<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): January 20, 1998
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 January 20, 1998, BANC ONE CORPORATION ("BANC ONE") issued a press
release announcing its earnings for the three-month and twelve-month periods
ended December 31, 1997. A copy of such press release is filed herein as Exhibit
99.1 and incorporated by reference herein.
On January 20, 1998, BANC ONE issued a press release announcing that
BANC ONE's Board of Directors have approved (i) a ten percent stock dividend on
shares of BANC ONE's common stock, payable on February 26, 1998 to shareholders
of record as of February 12, 1998, (ii) a cash dividend of $0.38 per share on
shares of BANC ONE's common stock, payable on March 31, 1998 to shareholders of
record on March 13, 1998, and (iii) a cash dividend of $0.875 per share on
shares of BANC ONE's Series C $3.50 Cumulative Convertible Preferred Stock (the
"Series C Preferred Stock"), payable on March 31, 1998 to shareholders of record
on March 13, 1998. BANC ONE also announced in the press release that it has
elected to redeem all of the shares of Series C Preferred Stock on April 16,
1998 (the "Redemption Date") at the redemption price of $51.05 per share plus
the amount of any dividends accrued and unpaid thereon to the Redemption Date. A
copy of such press release is filed herein as Exhibit 99.2 and incorporated by
reference herein.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
(a) Financial Statements
NONE. The financial statements included in this report are 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 January 20,
1998 titled "Banc One Announces Record Fourth
Quarter Results Including Record New Account Growth
and Favorable Trends Accelerate as Credit Card
Losses Continue to Decline at First USA."
Exhibit 99.2 BANC ONE CORPORATION Press Release dated January 20,
1998 titled "Banc One Declares a 10 Percent Stock
Dividend, Continues Current Cash Dividend, and
Announces Redemption of Series C Convertible Stock."
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: January 26, 1998 By: /s/ Bobby L. Doxey
-----------------------
Bobby L. Doxey
Controller
3
<PAGE> 1
Exhibit 99.1
BANC ONE CORPORATION
100 East Broad Street
Columbus, Ohio 43271-0240
NEWS RELEASE
For further information contact:
[BANC ONE LOGO] Jay S. Gould (614) 248-0189
John A. Russell (614) 248-5989
FOR RELEASE: January 20, 1998
BANC ONE ANNOUNCES RECORD FOURTH QUARTER RESULTS INCLUDING
RECORD NEW ACCOUNT GROWTH AND FAVORABLE TRENDS ACCELERATE
AS CREDIT CARD LOSSES CONTINUE TO DECLINE AT FIRST USA
----------------
BANC ONE CORPORATION, Columbus, Ohio (NYSE:ONE) reported record 1997 fourth
quarter earnings of $474.8 million, or $0.79 per share, and full-year 1997
earnings of $1.306 million or $2.19 per share.
Excluding second quarter First USA acquisition and strategic initiative charges,
and related quarterly securitization gain accounting adjustments, fourth quarter
earnings were $503.8 million, or $0.84 per share, both up 14 percent over the
year-ago quarter, with record full-year results of $1.811 billion or $3.04 per
share, up 8 percent and 10 percent, respectively, over 1996.
During 1997, First USA opened a record 8.1 million new accounts including a new
record of 2.4 million accounts in the fourth quarter. At year-end 1997, managed
credit card assets totaled $40.8 billion, up $6.0 billion or 17 percent from the
end of 1996. Cardmembers totaled 40.5 million at year-end, up 12 percent from
the end of 1996.
John B. McCoy, Chairman and Chief Executive Officer of BANC ONE CORPORATION,
said, "We are extremely pleased with our earnings performance for the fourth
quarter and the year. Our credit card operations posted their third consecutive
quarter of record new accounts while the managed credit card net charge off
ratio declined and other credit quality measures remained steady. We essentially
completed our Project One reengineering efforts and we are starting to realize
the rewards of that effort now. In addition, with fourth quarter earnings up
significantly from third quarter levels, we expect that our earnings momentum
will continue to build through 1998."
In portfolios where loan growth is being emphasized, credit card receivables
were up 20 percent, consumer loans up 16
-more-
<PAGE> 2
BANC ONE
page 2
percent, and commercial loans up 7 percent during 1997. Fourth quarter net
interest income on a managed basis totaled $2.057 billion, up 11 percent from
the prior-year quarter. This reflected the positive impact of a managed average
net interest margin of 6.27 percent, up 16 basis points from the 1996 fourth
quarter. Fourth quarter 1997 return on average common equity was 18.93 percent.
Net charge-offs during the 1997 fourth quarter totaled $290.3 million and
represented 1.38 percent of average loans, little changed from $289.4 million
and 1.34 percent in the 1997 third quarter. Net charge-offs on managed credit
card loans declined to 5.37 percent during the 1997 fourth quarter from 5.61
percent in the year-ago quarter and from 5.78 percent in the 1997 third quarter.
BANC ONE has a pending affiliation with First Commerce Corporation headquartered
in New Orleans, Louisiana, which is expected to be completed during the second
quarter of 1998.
BANC ONE CORPORATION had managed total assets of $147.0 billion, total assets of
$115.9 billion, and common equity of $10.2 billion at December 31, 1997. BANC
ONE operates over 1,200 banking centers in 12 states. 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; through InvestQuest at:
http://www.investquest.com; or through Fax-on-demand at: (614) 844-3860.
####
<PAGE> 3
For further information contact:
Jay S. Gould (614) 248-0189
1997 FOURTH 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.
Statement of Financial Accounting Standards No. 128, "Earnings Per Share" (SFAS
128) effective for financial statements issued for periods ending after December
15, 1997 was adopted. The term "earnings per share" used in this discussion
refers to diluted earnings per common share in accordance with SFAS 128.
DISCUSSION
SUMMARY OF RESULTS - 1997 FOURTH QUARTER AND FULL YEAR
Reported 1997 fourth quarter earnings were a record $474.8 million, up 7 percent
from the year-ago quarter. Earnings per share in the 1997 fourth quarter were
$0.79, up 7 percent from $0.74 in the 1996 fourth quarter. Excluding the impact
of the previously announced accounting adjustment by First USA related to the
recognition of securitization gains, earnings in the 1997 fourth quarter would
have been $503.8 million or $0.84 per share, both up 14 percent from year-ago
results.
Full-year 1997 reported earnings were $1,305.7 million down from $1,672.8
million in the prior year with earnings per share of $2.19, down from $2.77 for
1996. Excluding the 1997 second quarter charges related to the acquisition of
First USA and other strategic initiatives, as well as the impact of the First
USA recognition of securitization gains accounting adjustment, full-year 1997
earnings were a record $1,810.5 million, up 8 percent from 1996. On this same
basis, full-year 1997 earnings per share would have been a record $3.04, up 10
percent from 1996 results.
Performance highlights compared with the 1997 third quarter:
o Return on average assets exceeded 1.6% and return on average common equity
increased to 18.9%
o Strong loan growth in targeted portfolios
o Third consecutive quarter of record new credit card account generation
o Demand deposit growth accelerated
o Declining managed credit card net charge-offs
o Lower expenses
Page 1
<PAGE> 4
Key quarterly and year-to-date performance ratios are listed below in Table 1.
TABLE 1 - KEY PERFORMANCE RATIOS
4Q97 3Q97 4Q96
---- ---- ----
Return on average assets 1.67% 1.51% 1.63%
Return on average common equity 18.93 17.66 18.49
Period end total equity to assets 8.95 8.92 8.80
Period end tangible common equity
to net assets 7.84 7.88 7.98
"MANAGED" VS. "REPORTED" DISCUSSIONS
For funding and risk management purposes, loans are securitized, primarily in
support of credit card activities. When securitized, the loans are removed from
the balance sheet with related net revenue derived from these loans moving from
net interest income and loan loss provision expense to the noninterest income
loan servicing category. This complicates the understanding of underlying trends
in "reported" net interest income, net interest margin, noninterest income, as
well as the underlying growth rates of balance sheet "reported" loans and
leases. Therefore, to better understand underlying trends, it is helpful to
review selected results on a "managed" basis which adds to "reported" data on
loans and leases and loans held for sale, data on "securitized" loans.
For the most part, the following discussion is on a "managed" basis which better
characterizes the underlying trends and performance. For a discussion of those
income statement categories most impacted by the differences between reported
and managed presentations, refer to the "Selected 'As Reported' Discussion".
TABLE 2 - MANAGED INCOME STATEMENT
<TABLE>
<CAPTION>
($ in millions) Change
Change ------
4Q97 3Q97 Amount 4Q96 Amount Pct.
---- ---- ------ ---- ------ ----
<S> <C> <C> <C> <C> <C> <C>
* Net interest income (TE) $2,056.6 $2,044.7 $ 11.9 $1,855.7 $200.9 10.8%
* Provision expense 636.2 617.5 18.7 617.5 18.7 3.0
-------- -------- -------- ------
* Net funds function 1,420.4 1,427.2 (6.8) 1,238.2 182.2 14.7
* Noninterest income 735.4 783.4 (48.0) 801.8 (66.4) (8.3)
Noninterest expense 1,481.4 1,537.6 (56.2) 1,377.3 104.1 7.6
(TE) adjustment (13.2) (12.9) 0.3 (15.2) (2.0) nmv
-------- -------- ------ -------- ------
Pretax income 661.2 660.1 1.1 647.5 13.7 2.1
Income taxes & (TE) adj. 186.4 226.9 (40.5) 205.5 (19.1) (9.3)
-------- -------- ------ -------- ------
Net income $ 474.8 $ 433.2 $ 41.6 $ 442.0 $ 32.8 7.4%
(TE) Tax equivalent
* Line items significantly impacted by "managed" vs. "reported" presentations.
</TABLE>
MANAGED NET INTEREST INCOME AND MARGIN
Managed taxable equivalent net interest income in the 1997 fourth quarter was
$2,056.6 million, up $11.9 million from the third quarter reflecting a $1.4
billion increase in average managed earning assets to $130.2 billion. This
reflected a strong $1.9 billion increase in average managed loans (See Table 4),
partially offset by a $0.5 billion decline in average investment securities.
Page 2
<PAGE> 5
The benefit of higher managed average earning assets was partially offset by a
decline in the managed net interest margin (See Table 3).
The managed net interest margin in the 1997 fourth quarter decreased slightly to
6.27 percent from 6.30 percent in the 1997 third quarter. The managed net funds
function, which represents the managed net interest margin less the managed
provision for loan losses expressed as a percent of managed average earning
assets, also declined during the 1997 fourth quarter to 4.33 percent from 4.40
percent in the third quarter. Compared with the year-ago quarter, the managed
net interest margin and managed net funds function increased 16 basis points and
25 basis points, respectively.
TABLE 3 - MANAGED NET INTEREST MARGIN ANALYSIS
4Q97 3Q97(1) Change 4Q96 Change
MANAGED ---- ------- ------ ---- ------
-------
Net interest margin 6.27% 6.30% (3)bp 6.11% 16bp
Net funds function 4.33% 4.40% (7)bp 4.08% 25bp
(1) Restated to reflect the reclassification of selected securitization
assets to investments from other assets.
MANAGED LOAN GROWTH
Early in 1997, a decision was made to cap or reduce the size of the commercial
real estate portfolio. In our judgment, competition had driven deal terms and
pricing to levels that were no longer prudent and profitable. A similar decision
was made in 1996 to shrink the residential real estate portfolio because of
unattractive returns. These portfolios declined at an annualized rate of 11
percent in the fourth quarter.
Conversely, other portfolios, namely credit cards, consumer loans, and non-real
estate related commercial loans and leases were targeted for growth.
TABLE 4 - MANAGED LOAN GROWTH ANALYSIS (1)
($ in billions) Annualized Loan Growth Rates (2)
--------------------------------
4Q97 4Q97 3Q97 2Q97 4Q97
Average vs. vs. vs. vs.
Outstandings 3Q97 2Q97 1Q97 4Q96
------------ ---- ---- ---- ----
Wholesale $ 24.5 4.3% 3.1% 16.3% 7.3%
Consumer 34.5 10.0 14.0 17.2 15.6
Credit card 39.2 16.4 26.6 3.5 19.6
------
Targeted $ 98.2 11.0% 16.0% 11.6% 14.9%
Nontargeted 15.1 (10.6) (4.6) (7.2) (5.5)
------
Total $113.3 8.0% 12.9% 8.8% 11.7%
(1) Managed represents the total of on-balance sheet loans, securitized
loans, and loans held for sale.
(2) Growth rates reflect a restatement of prior periods to conform with
current period presentation; e.g. acquisitions, dispositions, loan
purchases/sales, and reclassifications.
Page 3
<PAGE> 6
Table 4 shows that the annualized growth rate in targeted loans was 11 percent
during the 1997 fourth quarter with credit cards increasing at 16 percent,
consumer loans at 10 percent, led by growth in home equity loans and auto
leases, and commercial loans and leases at 4 percent.
DEPOSITS AND BORROWINGS
During the quarter free funding from demand deposits increased and the maturity
structure of our liabilities was lengthened. Average noninterest bearing demand
deposits increased $658 million, representing the third consecutive quarter of
growth. Compared with the year-ago quarter, noninterest bearing demand deposits
were up 14 percent.
And reflecting a strategy to lengthen the maturity of wholesale funding sources,
on-balance sheet short-term borrowings were reduced through securitizations, as
well as medium-term debt issuance. Specifically, average short-term borrowing
decreased $2.7 billion during the fourth quarter due to the issuance of $1.2
billion of medium-term notes at the end of the 1997 third quarter to refinance
commercial paper, as well as $2.9 billion of credit card and indirect automobile
loan securitizations.
MANAGED NONINTEREST INCOME
Managed noninterest income totaled $735.4 million in the 1997 fourth quarter,
down $48.0 million from the third quarter primarily reflecting an $88.9 million
decline in venture capital income partially offset by increases in other fee
activities.
Managed credit card related fees were essentially unchanged between quarters. As
anticipated, there was a decline in current period securitization gains due to
the fact that fourth quarter credit card securitizations totaled $2.3 billion,
down from $6.1 billion in the 1997 third quarter. This negative impact was
basically offset by an increase in interchange income and other fees.
Other loan servicing income declined $15.7 million related to a 1997 fourth
quarter loss on an auto loan securitization, as well as a reclass of syndication
fees to the other income category.
Service charges on deposit accounts increased $7.0 million from third quarter
levels reflecting higher volume, as well as fees associated with Rapid Cash
activities. At year end over 5,000 Rapid Cash machines were deployed, up from
about 2,900 at the end of the prior quarter.
Excluding venture capital income, other income totaled $247.2 million, up $42.2
million from the 1997 third quarter. This increase reflected a variety of
transactions spread over a number of fee income categories and activities, as
well as the reclassification of syndication fees from other loans servicing
noted above.
MANAGED NONINTEREST EXPENSE
Managed noninterest expense in the 1997 fourth quarter totaled $1,481.4 million,
down $56.2 million from the third quarter reflecting a $110.4 million decline in
marketing and development expenses primarily associated with credit card
activities. And, as anticipated, Project One implementation costs continued to
decline, totaling $26.9 million in the 1997 fourth quarter, down from $29.5
million in the prior quarter.
Page 4
<PAGE> 7
Partially offsetting these declines was a $24.9 million increase in outside
services and processing. This increase reflected a combination of factors
including the impact of some data processing project extensions, Year 2000
expenses, and overall higher levels of business activities including credit card
and Rapid Cash expenses.
Similarly, the $16.1 million increase in depreciation expense from the 1997
third quarter was due to increased data processing equipment and expanded credit
card operations facilities. Expanded facilities for credit card operations also
accounted for the linked-quarter increases in net occupancy and equipment
expenses.
PROVISION FOR INCOME TAXES
The effective tax rate in the 1997 fourth quarter declined to 28.2 percent from
34.4 percent in the third quarter and reflected primarily two factors. First,
was a typical fourth quarter adjustment made to year-to-date tax accruals as
exemplified by the decline in the effective tax rate between the 1996 third and
fourth quarters from 33.1 percent to 31.7 percent. Second, was the
implementation of proactive tax planning initiatives. The effective tax rate for
full-year 1997 was 33.7 percent, up from 33.0 percent in 1996.
MANAGED LOAN LOSS PROVISION EXPENSE AND CREDIT QUALITY
The managed provision for loan losses totaled $636.2 million in the 1997 fourth
quarter, up from $617.5 million in the prior quarter. Managed net charge-offs in
the fourth quarter totaled $653.9 million, up from $636.2 million in the third
quarter and represented 2.29 percent of average managed loans and leases, up
from 2.27 percent in the prior quarter.
Table 5 shows net charge-off amounts and ratios expressed as an annualized
percent of average loan balances.
TABLE 5 - NET CHARGE-OFFS
4Q97 3Q97
($ in millions) ------------------ ------------------
REPORTED Amount Percent Amount Percent
- -------- ------ ------- ------ -------
Commercial $ 35.8 0.42% $ 6.4 0.07%
Consumer (excluding credit card) 81.4 0.86 77.8 0.83
Credit cards 173.1 5.80 205.2 5.70
------ ------
Total $290.3 1.38% $289.4 1.34%
MANAGED
- -------
Credit cards - managed $530.4 5.37% $548.1 5.78%
Total - managed $653.9 2.29% $636.2 2.27%
Managed credit card net charge-offs declined $17.7 million between quarters with
a corresponding decline in the managed net charge-off ratio to 5.37 percent from
5.78 percent. Compared with the 1997 third quarter credit card performance, the
6-month lagged managed charge-off ratio decline to 5.99 percent from 6.23
percent, with the 12-month lagged net charge-off ratio declining to 6.31 percent
from 6.86 percent.
Page 5
<PAGE> 8
Reflecting seasonal factors, the over 90 day delinquency rate on managed credit
cards increased to 2.29 percent at December 31, 1997 from 2.02 percent at the
end of the third quarter, but was comparable to the 2.23 percent level at the
end of the prior-year quarter. Also reflecting seasonal factors, the 30 day
delinquency rate on managed credit cards increased to 5.16 percent at year-end,
up from 4.85 percent at the end of September 1997 but was below the 5.22 percent
level at the end of last year.
The increase in commercial net charge-offs between quarters related to the
charge-off of three loans for which reserves had been established a number of
quarters earlier. The 1997 fourth quarter net charge-off ratio for consumer
loans, excluding credit cards, was 0.86 percent, little changed from 0.83
percent in the third quarter.
Total loans and leases delinquent 90 days or more at December 31, 1997 were
$559.2 million and represented 0.66 percent of period-end loans and leases, down
from $640.8 million or 0.77 percent at the end of the third quarter. The 90 day
delinquency ratio on commercial loans decreased to 0.24 percent at quarter end
down from 0.54 percent at September 30, 1997.
The December 31, 1997 allowance for loan losses represented 1.62 percent of
period-end loans and leases, unchanged from September 30, 1997, and provided
nonperforming loan coverage of 324 percent, up from 314 percent at the end of
the third quarter. Nonperforming assets at December 31, 1997 totaled $476.2
million and represented 0.56 percent of period-end loans and leases, down from
the end of the third quarter.
CREDIT CARD PERFORMANCE HIGHLIGHTS
The generation of new credit card business during the 1997 fourth quarter
remained very strong with a record 2.4 million new credit card accounts being
opened, the third consecutive quarter of record new account generation. This
reflected a number of premier names signed in the partnership area including the
American Medical Association, Special Olympics, and E-Trade. Of the accounts
opened during the 1997 fourth quarter, 2.0 million represented VISA/MasterCard
accounts, equaling the new VISA/MasterCard relationships in the third quarter.
At the end of the 1997 fourth quarter Cardmembers totaled 40.5 million.
At December 31, 1997, managed credit cards totaled $40.8 billion, up $1.9
billion from September 30, 1997, and up 17.1 percent from the end of 1996.
CAPITAL
Capital levels remained strong. The December 31, 1997 total equity to assets
ratio was 8.95 percent, up slightly from September 30, 1997. The tangible common
equity to tangible assets ratio declined slightly to 7.84 percent.
INTEREST RATE RISK
One objective of interest rate risk management continues to be to effectively
minimize the impact of changes in interest rate levels on net income.
Sophisticated modeling techniques and risk
Page 6
<PAGE> 9
management methodologies are used to model this impact. The basic process and
current results are as follows.
First, net income is modeled using the historical volatility of market rates to
calculate probable future rate movements. Second, and given the low volatility
of interest rates in recent years, the impact on net income of a +/- 100 basis
point immediate and parallel shift in rates is also modeled. Then the modeled
scenario producing the most adverse impact on net income becomes the measuring
standard to which interest rate risk is managed. Of these two scenarios, the
+100 basis point scenario currently results in the more adverse net income
impact.
Specifically, current modeling estimates that if rates increased by 100 basis
points, net income could decline by two percent over the following twelve month
period. Conversely, if rates declined by 100 basis points, net income could
increase by about two percent.
We have also recently modeled the estimated impact on net income if the yield
curve were to become inverted by 60 basis points within the bank range;i.e. Fed
Funds to 5 years. These results suggest a possible decline in net income of no
more than one percent over the next twelve month period. This suggests that net
income might only be modestly exposed to a yield curve inversion in the bank
range of the yield curve.
In summary, we believe our approaches yield results that are reasonable and
prudent and consistent with our stated objective.
But what is difficult, if not impossible to predict, however, is the impact an
inverted yield curve, or just the current low level of interest rates, could
have on customer behavior with regard to their borrowing and investing
activities, and therefore on our future loan and deposit growth.
SELECTED "AS REPORTED" DISCUSSION
REPORTED NET INTEREST INCOME AND MARGIN
Taxable equivalent net interest income in the 1997 fourth quarter was $1,332.0
million, down $44.2 million from the third quarter reflecting declines in both
average earning assets and reported net interest margin due to loan
securitizations late in the 1997 third quarter and fourth quarter. Reported
average earning assets in the 1997 fourth quarter decreased $2.6 billion
reflecting a $2.0 billion decline in average loans and leases, as well as the
continued planned sales of investment securities. Refer to Table 6 for reported
net interest margin detail.
TABLE 6 - REPORTED NET INTEREST MARGIN ANALYSIS
4Q97 3Q97 Change 4Q96 Change
REPORTED ---- ---- ------ ---- ------
--------
Net interest margin 5.33% 5.37% (4)bp 5.52% (19)bp
Net funds function 4.24% 4.31% (7)bp 4.22% 2 bp
REPORTED NONINTEREST INCOME
Reported noninterest income totaled $1,095.3 million in the 1997 fourth quarter,
down $7.6 million from the third quarter primarily reflecting an $88.9 million
decline in venture capital income partially offset by increases in other fee
activities.
Page 7
<PAGE> 10
Reported credit card servicing income increased $65.9 million. This increase was
favorably impacted by the higher level of securitized loans and interchange
income and lower net charge-off levels associated with securitized credit cards.
These increases were partially offset by lower current period securitization
gains as securitizations totaled $2.3 billion, down from $6.1 billion in the
1997 third quarter. As previously announced, the third quarter's high level of
securitizations reflected an acceleration of issuances into the 1997 third
quarter to take advantage of the third quarter's favorable asset backed
securities markets.
Primarily reflecting the movement of interchange income on credit card loans
securitized during the quarter to credit card servicing income, reported credit
card and merchant processing income declined $21.0 million from the third
quarter.
###
Page 8
<PAGE> 11
<TABLE>
<CAPTION>
BANC ONE CORPORATION AND SUBSIDIARIES 17-Jan-98
QUARTERLY RESULTS 02:43 PM
- ----------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED KEY FINANCIAL HIGHLIGHTS December 31, September 30, December 31, Chg from
(millions, except per common share amounts) (unaudited) 1997 1997 1996 Prior Year
- ----------------------------------------------------------------------------------------------------------------------------
EARNINGS AND DIVIDENDS
<S> <C> <C> <C> <C>
Net income $ 474.8 $ 433.2 $ 442.0 7.4%
Net income per common share -Basic (3) 0.81 0.74 0.77 5.2%
-Diluted (3) 0.79 0.73 0.74 6.8%
Dividends per common share (1) 0.38 0.38 0.34 11.8%
KEY PERFORMANCE RATIOS (2)
Return on average assets 1.67% 1.51% 1.63%
Return on average common equity 18.93% 17.66% 18.49%
Return on average total equity 18.76% 17.46% 18.23%
Net interest margin (TE) -Managed 6.27% 6.30% 6.11%
Net funds function (TE) -Managed 4.33% 4.40% 4.08%
CAPITAL
Tier I capital $ 8,700.5 $ 8,462.8 $ 9,556.9 -9.0%
Total qualifying capital 13,409.3 13,140.3 13,482.2 -0.5%
Total risk adjusted assets 102,310.6 100,555.5 95,788.5 6.8%
Tier I capital ratio 8.50% 8.42% 9.98%
Total risk adjusted capital ratio 13.11% 13.07% 14.07%
Leverage ratio 7.91% 7.61% 8.88%
Average total equity to average assets 8.93% 8.67% 8.92%
Tangible common equity to net assets 7.84% 7.88% 7.98%
INTANGIBLES - PERIOD END
Goodwill $ 741.8 $ 751.4 $ 508.4 45.9%
Other intangibles 512.2 341.8 264.4 93.7%
---------------------------------------------------
Total intangibles $ 1,254.0 $ 1,093.2 $ 772.8 62.3%
COMMON STOCK DATA
Book value per common share $ 17.48 $ 16.96 $ 16.93 3.2%
Price per common share:
High $ 59.81 $ 57.31 $ 47.88
Low 47.31 47.56 40.38
Close 54.31 56.00 43.00 26.3%
YEAR TO DATE RESULTS
Twelve Months Ended
--------------------------------------------------------------
CONSOLIDATED KEY FINANCIAL HIGHLIGHTS December 31, December 31, Chg from
(millions, except per common share amounts) (unaudited) 1997 1996 Prior Year
- ----------------------------------------------------------------------------------------------------------------------------
EARNINGS AND DIVIDENDS
Net income $ 1,305.7 $ 1,672.8 -21.9%
Net income per common share -Basic (3) 2.25 2.88 -21.9%
-Diluted (3) 2.19 2.77 -20.9%
Dividends per common share (1) 1.52 1.36 11.8%
KEY PERFORMANCE RATIOS (2)
Return on average assets 1.16% 1.59%
Return on average common equity 13.33% 17.83%
Return on average total equity 13.22% 17.56%
Net interest margin (TE) -Managed 6.25% 6.06%
Net funds function (TE) -Managed 4.32% 4.38%
(TE) = taxable equivalent
(1) As originally reported
(2) Annualized
(3) Amounts restated to conform with new accounting pronouncements
Page 9
</TABLE>
<PAGE> 12
BANC ONE CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
QUARTERLY RESULTS
Three Months Ended
-----------------------------------------
CONSOLIDATED STATEMENT OF INCOME December 31, September 30, December 31, Chg from
1997 1997 1996 Prior Year
(millions, except per common share amounts) (unaudited)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INTEREST INCOME $ 2,312.2 $ 2,387.1 $ 2,296.9 0.7%
INTEREST EXPENSE 993.4 1,023.8 951.2 4.4%
--------------------------------------
NET INTEREST INCOME 1,318.8 1,363.3 1,345.7 -2.0%
PROVISION FOR CREDIT LOSSES 272.6 270.8 319.6 -14.7%
--------------------------------------
Net interest income after provision for credit losses 1,046.2 1,092.5 1,026.1
NONINTEREST INCOME
Investment management and advisory activities 82.3 82.8 77.0 6.9%
Service charges on deposit accounts 184.3 177.3 170.3 8.2%
Loan processing and servicing income:
Mortgage banking 18.3 18.0 22.3 -17.9%
Credit card and merchant processing fees 23.7 44.7 74.0 -68.0%
Credit card servicing income 533.9 468.0 260.1 105.3%
Other loan servicing income (5.8) 9.9 6.0 -196.7%
--------------------------------------
Total loan processing and servicing income 570.1 540.6 362.4 57.3%
Securities gains 13.9 10.8 9.5 N/A
Other income:
Insurance 35.9 38.5 36.9 -2.7%
Securities brokerage 24.5 27.1 23.5 4.3%
Investment banking 14.2 11.5 13.3 6.8%
Other 170.1 214.3 303.5 -44.0%
--------------------------------------
Total other income 244.7 291.4 377.2 -35.1%
--------------------------------------
Total noninterest income 1,095.3 1,102.9 996.4 9.9%
NONINTEREST EXPENSE
Salaries and related costs 616.0 618.2 572.6 7.6%
Net occupancy expense, exclusive of depreciation 56.4 53.4 44.1 27.9%
Equipment expense 38.4 36.3 32.3 18.9%
Depreciation 98.4 82.3 80.1 22.8%
Amortization of intangibles 26.4 31.8 38.2 -30.9%
Outside services and processing 249.9 225.0 189.6 31.8%
Marketing and development 136.1 246.5 149.4 -8.9%
Communication and transportation 118.9 109.6 100.3 18.5%
Other 139.8 132.2 168.4 -17.0%
--------------------------------------
Total noninterest expense 1,480.3 1,535.3 1,375.0 7.7%
--------------------------------------
INCOME BEFORE INCOME TAXES 661.2 660.1 647.5 2.1%
Provision for income taxes 186.4 226.9 205.5 -9.3%
--------------------------------------
NET INCOME $ 474.8 $ 433.2 $ 442.0 7.4%
======================================
Net income per common share -Basic (2) $ 0.81 $ 0.74 $ 0.77 5.2%
-Diluted (2) $ 0.79 $ 0.73 $ 0.74 6.8%
Common shares outstanding - period end (1) 585.9 584.8 570.7 2.7%
Weighted average common shares outstanding -Basic (2) 585.9 583.0 569.9 2.8%
-Diluted (2) 598.7 599.1 598.9 -0.0%
<FN>
(1) Net of 1.3, .7, and 5.8 million treasury shares as of December 31, 1997, September 30, 1997, and December
31, 1996 respectively.
(2) Amounts restated to conform with new accounting pronouncements Page 10
</TABLE>
<PAGE> 13
BANC ONE CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
YEAR TO DATE RESULTS
Twelve Months Ended
---------------------------------------------------
CONSOLIDATED STATEMENT OF INCOME December 31, December 31, Chg from
1997 1996 Prior Year
(millions, except per common share amounts) (unaudited)
- -------------------------------------------------------------------------- --------------------------------------
<S> <C> <C> <C>
INTEREST INCOME $ 9,383.2 $ 8,736.2 7.4%
INTEREST EXPENSE 3,990.9 3,597.6 10.9%
----------------- -----------------
NET INTEREST INCOME 5,392.3 5,138.6 4.9%
PROVISION FOR CREDIT LOSSES 1,211.1 942.7 28.5%
----------------- -----------------
Net interest income after provision for credit losses 4,181.2 4,195.9
NONINTEREST INCOME
Investment management and advisory activities 315.5 279.1 13.0%
Service charges on deposit accounts 702.4 654.1 7.4%
Loan processing and servicing income:
Mortgage banking 76.0 88.7 -14.3%
Credit card and merchant processing fees 150.9 280.7 -46.2%
Credit card servicing income 1,558.2 1,059.2 47.1%
Other loan servicing income 17.1 24.7 -30.8%
----------------- -----------------
Total loan processing and servicing income 1,802.2 1,453.3 24.0%
Securities gains 57.0 16.7 N/A
Other income:
Insurance 159.5 135.3 17.9%
Securities brokerage 94.1 90.4 4.1%
Investment banking 48.1 39.5 21.8%
Other 657.1 694.5 -5.4%
----------------- -----------------
Total other income 958.8 959.7 -0.1%
----------------- -----------------
Total noninterest income 3,835.9 3,362.9 14.1%
NONINTEREST EXPENSE
Salaries and related costs 2,367.5 2,204.6 7.4%
Net occupancy expense, exclusive of depreciation 209.9 192.1 9.3%
Equipment expense 133.7 125.2 6.8%
Depreciation 338.7 300.8 12.6%
Amortization of intangibles 119.6 146.7 -18.5%
Outside services and processing 859.1 674.2 27.4%
Marketing and development 712.9 445.9 59.9%
Communication and transportation 427.6 378.4 13.0%
Restructuring charges 337.3 0.0 N/A
Other 542.5 594.1 -8.7%
----------------- -----------------
Total noninterest expense 6,048.8 5,062.0 19.5%
----------------- -----------------
INCOME BEFORE INCOME TAXES 1,968.3 2,496.8 -21.2%
Provision for income taxes 662.6 824.0 -19.6%
----------------- -----------------
NET INCOME $ 1,305.7 $ 1,672.8 -21.9%
================= =================
Net income per common share -Basic (1) $ 2.25 $ 2.88 -21.9%
-Diluted (1) $ 2.19 $ 2.77 -20.9%
Weighted average common shares outstanding -Basic (1) 574.9 575.0 -0.0%
-Diluted (1) 596.1 603.9 -1.3%
<FN>
(1) Amounts restated to conform with new accounting pronouncements Page 11
</TABLE>
<PAGE> 14
BANC ONE CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
QUARTERLY RESULTS
CONSOLIDATED BALANCE SHEET December 31, September 30, December 31, 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 $ 7,727.4 $ 6,474.6 $ 6,524.4 18.4%
Short-term investments 838.3 673.0 680.7 23.2%
Loans held for sale 2,362.0 466.0 1,473.8 60.3%
SECURITIES:
Securities held to maturity 785.3 723.1 4,397.9 -82.1%
Securities available for sale 14,467.9 14,704.2 14,733.8 -1.8%
-------------------------------------------------------
Total securities 15,253.2 15,427.3 19,131.7 -20.3%
LOANS AND LEASES:
Managed 113,186.8 112,514.3 101,960.7 11.0%
Securitized (31,134.0) (29,773.3) (22,571.0) 37.9%
-------------------------------------------------------
Total loans and leases - reported 82,052.8 82,741.0 79,389.7 3.4%
Allowance for credit losses (1,325.9) (1,343.6) (1,197.7) 10.7%
-------------------------------------------------------
Net loans and leases 80,726.9 81,397.4 78,192.0 3.2%
Other assets:
Bank premises and equipment, net 1,882.2 1,832.0 1,799.2 4.6%
Interest earned, not collected 821.3 902.5 782.1 5.0%
Other real estate owned 66.6 57.1 53.0 25.7%
Excess of cost over net assets of affiliates purchased 741.8 751.4 508.4 45.9%
Other 5,481.6 5,145.7 3,008.2 82.2%
-------------------------------------------------------
Total other assets 8,993.5 8,688.7 6,150.9 46.2%
-------------------------------------------------------
Total assets $115,901.3 $113,127.0 $112,153.5 3.3%
=======================================================
LIABILITIES
DEPOSITS:
Non-interest bearing $ 18,444.2 $ 17,287.1 $ 16,340.6 12.9%
Interest bearing 58,970.1 58,495.1 57,882.4 1.9%
-------------------------------------------------------
Total deposits 77,414.3 75,782.2 74,223.0 4.3%
Federal funds purchased and repurchase agreements 10,708.2 8,220.0 12,858.5 -16.7%
Other short-term borrowings 3,095.7 4,437.3 5,466.9 -43.4%
Long-term borrowings 11,066.4 11,370.9 6,827.8 62.1%
Accrued interest payable 489.7 503.2 468.6 4.5%
Other liabilities 2,751.0 2,723.9 2,440.7 12.7%
-------------------------------------------------------
Total liabilities 105,525.3 103,037.5 102,285.5 3.2%
-------------------------------------------------------
STOCKHOLDERS' EQUITY
Preferred stock 135.4 173.5 207.1 -34.6%
Common stock 2,936.2 2,927.6 2,882.6 1.9%
Capital in excess of aggregate stated value of common 4,122.5 4,052.5 4,346.4 -5.2%
Retained earnings 3,129.6 2,879.9 2,625.1 19.2%
Net unrealized holding gains (losses) on
securities available for sale 121.0 94.1 19.9 N/A
Treasury stock (68.7) (38.1) (213.1) -67.8%
-------------------------------------------------------
Total stockholders' equity 10,376.0 10,089.5 9,868.0 5.1%
-------------------------------------------------------
Total liabilities and stockholders' equity $115,901.3 $113,127.0 $112,153.5 3.3%
=======================================================
Page 12
</TABLE>
<PAGE> 15
<TABLE>
<CAPTION>
BANC ONE CORPORATION AND SUBSIDIARIES QUARTERLY AVERAGE BALANCE SHEET, YIELDS & RATES (1) (2)
Fourth Quarter 1997 Third Quarter 1997
-------------------------------------------------------------------------------
Average Income / Yield / Average Income / Yield /
(millions) (unaudited) Balance Expense Rate Balance Expense Rate
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Short term investments $1,151.3 $16.2 5.58% $757.5 $10.6 5.55%
Loans held for sale 460.1 8.8 7.59% 419.8 7.9 7.47%
Securities: (4) (5)
Taxable 12,954.9 216.8 6.64% 13,868.9 228.9 6.55%
Tax exempt 1,340.4 26.2 7.75% 1,436.5 28.8 7.95%
----------------------- ----------------------
Total securities 14,295.3 243.0 6.74% 15,305.4 257.7 6.68%
Loans and leases: (3)
Commercial 21,945.5 457.9 8.28% 21,704.1 458.2 8.38%
Real estate - commercial 5,681.5 129.7 9.06% 5,914.1 134.6 9.03%
Real estate - construction 3,936.3 96.2 9.70% 4,037.3 98.9 9.72%
Leases, net 2,582.5 44.3 6.81% 2,540.7 48.1 7.51%
Home equity 9,245.0 223.5 9.59% 8,744.8 213.7 9.70%
Real estate - residential 7,271.3 172.6 9.42% 7,299.7 170.2 9.25%
Indirect consumer loans 8,313.0 197.5 9.43% 8,322.3 199.5 9.51%
Auto lease 6,576.8 148.6 8.96% 6,235.1 134.2 8.54%
Student loans 1,746.6 33.0 7.50% 1,984.5 37.1 7.42%
Other 4,064.0 114.3 11.16% 4,117.1 121.3 11.69%
Credit card 11,831.3 439.8 14.75% 14,281.7 508.1 14.11%
----------------------- ----------------------
Total net loans and leases 83,193.8 2,057.4 9.81% 85,181.4 2,123.9 9.89%
Total earning assets 99,100.5 $2,325.4 9.31% 101,664.1 $2,400.1 9.37%
Allowance for credit losses (1,310.1) (1,361.0)
Other assets 14,709.4 13,182.6
---------- -----------
Total assets $112,499.8 $113,485.7
========== ===========
Deposits:
Noninterest bearing $16,592.3 $15,934.0
Interest bearing demand 1,509.3 $5.6 1.47% 1,515.7 $6.6 1.73%
Money market and savings 32,437.6 293.2 3.59% 31,765.8 282.4 3.53%
Time deposits:
CD's less than $100,000 17,474.1 237.6 5.39% 18,006.7 246.9 5.44%
CD's $100,000 and over:
Domestic 5,028.1 69.7 5.50% 5,726.2 78.6 5.45%
Foreign 2,363.6 32.4 5.44% 2,482.7 33.6 5.37%
----------------------- ----------------------
Total deposits 75,405.0 638.5 3.36% 75,431.1 648.1 3.41%
Borrowed Funds:
Short-term 12,396.4 182.4 5.84% 15,105.0 211.5 5.56%
Long-term 11,334.9 172.5 6.04% 10,156.1 164.3 6.42%
----------------------- ----------------------
Total borrowed funds 23,731.3 354.9 5.93% 25,261.1 375.8 5.90%
Total interest bearing liabilities 82,544.0 $993.4 4.77% 84,758.2 $1,023.9 4.79%
Other liabilities 3,319.8 2,951.0
Preferred stock 142.7 176.2
Common equity (6) 9,901.0 9,666.3
---------- ------------
Total liabilities and equity $112,499.8 $113,485.7
========== ===========
<FN>
(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 December 31, 1997 approximates $15,268
(6) Net unrealized holding gains (losses) on securities available for sale, net of tax
$104.0 $64.7
============ ============
Fourth Quarter 1996
-----------------------------------------
/ Average Income / Yield /
(millions) (unaudited) Balance Expense Rate
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Short term investments $793.3 $10.4 5.22%
Loans held for sale 452.9 6.4 5.62%
Securities: (4) (5)
Taxable 16,653.2 271.2 6.48%
Tax exempt 1,663.6 33.0 7.89%
------------------------
Total securities 18,316.8 304.2 6.61%
Loans and leases: (3)
Commercial 19,925.4 413.3 8.25%
Real estate - commercial 6,322.3 143.1 9.00%
Real estate - construction 3,517.7 87.1 9.85%
Leases, net 2,210.1 41.1 7.40%
Home equity 7,281.6 177.2 9.68%
Real estate - residential 6,377.4 144.7 9.03%
Indirect consumer loans 9,330.7 215.7 9.20%
Auto lease 4,044.5 86.8 8.54%
Student loans 1,793.4 34.2 7.59%
Other 4,107.1 119.4 11.57%
Credit card 13,661.7 528.5 15.39%
------------------------
Total net loans and leases 78,571.9 1,991.1 10.08%
Total earning assets 98,134.9 $2,312.1 9.37%
Allowance for credit losses (1,137.4)
Other assets 11,173.1
-----------
Total assets $108,170.6
===========
Deposits:
Noninterest bearing $14,601.9
Interest bearing demand 2,085.6 $8.8 1.68%
Money market and savings 29,430.5 250.4 3.38%
Time deposits:
CD's less than $100,000 18,293.2 257.6 5.60%
CD's $100,000 and over:
Domestic 5,560.5 76.2 5.45%
Foreign 3,081.2 41.5 5.36%
------------------------
Total deposits 73,052.9 634.5 3.46%
Borrowed Funds:
Short-term 16,759.7 216.4 5.14%
Long-term 5,982.1 100.3 6.67%
------------------------
Total borrowed funds 22,741.8 316.7 5.54%
Total interest bearing liabilities 81,192.8 $951.2 4.66%
Other liabilities 2,729.9
Preferred stock 213.6
Common equity (6) 9,432.4
-----------
Total liabilities and equity $108,170.6
===========
<FN>
(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 December 31, 1997 approximates $15,268
(6) Net unrealized holding gains (losses) on securities available for sale, net of tax
$34.4
===========
Page 13
</TABLE>
<PAGE> 16
<TABLE>
<CAPTION>
BANC ONE CORPORATION AND SUBSIDIARIES YEAR TO DATE AVERAGE BALANCE SHEET, YIELDS & RATES(1)(2)
Twelve months ended 1997 Twelve months ended 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 $886.9 $49.2 5.55% $662.2 $36.8 5.56%
Loans held for sale 1,149.9 139.2 12.11% 549.4 39.5 7.19%
Securities: (4) (5)
Taxable 15,036.4 987.7 6.57% 17,378.7 1,128.4 6.49%
Tax exempt 1,453.6 117.2 8.06% 1,694.2 139.4 8.23%
------------------------- ------------------------
Total securities 16,490.0 1,104.9 6.70% 19,072.9 1,267.8 6.65%
Loans and leases: (3)
Commercial 21,252.0 1,775.5 8.35% 19,368.9 1,600.3 8.26%
Real estate - commercial 5,948.1 537.3 9.03% 6,162.6 553.1 8.98%
Real estate - construction 3,910.0 379.0 9.69% 3,214.4 316.4 9.84%
Leases, net 2,465.4 178.3 7.23% 2,025.9 150.5 7.43%
Home equity 8,341.0 809.5 9.71% 5,966.8 581.9 9.75%
Real estate - residential 7,019.9 652.0 9.29% 5,931.2 522.3 8.81%
Indirect consumer loans 8,730.5 814.4 9.33% 9,802.8 876.6 8.94%
Auto lease 5,813.2 506.3 8.71% 3,435.9 286.9 8.35%
Student loans 1,946.8 146.0 7.50% 1,733.4 135.5 7.82%
Other 4,114.5 499.9 12.15% 4,971.4 582.1 11.71%
Credit card 12,583.2 1,845.5 14.67% 12,471.3 1,849.7 14.83%
------------------------- ------------------------
Total net loans and leases 82,124.6 8,143.7 9.92% 75,084.6 7,455.3 9.93%
Total earning assets 100,651.4 $9,437.0 9.38% 95,369.1 $8,799.4 9.23%
Allowance for credit losses (1,272.5) (1,103.4)
Other assets 12,941.3 10,678.6
---------- ----------
Total assets $112,320.2 $104,944.3
========== ==========
Deposits:
Noninterest bearing $15,620.6 $14,203.1
Interest bearing demand 1,654.1 $26.7 1.61% 2,391.5 $42.9 1.79%
Money market and savings 31,284.1 1,097.8 3.51% 29,008.1 963.3 3.32%
Time deposits:
CD's less than $100,000 17,935.8 981.1 5.47% 18,928.8 1,053.2 5.56%
CD's $100,000 and over:
Domestic 5,646.2 309.8 5.49% 5,432.2 270.8 4.99%
Foreign 2,396.2 129.8 5.42% 2,428.9 130.0 5.35%
------------------------- -----------------------
Total deposits 74,537.0 2,545.2 3.41% 72,392.6 2,460.2 3.40%
Borrowed Funds:
Short-term 15,626.8 858.9 5.50% 15,372.4 803.4 5.23%
Long-term 9,329.6 586.9 6.29% 5,083.4 334.0 6.57%
------------------------- -----------------------
Total borrowed funds 24,956.4 1,445.8 5.79% 20,455.8 1,137.4 5.56%
Total interest bearing liabilities 83,872.8 $3,991.0 4.76% 78,645.3 $3,597.6 4.57%
Other liabilities 2,948.2 2,569.9
Preferred stock 177.0 236.1
Common equity (6) 9,701.6 9,289.9
---------- ----------
Total liabilities and equity $112,320.2 $104,944.3
========== ==========
<FN>
(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 December 31, 1997 approximates $15,268
(6) Net unrealized holding gains (losses) on securities available for sale, net of tax
$35.9 $9.8
========== ==========
Page 14
</TABLE>
<PAGE> 17
BANC ONE CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
MANAGED LOAN GROWTH ANALYSIS(1)(2) DECEMBER 31, 1997 GROWTH(3)
-------------------------------------------------------------------------------------------
BALANCE SHEET TOTAL
----------------------------
(millions) (unaudited) REPORTED HELD FOR SALE SECURITIZED MANAGED 4Q97 VS. 3Q97 4Q97 VS. 4Q96
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PERIOD END BALANCES
WHOLESALE
Commercial loans $22,446.0 $22,446.0 9.99% 7.23%
Real estate - commercial 5,601.4 5,601.4 -12.23% -14.55%
Real estate - construction 3,808.1 3,808.1 -29.16% 2.76%
Leases 2,767.3 2,767.3 30.86% 18.95%
---------------------------------------------------------
Total wholesale 34,622.8 34,622.8 3.12% 3.29%
CONSUMER
Real estate - residential 7,189.4 $540.0 7,729.4 10.88% 10.97%
Home equity 9,488.0 $168.4 9,656.4 19.32% 21.01%
Indirect consumer 7,683.4 1,646.4 9,329.8 -4.23% -8.57
Auto Lease 6,748.6 6,748.6 21.79% 56.32
Student 1,831.8 745.5 2,577.3 41.43% -1.71%
Other consumer 3,984.8 106.4 4,091.2 -3.46% 11.07%
---------------------------------------------------------
Total Consumer 36,926.0 540.0 2,666.7 40,132.7 11.32% 12.19%
CREDIT CARDS 10,504.0 1,822.0 28,467.3 40,793.3 17.33% 16.52%
---------------------------------------------------------
Total loans and leases $82,052.8 $2,362.0 $31,134.0 $115,548.8 10.91% 10.78%
=========================================================
AVERAGE BALANCES THREE MONTHS ENDED DECEMBER 31, 1997 GROWTH(3)
-------------------------------------------------------------------------------------------
WHOLESALE
Commercial loans $21,945.5 $21,945.5 4.41% 6.48%
Real estate - commercial 5,681.5 5,681.5 -15.60% -11.93%
Real estate - construction 3,936.3 3,936.3 -9.93% 8.77%
Leases 2,582.5 2,582.5 6.53% 16.85%
---------------------------------------------------------
Total wholesale 34,145.8 34,145.8 -0.58% 3.82%
CONSUMER
Real estate - residential 7,271.3 $460.1 7,731.4 4.79% 10.48%
Home equity 9,245.0 $174.7 9,419.7 21.73% 20.05%
Indirect consumer 8,313.0 1,248.0 9,561.0 -2.48% -9.72
Auto Lease 6,576.8 6,576.8 21.74% 62.61
Student 1,746.6 761.6 2,508.2 -25.22% -3.73%
Other consumer 4,064.0 114.1 4,178.1 4.59% 12.97%
---------------------------------------------------------
Total consumer 37,216.7 460.1 2,298.4 39,975.2 7.49% 11.72%
CREDIT CARDS 11,831.3 27,354.3 39,185.6 16.37% 19.63%
---------------------------------------------------------
Total loans and leases $83,193.8 $460.1 $29,652.7 $113,306.6 8.01% 11.71%
=========================================================
<FN>
(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. acquisitions, dispositions, loan
purchases/sales, and reclassifications.
(3) Annualized
Page 15
</TABLE>
<PAGE> 18
BANC ONE CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
QUARTERLY RESULTS
MANAGED CREDIT CARD DETAIL (1) Three Months Ended
-------------------------------------------------------------------------------
Dec. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31,
(millions) (unaudited) 1997 1997 1997 1997 1996
- ----------------------------------------------------------------------------------------------------------------------------------
BANC ONE CORPORATION
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PERIOD END LOANS - MANAGED $40,793.3 $38,915.9 $36,151.9 $34,783.8 $34,838.0
- securitized (28,467.3) (27,467.2) (22,636.3) (21,314.4) (20,414.5)
-------------------------------------------------------------------------------
- reported 12,326.0 11,448.7 13,515.6 13,469.4 14,423.5
-------------------------------------------------------------------------------
AVERAGE LOANS - MANAGED 39,185.6 37,603.6 35,123.2 34,882.7 33,370.5
- securitized (27,354.3) (23,321.9) (21,882.5) (20,976.2) (19,708.8)
-------------------------------------------------------------------------------
- reported 11,831.3 14,281.7 13,240.7 13,906.5 13,661.7
- ----------------------------------------------------------------------------------------------------------------------------------
NET CHARGE-OFFS - AMOUNT - MANAGED 530.4 548.1 544.2 485.1 470.8
- securitized (357.3) (342.9) (334.3) (328.3) (292.0)
-------------------------------------------------------------------------------
- reported 173.1 205.2 209.9 156.8 178.8
-------------------------------------------------------------------------------
- RATE - MANAGED 5.37% 5.78% 6.22% 5.63% 5.61%
- securitized 5.18% 5.83% 6.13% 6.35% 5.89%
-------------------------------------------------------------------------------
- reported 5.80% 5.70% 6.36% 4.57% 5.21%
- ----------------------------------------------------------------------------------------------------------------------------------
DELINQUENCY RATE - 30+ DAYS - MANAGED 5.16% 4.85% 4.76% 5.21% 5.22%
- securitized 5.23% 4.62% 4.83% 5.22% 5.48%
-------------------------------------------------------------------------------
- reported 4.99% 5.41% 4.68% 5.20% 4.84%
-------------------------------------------------------------------------------
- 90+ DAYS - MANAGED 2.29% 2.02% 2.11% 2.39% 2.23%
- securitized 2.34% 1.92% 2.15% 2.40% 2.34%
-------------------------------------------------------------------------------
- reported 2.17% 2.27% 2.05% 2.35% 2.05%
- ----------------------------------------------------------------------------------------------------------------------------------
CREDIT CARD CHARGE VOLUME - MANAGED 12,859.2 11,738.8 10,168.9 9,385.1 11,390.0
NEW ACCOUNTS OPENED - MANAGED 2,405.5 2,285.6 2,209.9 1,237.8 1,730.4
CREDIT CARDS ISSUED - MANAGED 40,502.8 38,738.0 37,739.0 37,994.8 36,205.7
ACCOUNTS ON FILE - MANAGED 31,396.0 30,117.8 29,427.0 29,564.8 28,044.7
===================================================================================================================================
Three Months Ended
----------------------------------------------------------------------------
Dec. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31,
CONSOLIDATED BANC ONE CREDIT QUALITY 1997 1997 1997 1997 1996
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Allowance for credit losses - period end $1,325.9 $1,343.6 $1,362.2 $1,222.4 $1,197.7
Nonperforming assets - period end:
Nonaccrual $408.8 $427.0 $395.4 $371.9 $374.2
Renegotiated 0.8 0.9 1.0 2.3 8.2
Other real estate owned 66.6 57.1 53.7 59.6 53.0
----------------------------------------------------------------------------
Total nonperforming assets $476.2 $485.0 $450.1 $433.8 $435.4
Loans delinquent over 90 days $559.2 $640.8 $494.2 $516.3 $483.9
Gross charge-offs $361.3 $363.4 $365.1 $332.7 $323.7
Recoveries 71.0 74.0 71.3 85.4 64.0
----------------------------------------------------------------------------
Net charge-offs $290.3 $289.4 $293.8 $247.3 $259.7
Allowance to ending loans and leases 1.62% 1.62% 1.62% 1.55% 1.51%
Allowance to nonperforming loans and leases 323.7% 314.0% 343.6% 326.7% 313.2%
Nonperforming assets to ending loans and leases (3) 0.56% 0.58% 0.53% 0.53% 0.54%
90 days delinquent to ending loans and leases (3) 0.66% 0.77% 0.58% 0.63% 0.60%
Net charge-offs to average loans and leases (2) (3) 1.38% 1.34% 1.42% 1.24% 1.31%
<FN>
(1) Includes credit card loans held for sale
(2) Annualized
(3) Includes loans held for sale Page 16
</TABLE>
<PAGE> 1
Exhibit 99.2
BANC ONE CORPORATION
100 East Broad Street
Columbus, Ohio 43271-0240
NEWS RELEASE
For further information contact:
[BANC ONE LOGO] Jay S. Gould (614) 248-0189
John A. Russell (614) 248-5989
FOR RELEASE: January 20, 1998
BANC ONE DECLARES A 10 PERCENT STOCK DIVIDEND, CONTINUES
CURRENT CASH DIVIDEND, AND ANNOUNCES REDEMPTION
OF SERIES C CONVERTIBLE STOCK
---------------
BANC ONE CORPORATION, Columbus Ohio (NYSE:ONE) John B. McCoy, Chairman and Chief
Executive Officer of BANC ONE, announced that the Corporation's Board of
Directors approved a 10 percent stock dividend payable on February 26, 1998 to
shareholders of record as of February 12, 1998. This represents the fifteenth 10
percent stock dividend declared since 1968.
The current cash dividend of $.38 per share will continue to be paid on existing
and new shares which represents an effective increase in the cash dividend of 10
percent. Over the last decade, BANC ONE's cash dividend has been increased on 12
occasions and has grown at an annual compounded rate of 13 percent.
The cash dividend of $.38 cents per share will be paid March 31, 1998 to
shareholders of record on March 13, 1998.
McCoy indicated, "This truly has been another solid year for BANC ONE. We
couldn't be more pleased with the earnings performance throughout the company.
The stock and dividend increase represents our confidence in our prospects and
continued intention of rewarding our shareholders as increasing earnings
warrant."
The Corporation's Board of Directors also declared a cash dividend of $.875 per
share on shares of BANC ONE's Series C Convertible Preferred stock. This
dividend is payable on March 31, 1998 to shareholders of record as of March 13,
1998.
The Corporation's Board of Directors also announced the election to redeem all
of the shares of BANC ONE's Series C Convertible Preferred stock on April 16,
1998 (the "Redemption Date") at the redemption price of $51.05 per share plus
the amount of any dividends accrued and unpaid thereon to the Redemption Date.
-more-
<PAGE> 2
BANC ONE
PAGE 2
BANC ONE CORPORATION had managed total assets of $147.0 billion, total assets of
$115.9 billion, and common equity of $10.2 billion at December 31, 1997. BANC
ONE operates over 1,200 banking centers in 12 states. 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; through InvestQuest at:
http://www.investquest.com; or through Fax-on-demand at: (614) 844-3860.
####
