<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): APRIL 17, 1997
BANK OF BOSTON CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
MASSACHUSETTS 1-6522 04-2471221
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
</TABLE>
100 FEDERAL STREET, BOSTON, MASSACHUSETTS 02110
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 434-2200
________________________________________________________________________________
________________________________________________________________________________
<PAGE>
-2-
ITEM 5. OTHER EVENTS.
- ----------------------
On April 17, 1997, Bank of Boston Corporation (the Corporation) issued a
press release announcing its earnings for the quarter ended March 31, 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
April 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.
BANK OF BOSTON CORPORATION
Dated: April 18, 1997 /s/ Robert T. Jefferson
------------------------------------------------
Robert T. Jefferson
Comptroller
<PAGE>
EXHIBIT 99 (A)
BANKBOSTON REPORTS FIRST QUARTER NET INCOME
OF $207 MILLION OR $1.27 PER SHARE
12% GROWTH IN EPS FROM PRIOR YEAR
COMMON DIVIDEND INCREASED 16% TO 51 CENTS PER SHARE
BOSTON, April 17, 1997 -- Bank of Boston Corporation ("BankBoston";
NYSE: "BKB") reported today first quarter net income of $207 million, or $1.27
per common share on a fully diluted basis compared with net income for the first
quarter of 1996 of $186 million, or $1.13 per share, before special items
related to the sale of the mortgage banking subsidiary ($155 million, or $.93
per share, including these special items). Net income for the fourth quarter of
1996 was $202 million, or $1.24 per share.
Operating highlights were (amounts shown are before special items):
- On a fully taxable equivalent basis, operating income (before credit
costs) was $413 million in the first quarter, compared with $410
million in the prior quarter and $381 million in the first quarter of
1996;
- Return on average common equity was 18.02% in the first quarter
compared with 17.71% in the prior quarter and 16.96% in the first
quarter of 1996;
- Return on average assets was 1.33% in the first quarter, 1.31% in the
prior quarter and 1.28% in the first quarter of 1996;
- Nonaccrual loans and OREO totaled $445 million at March 31, 1997,
compared with $452 million at December 31, 1996 and $449 million at
March 31, 1996. Net credit losses were $79 million in the first
quarter compared with $75 million in the prior quarter and $51 million
in the first quarter of 1996.
The Board of Directors approved an increase in the Corporation's quarterly
dividend on common stock to 51 cents per share from 44 cents per share. The
dividend is payable on May 30 to stockholders of record on May 5.
<PAGE>
NONINTEREST INCOME
The components of noninterest income are as follows:
<TABLE>
<CAPTION>
Fourth
Quarter First Quarter
- ------- -------------
1996 (in millions) 1997 1996 Change
----- ---- ---- ------
<S> <C> <C> <C> <C>
$ 147 Financial service fees $ 138 $ 163 $(25)
45 Net equity and mezzanine profits 37 37 0
25 Mutual fund fees 25 21 4
34 Personal trust fees 34 32 2
6 Other trust and agency fees 7 4 3
17 Trading profits and commissions 19 13 6
17 Net foreign exchange trading profits 19 13 6
Securities portfolio gains, net (before
7 valuation charges in Q4'96) 9 13 (4)
31 Other income 42 40 2
11 Other items 0 0 0
----- ----- ----- ----
340 Subtotal 330 336 (6)
Mortgage banking related items, net
0 (details on following page) 0 (51) 51
----- ---- ----- ----
$ 340 Total $ 330 $ 285 $ 45
===== ===== ===== ====
</TABLE>
- Changes in financial service fees are detailed below. The decline
from the first quarter of 1996 was greatly influenced by the sale of
the Corporation's mortgage banking subsidiary in March 1996.
- Equity and mezzanine profits declined from the fourth quarter of 1996
and were flat with the prior year. The Corporation continues to make
new investments and the portfolio balance has grown over
$200 million since the beginning of 1996.
- Mutual fund fees were flat with the fourth quarter of 1996 and
improved $4 million from the prior year. The increase from the prior
year was due, in part, to higher levels of funds under management in
Brazil. These funds stood at $4.1 billion at March 31, 1997 compared
with $3.0 billion a year earlier.
- The increase in personal trust and other trust and agency fees from
the first quarter of last year reflected a higher level of assets
under management and higher custody fees, respectively.
- Trading account profits and commissions improved in both comparisons
driven mainly by a higher level of profits from Brazil.
- The growth in foreign exchange profits from the prior periods
reflected the Corporation's increased emphasis in this segment of its
Global Capital Markets business.
- The combination of other income and other items was flat with the
prior quarter. Other income in the first quarter of 1997 included
gains from the sale of consumer loans and a higher level of income
from the Corporation's Argentine pension management and mortgage
banking joint ventures, which included the effect of the recently
completed initial public offering by HomeSide, Inc. Amounts included
within other items in the fourth quarter of 1996 were as follows: (1)
a gain of $47 million from the previously announced sale of twenty
branches to US Trust, which involved the transfer of approximately
$700 million of deposits and $500 million of loans, (2) a charge of
$25 million from the transfer of approximately $400 million of
commercial real estate loans into a held for sale account as part of
the Corporation's balance sheet management program, and (3) valuation-
related charges of $11 million associated with certain investments.
<PAGE>
The components of financial service fees are as follows:
<TABLE>
<CAPTION>
Fourth
- ------- First Quarter
Quarter ---------------
- -------
1996 (in millions) 1997 1996 Change
- ---- ----- ----- ------
<S> <C> <C> <C> <C>
$ 59 Deposit and ATM-related fees $ 57 $ 59 $ (2)
17 Letters of credit and
acceptance fees 17 17 0
21 Syndication and agent fees 14 10 4
10 Other loan-related fees 9 11 (2)
Net mortgage servicing fees
0 (before items detailed below) 0 22 (22)
40 Other 41 44 (3)
- ---- ----- ----- -----
$147 Total $ 138 $ 163 ($25)
==== ===== ===== =====
</TABLE>
- Deposit and ATM-related fees declined in both comparisons due, in
part, to the fourth quarter sale of branches to US Trust.
- Syndication and agent fees declined from the unusually high level
of income attained during the fourth quarter of 1996. The increase
from the prior year reflected 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.
- The decline in other financial service fees from the prior year is
mainly due to lower levels of credit insurance and advisory fees.
Mortgage banking-related special items included in the first quarter of
1996 were as follows:
<TABLE>
<CAPTION>
<S> <C>
(in millions)
Sale of mortgage subsidiary $ 60
Contracts used to manage prepayment
risk, net (111)
-----
Total $ (51)
=====
</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 $625 million
for the first quarter of 1997, compared with $616 million in the prior quarter
and $571 million in the first quarter of 1996. Net interest margin was 4.47% for
the first quarter of 1997 and the fourth quarter of 1996, compared with 4.40% in
the first quarter of last year.
The $9 million increase in net interest revenue from the prior quarter
reflected a growth in average earning assets of approximately $2 billion, higher
levels of dividends from UK and Argentine equity investments, interest
recoveries on loans, and wider spreads from the credit card business as the
"promotional rate" period expired on additional loans in the portfolio. These
factors were partially offset by the full quarter impact of the sale of
approximately $700 million of retail deposits to US Trust, which occurred in the
fourth quarter, and fewer days in the first quarter. Net interest margin was
flat compared with the fourth quarter. The favorable impact of the equity
dividends, interest recoveries, and wider credit card spreads served to offset a
decline in margin from the US Trust sale and the aforementioned growth in
average earning assets. The latter stemmed from an increase in various
categories of treasury assets, mainly investment securities, as the Corporation
sought to invest a portion of its excess capital in productive assets.
Compared with the prior year, net interest revenue and margin each
improved. Contributing to the increase in net interest revenue were higher
levels of average earning assets, which increased by over $4 billion, including
an increase of $2.6 billion in average loans and leases. Increases in domestic
commercial and consumer loans coupled with growth in the Latin American
portfolio were partially offset by a decline in residential mortgages, which
reflected sales that took place during 1996. The equity dividends and interest
recoveries discussed above were also factors in the net interest revenue
increase and were the main reasons for the improvement in net interest margin.
<PAGE>
NONINTEREST EXPENSE
The components of noninterest expense are as follows:
<TABLE>
<CAPTION>
Fourth
- ------- First
Quarter Quarter
- ------- ------------
1996 (in millions) 1997 1996 Change
----- ----- ----- ------
<S> <C> <C> <C> <C>
$ 299 Employee costs $ 310 $ 293 $17
87 Occupancy & equipment 86 85 1
14 Professional fees 12 13 (1)
24 Advertising and public relations 22 27 (5)
27 Communications 26 26 0
7 Goodwill amortization 7 5 2
88 Other 79 76 3
----- ----- ----- ---
546 Subtotal before OREO costs 542 525 17
2 OREO costs 2 2 0
----- ----- ----- ---
$ 548 Total $ 544 $ 527 $17
===== ===== ===== ===
</TABLE>
Noninterest expense before OREO costs was $542 million in the first quarter
of 1997, compared with $546 million in the prior quarter and $525 million for
the same quarter in 1996.
The $4 million decrease from the fourth quarter was partly due to a lower
level of expenses from the Regional Consumer business, including additional cost
savings from the BayBanks integration. In addition, there were declines in
various non-employee cost categories including professional fees, advertising,
travel and litigation costs. These declines were partially offset by an
increase in employee costs which reflected, in part, higher incentive
compensation, an increase in expenses from Brazil caused by branch expansion and
increased levels of payroll taxes, and Millennium Project ("Year 2000") costs.
Incentive compensation in the fourth quarter included the effect of a $6 million
charge associated with a performance restricted stock plan for certain
employees.
Compared with first quarter of 1996, the growth in noninterest expense
reflected ongoing expansion and investment spending in several of the
Corporation's growth businesses, mainly Latin America and capital markets.
Initiatives in these businesses included branch expansion and growth in fee-
based businesses in Latin America and the start up of a Section 20 subsidiary
and the hiring of sales/trading professionals in all capital markets businesses.
Current year expense levels also included higher incentive compensation costs
related to improved business unit performance. These increases were partially
offset by cost savings achieved from the BayBanks integration.
<PAGE>
CREDIT PROFILE
Loan and Lease Portfolio
The segments of the lending portfolio are as follows:
<TABLE>
(in millions) 3-31-97 12-31-96 9-30-96 6-30-96 3-31-96
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
United States Operations:
Commercial, industrial and financial $ 14,203 $ 13,162 $ 13,828 $ 12,915 $ 12,677
Commercial real estate
Construction 265 284 323 410 383
Other commercial real estate 3,129 3,240 3,228 3,326 3,242
Consumer-related loans:
Residential mortgages 3,067 3,184 4,156 4,133 4,218
Home equity loans 2,908 2,878 2,842 2,775 2,644
Credit card 1,404 1,395 1,320 1,223 810
Other 4,708 5,503 5,349 5,218 5,200
Lease financing 1,766 1,816 1,778 1,627 1,565
Unearned income (275) (287) (272) (245) (240)
-------- -------- -------- -------- --------
31,175 31,175 32,552 31,382 30,499
-------- -------- -------- -------- --------
International Operations:
Loans and lease financing, net of
unearned income 9,844 9,886 9,501 9,271 8,769
-------- -------- -------- -------- --------
Total loans and lease financing $ 41,019 $ 41,061 $ 42,053 $ 40,653 $ 39,268
======== ======== ======== ======== ========
</TABLE>
Loans and leases were approximately $41 billion at March 31, 1997 and
December 31, 1996. Growth in the domestic commercial, industrial and financial
category, which was driven by increases in various corporate banking businesses,
was offset by lower levels of domestic commercial real estate and consumer loans
reflecting loan sales which occurred during the first quarter.
Nonaccrual Loans and OREO
Nonaccrual loans and OREO amounted to $445 million at March 31, 1997,
compared with $452 million at December 31, 1996, and $449 million at March 31,
1996. Nonaccrual loans and OREO represented 1.1% of related assets at March 31,
1997, December 31, 1996 and March 31, 1996.
The components of consolidated nonaccrual loans and OREO are as follows:
<TABLE>
(in millions) 3-31-97 12-31-96 9-30-96 6-30-96 3-31-96
-------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
Domestic nonaccrual loans:
Commercial, industrial and financial $ 72 $ 82 $ 114 $ 140 $ 93
Commercial real estate
Construction 4 6 9 10 22
Other commercial real estate 47 67 84 86 102
Consumer-related loans
Residential mortgages 65 57 60 45 46
Home equity loans 25 23 22 20 16
Credit card 23 17 5 2 0
Other 41 44 44 38 42
-------- -------- -------- -------- --------
277 296 338 341 321
-------- -------- -------- -------- --------
International nonaccrual loans 119 106 106 57 63
-------- -------- -------- -------- --------
Total nonaccrual loans 396 402 444 398 384
OREO 49 50 52 62 65
-------- -------- -------- -------- --------
Total $ 445 $ 452 $ 496 $ 460 $ 449
======== ======== ======== ======== ========
</TABLE>
<PAGE>
Provision and Reserve for Credit Losses
The reserve for credit losses at March 31, 1997 was $864 million, or 2.11%
of outstanding loans and leases, compared with $883 million, or 2.15% at
December 31, 1996, and $884 million, or 2.25% at March 31, 1996. The reserve
for credit losses was 218% of nonaccrual loans at March 31, 1997, 220% at
December 31, 1996, and 230% at March 31, 1996.
The provision for credit losses was $60 million in the first quarter of
1997 and the fourth quarter of 1996 compared with $57 million in the first
quarter of 1996.
Net credit losses were $79 million for the first quarter of 1997, compared
with $75 million (including $15 million related to the transfer of commercial
real estate loans into a held for sale account) for the prior quarter and $51
million for the comparable period last year. Net credit losses as a percent of
average loans and leases on an annualized basis were .77% in the first quarter
of 1997, compared with .71% for the fourth quarter of 1996 and .52% for the
first quarter of 1996.
<TABLE>
<CAPTION>
Net credit losses were as follows:
Fourth
- ------- First
Quarter Quarter
- ------- ------------
1996 (in millions) 1997 1996
---- ----- -----
<S> <C> <C> <C>
Domestic
$ 3 Commercial, industrial and financial $ 18 $ 3
16 Commercial real estate* 0 11
Consumer-related loans:
2 Residential mortgages 1 4
13 Credit card 19 3
3 Home equity loans 2 2
26 Other 35 23
---- ----- -----
63 75 46
12 International 4 5
---- ----- -----
$ 75 Total $ 79 $ 51
==== ===== =====
</TABLE>
*The fourth quarter commercial real estate total includes $15 million associated
with the transfer of loans into a held for sale category.
THE CORPORATION
BankBoston, with assets of $64.8 billion, was founded in 1784. BankBoston
is engaged primarily in consumer banking in southern New England, providing
financing and capital markets services 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 650
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)
December 31 March 31
- ------------ ------------------
1996 1997 1996
- ------------ -------- -------
<C> <S> <C> <C>
Assets
Securities:
$ 680 Held to maturity $ 692 $ 699
7,804 Available for sale 9,082 7,280
41,061 Loans and lease financing 41,019 39,268
(883) Reserve for credit losses (864) (884)
------- ------- -------
40,178 Net loans and lease financing 40,155 38,384
4,729 Other earning assets 5,755 4,500
8,915 Cash and other nonearning assets 9,096 7,152
------- ------- -------
$62,306 Total Assets $64,780 $58,015
======= ======= =======
Liabilities and Stockholders' Equity
$42,831 Deposits $42,307 $41,349
9,158 Funds borrowed 11,838 7,635
2,821 Notes payable 2,708 2,499
2,062 Other liabilities 2,566 1,846
Guaranteed preferred beneficial
interest in corporation's junior
500 subordinated debt 500 0
------- ------- -------
57,372 Total Liabilities 59,919 53,329
------- ------- -------
Stockholders' Equity
508 Preferred equity 508 508
4,426 Common equity 4,353 4,178
------- ------- -------
4,934 Total Stockholders' Equity 4,861 4,686
------- ------- -------
Total Liabilities and Stockholders'
$62,306 Equity $64,780 $58,015
======= ======= =======
</TABLE>
SELECTED AVERAGE BALANCES
<TABLE>
<CAPTION>
Quarter Ended Quarters Ended
- ------------- --------------
December 31 March 31
- ------------- -----------
1996 1997 1996
- ------------- ------- -------
<C> <S> <C> <C>
Assets
$41,835 Loans and lease financing $41,732 $39,179
8,029 Securities 9,261 8,143
54,819 Total earning assets 56,641 52,172
61,056 Total assets 63,224 58,587
Liabilities and Stockholders' Equity
34,739 Interest bearing deposits 34,349 33,547
7,292 Noninterest bearing deposits 7,550 7,085
------- ------- -------
42,031 Total deposits 41,899 40,632
2,983 Notes payable 3,316 2,421
47,079 Total interest bearing liabilities 48,531 45,029
4,317 Common stockholders' equity 4,444 4,198
4,825 Total stockholders' equity 4,952 4,706
</TABLE>
NUMBER OF EMPLOYEES
<TABLE>
<CAPTION>
Mar 31 Dec 31 Mar 31
1997 1996 1996
-------- ------- --------
<S> <C> <C> <C>
Full time equivalent employees 22,000 22,000 22,400
</TABLE>
<PAGE>
CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
(dollars in millions, except per share amounts)
Quarters Ended Quarters Ended
December 31 March 31
-------------- -----------------
1996 1997 1996
---- -------- -------
<S> <C> <C> <C>
$1,250.1 Interest income $1,275.0 $1,240.3
638.9 Interest expense 655.0 674.8
-------- -------- --------
611.2 Net interest revenue 620.0 565.5
60.0 Provision for credit losses 60.0 56.9
-------- -------- --------
Net interest revenue after provision
551.2 for credit losses 560.0 508.6
-------- -------- --------
Noninterest income:
146.6 Financial service fees 137.5 51.6
65.0 Trust and agency fees 66.0 57.4
17.2 Trading profits and commissions 19.3 12.9
(.8) Securities portfolio gains, net 8.8 13.4
111.5 Other income 98.1 149.9
-------- -------- --------
339.5 Total noninterest income 329.7 285.2
-------- -------- --------
Noninterest expense:
254.5 Salaries 257.7 240.8
44.4 Employee benefits 52.7 52.2
50.6 Occupancy expense 50.8 51.1
36.2 Equipment expense 35.6 34.3
160.4 Other expense 145.9 147.0
-------- -------- --------
546.1 Subtotal 542.7 525.4
1.8 OREO costs 1.5 1.5
-------- -------- --------
547.9 Total noninterest expense 544.2 526.9
-------- -------- --------
342.8 Income before income taxes 345.5 266.9
141.3 Provision for income taxes 138.7 112.0
-------- -------- --------
$201.5 NET INCOME $ 206.8 $ 154.9
======== ======== ========
NET INCOME PER COMMON SHARE:
$1.26 Primary $ 1.29 $ .94
$1.24 Fully diluted $ 1.27 $ .93
$.44 DIVIDENDS PAID PER COMMON SHARE $ .44 $ .37
Average number of common shares, in thousands:
152,975 Primary 153,421 154,988
155,157 Fully diluted 155,592 156,844
$9.4 Preferred dividends $ 9.3 $ 9.3
</TABLE>
<PAGE>
OTHER DATA
<TABLE>
<CAPTION>
(dollars in millions, except per share amounts)
Quarter Ended Quarters Ended
- ------------- --------------
December 31 March 31
----------- ------------
1996 1997 1996
---- ----- -----
<C> <S> <C> <C>
EARNINGS PER SHARE BEFORE SPECIAL ITEMS*:
$1.26 Primary $ 1.29 $ 1.14
$1.24 Fully diluted $ 1.27 $ 1.13
RETURN ON AVERAGE TOTAL ASSETS (ANNUALIZED):
1.31% Net income 1.33% 1.06%
1.31% Net income before special items* 1.33% 1.28%
RETURN ON AVERAGE COMMON EQUITY (ANNUALIZED):
17.71% Net income 18.02% 13.94%
17.71% Net income before special items* 18.02% 16.96%
* First quarter 1996 amounts exclude items
related to the sale of the mortgage banking
subsidiary.
CONSOLIDATED NET INTEREST REVENUE AND MARGIN:
Net interest revenue, fully taxable
$616.5 equivalent basis $ 625.0 $ 570.9
4.47% Net interest margin 4.47% 4.40%
4.65% DOMESTIC NET INTEREST MARGIN (ESTIMATED) 4.54% 4.53%
3.97% INTERNATIONAL NET INTEREST MARGIN (ESTIMATED) 4.30% 3.99%
<CAPTION>
Dec. 31 Mar. 31
------- ------------
1996 1997 1996
------- ----- -----
<C> <S> <C> <C>
COMMON STOCKHOLDERS' EQUITY:
$4,426 Common stockholders' equity $ 4,353 $ 4,178
153,173 Common shares outstanding, in thousands 151,807 153,935
Per common share:
$28.89 Book value $ 28.67 $ 27.14
64.25 Market value 67.00 49.63
CAPITAL RATIOS/REGULATORY CAPITAL:
6.49% Tangible Common Equity ratio 6.13% 6.63%
Risk-based capital ratios: Estimate
9.2% Tier 1 capital ratio (minimum required 4.00%) 8.9% 8.7%
13.6% Total capital ratio (minimum required 8.00%) 13.0% 12.9%
8.2% Leverage ratio 7.7% 7.4%
$4,954 Tier 1 capital $ 4,838 $ 4,296
7,291 Total capital 7,045 6,402
53,583 Total risk-adjusted assets 54,093 49,476
</TABLE>
<PAGE>
RESERVE FOR CREDIT LOSSES
<TABLE>
<CAPTION>
(dollars in millions)
Quarter Ended Quarters Ended
December 31 March 31
- ------------- ----------------------
1996 1997 1996
---- ------- ------
<C> <S> <C> <C>
$896.7 Beginning balance $883.3 $889.2
60.0 Provision for credit losses 60.0 56.9
1.5 Reserve of acquired companies 0.0 0.0
0.0 Reserves of companies sold 0.0 (10.9)
(98.1) Credit losses (96.7) (71.9)
23.2 Recoveries 17.4 20.8
-------- ------ -----
(74.9) Net credit losses (79.3) (51.1)
-------- ------ ------
$883.3 Ending balance $864.0 $884.1
======== ====== ======
2.15% Reserve as a % of loans and leases 2.11% 2.25%
======== ====== ======
220% Reserve as a % of nonaccrual loans 218% 230%
======== ====== ======
</TABLE>
RENEGOTIATED LOANS
<TABLE>
<CAPTION>
(in millions) 1996 1997
First Second Third Fourth First
Qtr Qtr Qtr Qtr Qtr
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Renegotiated loans $28 $13 $11 $8 $0
======== ======== ======== ======== ========
</TABLE>
