine months ended September 30, 1994
approximates the anticipated effective rate for 1994.
<TABLE>
Table 4
- - - - -----------------------------------------------------------------------
LIQUIDITY
<CAPTION>
Sept. 30, Dec. 31, Sept. 30,
$(millions) 1994 1993 1993
- - - - -----------------------------------------------------------------------
<S> <C> <C> <C>
Earning assets, net of money
market investments ............. $77,847 $74,773 $71,229
LARGE LIABILITIES
Net national market
liabilities ................... $ 2,521 $ 3,054 $ 2,883
As a percent of net
earning asset ................. 3.24% 4.08% 4.05%
Total net large liabilities .... $15,353 $12,121 $10,375
As a percent of net
earning assets ................ 19.72% 16.21% 14.57%
</TABLE>
LIQUIDITY
At September 30, 1994, large liability dependence was 19.72%, an increase from
16.21% at December 31, 1993. The increase was due primarily to additional
short-term borrowings in the first quarter to fund increased loan and
securities growth. BANC ONE's policy is that large liability dependence be no
greater than 30%. BANC ONE manages the position at much lower levels.
NET INCOME PER SHARE
BANC ONE reported net income of $.68 and $2.27 per common share for the three
and nine month periods ended September 30, 1994, compared to $.73 and $2.19 for
the same periods in 1993 (as restated for the 10% common stock dividend,
effective February 10, 1994).
<TABLE>
Table 5
- - - - ------------------------------------------------------------------------
ANALYSIS OF NET INCOME PER COMMON SHARE
<CAPTION>
Third Nine
Quarter Months
- - - - ------------------------------------------------------------------------
<S> <C> <C>
Net income per common share, prior year ..... $ .73 $2.19
INCREASE/(DECREASE) FROM CHANGES IN
Earning asset volume ........................ .49 .45
Rates and other effects of net
interest income ............................ (.56) (.49)
Lower provision for loan and lease losses ... .06 .17
Non-interest income, excluding
securities transactions .................... .18 .28
Securities transactions ..................... (.04) (.05)
Non-interest expense ........................ (.18) (.08)
Provision for federal income taxes .......... .01 (.11)
Change in method of accounting for
income taxes ............................... (.05)
----- -----
Subtotal ..................................... .69 2.31
Changes in average common shares ............. (.01) (.04)
----- -----
NET INCOME PER COMMON SHARE .................. $ .68 $2.27
===== =====
</TABLE>
STOCKHOLDERS' EQUITY
At September 30, 1994, BANC ONE had total stockholders' equity of $7.8
billion, up from $7.4 billion at December 31, 1993. This increase was due
primarily to earnings net of common and preferred dividends partially offset by
an after tax unrealized holding loss of approximately $208 million recorded on
securities available for sale in accordance with Statement of Financial
Accounting Standards No. 115, Accounting for Certain Investments in Debt and
Equity Securities.
Common Stockholders' equity was $7.5 billion at September 30, 1994, up from
$7.2 billion at December 31, 1993. The Corporation's ratio of common
stockholders' equity to total assets was 8.52% at September 30, 1994, which is
an increase from 8.47% at December 31, 1993.
<PAGE> 16
AFFILIATIONS
On August 15, 1994, the Corporation acquired all of the outstanding shares of
Liberty National Bancorp ("Liberty") of Louisville, Kentucky, in exchange for
24.8 million shares of BANC ONE common stock. Liberty had assets of
approximately $5.3 billion at August 15, 1994. This acquisition has been
accounted for as a pooling of interests, and accordingly, the financial
statements have been restated. The following table shows the effect of
Liberty's results of operations for the periods prior to combination:
<TABLE>
<CAPTION>
$(thousands) BANC ONE LIBERTY COMBINED
- - - - ------------ -------- ------- --------
<S> <C> <C> <C>
1994 Total Revenue (nine months) $5,713,124 $305,074 $6,018,198
Net Income $929,772 $10,959 $940,731
1993 Total Revenue $7,226,790 $383,880 $7,610,670
Net Income $1,139,980 $51,514 $1,191,494
1992 Total Revenue $7,358,393 $382,264 $7,740,657
Net Income $876,588 $45,639 $922,227
1991 Total Revenue $6,828,327 $395,562 $7,223,889
Net Income $664,288 $39,098 $703,386
</TABLE>
In recent quarters, the market value of bank and bank holding company common
stock, including BANC ONE, has decreased. This has had the
effect of limiting the ability to effect acquisitions in non-dilutive
acquisition transactions accounted for as poolings of interest.
OTHER DEVELOPMENTS
Since the introduction of the income tax refund anticipation loan ("RAL")
program in 1990, the yield on the consumer loan portfolio for the first quarter
of each year has been enhanced by these very short-term, high yielding loans.
RAL originations totaled $2.2 billion and $2.4 billion in the first quarter of
1994 and 1993, respectively. During 1994, the Internal Revenue Service
announced changes that could impact the RAL's, including the fact that it won't
notify refund lenders in advance of taxpayers entitled to refunds. These
changes have prompted some competitors to announce they will no longer offer
this type of product. BANC ONE remains committed to the RAL program in 1995
under a revised information gathering and credit approval process and an
improved collection system; however, it is not currently possible to predict
the impact these changes will have on originations and profitability as
compared to prior years.
<PAGE> 17
SUBSEQUENT EVENT
Credit card receivables of $2 billion that were held for sale at September 30,
1994, were sold to a trust on November 14, 1994. The proceeds of the sale were
used to reduce short-term borrowed funds. The Trust sold two, three, and four
year, fixed rate certificates backed by the receivables to investors. BANC ONE
will service the related credit card accounts and receive the excess cash flows
from the Trust, after payment of interest to investors, as servicing fee
income. Net income is expected to be lower in future periods due to the
certificates being longer term than the borrowings paid off. The sale is part
of BANC ONE's initiative to reduce its earnings sensitivity to rising interest
rates.
<PAGE> 18
<TABLE>
Activity in off-balance sheet investment products for the first, second and third quarters of 1994 is summarized as follows:
<CAPTION>
Generic Amortizing
Receive Receive Pay Forward Purchased
$(millions) Fixed Fixed Fixed Basis Starting Caps
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1993 $ 6,738 $ 15,054 $ 1,619 $ 5,556 $ 7,500 $ 0
Additions 768 30 4,000 2,299 450 3,672
Maturities/Amortization (350) (2,100) (193) (1)
Terminations (500)
Forward Starting Becoming Effective 2,500 (2,500)
------- ------- ------- ------- ------- -------
Balance, March 31, 1994 7,156 15,484 4,926 7,854 5,450 3,672
Additions 100 250
Maturities/Amortization (75) (1,256) (216) (1)
Terminations (245) (500)
Forward Starting Becoming Effective 1,000 (1,000)
------- ------- ------- ------- ------- -------
Balance, June 30, 1994 7,181 14,983 4,710 8,103 3,950 3,672
Additions 25 25 2,000
Maturities/Amortization (22) (1,246) (190)
Terminations (350)
Forward Starting Becoming Effective 100 2,500 (2,600)
------- ------- ------- ------- ------- -------
Balance, September 30, 1994 $ 7,284 $ 16,237 $ 4,545 $ 8,103 $ 1,000 $ 5,672
======= ======= ======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
Other Total
---------------------------------------------------------------
<S> <C> <C>
Balance, December 31, 1993 $ 2,598 $ 39,065
Additions 488 11,707
Maturities/Amortization (162) (2,806)
Terminations (500)
Forward Starting Becoming Effective 0
------- -------
Balance, March 31, 1994 2,924 47,466
Additions 112 462
Maturities/Amortization (122) (1,670)
Terminations (500) (1,245)
Forward Starting Becoming Effective 0
------- -------
Balance, June 30, 1994 2,414 45,013
Additions 2,544 4,594
Maturities/Amortization (1,173) (2,631)
Terminations (350)
Forward Starting Becoming Effective 0
------- -------
Balance, September 30, 1994 $ 3,785 $ 46,626
======= ========
</TABLE>
<TABLE>
Unrealized gains and losses in off-balance sheet investment products at September 30, 1994 are summarized as follows:
<CAPTION>
Unrealized Gain (Loss) as of September 30, 1994
-----------------------------------------------
Net
Total Notional Unrealized Unrealized Unrealized
$(millions) Amount Gains Losses Gain (Loss)
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Generic Receive Fixed $ 7,284 $ 10 $ (136) $ (126)
Amortizing Receive Fixed 16,237 6 (636) (630)
Pay Fixed 4,545 66 (8) 58
Basis 8,103 1 (269) (268)
Forward Starting 1,000 (47) (47)
Purchased Caps 5,672 32 32
Other 3,785 52 (9) 43
--------- ------- -------- ------
Total $ 46,626 $ 167 $ (1,105) $ (938)
========= ======= ========= ======
</TABLE>
<PAGE> 19
<TABLE>
OFF-BALANCE SHEET INVESTMENT PRODUCTS
Maturities and weighted average rates of each significant type of product at September 30, 1994 are shown below. The off-balance
sheet investment products used by BANC ONE are primarily interest rate swaps. These rate swaps generally involve the exchange of
fixed and floating rate interest payments based on an underlying notional amount. A key assumption in the information is that rates
remain constant at September 30, 1994 levels. To the extent that rates change, both the maturity and variable interest rate
information will change.
<CAPTION>
Maturities of September 30, 1994 Off-Balance Sheet Investment Products
------------------------------------------------------------------------------------------
September
1999 - 30, 1994
$ (millions) 1994 1995 1996 1997 1998 2003 2004+ Total
- - - - --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Receive Fixed Generic Swaps
Notional Value $ 200 $ 5,378 $ 648 $ 128 $ 30 $ 750 $ 150 $ 7,284
Weighted Average Receive Rate 5.17% 5.16% 4.81% 6.71% 4.95% 6.97% 5.82% 5.35%
Weighted Average Pay Rate 5.06 4.82 4.87 4.86 4.81 6.17 6.52 5.01
Receive Fixed Amortizing Swaps
Notional Value 1,697 6,400 5,862 2,035 220 15 8 16,237
Weighted Average Receive Rate 5.98% 5.25% 5.18% 5.13% 5.54% 8.81% 8.82% 5.29%
Weighted Average Pay Rate 5.28 5.08 5.11 4.98 4.93 4.94 4.94 5.09
Pay Fixed Swaps
Notional Value 71 1,811 2,272 295 84 12 4,545
Weighted Average Receive Rate 4.58% 5.02% 5.22% 5.23% 4.93% 6.07% 5.13%
Weighted Average Pay Rate 7.59 4.70 5.33 6.12 5.28 8.22 5.17
Basis Swaps
Notional Value 362 3,843 3,590 308 8,103
Weighted Average Receive Rate 4.96% 4.64% 3.85% 4.18% 4.29%
Weighted Average Pay Rate 4.96 5.33 5.03 5.11 5.17
Forward Starting Swaps
Notional Value 1,000 1,000
Weighted Average Receive Rate 5.47% 5.47%
Weighted Average Pay Rate 5.50 5.50
Purchased Caps
Notional Value 1,458 4,214 5,672
Other (1)
Notional Value 1 ,701 369 1,382 209 29 87 8 3,785
------- ------- --------- ------- -------- ------- -------- --------
Total Notional Value $ 3,669 $15,778 $ 19,221 $ 6,257 $ 671 $ 864 $ 166 $ 46,626
======= ======= ========= ======= ======== ======= ======== ========
Total Weighted Average Rates on Swaps
Receive Rate 5.85% 5.18% 5.04% 4.41% 4.78% 6.99% 5.96% 5.07%
Pay Rate 5.34 4.93 5.22 5.06 5.06 6.17 6.44 5.11
<FN>
(1) Other off-balance sheet investment products include interest rate collars, customer caps, floors, futures, options, swap
options, forward rate agreements and currency swaps. The other category also includes $1,457 million of transactions accounted for
as anticipatory hedges. The maturity information for these transactions is based on expected, rather than contractual, terms. All
other maturity information reflects contractual terms using interest rates unchanged from those in effect at September 30, 1994.
</TABLE>
<PAGE> 20
BANC ONE CORPORATION AND SUBSIDIARIES
PART II
OTHER INFORMATION
Item 1- During the third quarter of 1994, BANC ONE settled two unrelated
legal matters that were previously reported contingencies as of
December 31, 1993. In October 1993, the Federal District Court
for the Southern District of New York entered a judgment for
approximately $27 million against BANC ONE, Arizona, N.A.
(formerly Valley National Bank) based upon alleged violations by
Valley National Bank of the Employee Retirement Income Security
Act of 1974. BANC ONE was aware of this case prior to the
acquisition of Valley National Bank. In November 1993, the
Probate Court of Dallas County, Texas entered a judgment of
approximately $26 million against Bank One, Texas, N.A. based on
alleged breach of fiduciary duties associated with the handling
of a personal trust. These settlements did not have a material
adverse effect on BANC ONE's consolidated earnings or financial
position.
Item 2-Inapplicable
Item 3-Inapplicable
Item 4-Inapplicable
Item 5-Inapplicable
Item 6-EXHIBITS AND REPORTS ON FORM 8-K
a. In compliance with Part I Financial Information the following
exhibits are incorporated by reference:
Exhibit 11 Statement Regarding Computation of Earnings per
Common Share
Exhibit 12 Statement Regarding Computation of Ratio of Earnings
to Fixed Charges
<PAGE> 21
SIGNATURES
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 thereunto duly authorized.
BANC ONE CORPORATION
_____________________ _________________________________________
Date
William C. Leiter
Controller and
Chief Accounting Officer
<PAGE> 22
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number
--------------
<S> <C>
11 Statement Regarding Computation of Earnings per Common Share
12 Statement Regarding Computation of Ratio of Earnings to Fixed
Charges
27 Financial Data Schedules
</TABLE>
<PAGE> 1
<TABLE>
EXHIBIT 11
BANC ONE CORPORATION and Subsidiaries
STATEMENT REGARDING COMPUTATION OF EARNINGS PER COMMON SHARE
(000's, except per share amounts)
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------- ---------------------------
1994 1993 1994 1993
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
PRIMARY:
Earnings:
Net income $ 283,212 $ 296,214 $ 940,732 $ 891,253
Deduct: Dividends on preferred shares 4,373 4,375 13,119 13,341
----------- ----------- ----------- -----------
Net income available to common shareholders $ 278,839 $ 291,839 $ 927,613 $ 877,912
=========== =========== =========== ===========
Shares:
Weighted average common shares outstanding 407,220 399,798 406,706 399,121
Add: Dilutive effect of outstanding options,
as determined by the application of the
treasury stock method 1,743 1,613 1,409 1,743
----------- ----------- ----------- -----------
Weighted average common shares outstanding,
as adjusted 408,963 401,411 408,115 400,864
=========== =========== =========== ===========
PRIMARY EARNINGS PER COMMON SHARE $ 0.68 $ 0.73 $ 2.27 $ 2.19
=========== =========== =========== ===========
FULLY DILUTED:
Earnings:
Net income $ 283,212 $ 296,214 $ 940,732 $ 891,253
=========== =========== =========== ===========
Shares:
Weighted average common shares outstanding 407,220 399,798 406,706 399,121
Add: Dilutive effect of outstanding options,
as determined by the application of the
treasury stock method 1,743 1,614 1,433 1,814
Add: Conversion of preferred stock 8,765 6,377 8,765 6,795
----------- ----------- ----------- -----------
Weighted average common shares outstanding,
as adjusted 417,728 407,789 416,904 407,730
=========== =========== =========== ===========
FULLY DILUTED EARNINGS PER COMMON SHARE $ 0.68 $ 0.73 $ 2.26 $ 2.19
=========== =========== =========== ===========
</TABLE>
<PAGE> 1
<TABLE>
EXHIBIT 12
BANC ONE CORPORATION and Subsidiaries
STATEMENT REGARDING COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (2)
$(thousands)
<CAPTION>
Nine Months Ended
September 30,
--------------------------
1994 1993
----------- -----------
<S> <C> <C>
Calculation excluding interest on deposits:
Earnings:
Income before income taxes and change in
accounting principle and equity in earnings of
of Bank One, Texas, NA (1) $ 1,431,980 $ 1,319,466
Fixed charges 452,190 251,653
Less: Capitalized interest (740) (456)
----------- -----------
$ 1,883,430 $ 1,570,663
----------- -----------
Fixed charges:
Interest expense, including interest factor
of capitalized leases and amortization of
deferred debt expense $ 411,903 $ 215,098
Portion of rental payments under operating
leases deemed to be interest 40,287 36,555
----------- -----------
Fixed charges $ 452,190 $ 251,653
----------- -----------
Ratio of earnings to fixed charges excluding
interest on deposits 4.17 x 6.24 x
Calculation including interest on deposits:
Earnings:
Income before income taxes and change in
accounting principle and equity in earnings of
of Bank One, Texas, NA (1) $ 1,431,980 $ 1,319,466
Fixed charges 1,637,070 1,377,837
Less: Capitalized interest (740) (456)
----------- -----------
$ 3,068,310 $ 2,696,847
----------- -----------
Fixed charges:
As detailed above $ 452,190 $ 251,653
Interest on deposits 1,184,880 1,126,184
----------- -----------
Fixed charges $ 1,637,070 $ 1,377,837
----------- -----------
Ratio of earnings to fixed charges including
interest on deposits 1.87 x 1.96 x
</TABLE>
<TABLE>
<CAPTION>
Years Ended December 31,
---------------------------------------------------------------------
1993 1992 1991 1990 1989
------------ ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Calculation excluding interest on deposits:
Earnings:
Income before income taxes and change in
accounting principle and equity in earnings of
of Bank One, Texas, NA (1) $ 1,770,712 $ 1,341,249 $ 928,947 $ 727,310 $ 403,117
Fixed charges 348,327 321,402 419,274 467,263 472,604
Less: Capitalized interest (652) (1,199) (1,732) (2,181) (2,338)
------------ ------------ ----------- ----------- -----------
$ 2,118,387 $ 1,661,452 $ 1,346,489 $ 1,192,392 $ 873,383
------------ ------------ ----------- ----------- -----------
Fixed charges:
Interest expense, including interest factor
of capitalized leases and amortization of
deferred debt expense $ 298,857 $ 278,615 $ 379,708 $ 433,953 $ 444,448
Portion of rental payments under operating
leases deemed to be interest 49,470 42,787 39,566 33,310 28,156
------------ ------------ ----------- ----------- -----------
Fixed charges $ 348,327 $ 321,402 $ 419,274 $ 467,263 $ 472,604
------------ ------------ ----------- ----------- -----------
Ratio of earnings to fixed charges excluding
interest on deposits 6.08 x 5.17 x 3.21 x 2.55 x 1.85 x
Calculation including interest on deposits:
Earnings:
Income before income taxes and change in
accounting principle and equity in earnings of
of Bank One, Texas, NA (1) $ 1,770,712 $ 1,341,249 $ 928,947 $ 727,310 $ 403,117
Fixed charges 1,826,018 2,318,274 2,955,918 3,115,412 2,894,930
Less: Capitalized interest (652) (1,199) (1,732) (2,181) (2,338)
------------ ------------ ----------- ----------- -----------
$ 3,596,078 $ 3,658,324 $ 3,883,133 $ 3,840,541 $ 3,295,709
------------ ------------ ----------- ----------- -----------
Fixed charges:
As detailed above $ 348,327 $ 321,402 $ 419,274 $ 467,263 $ 472,604
Interest on deposits 1,477,691 1,996,872 2,536,644 2,648,149 2,422,326
------------ ------------ ----------- ----------- -----------
Fixed charges $ 1,826,018 $ 2,318,274 $ 2,955,918 $ 3,115,412 $ 2,894,930
------------ ------------ ----------- ----------- -----------
Ratio of earnings to fixed charges including
interest on deposits 1.97 x 1.58 x 1.31 x 1.23 x 1.14 x
<FN>
(1) Results of Bank One, Texas, NA are consolidated beginning October 1, 1991
(2) All prior period amounts have been restated for the pooling of interests of Liberty National Bancorp, Inc.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> SEP-30-1994
<CASH> 5,070,208
<INT-BEARING-DEPOSITS> 35,053
<FED-FUNDS-SOLD> 568,048
<TRADING-ASSETS> 205,609
<INVESTMENTS-HELD-FOR-SALE> 12,141,021
<INVESTMENTS-CARRYING> 5,013,878
<INVESTMENTS-MARKET> 5,049,595
<LOANS> 61,647,354
<ALLOWANCE> 955,157
<TOTAL-ASSETS> 88,163,723
<DEPOSITS> 65,909,701
<SHORT-TERM> 11,326,698
<LIABILITIES-OTHER> 1,327,060
<LONG-TERM> 1,837,147
<COMMON> 2,043,155
0
249,900
<OTHER-SE> 5,470,062
<TOTAL-LIABILITIES-AND-EQUITY> 88,163,723
<INTEREST-LOAN> 3,986,468
<INTEREST-INVEST> 772,716
<INTEREST-OTHER> 24,113
<INTEREST-TOTAL> 4,783,297
<INTEREST-DEPOSIT> 1,184,880
<INTEREST-EXPENSE> 1,595,932
<INTEREST-INCOME-NET> 3,187,365
<LOAN-LOSSES> 206,650
<SECURITIES-GAINS> (6,785)
<EXPENSE-OTHER> 2,783,636
<INCOME-PRETAX> 1,431,980
<INCOME-PRE-EXTRAORDINARY> 940,732
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 940,732
<EPS-PRIMARY> 2.27
<EPS-DILUTED> 2.27
<YIELD-ACTUAL> 5.57
<LOANS-NON> 429,614
<LOANS-PAST> 195,354
<LOANS-TROUBLED> 4,143
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 967,254
<CHARGE-OFFS> 379,359
<RECOVERIES> 154,231
<ALLOWANCE-CLOSE> 955,157
<ALLOWANCE-DOMESTIC> 687,455
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 267,702
</TABLE>
