<PAGE>
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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 19, 1995
BANK OF BOSTON CORPORATION
(Exact name of registrant as specified in its charter)
Massachusetts 1-6522 04-2471221
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
100 Federal Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 434-2200
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<PAGE>
-2-
Item 5. Other Events.
On January 19, 1995, Bank of Boston Corporation (the "Corporation") issued
a press release announcing its earnings for the quarter and year ended December
31, 1994. The financial information that is included herewith as Exhibit 99 was
included in the Corporation's press release and is incorporated herein by
reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
99 Financial information included in the Corporation's Press
Release dated January 19, 1995.
<PAGE>
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.
BANK OF BOSTON CORPORATION
Dated: January 25, 1995 /s/ WILLIAM J. SHEA
----------------------------------
William J. Shea
Vice Chairman, Chief Financial Officer
and Treasurer
<PAGE>
BOSTON, January 19, 1995 -- Bank of Boston Corporation (NYSE: BKB)
reported today fourth quarter net income of $121 million, or $1.01 per common
share on a fully diluted basis. This compares with $116 million, or $.96 per
share, in the third quarter of 1994 (before special revenue items, restructuring
charges and conversion-related costs) and $103 million, or $.85 per share, in
the fourth quarter of 1993. On this same basis, net income for the full year
1994 was $443 million, or $3.68 per share (before extraordinary items and the
effect of accounting changes), compared with $332 million, or $2.73 per share
for the full year 1993, an increase of 34%.
Actual net income for the full year 1994 was $435 million, or $3.61
per share, on a fully diluted basis, compared with $299 million, or $2.44 per
share for the full year 1993. The quarter comparisons were $121 million, or
$1.01 per share in the fourth quarter of 1994, versus $124 million, or $1.04 per
share in the third quarter and $103 million, or $.85 per share in the fourth
quarter of 1993.
<PAGE>
BANK OF BOSTON PAGE 2
NET INTEREST REVENUE
Net interest revenue, on a fully taxable equivalent basis, was $435 million
for the fourth quarter of 1994, compared with $405 million in the prior quarter
(excluding special revenue earned in Brazil) and $351 million for the same
period in 1993. On this same basis, net interest margin was 4.39% for the fourth
quarter of 1994, compared with 4.14% in the third quarter of 1994 and 3.86% in
the fourth quarter of 1993.
The increases in net interest revenue and margin from the third quarter
principally reflected improvements in two areas. The majority of the net
interest revenue improvement came from domestic operations, as rising interest
rates have resulted in loan yields growing at a faster pace than retail deposit
rates. In addition, the Corporation's modest asset sensitive interest rate risk
position, as well as increases in the level of higher yielding consumer-related
loans, contributed to the improvement in domestic net interest revenue. The
remaining improvement came principally from Brazilian operations. During the
third quarter of 1994, the Corporation recognized approximately $20 million ($11
million after-tax, or 10 cents per share) of net interest revenue from Brazilian
operations that was earned during the transition period into Brazil's new
economic program, and as such, was viewed as a special item. Excluding this
special revenue, Brazilian net interest revenue and margin improved during the
fourth quarter, reflecting successful funding strategies adopted by the
Corporation. As Brazil's new economic program continued to evolve during the
quarter, inflation remained at low levels and the Brazilian currency remained
stable compared with the U.S. dollar.
The growth in net interest revenue and margin from the fourth quarter of
1993 resulted from the same factors discussed above. Net interest revenue also
benefited from higher Latin American loan levels and the acquisitions of
BankWorcester and Pioneer.
NONINTEREST INCOME
Noninterest income is composed of the following:
<TABLE>
<CAPTION>
Third
Quarter Fourth Quarter Twelve Months
- ------- ------------- -----------------
1994 (in millions) 1994 1993 Change 1994 1993 Change
---- ---- ---- ------ ---- ---- ------
<C> <S> <C> <C> <C> <C> <C> <C>
$ 104 Financial service fees $ 105 $ 95 $ 10 $ 396 $ 350 $ 46
51 Trust and agency fees 53 45 8 201 178 23
11 Trading profits and commissions 0 4 (4) 16 24 (8)
1 Securities portfolio gains, net 3 9 (6) 14 32 (18)
9 Mezzanine/venture capital profits, net 2 2 0 30 38 (8)
11 Foreign exchange trading profits 11 12 (1) 42 45 (3)
0 Gain on the sale of domestic factoring business 0 0 0 27 0 27
15 Other income 25 22 3 102 79 23
----- ----- ----- --- ----- ----- ----
$202 Total $ 199 $ 189 $10 $ 828 $ 746 $ 82
===== ===== ===== === ===== ===== ====
</TABLE>
Trust and agency fees improved in all comparisons reflecting increased
volumes and new business in the Latin American mutual fund and domestic stock
transfer businesses. Trading account profits were lower in all comparisons
stemming from lower profits from international securities trading. Other income
in the fourth quarter included $6 million from the sale of mortgage servicing
rights. Other income in the third quarter included $15 million of exchange-rate
related profits stemming from the strengthening of Brazil's currency against the
U.S. dollar subsequent to the implementation of that country's new economic
program on July 1, 1994. Other income in the third quarter also included the
effect of approximately $15 million of charges associated with certain
investments, including investments in foreign equity subsidiaries and writedowns
of domestic investments acquired in connection with loan restructurings.
<PAGE>
BANK OF BOSTON PAGE 3
FINANCIAL SERVICE FEES
The components of financial service fees are as follows:
<TABLE>
<CAPTION>
Third
Quarter Fourth Quarter Twelve Months
- ------- -------------- ----------------
1994 (in millions) 1994 1993 Change 1994 1993 Change
---- ---- ---- ------ ---- ---- ------
<C> <S> <C> <C> <C> <C> <C> <C>
$ 32 Deposit fees $ 33 $ 32 $ 1 $ 126 $ 122 $ 4
17 Letters of credit and acceptance fees 17 15 2 61 58 3
Mortgage servicing fees:
32 Fee income 35 27 8 125 105 20
(16) Amortization of mortgage servicing assets (18) (22) 4 (68) (99) 31
---- ----- ----- --- ----- ----- ----
16 Net mortgage servicing fees 17 5 12 57 6 51
15 Loan-related fees 16 13 3 60 45 15
1 Factoring fees 0 7 (7) 4 24 (20)
23 Other 22 23 (1) 88 95 (7)
----- ----- ----- --- ----- ----- ----
$ 104 Total $ 105 $ 95 $10 $ 396 $ 350 $ 46
===== ===== ===== === ===== ===== ====
</TABLE>
The increase in mortgage servicing fee income from prior year periods
reflected ongoing growth in the Corporation's servicing portfolio, which rose to
$38 billion at December 31, 1994 from $28 billion a year ago, as well as lower
amortization of servicing rights resulting from a decline in mortgage
refinancings. Loan-related fees continued to increase in the fourth quarter and
showed significant improvement over prior year periods, reflecting growth in
syndication activity. The decline in factoring fees from prior year periods was
attributable to the 1994 sale of the Corporation's factoring business. Other
financial service fees have declined from prior year periods stemming from the
sale of the Corporation's freight management business. This was partially
offset, however, by higher fees from the Corporation's Argentine credit card
business.
NONINTEREST EXPENSE
The components of noninterest expense are as follows:
<TABLE>
<CAPTION>
Third
Quarter Fourth Quarter Twelve Months
- ------- ------------ ---------------
1994 (in millions) 1994 1993 Change 1994 1993 Change
---- ---- ---- ------ ---- ---- ------
<C> <S> <C> <C> <C> <C> <C> <C>
$ 207 Employee costs $ 213 $ 186 $ 27 $ 813 $ 771 $ 42
59 Occupancy & equipment 59 55 4 230 224 6
16 Professional fees 13 16 (3) 54 56 (2)
13 FDIC insurance premiums 13 15 (2) 51 62 (11)
72 Other 80 69 11 288 289 (1)
-----
Noninterest expense, before restructuring,
367 conversion-related, and OREO costs 378 341 37 1,436 1,402 34
5 Restructuring and conversion-related costs 0 0 0 21 85 (64)
6 OREO costs 4 6 (2) 22 44 (22)
----- ----- ----- --- ------ ------ ----
$ 378 Total $ 382 $ 347 $35 $1,479 $1,531 $(52)
===== ===== ===== === ====== ====== ====
</TABLE>
Noninterest expense, before restructuring, conversion-related and OREO
costs, was $378 million in the fourth quarter of 1994, compared with $367
million in the prior quarter and $341 million for the same quarter in 1993.
Using this expense base, the Corporation's operating ratio of expenses to
revenue improved to 59.6% in the fourth quarter, compared with 60.4% in the
third quarter and 63.1% in the fourth quarter last year.
Compared with the third quarter, employee costs grew $6 million reflecting,
in part, an increase in Latin America coupled with a full quarter effect of the
Pioneer acquisition. The growth in Latin America was mainly the result of a
government-mandated wage increase in Brazil, as well as continued expansion in
Argentina. Nonemployee costs grew $5 million as increases in travel expenses
and advertising costs, associated with the Corporation's marketing efforts, and
higher goodwill amortization, more than offset a decline in legal and consulting
costs.
<PAGE>
BANK OF BOSTON PAGE 4
Compared with the fourth quarter of 1993, noninterest expense, before
restructuring, conversion-related and OREO costs, increased $37 million. This
was mainly due to a $27 million increase in employee costs stemming from an
increase in expenses from Latin America and the acquisitions of BankWorcester
and Pioneer, which more than offset declines from a reduction in other domestic
employees. Nonemployee costs grew $10 million, as increases from the
BankWorcester and Pioneer acquisitions and higher levels of advertising,
communications, equipment and travel expenses more than offset lower FDIC
insurance premiums and legal fees.
CREDIT PROFILE
Loan and Lease Portfolio
The segments of the lending portfolio are as follows:
<TABLE>
<CAPTION>
(in millions) 12-31-94 9-30-94 6-30-94 3-31-94 12-31-93
-------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C>
United States Operations:
Commercial, industrial and financial $ 11,805 $ 11,987 $ 11,871 $ 12,064 $ 11,991
Construction 354 464 499 542 617
Other commercial real estate 3,141 3,110 3,084 2,851 3,123
Loans secured by 1-4 family
residential properties 5,004 4,878 4,215 3,923 4,159
Loans to individuals 2,462 2,373 2,283 1,795 1,610
Lease financing 1,366 1,312 1,263 1,257 1,264
Unearned income (216) (199) (198) (202) (204)
--------- -------- -------- -------- ---------
23,916 23,925 23,017 22,230 22,560
--------- -------- -------- -------- ---------
International Operations:
Loans and lease financing, net of
unearned 7,089 6,956 6,949 6,324 6,222
income --------- -------- -------- -------- ---------
Total loans and lease financing $ 31,005 $ 30,881 $ 29,966 $ 28,554 $ 28,782
========= ======== ======== ======== =========
</TABLE>
Domestic loans and leases were relatively unchanged from September 30, 1994
as increases in the consumer-related categories were offset by lower levels of
commercial loans. The increase in consumer-related loans reflected the
Corporation's emphasis in this area and included growth from Fidelity Acceptance
Corporation, the Corporation's consumer finance subsidiary. During the quarter,
the Corporation also announced an agreement to acquire Ganis Credit Corporation,
a consumer finance company headquartered in Newport Beach, California. This
transaction is expected to close during the first quarter of 1995. The decline
in domestic commercial, industrial and financial loans reflected increased
syndication activity and the Corporation's efforts to reduce low spread assets.
The international portfolio increased by $133 million primarily due to
ongoing growth in the Argentine portfolio.
<PAGE>
BANK OF BOSTON PAGE 5
Nonaccrual Loans and OREO
Nonaccrual loans and OREO amounted to $441 million at December 31, 1994,
compared with $470 million at September 30, 1994, and $659 million at December
31, 1993. Nonaccrual loans and OREO represented 1.4% of related assets at
December 31, 1994, compared with 1.5% at September 30, 1994 and 2.3% at December
31, 1993.
The components of consolidated nonaccrual loans and OREO are as follows:
<TABLE>
<CAPTION>
(in millions) 12-31-94 9-30-94 6-30-94 3-31-94 12-31-93
-------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
Domestic nonaccrual loans*:
Commercial, industrial and financial $ 113 $ 119 $ 131 $ 112 $ 121
Construction 13 18 30 27 30
Other commercial real estate 106 119 160 134 231
Real estate secured by 1-4 family residential
properties 44 35 30 17 64
Loans to individuals 24 15 9 13 10
Lease financing 0 0 0 0 1
--------- -------- -------- -------- ---------
300 306 360 303 457
--------- -------- -------- -------- ---------
International nonaccrual loans 65 71 87 96 94
--------- -------- -------- -------- ---------
Total nonaccrual loans 365 377 447 399 551
OREO 76 93 71 66 108
--------- -------- -------- -------- ---------
Total $ 441 $ 470 $ 518 $ 465 $ 659
========= ======== ======== ======== =========
</TABLE>
* Excludes assets placed in the accelerated disposition portfolio.
Accelerated Disposition Portfolio
The Corporation's accelerated disposition portfolio exposure was $135
million at December 31, 1994, compared with $145 million at September 30, 1994.
During the fourth quarter, the Corporation sold approximately $60 million of its
September 30 portfolio, which was offset by the transfer of additional loans
into the portfolio. The Corporation is actively engaged in a formal selling
effort and expects to dispose of its December 31, 1994 portfolio during 1995.
<PAGE>
BANK OF BOSTON PAGE 6
Provision and Reserve for Credit Losses
The reserve for credit losses at December 31, 1994 was $680 million, or
2.19% of outstanding loans and leases, compared with $677 million, or 2.19% at
September 30, 1994, and $770 million, or 2.68% at December 31, 1993. The
reserve for credit losses was 186% of nonaccrual loans at December 31, 1994,
179% at September 30, 1994, and 140% at December 31, 1993.
The provision for credit losses was $35 million for the fourth quarter of
1994, compared with $25 million for the prior quarter and $10 million for the
comparable period last year. For the full year 1994, the provision for credit
losses was $130 million, compared with $70 million in the previous year. The
1994 provision includes the effect of transferring lower quality real estate
exposure to the accelerated disposition portfolio.
Net credit losses were $31 million for the fourth quarter of 1994, compared
with $32 million for the prior quarter and $39 million for the comparable period
last year. Net credit losses as a percent of average loans and leases on an
annualized basis were .40% in 1994's fourth quarter, compared with .42% for the
third quarter of 1994 and .54% for the fourth quarter of 1993. For the full
year 1994, net credit losses, excluding those associated with the accelerated
disposition portfolio, were $126 million compared with $223 million for the same
period in 1993.
Net credit losses were as follows:
<TABLE>
<CAPTION>
Third
-----
Quarter Fourth Quarter Twelve Months
- ------- ------------------ ----------------
1994 (in millions) 1994 1993 1994* 1993
---- ---- ----- ----- ----
Domestic
<C> <S> <C> <C> <C> <C>
$ 6 Commercial, industrial and financial $ 4 $ 7 $ 14 $ 40
7 Commercial real estate 8 14 33 73
2 1-4 family residential 5 4 12 18
10 Loans to individuals 7 9 37 31
0 Lease financing 0 1 0 1
----- ----- ----- ----- -----
25 Subtotal 24 35 96 163
7 International 7 4 30 60
----- ----- ----- ----- -----
$ 32 Total $ 31 $ 39 $ 126 $ 223
===== ===== ===== ===== =====
</TABLE>
* Excludes credit losses related to the transfer of assets to the accelerated
disposition portfolio.
THE CORPORATION
Bank of Boston Corporation, New England's only global bank, with assets of
$44.6 billion, is a superregional bank holding company with regional, national
and global operations. Its major banking subsidiaries are The First National
Bank of Boston, in Massachusetts, Bank of Boston Connecticut and Rhode Island
Hospital Trust National Bank. At December 31, 1994, the Corporation also owned
Casco Northern Bank, in Maine, and Bank of Vermont, however, it is expected that
the sale of these banking subsidiaries will be consummated during the first
quarter of 1995. The Corporation and its subsidiaries provide a broad range of
financial services to individual, corporate, institutional and governmental
customers, as well as to other banks in New England and in selected markets
across the nation and around the world. The Corporation's common and preferred
stocks are listed on the New York and Boston exchanges.
<PAGE>
BANK OF BOSTON PAGE 7
CONSOLIDATED BALANCE SHEET
(dollars in millions)
<TABLE>
<CAPTION>
September 30 December 31
------------ ---------------------
1994 1994 1993
-------- --------- ---------
<C> <S> <C> <C>
Assets
Securities:
$ 2,022 Held to maturity $ 1,703 $ 1,569
2,214 Available for sale 2,997 1,438
30,881 Loans and lease financing 31,005 28,782
(677) Reserve for credit losses (680) (770)
------- ------- -------
30,204 Net loans and lease financing 30,325 28,012
128 Accelerated disposition portfolio 118 0
4,190 Other earning assets 3,524 4,073
5,536 Cash and other nonearning assets 5,963 5,496
------- ------- -------
$44,294 Total Assets $44,630 $40,588
======= ======= =======
Liabilities and Stockholders' Equity
$30,313 Deposits $31,356 $29,614
7,283 Funds borrowed 6,360 4,975
2,131 Notes payable 2,169 1,973
1,454 Other liabilities 1,603 1,114
------- ------- -------
41,181 Total Liabilities 41,488 37,676
------- ------- -------
Stockholders' Equity
508 Preferred equity 508 508
2,605 Common equity 2,634 2,404
------- ------- -------
3,113 Total Stockholders' Equity 3,142 2,912
------- ------- -------
$44,294 Total Liabilities and Stockholders' Equity $44,630 $40,588
======= ======= =======
</TABLE>
SELECTED AVERAGE BALANCES
<TABLE>
<CAPTION>
Quarter Ended Quarters Ended Twelve Months Ended
September 30 December 31 December 31
- ------------- ---------------- -----------------
1994 1994 1993 1994 1993
-------- ------- ------- -------- -------
<C> <S> <C> <C> <C> <C>
Assets
$30,362 Loans and lease financing $31,076 $28,172 $29,790 $26,586
3,489 Securities 4,435 3,194 3,510 3,624
38,846 Total earning assets 39,349 36,129 38,145 34,299
43,925 Total assets 44,400 40,403 43,061 38,367
Liabilities and Stockholders' Equity
25,012 Interest bearing deposits 25,263 23,915 24,301 23,684
4,892 Noninterest bearing deposits 5,182 5,332 5,000 4,855
------- ------- ------- ------- -------
29,904 Total deposits 30,445 29,247 29,301 28,539
1,987 Notes payable 2,141 1,876 2,069 1,743
34,360 Total interest bearing liabilities 34,598 31,181 33,550 29,776
2,540 Common stockholders' equity 2,621 2,309 2,515 2,243
3,048 Total stockholders' equity 3,129 2,817 3,023 2,719
</TABLE>
NUMBER OF EMPLOYEES
<TABLE>
<CAPTION>
Dec 31 Sept 30 Dec 31
1994 1994 1993
--------- ---------- ---------
<S> <C> <C> <C>
Full time equivalent employees 18,355 18,625 18,644
</TABLE>
<PAGE>
BANK OF BOSTON PAGE 8
CONSOLIDATED STATEMENT OF INCOME
(dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
Quarter Ended Quarters Ended Twelve Months Ended
September December 31 December 31
- ------------- ------------------- -------------------
30
--
1994 1994 1993 1994 1993
----- --------- -------- -------- --------
<C> <S> <C> <C> <C> <C>
$1,083.5 Interest income $1,071.4 $ 721.9 $3,718.8 $2,738.7
659.6 Interest expense 638.0 372.6 2,146.2 1,393.8
-------- -------- -------- -------- --------
423.9 Net interest revenue 433.4 349.3 1,572.6 1,344.9
25.0 Provision for credit losses 35.0 10.0 130.0 70.1
-------- -------- -------- -------- --------
Net interest revenue after provision
398.9 for credit losses 398.4 339.3 1,442.6 1,274.8
-------- -------- -------- -------- --------
Noninterest income:
104.3 Financial service fees 105.5 95.2 396.1 350.0
50.6 Trust and agency fees 53.1 45.5 201.6 177.6
10.9 Trading profits and commissions (.1) 3.9 15.8 23.6
1.3 Securities portfolio gains, net 2.5 8.8 13.6 32.2
35.1 Other income 37.6 35.6 200.9 162.1
-------- -------- -------- -------- --------
202.2 Total noninterest income 198.6 189.0 828.0 745.5
-------- -------- -------- -------- --------
Noninterest expense:
168.1 Salaries 177.8 153.3 665.3 634.6
38.6 Employee benefits 35.1 32.7 147.6 136.2
35.2 Occupancy expense 34.4 31.3 134.6 127.8
24.2 Equipment expense 24.9 23.4 96.0 96.2
101.0 Other expense 105.6 100.3 392.0 407.2
-------- -------- -------- -------- --------
367.1 Subtotal 377.8 341.0 1,435.5 1,402.0
Merger and restructuring charges and other related
5.0 conversion costs 0 0 21.4 85.0
6.2 OREO costs 4.1 5.6 22.3 43.8
-------- -------- -------- -------- --------
378.3 Total noninterest expense 381.9 346.6 1,479.2 1,530.8
-------- -------- -------- -------- --------
Income before income taxes, extraordinary item
and cumulative effect of changes in
222.8 accounting principles 215.1 181.7 791.3 489.5
98.8 Provision for income taxes 94.3 79.2 349.4 214.7
-------- -------- -------- -------- --------
Income before extraordinary item and cumulative
124.0 effect of changes in accounting principles 120.8 102.5 441.9 274.8
Extraordinary loss from early extinguishment of debt,
0 net of tax 0 0 (6.6) 0
Change in the method of accounting for purchased
0 mortgage servicing rights, net of related taxes 0 0 0 (53.0)
0 Change in the method of accounting for income taxes 0 0 0 77.2
-------- -------- -------- -------- --------
$ 124.0 NET INCOME $ 120.8 $ 102.5 $ 435.3 $ 299.0
======== ======== ======== ======== ========
PER COMMON SHARE:
Income before extraordinary item and cumulative
effect of changes in accounting principles:
$ 1.07 Primary $ 1.04 $ .88 $ 3.79 $ 2.28
$ 1.04 Fully diluted $ 1.01 $ .85 $ 3.67 $ 2.22
Net income:
$ 1.07 Primary $ 1.04 $ .88 $ 3.73 $ 2.51
$ 1.04 Fully diluted $ 1.01 $ .85 $ 3.61 $ 2.44
$ .22 Dividends declared $ .27 $ .10 $ .93 $ .40
Average number of common shares, in thousands:
106,981 Primary 107,108 105,644 106,730 105,336
111,690 Fully diluted 111,831 110,308 111,427 110,258
$ 9.4 Preferred dividends $ 9.4 $ 9.4 $ 37.5 $ 34.7
</TABLE>
<PAGE>
BANK OF BOSTON PAGE 9
OTHER DATA
(dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
Quarter Ended
September 30 Quarters Ended Twelve Months Ended
- ------------- December 31 December 31
------------------- -------------------
1994 1994 1993 1994 1993
----- -------- -------- -------- --------
<C> <S> <C> <C> <C> <C>
NET INCOME BEFORE SPECIAL REVENUE ITEMS, MERGER AND
RESTRUCTURING CHARGES AND OTHER RELATED CONVERSION
COSTS, EXTRAORDINARY ITEMS AND CUMULATIVE EFFECT OF
ACCOUNTING CHANGES:
$124.0 Net income $120.8 $102.5 $435.3 $299.0
(11.0) Special revenue items, net of tax 0 0 (11.0) 0
Merger and restructuring charges and other
3.0 related conversion costs, net of tax 0 0 12.2 57.0
0 Extraordinary item, net of tax 0 0 6.6 0
Cumulative effect of accounting changes,
0 net of tax 0 0 0 (24.2)
---- ------ ------ -------- --------
Net income before special revenue items, merger
and restructuring charges and other related
conversion costs, extraordinary items
and cumulative effect of accounting
$116.0 changes $120.8 $102.5 $443.1 $331.8
====== ====== ====== ====== ======
EARNINGS PER SHARE BEFORE SPECIAL REVENUE ITEMS,
MERGER AND RESTRUCTURING CHARGES AND OTHER RELATED
CONVERSION COSTS, EXTRAORDINARY ITEMS AND
CUMULATIVE EFFECT OF ACCOUNTING CHANGES:
$ 1.00 Primary $ 1.04 $ .88 $3.80 $2.82
$ .96 Fully diluted $ 1.01 $ .85 $3.68 $2.73
RETURN ON AVERAGE TOTAL ASSETS (ANNUALIZED):
1.12% Net income 1.08% 1.01% 1.01% .78%
Net income before special revenue items, merger
and restructuring charges and other related
conversion costs, extraordinary items and
1.05% cumulative effect of accounting changes 1.08% 1.01% 1.03% .86%
RETURN ON AVERAGE COMMON EQUITY (ANNUALIZED):
17.90% Net income 16.86% 16.00% 15.82% 11.78%
Net income before special revenue items, merger
and restructuring charges and other related
conversion costs, extraordinary items and
16.65% cumulative effect of accounting changes 16.86% 16.00% 16.13% 13.25%
CONSOLIDATED NET INTEREST REVENUE AND MARGIN:
Including special items:
Net interest revenue, fully taxable
$425.2 equivalent basis $435.4 $351.3 $1,578.9 $1,352.6
4.34% Net interest margin 4.39% 3.86% 4.14% 3.94%
Excluding special items:
Net interest revenue, fully taxable
$405.2 equivalent basis $435.4 $351.3 $1,558.9 $1,352.6
4.14% Net interest margin 4.39% 3.86% 4.09% 3.94%
4.41% DOMESTIC NET INTEREST MARGIN (ESTIMATED) 4.61% 4.12% 4.34% 4.10%
</TABLE>
<PAGE>
BANK OF BOSTON PAGE 10
<TABLE>
<CAPTION>
September 30 December 31
------------ -------------------------
1994 1994 1993
----- ------ -------
<C> <S> <C> <C>
COMMON STOCKHOLDERS' EQUITY:
$ 2,605 Common stockholders' equity $ 2,634 $ 2,404
107,169 Common shares outstanding, in thousands 106,547 105,801
Per common share:
$ 24.30 Book value $ 24.72 $ 22.71
26.63 Market value 25.88 23.00
REGULATORY CAPITAL:
Risk-based capital ratios: Estimate
6.9% Tier 1 capital ratio (minimum required 4.00%) 7.0% 7.2%
11.9% Total capital ratio (minimum required 8.00%) 12.1% 12.4%
6.4% Leverage ratio 6.5% 6.8%
$ 2,806 Tier 1 capital $ 2,876 $ 2,754
4,873 Total capital 4,985 4,725
40,854 Total risk-adjusted assets 41,317 38,179
</TABLE>
RESERVE FOR CREDIT LOSSES
(dollars in millions)
<TABLE>
<CAPTION>
Quarter Ended Quarters Ended Twelve Months Ended
September 30 December 31 December 31
- ------------- ------------------ -------------------
1994 1994 1993 1994 1993
-------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C>
$ 675.8 Beginning balance $676.5 $798.8 $ 770.3 $ 923.1
8.1 Reserves of acquired companies 0 0 24.7 0
25.0 Provision for credit losses 35.0 10.0 130.0 70.1
(51.8) Credit losses (50.0) (53.4) (193.8) (273.2)
19.4 Recoveries 18.7 14.9 68.0 50.3
------- ------ ------ ------- -------
Net credit losses before losses related to accelerated
(32.4) disposition portfolio (31.3) (38.5) (125.8) (222.9)
Credit losses related to exposures transferred to
0 accelerated disposition portfolio: 0 0 (119.0) 0
------- ------ ------ ------- -------
$ 676.5 Ending balance $680.2 $770.3 $ 680.2 $ 770.3
======= ====== ====== ======= =======
2.19% Reserve as a % of loans and leases 2.19% 2.68% 2.19% 2.68%
======= ====== ====== ======= =======
179% Reserve as a % of nonaccrual loans 186% 140% 186% 140%
======= ====== ====== ======= =======
</TABLE>
RENEGOTIATED LOANS
<TABLE>
<CAPTION>
1993 1994
Fourth First Second Third Fourth
Qtr Qtr Qtr Qtr Qtr
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Renegotiated loans $225 $116 $81 $72 $68
==== ==== === === ===
</TABLE>
###
