<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): JANUARY 15, 1998
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 January 15, 1998, BankBoston Corporation (the Corporation) issued a
press release announcing its earnings for the quarter ended December 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 January 15, 1998.
<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: January 16, 1998 /s/ Robert T. Jefferson
--------------------------------------------
Robert T. Jefferson
Comptroller
<PAGE>
EXHIBIT 99 (A)
BANKBOSTON REPORTS FOURTH QUARTER NET INCOME
OF $235 MILLION OR $1.56 PER SHARE
26% GROWTH IN EPS FROM PRIOR YEAR
COMMON DIVIDEND RAISED 14% TO 58 CENTS
BOSTON, January 15, 1998 -- BankBoston Corporation (NYSE: BKB) reported
today fourth quarter net income of $235 million, or $1.56 per common share on a
diluted basis. This compares with $226 million, or $1.47 per share, in the
third quarter of 1997 and $202 million, or $1.24 per share, in the fourth
quarter of 1996.
Net income for the full year of 1997 was $879 million, or $5.65 per share,
compared with net income for the full year of 1996 of $773 million, or $4.71 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 full year of 1996 was $650 million, or $3.93 per share.
Operating highlights were as follows (full year 1996 amounts are before
charges associated with the acquisition of BayBanks and items related to the
sale of the mortgage banking subsidiary):
. On a fully taxable equivalent basis, operating income (before credit
costs) was $439 million in the fourth quarter, compared with $424
million in the prior quarter and $410 million in the fourth quarter of
1996. The growth in operating income occurred despite the previously
announced October net trading losses of $20 million, which resulted
from volatility in the financial markets of emerging markets
countries. Total revenue for the fourth quarter was $1,039 million
compared with $968 million in the third quarter, excluding a net gain
of $57 million from the sale of Fidelity Acceptance Corporation. For
the full year of 1997, operating income was $1,696 million, compared
with $1,582 million for the full year of 1996;
. Return on average common equity ("ROE") was 21.74% in the fourth
quarter compared with 21.11% in the prior quarter and 17.71% in the
fourth quarter of 1996. For the full year of 1997, ROE was 20.05%,
compared with 17.36% for 1996;
. Return on average assets ("ROA") was 1.37% in the fourth quarter
compared with 1.36% in the prior quarter and 1.31% in the fourth
quarter of 1996. For the full year of 1997, ROA was 1.35%, compared
with 1.30% for 1996;
. Nonaccrual loans and OREO totaled $356 million at December 31, 1997,
compared with $387 million at September 30, 1997 and $452 million at
December 31, 1996. Net credit losses were $60 million in the fourth
quarter of 1997 compared with $61 million in the prior quarter and $75
million in the fourth quarter of 1996.
In addition, the Board of Directors approved an increase in the quarterly
dividend on common stock to 58 cents from 51 cents per share, payable on
February 27, 1998 to stockholders of record on February 2, 1998.
<PAGE>
NONINTEREST INCOME
The components of noninterest income are as follows:
<TABLE>
<CAPTION>
Third
Quarter Fourth Quarter Twelve Months
- --------- -------------- ---------------
1997 (in millions) 1997 1996 Change 1997 1996 Change
- --------- ----- ----- ------- ----- ----- -------
<C> <S> <C> <C> <C> <C> <C> <C>
$168 Financial service fees $ 194 $ 147 $ 47 $ 655 $ 585 $ 70
61 Net equity and mezzanine profits 68 45 23 221 209 12
29 Mutual fund fees 30 25 5 111 94 17
37 Personal trust fees 38 34 4 145 131 14
7 Other trust and agency fees 7 6 1 27 21 6
20 Trading profits and commissions (9) 17 (26) 58 76 (18)
18 Net foreign exchange trading profits 31 17 14 88 54 34
11 Securities portfolio gains, net 27 7 20 80 31 49
0 Gain on sale of mortgage servicing 0 0 0 0 13 (13)
68 Gain on sale of Fidelity Acceptance Corp. 0 0 0 68 0 68
0 Sale of Mortgage Bank and related items, net 0 0 0 0 (5) 5
29 Other income 22 42 (20) 110 135 (25)
----- ----- ----- ---- ------ ------ ----
$448 Total $408 $340 $ 68 $1,563 $1,344 $219
===== ===== ===== ==== ====== ====== ====
</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. At December 31, 1997,
the Private Equity portfolio had a carrying value of nearly $1 billion
compared with approximately $800 million at the end of 1996.
. Mutual fund fees improved in all comparisons, generally reflecting
higher levels of fees from international operations. The combined
level of assets under management in Argentina and Brazil has risen to
$6.1 billion at December 31, 1997 compared with $4.2 billion at
December 31, 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.
. The current quarter level of trading account profits and commissions
was affected by the previously announced losses that were incurred
during October from trading in emerging markets securities. These
losses were partially offset by profits generated during November and
December, which also mainly resulted from trading in emerging markets
securities.
. Foreign exchange profits were strong in the fourth quarter. The
increase from the third quarter was due to volatility in the world
financial markets that was induced by the ongoing crisis in Asia and
lead to a higher customer demand for products. The growth in foreign
exchange profits in the full year comparison also reflects the
Corporation's increased emphasis on this segment of its Global Capital
Markets business.
. The increase in securities gains in the quarterly comparisons mainly
reflects a higher level of gains from sales of emerging markets
securities. A high volume of Argentine security sales in the second
quarter of 1997 also affected the full year comparison.
. The decline in other income from the third quarter was due to lower
equity earnings from affiliates and gains on sales of loans. This was
partially offset by the absence of a third quarter charge of $11
million resulting from interest rate futures contracts that had been
used to hedge the funding of Fidelity Acceptance Corporation.
<PAGE>
The components of financial service fees are as follows:
<TABLE>
<CAPTION>
Third
Quarter Fourth Quarter Twelve Months
- --------- -------------- --------------
1997 (in millions) 1997 1996 Change 1997 1996 Change
- --------- ----- ----- ------ ----- ----- -------
<C> <S> <C> <C> <C> <C> <C> <C>
$ 69 Deposit and ATM-related fees $ 70 $ 59 $11 $259 $238 $ 21
19 Letters of credit and acceptance fees 20 17 3 73 68 5
22 Syndication and agent fees 35 21 14 95 58 37
11 Other loan-related fees 10 10 0 39 38 1
0 Net mortgage servicing fees* 0 0 0 0 29 (29)
47 Other 59 40 19 189 154 35
----- ----- ----- --- ----- ----- ----
$168 Total $194 $147 $47 $655 $585 $ 70
===== ===== ===== === ===== ===== ====
</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 prior year periods mainly
due to repricing of certain domestic products. An increase in fees
from Argentine operations also contributed to the improvement from the
fourth quarter of last year.
. 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 mainly to growth in the Global Capital Markets business, including
higher levels of advisory and underwriting fees.
NET INTEREST REVENUE
Net interest revenue, on a fully taxable equivalent basis, was $631 million
for the fourth quarter of 1997, compared with $577 million in the prior quarter
and $616 million in the fourth quarter of 1996. Net interest margin was 4.20%
for the fourth quarter of 1997, compared with 3.96% in the third quarter of 1997
and 4.47% in the fourth quarter of last year. For the full year of 1997, net
interest revenue, on a fully taxable equivalent basis, was $2,453 million,
compared with $2,360 million for the full year of 1996. On the same basis, net
interest margin was 4.25% in 1997 and 4.42% in 1996.
The improvements in net interest revenue and net interest margin from the
prior quarter reflect wider spreads in Brazil resulting from volatility in the
local financial markets during the fourth quarter, an increase in dividends from
private equity investments, higher levels of noninterest bearing deposits and an
increase in loan fees. In addition, a $1.8 billion increase in average earning
assets, mainly securities and international loans, also contributed to the
growth in net interest revenue.
Compared with the prior year periods, net interest revenue improved, while
net interest margin declined. The increase in net interest revenue resulted
from higher levels of average earning assets, mainly securities and
international loans, and an increase in dividends from private equity
investments. These improvements were partially offset by the sale of Fidelity
Acceptance Corporation, which was also the main reason for the declines in the
margin comparisons.
<PAGE>
NONINTEREST EXPENSE
The components of noninterest expense are as follows:
<TABLE>
<CAPTION>
Third
Quarter Fourth Quarter Twelve Months
- --------- -------------- ----------------
1997 (in millions) 1997 1996 Change 1997 1996 Change
- --------- ----- ----- ------ ------ ------ -------
<C> <S> <C> <C> <C> <C> <C> <C>
$318 Employee costs $339 $293 $ 46 $1,279 $1,168 $ 111
86 Occupancy & equipment 90 87 3 350 341 9
14 Professional fees 23 14 9 61 56 5
25 Advertising and public relations 34 24 10 107 108 (1)
29 Communications 29 27 2 112 101 11
6 Goodwill amortization 6 7 (1) 27 24 3
122 Other 79 94 (15) 384 329 55
----- ----- ----- ---- ------ ------ -----
600 Subtotal 600 546 54 2,320 2,127 193
1996 special items:
0 Restructuring and merger-related costs 0 0 0 0 180 (180)
0 Accelerated vesting of restricted stock 0 0 0 0 4 (4)
1 OREO costs 0 2 (2) 4 9 (5)
----- ----- ----- ---- ------ ------ -----
$601 Total $600 $548 $ 52 $2,324 $2,320 $ 4
===== ===== ===== ==== ====== ====== =====
</TABLE>
Noninterest expense, before OREO costs, was flat with the prior quarter and
was affected by the following items:
. Expenses from Latin American operations increased $20 million due to
increased investment spending, including costs associated with branch
expansion programs as well as advertising and promotional campaigns
related to the unveiling of the new BankBoston brand. The number of
Latin American employees grew by 300 during the fourth quarter and
totaled approximately 6,400 at December 31, 1997. Seventeen new
branches were opened in Argentina during the fourth quarter with
approximately 50 more to be opened during the first half of 1998.
During 1997, Brazil opened 10 new branches and is scheduled to open
approximately 30 more during 1998. The increase from the third quarter
was also affected by mandatory fourth quarter salary increases in
Brazil.
. Incentive compensation increased $14 million mainly in the Corporate
Banking and Capital Markets businesses, reflecting higher levels of
revenue from these areas. The higher level also reflected an increase
in charges associated with the Corporation's performance restricted
stock plan as a result of achieving certain price targets.
. The $9 million increase in professional fees relates mainly to several
consulting arrangements undertaken by the Corporation's businesses.
The largest of these is the Corporation's redesign initiative which
will involve a review of many processes and activities on the domestic
side of the bank, including those associated with the regional
consumer business.
. Also contributing to the growth in noninterest expense from the prior
quarter were higher expenses related to expatriates and growth in the
levels of domestic expenses for travel, software, regional
advertising, occupancy and equipment expenses.
. The third quarter included charges of $38 million related to the
regional consumer business for additional conversion costs for
BayBanks, the closing of branches and changes to the Connecticut
operations. In addition, contributions of $11 million were made by the
Corporation in the third quarter to its Charitable Foundation.
Compared with prior year periods, noninterest expense, before special items
and OREO costs, grew $54 million from the fourth quarter and $193 million from
the full year of 1996. The major drivers of these increases were 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. In addition, the third quarter of 1997 charges discussed above
contributed to the increase in the full year comparison. 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>
<CAPTION>
(in millions) 12-31-97 9-30-97 6-30-97 3-31-97 12-31-96
--------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
United States Operations:
Commercial, industrial and financial $15,268 $15,062 $14,527 $14,203 $13,162
Commercial real estate
Construction 271 317 314 265 284
Other commercial real estate 4,211 3,845 3,398 3,129 3,240
Consumer-related loans:
Residential mortgages 2,570 2,720 3,016 3,067 3,184
Home equity loans 2,823 2,952 2,924 2,908 2,878
Credit card 1,756 1,596 1,488 1,404 1,395
Other 2,956 3,118 4,739 4,708 5,503
Lease financing 1,938 1,880 1,780 1,766 1,816
Unearned income (302) (293) (277) (275) (287)
--------- -------- -------- -------- ---------
31,491 31,197 31,909 31,175 31,175
--------- -------- -------- -------- ---------
International Operations:
Commercial 10,159 9,261 8,643 8,208 8,306
Consumer-related loans:
Residential mortgages 947 893 781 744 699
Credit card 182 155 148 137 145
Other 828 678 566 501 461
Lease financing 452 345 357 338 368
Unearned Income (79) (68) (91) (84) (93)
--------- -------- -------- -------- ---------
12,489 11,264 10,404 9,844 9,886
--------- -------- -------- -------- ---------
Total loans and lease financing $43,980 $42,461 $42,313 $41,019 $41,061
========= ======== ======== ======== =========
</TABLE>
Loans and leases were $44.0 billion at December 31, 1997, compared with
$42.5 billion at September 30, 1997. The growth was due to a $1.2 billion
increase in the international portfolio, including a $600 million increase in
Argentine loans, which reflected growth in both the commercial and consumer
portfolios. In addition, temporary financings related to Brazilian
privatizations contributed to the increase. The $300 million increase in the
domestic portfolio reflects higher levels of commercial loans, partially offset
by a decrease in consumer loans. Commercial loan levels are affected by the
timing of syndication activities, while the decline in consumer loans was due to
the ongoing runoff of the indirect auto portfolio combined with loan sales. The
increase in the credit card portfolio principally occurred in the national
business. The previously announced agreement to form a credit card joint venture
with Bank of Montreal and First Annapolis has been extended into the first
quarter of 1998. Discussions to complete the transaction, which remains subject
to receipt of certain regulatory approvals, continue.
<PAGE>
Nonaccrual Loans and OREO
Nonaccrual loans and OREO amounted to $356 million at December 31, 1997,
compared with $387 million at September 30, 1997, and $452 million at December
31, 1996. Nonaccrual loans and OREO represented .8% of related assets at
December 31, 1997, compared with .9% at September 30, 1997 and 1.1% at December
31, 1996.
The components of consolidated nonaccrual loans and OREO are as follows:
<TABLE>
<CAPTION>
(in millions) 12-31-97 9-30-97 6-30-97 3-31-97 12-31-96
--------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
Domestic nonaccrual loans:
Commercial, industrial and financial $ 59 $ 68 $ 39 $ 72 $ 82
Commercial real estate
Construction 3 4 3 4 6
Other commercial real estate 40 44 48 47 67
Consumer-related loans
Residential mortgages 50 51 56 65 57
Home equity loans 14 26 26 25 23
Credit card 26 22 22 23 17
Other 20 23 44 41 44
--------- -------- -------- -------- ---------
212 238 238 277 296
--------- -------- -------- -------- ---------
International nonaccrual loans:
Commercial 64 58 72 82 74
Consumer-related loans
Residential mortgages 28 31 29 26 22
Credit card 4 3 4 4 4
Other 12 7 8 7 6
--------- -------- -------- -------- ---------
108 99 113 119 106
--------- -------- -------- -------- ---------
Total nonaccrual loans 320 337 351 396 402
OREO 36 50 47 49 50
--------- -------- -------- -------- ---------
Total $356 $387 $398 $445 $452
========= ======== ======== ======== =========
</TABLE>
<PAGE>
Provision and Reserve for Credit Losses
The reserve for credit losses at December 31, 1997 was $712 million, or
1.62% of outstanding loans and leases, compared with $729 million, or 1.72% at
September 30, 1997, and $883 million, or 2.15% at December 31, 1996. The reserve
for credit losses was 222% of nonaccrual loans at December 31, 1997, 216% at
September 30, 1997, and 220% at December 31, 1996.
The provision for credit losses was $40 million in fourth and third
quarters of 1997, compared with $60 million in the fourth quarter of 1996. For
the full year of 1997, the provision for credit losses was $200 million,
compared with $231 million for the full year of 1996.
Net credit losses were $60 million in the fourth quarter of 1997, compared
with $61 million in the third quarter of 1997 and $75 million in the fourth
quarter of 1996. Net credit losses as a percent of average loans and leases on
an annualized basis were .55% in the fourth quarter of 1997, compared with .57%
for the third quarter of 1997 and .71% for the fourth quarter of 1996.
The decline from the prior year in the provision, reserve and related
ratios, primarily reflects the Corporation's decision to exit its national
consumer business, including the third quarter sale of Fidelity Acceptance
Corporation.
Net credit losses were as follows:
<TABLE>
<CAPTION>
Third
Quarter Fourth Quarter Twelve Months
- ----------- --------------- ---------------
1997 (in millions) 1997 1996 1997 1996
- ----------- ------ ----- ------ -----
<C> <S> <C> <C> <C> <C>
Domestic
$ 2 Commercial, industrial and financial $ 8 $ 3 $ 33 $ 8
(2) Commercial real estate 0 16 (5) 31
Consumer-related loans:
1 Residential mortgages 2 2 4 11
24 Credit card 25 13 92 27
2 Home equity loans 2 3 8 7
12 Other 15 26 96 109
----- ----- ----- ----- -----
39 52 63 228 193
International
12 Commercial (3) 4 13 5
Consumer-related loans:
4 Credit card 3 3 13 5
6 Other 8 5 25 27
----- ----- ----- ----- -----
22 8 12 51 37
----- ----- ----- ----- -----
$61 Total $60 $75 $279 $230
===== ===== ===== ===== =====
</TABLE>
THE CORPORATION
BankBoston, with assets of $69.3 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>
September 30 December 31
-------------- ------------------
1997 1997 1996
-------------- ------ ------
<C> <S> <C> <C>
Assets
Securities:
$ 9,425 Available for sale $ 9,869 $ 7,792
654 Held to maturity 636 692
42,461 Loans and lease financing 43,980 41,061
(729) Reserve for credit losses (712) (883)
------- ------- -------
41,732 Net loans and lease financing 43,268 40,178
6,901 Other earning assets 5,420 4,729
9,518 Cash and other nonearning assets 10,075 8,915
------- ------- -------
$68,230 Total Assets $69,268 $62,306
======= ======= =======
Liabilities and Stockholders' Equity
$44,655 Deposits $45,761 $42,831
12,585 Funds borrowed 11,723 9,136
2,781 Notes payable 2,941 2,843
3,080 Other liabilities 3,486 2,062
Guaranteed preferred beneficial interests in
747 corporation's junior subordinated debentures 747 500
------- ------- -------
63,848 Total Liabilities 64,658 57,372
------- ------- -------
Stockholders' Equity
278 Preferred equity 278 508
4,104 Common equity 4,332 4,426
------- ------- -------
4,382 Total Stockholders' Equity 4,610 4,934
------- ------- -------
$68,230 Total Liabilities and Stockholders' Equity $69,268 $62,306
======= ======= =======
</TABLE>
SELECTED AVERAGE BALANCES
<TABLE>
<CAPTION>
Quarter Ended Quarters Ended Twelve Months Ended
- ------------------- -------------------- -------------------
September 30 December 31 December 31
- ------------------- -------------------- -------------------
1997 1997 1996 1997 1996
- ------------------- ------- ------- -------- --------
<C> <S> <C> <C> <C> <C>
Assets
$42,429 Loans and lease financing $43,242 $41,835 $42,383 $40,589
9,661 Securities 10,538 8,029 9,741 8,122
57,769 Total earning assets 59,554 54,819 57,708 53,410
65,704 Total assets 68,092 61,056 65,263 59,523
Liabilities and Stockholders' Equity
35,098 Interest bearing deposits 35,834 34,739 34,922 34,491
7,891 Noninterest bearing deposits 8,418 7,292 7,931 7,112
------- ------- ------- ------- -------
42,989 Total deposits 44,252 42,031 42,853 41,603
3,336 Notes payable 3,524 2,983 3,382 2,666
50,801 Total interest bearing liabilities 52,088 47,079 50,168 45,908
4,080 Common stockholders' equity 4,202 4,317 4,227 4,236
4,548 Total stockholders' equity 4,480 4,825 4,667 4,744
</TABLE>
NUMBER OF EMPLOYEES
<TABLE>
<CAPTION>
Dec 31 Sept. 30 Dec 31
1997 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
Full time equivalent employees 21,500 21,200 22,000
</TABLE>
<PAGE>
CONSOLIDATED STATEMENT OF INCOME
(dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
Quarter Ended Quarters Ended Twelve Months Ended
September 30 December 31 December 31
- ----------------- --------------------- --------------------
1997 1997 1996 1997 1996
- ----------------- -------- --------- -------- --------
<C> <S> <C> <C> <C> <C>
$1,266.8 Interest income $1,341.5 $1,250.1 $5,164.1 $4,892.4
695.7 Interest expense 720.0 638.9 2,735.5 2,552.8
-------- -------- -------- -------- --------
571.1 Net interest revenue 621.5 611.2 2,428.6 2,339.6
40.0 Provision for credit losses 40.0 60.0 200.0 231.0
-------- -------- -------- -------- --------
Net interest revenue after provision
531.1 for credit losses 581.5 551.2 2,228.6 2,108.6
-------- -------- -------- -------- --------
Noninterest income:
168.4 Financial service fees 193.6 146.6 655.3 473.8
72.8 Trust and agency fees 74.8 65.0 283.0 246.0
19.9 Trading profits and commissions (8.6) 17.2 58.3 75.8
11.3 Securities portfolio gains, net 27.4 (.8) 79.5 23.2
175.8 Other income 121.2 111.5 487.0 525.4
-------- -------- -------- -------- --------
448.2 Total noninterest income 408.4 339.5 1,563.1 1,344.2
-------- -------- -------- -------- --------
Noninterest expense:
263.8 Salaries 283.0 254.5 1,064.7 983.4
54.0 Employee benefits 56.3 44.4 214.2 194.7
49.6 Occupancy expense 51.3 50.6 203.8 202.6
36.1 Equipment expense 38.4 36.2 146.0 138.6
197.0 Other expense 171.4 160.4 691.1 611.0
-------- -------- -------- -------- --------
600.5 Subtotal 600.4 546.1 2,319.8 2,130.3
0.0 Restructuring and merger-related costs 0.0 0.0 0.0 180.0
0.8 OREO costs 0.1 1.8 4.1 9.2
-------- -------- -------- -------- --------
601.3 Total noninterest expense 600.5 547.9 2,323.9 2,319.5
-------- -------- -------- -------- --------
378.0 Income before income taxes 389.4 342.8 1,467.8 1,133.3
152.3 Provision for income taxes 154.7 141.3 588.6 483.1
-------- -------- -------- -------- --------
$ 225.7 NET INCOME $ 234.7 $ 201.5 $ 879.2 $ 650.2
======== ======== ======== ======== ========
NET INCOME PER COMMON SHARE:
$ 1.49 Basic $ 1.59 $ 1.26 $ 5.73 $ 3.99
$ 1.47 Diluted $ 1.56 $ 1.24 $ 5.65 $ 3.93
$ .51 DIVIDENDS PAID PER COMMON SHARE $ .51 $ .44 $ 1.97 $ 1.69
Average number of common shares, in thousands:
145,383 Basic 145,241 152,975 147,959 153,529
147,842 Diluted 147,309 155,157 150,040 156,112
$ 8.6 Preferred dividends $ 4.4 $ 9.4 $ 31.7 $ 37.4
</TABLE>
<PAGE>
Other Data
<TABLE>
<CAPTION>
(dollars in millions, except per share amounts)
Quarter Ended Quarters Ended Twelve Months Ended
- ----------------- --------------- -------------------
September 30 December 31 December 31
- ----------------- --------------- -------------------
1997 1997 1996 1997 1996
- ----------------- ------ ------ ------ ------
<C> <S> <C> <C> <C> <C>
EARNINGS PER SHARE BEFORE SPECIAL ITEMS*:
$1.49 Basic $ 1.59 $ 1.26 $ 5.73 $ 4.79
$1.47 Diluted $ 1.56 $ 1.24 $ 5.65 $ 4.71
RETURN ON AVERAGE TOTAL ASSETS (ANNUALIZED):
1.36% Net income 1.37% 1.31% 1.35% 1.09%
1.36% Net income before special items* 1.37% 1.31% 1.35% 1.30%
RETURN ON AVERAGE COMMON EQUITY (ANNUALIZED):
21.11% Net income 21.74% 17.71% 20.05% 14.47%
21.11% Net income before special items* 21.74% 17.71% 20.05% 17.36%
* Based on net income of $235 million in the
fourth quarter of 1997, $226 million in the
third quarter of 1997, and $202 million in the
fourth quarter of 1996.
CONSOLIDATED NET INTEREST REVENUE AND MARGIN:
Net interest revenue, fully taxable
$576.5 equivalent basis $631.1 $616.5 $2,453.0 $2,360.0
3.96% Net interest margin 4.20% 4.47% 4.25% 4.42%
4.01% DOMESTIC NET INTEREST MARGIN (ESTIMATED) 4.30% 4.65% 4.36% 4.54%
3.83% INTERNATIONAL NET INTEREST MARGIN (ESTIMATED) 3.97% 3.97% 3.98% 4.05%
</TABLE>
<TABLE>
<CAPTION>
September 30 December 31
- ----------------- ---------------------
1997 1997 1996
- ----------------- -------- --------
<C> <S> <C> <C>
COMMON STOCKHOLDERS' EQUITY:
$ 4,104 Common stockholders' equity $ 4,332 $ 4,426
144,535 Common shares outstanding, in thousands 145,707 153,173
Per common share:
$ 28.40 Book value $ 29.73 $ 28.89
88.44 Market value 93.94 64.25
CAPITAL RATIOS/REGULATORY CAPITAL:
5.56% Tangible Common Equity ratio 5.81% 6.49%
Risk-based capital ratios: Estimate
7.8% Tier 1 capital ratio (minimum required 4.00%) 7.9% 9.2%
11.7% Total capital ratio (minimum required 8.00%) 12.0% 13.6%
7.2% Leverage ratio 7.3% 8.2%
$ 4,626 Tier 1 capital $ 4,971 $ 4,954
6,930 Total capital 7,519 7,291
59,079 Total risk-adjusted assets 62,769 53,583
</TABLE>
<PAGE>
RESERVE FOR CREDIT LOSSES
<TABLE>
<CAPTION>
(dollars in millions)
Quarter Ended Quarters Ended Twelve Months Ended
September 30 December 31 December 31
- --------------------- ------------------ ---------------------
1997 1997 1996 1997 1996
- --------------------- ------ ------ ------- -------
<C> <S> <C> <C> <C> <C>
$ 844.7 Beginning balance $729.1 $896.7 $ 883.3 $ 889.2
40.0 Provision for credit losses 40.0 60.0 200.0 231.0
0.0 Reserve of acquired companies 2.7 1.5 2.7 3.7
(94.7) Reserves of companies sold 0.0 0.0 (94.7) (10.9)
(80.0) Credit losses (83.2) (98.1) (366.4) (310.2)
19.1 Recoveries 23.0 23.2 86.7 80.5
------- ------ ------ ------- -------
(60.9) Net credit losses (60.2) (74.9) (279.7) (229.7)
------- ------ ------ ------- -------
$ 729.1 Ending balance $711.6 $883.3 $ 711.6 $ 883.3
======= ====== ====== ======= =======
1.72% Reserve as a % of loans and leases 1.62% 2.15% 1.62% 2.15%
======= ====== ====== ======= =======
216% Reserve as a % of nonaccrual loans 222% 220% 222% 220%
======= ====== ====== ======= =======
</TABLE>
