<PAGE> 1
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 (Date of earliest event reported): July 15, 1997
BANC ONE CORPORATION
(Exact Name of Registrant as Specified in Charter)
Ohio
(State or Other Jurisdiction of Incorporation)
1-8552 31-0738296
(Commission File Number) (IRS Employer Identification No.)
100 East Broad Street, Columbus, Ohio 43271
(Address of Principal Executive Offices)(Zip Code)
Registrant's telephone number, including area code: (614) 248-5944
N/A
(Former Name or Former Address, If Changed Since Last Report)
<PAGE> 2
ITEM 5. OTHER EVENTS
On July 15, 1997, BANC ONE CORPORATION ("BANC ONE") issued a press
release announcing its earnings for the three-month period ended June 30, 1997.
A copy of such press release is filed herein as Exhibit 99.1 and incorporated by
reference herein. BANC ONE has prepared a performance discussion and financial
supplement with respect to the Second Quarter of 1997, which financial
information is filed herein as Exhibit 99.2 and incorporated herein by
reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
(a) Financial Statements
None. The financial information included in this report is not
required to be filed as part of this report.
(b) Pro Forma Financial Information
None.
(c) Exhibits
Exhibit 99.1 BANC ONE CORPORATION Press Release dated July 15,
1997 titled "BANC ONE Completes Successful
Quarter with Major Initiatives Accomplished and
Confirms Strong Growth and Favorable Credit
Quality Trends at Recently Acquired First USA."
Exhibit 99.2 1997 Second Quarter Performance Discussion and
Financial Support.
2
<PAGE> 3
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 hereunto duly authorized.
BANC ONE CORPORATION
(Registrant)
Date: July 15, 1997 By: /s/ Steven Alan Bennett
--------------------------
Steven Alan Bennett
Senior Vice President and
General Counsel
3
<PAGE> 1
Exhibit 99.1
For further information contact:
Jay S. Gould (614) 248-0189
Jacqueline R. Spak (614) 248-1280
John A. Russell (614) 248-5989
FOR RELEASE: July 15, 1997
BANC ONE COMPLETES SUCCESSFUL QUARTER WITH MAJOR INITIATIVES
ACCOMPLISHED AND CONFIRMS STRONG GROWTH AND FAVORABLE CREDIT
QUALITY TRENDS AT RECENTLY ACQUIRED FIRST USA
-----------------------
BANC ONE CORPORATION, Columbus, Ohio (NYSE:ONE) completed one of its most
successful quarters ever as major initiatives under way during the year came to
fruition. During the second quarter, BANC ONE completed the acquisition of
Liberty Bancorp, Inc. in Oklahoma, a purchase transaction and First USA, Inc., a
pooling of interests transaction with prior period results being restated.
Integration efforts with First USA were significantly accomplished as First USA
assumed responsibility for a unified BANC ONE/First USA card company which is
now the third largest in the United States. In addition, plans were finalized
for the rationalization of the BANC ONE retail delivery system and the three
major rating agencies affirmed BANC ONE's ratings.
One time charges associated with these activities were identified and taken
during the quarter. John B. McCoy, Chairman and Chief Executive Officer of BANC
ONE, noted that the overall running rates of First USA and BANC ONE, after these
charges and previously announced accounting adjustments, are generally
consistent with the projections made earlier this year when the planned
acquisition of First USA was announced. McCoy also expressed satisfaction with
the demonstrated positive credit quality trends at First USA and the current
indications that the former BANC ONE card portfolios are following similar
trends although somewhat lagging First USA's timeline. BANC ONE's consumer
indirect loan portfolio showed marked improvement over the prior quarter with a
decrease in net credit losses of 43 basis points to 1.58 percent from 2.01
percent.
In commenting upon the rating agency actions, McCoy said, "We are gratified to
have our ratings affirmed after such a significant acquisition and to remain as
one of only eight bank holding companies with a "Aa3" rating or better from
Moody's and one of only five with a rating of "AA-" or higher from Standard &
Poor's of the top twenty-five banking organizations in the country."
Excluding the $467 million pretax impact of these one-time charges, as well as
the impact of the previously announced accounting adjustment by First USA
related to the recognition of securitization gains, earnings for the current
quarter were $391.6 million or $0.67 per common share compared with $395.2
million or $0.66 per common share in the 1996 second quarter. On this same
basis, earnings for the first six months of 1997 were $826.5 million or $1.40
per
<PAGE> 2
common share compared with $818.0 million or $1.35 per common share for the same
year-ago period.
Actual net income for the second quarter, including the special one time charges
and accounting adjustments, was $16 million or $.02 per common share compared
with second quarter 1996 net income of $395 million or $.66 per share. Actual
net income for the first half was $398 million or $.67 per common share.
Managed total assets at the end of the first half for BANC ONE totaled $140.7
billion.
First USA achieved exceptional managed loan growth during the quarter ended June
30, 1997 of $1.7 billion or 30 percent annualized, the strongest non-December
quarterly loan growth in the history of the company. Total managed loans at
quarter-end were $24.6 billion. The company also opened a record 1.8 million new
accounts during the quarter increasing total Cardmembers to 17.8 million. Asset
quality trends were favorable as the 30 day delinquency rate on the managed
portfolio declined to 4.08 percent at June 30, 1997 from 4.62 percent at March
31, 1997. Regarding performance of First USA's $21 billion Credit Card Master
Trust, as previously reported June represented the eighth consecutive month of
declining delinquencies and the net charge-off ratio declined from 6.43 percent
in May to 5.70 percent in June.
The second quarter special one-time expenses referred to above included $467
million in expenses which relate to the actions taken by BANC ONE during the
quarter. The most significant element of this overall charge was the one-time
charge associated with the First USA acquisition, with the bulk of the remainder
being associated with the implementation of the BANC ONE retail delivery system
initiative.
The most significant element of the First USA-related charge was an increase to
the provision for credit losses of approximately $130 million as certain "held
for sale" assets were reclassified to loans and more conservative charge-off
standards were adopted by First USA to align with existing BANC ONE policies.
BANC ONE and First USA noted that the integration of the two credit card
organizations is proceeding rapidly and smoothly. All merger-related management
reassignments are complete and First USA credit practices have been installed
within the BANC ONE credit card operation.
First USA has already completed two major platinum card mailings to Bank One
customers and prospects under the Bank One name. All systems-related decisions
have been made and the conversion of BANC ONE's credit card operations to First
Data Resources is scheduled for February 1998 but could be completed as early as
November 1997.
The 1997 second quarter core net interest margin of the combined companies was
5.41 percent, an increase from 5.33 percent in the year-ago quarter. Growth in
net interest margin resulted from loan growth and a higher yielding asset mix.
<PAGE> 3
Second quarter 1997 average loan and lease balances on a managed basis totaled
$107 billion, an annualized increase of 8.8 percent from $104 billion average in
the first quarter of 1997. Managed loans include the total of on-balance sheet
loans, loans sold with servicing retained excluding mortgages securitized and
serviced in the normal course of business, and loans held for sale.
Noninterest income in the 1997 second quarter totaled $831 million, up 8 percent
from the prior year and $23 million from the 1997 first quarter which included
particularly strong venture capital gains.
Second quarter 1997 operating expenses, excluding $337 million of restructuring
charges, totaled $1.387 billion, a $78 million increase from the first quarter
of 1997 primarily associated with stepped-up First USA business development
activities.
Nonperforming assets totaled $450 million at June 30, 1997 compared with $434
million at the end of the first quarter and represented only .53 percent of
period-end loans and leases. Loan loss reserves were increased from 1.55 percent
of loans and leases at March 31, 1997, to 1.62 percent at June 30, 1997.
BANC ONE CORPORATION had managed total assets of $140.7 billion and common
equity of $9.7 billion at June 30, 1997. BANC ONE currently operates
approximately 1,500 offices in 12 states. BANC ONE owns First USA, a financial
services company specializing in the credit card business and is currently the
third largest among domestic Visa and MasterCard issuers. BANC ONE also owns
several additional corporations that engage in a full range of financial
services. Information about BANC ONE's financial results and its products and
services can be accessed on the Internet at:
http://www.bankone.com and through InvestQuest at
http://www.investquest.com or Fax-on-demand:(614) 844-3860
First USA maintains a site on the World Wide Web at http://www.firstusa.com.
<PAGE> 1
Exhibit 99.2
For further information contact:
Jay S. Gould (614) 248-0189
Jacqueline R. Spak (614) 248-1280
1997 SECOND QUARTER
PERFORMANCE DISCUSSION AND FINANCIAL SUPPLEMENT
This discussion and analysis contains forward-looking statements that are
provided to assist in the understanding of anticipated future financial
performance. However, such performance involves risks and uncertainties which
may cause actual results to differ materially from those in such statements. For
a discussion of certain factors that may cause such forward-looking statements
to differ materially from actual results, see the 1996 Form 10-K.
DISCUSSION
During the 1997 second quarter, two acquisitions were completed. On June 1,
1997, Liberty Bancorp. Inc. of Oklahoma ("Liberty") was acquired and accounted
for as a purchase. On June 27, 1997 the acquisition of First USA, Inc. ("First
USA") was completed with prior period results restated as this transaction was
accounted for on a pooling of interests basis.
Reported 1997 second quarter earnings were $15.8 million ($0.02 per common
share) compared with prior-year quarter results of $395.2 million ($0.66 per
common share). For the first six months of 1997 earnings were $397.7 million
($0.67 per common share) down from the same year-ago period of $818.0 million
($1.35 per common share). The significant decline in second quarter and
year-to-date earnings reflected several significant and nonrecurring items in
the 1997 second quarter which are discussed in the following two sections.
RESTRUCTURING AND MERGER-RELATED COSTS
1997 second quarter earnings and comparisons with prior periods were negatively
impacted by $467.4 million ($328.8 after tax or $0.56 per common share) of costs
associated with the acquisition of First USA and other strategic initiatives. Of
the $467.4 million pretax amount, $337.3 million represented a noninterest
expense restructuring charge with $130.1 million related to additional provision
for credit losses.
Of the $337.3 million pretax restructuring charge, $240.9 million related to the
acquisition of First USA and represented costs associated with business
integration, employee-related expenses, transaction costs, and the redemption of
First USA's preferred stock. The remaining $96.4 million related to costs
associated with a strategic initiative to streamline the retail branch delivery
structure by consolidating approximately 200 banking centers over the next 18
months and the previously announced decision to terminate development of the
Strategic Banking System. The banking centers will be consolidated into other
banking centers in close proximity serving the same customers in order to reduce
costs and reinvest in more cost effective, convenient outlets for customers. The
total $337.3 million charge is expected to result in
<PAGE> 2
improved pretax earnings of about $90 million by 1999 in addition to the $335
million in synergies anticipated in the First USA acquisition.
Also during the quarter, and in conjunction with the First USA merger and a
decision to consolidate the BANC ONE and First USA credit card master trusts,
$2.0 billion of credit card loans previously classified as loans held for sale
were transferred into loans and leases with a resulting provision for credit
losses taken. In addition, another provision was taken to align First USA's
credit card charge-off policy to BANC ONE's more conservative policy. These two
provisions totaled $130.1 million pretax.
Excluding the $467.4 million pretax impact of these special items, as well as
the impact of the previously announced accounting adjustment by First USA
related to the recognition of securitization gains discussed below, earnings for
the current quarter were $391.6 million or $0.67 per common share compared with
$395.2 million or $0.66 per common share in the 1996 second quarter. On this
same basis earnings for the first six months of 1997 were $826.5 million or
$1.40 per common share compared with $818.0 million or $1.35 per common share
for the same year-ago period.
EARNINGS ANALYSIS
Given the acquisition of First USA and the second quarter charges, Table 1 is
presented as an aid to understanding the components of 1997 second quarter
earnings.
TABLE 1 - EARNINGS ANALYSIS
<TABLE>
<CAPTION>
($ in millions) BANC First One Time BANC ONE
ONE USA Charges Consolidated
--- --- ------- ------------
<S> <C> <C> <C> <C>
Net interest income (TE) $1,301.7 $ 64.5 $ -- $1,366.2
Provision for credit losses 229.6 36.1 130.1 395.8
Noninterest income 556.4 274.1 -- 830.5
Noninterest expense 1,087.4 299.5 337.3 1,724.2
(TE) Tax equivalent adjustment 13.8 -- -- 13.8
---- --- --- ----
Income before income taxes $ 527.3 $ 3.0 $(467.4) $ 62.9
Provision for income taxes 184.6 1.1 (138.6) 47.1
----- --- ------ ----
Net income $ 342.7 $ 1.9 $(328.8) $ 15.8
</TABLE>
BANC ONE on a stand alone basis earned $342.7 million in the 1997 second quarter
compared with $370.7 million in the 1997 first quarter. This $28.0 million
earnings decline is more than explained by two items totaling $48 million after
tax: $28 million in Project One spending, which unlike prior quarters, was not
offset by nonrecurring income items and $20 million in seasonal tax refund
anticipation loan (RAL) activity which favorably impacted the first quarter.
First USA earned $1.9 million in the current quarter compared with $24.1 million
in the 1997 first quarter. As previously reported, an accounting adjustment
associated with the recognition of gains on sale of securitized assets resulted
in gains being recorded in prior years with the negative impact of reducing
First USA's 1997 full-year reported after tax earnings by $176
<PAGE> 3
million. This negatively impacted the 1997 second quarter by $47 million.
Excluding this impact, second quarter earnings were $48.9 million.
This $34 million earnings decline between quarters reflected a decision to
accelerate 1997 first half marketing activities and increase market penetration
in order to capitalize on a competitive environment in which other credit card
issuers were reducing their business development efforts. This decision has had
the desired impact as evidenced by the growth in managed loans and new accounts
discussed below. It is anticipated that marketing and business development
expenses during the 1997 third and fourth quarters, while still reflecting a
strong growth orientation, will return to more normal levels. As such, and
exclusive of the negative impact of the securitization accounting adjustment,
expectations for First USA's earnings for the second half of 1997 remain
consistent with projections made in January at the time of the merger
announcement.
Given the underlying trends for First USA and other business segments, our
expectations for 1997 second half earnings per share are in the $1.50 range.
That implies a $1.60 running rate when the impact of the accounting adjustment
associated with the recognition of gains on securitizations is added back.
Our initial target for 1998 is in excess of $4.00 per share. There are several
significant factors leading to this increase from the second half run rate.
These include anticipated Project One benefits, targeted First USA synergies,
the elimination of the effect of the securitization accounting adjustment, and
run rate implications of the second quarter special charge.
SUMMARY OF RESULTS - 1997 SECOND QUARTER
Key quarterly and year-to-date performance ratios are listed below in Table 2.
TABLE 2 - KEY PERFORMANCE RATIOS
<TABLE>
<CAPTION>
Three Months Ending
-------------------
6/30/97 3/31/97 6/30/96
------- ------- -------
<S> <C> <C> <C>
Return on average assets (1) 1.23% 1.40% 1.54%
Return on average common equity (1) 13.95 16.30 17.17
Period end total equity to assets 8.53 8.61 9.15
Period end tangible common equity
to net assets 7.52 7.83 8.12
</TABLE>
(1) 1997 second quarter amounts exclude the $467.4 million restructuring and
merger-related charges.
Taxable equivalent net interest income was $1.366 billion, basically unchanged
from the first quarter but up 7 percent from the year-ago quarter. Average 1997
second quarter on balance sheet loans and leases increased at a 5 percent
annualized rate, more than offsetting a decline in lower margin investment
securities, resulting in a 3 percent annualized growth in average earning
assets. The core net interest margin (after first quarter RAL impact) was 5.41
percent, up slightly from the prior quarter and 8 basis points from the
prior-year quarter. The core net funds
<PAGE> 4
function, excluding the impact of the $130.1 million in one-time provision
charges, increased slightly from the first quarter's 4.33 percent level to 4.36
percent. Refer to Table 3 for net interest margin detail.
TABLE 3 - NET INTEREST MARGIN ANALYSIS
<TABLE>
<CAPTION>
($ in millions) Three Months Ending Three Months Ending
------------------- -------------------
6/30/97 3/31/97 Change 6/30/96 Change
------- ------- ------ ------- ------
<S> <C> <C> <C> <C> <C>
Net interest income (TE) $ 1,366 $ 1,372 (1.6)%(1) $ 1,272 7.4%
Avg. earnings assets 101,241 100,605 2.5 (1) 94,168 7.5
Reported NIM 5.41% 5.53% (12)bp 5.43% (2)bp
Adjustments (3) (--) (0.13) 13 (0.10) 10
--- ----- ----- --
Core NIM 5.41% 5.40% 1 5.33% 8
Core net funds
function (3) 4.36%(2) 4.33% 3 bp 4.50% (14)bp
</TABLE>
(TE) Taxable equivalent
(1) Annualized
(2) Excluding impact of $130.1 million of one-time provisioning
(3) Excluding RAL impact in 1Q97 and 1Q96 and a one-time accrual
adjustment in 2Q96.
Table 4 shows a comprehensive view of total loan and lease growth by adding
together loans and leases and loans held for sale as reported on the balance
sheet with securitized loans.
On this basis, underlying loan growth during the second quarter was an
annualized 9 percent compared with 15 percent during the first quarter and 12
percent during the year-ago quarter. Wholesale loans increased at a 10 percent
annualized rate, up from 5 percent during the first quarter. Second quarter
consumer loans excluding credit cards grew at a 13 percent annualized rate, up
slightly from the prior quarter. Total loans and leases excluding credit cards
increased at an 11 percent rate during the quarter compared with 9 percent
during the 1997 first quarter and 9 percent in the year ago quarter. Wholesale
and consumer loans grew at a more rapid rate during the 1997 second quarter than
in any of the last four quarters.
TABLE 4 - UNDERLYING LOAN GROWTH ANALYSIS
<TABLE>
<CAPTION>
($ in billions) Annualized Loan Growth Rates
----------------------------
2Q97 2Q97 1Q97 4Q96 3Q96
Average vs. vs. vs. vs.
Outstandings 1Q97 4Q96 3Q96 2Q96
------------ ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Wholesale $ 33.5 9.5% 5.4% 9.6% 5.3%
Consumer 38.1 13.1 12.5 8.8 7.0
---- ---- ---- --- ---
Subtotal $ 71.6 11.4 9.2 9.2 6.2
Credit Card 35.1 3.5 27.3 24.9 16.4
---- --- ---- ---- ----
Total $106.7 8.8% 15.1% 14.2% 9.4%
</TABLE>
<PAGE> 5
Credit card loan growth slowed during the quarter to a 4 percent annualized rate
from 27 percent in the first quarter. This slowdown in growth was a result of a
earlier tightening of credit standards and reduced marketing programs in the
BANC ONE portfolio in anticipation of the First USA merger and resultant
synergies. In contrast, First USA marketing programs during the quarter
generated significant growth in loans, though much of it occurred late in the
second quarter thereby having a lesser impact on the quarterly average growth
rate. Annualized growth during the quarter as measured by the change in end of
period loans was 30 percent for First USA compared with 16 percent for the
consolidated credit card portfolio.
Noninterest income totaled $830.5 million in the 1997 second quarter, up $23.3
million from the first quarter reflecting increases in a number of fee
activities, most notably loan processing and servicing income, which was
partially offset by lower venture capital gains. Compared with the year-ago
quarter, noninterest income was up $58.3 million. This year-over-year increase
reflected growth in securities brokerage, service charges on deposit accounts,
and investment management and advisory activities which was only partially
offset by a decline in loan processing and servicing income which was negatively
impacted by lower credit card and merchant processing fees and a higher level of
charge-offs in credit card securitized assets.
Noninterest expense continued to be influenced by Project One implementation
costs. But as anticipated, during the 1997 second quarter such costs declined
from $55 million in the first quarter to $43 million, a $12 million decrease.
Excluding Project One implementation costs for comparison purposes, as well as
the 1997 second quarter $337.3 million restructuring charge, noninterest expense
between quarters increased $90.1 million. This increase reflected a $70.3
million increase in marketing expense primarily associated with stepped-up First
USA business development activities. Compared with the year-ago quarter, and
excluding Project One implementation costs from both periods and the 1997 second
quarter restructuring charge, noninterest expense was up $142.4 million with
$100.2 million related to higher marketing expense.
CREDIT QUALITY
The June 30, 1997 allowance for loan losses was $1.362 billion, up $139.8
million from March 31, 1997. As a percent of period end loans and leases, the
allowance for loan and lease losses improved significantly from 1.55 percent at
March 31, 1997 to 1.62 percent at June 30, 1997 and provided nonperforming loan
coverage of 344 percent. Nonperforming assets at June 30, 1997 totaled $450
million and though up $16 million from the end of the 1997 first quarter,
remained at a low 0.53 percent of period-end loans and leases.
Refer to Table 5 for net charge-off amounts and percents expressed as an
annualized percent of average loan balances.
<PAGE> 6
TABLE 5 - NET CHARGE-OFFS
<TABLE>
<CAPTION>
Three Months Ending
-------------------
($ in millions) June 30, 1997 March 31, 1997
------------- --------------
Amount Percent Amount Percent
------ ------- ------ -------
<S> <C> <C> <C> <C>
Commercial $ 1.3 0.02% $ 4.1 0.08%
Real estate 6.4 0.10 6.3 0.10
Consumer (excluding credit card) 75.4 1.44 79.1 1.60
Credit Cards - reported 209.9 6.36 156.8 4.57
Leases 0.8 0.13 1.0 0.17
------ ------
Total Corporation $293.8 1.42% $247.3 1.24%
</TABLE>
Net charge-offs in the second quarter totaled $293.8 million, up $46.5 million
from the prior quarter and as a percent of average loans and leases were 1.42
percent compared with 1.24 percent in the 1997 first quarter. Excluding the
impact of credit card accounting policy changes relating to the timing of
recognition of bankruptcy losses by BANC ONE in the 1997 first quarter and the
adoption of a more conservative charge-off policy by First USA in the second
quarter, net charge-offs would have been unchanged at 1.39 percent in both
quarters.
The decline in other noncredit card consumer net charge-offs on both a dollar
and percent basis reflected lower gross charge-offs though recoveries also
showed improvement due to more efficient collection efforts.
Loans delinquent 90 days or more at June 30, 1997 totaled $494.2 million and
represented 0.58 percent of end of period loans and leases, down from $516.3
million or 0.63 percent at the end of the first quarter. Most important, credit
card delinquencies on a managed portfolio basis declined during the 1997 second
quarter from 2.39 percent of related balances to 2.11 percent.
CREDIT CARD PERFORMANCE
The generation of new credit card business for First USA during the 1997 second
quarter was very strong reflecting stepped-up marketing and business development
activities. June 30, 1997 ending credit card balances for First USA increased
$1.7 billion or 30 percent on an annualized basis from the end of the first
quarter and 1.8 million new accounts were opened, almost double recent quarterly
performance. This growth was driven primarily by significant new partnership
relationships and successful consumer lifestyle programs, as well as benefiting
from a moderation in industry-wide mail volume and reduction in account
attrition. On a consolidated basis, managed credit card balances at June 30,
1997 were $36.2 billion on a customer base of 37.7 million Cardmembers.
Credit card asset quality trends continued to improve. On a consolidated basis,
the 30 day managed delinquency rate declined to 4.76 percent from 5.21 percent
at the end of the 1997 first quarter. In the $21 billion First USA Master Trust,
the 30 day delinquency rate has declined for eight consecutive months through
June 30, 1997. Most important, the Master Trust net credit loss ratio declined
from 6.43 percent in May to 5.70 percent in June 1997.
<PAGE> 7
Net charge-offs in the managed credit card portfolio for the 1997 second quarter
increased from 5.63 percent to 6.22 percent with 36 percent, or 21 basis points
of the 59 basis point increase, explained by the above mentioned changes in
accounting policy. Specifically, these changes were BANC ONE's first quarter
adoption of a 90 day charge-off policy on bankruptcies and the second quarter
adoption by First USA of a more conservative general 180 day charge-off policy
on credit cards. Adjusted for impact of these accounting policy changes, the net
charge-off ratio increased from 5.95 percent to 6.33 percent.
The integration of the BANC ONE and First USA credit card businesses is
proceeding rapidly and smoothly. All merger-related management reassignments
were completed. Also, during the quarter First USA conducted two major platinum
card mailings to BANC ONE customers and prospects. All systems-related decisions
have been made and the conversion of BANC ONE's credit card operations to First
Data Resources is scheduled for February 1998 with a possible completion as
early as November 1997. Management continues to believe the opportunities
created by the combined credit card operations are on track to meet or exceed
the previously stated objectives for combined expense reductions and revenue
enhancements.
CAPITAL
At June 30, 1997, the tangible common equity to net assets ratio was 7.52
percent, down from 7.83 percent at March 31, 1997 due principally to asset
growth.
In connection with the merger, $193 million of First USA's $200 million of trust
preferred securities were redeemed by June 30, 1997.
During the quarter, the BANC ONE's credit ratings were reaffirmed by Moody's and
Standard & Poor's. Table 6 below highlights the long term debt ratings by major
rating agencies.
TABLE 6 - BANC ONE CORPORATION CREDIT AGENCY RATINGS
<TABLE>
<CAPTION>
Senior Subordinated
Debt Debt
---- ----
<S> <C> <C>
Moody's Aa3 A1
Standard & Poor's AA- A+
Thomson BankWatch AA AA-
</TABLE>
###
<PAGE> 8
BANC ONE CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
QUARTERLY RESULTS
------------------------------------------------
CONSOLIDATED KEY FINANCIAL HIGHLIGHTS June 30, March 31, June 30, Chg from
1997 1997 1996 Prior Year
(millions, except per common share amounts) (unaudited)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EARNINGS AND DIVIDENDS
Net income $15.8 $381.9 $395.2 -96.0%
Net income per common share 0.02 0.65 0.66 -97.0%
Dividends per common share (1) 0.38 0.38 0.34 11.8%
BALANCE SHEET HIGHLIGHTS - PERIOD END
Loans and leases - managed $109,429.1 $102,475.4 $95,786.4 14.2%
Loans and leases $84,200.1 $79,051.0 $73,684.3
Earning assets 100,760.7 100,544.2 94,371.5 6.8%
Total assets 115,491.6 111,837.0 104,791.7 10.2%
Total deposits 76,963.9 73,942.8 72,540.5 6.1%
Long-term borrowings 9,972.2 7,571.0 4,847.8 105.7%
Total stockholders' equity 9,849.5 9,634.3 9,588.2 2.7%
CONDENSED INCOME STATEMENT
Gross revenue (TE) $3,204.1 $3,145.1 $2,894.7 10.7%
Net interest income (TE) $1,366.2 $1,371.6 $1,272.4 7.4%
Provision for credit losses 395.8 271.9 194.7 103.3%
Noninterest income 830.5 807.2 772.2 7.5%
Noninterest expense 1,724.2 1,309.0 1,238.0 39.3%
Tax equivalent adjustment 13.8 13.8 16.2 -14.8%
-------------------------------------------------
Income before income taxes 62.9 584.1 595.7 -89.4%
Provision for income taxes 47.1 202.2 200.5 -76.5%
-------------------------------------------------
Net income $15.8 $381.9 $395.2 -96.0%
=================================================
Net income available to common stockholders $12.6 $378.5 $391.0 -96.8%
=================================================
KEY PERFORMANCE RATIOS
Return on average assets 0.06% 1.40% 1.54%
Return on average common equity 0.51% 16.30% 17.17%
Return on average total equity 0.63% 16.11% 16.90%
Net interest margin (TE) 5.41% 5.53% 5.43%
Net funds function (TE) 3.84% 4.43% 4.60%
COMMON STOCK DATA
Common shares outstanding - period end (2) 581.5 563.7 575.0 1.1%
- average 583.2 588.3 595.7 -2.1%
Book value per common share $16.62 $16.74 $16.26 2.2%
Price per common share:
High 50.13 49.25 37.75
Low 39.13 39.38 32.88
Close 48.44 39.75 34.00 42.5%
</TABLE>
(TE) = taxable equivalent
(1) As originally reported
(2) Net of 0, 13.9, and 1.7 million treasury shares as of June 30, 1997, March
31, 1997, and June 30, 1996 respectively.
<PAGE> 9
BANC ONE CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
QUARTERLY RESULTS
------------------------------------------------
CONSOLIDATED KEY FINANCIAL HIGHLIGHTS (CONTINUED) June 30, March 31, June 30, Chg from
1997 1997 1996 Prior Year
(millions, except per common share amounts) (unaudited)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CAPITAL (2)
Tier I capital $8,388.0 $9,063.1 $8,954.0 -6.3%
Total qualifying capital 13,123.0 12,922.8 12,276.0 6.9%
Total risk adjusted assets 102,463.5 96,077.8 88,563.5 15.7%
Tier I capital ratio 8.19% 9.43% 10.11%
Total risk adjusted capital ratio 12.81% 13.45% 13.86%
Leverage ratio 8.47% 8.27% 8.72%
Average total equity to average assets 8.90% 8.68% 9.09%
Tangible common equity to net assets 7.52% 7.83% 8.12%
INTANGIBLES - PERIOD END
Goodwill $762.1 $500.1 $560.3 36.0%
Other intangibles 299.7 243.2 351.5 -14.7%
-------------------------------------------------
Total intangibles $1,061.8 $743.3 $911.8 16.5%
CREDIT QUALITY
Allowance for credit losses - period end $1,362.2 $1,222.4 $1,100.5 23.8%
Nonperforming assets - period end:
Nonaccrual $395.4 $371.9 $385.6 2.5%
Renegotiated 1.0 2.3 2.1 -52.4%
Other real estate owned 53.7 59.6 70.5 -23.8%
-------------------------------------------------
Total nonperforming assets $450.1 $433.8 $458.2 -1.8%
Loans delinquent over 90 days $494.2 $516.3 $330.8 49.4%
Gross charge-offs $365.1 $332.7 $236.4 54.4%
Recoveries 71.3 85.4 64.3 10.9%
-------------------------------------------------
Net charge-offs $293.8 $247.3 $172.1 70.7%
CREDIT RATIOS
Allowance to ending loans and leases 1.62% 1.55% 1.49%
Allowance to nonperforming loans and leases 343.6% 326.7% 283.8%
Nonperforming assets to ending loans and leases (3) 0.53% 0.53% 0.62%
90 days delinquent to ending loans and leases (3) 0.58% 0.63% 0.45%
Net charge-offs to average loans and leases (1) (3) 1.42% 1.24% 0.94%
</TABLE>
(TE) = taxable equivalent
(1) Annualized
(2) June 30, 1997 amounts are calculated based on preliminary data
(3) Includes loans held for sale
<PAGE> 10
BANC ONE CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
YEAR TO DATE RESULTS
Six Months Ended
------------------------------------------------
CONSOLIDATED KEY FINANCIAL HIGHLIGHTS June 30, June 30, Chg from
1997 1996 Prior Year
(millions, except per common share amounts) (unaudited)
- ---------------------------------------------------------------------- ----------------------------------
<S> <C> <C> <C>
EARNINGS AND DIVIDENDS
Net income $397.7 $818.0 -51.4%
Net income per common share 0.67 1.35 -50.4%
Dividends per common share (1) 0.76 0.68 11.8%
CONDENSED INCOME STATEMENT
Gross revenue (TE) $6,349.2 $5,821.1 9.1%
Net interest income (TE) $2,737.8 $2,548.6 7.4%
Provision for credit losses 667.7 382.8 74.4%
Noninterest income 1,637.7 1,528.7 7.1%
Noninterest expense 3,033.2 2,430.0 24.8%
Tax equivalent adjustment 27.6 32.1 -14.0%
----------------- -----------------
Income before income taxes 647.0 1,232.4 -47.5%
Provision for income taxes 249.3 414.4 -39.8%
----------------- -----------------
Net income $397.7 $818.0 -51.4%
================= =================
Net income available to common stockholders $391.1 $809.5 -51.7%
================= =================
KEY PERFORMANCE RATIOS
Return on average assets (2) 0.72% 1.59%
Return on average common equity (2) 8.20% 17.66%
Return on average total equity (2) 8.17% 17.39%
Net interest margin (TE) 5.47% 5.44%
Net funds function (TE) 4.14% 4.62%
COMMON STOCK DATA
Common shares outstanding - average 585.7 598.1 -2.1%
CAPITAL
Average total equity to average assets 8.79% 9.12%
CREDIT QUALITY
Gross charge-offs $697.8 $474.3 47.1%
Recoveries 156.7 123.9 26.5%
----------------- -----------------
Net charge-offs $541.1 $350.4 54.4%
Net charge-offs to average loans and leases (2) (3) 1.33% 0.95%
</TABLE>
(TE) = taxable equivalent
(1) As originally reported
(2) Annualized
(3) Includes loans held for sale
<PAGE> 11
BANC ONE CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
QUARTERLY RESULTS
Three Months Ended
------------------------------------------------
CONSOLIDATED STATEMENT OF INCOME June 30, March 31, June 30, Chg from
1997 1997 1996 Prior Year
(millions, except per common share amounts) (unaudited)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INTEREST INCOME $2,359.8 $2,324.1 $2,106.3 12.0%
INTEREST EXPENSE 1,007.4 966.3 850.1 18.5%
-------------------------------------------------
NET INTEREST INCOME 1,352.4 1,357.8 1,256.2 7.7%
PROVISION FOR CREDIT LOSSES 395.8 271.9 194.7 103.3%
-------------------------------------------------
Net interest income after provision for credit losses 956.6 1,085.9 1,061.5
NONINTEREST INCOME
Investment management and advisory activities 76.2 74.2 67.7 12.6%
Service charges on deposit accounts 174.8 166.0 161.2 8.4%
Loan processing and servicing income:
Mortgage banking 19.5 20.3 26.1 -25.3%
Credit card and merchant processing fees 44.5 38.0 63.7 -30.1%
Loan servicing income 297.5 271.3 279.1 6.6%
-------------------------------------------------
Total loan processing and servicing income 361.5 329.6 368.9 -2.0%
Securities gains 17.1 15.2 4.5 280.0%
Other income:
Insurance 31.4 32.6 31.8 -1.3%
Securities brokerage 35.7 28.0 29.4 21.4%
Investment banking 13.1 9.3 11.3 15.9%
Other 120.7 152.3 97.4 23.9%
-------------------------------------------------
Total other income 200.9 222.2 169.9 18.2%
-------------------------------------------------
Total noninterest income 830.5 807.2 772.2 7.5%
NONINTEREST EXPENSE
Salaries and related costs 565.6 567.7 547.4 3.3%
Net occupancy expense, exclusive of depreciation 48.9 51.2 51.4 -4.9%
Equipment expense 28.9 30.2 30.9 -6.5%
Taxes other than income and payroll 25.4 23.1 25.2 0.8%
Depreciation 79.3 78.8 79.6 -0.4%
Amortization of intangibles 31.5 29.8 39.1 -19.4%
Outside services and processing 192.7 191.5 164.2 17.4%
Marketing and development 200.3 130.0 100.1 100.1%
Communication and transportation 104.7 94.4 93.4 12.1%
Restructuring charges 337.3 0.0 0.0 100.0%
Other 109.6 112.3 106.7 2.7%
-------------------------------------------------
Total noninterest expense 1,724.2 1,309.0 1,238.0 39.3%
-------------------------------------------------
INCOME BEFORE INCOME TAXES 62.9 584.1 595.7 -89.4%
Provision for income taxes 47.1 202.2 200.5 -76.5%
-------------------------------------------------
NET INCOME $15.8 $381.9 $395.2 -96.0%
=================================================
Net income per common share $0.02 $0.65 $0.66 -97.0%
Weighted average common shares outstanding 583.2 588.3 595.7 -2.1%
</TABLE>
<PAGE> 12
BANC ONE CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
YEAR TO DATE RESULTS
Six Months Ended
------------------------------------------------
CONSOLIDATED STATEMENT OF INCOME June 30, June 30, Chg from
1997 1996 Prior Year
(millions, except per common share amounts) (unaudited)
- ---------------------------------------------------------------------- -------------------------------
<S> <C> <C> <C>
INTEREST INCOME $4,683.9 $4,260.3 9.9%
INTEREST EXPENSE 1,973.7 1,743.8 13.2%
----------------- -----------------
NET INTEREST INCOME 2,710.2 2,516.5 7.7%
PROVISION FOR CREDIT LOSSES 667.7 382.8 74.4%
----------------- -----------------
Net interest income after provision for credit losses 2,042.5 2,133.7
NONINTEREST INCOME
Investment management and advisory activities 150.4 130.3 15.4%
Service charges on deposit accounts 340.8 318.0 7.2%
Loan processing and servicing income:
Mortgage banking 39.8 45.9 -13.3%
Credit card and merchant processing fees 82.5 134.2 -38.5%
Loan servicing income 568.8 536.8 6.0%
----------------- -----------------
Total loan processing and servicing income 691.1 716.9 -3.6%
Securities gains 32.3 5.6 476.8%
Other income:
Insurance 64.0 58.1 10.2%
Securities brokerage 63.7 51.5 23.7%
Investment banking 22.4 19.7 13.7%
Other 273.0 228.6 19.4%
----------------- -----------------
Total other income 423.1 357.9 18.2%
----------------- -----------------
Total noninterest income 1,637.7 1,528.7 7.1%
NONINTEREST EXPENSE
Salaries and related costs 1,133.3 1,091.0 3.9%
Net occupancy expense, exclusive of depreciation 100.1 100.0 0.1%
Equipment expense 59.1 61.0 -3.1%
Taxes other than income and payroll 48.5 49.8 -2.6%
Depreciation 158.1 151.3 4.5%
Amortization of intangibles 61.3 74.2 -17.4%
Outside services and processing 384.2 319.5 20.3%
Marketing and development 330.3 195.1 69.3%
Communication and transportation 199.1 181.7 9.6%
Restructuring charges 337.3 0.0 100.0%
Other 221.9 206.4 7.5%
----------------- -----------------
Total noninterest expense 3,033.2 2,430.0 24.8%
----------------- -----------------
INCOME BEFORE INCOME TAXES 647.0 1,232.4 -47.5%
Provision for income taxes 249.3 414.4 -39.8%
----------------- -----------------
NET INCOME $397.7 $818.0 -51.4%
================= =================
Net income per common share 0.67 1.35 -50.4%
Weighted average common shares outstanding 585.7 598.1 -2.1%
</TABLE>
<PAGE> 13
BANC ONE CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEET June 30, March 31, June 30, Chg from
1997 1997 1996 Prior Year
(millions, except per common share amounts) (unaudited)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Cash and due from banks $6,364.7 $5,435.1 $5,200.0 22.4%
Short-term investments 1,002.1 618.5 1,082.5 -7.4%
Loans held for sale 392.9 2,369.0 508.0 -22.7%
SECURITIES:
Securities held to maturity 760.1 4,407.7 3,808.4 -80.0%
Securities available for sale 14,405.5 14,098.0 15,288.3 -5.8%
-------------------------------------------------
Total securities 15,165.6 18,505.7 19,096.7 -20.6%
LOANS AND LEASES:
Managed 109,429.1 102,475.4 95,786.4 14.2%
Securitized (25,229.0) (23,424.4) (22,102.1) 14.1%
-------------------------------------------------
Total loans and leases - reported 84,200.1 79,051.0 73,684.3 14.3%
Allowance for credit losses (1,362.2) (1,222.4) (1,100.5) 23.8%
-------------------------------------------------
Net loans and leases 82,837.9 77,828.6 72,583.8 14.1%
Other assets:
Bank premises and equipment, net 1,833.1 1,807.7 1,771.1 3.5%
Interest earned, not collected 833.8 756.1 729.6 14.3%
Other real estate owned 53.7 59.6 70.5 -23.8%
Excess of cost over net assets of affiliates purchased 762.1 500.1 560.3 36.0%
Other 6,245.7 3,956.6 3,189.2 95.8%
-------------------------------------------------
Total other assets 9,728.4 7,080.1 6,320.7 53.9%
-------------------------------------------------
Total assets $115,491.6 $111,837.0 $104,791.7 10.2%
=================================================
LIABILITIES
DEPOSITS:
Non-interest bearing $18,191.6 $15,853.6 $14,586.7 24.7%
Interest bearing 58,772.3 58,089.2 57,953.8 1.4%
-------------------------------------------------
Total deposits 76,963.9 73,942.8 72,540.5 6.1%
Federal funds purchased and repurchase agreements 9,105.3 12,375.9 9,716.0 -6.3%
Other short-term borrowings 6,820.3 5,618.8 5,273.3 29.3%
Long-term borrowings 9,972.2 7,571.0 4,847.8 105.7%
Accrued interest payable 520.1 442.6 449.0 15.8%
Other liabilities 2,260.3 2,251.6 2,376.9 -4.9%
-------------------------------------------------
Total liabilities 105,642.1 102,202.7 95,203.5 11.0%
-------------------------------------------------
STOCKHOLDERS' EQUITY
Preferred stock 184.2 195.6 240.6 -23.4%
Common stock 2,907.6 2,888.0 2,883.4 0.8%
Capital in excess of aggregate stated value of common 4,054.3 4,365.2 4,477.3 -9.4%
Retained earnings 2,672.1 2,833.9 2,088.3 28.0%
Net unrealized holding gains (losses) on
securities available for sale 31.3 (77.5) (39.7) -178.8%
Treasury stock 0.0 (570.9) (61.7) -100.0%
-------------------------------------------------
Total stockholders' equity 9,849.5 9,634.3 9,588.2 2.7%
-------------------------------------------------
Total liabilities and stockholders' equity $115,491.6 $111,837.0 $104,791.7 10.2%
=================================================
</TABLE>
<PAGE> 14
BANC ONE CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
QUARTERLY RESULTS
LOAN AND LEASE ANALYSIS - PERIOD ENDING June 30, March 31, June 30, Chg from
1997 1997 1996 Prior Year
(millions) (unaudited)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Commercial $22,115.0 $20,707.6 $19,445.9 13.7%
Real estate - commercial 6,028.3 5,969.8 6,183.9 -2.5%
Real estate - construction 3,968.4 3,920.0 3,166.7 25.3%
Real estate - residential 15,673.7 14,500.5 11,543.8 35.8%
- securitized (188.9) (207.2) (232.2) -18.6%
-------------------------------------------------
- reported 15,484.8 14,293.3 11,311.6 36.9%
Consumer, net - managed 22,963.5 22,258.8 22,400.1 2.5%
- securitized (2,403.8) (1,902.8) (2,266.5) 6.1%
-------------------------------------------------
- reported 20,559.7 20,356.0 20,133.6 2.1%
Credit card - managed 36,151.9 32,783.8 30,999.5 16.6%
- securitized (22,636.3) (21,314.4) (19,603.4) 15.5%
-------------------------------------------------
- reported 13,515.6 11,469.4 11,396.1 18.6%
Leases, net 2,528.3 2,334.9 2,046.5 23.5%
-------------------------------------------------
Total loans and leases - managed $109,429.1 $102,475.4 $95,786.4 14.2%
- securitized (25,229.0) (23,424.4) (22,102.1) 14.1%
-------------------------------------------------
- reported $84,200.1 $79,051.0 $73,684.3 14.3%
=================================================
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended
------------------------------------------------
LOAN AND LEASE ANALYSIS - AVERAGE June 30, March 31, June 30, Chg from
1997 1997 1996 Prior Year
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Commercial $21,183.5 $20,150.2 $19,386.9 9.3%
Real estate - commercial 6,007.2 6,195.7 6,098.2 -1.5%
Real estate - construction 3,892.8 3,770.5 3,093.9 25.8%
Real estate - residential 14,957.7 14,298.7 11,213.9 33.4%
- securitized (197.0) (210.7) (7.7) 2458.4%
-------------------------------------------------
- reported 14,760.7 14,088.0 11,206.2 31.7%
Consumer, net - managed 22,750.2 21,941.1 22,240.5 2.3%
- securitized (1,794.8) (1,843.5) (2,067.4) -13.2%
-------------------------------------------------
- reported 20,955.4 20,097.6 20,173.1 3.9%
Credit card - managed 33,189.1 33,882.7 30,450.2 9.0%
- securitized (21,882.5) (20,976.2) (19,152.6) 14.3%
-------------------------------------------------
- reported 11,306.6 12,906.5 11,297.6 0.1%
Leases, net 2,421.9 2,312.6 1,972.0 22.8%
-------------------------------------------------
Total loans and leases - managed $104,402.4 $102,551.5 $94,455.6 10.5%
- securitized (23,874.3) (23,030.4) (21,227.7) 12.5%
-------------------------------------------------
- reported $80,528.1 $79,521.1 $73,227.9 10.0%
=================================================
</TABLE>
<PAGE> 15
BANC ONE CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
YEAR TO DATE RESULTS
LOAN AND LEASE ANALYSIS - AVERAGE Six Months Ended
------------------------------------------------ Chg from
June 30, June 30, Prior Year
(millions) (unaudited) 1997 1996
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Commercial $20,669.7 $19,125.6 8.1%
Real estate - commercial 6,100.9 6,043.4 1.0%
Real estate - construction 3,832.0 3,007.1 27.4%
Real estate - residential 14,630.0 11,157.4 31.1%
- securitized (203.8) (3.9) 5125.6%
----------------- ----------------
- reported 14,426.2 11,153.5 29.3%
Consumer, net - managed 22,347.9 22,021.8 1.5%
- securitized (1,819.0) (1,921.3) -5.3%
----------------- ----------------
- reported 20,528.9 20,100.5 2.1%
Credit card - managed 23,219.2 30,121.7 -22.9%
- securitized (11,117.1) (18,080.4) -38.5%
----------------- ----------------
- reported 12,102.1 12,041.3 0.5%
Leases, net 2,367.6 1,874.0 26.3%
----------------- ----------------
Total loans and leases - managed $93,167.3 $93,350.9 -0.2%
- securitized (13,139.9) (20,005.5) -34.3%
----------------- ----------------
- reported $80,027.4 $73,345.4 9.1%
================= ================
</TABLE>
<PAGE> 16
<TABLE>
<CAPTION>
BANC ONE CORPORATION AND SUBSIDIARIES QUARTERLY AVERAGE BALANCE SHEET, YIELDS & RATES (1) (2)
Second Quarter 1997 First Quarter 1997 Second Quarter 1996
---------------------------------------------------------------------------------------------------
Average Income / Yield / Average Income / Yield / Average Income / Yield /
(millions) (unaudited) Balance Expense Rate Balance Expense Rate Balance Expense Rate
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Short term investments $792.2 $11.2 5.67% $844.8 $11.2 5.38% $645.5 $9.6 5.98%
Loans held for sale 2,317.7 78.3 13.55% 1,420.6 44.2 12.62% 699.4 13.4 7.71%
Securities: (4) (5)
Taxable 16,137.3 264.8 6.58% 17,244.4 277.2 6.52% 17,865.0 286.2 6.44%
Tax exempt 1,465.9 30.3 8.29% 1,574.3 31.9 8.22% 1,729.7 35.6 8.28%
-------------------------- --------------------- ---------------------------
Total securities 17,603.2 295.1 6.72% 18,818.7 309.1 6.66% 19,594.7 321.8 6.61%
Loans and leases: (3)
Commercial 21,183.5 447.5 8.47% 20,150.2 411.9 8.29% 19,386.9 399.5 8.29%
Real estate - commercial 6,007.2 136.6 9.12% 6,195.7 136.4 8.93% 6,098.2 135.0 8.90%
Real estate - construction 3,892.8 93.9 9.68% 3,770.5 90.0 9.68% 3,093.9 76.7 9.97%
Real estate - residential 14,760.7 351.4 9.55% 14,088.0 330.1 9.50% 11,206.2 258.3 9.27%
Consumer, net 20,955.4 494.0 9.46% 20,097.6 487.1 9.83% 20,173.1 468.4 9.34%
Credit Card 11,306.6 420.6 14.92% 12,906.5 477.0 14.99% 11,297.6 402.9 14.34%
Leases, net 2,421.9 45.0 7.45% 2,312.6 40.9 7.17% 1,972.0 36.9 7.53%
-------------------------- --------------------- ---------------------------
Total net loans and leases 80,528.1 1,989.0 9.91% 79,521.1 1,973.4 10.06% 73,227.9 1,777.7 9.76%
Total earning assets 101,241.2 $2,373.6 9.40% 100,605.2 $2,337.9 9.42% 94,167.5 $2,122.5 9.07%
Allowance for credit losses (1,217.6) (1,199.0) (1,081.9)
Other assets 12,477.8 11,355.8 10,339.3
-------------- --------------- ---------------
Total assets $112,501.4 $110,762.0 $103,424.9
============== =============== ===============
Deposits:
Noninterest bearing $15,342.0 $14,588.5 $14,073.7
Interest bearing demand 1,677.3 $7.0 1.67% 1,920.1 $7.5 1.58% 2,240.3 $9.6 1.72%
Money market and savings 30,826.6 269.6 3.51% 30,075.1 252.6 3.41% 29,197.9 235.8 3.25%
Time deposits:
CD's less than $100,000 18,128.4 249.5 5.52% 18,140.5 247.1 5.52% 19,040.7 261.0 5.51%
CD's $100,000 and over:
Domestic 5,817.1 80.1 5.52% 6,023.3 81.4 5.48% 5,406.6 47.8 3.56%
Foreign 2,148.3 29.3 5.47% 2,591.8 34.5 5.40% 2,272.9 29.9 5.29%
-------------------------- --------------------- ---------------------------
Total deposits 73,939.7 635.5 3.45% 73,339.3 623.1 3.45% 72,232.1 584.1 3.25%
Borrowed Funds:
Short-term 17,043.2 233.1 5.49% 18,030.4 231.9 5.22% 14,592.5 189.2 5.21%
Long-term 8,776.4 138.8 6.34% 6,994.2 111.3 6.45% 4,726.1 76.8 6.54%
-------------------------- --------------------- ---------------------------
Total borrowed funds 25,819.6 371.9 5.78% 25,024.6 343.2 5.56% 19,318.6 266.0 5.54%
Total interest bearing liabilities 84,417.3 $1,007.4 4.79% 83,775.4 $966.3 4.68% 77,477.0 $850.1 4.41%
Other liabilities 2,735.1 2,781.3 2,471.6
Preferred stock 188.9 201.0 243.0
Common equity (6) 9,818.1 9,415.8 9,159.6
-------------- --------------- ---------------
Total liabilities and equity $112,501.4 $110,762.0 $103,424.9
============== =============== ===============
(1) Fully taxable equivalent basis
(2) Certain prior period amounts have been reclassified for comparison
purposes
(3) Nonaccrual loans are included in loan balances
(4) Average securities balances are based on amortized historical cost,
excluding SFAS 115 adjustments to fair value which are included in
other assets.
(5) Fair value of total securities at June 30, 1997 approximates $15,181
(6) Net unrealized holding gains (losses) on securities available for sale,
net of tax
($23.4) ($1.3) ($36.6)
============== =============== ===============
</TABLE>
<PAGE> 17
<TABLE>
<CAPTION>
BANC ONE CORPORATION AND SUBSIDIARIES YEAR TO DATE AVERAGE BALANCE SHEET, YIELDS & RATES (1)(2)
First Six Months 1997 First Six Months 1996
---------------------------------- ---------------------------------
Average Income / Yield / Average Income / Yield /
(millions) (unaudited) Balance Expense Rate Balance Expense Rate
- ------------------------------------------------------------------------ ---------------------------------
<S> <C> <C> <C> <C> <C> <C>
Short term investments $818.4 $22.4 5.52% $618.3 $17.7 5.76%
Loans held for sale 1,871.6 122.5 13.20% 644.7 24.2 7.55%
Securities: (4)(5)
Taxable 16,687.8 542.0 6.55% 17,960.7 580.9 6.50%
Tax exempt 1,519.8 62.2 8.25% 1,731.5 72.2 8.39%
------------------------ -------------------------
Total securities 18,207.6 604.2 6.69% 19,692.2 653.1 6.67%
Loans and leases: (3)
Commercial 20,669.7 859.4 8.38% 19,125.6 783.1 8.23%
Real estate - commercial 6,100.9 273.0 9.02% 6,043.4 269.3 8.96%
Real estate - construction 3,832.0 183.9 9.68% 3,007.1 148.5 9.93%
Real estate - residential 14,426.2 681.5 9.53% 11,153.5 513.2 9.25%
Consumer, net 20,528.9 981.1 9.64% 20,100.5 956.0 9.56%
Credit Card 12,102.1 897.6 14.96% 12,041.3 857.9 14.33%
Leases, net 2,367.6 85.9 7.32% 1,874.0 69.4 7.45%
------------------------ -------------------------
Total net loans and leases 80,027.4 3,962.4 9.98% 73,345.4 3,597.4 9.86%
Total earning assets 100,925.0 $4,711.5 9.41% 94,300.6 $4,292.4 9.15%
Allowance for credit losses (1,208.4) (1,080.3)
Other assets 11,919.9 10,504.3
------------ -------------
Total assets $111,636.5 $103,724.6
============ =============
Deposits:
Noninterest bearing $14,967.4 $14,108.4
Interest bearing demand 1,798.0 $14.5 1.63% 2,677.7 $24.4 1.83%
Money market and savings 30,452.9 522.2 3.46% 28,625.5 467.8 3.29%
Time deposits:
CD's less than $100,000 18,134.4 496.6 5.52% 19,417.6 537.0 5.56%
CD's $100,000 and over:
Domestic 5,919.7 161.5 5.50% 5,497.0 124.3 4.55%
Foreign 2,368.8 63.8 5.43% 1,853.1 49.0 5.32%
------------------------ -------------------------
Total deposits 73,641.2 1,258.6 3.45% 72,179.3 1,202.5 3.35%
Borrowed Funds:
Short-term 17,534.1 465.0 5.35% 14,878.1 389.5 5.26%
Long-term 7,890.2 250.1 6.39% 4,704.7 151.7 6.48%
------------------------ -------------------------
Total borrowed funds 25,424.3 715.1 5.67% 19,582.8 541.2 5.56%
Total interest bearing liabilities 84,098.1 $1,973.7 4.73% 77,653.7 $1,743.7 4.52%
Other liabilities 2,758.0 2,499.7
Preferred stock 194.9 245.2
Common equity (6) 9,618.1 9,217.6
------------ ------------
Total liabilities and equity $111,636.5 $103,724.6
============ ============
(1) Fully taxable equivalent basis
(2) Certain prior period amounts have been reclassified for comparison
purposes
(3) Nonaccrual loans are included in loan balances
(4) Average securities balances are based on amortized historical cost,
excluding SFAS 115 adjustments to fair value which are included in
other assets.
(5) Fair value of total securities at June 30, 1997 approximates $15,181
(6) Net unrealized holding gains (losses) on securities available for sale,
net of tax
($12.2) $21.7
============= ============
</TABLE>
<PAGE> 18
BANC ONE CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
QUARTERLY RESULTS
UNDERLYING LOAN GROWTH ANALYSIS (1) (2) Three Months Ended
----------------------------------------------------------------------
Jun. 30, Mar. 31, Jun. 30, Growth(3) Growth
(millions) (unaudited) 1997 1997 1996 2Q vs. 1Q 2Q vs. 2Q
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
AVERAGE BALANCES
WHOLESALE
Commercial loans and leases $23,576.8 $22,657.0 $21,816.5 16.3% 8.1%
Real estate - construction 3,892.8 3,803.8 3,127.2 9.4% 24.5%
Real estate - commercial 6,007.2 6,238.0 6,165.2 -14.8% -2.6%
------------------------------------------
Total wholesale 33,476.8 32,698.8 31,108.9 9.5% 7.6%
CONSUMER
Real estate - residential 5,570.1 5,704.8 6,218.3 -9.4% -10.4%
Home equity 8,046.9 7,709.0 6,735.5 17.6% 19.5%
Direct consumer 3,281.3 3,113.3 2,775.9 21.6% 18.2%
Indirect consumer 15,472.0 14,885.2 14,164.0 15.8% 9.2%
Student 2,856.1 2,898.7 2,655.9 -5.9% 7.5%
Other consumer 938.7 935.3 818.8 1.5% 14.6%
Consumer finance 1,955.0 1,672.1 1,040.3 67.9% 87.9%
------------------------------------------
Sub-total 38,120.1 36,918.4 34,408.7 13.1% 10.8%
Credit cards 35,123.2 34,822.2 29,457.8 3.5% 19.2%
------------------------------------------
Total consumer 73,243.3 71,740.6 63,866.5 8.4% 14.7%
==========================================
Total loans and leases 106,720.1 104,439.4 94,975.4 8.8% 12.4%
==========================================
PERIOD END BALANCES
WHOLESALE
Commercial loans and leases $24,615.9 $23,713.1 $22,434.6 15.3% 9.7%
Real estate - construction 3,968.4 4,023.8 3,270.4 -5.5% 21.3%
Real estate - commercial 6,028.3 6,095.9 6,334.7 -4.4% -4.8%
------------------------------------------
Total wholesale 34,612.6 33,832.8 32,039.7 9.2% 8.0%
CONSUMER
Real estate - residential 5,760.7 5,754.6 6,241.0 0.4% -7.7%
Home equity 8,372.7 7,804.1 6,977.4 29.2% 20.0%
Direct consumer 3,347.2 3,108.9 2,762.7 30.7% 21.2%
Indirect consumer 15,683.1 15,440.1 14,516.6 6.3% 8.0%
Student 2,790.0 2,894.6 2,633.3 -14.5% 6.0%
Other consumer 949.3 932.5 840.3 7.2% 13.0%
Consumer finance 2,154.5 1,824.1 1,108.2 72.7% 94.4%
------------------------------------------
Sub-total 39,057.5 37,758.9 35,079.5 13.8% 11.3%
Credit cards 36,151.9 34,759.3 30,034.7 16.1% 20.4%
------------------------------------------
Total consumer 75,209.4 72,518.2 65,114.2 14.9% 15.5%
==========================================
Total loans and leases 109,822.0 106,351.0 97,153.9 13.1% 13.0%
==========================================
</TABLE>
(1) Represents total of on-balance sheet loans, loans held for sale, and
securitized loans.
(2) Prior periods restated to conform with current period presentation; e.g.
acquistions, dispositions, loan purchases/sales, and reclassifications.
(3) Annualized
<PAGE> 19
BANC ONE CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
QUARTERLY RESULTS
MANAGED CREDIT CARD DETAIL (1) Three Months Ended
--------------------------------------------------------------------------------
Jun. 30, Mar. 31, Dec. 31, Sep. 30, Jun. 30,
(millions) (unaudited) 1997 1997 1996 1996 1996
- ---------------------------------------------------------------------------------------------------------------------------------
BANC ONE CORPORATION (EXCLUDING FIRST USA)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PERIOD END LOANS - MANAGED $11,532.0 $11,893.8 $12,641.4 $12,798.0 $12,271.6
- securitized (3,340.0) (3,340.0) (3,340.0) (3,940.0) (4,440.0)
--------------------------------------------------------------------------------
- reported 8,192.0 8,553.8 9,301.4 8,858.0 7,831.6
--------------------------------------------------------------------------------
QUARTERLY AVERAGE LOANS - MANAGED 11,635.8 12,290.5 12,824.4 12,595.8 11,918.5
- securitized (3,340.0) (3,340.0) (3,558.0) (4,198.0) (4,440.0)
--------------------------------------------------------------------------------
- reported 8,295.8 8,950.5 9,266.4 8,397.8 7,478.5
- ---------------------------------------------------------------------------------------------------------------------------------
NET CHARGE-OFFS - AMOUNT - MANAGED 228.8 182.2 218.8 192.3 173.7
- securitized (66.4) (60.5) (69.7) (77.0) (77.0)
--------------------------------------------------------------------------------
- reported 162.4 121.7 149.1 115.3 96.7
- RATE - MANAGED 7.89% 6.01% 6.79% 6.06% 5.86%
- securitized 7.98% 7.35% 7.79% 7.30% 6.98%
--------------------------------------------------------------------------------
- reported 7.85% 5.51% 6.40% 5.46% 5.20%
- ---------------------------------------------------------------------------------------------------------------------------------
DELINQUENCY RATE - 30+ DAYS - MANAGED 6.21% 6.35% 5.80% 5.05% 4.62%
- securitized 6.30% 6.59% 6.56% 5.85% 5.11%
--------------------------------------------------------------------------------
- reported 6.22% 6.26% 5.53% 4.69% 4.34%
--------------------------------------------------------------------------------
- 90+ DAYS - MANAGED 2.77% 2.80% 2.39% 2.04% 1.82%
- securitized 2.89% 2.98% 2.77% 2.36% 1.93%
--------------------------------------------------------------------------------
- reported 2.76% 2.73% 2.25% 1.97% 1.76%
- ---------------------------------------------------------------------------------------------------------------------------------
CREDIT CARD CHARGE VOLUME - MANAGED 3,724.3 3,604.9 5,049.7 4,816.2 4,495.4
NEW ACCOUNTS OPENED - MANAGED 398.0 361.2 696.0 646.6 660.4
CREDIT CARDS ISSUED - MANAGED 19,908.5 21,744.2 20,259.2 22,099.3 22,058.6
ACCOUNTS ON FILE - MANAGED 15,592.5 17,043.5 15,843.2 17,258.4 17,219.2
=================================================================================================================================
FIRST USA
- ---------------------------------------------------------------------------------------------------------------------------------
PERIOD END LOANS - MANAGED $24,619.9 $22,890.0 $22,196.6 $19,792.7 $18,727.9
- securitized (19,296.3) (17,974.4) (17,074.5) (16,026.3) (15,163.4)
--------------------------------------------------------------------------------
- reported 5,323.6 4,915.6 5,122.1 3,766.4 3,564.5
--------------------------------------------------------------------------------
QUARTERLY AVERAGE LOANS - MANAGED 23,487.4 22,592.2 20,546.1 19,092.0 18,531.7
- securitized (18,542.5) (17,636.2) (16,150.8) (15,358.1) (14,712.6)
--------------------------------------------------------------------------------
- reported 4,944.9 4,956.0 4,395.3 3,733.9 3,819.1
- ---------------------------------------------------------------------------------------------------------------------------------
NET CHARGE-OFFS - AMOUNT - MANAGED 315.4 302.9 252.0 226.0 192.0
- securitized (267.9) (267.8) (222.3) (198.9) (170.6)
--------------------------------------------------------------------------------
- reported 47.5 35.1 29.7 27.1 21.4
- RATE - MANAGED 5.39% 5.44% 4.88% 4.71% 4.17%
- securitized 5.80% 6.16% 5.48% 5.15% 4.66%
--------------------------------------------------------------------------------
- reported 3.85% 2.87% 2.69% 2.89% 2.25%
- ---------------------------------------------------------------------------------------------------------------------------------
DELINQUENCY RATE - 30+ DAYS - MANAGED 4.08% 4.62% 4.89% 4.70% 4.00%
- securitized 4.57% 4.96% 5.27% 4.99% 4.23%
--------------------------------------------------------------------------------
- reported 2.32% 3.36% 3.59% 3.47% 3.06%
--------------------------------------------------------------------------------
- 90+ DAYS - MANAGED 1.80% 2.18% 2.14% 1.94% 1.69%
- securitized 2.02% 2.29% 2.25% 2.02% 1.75%
--------------------------------------------------------------------------------
- reported 0.97% 1.70% 1.70% 1.58% 1.43%
- ---------------------------------------------------------------------------------------------------------------------------------
CREDIT CARD CHARGE VOLUME - MANAGED 6,444.6 5,780.2 6,340.3 4,914.5 4,547.5
NEW ACCOUNTS OPENED - MANAGED 1,811.9 876.6 1,034.4 1,044.9 696.5
CREDIT CARDS ISSUED - MANAGED 17,830.5 16,250.6 15,946.5 15,127.0 14,318.1
ACCOUNTS ON FILE - MANAGED 13,834.5 12,521.3 12,201.5 11,579.4 10,933.3
=================================================================================================================================
</TABLE>
(1) Includes credit card loans held for sale
<PAGE> 20
BANC ONE CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
QUARTERLY RESULTS
MANAGED CREDIT CARD DETAIL (1) (CONTINUED) Three Months Ended
--------------------------------------------------------------------------------
Jun. 30, Mar. 31, Dec. 31, Sep. 30, Jun. 30,
(millions) (unaudited) 1997 1997 1996 1996 1996
- ---------------------------------------------------------------------------------------------------------------------------------
BANC ONE CORPORATION
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PERIOD END LOANS - MANAGED $36,151.9 $34,783.8 $34,838.0 $32,590.7 $30,999.5
- securitized (22,636.3) (21,314.4) (20,414.5) (19,966.3) (19,603.4)
--------------------------------------------------------------------------------
- reported 13,515.6 13,469.4 14,423.5 12,624.4 11,396.1
--------------------------------------------------------------------------------
QUARTERLY AVERAGE LOANS - MANAGED 35,123.2 34,882.7 33,370.5 31,687.8 30,450.2
- securitized (21,882.5) (20,976.2) (19,708.8) (19,556.1) (19,152.6)
--------------------------------------------------------------------------------
- reported 13,240.7 13,906.5 13,661.7 12,131.7 11,297.6
- ---------------------------------------------------------------------------------------------------------------------------------
NET CHARGE-OFFS - AMOUNT - MANAGED 544.2 485.1 470.8 418.3 365.7
- securitized (334.3) (328.3) (292.0) (275.9) (247.6)
--------------------------------------------------------------------------------
- reported 209.9 156.8 178.8 142.4 118.1
- RATE - MANAGED 6.22% 5.63% 5.61% 5.25% 4.83%
- securitized 6.13% 6.35% 5.89% 5.61% 5.20%
--------------------------------------------------------------------------------
- reported 6.36% 4.57% 5.21% 4.67% 4.20%
- ---------------------------------------------------------------------------------------------------------------------------------
DELINQUENCY RATE - 30+ DAYS - MANAGED 4.76% 5.21% 5.22% 4.84% 4.25%
- securitized 4.83% 5.22% 5.48% 5.16% 4.43%
--------------------------------------------------------------------------------
- reported 4.68% 5.20% 4.84% 4.33% 3.94%
--------------------------------------------------------------------------------
- 90+ DAYS - MANAGED 2.11% 2.39% 2.23% 1.98% 1.74%
- securitized 2.15% 2.40% 2.34% 2.09% 1.79%
--------------------------------------------------------------------------------
- reported 2.05% 2.35% 2.05% 1.85% 1.66%
- ---------------------------------------------------------------------------------------------------------------------------------
CREDIT CARD CHARGE VOLUME - MANAGED 10,168.9 9,385.1 11,390.0 9,730.7 9,042.9
NEW ACCOUNTS OPENED - MANAGED 2,209.9 1,237.8 1,730.4 1,691.5 1,356.9
CREDIT CARDS ISSUED - MANAGED 37,739.0 37,994.8 36,205.7 37,226.3 36,376.7
ACCOUNTS ON FILE - MANAGED 29,427.0 29,564.8 28,044.7 28,837.8 28,152.5
=================================================================================================================================
</TABLE>
(1) Includes credit card loans held for sale
