<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): OCTOBER 16, 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
_____________________________________________________________________
_____________________________________________________________________
<PAGE>
-2-
ITEM 5. OTHER EVENTS.
- ----------------------
On October 16, 1997, BankBoston Corporation (the Corporation) issued a press
release announcing its earnings for the quarter ended September 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
October 16, 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: October 17, 1997 /s/ Robert T. Jefferson
------------------------------------------------
Robert T. Jefferson
Comptroller
<PAGE>
EXHIBIT 99(A)
BANKBOSTON REPORTS THIRD QUARTER NET INCOME
OF $226 MILLION OR $1.47 PER SHARE
21% GROWTH IN CORE EPS FROM PRIOR YEAR
BOSTON, October 16, 1997 -- BankBoston Corporation (NYSE: BKB) reported
today third quarter net income of $226 million, or $1.47 per common share on a
fully diluted basis. This compares with $212 million, or $1.35 per share, in
the second quarter of 1997 and $197 million, or $1.21 per share, in the third
quarter of 1996 before a charge for restructuring and merger-related costs
associated with the BayBanks acquisition (net income, including this charge, was
$80 million, or $.45 per share).
Net income for the first nine months of 1997 was $645 million, or $4.07 per
share, compared with net income for the first nine months of 1996 of $571
million, or $3.48 per share, before charges associated with the acquisition of
BayBanks and items related to the sale of the mortgage banking subsidiary
(actual net income for the first nine months of 1996 was $449 million, or $2.69
per share).
Operating highlights were as follows: (amounts shown for the third quarter
of 1996 are before the charge for restructuring and merger-related costs
associated with the BayBanks acquisition):
. On a fully taxable equivalent basis, operating income (before credit
costs) was $424 million in the third quarter, compared with $421
million in the prior quarter and $405 million in the third quarter of
1996;
. Return on average common equity was 21.11% in the third quarter
compared with 19.54% in the prior quarter and 17.56% in the third
quarter of 1996;
. Return on average assets was 1.36% in the third quarter compared with
1.33% in the prior quarter and 1.31% in the third quarter of 1996;
. Nonaccrual loans and OREO totaled $387 million at September 30, 1997,
compared with $398 million at June 30, 1997 and $496 million at
September 30, 1996. Net credit losses were $61 million in the third
quarter of 1997 compared with $79 million in the prior quarter and $55
million in the third quarter of 1996.
Included within the third quarter of 1997 results discussed above were the
following items:
. A gain of $68 million from the previously announced sale of Fidelity
Acceptance Corporation, the Corporation's consumer finance subsidiary;
. A charge of $11 million resulting from a loss on interest rate futures
contracts that had been used to hedge the funding of Fidelity
Acceptance Corporation;
. Charges of $38 million related to the regional consumer business for
additional conversion costs for BayBanks associated with integrating
teller, ATM and other back office systems; the planned closing of
additional branches; and the extension of the new product set to the
Connecticut operations in connection with the pending October merger
of Bank of Boston Connecticut into the Corporation's lead bank,
BankBoston, N.A.;
. Contributions of $11 million made by the Corporation to its Charitable
Foundation;
. A charge of $8 million associated with Latin America covering de novo
branch expansion, as well as advertising and promotional campaigns
related to the unveiling of the new BankBoston brand.
<PAGE>
FIDELITY ACCEPTANCE CORPORATION
The divestiture of Fidelity Acceptance Corporation did not have a material
effect on operating earnings in the third quarter but did reduce reported levels
of major income statement categories, net interest margin, loan levels,
nonaccrual loans, and net credit losses.
NONINTEREST INCOME
The components of noninterest income are as follows:
<TABLE>
<CAPTION>
Second
Quarter Third Quarter Nine Months
- ------- -------------- -----------------
1997 (in millions) 1997 1996 Change 1997 1996 Change
---- ----- ----- ------- ------ ------- -------
<C> <S> <C> <C> <C> <C> <C> <C>
$156 Financial service fees $168 $140 $ 28 $ 462 $ 438 $ 24
55 Net equity and mezzanine profits 61 51 10 153 165 (12)
27 Mutual fund fees 29 24 5 81 69 12
36 Personal trust fees 37 32 5 107 97 10
6 Other trust and agency fees 7 6 1 20 15 5
28 Trading profits and commissions 20 21 (1) 67 59 8
20 Net foreign exchange trading profits 18 13 5 57 37 20
32 Securities portfolio gains, net 11 7 4 52 24 28
0 Gain on sale of mortgage servicing 0 13 (13) 0 13 (13)
0 Gain on sale of Fidelity Acceptance Corp. 68 0 68 68 0 68
0 Sale of Mortgage Bank and related items, net 0 0 0 0 (5) 5
17 Other income 29 30 (1) 88 93 (5)
---- ---- ---- ---- ------ ------ ----
$377 Total $448 $337 $111 $1,155 $1,005 $150
==== ==== ==== ==== ====== ====== ====
</TABLE>
. The improvement in financial service fees is detailed below.
. Equity and mezzanine profits reflected the ongoing strong performance
of the Corporation's Private Equity business as exhibited in both
quarterly comparisons. The Corporation has made over $250 million of
new investments during 1997. The decline in profits in the nine month
comparison resulted from an unusually high level of gains recorded
during the second quarter of 1996.
. Mutual fund fees improved in all comparisons, generally reflecting
higher levels of fees from the Argentine and Brazilian businesses. The
combined level of assets under management in Argentina and Brazil has
risen to $6.0 billion at September 30, 1997 compared with $3.9 billion
at September 30, 1996. In addition, higher fees from the International
Private Banking business also contributed to the increases.
. The increase in personal trust fees from prior year periods mainly
relates to an increase in domestic assets under management.
. Trading account profits and commissions declined from the second
quarter due to lower levels of profits from international operations.
The increase in the nine month comparison reflects growth in the
Corporation's Global Capital Markets business.
. The growth in foreign exchange profits from prior year periods
reflects the Corporation's increased emphasis on this segment of its
Global Capital Markets business, while the decline from the prior
quarter resulted from lower profits in Asia.
. The decrease in securities gains from the prior quarter reflects a
high second quarter volume of Argentine security sales, which yielded
gains of approximately $20 million.
. During the third quarter of 1997, the Corporation recorded a gain of
$68 million related to the sale of Fidelity Acceptance Corporation,
its consumer finance subsidiary, to Norwest Financial Corp.
. Other income included a charge of $11 million in the third quarter of
1997 resulting from interest rate futures contracts that had been used
to hedge the funding of Fidelity Acceptance Corporation. Compared with
the second quarter, this was more than offset by higher equity
earnings from affiliates and gains on the sales of loans.
<PAGE>
The components of financial service fees are as follows:
<TABLE>
<CAPTION>
Second
Quarter Third Quarter Nine Months
- ------- -------------- -----------------
1997 (in millions) 1997 1996 Change 1997 1996 Change
---- ----- ----- ------- ------ ------- -------
<C> <S> <C> <C> <C> <C> <C> <C>
$ 62 Deposit and ATM-related fees $ 69 $ 61 $ 8 $189 $180 $ 9
18 Letters of credit and acceptance fees 19 18 1 53 51 2
23 Syndication and agent fees 22 14 8 60 36 24
9 Other loan-related fees 11 9 2 29 28 1
0 Net mortgage servicing fees* 0 3 (3) 0 29 (29)
44 Other 47 35 12 131 114 17
---- ---- ---- --- ---- ---- ----
$156 Total $168 $140 $28 $462 $438 $ 24
==== ==== ==== === ==== ==== ====
</TABLE>
*Excludes effects of contracts used to hedge prepayment risk, pending sale
of the mortgage banking subsidiary, which are included in "Sale of
Mortgage Bank and related items, net".
. Deposit and ATM-related fees increased from the prior quarter due, in
part, to repricing of certain domestic products, a higher volume of
domestic accounts, and an increase in fees from Argentine operations.
. Syndication and agent fees increased from prior year 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 mainly to growth in the Global Capital Markets business, including
higher levels of advisory fees and the recording of underwriting fees
in 1997.
NET INTEREST REVENUE
Net interest revenue, on a fully taxable equivalent basis, was $577 million
for the third quarter of 1997, compared with $620 million in the prior quarter
and $596 million in the third quarter of 1996. Net interest margin was 3.96%
for the third quarter of 1997 and 4.38% in the second quarter of 1997, compared
with 4.40% in the third quarter of last year. For the first nine months of
1997, net interest revenue, on a fully taxable equivalent basis, was $1,822
million, compared with $1,744 million in the first nine months of 1996. Net
interest margin was 4.27% for the first nine months of 1997, compared with 4.40%
for the first nine months of 1996.
The declines in net interest revenue and margin in both quarterly
comparisons mainly reflect the third quarter 1997 sale of Fidelity Acceptance
Corporation, which engaged in high margin, sub-prime consumer lending.
Partially offsetting the quarterly declines in net interest revenue from this
sale was an increase in the average balance of earning assets including domestic
commercial loans, Latin American loans, and securities. Excluding the impact of
the Fidelity sale, average earning assets grew approximately $2 billion from the
second quarter and approximately $5 billion from the third quarter of 1996.
Lower levels of loan fees and interest recoveries affected the second quarter
comparison of net interest revenue and margin.
Compared with the first nine months of 1996, the improvement in net interest
revenue resulted from higher levels of average earning assets, partially offset
by the sale of Fidelity Acceptance Corporation. The latter was also the main
reason for the decline in margin in the nine month comparison.
<PAGE>
NONINTEREST EXPENSE
The components of noninterest expense are as follows:
<TABLE>
<CAPTION>
Second
Quarter Third Quarter Nine Months
------- -------------- ----------------
1997 (in millions) 1997 1996 Change 1997 1996 Change
---- ----- ----- ------- ------ ------ -------
<C> <S> <C> <C> <C> <C> <C> <C>
$312 Employee costs $318 $293 $ 25 $ 939 $ 875 $ 64
88 Occupancy & equipment 86 85 1 260 254 6
12 Professional fees 14 15 (1) 38 42 (4)
27 Advertising and public relations 25 26 (1) 73 84 (11)
28 Communications 29 24 5 83 74 9
7 Goodwill amortization 6 7 (1) 21 17 4
102 Other 122 78 44 305 235 70
---- ---- ---- ----- ------ ------ -----
576 Subtotal 600 528 72 1,719 1,581 138
OREO costs
1996 special items:
0 Restructuring and merger-related costs 0 180 (180) 0 180 (180)
0 Accelerated vesting of restricted stock 0 0 0 0 4 (4)
2 OREO costs 1 5 (4) 4 7 (3)
---- ---- ---- ----- ------ ------ -----
$578 Total $601 $713 $(112) $1,723 $1,772 $ (49)
==== ==== ==== ===== ====== ====== =====
</TABLE>
The comparison of noninterest expense with the prior quarter was affected
by the following items:
. Third quarter charges of $38 million related to the regional consumer
business for additional conversion costs for BayBanks associated with
integrating teller, ATM and other back office systems; the planned
closing of additional branches; and the extension of the new product
set to the Connecticut operations in connection with the pending
merger of Bank of Boston Connecticut into the Corporation's lead bank,
BankBoston, N.A. Regional consumer charges associated with the
BayBanks integration totaled $19 million in the second quarter and
covered 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.
. Contributions of $11 million made by the Corporation in the third
quarter to its Charitable Foundation.
. Third quarter costs of $8 million associated with Latin America
covering branch expansion, as well as advertising and promotional
campaigns related to the unveiling of the new BankBoston brand.
. The sale of Fidelity Acceptance Corporation in the third quarter.
. 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.
Excluding the items discussed above, noninterest expense, before OREO costs
and 1996 special items, increased approximately $10 million from the second
quarter due to higher incentive compensation in Global Capital Markets and
Corporate Banking, continued investments in Latin America, and higher levels of
Millennium ("Year 2000") project expenses.
Compared with prior year periods, noninterest expense, before special items
and OREO costs, grew $72 million from the third quarter and $138 million from
the first nine months of 1996. The major drivers of these increases were the
1997 charges discussed above as well as investment spending in Latin America,
primarily Argentina and Brazil; the ongoing buildup of the Corporation's
Corporate Banking and 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; and expenses
incurred in connection with the Corporation's Millennium 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>
(in millions) 9-30-97 6-30-97 3-31-97 12-31-96 9-30-96
-------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C>
United States Operations:
Commercial, industrial and financial $15,062 $14,527 $14,203 $13,162 $13,828
Commercial real estate
Construction 317 314 265 284 323
Other commercial real estate 3,845 3,398 3,129 3,240 3,228
Consumer-related loans:
Residential mortgages 2,720 3,016 3,067 3,184 4,156
Home equity loans 2,952 2,924 2,908 2,878 2,842
Credit card 1,596 1,488 1,404 1,395 1,320
Other 3,118 4,739 4,708 5,503 5,349
Lease financing 1,880 1,780 1,766 1,816 1,778
Unearned income (293) (277) (275) (287) (272)
------- ------- ------- ------- -------
31,197 31,909 31,175 31,175 32,552
------- ------- ------- ------- -------
International Operations:
Loans and lease financing, net of unearned income 11,264 10,404 9,844 9,886 9,501
------- ------- ------- ------- -------
Total loans and lease financing $42,461 $42,313 $41,019 $41,061 $42,053
======= ======= ======= ======= =======
</TABLE>
Loans and leases were $42.5 billion at September 30, 1997, compared with
$42.3 billion at June 30, 1997. The growth was due to an $860 million increase
in the international portfolio, mainly attributable to Argentina and Brazil; a
higher level of commercial and industrial loans, mainly from the New England
Corporate Banking and Asset Based Finance businesses; and an increase in
commercial real estate loans. Domestic commercial loan levels are also affected
by the timing of syndication transactions. These increases were mostly offset
by a decline in domestic consumer loans, reflecting, in part, the third quarter
sale of Fidelity Acceptance Corporation, which had a $1.1 billion loan
portfolio.
Nonaccrual Loans and OREO
Nonaccrual loans and OREO amounted to $387 million at September 30, 1997,
compared with $398 million at June 30, 1997, and $496 million at September 30,
1996. The decline from June 30 reflects, in part, the sale of Fidelity
Acceptance Corporation. Nonaccrual loans and OREO represented .9% of related
assets at September 30, 1997 and June 30, 1997 and 1.2% at September 30, 1996.
The components of consolidated nonaccrual loans and OREO are as follows:
<TABLE>
(in millions) 9-30-97 6-30-97 3-31-97 12-31-96 9-30-96
-------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C>
Domestic nonaccrual loans:
Commercial, industrial and financial $ 68 $ 39 $ 72 $ 82 $114
Commercial real estate
Construction 4 3 4 6 9
Other commercial real estate 44 48 47 67 84
Consumer-related loans
Residential mortgages 51 56 65 57 60
Home equity loans 26 26 25 23 22
Credit card 22 22 23 17 5
Other 23 44 41 44 44
---- ---- ---- ---- ----
238 238 277 296 338
---- ---- ---- ---- ----
International nonaccrual loans 99 113 119 106 106
---- ---- ---- ---- ----
Total nonaccrual loans 337 351 396 402 444
OREO 50 47 49 50 52
---- ---- ---- ---- ----
Total $387 $398 $445 $452 $496
==== ==== ==== ==== ====
</TABLE>
<PAGE>
Provision and Reserve for Credit Losses
The reserve for credit losses at September 30, 1997 was $729 million, or
1.72% of outstanding loans and leases, compared with $845 million, or 2.00% at
June 30, 1997, and $897 million, or 2.13% at September 30, 1996. The reserve
for credit losses was 216% of nonaccrual loans at September 30, 1997, 240% at
June 30, 1997, and 202% at September 30, 1996.
The provision for credit losses was $40 million in the third quarter of
1997, compared with $60 million in the second quarter of 1997 and $57 million in
the third quarter of 1996.
Net credit losses were $61 million in the third quarter of 1997, compared
with $79 million in the second quarter of 1997 and $55 million in the third
quarter of 1996. Net credit losses as a percent of average loans and leases on
an annualized basis were .57% in the third quarter of 1997, compared with .76%
for the second quarter of 1997 and .53% for the third quarter of 1996.
The decline from the prior quarter in the provision, reserve and related
ratios, and in net credit losses, primarily reflects the Corporation's decision
to downsize its national consumer business, including the third quarter sale of
Fidelity Acceptance Corporation.
Net credit losses were as follows:
<TABLE>
<CAPTION>
Second
Quarter Third Quarter Nine Months
------- --------------- ---------------
1997 (in millions) 1997 1996 1997 1996
---- ------ ----- ------ -----
<C> <S> <C> <C> <C> <C>
Domestic
$ 5 Commercial, industrial and
financial $ 2 $ 0 $ 25 $ 5
(3) Commercial real estate (2) 1 (5) 15
Consumer-related loans:
0 Residential mortgages 1 2 2 9
24 Credit card 24 7 67 14
1 Home equity loans 2 0 6 4
34 Other 12 35 81 83
--- --- --- ---- ----
61 39 45 176 130
18 International 22 10 43 25
--- --- --- ---- ----
$79 Total $61 $55 $219 $155
=== === === ==== ====
</TABLE>
The Corporation
BankBoston, with assets of $68.2 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
(dollars in millions)
<TABLE>
<CAPTION>
June 30 September 30
------- -------------------
1997 1997 1996
------- ------- -------
<C> <S> <C> <C>
Assets
Securities:
$ 8,969 Available for sale $ 9,425 $ 7,413
636 Held to maturity 654 685
42,313 Loans and lease financing 42,461 42,053
(845) Reserve for credit losses (729) (897)
------- ------- -------
41,468 Net loans and lease financing 41,732 41,156
5,758 Other earning assets 6,901 4,513
9,307 Cash and other nonearning assets 9,518 8,196
------- ------- -------
$66,138 Total Assets $68,230 $61,963
======= ======= =======
Liabilities and Stockholders' Equity
$42,978 Deposits $44,655 $43,328
12,377 Funds borrowed 12,585 9,250
2,696 Notes payable 2,781 2,846
2,666 Other liabilities 3,080 1,785
Guaranteed preferred beneficial interests
in corporation's junior subordinated
747 debentures 747 0
------- ------- -------
61,464 Total Liabilities 63,848 57,209
------- ------- -------
Stockholders' Equity
508 Preferred equity 278 508
4,166 Common equity 4,104 4,246
------- ------- -------
4,674 Total Stockholders' Equity 4,382 4,754
------- ------- -------
$66,138 Total Liabilities and Stockholders' Equity $68,230 $61,963
======= ======= =======
</TABLE>
Selected Average Balances
<TABLE>
<CAPTION>
Quarter Ended Quarters Ended Nine Months Ended
------------- -------------- -----------------
June 30 September 30 September 30
------- -------------- -----------------
1997 1997 1996 1997 1996
----- ------- -------------- ------- -----------------
<C> <S> <C> <C> <C> <C>
Assets
$42,112 Loans and lease financing $42,429 $41,223 $42,093 $40,176
9,488 Securities 9,661 8,249 9,471 8,153
56,834 Total earning assets 57,769 53,924 57,085 52,941
63,946 Total assets 65,704 60,049 64,292 59,010
Liabilities and Stockholders' Equity
34,391 Interest bearing deposits 35,098 35,432 34,616 34,408
7,855 Noninterest bearing deposits 7,891 7,185 7,766 7,052
------- ------- ------- ------- -------
42,246 Total deposits 42,989 42,617 42,382 41,460
3,351 Notes payable 3,336 2,674 3,334 2,560
49,208 Total interest bearing liabilities 50,801 46,407 49,522 45,515
4,159 Common stockholders' equity 4,080 4,251 4,218 4,210
4,667 Total stockholders' equity 4,548 4,759 4,713 4,718
</TABLE>
NUMBER OF EMPLOYEES
<TABLE>
<CAPTION>
Sept. 30 June 30 Sept. 30
1997 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
Full time equivalent employees 21,200 22,000 22,600
</TABLE>
<PAGE>
CONSOLIDATED STATEMENT OF INCOME
(dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
Quarter Ended Quarters Ended Nine Months Ended
June 30 September 30 September 30
------- -------------------- --------------------
1997 1997 1996 1997 1996
----- -------- -------- -------- --------
<C> <S> <C> <C> <C> <C>
$1,280.7 Interest income $1,266.8 $1,199.5 $3,822.5 $3,642.3
664.8 Interest expense 695.7 608.1 2,015.5 1,913.9
-------- -------- -------- -------- --------
615.9 Net interest revenue 571.1 591.4 1,807.0 1,728.4
60.0 Provision for credit losses 40.0 57.0 160.0 171.0
-------- -------- -------- -------- --------
Net interest revenue after provision
555.9 for credit losses 531.1 534.4 1,647.0 1,557.4
-------- -------- -------- -------- --------
Noninterest income:
155.7 Financial service fees 168.4 140.4 461.7 327.2
69.4 Trust and agency fees 72.8 61.6 208.2 181.0
27.9 Trading profits and commissions 19.9 20.7 67.0 58.6
31.9 Securities portfolio gains, net 11.3 7.1 52.0 24.0
91.9 Other income 175.8 106.7 365.8 413.8
-------- -------- -------- -------- --------
376.8 Total noninterest income 448.2 336.5 1,154.7 1,004.6
-------- -------- -------- -------- --------
Noninterest expense:
260.2 Salaries 263.8 244.2 781.6 728.9
51.3 Employee benefits 54.0 49.1 158.0 150.4
52.1 Occupancy expense 49.6 51.1 152.5 151.9
35.8 Equipment expense 36.1 34.2 107.6 102.4
176.8 Other expense 197.0 149.0 519.7 450.6
-------- -------- -------- -------- --------
576.2 Subtotal 600.5 527.6 1,719.4 1,584.2
0.0 Restructuring and merger-related costs 0.0 180.0 0.0 180.0
1.7 OREO costs 0.8 4.8 4.0 7.4
-------- -------- -------- -------- --------
577.9 Total noninterest expense 601.3 712.4 1,723.4 1,771.6
-------- -------- -------- -------- --------
354.8 Income before income taxes 378.0 158.5 1,078.3 790.4
142.8 Provision for income taxes 152.3 78.5 433.8 341.8
-------- -------- -------- -------- --------
$ 212.0 NET INCOME $ 225.7 $ 80.0 $ 644.5 $ 448.6
======== ======== ======== ======== ========
NET INCOME PER COMMON SHARE:
$ 1.37 Primary $ 1.49 $ .46 $ 4.15 $ 2.74
$ 1.35 Fully diluted $ 1.47 $ .45 $ 4.07 $ 2.69
$ .51 DIVIDENDS PAID PER COMMON SHARE $ .51 $ .44 $ 1.46 $ 1.25
Average number of common shares, in thousands:
147,910 Primary 145,383 153,103 148,875 153,715
149,787 Fully diluted 147,842 155,183 151,574 156,300
$ 9.3 Preferred dividends $ 8.6 $ 9.4 $ 27.2 $ 28.0
</TABLE>
<PAGE>
Other Data
(dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
Quarter Ended Quarters Ended Nine Months Ended
- --------------- --------------- ------------------
June 30 September 30 September 30
------- ---------------------- --------------------------
1997 1997 1996 1997 1996
---- ------- --------------- --------- ------------------
<C> <S> <C> <C> <C> <C>
EARNINGS PER SHARE BEFORE SPECIAL ITEMS*:
$1.37 Primary $ 1.49 $ 1.23 $ 4.15 $ 3.53
$1.35 Fully diluted $ 1.47 $ 1.21 $ 4.07 $ 3.48
RETURN ON AVERAGE TOTAL ASSETS (ANNUALIZED):
1.33% Net income 1.36% .53% 1.34% 1.02%
1.33% Net income before special items* 1.36% 1.31% 1.34% 1.29%
RETURN ON AVERAGE COMMON EQUITY (ANNUALIZED):
19.54% Net income 21.11% 6.61% 19.56% 13.35%
19.54% Net income before special items* 21.11% 17.56% 19.56% 17.24%
* Based on net income of $226 million in the
third quarter of 1997, $212 million in the
second quarter of 1997, and $197 million in the
third quarter of 1996.
CONSOLIDATED NET INTEREST REVENUE AND MARGIN:
Net interest revenue, fully taxable
$620.4 equivalent basis $576.5 $596.4 $1,822.0 $1,743.5
4.38% Net interest margin 3.96% 4.40% 4.27% 4.40%
4.58% DOMESTIC NET INTEREST MARGIN (ESTIMATED) 4.01% 4.51% 4.37% 4.50%
3.83% INTERNATIONAL NET INTEREST MARGIN (ESTIMATED) 3.83% 4.07% 3.98% 4.08%
</TABLE>
<TABLE>
<CAPTION>
June 30 September 30
------- ----------------------
1997 1997 1996
---- --------- ---------
<C> <S> <C> <C>
COMMON STOCKHOLDERS' EQUITY:
$ 4,166 Common stockholders' equity $ 4,104 $ 4,246
147,111 Common shares outstanding, in thousands 144,535 152,634
Per common share:
$ 28.32 Book value $ 28.40 $ 27.81
72.38 Market value 88.44 57.88
CAPITAL RATIOS/REGULATORY CAPITAL:
5.78% Tangible Common Equity ratio 5.56% 6.27%
Risk-based capital ratios: Estimate
8.8% Tier 1 capital ratio (minimum required 4.00%) 7.8% 8.3%
12.8% Total capital ratio (minimum required 8.00%) 11.7% 12.7%
7.8% Leverage ratio 7.2% 7.2%
$ 4,918 Tier 1 capital $ 4,610 $ 4,319
7,160 Total capital 6,927 6,642
55,764 Total risk-adjusted assets 59,263 52,223
</TABLE>
<PAGE>
Reserve for Credit Losses
(dollars in millions)
<TABLE>
<CAPTION>
Quarter Ended Quarters Ended Nine Months Ended
June 30 September 30 September 30
------------ ------------------- ---------------------
1997 1997 1996 1997 1996
------- ------- ------- -------- --------
<C> <S> <C> <C> <C> <C>
$ 864.0 Beginning balance $844.7 $894.5 $ 883.3 $ 889.2
60.0 Provision for credit losses 40.0 57.0 160.0 171.0
0.0 Reserve of acquired companies 0.0 0.0 0.0 2.1
0.0 Reserves of companies sold (94.7) 0.0 (94.7) (10.9)
(106.5) Credit losses (80.0) (73.4) (283.2) (212.0)
27.2 Recoveries 19.1 18.6 63.7 57.3
-------- ------ ------ ------- -------
(79.3) Net credit losses (60.9) (54.8) (219.5) (154.7)
-------- ------ ------ ------- -------
$ 844.7 Ending balance $729.1 $896.7 $ 729.1 $ 896.7
======== ====== ====== ======= =======
2.00% Reserve as a % of loans and leases 1.72% 2.13% 1.72% 2.13%
======== ====== ====== ======= =======
240% Reserve as a % of nonaccrual loans 216% 202% 216% 202%
======== ====== ====== ======= =======
</TABLE>
