<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): JULY 17, 1997
BANKBOSTON 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 July 17, 1997, BankBoston Corporation (the Corporation) issued a press
release announcing its earnings for the quarter ended June 30, 1997. The
financial information that is included herewith as Exhibit 99(a) was included in
the Corporation's press release and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
- -------------------------------------------
(c) Exhibits.
99(a) Financial information included in the Corporation's Press Release dated
July 17, 1997.
<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.
BANKBOSTON CORPORATION
Dated: July 18, 1997 /s/ Robert T. Jefferson
------------------------------------------------
Robert T. Jefferson
Comptroller
<PAGE>
EXHIBIT 99 (A)
BANKBOSTON REPORTS SECOND QUARTER NET INCOME
OF $212 MILLION OR $1.35 PER SHARE
17% GROWTH IN CORE EPS FROM PRIOR YEAR
BOSTON, July 17, 1997 -- BankBoston Corporation (NYSE: BKB) reported
today second quarter net income of $212 million, or $1.35 per common share on a
fully diluted basis. This compares with $207 million, or $1.27 per share, in
the first quarter of 1997 and $188 million, or $1.15 per share, in the second
quarter of 1996 before special items ($214 million, or $1.32 per share,
including special items).
Net income for the first half of 1997 was $419 million, or $2.62 per
share, compared with net income for the first half of 1996 of $374 million, or
$2.28 per share, before special items ($369 million, or $2.24 per share,
including special items).
Operating highlights were (amounts shown for the second
quarter of 1996 are before special items):
. On a fully taxable equivalent basis, operating income (before credit
costs) was $421 million in the second quarter, compared with $413
million in the prior quarter and $386 million in the second quarter of
1996. During the second quarter of 1997, the Corporation completed a
major phase of the BayBanks integration. Costs associated with the
integration, together with a modest amount of expenses related to a
reconfiguration of Asian operations, were $22 million. In addition,
the second quarter included approximately $20 million of gains from
the sale of Argentine securities;
. Return on average common equity was 19.54% in the second quarter
compared with 18.02% in the prior quarter and 17.19% in the second
quarter of 1996;
. Return on average assets was 1.33% in the second and first quarters of
1997 and 1.29% in the second quarter of 1996;
. Nonaccrual loans and OREO totaled $398 million at June 30, 1997,
compared with $445 million at March 31, 1997 and $460 million at June
30, 1996. Net credit losses were $79 million in the second and first
quarters of 1997 compared with $49 million in the second quarter of
1996.
. During the second quarter, the Corporation continued executing its
share buyback program, repurchasing 5 million shares. A total of 7.5
million shares have been repurchased during the first half of 1997.
On June 23, the Corporation announced that it had entered into an agreement
to sell its consumer finance subsidiary, Fidelity Acceptance Corporation. This
transaction is expected to close in the second half of 1997 and had no effect on
the Corporation's second quarter financial statements.
<PAGE>
NONINTEREST INCOME
The components of noninterest income are as follows:
<TABLE>
<CAPTION>
First Second
Quarter Quarter Six Months
- ------- ------------ -------------
1997 (in millions) 1997 1996 Change 1997 1996 Change
- ------- ----- ----- ------- ----- ------ -------
<C> <S> <C> <C> <C> <C> <C> <C>
$ 138 Financial service fees $ 156 $ 135 $ 21 $ 293 $ 298 $ (5)
37 Net equity and mezzanine profits 55 77 (22) 92 114 (22)
25 Mutual fund fees 27 23 4 52 44 8
34 Personal trust fees 36 33 3 70 65 5
7 Other trust and agency fees 6 6 0 13 10 3
19 Trading profits and commissions 28 25 3 47 38 9
19 Net foreign exchange trading profits 20 12 8 39 24 15
9 Securities portfolio gains, net 32 3 29 41 17 24
42 Other income 17 23 (6) 60 63 (3)
----- ----- ----- ---- ----- ----- ----
330 Subtotal 377 337 40 707 673 34
0 Mortgage banking related items, net 0 46 (46) 0 (5) 5
----- ----- ----- ---- ----- ----- ----
$ 330 Total $ 377 $ 383 $ (6) $ 707 $ 668 $ 39
===== ===== ===== ==== ===== ===== ====
</TABLE>
. Changes in financial service fees are detailed below.
. Equity and mezzanine profits improved from the first quarter but
declined from prior year periods as a result of the unusually high
level of gains recorded during the second quarter of 1996. The
Corporation continues to make new investments and the portfolio
balance has grown over $200 million since the beginning of 1996.
. Mutual fund fees improved in all comparisons due, in part, to higher
levels of fees from the Brazilian and Argentine businesses. The level
of assets under management in Brazil has risen to $4.4 billion at June
30, 1997 compared with $3.3 billion at June 30, 1996. In Argentina,
the Corporation has over a 20% market share with assets under
management of $900 million compared with $300 million at June 30,
1996.
. The increase in personal trust fees from the first quarter reflects
the impact of seasonal tax preparation fees while the growth from
prior year periods mainly relates to an increase in assets under
management.
. Trading account profits and commissions improved in all comparisons.
The improvement is principally due to higher profits from Global
Capital Markets, reflecting growth in the emerging markets and high
yield businesses. The second quarter of 1997 marked the first full
quarter in which the Corporation's Section 20 subsidiary was
operational. Higher levels of profits from local Brazilian and
Argentine operations also contributed to the improvement from the
first six months of last year.
. The growth in foreign exchange profits from the prior year periods
reflected the Corporation's increased emphasis in this segment of its
Global Capital Markets business coupled with higher profits from Asian
operations.
. The increase in securities gains from all prior periods reflects sales
of Argentine securities in the second quarter of 1997, which yielded
gains of approximately $20 million.
. Other income declined $25 million from the prior quarter mainly due to
(1) the absence of gains on the sale of Ganis loans recorded in the
first quarter, (2) actuarial adjustments and start-up costs related to
the Corporation's Argentine and Mexican pension management joint
ventures, respectively and (3) the absence of first quarter income
related to the initial public offering of the Corporation's mortgage
banking joint venture. The comparison with the prior year quarter was
affected by items (1) and (2) discussed above, partially offset by the
absence of losses incurred in the second quarter of last year from the
sale of residential mortgages.
<PAGE>
The components of financial service fees are as follows:
<TABLE>
<CAPTION>
First
----- Second Quarter Six Months
Quarter ---------------------- --------------------
--------
1997 (in millions) 1997 1996 Change 1997 1996 Change
---- ---------- ---------- ------------ --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 58 Deposit and ATM-related fees $ 62 $ 61 $ 1 $ 120 $ 123 $ (3)
17 Letters of credit and
acceptance fees 18 16 2 34 33 1
14 Syndication and agent fees 23 13 10 38 22 16
9 Other loan-related fees 9 8 1 18 19 (1)
Net mortgage servicing fees
0 (before items detailed below) 0 4 (4) 0 26 (26)
40 Other 44 33 11 83 75 8
---- ----- ----- --- ----- ----- ----
$138 Total $ 156 $ 135 $21 $ 293 $ 298 $ (5)
==== ===== ===== === ===== ===== ====
</TABLE>
. Deposit and ATM-related fees increased from the prior quarter
due to higher domestic electronic banking fees and an
increase in fees from Latin American operations.
. Syndication and agent fees increased from all prior periods
due to a higher volume of transactions generated by the
Corporation's corporate finance business.
. The decline in net mortgage servicing fees from the prior
year reflected the sale of the Corporation's mortgage banking
subsidiary in 1996.
. The increase in other financial service fees from all prior
periods is due, in part, to higher advisory fees.
Underwriting fees earned by the Global Capital Markets
business in 1997 and an increase in custody fees from
Argentina also contributed to the improvement in the six
month comparison, while higher Latin American credit card
fees contributed to the increase in both quarterly
comparisons.
Mortgage banking-related special items included in noninterest income for 1996
are composed of the following:
<TABLE>
<CAPTION>
Second Quarter Six Months
-------------- ----------
1996 1996
---- ----
(in millions)
<S> <C> <C>
Mortgage banking-related gains/losses:
Sale of mortgage subsidiary $ 46 $ 106
Contracts used to manage prepayment risk, net 0 (111)
---- -----
Total $ 46 $ (5)
==== =====
</TABLE>
During the first quarter of 1996, the Corporation recorded a net pre-tax
loss of $51 million from mortgage banking-related items. As a result of the
first quarter's rising rate environment, a loss of $111 million (net of
decreased servicing amortization) was recorded from the change in market value
of contracts used to manage prepayment risk in the mortgage servicing portfolio
which, in turn, protected the economic value of the Corporation's mortgage
banking subsidiary pending the completion of its sale to HomeSide, Inc. The
completion of this transaction resulted in the recognition of gains totaling
$106 million, of which $60 million was recorded in the first quarter and $46
million was recorded in the second quarter. The Corporation now owns a 26%
interest in HomeSide, Inc., which ranks among the country's largest mortgage
banking companies.
<PAGE>
NET INTEREST REVENUE
Net interest revenue, on a fully taxable equivalent basis, was $620 million
for the second quarter of 1997, compared with $625 million in the prior quarter
and $576 million in the second quarter of 1996. Net interest margin was 4.38%
for the second quarter of 1997 and 4.47% in the first quarter of 1997, compared
with 4.40% in the second quarter of last year. For the first half of 1997, net
interest revenue on a fully taxable equivalent basis, was $1,245 million,
compared with $1,147 million in the first half of 1996. Net interest margin was
4.43% for the first half of 1997, compared with 4.40% for the first half of
1996.
The $5 million decrease in net interest revenue and the 9 basis point
decline in margin from the prior quarter mainly reflected the absence of high
first quarter levels of dividends from U.K. and Argentine equity investments as
well as narrower spreads. These declines were partially offset by higher levels
of loan fees and gains from sales of lease residuals. In addition, an increase
in average earning assets and one more day in the second quarter helped to
offset the decline in net interest revenue.
Compared with prior year periods net interest revenue improved $44 million
in the quarter and $98 million from the first six months. These increases were
mainly driven by higher levels of average earning assets, primarily domestic
commercial loans, Latin American loans, and securities, which in the aggregate
increased by over $4 billion in each comparison. Net interest margin was fairly
flat in both prior year comparisons.
<PAGE>
NONINTEREST EXPENSE
The components of noninterest expense are as follows:
<TABLE>
<CAPTION>
First
- ------- Second
Quarter Quarter Six Months
- ------- ------------ --------------
1997 (in millions) 1997 1996 Change 1997 1996 Change
- ------- ----- ----- ------- ------ ------ -------
<C> <S> <C> <C> <C> <C> <C> <C> <C>
$ 311 Employee costs $ 312 $ 289 $23 $ 622 $ 582 $40
87 Occupancy & equipment 88 84 4 174 169 5
12 Professional fees 12 14 (2) 24 27 (3)
22 Advertising and public relations 27 31 (4) 49 58 (9)
26 Communications 28 25 3 54 50 4
7 Goodwill amortization 7 5 2 15 11 4
77 Other 102 79 23 181 155 26
----- ----- ----- --- ------ ------ ---
542 Subtotal before special item and OREO costs 576 527 49 1,119 1,052 67
Special item:
0 Accelerated vesting of restricted stock 0 4 (4) 0 4 (4)
2 OREO costs 2 1 1 3 3 0
----- ----- ----- --- ------ ------ ---
$ 544 Total $ 578 $ 532 $46 $1,122 $1,059 $63
===== ===== ===== === ====== ====== ===
</TABLE>
Noninterest expense, before special items and OREO costs, in the second
quarter was marked by integration-related costs and spending in key growth
businesses.
. During the second quarter, the Corporation completed a major phase of
the BayBanks integration. Costs associated with the integration
totaled $19 million in the second quarter and the bulk of the costs
are contained in the "other" category in the table shown above. These
costs included temporary help for systems work, branch banking and
telebanking; training staff on new products and systems; creating and
mailing brochures to consumer and corporate customers; and converting
to the new BankBoston brand name.
. Latin American expenses increased $7 million as the Corporation
continues to invest in Argentina and Brazil. The growth in expenses
is due, in part, to the opening of new branches, the expansion of
capital markets activities and increased advertising costs.
. During the second quarter, the Corporation recorded a restructuring
charge of $3 million related to its Asian operations. This charge
primarily relates to the cost of centralizing regional support and
processing functions.
. Other items of note included an increase in incentive compensation
related to the Global Capital Markets businesses and higher
advertising expenses in the New England region to promote certain
products and the new BankBoston brand name.
Compared with prior year periods, noninterest expense, before special items
and OREO costs, grew $49 million from the second quarter and $67 million from
the first half of 1996. The major drivers of these increases were the BayBanks
integration expenses discussed above; investment spending in Latin America,
primarily Argentina and Brazil; the evolution of the Corporation's Global
Capital Markets businesses, including the launching of a Section 20 subsidiary,
the formation of a high yield desk, and higher incentive compensation in line
with the growth in revenues; higher expenses from domestic commercial banking,
primarily increased incentive compensation; and expenses incurred in connection
with the Corporation's Millennium ("Year 2000") project. The growth in expenses
from these areas more than offset incremental expense savings achieved from the
consolidation of BayBanks into the Corporation.
<PAGE>
CREDIT PROFILE
Loan and Lease Portfolio
The segments of the lending portfolio are as follows:
<TABLE>
<S> <C> <C> <C> <C> <C>
(in millions) 6-30-97 3-31-97 12-31-96 9-30-96 6-30-96
-------- -------- --------- -------- --------
United States Operations:
Commercial, industrial and financial $ 14,527 $ 14,203 $ 13,162 $ 13,828 $ 12,915
Commercial real estate
Construction 314 265 284 323 410
Other commercial real estate 3,398 3,129 3,240 3,228 3,326
Consumer-related loans:
Residential mortgages 3,016 3,067 3,184 4,156 4,133
Home equity loans 2,924 2,908 2,878 2,842 2,775
Credit card 1,488 1,404 1,395 1,320 1,223
Other 4,739 4,708 5,503 5,349 5,218
Lease financing 1,780 1,766 1,816 1,778 1,627
Unearned income (277) (275) (287) (272) (245)
-------- -------- --------- -------- --------
31,909 31,175 31,175 32,552 31,382
-------- -------- --------- -------- --------
International Operations:
Loans and lease financing, net of 10,404 9,844 9,886 9,501 9,271
unearned income -------- -------- --------- -------- --------
Total loans and lease financing $ 42,313 $ 41,019 $ 41,061 $ 42,053 $ 40,653
======== ======== ========= ======== ========
</TABLE>
Loans and leases were $42.3 billion at June 30, 1997, compared with $41.0
billion at March 31, 1997. The increase in domestic loans reflected growth from
the nationally-based specialized industries, asset based finance and real estate
portfolios, while the increase in international loans was mainly attributable to
Argentina and Brazil.
Nonaccrual Loans and OREO
Nonaccrual loans and OREO amounted to $398 million at June 30, 1997,
compared with $445 million at March 31, 1997, and $460 million at June 30, 1996.
Nonaccrual loans and OREO represented .9% of related assets at June 30, 1997,
compared with 1.1% at March 31, 1997 and June 30, 1996.
The components of consolidated nonaccrual loans and OREO are as follows:
<TABLE>
<S> <C> <C> <C> <C> <C>
(in millions) 6-30-97 3-31-97 12-31-96 9-30-96 6-30-96
-------- -------- --------- -------- --------
Domestic nonaccrual loans:
Commercial, industrial and financial $ 39 $ 72 $ 82 $ 114 $ 140
Commercial real estate
Construction 3 4 6 9 10
Other commercial real estate 48 47 67 84 86
Consumer-related loans
Residential mortgages 56 65 57 60 45
Home equity loans 26 25 23 22 20
Credit card 22 23 17 5 2
Other 44 41 44 44 38
-------- -------- --------- -------- --------
238 277 296 338 341
-------- -------- --------- -------- --------
International nonaccrual loans 113 119 106 106 57
-------- -------- --------- -------- --------
Total nonaccrual loans 351 396 402 444 398
OREO 47 49 50 52 62
-------- -------- --------- -------- --------
Total $ 398 $ 445 $ 452 $ 496 $ 460
======== ======== ========= ======== ========
</TABLE>
<PAGE>
Provision and Reserve for Credit Losses
The reserve for credit losses at June 30, 1997 was $845 million, or 2.00%
of outstanding loans and leases, compared with $864 million, or 2.11% at March
31, 1997, and $894 million, or 2.20% at June 30, 1996. The reserve for credit
losses was 240% of nonaccrual loans at June 30, 1997, 218% at March 31, 1997,
and 225% at June 30, 1996.
The provision for credit losses was $60 million in the second and first
quarters of 1997, compared with $57 million in the second quarter of 1996.
Net credit losses were $79 million in the second and first quarters of
1997, compared with $49 million in the second quarter of 1996. Net credit
losses from Fidelity Acceptance Corporation (FAC), the Corporation's sub-prime
automobile finance company, were $21 million in the second quarter and $44
million in the first half of 1997. The sale of FAC, which was announced in late
June, is expected to close in the third quarter. Net credit losses as a percent
of average loans and leases on an annualized basis were .76% in the second
quarter of 1997, compared with .77% for the first quarter of 1997 and .49% for
the second quarter of 1996.
Net credit losses were as follows:
<TABLE>
<CAPTION>
First
- ------- Second
Quarter Quarter Six Months
- ------- ------------- -------------
1997 (in millions) 1997 1996 1997 1996
- ------- ------ ----- ------ -----
<C> <S> <C> <C> <C> <C>
Domestic
$ 18 Commercial, industrial and financial $ 5 $ 2 $ 23 $ 5
0 Commercial real estate (3) 3 (3) 14
Consumer-related loans:
1 Residential mortgages 0 3 1 7
19 Credit card 24 4 43 7
2 Home equity loans 1 2 3 4
35 Other 34 25 69 48
----- ----- ----- ----- -----
75 61 39 136 85
4 International 18 10 22 15
----- ----- ----- ----- -----
$ 79 Total $ 79 $ 49 $ 158 $ 100
===== ===== ===== ===== =====
</TABLE>
THE CORPORATION
BankBoston, with assets of $66.1 billion, was founded in 1784. BankBoston
is engaged in: consumer banking in southern New England; financing to selected
corporations regionally, nationally and internationally; and full-service
banking in key Latin American markets. The Corporation and its subsidiaries
operate through a network of offices in the U.S. and through more than 100
offices in 23 countries in Latin America, Europe and Asia, the third largest
overseas network of any U.S. bank. The Corporation's common and preferred
stocks are listed on the New York and Boston stock exchanges.
<PAGE>
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
(dollars in millions)
March 31 June 30
- ------------ ------------------
1997 1997 1996
- ------------ -------- --------
<C> <S> <C> <C>
Assets
Securities:
$ 692 Held to maturity $ 636 $ 686
9,082 Available for sale 8,969 8,459
41,019 Loans and lease financing 42,313 40,653
(864) Reserve for credit losses (845) (894)
------- ------- -------
40,155 Net loans and lease financing 41,468 39,759
5,754 Other earning assets 5,758 5,462
9,097 Cash and other nonearning assets 9,307 8,021
------- ------- -------
$64,780 Total Assets $66,138 $62,387
======= ======= =======
Liabilities and Stockholders' Equity
$42,307 Deposits $42,978 $43,494
11,839 Funds borrowed 12,377 9,215
2,708 Notes payable 2,693 2,632
2,565 Other liabilities 2,666 2,084
Guaranteed preferred beneficial
interests in corporation's
500 junior subordinated debentures 750 0
------- ------- -------
59,919 Total Liabilities 61,464 57,425
------- ------- -------
Stockholders' Equity
508 Preferred equity 508 508
4,353 Common equity 4,166 4,454
------- ------- -------
4,861 Total Stockholders' Equity 4,674 4,962
------- ------- -------
Total Liabilities and Stockholders'
$64,780 Equity $66,138 $62,387
======= ======= =======
</TABLE>
SELECTED AVERAGE BALANCES
<TABLE>
<CAPTION>
Quarter Ended Quarters Ended Six Months Ended
- ------------- -------------- ----------------
March 31 June 30 June 30
-------- -------------- ----------------
1997 1997 1996 1997 1996
------- ------- -------------- ------- ----------------
<C> <S> <C> <C> <C> <C>
Assets
$41,732 Loans and lease financing $42,112 $40,114 $41,923 $39,646
9,261 Securities 9,488 8,065 9,375 8,105
56,641 Total earning assets 56,834 52,717 56,738 52,444
63,224 Total assets 63,946 58,381 63,580 58,485
Liabilities and Stockholders' Equity
34,349 Interest bearing deposits 34,391 34,233 34,370 33,889
7,550 Noninterest bearing deposits 7,855 6,885 7,703 6,986
------- ------- ------- ------- -------
41,899 Total deposits 42,246 41,118 42,073 40,875
3,316 Notes payable 3,351 2,584 3,333 2,502
48,531 Total interest bearing liabilities 49,208 45,099 48,871 45,064
4,444 Common stockholders' equity 4,159 4,180 4,294 4,190
4,952 Total stockholders' equity 4,667 4,688 4,802 4,698
</TABLE>
NUMBER OF EMPLOYEES
<TABLE>
<CAPTION>
June 30 Mar 31 June 30
1997 1997 1996
--------- ------- --------
<S> <C> <C> <C>
Full time equivalent employees 22,000 22,000 22,700
</TABLE>
<PAGE>
CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
(dollars in millions, except per share amounts)
Quarter Ended Quarters Ended Six Months Ended
March 31 June 30 June 30
------------ ------------------ ------------------
1997 1997 1996 1997 1996
------------ -------- -------- -------- --------
<C> <S> <C> <C> <C> <C>
$1,275.0 Interest income $1,280.7 $1,202.5 $2,555.7 $2,442.8
655.0 Interest expense 664.8 631.0 1,319.8 1,305.8
- -------- -------- -------- -------- --------
620.0 Net interest revenue 615.9 571.5 1,235.9 1,137.0
60.0 Provision for credit losses 60.0 57.1 120.0 114.0
- -------- -------- -------- -------- --------
Net interest revenue after
560.0 provision for credit losses 555.9 514.4 1,115.9 1,023.0
- -------- -------- -------- -------- --------
Noninterest income:
137.5 Financial service fees 155.7 135.3 293.2 186.9
66.0 Trust and agency fees 69.4 61.9 135.4 119.3
19.3 Trading profits and commissions 27.9 25.0 47.2 37.9
8.8 Securities portfolio gains, net 31.9 3.4 40.8 16.9
98.1 Other income 91.9 157.3 190.0 307.1
- -------- -------- -------- -------- --------
329.7 Total noninterest income 376.8 382.9 706.6 668.1
- -------- -------- -------- -------- --------
Noninterest expense:
257.7 Salaries 260.2 243.9 517.9 484.7
52.7 Employee benefits 51.3 49.0 103.9 101.2
50.8 Occupancy expense 52.1 49.7 102.9 100.8
35.6 Equipment expense 35.8 33.9 71.5 68.2
145.9 Other expense 176.8 154.6 322.7 301.6
- -------- -------- -------- -------- --------
542.7 Subtotal 576.2 531.1 1,118.9 1,056.5
1.5 OREO costs 1.7 1.1 3.2 2.6
- -------- -------- -------- -------- --------
544.2 Total noninterest expense 577.9 532.2 1,122.1 1,059.1
- -------- ------- -------- -------- --------
345.5 Income before income taxes 354.8 365.1 700.4 632.0
138.7 Provision for income taxes 142.8 151.3 281.6 263.3
- -------- -------- -------- -------- --------
$206.8 NET INCOME $ 212.0 $ 213.8 $ 418.8 $ 368.7
======== ======== ======== ======== ========
NET INCOME PER COMMON SHARE:
$1.29 Primary $ 1.37 $ 1.33 $ 2.66 $ 2.27
$1.27 Fully diluted $ 1.35 $ 1.32 $ 2.62 $ 2.24
$.44 DIVIDENDS PAID PER COMMON SHARE $ .51 $ .44 $ .95 $ .81
Average number of
common shares, in thousands:
153,421 Primary 147,910 153,650 150,650 154,318
155,592 Fully diluted 149,787 155,183 152,691 156,018
$9.3 Preferred dividends $ 9.3 $ 9.3 $ 18.6 $ 18.6
</TABLE>
<PAGE>
OTHER DATA
(dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
Quarter Ended Quarters Ended Six Months Ended
- --------------- --------------- -----------------
March 31 June 30 June 30
-------- --------------- -----------------
1997 1997 1996 1997 1996
---- ------- --------------- --------- -----------------
<S> <C> <C> <C> <C> <C>
EARNINGS PER SHARE BEFORE SPECIAL ITEMS*:
$1.29 Primary $ 1.37 $ 1.16 $ 2.66 $ 2.30
$1.27 Fully diluted $ 1.35 $ 1.15 $ 2.62 $ 2.28
RETURN ON AVERAGE TOTAL ASSETS (ANNUALIZED):
1.33% Net income 1.33% 1.47% 1.33% 1.27%
1.33% Net income before special items* 1.33% 1.29% 1.33% 1.29%
RETURN ON AVERAGE COMMON EQUITY (ANNUALIZED):
18.02% Net income 19.54% 19.68% 18.79% 16.80%
18.02% Net income before special items* 19.54% 17.19% 18.79% 17.07%
* Based on net income of $212 million in the
second quarter of 1997, $207 million in the first
quarter of 1997, and $188 million in the second
quarter of 1996.
CONSOLIDATED NET INTEREST REVENUE AND MARGIN:
Net interest revenue, fully taxable
$625.0 equivalent basis $620.4 $576.2 $1,245.4 $1,147.1
4.47% Net interest margin 4.38% 4.40% 4.43% 4.40%
4.54% DOMESTIC NET INTEREST MARGIN (ESTIMATED) 4.58% 4.47% 4.56% 4.50%
4.30% INTERNATIONAL NET INTEREST MARGIN (ESTIMATED) 3.83% 4.18% 4.06% 4.09%
</TABLE>
<TABLE>
<CAPTION>
March 31 June 30
- -------- --------------------
1997 1997 1996
---- --------- --------
<C> <S> <C> <C>
COMMON STOCKHOLDERS' EQUITY:
$4,353 Common stockholders' equity $ 4,166 $ 4,454
151,807 Common shares outstanding, in thousands 147,111 156,681
Per common share:
$28.67 Book value $ 28.32 $ 28.42
67.00 Market value 72.38 49.50
CAPITAL RATIOS/REGULATORY CAPITAL:
6.13% Tangible Common Equity ratio 5.78% 6.52%
Risk-based capital ratios: Estimate
9.0% Tier 1 capital ratio (minimum required 4.00%) 8.7% 8.6%
13.0% Total capital ratio (minimum required 8.00%) 12.7% 12.7%
7.8% Leverage ratio 7.8% 7.8%
$4,838 Tier 1 capital $ 4,920 $ 4,505
7,044 Total capital 7,170 6,649
54,034 Total risk-adjusted assets 56,404 52,417
</TABLE>
<PAGE>
RESERVE FOR CREDIT LOSSES
<TABLE>
<CAPTION>
(dollars in millions)
Quarter Ended Quarters Ended Six Months Ended
March 31 June 30 June 30
- -------------- ----------------- ------------------
1997 1997 1996 1997 1996
- -------------- -------- ------- -------- --------
<C> <S> <C> <C> <C> <C>
$883.3 Beginning balance $ 864.0 $884.1 $ 883.3 $ 889.2
60.0 Provision for credit losses 60.0 57.1 120.0 114.0
0.0 Reserve of acquired companies 0.0 2.1 0.0 2.1
0.0 Reserves of companies sold 0.0 0.0 0.0 (10.9)
(96.7) Credit losses (106.5) (66.6) (203.2) (138.5)
17.4 Recoveries 27.2 17.8 44.6 38.6
- ----- ------- ------ ------- -------
(79.3) Net credit losses (79.3) (48.8) (158.6) (99.9)
- ----- ------- ------ ------- -------
$864.0 Ending balance $ 844.7 $894.5 $ 844.7 $ 894.5
======= ======= ====== ======= =======
Reserve as a % of loans
2.11% and leases 2.00% 2.20% 2.00% 2.20%
======= ======= ====== ======= =======
Reserve as a
218% % of nonaccrual loans 240% 225% 240% 225%
======= ======= ====== ======= =======
</TABLE>
RENEGOTIATED LOANS
<TABLE>
<CAPTION>
(in millions)
1996 1997
Second Third Fourth First Second
Qtr Qtr Qtr Qtr Qtr
------- ---- ----- ----- ------
<S> <C> <C> <C> <C> <C>
Renegotiated loans $13 $11 $ 8 $0 $ 0
====== ===== ===== ===== =====
</TABLE>
