<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 16, 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 July 16, 1998, BankBoston Corporation (the Corporation) issued a press
release announcing its earnings for the quarter ended June 30, 1998. 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 16, 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: July 20, 1998 /s/ Robert T. Jefferson
---------------------------------
Robert T. Jefferson
Comptroller
<PAGE>
EXHIBIT 99 (A)
BANKBOSTON REPORTS SECOND QUARTER NET INCOME
OF $242 MILLION OR $.80 PER SHARE
18% GROWTH IN EPS FROM PRIOR YEAR
BOSTON, July 16, 1998 -- BankBoston Corporation (NYSE: BKB) reported today
second quarter net income of $242 million, or $.80 per common share on a diluted
basis. This compares with $212 million, or $.68 per share, in the second
quarter of 1997.
Net income for the first half of 1998 was $480 million, or $1.58 per share,
compared with net income for the first half of 1997 of $419 million, or $1.31
per share. All quarterly and six month earnings per share amounts have been
adjusted to reflect the Corporation's recent 2 for 1 stock split.
Operating highlights were as follows:
. On a fully taxable equivalent basis, revenues were $1,102 million in
the current quarter compared with $997 million in the second quarter
of 1997;
. On a fully taxable equivalent basis, operating income (pre-tax income
before provision for credit losses) was $455 million in the second
quarter compared with $419 million in the second quarter of 1997;
. Return on average common equity was 20.70% in the second quarter
compared with 19.54% in the second quarter of 1997;
. Return on average assets was 1.36% in the second quarter compared with
1.33% in the second quarter of 1997;
. Provision for credit losses was $60 million in the second quarter
compared with net credit losses in the quarter of $51 million. The
provision in the second quarter of 1997 was $60 million compared with
net credit losses of $79 million;
. Nonaccrual loans and OREO totaled $382 million at June 30, 1998,
compared with $398 million at June 30, 1997.
<PAGE>
NONINTEREST INCOME
The components of noninterest income are as follows:
<TABLE>
<CAPTION>
First
Quarter Second Quarter Six Months
------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1998 (in millions) 1998 1997 Change 1998 1997 Change
---- ------ ----- ------- ------ ----- -------
$ 163 Financial service fees $ 192 $ 156 $ 36 $ 355 $ 293 $ 62
52 Net equity and mezzanine profits 84 55 29 136 92 44
31 Mutual fund fees 32 27 5 62 52 10
40 Personal trust fees 41 36 5 82 70 12
8 Other trust and agency fees 9 6 3 17 13 4
34 Trading profits and commissions (4) 28 (32) 30 47 (17)
28 Net foreign exchange trading profits 32 20 12 61 39 22
25 Securities portfolio gains, net 11 32 (21) 36 41 (5)
43 Other income 60 17 43 102 60 42
165 Gain on sale of HomeSide 0 0 0 165 0 165
----- ----- ----- ---- ------ ----- ----
$ 589 Total $ 457 $ 377 $ 80 $1,046 $ 707 $339
===== ===== ===== ==== ====== ===== ====
</TABLE>
. Changes in financial service fees are detailed below.
. The level of equity and mezzanine profits in the second quarter of
1998 reflected a higher level of gains and the ongoing strong
performance from the Corporation's Private Equity business. At June
30, 1998, the Private Equity portfolio had a carrying value of $1.2
billion compared with approximately $825 million at June 30, 1997.
. Mutual fund fees improved in all comparisons, mainly driven by higher
fees from Argentina and Private Banking. The combined level of assets
under management in Argentina and Brazil was $7.0 billion at June 30,
1998 compared with $5.3 billion at June 30, 1997.
. The increase in personal trust fees from prior year periods mainly
relates to an increase in domestic assets under management.
. The second quarter loss in trading account profits and commissions
mainly reflects losses from emerging markets securities due to
volatility in the world financial markets related to the ongoing
crisis in Asia.
. Foreign exchange profits improved in all comparisons due principally
to higher customer demand for products arising out of volatile market
conditions.
. Securities gains declined in both quarterly comparisons due, in part,
to lower gains from sales of emerging markets securities.
. Compared with all prior periods, the growth in other income reflects a
gain from the sale of the Corporation's minority interest in a Mexican
pension company in the second quarter of 1998 and a higher level of
gains from sales of loans principally related to corporate finance
activities. In addition, comparisons with prior year periods were
also affected by earnings in 1998 from an investment in bank owned
life insurance policies, which was largely offset by the funding cost
for the investment that was included in net interest revenue.
<PAGE>
The components of financial service fees are as follows:
<TABLE>
<CAPTION>
First
Quarter
Second Quarter Six Months
-------------- --------------
1998 (in millions) 1998 1997 Change 1998 1997 Change
---- ----- ----- ------- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 70 Deposit and ATM-related fees $ 76 $ 62 $14 $ 146 $ 120 $26
18 Letters of credit and acceptance fees 19 18 1 38 34 4
15 Syndication and agent fees 20 23 (3) 35 38 (3)
9 Other loan-related fees 12 9 3 21 18 3
51 Other 65 44 21 115 83 32
----- ----- ----- --- ----- ----- ---
$ 163 Total $ 192 $ 156 $36 $ 355 $ 293 $62
===== ===== ===== === ===== ===== ===
</TABLE>
. Deposit and ATM-related fees increased in all comparisons due, in
part, to higher fees from Argentine operations, including an increase
from the acquisition of Deutsche Bank Argentina, and an increase in
domestic electronic banking fees.
. Syndication and agent fees improved from the prior quarter due to a
higher number of transactions.
. The growth in other financial service fees from all prior periods is
due mainly to higher levels of advisory and underwriting fees, as well
as an increase in credit card fees from Argentina, including an
increase from the acquisition of Deutsche Bank Argentina.
NET INTEREST REVENUE
Net interest revenue, on a fully taxable equivalent basis, was $645 million
for the second quarter of 1998, compared with $607 million in the prior quarter
and $620 million in the second quarter of 1997. Net interest margin was 4.17%
for the second quarter of 1998, compared with 4.07% in the first quarter of 1998
and 4.38% in the second quarter of last year. For the first half of 1998, net
interest revenue on a fully taxable equivalent basis was $1,252 million,
compared with $1,245 million in the first half of 1997. Net interest margin was
4.12% for the first half of 1998, compared with 4.43% for the first half of
1997.
The increases in net interest revenue and net interest margin from the
prior quarter reflected wider spreads in Brazil, as the Corporation's interest
rate positions benefited from volatility in the local markets, a higher level of
dividends from private equity investments, and an increase in loan fees. In
addition, the growth in net interest revenue reflected an additional day in the
second quarter accrual period, and an increase from Argentina due, in part, to
the acquisition of Deutsche Bank Argentina S.A., which closed in late January
and contributed a full three months of revenue in the second quarter.
Compared with prior year periods, net interest revenue increased while net
interest margin declined. Net interest revenue was favorably affected by
increases in average earning assets, which, excluding the effect of national
consumer loans, were up approximately $7 billion in both the quarterly and six
month comparisons. Approximately $4.5 billion of these increases related to
average loans and leases mainly reflecting growth in the domestic commercial
portfolio and in Argentina, including the impact of the Deutsche Bank Argentina
S.A. acquisition. The prior year comparisons of net interest revenue and margin
were favorably affected by wider spreads and a higher volume of average earning
assets in Brazil. Partially offsetting the improvements in net interest revenue
and contributing to the decline in net interest margin were the Corporation's
exit from its national consumer businesses [Fidelity Acceptance Corporation,
Ganis and credit card] and the impact of funding costs associated with an
investment in bank owned life insurance policies. The latter was largely offset
by the revenue from this investment that was included in noninterest income as
discussed previously.
<PAGE>
NONINTEREST EXPENSE
The components of noninterest expense are as follows:
<TABLE>
<CAPTION>
First
Quarter
Second Quarter Six Months
-------------- ----------------
1998 (in millions) 1998 1997 Change 1998 1997 Change
---- ----- ----- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 354 Employee costs $ 368 $ 312 $ 56 $ 722 $ 622 $100
94 Occupancy & equipment 96 88 8 190 174 16
24 Professional fees 22 12 10 46 24 22
22 Advertising and public relations 32 27 5 54 49 5
30 Communications 31 28 3 61 54 7
8 Goodwill amortization 8 7 1 16 15 1
129 Other 90 104 (14 ) 219 184 35
----- ----- ----- ---- ------ ------ ----
$ 661 Total $ 647 $ 578 $ 69 $1,308 $1,122 $186
===== ===== ===== ==== ====== ====== ====
</TABLE>
The $14 million decline in noninterest expense from the prior quarter reflected:
. The absence of $48 million of costs in the first quarter related to
charges for realignments of the Corporation's European operations and
domestic private banking business and costs incurred in the New
England regional businesses, including the write-off of software,
redesign costs, and the merger of the Rhode Island banking subsidiary
into BankBoston, N.A.
. Noninterest expense from Latin American operations increased $16
million. The Corporation continued to incur expenses related to its de
novo branch expansion programs in Argentina and Brazil. As of June 30,
1998, the Corporation had opened 64 branches in Argentina and 15
branches in Brazil in connection with these programs. The increase in
noninterest expense was also affected by the acquisition of Deutsche
Bank Argentina S.A., which closed in late January and contributed a
full three months of expense in the second quarter.
. Noninterest expense from Corporate Banking increased $10 million due
mainly to higher levels of incentive compensation in the corporate
finance and private equity units in line with their increased
operating performance.
. Higher advertising costs, mainly related to the introduction of new
home-banking products from our regional consumer business also
contributed to the increase.
Noninterest expense grew $69 million from the second quarter of 1997 and
$186 million in the six month comparison. These increases were mainly related to
investment spending in Latin America, including de novo expansion costs and the
Deutsche Bank Argentina acquisition, and the ongoing buildup of the
Corporation's Corporate Banking and Global Capital Markets businesses, including
higher incentive compensation in line with the growth in revenues. In addition,
charges incurred in the first quarter of 1998, as discussed above, related to
the European, private banking, and regional consumer businesses contributed to
the increase in the six month comparison. Partially offsetting these increases
was the absence of expenses from the national consumer businesses.
<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) 6-30-98 3-31-98 12-31-97 9-30-97 6-30-97
-------- -------- --------- -------- --------
United States Operations:
Commercial, industrial and financial $ 16,275 $ 15,887 $ 15,268 $ 15,062 $ 14,527
Commercial real estate
Construction 219 260 271 317 314
Other commercial real estate 3,876 3,736 4,211 3,845 3,398
Consumer-related loans:
Residential mortgages 2,229 2,551 2,570 2,720 3,016
Home equity 2,871 2,802 2,823 2,952 2,924
Credit card 412 503 1,756 1,596 1,488
Other 2,753 2,801 2,956 3,118 4,739
Lease financing 1,609 2,017 1,938 1,880 1,780
Unearned income (232) (303) (302) (293) (277)
-------- -------- --------- -------- --------
30,012 30,254 31,491 31,197 31,909
-------- -------- --------- -------- --------
International Operations:
Commercial 10,218 10,682 10,159 9,261 8,643
Consumer-related loans:
Residential mortgages 1,318 1,302 947 893 781
Credit card 248 226 182 155 148
Other 1,087 987 828 678 566
Lease financing 519 517 452 345 357
Unearned Income (148) (146) (79) (68) (91)
-------- -------- --------- -------- --------
13,242 13,568 12,489 11,264 10,404
-------- -------- --------- -------- --------
Total loans and lease financing $ 43,254 $ 43,822 $ 43,980 $ 42,461 $ 42,313
======== ======== ========= ======== ========
</TABLE>
Loans and leases were $43.3 billion at June 30, 1998, compared with $43.8
billion at March 31, 1998. The domestic portfolio declined approximately $250
million due to the transfer of certain leveraged leases into a newly created
partnership, a further decline in the indirect auto portfolio as planned, and
lower levels of residential mortgage and credit card loans. These declines more
than offset an increase in domestic commercial loans which was mainly
attributable to growth in several of the specialty lending portfolios. The
decline in international loans reflected lower levels of Brazilian, Asian and
European loans, partially offset by an increase from Argentina.
<PAGE>
Nonaccrual Loans and OREO
Nonaccrual loans and OREO amounted to $382 million at June 30, 1998,
compared with $369 million at March 31, 1998, and $398 million at June 30, 1997.
Nonaccrual loans and OREO represented .9% of related assets at June 30, 1998,
compared with .8% at March 31, 1998 and .9% at June 30, 1997.
The nonaccrual loan total at June 30, 1998 included $27 million related to
Indonesian loans, compared with $19 million at March 31, 1998. Net credit
losses incurred in 1998 on Indonesian loans were $10 million in both the second
quarter and first six months. Total loan exposure to Indonesia continued its
steady decline to approximately $75 million at June 30, 1998 compared with
approximately $200 million at December 31, 1997.
The components of consolidated nonaccrual loans and OREO are as follows:
<TABLE>
<S> <C> <C> <C> <C> <C>
(in millions) 6-30-98 3-31-98 12-31-97 9-30-97 6-30-97
-------- -------- --------- -------- --------
Domestic nonaccrual loans:
Commercial, industrial and financial $ 63 $ 43 $ 59 $ 68 $ 39
Commercial real estate
Construction 2 3 3 4 3
Other commercial real estate 33 41 40 44 48
Consumer-related loans
Residential mortgages 42 46 50 51 56
Home equity 15 15 14 26 26
Credit card 6 6 26 22 22
Other 18 20 20 23 44
-------- -------- --------- -------- --------
179 174 212 238 238
-------- -------- --------- -------- --------
International nonaccrual loans:
Commercial 107 97 64 58 72
Consumer-related loans
Residential mortgages 36 34 28 31 29
Credit card 6 4 4 3 4
Other 26 18 12 7 8
-------- -------- --------- -------- --------
175 153 108 99 113
-------- -------- --------- -------- --------
Total nonaccrual loans 354 327 320 337 351
OREO 28 42 36 50 47
-------- -------- --------- -------- --------
Total $ 382 $ 369 $ 356 $ 387 $ 398
======== ======== ========= ======== ========
</TABLE>
<PAGE>
Provision and Reserve for Credit Losses
The reserve for credit losses at June 30, 1998 was $734 million, or 1.70%
of outstanding loans and leases, compared with $725 million, or 1.65% at March
31, 1998, and $845 million, or 2.00% at June 30, 1997. The reserve for credit
losses was 207% of nonaccrual loans at June 30, 1998, compared with 222% at
March 31, 1998 and 240% at June 30, 1997.
The provision for credit losses was $60 million in the second quarter of
1998, compared with $140 million in the first quarter of 1998 and $60 million in
the second quarter of 1997.
Net credit losses were $51 million in the second quarter of 1998, compared
with $141 million in the first quarter of 1998 and $79 million in the second
quarter of 1997. Net credit losses in the first quarter of 1998 included $66
million related to a previously disclosed situation surrounding a series of
loans made by a former officer in the Corporation's international private
banking office in New York. Net credit losses as a percent of average loans and
leases on an annualized basis were .46% in the second quarter of 1998, compared
with 1.30% for the first quarter of 1998 (.69% without the $66 million chargeoff
from international private banking) and .76% for the second quarter of 1997.
Net credit losses were as follows:
<TABLE>
<CAPTION>
First
Quarter Second Quarter Six Months
---------------- ----------------
1998 (in millions) 1998 1997 1998 1997
---- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Domestic
$ 13 Commercial, industrial and financial $ 5 $ 5 $ 18 $ 23
(1) Commercial real estate (1) (3) (2) (3)
Consumer-related loans:
2 Residential mortgages 1 0 3 1
20 Credit card 6 24 26 43
2 Home equity 1 1 3 3
19 Other 11 34 30 69
----- ----- ----- ----- -----
55 23 61 78 136
International
76 Commercial 13 12 89 11
Consumer-related loans:
2 Credit card 2 1 4 3
8 Other 13 5 21 8
----- ----- ----- ----- -----
86 28 18 114 22
----- ----- ----- ----- -----
$ 141 Total $ 51 $ 79 $ 192 $ 158
===== ===== ===== ===== =====
</TABLE>
THE CORPORATION
BankBoston, with assets of $70.5 billion and some 22,900 employees, is the
nation's oldest commercial bank and New England's only global bank. BankBoston
is engaged in consumer, small business, and corporate banking in New England;
delivering sophisticated financial solutions to corporations and governments
nationally and internationally; and full service banking in leading Latin
American markets. The Corporation's common stock is listed on the New York and
Boston stock exchanges.
<PAGE>
CONSOLIDATED BALANCE SHEET
(dollars in millions)
<TABLE>
<CAPTION>
March 31 June 30
-------- ----------------------
1998 1998 1997
------- ------- -------
<S> <C> <C> <C>
Assets
Securities:
$10,587 Available for sale $11,142 $ 8,969
617 Held to maturity 604 636
43,822 Loans and lease financing 43,254 42,313
(725) Reserve for credit losses (734) (845)
------- ------- -------
43,097 Net loans and lease financing 42,520 41,468
5,875 Other earning assets 5,704 5,758
11,252 Cash and other nonearning assets 10,529 9,307
------- ------- -------
$71,428 Total Assets $70,499 $66,138
======= ======= =======
Liabilities and Stockholders' Equity
$46,397 Deposits $45,196 $42,978
12,495 Funds borrowed 12,507 12,377
3,469 Notes payable 3,682 2,696
3,513 Other liabilities 3,139 2,666
Guaranteed preferred beneficial interests in
747 corporation's junior subordinated debentures 995 747
------- ------- -------
66,621 Total Liabilities 65,519 61,464
------- ------- -------
Stockholders' Equity
278 Preferred equity 278 508
4,529 Common equity 4,702 4,166
------- ------- -------
4,807 Total Stockholders' Equity 4,980 4,674
------- ------- -------
$71,428 Total Liabilities and Stockholders' Equity $70,499 $66,138
======= ======= =======
SELECTED AVERAGE BALANCES
Quarter Ended Quarters Ended Six Months Ended
------------- -------------- ----------------
March 31 June 30 June 30
-------- --------- ---------
1998 1998 1997 1998 1997
-------- -------- -------- ------- --------
<C> <C> <C> <C> <C>
Assets
$43,706 Loans and lease financing $44,196 $42,112 $43,952 $41,923
10,606 Securities 11,188 9,488 10,898 9,375
60,487 Total earning assets 61,961 56,834 61,228 56,738
69,710 Total assets 71,236 63,946 70,476 63,580
Liabilities and Stockholders' Equity
37,158 Interest bearing deposits 37,195 34,391 37,176 34,370
8,616 Noninterest bearing deposits 8,209 7,855 8,411 7,703
------- ------- ------- ------- -------
45,774 Total deposits 45,404 42,246 45,587 42,073
3,749 Notes payable (1) 4,392 3,351 4,073 3,333
53,216 Total interest bearing liabilities 54,641 49,208 53,932 48,871
4,452 Common stockholders' equity 4,600 4,159 4,525 4,294
4,730 Total stockholders' equity 4,878 4,667 4,803 4,802
</TABLE>
(1) Amounts include guaranteed beneficial interests in Corporation's junior
subordinated debentures.
<PAGE>
CONSOLIDATED STATEMENT OF INCOME
(dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
Quarter Ended Quarters Ended Six Months Ended
March 31 June 30 June 30
----------- --------------------- --------------------
1998 1998 1997 1998 1997
------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$1,337.4 Interest income $1,390.2 $1,280.7 $2,727.6 $2,555.7
734.1 Interest expense 750.7 664.8 1,484.8 1,319.8
-------- -------- -------- -------- --------
603.3 Net interest revenue 639.5 615.9 1,242.8 1,235.9
140.0 Provision for credit losses 60.0 60.0 200.0 120.0
-------- -------- -------- -------- --------
Net interest revenue after provision
463.3 for credit losses 579.5 555.9 1,042.8 1,115.9
-------- -------- -------- -------- --------
Noninterest income:
162.8 Financial service fees 191.7 155.7 354.5 293.2
79.3 Trust and agency fees 82.1 69.4 161.4 135.4
34.0 Trading profits and commissions (3.7) 27.9 30.4 47.2
24.8 Securities portfolio gains, net 11.4 31.9 36.2 40.8
288.1 Other income 175.9 91.9 464.0 190.0
-------- -------- -------- -------- --------
589.0 Total noninterest income 457.4 376.8 1,046.5 706.6
-------- -------- -------- -------- --------
Noninterest expense:
292.7 Salaries 305.1 260.2 597.8 517.9
60.9 Employee benefits 63.3 51.3 124.2 103.9
54.4 Occupancy expense 55.8 52.1 110.1 102.9
40.1 Equipment expense 39.6 35.8 79.8 71.5
212.9 Other expense 183.6 178.5 396.6 325.9
-------- -------- -------- -------- --------
661.0 Total noninterest expense 647.4 577.9 1,308.5 1,122.1
-------- -------- -------- -------- --------
391.3 Income before income taxes 389.5 354.8 780.8 700.4
153.0 Provision for income taxes 147.6 142.8 300.7 281.6
-------- -------- -------- -------- --------
$ 238.3 NET INCOME $ 241.9 $ 212.0 $ 480.1 $ 418.8
======== ======== ======== ======== ========
NET INCOME PER COMMON SHARE:
$ .80 Basic $ .81 $ .68 $ 1.61 $ 1.33
$ .79 Diluted $ .80 $ .68 $ 1.58 $ 1.31
$ .29 DIVIDENDS PAID PER COMMON SHARE $ .29 $ .26 $ .58 $ .48
Average number of common shares, in thousands:
292,542 Basic 293,769 295,820 293,159 301,300
296,840 Diluted 298,275 299,574 297,579 305,382
$ 4.4 Preferred dividends $ 4.4 $ 9.3 $ 8.8 $ 18.6
</TABLE>
NUMBER OF EMPLOYEES
<TABLE>
<CAPTION>
June 30 Mar 31 June 30
1998 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
Full time equivalent employees 22,900 22,500 22,000
</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
-------- ------- -------
1998 1998 1997 1998 1997
---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
1.39% Return on average total assets (annualized) 1.36% 1.33% 1.37% 1.33%
21.31% Return on average common equity (annualized) 20.70% 19.54% 21.01% 18.79%
$607.0 Net interest revenue, fully taxable equivalent basis $644.9 $620.4 $1,251.9 $1,245.4
4.07% Net interest margin 4.17% 4.38% 4.12% 4.43%
4.14% Domestic net interest margin (estimated) 4.12% 4.58% 4.13% 4.56%
3.92% International net interest margin (estimated) 4.29% 3.83% 4.11% 4.06%
</TABLE>
<TABLE>
<CAPTION>
March 31 June 30
-------- ----------------------
1998 1998 1997
---- ---- ----
<S> <C> <C>
COMMON STOCKHOLDERS' EQUITY:
$4,529 Common stockholders' equity $4,702 $4,166
293,413 Common shares outstanding, in thousands 294,126 294,221
Per common share:
$15.44 Book value $15.99 $14.16
55.13 Market value 55.63 36.19
CAPITAL RATIOS/REGULATORY CAPITAL:
5.75% Tangible Common Equity ratio 6.09% 5.78%
Risk-based capital ratios: Estimate
7.9% Tier 1 capital ratio (minimum required 4.00%) 8.5% 8.8%
12.3% Total capital ratio (minimum required 8.00%) 13.2% 12.8%
7.3% Leverage ratio 7.8% 7.8%
$5,049 Tier 1 capital $5,491 $4,918
7,874 Total Capital 8,524 7,160
63,848 Total risk-adjusted assets 64,748 55,764
</TABLE>
REVERSE FOR CREDIT LOSSES
(dollars in millions)
<TABLE>
<CAPTION>
Quarter Ended Quarters Ended Six Months Ended
- - ------------- -------------- ----------------
March 31 June 30 June 30
-------- ---------------------- ----------------------------
1998 1998 1997 1998 1997
---- ------ ------ ------ ------
<S> <C> <C> <C> <C>
$711.6 Beginning balance $725.1 $864.0 $711.6 $883.3
140.0 Provision for credit losses 60.0 60.0 200.0 120.0
14.0 Reserve of acquired companies 0.0 0.0 14.0 0.0
(156.1) Credit losses (73.4) (106.5) (229.6) (203.2)
15.6) Recoveries 22.2 27.2 37.9 44.6
------ ----- ------ ------ ------
(140.5) Net credit losses (51.2) (79.3) (191.7) (158.6)
------ ----- ------ ------ ------
$725.1 Ending balance $733.9 $844.7 $733.9 $844.7
------ ------ ------ ------ ------
1.65 % Reserve as a % of loans and leases 1.70% 2.00% 1.70% 2.00%
----- ----- ----- ----- -----
2.22% Reserve as a % of nonaccrual loans 2.07% 2.40% 2.07% 2.40%
----- ----- ----- ----- -----
</TABLE>
