<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 19, 1999
MELLON FINANCIAL CORPORATION
(Exact name of registrant as specified in charter)
Pennsylvania 1-7410 25-1233834
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) dentification No.)
One Mellon Bank Center
500 Grant Street 15258
Pittsburgh, Pennsylvania (Zip code)
(Address of principal executive offices)
Registrant's telephone number, including area code - (412) 234-5000
MELLON BANK CORPORATION
(Former name or former address, if changed since last report)
<PAGE>
ITEM 5. OTHER EVENTS
By press release dated October 19, 1999, Mellon Financial Corporation,
formerly Mellon Bank Corporation, (the "Corporation") announced third
quarter 1999 results of operations.
In the same press release, the Corporation announced that effective
October 18, 1999, its corporate name became Mellon Financial
Corporation.
Also on October 18, 1999 Mellon Financial Company changed its corporate
name to Mellon Funding Corporation.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibit Description
Number
99.1 Mellon Financial Corporation Press Release, dated October 19, 1999,
announcing the matters referenced in the first two paragraphs of Item 5
above.
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 thereunto duly authorized.
MELLON FINANCIAL CORPORATION
Date: October 20, 1999 By: /s/ Steven G. Elliott
__________________________
Steven G. Elliott
Senior Vice Chairman and Chief
Financial Officer
<PAGE>
EXHIBIT INDEX
Number Description Method of Filing
99.1 Press Release dated Filed herewith
October 19, 1999
<PAGE>
Exhibit 99.1
[LOGO OF MELLON APPEARS HERE]
News Release
Contact: MEDIA ANALYSTS Corporate Affairs
----- --------
Stephen K. Dishart Donald J. MacLeod One Mellon Bank Center
(412) 234-0850 (412) 234-5601 Pittsburgh, PA 15258-0001
- --------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE
MELLON REPORTS RECORD THIRD QUARTER 1999 RESULTS
------------------------------------------------
. Quarterly Operating Earnings Per Share at 46 Cents, Up 12 Percent Over Last
Year
. Return on Common Equity is 22.3 Percent and Return on Assets is 1.92
Percent, Excluding a Net Loss From Divestitures
. Quarterly Cash Operating Earnings Per Share at 52 Cents, Up 11 Percent Over
Last Year
. Cash Return on Tangible Common Equity is 43.7 Percent and Cash Return on
Tangible Assets is 2.25 Percent, Excluding a Net Loss From Divestitures
. Declares Regular Quarterly Common Stock Dividend
<TABLE>
<CAPTION>
Financial Highlights Quarter ended Nine months ended
---------------------------------- ------------------
(dollar amounts in millions, Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30,
except per share amounts) 1999 1999 1998 1999 1998
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operating results (a):
Diluted earnings per common share $ .46 $ .45 $ .41 $1.34 $1.20
Net income applicable to common stock $ 236 $ 236 $ 218 $ 703 $ 639
Return on common equity (annualized) 22.3% 21.4% 20.3% 21.5% 20.9%
Return on assets (annualized) 1.92% 1.90% 1.81% 1.89% 1.83%
Cash operating results (a):
Diluted earnings per common share $ .52 $ .50 $ .47 $1.51 $1.36
Net income applicable to common stock $ 266 $ 266 $ 246 $ 792 $ 720
Return on common equity (annualized) 43.7% 41.1% 40.2% 41.7% 41.2%
Return on assets (annualized) 2.25% 2.23% 2.11% 2.21% 2.13%
Reported results:
Diluted earnings per common share $ .45 $ .45 $ .41 $1.38 $1.20
Net income applicable to common stock $ 231 $ 238 $ 218 $ 723 $ 639
Return on common equity (annualized) 21.8% 21.6% 20.3% 22.1% 20.9%
Return on assets (annualized) 1.87% 1.92% 1.81% 1.94% 1.83%
Fee revenue as a percentage of net interest and fee
revenue (FTE) 69% 69% 66% 69% 66%
Efficiency ratio excluding amortization of intangibles 61% 62% 62% 61% 63%
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Operating and cash operating results for the third quarter of 1999
exclude a $5 million after-tax net loss from divestitures. The second
quarter of 1999 excludes a $38 million after-tax net gain from divestitures
and $36 million of nonrecurring expenses after taxes. Also excluded from
the first nine months of 1999 are a $49 million after-tax net gain from
divestitures and a $26 million after-tax charge for the cumulative effect
of a change in accounting principle recorded in the first quarter of 1999.
Cash operating results exclude the after-tax impact of the amortization of
goodwill and other intangibles from purchase acquisitions.
--more--
[LOGO OF MELLON APPEARS HERE]
[LOGO OF DREYFUS APPEARS HERE] [LOGO OF THE BOSTON COMPANY APPEARS HERE]
The Dreyfus Corporation and The Boston Company are companies of Mellon Financial
Corporation.
<PAGE>
Mellon Reports Earnings
October 19, 1999
Page 2
PITTSBURGH, Oct. 19, 1999--Mellon Financial Corporation (formerly Mellon Bank
Corporation) (NYSE: MEL) today announced record third quarter 1999 diluted
operating earnings per common share of 46 cents, an increase of 12 percent
compared with 41 cents per common share in the third quarter of 1998. Operating
net income applicable to common stock totaled $236 million in the third quarter
of 1999, an increase of 8 percent compared with $218 million in the third
quarter of 1998. In the second quarter of 1999, diluted operating earnings per
common share totaled 45 cents and operating net income applicable to common
stock was $236 million.
"Our first three quarters of 1999 have been strong, clearly indicating that our
plans for investing in and building our high-growth, high-return businesses have
been set in motion," said Martin G. McGuinn, Mellon chairman and chief executive
officer. "Also, we are now using the name Mellon Financial Corporation when
referring to our holding company. This clearly communicates our strategic
emphasis as we strive to become the best performing financial services company.
In addition, during the third quarter we also completed the divestitures
announced earlier this year."
The Corporation also declared a regular quarterly common dividend of 20 cents
per share. This cash dividend is payable on Nov. 15, 1999, to shareholders of
record at the close of business on Oct. 29, 1999.
Fee revenue for the third quarter of 1999 of $765 million was impacted by the
March 1999 sale of the credit card business, the June 1999 sale of the network
services transaction processing unit, the sale of the mortgage businesses that
was completed in the third quarter of 1999 and the October 1998 acquisition of
Newton Management Limited (Newton). Excluding the effect of acquisitions and
divestitures, fee revenue increased 9 percent, compared with the third quarter
of 1998, primarily due to a 12 percent increase in trust and investment fee
revenue. Excluding the fee revenue generated by the mortgage businesses and the
network services transaction processing unit, fee revenue decreased 1 percent
compared with the second quarter of 1999, resulting from lower securities
lending revenue, lower brokerage fees and lower foreign currency and securities
trading revenue.
Net interest revenue on a fully taxable equivalent basis for the third quarter
of 1999 was $352 million, down $24 million compared with the prior-year period
and down $11 million from the second quarter of 1999. The decrease compared with
the third quarter of 1998 primarily resulted from the sale of the credit card
business. Excluding the net interest revenue generated by the credit card
business in the prior-year period, net interest revenue decreased $9 million
compared with the third quarter of 1998, reflecting lower loan fees and higher
funding costs related to the repurchase of common stock. The decrease compared
with the second quarter of 1999 resulted from higher funding costs related to
the repurchase of common stock as well as a lower level of interest-earning
assets.
Operating expense before trust-preferred securities expense and net revenue from
acquired property for the third quarter of 1999 was $716 million. Excluding the
effect of acquisitions and divestitures and $56 million of nonrecurring expenses
in the second quarter of 1999, operating expense was unchanged compared with the
third quarter of 1998 and decreased 2 percent compared with the second quarter
of 1999, reflecting the continuing focus on expense management.
--more--
<PAGE>
Mellon Reports Earnings
October 19, 1999
Page 3
Credit quality expense was $5 million in the third quarter of 1999, compared
with $12 million in the third quarter of 1998 and $5 million in the second
quarter of 1999. The lower expense in the third quarter of 1999 compared with
the prior-year period resulted from a lower provision for credit losses
following the sale of the credit card business, as well as higher net revenue
from acquired property. Nonperforming assets totaled $169 million at Sept. 30,
1999, compared with $142 million at June 30, 1999, $161 million at March 31,
1999, and $140 million at Sept. 30, 1998. The ratio of nonperforming assets to
total loans and net acquired property was .58 percent at Sept. 30, 1999,
compared with .46 percent at June 30, 1999, .53 percent at March 31, 1999, and
.45 percent at Sept. 30, 1998.
On Oct. 18, 1999, the Corporation changed its corporate name to Mellon Financial
Corporation from Mellon Bank Corporation.
Mellon is a global financial services company with approximately $2.5 trillion
in assets under management, administration or custody, including approximately
$450 billion under management. One of the world's leading providers of wealth
management and global asset management for individual and institutional
investors, as well as global investment services for businesses and
institutions, Mellon also offers a comprehensive array of banking services for
individuals and small, midsize and large businesses and institutions in selected
geographies. Its 12 asset management companies, which include The Dreyfus
Corporation in the United States and Newton Management Limited in the United
Kingdom, provide investment products in virtually every asset class or
investment style. In addition, Mellon is a top global provider of custody,
retirement and benefits consulting services through its Mellon Trust and Buck
Consultants affiliates. Headquartered in Pittsburgh, Pennsylvania, Mellon has
operations or joint ventures around the world.
We invite you to hear taped comments from Steven G. Elliott, Mellon senior vice
chairman and chief financial officer, regarding the Corporation's third quarter
1999 earnings by calling (412) 236-5385 beginning at approximately 1 p.m. EDT on
Tuesday, Oct. 19, 1999, through 5 p.m. EDT on Tuesday, Oct. 26, 1999. Press
releases and other information about Mellon Financial Corporation and its
products and services are available at www.mellon.com on the Internet. For
Mellon press releases by fax, call 1 800 758-5804, identification number 552187.
# # #
<PAGE>
Mellon Reports Earnings
October 19, 1999
Page 4
<TABLE>
<CAPTION>
Noninterest Revenue
- -------------------
Quarter ended Nine months ended
------------------------------------------ ------------------------
Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30,
(dollar amounts in millions) 1999 1999 1998 1999 1998
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Trust and investment fee revenue:
Investment management:
Mutual fund $152 $149 $122 $ 445 $ 342
Private asset 73 73 56 217 162
Institutional asset 65 62 51 190 154
- ---------------------------------------------------------------------------------------------------------------------------
Total investment management revenue 290 284 229 852 658
Administration and custody:
Institutional trust 96 104 95 300 288
Mutual fund 39 38 34 111 101
Private asset 5 5 5 15 14
- ---------------------------------------------------------------------------------------------------------------------------
Total administration and custody revenue 140 147 134 426 403
Benefits consulting 66 61 58 183 164
Brokerage fees 13 16 11 44 32
- ---------------------------------------------------------------------------------------------------------------------------
Total trust and investment fee revenue 509 508 432 1,505 1,257
Cash management and deposit transaction charges 70 70 66 206 192
Mortgage servicing fees 48 51 44 151 152
Foreign currency and securities trading revenue 42 45 39 130 118
Credit card fees - - 23 18 70
Other 96 113 108 331 333
- ---------------------------------------------------------------------------------------------------------------------------
Total fee revenue 765 787 712 2,341 2,122
Net gain (loss) from divestitures (8) 59 - 134 -
Gains on sales of securities - - - - 1
- ---------------------------------------------------------------------------------------------------------------------------
Total noninterest revenue $757 $846 $712 $ 2,475 $ 2,123
- ---------------------------------------------------------------------------------------------------------------------------
Fee revenue as a percentage of net interest and
fee revenue (FTE) 69% 69% 66% 69% 66%
Trust and investment fee revenue as a percentage
of net interest and fee revenue (FTE) 45% 44% 40% 44% 39%
- ---------------------------------------------------------------------------------------------------------------------------
Memo:
Gross joint venture fee revenue (a) $122 $120 $ 70 $ 345 $ 217
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) The Corporation accounts for its interest in joint ventures under the
equity method of accounting with the net results primarily recorded as
other fee revenue, as well as trust and investment fee revenue. The gross
fee revenue is not included in total fee revenue above.
Fee revenue
Fee revenue increased $53 million, or 7%, in the third quarter of 1999 compared
with the third quarter of 1998. Fee revenue in the third quarter of 1999 was
impacted by the March 1999 sale of the credit card business, the June 1999 sale
of the network services transaction processing unit, the sale of the mortgage
businesses that was completed in the third quarter of 1999 and the October 1998
acquisition of Newton Management Limited (Newton). Excluding the effect of
acquisitions and divestitures, fee revenue increased 9% compared with the prior-
year period, primarily due to a 12% increase in trust and investment fee
revenue.
<PAGE>
Mellon Reports Earnings
October 19, 1999
Page 5
<TABLE>
<CAPTION>
3rd Qtr. 1999 3rd Qtr. 1999 Nine Mo. 1999
over over over
3rd Qtr. 1998 2nd Qtr. 1999 Nine Mo. 1998
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Trust and investment fee revenue growth (a) 12% -% 13%
Fee revenue growth (b) 9% (1)% 12%
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Excluding the effect of acquisitions.
(b) Excluding the effect of acquisitions and divestitures and fees from the
electronic filing of income tax returns.
Excluding the revenue from the Newton acquisition, investment management revenue
increased $28 million compared with the third quarter of 1998. This increase
resulted from a $15 million, or 12%, increase in mutual fund management revenue,
a $7 million, or 13%, increase in private asset management revenue and a $6
million, or 11%, increase in institutional asset management revenue. These
increases resulted from net new business and an increase in the market value of
assets under management.
The average net assets of proprietary funds managed at Dreyfus/Founders/Newton
in the third quarter of 1999 were $124 billion, up $16 billion from $108 billion
in the third quarter of 1998 and down $2 billion from $126 billion in the second
quarter of 1999. The increase from the prior-year period primarily resulted from
increases in average net assets of equity funds and institutional taxable money
market funds. Proprietary equity funds averaged $45 billion in the third quarter
of 1999, compared with $32 billion in the third quarter of 1998 and $44 billion
in the second quarter of 1999.
Administration and custody fee revenue increased $6 million, or 4%, in the third
quarter of 1999 compared with the third quarter of 1998, resulting from a $5
million, or 18%, increase in mutual fund administration revenue. The reported
growth within institutional trust and custody revenue was tempered primarily by
the contribution of business to the Russell/Mellon Analytical Services Inc. and
the CIBC Mellon Global Securities Services joint ventures. The results of joint
ventures are accounted for under the equity method of accounting, which reports
the results of the joint ventures on a net basis, rather than reporting the
revenues and expenses separately. Including the institutional trust and custody
gross revenue generated by the Corporation's joint ventures that provide
institutional trust and custody services, institutional trust and custody
revenue increased $21 million, or 21%, compared with the third quarter of 1998,
and decreased $5 million, or 4%, compared with the second quarter of 1999. The
decrease compared with the second quarter of 1999 resulted from lower
administration revenue at Buck Consultants, Inc. and lower securities lending
revenue.
Mutual fund administration and custody fees are expected to be impacted
beginning in the second quarter of 2000 as a long-term contract with a third
party expires at the end of May 2000. Fees from this contract totaled
approximately $22 million in the third quarter of 1999.
Benefits consulting fees generated by Buck Consultants, Inc. increased $8
million, or 15%, in the third quarter of 1999, compared with the third quarter
of 1998, primarily resulting from net new business and increased project
activity with existing clients. The $2 million, or 23%, increase in brokerage
fees in the third quarter of 1999 compared to the prior-year period primarily
resulted from higher trading volumes. Dreyfus Brokerage Services, Inc. averaged
approximately 8,500 trades per day in the third quarter of 1999, compared with
approximately 9,800 trades per day in the second quarter of 1999 and
approximately 6,900 trades per day in the third quarter of 1998.
<PAGE>
Mellon Reports Earnings
October 19, 1999
Page 6
The $4 million, or 6%, increase in cash management fees and deposit transaction
charges in the third quarter of 1999, compared with the prior-year period,
primarily resulted from higher volumes.
Mortgage servicing fees increased $4 million, or 8%, in the third quarter of
1999 compared with the third quarter of 1998. This increase primarily resulted
from a lower level of mortgage prepayments. By September 30, 1999, the
Corporation completed the sales of the residential and commercial mortgage
servicing businesses.
Foreign currency and securities trading revenue increased $3 million, or 9%, in
the third quarter of 1999 compared with the prior-year period. This increase was
primarily related to growth in the number of foreign exchange customers and
favorable market conditions. The absence of credit card fees in the third and
second quarters of 1999 resulted from the March 1999 divestiture of the credit
card business.
Other fee revenue decreased $12 million, or 12%, in the third quarter of 1999,
compared with the prior-year period, primarily resulting from the June 1999 sale
of the network services transaction processing unit. This business generated $14
million and $11 million of fee revenue in the second quarter of 1999 and the
third quarter of 1998, respectively.
Excluding the fee revenue generated by the mortgage businesses and the network
services transaction processing unit, fee revenue decreased 1% compared with the
second quarter of 1999, resulting from lower securities lending revenue, lower
brokerage fees and lower foreign currency and securities trading revenue.
Fee revenue in the first nine months of 1999 totaled $2.341 billion. The
comparison to the first nine months of 1998 was impacted by the credit card,
network services, and mortgage banking divestitures, the Newton and Founders
acquisitions and the elimination of fees from the electronic filing of income
tax returns, a service that was discontinued at the end of 1998. Excluding these
factors, fee revenue increased 12% compared with the first nine months of 1998,
primarily due to a 13% increase in trust and investment fee revenue.
Net gain (loss) from divestitures
In the third quarter of 1999, the Corporation recorded an $8 million pre-tax net
loss from divestitures. The after-tax net loss from these transactions totaled
$5 million, or $.01 per common share. The net loss primarily resulted from an
adjustment to the previous write-downs recorded to reflect the net sales
proceeds received for the residential and commercial mortgage servicing
businesses. On September 30, 1999, the sale of the residential business to Chase
Mortgage Company, a subsidiary of The Chase Manhattan Corporation, was
completed. In addition, during the third quarter of 1999, the sale of the
commercial business to GMAC Commercial Mortgage Corporation, was completed. This
loss was partially offset by an additional gain related to the June 1999 sale of
the network services transaction processing unit to U.S. Bancorp as more
customers converted to the purchaser, as well as a gain on the sale of seven
Mellon Bank (MD) retail offices to Sandy Spring National Bank of Maryland in
September 1999. The Corporation expects a favorable impact on operating results
following the sale of the mortgage businesses, which generated an after-tax
operating loss of approximately $5 million, or approximately $.01 per common
share, in the third quarter of 1999. Including the $142 million pre-tax net gain
reported in the first six months of 1999, the pre-tax net gain from divestitures
totaled $134 million for the first nine months of 1999.
<PAGE>
Mellon Reports Earnings
October 19, 1999
Page 7
<TABLE>
<CAPTION>
Net Interest Revenue
- --------------------
Quarter ended Nine months ended
---------------------------------------- ------------------------
Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30,
(dollar amounts in millions) 1999 1999 1998 1999 1998
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net interest revenue (FTE) $ 352 $ 363 $ 376 $ 1,086 $ 1,117
Net interest margin (FTE) 3.63% 3.74% 3.95% 3.71% 3.99%
Average securities $ 6,364 $ 6,652 $ 5,754 $ 6,593 $ 5,552
Average loans $ 30,177 $ 30,504 $ 30,426 $ 30,711 $ 30,043
Average interest-earning assets $ 38,407 $ 39,015 $ 37,797 $ 39,072 $ 37,396
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
Net interest revenue on a fully taxable equivalent basis in the third quarter of
1999 decreased $24 million compared with the third quarter of 1998. This
decrease primarily resulted from the sale of the credit card business. Excluding
the net interest revenue generated by the credit card business in the prior-year
period, net interest revenue decreased $9 million compared with the third
quarter of 1998, reflecting lower loan fees and higher funding costs related to
the repurchase of common stock.
Net interest revenue decreased $11 million in the third quarter of 1999 compared
with the second quarter of 1999. This decrease resulted from higher funding
costs related to the repurchase of common stock as well as a lower level of
interest-earning assets.
Net interest revenue decreased $31 million in the first nine months of 1999
compared with the prior-year period. Excluding the net interest revenue
generated by the credit card business, net interest revenue decreased $3 million
compared with the first nine months of 1998, reflecting lower loan fees and
higher funding costs related to the repurchase of common stock, partially offset
by a higher level of interest-free funds.
<PAGE>
Mellon Reports Earnings
October 19, 1999
Page 8
<TABLE>
<CAPTION>
Operating Expense
- -----------------
Quarter ended Nine months ended
---------------------------------------- ------------------------
Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30,
(dollar amounts in millions) 1999 1999 1998 1999 1998
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Staff expense $ 387 $ 397 $ 358 $ 1,175 $ 1,070
Professional, legal and other purchased services 63 73 72 207 200
Net occupancy expense 61 64 59 186 174
Equipment expense 40 63 42 144 122
Amortization of mortgage servicing assets and
purchased credit card relationships 33 37 43 112 132
Amortization of goodwill and other intangible assets 37 37 35 111 100
Other expense 95 138 108 350 337
- ----------------------------------------------------------------------------------------------------------------------------------
Operating expense before trust-preferred securities
expense and net revenue from acquired property 716 809 717 2,285 2,135
Trust-preferred securities expense 20 19 20 59 59
Net revenue from acquired property (5) (5) (3) (10) (6)
- ----------------------------------------------------------------------------------------------------------------------------------
Total operating expense $ 731 $ 823 $ 734 $ 2,334 $ 2,188
- ----------------------------------------------------------------------------------------------------------------------------------
Average full-time equivalent staff 28,300 28,700 28,400 28,700 28,300
- ----------------------------------------------------------------------------------------------------------------------------------
Efficiency ratio (a) 64% 65% 66% 66% 66%
Efficiency ratio excluding amortization of goodwill
and other intangible assets 61% 62% 62% 61% 63%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Operating expense before trust-preferred securities expense, net revenue
from acquired property and second quarter 1999 nonrecurring expenses, as a
percentage of revenue, computed on a taxable equivalent basis, excluding
the net gain (loss) on divestitures and the sale of securities.
Operating expense before trust-preferred securities expense and net revenue from
acquired property totaled $716 million, a decrease of $1 million compared with
the third quarter of 1998. Third quarter 1999 expenses were impacted by the sale
of the credit card business, the sale of the network services transaction
processing unit, the sale of the mortgage businesses and the Newton acquisition.
Excluding the effect of acquisitions and divestitures, operating expense before
trust-preferred securities expense and net revenue from acquired property was
unchanged compared with the third quarter of 1998, reflecting the continuing
focus on expense management.
<TABLE>
<CAPTION>
3rd Qtr. 1999 3rd Qtr. 1999 Nine Mo. 1999
over over over
3rd Qtr. 1998 2nd Qtr. 1999 Nine Mo. 1998
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating expense (reduction) growth (a) -% (2)% 2%
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Operating expense before trust-preferred securities expense and net revenue
from acquired property excluding second quarter 1999 nonrecurring expenses
and the effect of acquisitions and divestitures.
Operating expense before trust-preferred securities expense and net revenue from
acquired property decreased $93 million compared with the second quarter of
1999. This decrease primarily resulted from $56 million of nonrecurring expenses
recorded in the second quarter of 1999 as well as the sale of the
<PAGE>
Mellon Reports Earnings
October 19, 1999
Page 9
network services transaction processing unit and the sale of the mortgage
businesses. The nonrecurring expenses in the second quarter of 1999 consisted of
a $30 million charitable contribution to the Mellon Bank Foundation as well as
$26 million of expenses primarily related to replacing obsolete computer
equipment and closing facilities as part of Mellon's Third Century strategic
initiatives. Excluding these expenses and the impact of divestitures, operating
expense before trust-preferred securities expense and net revenue from acquired
property decreased 2% compared with the second quarter of 1999.
Excluding the effect of the nonrecurring expenses, acquisitions and
divestitures, operating expense before trust-preferred securities expense and
net revenue from acquired property increased 2% in the first nine months of 1999
compared with the prior-year period.
Income Taxes
- ------------
The Corporation's effective tax rate for the third quarter of 1999 was 36.7%,
compared with 35.3% for the third quarter of 1998. The effective rate, excluding
the effect of the net loss on divestitures, was 36.5% for the third quarter of
1999. It is currently anticipated that the effective tax rate, excluding the
effect of any net gain or loss from divestitures and nonrecurring expenses, will
remain at approximately 36.5% for the remainder of 1999.
Credit Quality Expense, Net Credit Losses and Reserve for Credit Losses
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
Quarter ended Nine months ended
---------------------------------------- ------------------------
Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30,
(dollar amounts in millions) 1999 1999 1998 1999 1998
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Provision for credit losses $ 10 $ 10 $ 15 $ 35 $ 45
Net revenue from acquired property (5) (5) (3) (10) (6)
- --------------------------------------------------------------------------------------------------------------------------
Credit quality expense $ 5 $ 5 $ 12 $ 25 $ 39
- -------------------------------------------------------------------------------------------------------------------------
Net credit (losses) recoveries:
Credit card $ - $ - $ (10) $ (10) $ (29)
Other consumer credit (2) (4) (4) (10) (8)
Commercial real estate - - 2 - (2)
Commercial and financial (8) (7) (3) (18) (7)
- --------------------------------------------------------------------------------------------------------------------------
Total net credit losses $ (10) $ (11) $ (15) $ (38) $ (46)
- --------------------------------------------------------------------------------------------------------------------------
Annualized net credit losses to average loans .14% .13% .19% .17% .20%
- -------------------------------------------------------------------------------------------------------------------------
Reserve for credit losses at end of period $ 405 $ 409 $ 498
Reserve as a percentage of total loans 1.39% 1.34% 1.60%
- -------------------------------------------------------------------------------------------
</TABLE>
The decrease in credit quality expense in the third quarter of 1999 compared
with the third quarter of 1998 resulted from a lower provision for credit losses
following the sale of the credit card business as well as higher net revenue
from acquired property.
<PAGE>
Mellon Reports Earnings
October 19, 1999
Page 10
The $93 million decrease in the reserve for credit losses at September 30, 1999,
compared with September 30, 1998, was primarily due to the sale of the credit
card business in March 1999. In conjunction with this sale, $84 million that had
been associated with the credit card portfolio was removed from the reserve for
credit losses. In addition, during the third quarter of 1999, $4 million that
had been associated with the residential mortgage portfolio was removed from the
reserve for credit losses in conjunction with the sale of the mortgage business.
<TABLE>
<CAPTION>
Nonperforming Assets
- --------------------
Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
(dollar amounts in millions) 1999 1999 1999 1998 1998
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Domestic nonperforming loans:
Consumer mortgage $ 47 $ 43 $ 44 $ 44 $ 53
Commercial real estate 6 6 6 6 8
Other domestic 101 72 77 53 42
- ---------------------------------------------------------------------------------------------------------------------------
Total nonperforming loans 154 121 127 103 103
Acquired property:
Real estate acquired 15 24 37 40 40
Reserve for real estate acquired (3) (4) (5) (5) (5)
- --------------------------------------------------------------------------------------------------------------------------
Net real estate acquired 12 20 32 35 35
Other assets acquired 3 1 2 2 2
- ---------------------------------------------------------------------------------------------------------------------------
Total acquired property 15 21 34 37 37
- ---------------------------------------------------------------------------------------------------------------------------
Total nonperforming assets $ 169 $ 142 $ 161 $ 140 $ 140
- ---------------------------------------------------------------------------------------------------------------------------
Nonperforming loans as a percentage of total loans .53% .40% .41% .32% .33%
Nonperforming assets as a percentage of total loans
and net acquired property .58% .46% .53% .44% .45%
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
Nonperforming assets increased $27 million compared with June 30, 1999, and $29
million compared with September 30, 1998. The higher level of nonperforming
loans primarily resulted from the addition of two commercial loans, one each
during the first quarter and third quarter of 1999. This increase was partially
offset by continued sales of acquired property.
<PAGE>
Mellon Reports Earnings
October 19, 1999
Page 11
Selected Capital Data
- ---------------------
<TABLE>
<CAPTION>
(dollar amounts in millions, Sept. 30, June 30, Dec. 31, Sept. 30,
except per share amounts) 1999 1999 1998 1998
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Total shareholders' equity $ 4,219 (a) $ 4,303 $ 4,521 $ 4,358 (a)
Total shareholders' equity to assets ratio 9.00% 8.77% 8.90% 9.03%
Tangible shareholders' equity (c) $ 2,454 (b) $ 2,498 $ 2,641 $ 2,540 (b)
Tangible shareholders' equity to assets ratio (d) 5.45% 5.29% 5.41% 5.47%
Tier I capital ratio 7.1 (e) 6.87 6.53 6.78
Total (Tier I plus Tier II) capital ratio 11.6 (e) 11.18 10.80 11.22
Leverage capital ratio 6.8 (e) 6.70 6.73 7.06
Book value per common share $ 8.29 $ 8.37 $ 8.63 $ 8.35
Tangible book value per common share $ 4.83 $ 4.86 $ 5.04 $ 4.87
Closing common stock price $ 33.63 $ 36.38 $ 34.38 $ 27.50
Market capitalization $ 17,103 $ 18,704 $ 18,007 $ 14,363
Common shares outstanding (000) 508,650 514,211 523,846 522,280
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Average total shareholders' equity for the nine months ended September 30,
1999, and September 30, 1998, was $4.365 billion and $4.123 billion,
respectively.
(b) Average tangible common shareholders' equity for the nine months ended
September 30, 1999, and September 30, 1998, was $2.538 billion and $2.337
billion, respectively.
(c) Includes $64 million, $64 million, $60 million and $- million,
respectively, of minority interest, primarily related to Newton. In
addition, includes $353 million, $368 million, $373 million and $297
million, respectively, of tax benefits related to tax deductible goodwill
and other intangibles.
(d) Shareholders' equity plus minority interest less goodwill and other
intangibles recorded in connection with purchase acquisitions divided by
total assets less goodwill and other intangibles. The amount of goodwill
and other intangibles subtracted from shareholders' equity and total assets
is net of any tax benefit.
(e) Estimated.
The decrease in shareholders' equity at September 30, 1999, compared with the
prior periods primarily reflects common stock repurchases partially offset by
earnings retention. During the third quarter of 1999, 6.6 million shares of
common stock were repurchased, bringing year-to-date repurchases to 20 million
shares and completing the 20 million share repurchase program authorized by the
board of directors in January 1999. These shares had a total purchase price of
$694 million for an average share price of $34.68 per share. In September 1999,
the board of directors authorized an additional repurchase of up to 25 million
shares of common stock for general corporate purposes.
The continued improvement in the Corporation's capital ratios in 1999, resulted
from the net gain and lower asset levels following the divestitures.
<PAGE>
Mellon Reports Earnings
October 19, 1999
Page 12
SUMMARY DATA
Mellon Financial Corporation
Five Quarter Trend
<TABLE>
<CAPTION>
(dollar amounts in millions, Quarter ended
----------------------------------------------------------------------
except per share amounts; Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
common shares in thousands) 1999 1999 1999 1998 1998
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Selected key data
- -----------------
Diluted earnings per common share:
Operating $ .46 (a) $ .45 (a) $ .43 (a) $ .42 $ .41
Cash operating (b) .52 (a) .50 (a) .49 (a) .47 .47
Reported .45 .45 .48 .42 .41
Net income applicable to common stock:
Operating $ 236 (a) $ 236 (a) $ 231 (a) $ 222 $ 218
Cash operating (b) 266 (a) 266 (a) 260 (a) 252 246
Reported 231 238 254 222 218
Return on common equity (annualized):
Operating 22.3% (a) 21.4% (a) 20.9% (a) 20.1% 20.3%
Cash operating (b) 43.7 (a) 41.1 (a) 40.4 (a) 40.2 40.2
Reported 21.8 21.6 23.1 20.1 20.3
Return on assets (annualized):
Operating 1.92% (a) 1.90% (a) 1.84% (a) 1.76% 1.81%
Cash operating (b) 2.25 (a) 2.23 (a) 2.16 (a) 2.07 2.11
Reported 1.87 1.92 2.03 1.76 1.81
Shareholders' equity to assets:
Reported 9.00% 8.77% 9.12% 8.90% 9.03%
Tangible (b) 5.45 5.29 5.60 5.41 5.47
- -------------------------------------------------------------------------------------------------------------------------------
Fee revenue as a percentage of net interest and
fee revenue (FTE) 69% 69% 68% 68% 66%
Efficiency ratio excluding amortization of intangibles 61% 62% (c) 62% 65% 62%
Average common shares and equivalents outstanding:
Basic 511,777 (d) 518,273 523,448 523,082 522,156 (d)
Diluted 518,605 (d) 525,712 531,288 531,496 531,548 (d)
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- continued -
<PAGE>
Mellon Reports Earnings
October 19, 1999
Page 13
SUMMARY DATA
Mellon Financial Corporation
Five Quarter Trend
(continued)
<TABLE>
<CAPTION>
Quarter ended
----------------------------------------------------------------------
Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
(dollar amounts in millions) 1999 1999 1999 1998 1998
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Average balances for the quarter
- --------------------------------
Money market investments $ 1,463 $ 1,445 $ 1,286 $ 1,525 $ 1,351
Trading account securities 403 414 291 258 266
Securities 6,364 6,652 6,767 6,141 5,754
Loans 30,177 30,504 31,467 31,503 30,426
Total interest-earning assets 38,407 39,015 39,811 39,427 37,797
Total assets 48,871 (e) 49,766 50,677 50,110 47,937 (e)
Total tangible assets (b) 47,012 (f) 47,878 48,755 48,153 46,096 (f)
Deposits 33,462 33,358 34,087 34,492 33,399
Total interest-bearing liabilities 31,349 31,634 32,825 32,406 31,104
Total shareholders' equity 4,212 4,417 4,469 4,391 4,265
Tangible shareholders' equity (b) 2,417 2,591 2,608 2,487 2,424
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) For the quarter ended September 30, 1999, operating and cash operating
results exclude a $5 million after-tax net loss from divestitures. The
second quarter of 1999 excludes a $38 million after-tax net gain from
divestitures and $36 million of nonrecurring expenses after taxes. The
first quarter of 1999 excludes a $49 million after-tax net gain from
divestitures and a $26 million after-tax charge for the cumulative effect
of a change in accounting principle.
(b) Excludes the after-tax impact of the amortization of goodwill and other
intangibles from purchase acquisitions. In addition, the amount of goodwill
and other identified intangibles subtracted from common equity and total
assets is net of any tax benefit.
(c) Also excludes $56 million of nonrecurring expenses.
(d) The basic average common shares and equivalents outstanding for the nine
months ended September 30, 1999, and September 30, 1998, were 517,790,000
and 519,550,000, respectively. The diluted average common shares and
equivalents outstanding for the nine months ended September 30, 1999, and
September 30, 1998, were 525,182,000 and 529,884,000, respectively.
(e) Average total assets for the nine months ended September 30, 1999, and
September 30, 1998, were $49.765 billion and $47.384 billion, respectively.
(f) Average total tangible assets for the nine months ended September 30, 1999,
and September 30, 1998, were $47.876 billion and $45.631 billion,
respectively.
Note: All calculations are based on unrounded numbers.
<PAGE>
Mellon Reports Earnings
October 19, 1999
Page 14
CONDENSED CONSOLIDATED INCOME STATEMENT
Mellon Financial Corporation
<TABLE>
<CAPTION>
Quarter ended Nine months ended
September 30, September 30,
----------------------- ------------------------
(in millions, except per share amounts) 1999 1998 1999 1998
- --------------------------------------- ------ ------- ------- -------
<S> <C> <C> <C> <C>
Interest revenue
- ----------------
Interest and fees on loans (loan fees of $14, $21,
$45 and $55) $ 553 $ 616 $ 1,688 $ 1,799
Interest-bearing deposits with banks 9 8 27 23
Federal funds sold and securities under resale agreements 9 12 23 37
Other money market investments 1 1 2 5
Trading account securities 5 4 14 11
Securities 102 95 316 278
------ ------- ------- -------
Total interest revenue 679 736 2,070 2,153
Interest expense
- ----------------
Interest on deposits 218 248 646 717
Federal funds purchased and securities under
repurchase agreements 22 35 82 89
Other short-term borrowings 34 27 97 85
Notes and debentures 56 51 166 151
------ ------- ------- -------
Total interest expense 330 361 991 1,042
------ ------- ------- -------
Net interest revenue 349 375 1,079 1,111
Provision for credit losses 10 15 35 45
------ ------- ------- -------
Net interest revenue after provision for credit losses 339 360 1,044 1,066
Noninterest revenue
- -------------------
Trust and investment fee revenue 509 432 1,505 1,257
Cash management and deposit transaction charges 70 66 206 192
Mortgage servicing fees 48 44 151 152
Foreign currency and securities trading revenue 42 39 130 118
Credit card fees - 23 18 70
Other 96 108 331 333
------ ------- ------- -------
Total fee revenue 765 712 2,341 2,122
Net gain (loss) from divestitures (8) - 134 -
Gains on sales of securities - - - 1
------ ------- ------- -------
Total noninterest revenue 757 712 2,475 2,123
Operating expense
- -----------------
Staff expense 387 358 1,175 1,070
Professional, legal and other purchased services 63 72 207 200
Net occupancy expense 61 59 186 174
Equipment expense 40 42 144 122
Amortization of mortgage servicing assets and purchased
credit card relationships 33 43 112 132
Amortization of goodwill and other intangible assets 37 35 111 100
Other expense 95 108 350 337
Trust-preferred securities expense 20 20 59 59
Net revenue from acquired property (5) (3) (10) (6)
------ ------- ------- -------
Total operating expense 731 734 2,334 2,188
------ ------- ------- -------
</TABLE>
- continued -
<PAGE>
Mellon Reports Earnings
October 19, 1999
Page 15
CONDENSED CONSOLIDATED INCOME STATEMENT
Mellon Financial Corporation
(continued)
<TABLE>
<CAPTION>
Quarter ended Nine months ended
September 30, September 30,
------------------------ --------------------------
(in millions, except per share amounts) 1999 1998 1999 1998
- --------------------------------------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
Income before income taxes and cumulative effect
of accounting change 365 338 1,185 1,001
Provision for income taxes 134 120 436 353
------ ------ ------ ------
Income before cumulative effect of accounting change 231 218 749 648
Cumulative effect of accounting change - - (26) -
------ ------ ------ ------
Net income 231 218 723 648
Dividends on preferred stock - - - 9
------ ------ ------ ------
Net income applicable to common stock $ 231 $ 218 $ 723 $ 639
====== ====== ====== ======
Earnings per share
- ------------------
Basic net income per common share:
Income before cumulative effect of accounting change $ .46 $ .42 $ 1.45 $ 1.23
Cumulative effect of accounting change - - (.05) -
------ ------ ------ ------
Net income $ .46 $ .42 $ 1.40 $ 1.23
====== ====== ====== ======
Diluted net income per common share:
Income before cumulative effect of accounting change $ .45 $ .41 $ 1.43 $ 1.20
Cumulative effect of accounting change - - (.05) -
------ ------ ------ ------
Net income $ .45 $ .41 $ 1.38 $ 1.20
====== ====== ====== ======
</TABLE>
<PAGE>
Mellon Reports Earnings
October 19, 1999
Page 16
CONDENSED CONSOLIDATED BALANCE SHEET
Mellon Financial Corporation
<TABLE>
<CAPTION>
Sept. 30, June 30, Dec. 31, Sept. 30,
(dollar amounts in millions) 1999 1999 1998 1998
- ---------------------------- --------- --------- --------- ---------
<S> <C> <C> <C> <C>
Assets
- ------
Cash and due from banks $ 3,340 $ 3,140 $ 2,926 $ 2,839
Money market investments 1,252 1,075 798 988
Trading account securities 288 318 193 178
Securities available for sale 5,209 5,241 5,373 4,190
Investment securities (approximate fair value of $1,246,
$1,332, $1,634 and $1,787) 1,251 1,330 1,602 1,743
Loans, net of unearned discount of $77, $70, $54 and $65 29,156 30,544 32,093 31,052
Reserve for credit losses (405) (409) (496) (498)
-------- -------- -------- -------
Net loans 28,751 30,135 31,597 30,554
Premises and equipment 537 552 569 562
Acquired property, net of reserves of $3, $4, $5 and $5 15 21 37 37
Goodwill and other intangibles 2,182 2,237 2,313 2,115
Mortgage servicing assets and purchased credit card relationships 17 1,069 1,132 1,031
Other assets 4,019 3,970 4,237 4,006
-------- -------- -------- -------
Total assets $ 46,861 $ 49,088 $ 50,777 $48,243
======== ======== ======== =======
Liabilities
- -----------
Deposits in domestic offices $ 28,928 $ 29,574 $ 31,269 $29,659
Deposits in foreign offices 3,101 3,401 3,114 3,294
Short-term borrowings 3,570 4,765 4,942 4,483
Other liabilities 2,354 2,751 2,637 2,454
Notes and debentures (with original maturities over one year) 3,698 3,303 3,303 3,004
-------- -------- -------- -------
Total liabilities 41,651 43,794 45,265 42,894
Trust-preferred securities
- --------------------------
Guaranteed preferred beneficial interests in Corporation's
junior subordinated deferrable interest debentures 991 991 991 991
Shareholders' equity
- --------------------
Common stock - $.50 par value
Authorized - 800,000,000 shares
Issued - 588,661,920; 588,661,920 (a); 294,330,960;
and 294,330,960 shares 294 294 147 147
Additional paid-in capital 1,773 1,765 1,887 1,867
Retained earnings 3,698 3,587 3,353 3,244
Accumulated unrealized (loss) gain, net of tax (105) (90) 25 29
Treasury stock of 80,011,896; 74,450,718 (a);
32,407,960; and 33,191,388 shares at cost (1,441) (1,253) (891) (929)
-------- -------- -------- -------
Total shareholders' equity 4,219 4,303 4,521 4,358
-------- -------- -------- -------
Total liabilities, trust-preferred securities and
shareholders' equity $ 46,861 $ 49,088 $ 50,777 $48,243
======== ======== ======== =======
</TABLE>
____________________
(a) Reflects the two-for-one common stock split distributed on May 17, 1999.
<PAGE>
Mellon Reports Earnings
October 19, 1999
Page 17
CONDENSED CONSOLIDATED INCOME STATEMENT
Mellon Financial Corporation
Five Quarter Trend
<TABLE>
<CAPTION>
Quarter ended
------------------------------------------------------------------
Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
(in millions, except per share amounts) 1999 1999 1999 1998 1998
- --------------------------------------- --------- --------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C>
Interest revenue
- ----------------
Interest and fees on loans (loan fees of
$14, $15, $16, $18 and $21) $ 553 $ 555 $ 580 $ 614 $ 616
Interest-bearing deposits with banks 9 9 9 10 8
Federal funds sold and securities under resale
agreements 9 5 9 12 12
Other money market investments 1 - 1 1 1
Trading account securities 5 5 4 4 4
Securities 102 106 108 98 95
----- ----- ----- ----- -----
Total interest revenue 679 680 711 739 736
Interest expense
- ----------------
Interest on deposits 218 207 221 243 248
Federal funds purchased and securities under
repurchase agreements 22 23 37 34 35
Other short-term borrowings 34 34 29 29 27
Notes and debentures 56 55 55 53 51
----- ----- ----- ----- -----
Total interest expense 330 319 342 359 361
----- ----- ----- ----- -----
Net interest revenue 349 361 369 380 375
Provision for credit losses 10 10 15 15 15
----- ----- ----- ----- -----
Net interest revenue after provision for
credit losses 339 351 354 365 360
Noninterest revenue
- --------------------
Trust and investment fee revenue 509 508 488 465 432
Cash management and deposit transaction charges 70 70 66 70 66
Mortgage servicing fees 48 51 52 48 44
Foreign currency and securities trading revenue 42 45 43 47 39
Credit card fees - - 18 22 23
Other 96 113 122 147 108
----- ----- ----- ----- -----
Total fee revenue 765 787 789 799 712
Net gain (loss) from divestitures (8) 59 83 - -
Gains on sales of securities - - - - -
----- ----- ----- ----- -----
Total noninterest revenue 757 846 872 799 712
Operating expense
- -----------------
Staff expense 387 397 391 386 358
Professional, legal and other purchased services 63 73 71 97 72
Net occupancy expense 61 64 61 63 59
Equipment expense 40 63 41 59 42
Amortization of mortgage servicing assets
and purchased credit card relationships 33 37 42 47 43
Amortization of goodwill and other intangible assets 37 37 37 37 35
Other expense 95 138 117 116 108
Trust-preferred securities expense 20 19 20 20 20
Net revenue from acquired property (5) (5) - - (3)
----- ----- ----- ----- -----
Total operating expense 731 823 780 825 734
----- ----- ----- ----- -----
</TABLE>
- continued -
<PAGE>
Mellon Reports Earnings
October 19, 1999
Page 18
CONDENSED CONSOLIDATED INCOME STATEMENT
Mellon Financial Corporation
Five Quarter Trend
(continued)
<TABLE>
<CAPTION>
Quarter ended
--------------------------------------------------------------------
Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
(in millions, except per share amounts) 1999 1999 1999 1998 1998
- --------------------------------------- --------- --------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C>
Income before income taxes and
cumulative effect of accounting change 365 374 446 339 338
Provision for income taxes 134 136 166 117 120
------ ------ ------ ------ ------
Income before cumulative effect of
accounting change 231 238 280 222 218
Cumulative effect of accounting change - - (26) - -
------ ------ ------ ------ ------
Net income 231 238 254 222 218
Dividends on preferred stock - - - - -
------ ------ ------ ------ ------
Net income applicable to common stock $ 231 $ 238 $ 254 $ 222 $ 218
====== ====== ====== ====== ======
Earnings per share
- ------------------
Basic net income per common share:
Income before cumulative effect
of accounting change $ .46 $ .45 $ .54 $ .42 $ .42
Cumulative effect of accounting change - - (.05) - -
------ ------- ------ ------ ------
Net income $ .46 $ .45 $ .49 $ .42 $ .42
====== ======= ====== ====== ======
Diluted net income per common share:
Income before cumulative effect
of accounting change $ .45 $ .45 $ .53 $ .42 $ .41
Cumulative effect of accounting change - - (.05) - -
------ --------- ------ ------- -------
Net income $ .45 $ .45 $ .48 $ .42 $ .41
====== ======= ====== ======= =======
</TABLE>
