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FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) April 15, 1996
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First Chicago NBD Corporation
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 1-7127 38-1984850
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(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER IDENTIFICATION NO.)
One First National Plaza, Chicago, IL 60670
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE 312-732-4000
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ITEM 5. OTHER EVENTS
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The Registrant hereby incorporates by reference the information contained
in Attachment A hereto in response to this Item 5
Pursuant to the requirements of the Securities Exchange Act of l934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
First Chicago NBD Corporation
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(REGISTRANT)
Date: April 15, 1996 By: /s/ M. Eileen Kennedy
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Title: Senior Vice President and
Treasurer
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Attachment A
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CHICAGO, April 15, 1996 -- First Chicago NBD Corporation today reported net
income of $340 million for the first quarter of 1996, up from $336 million for
the first quarter of 1995. Earnings per common share were $1.03, a 4% increase
from $0.99 per share in the year-ago quarter. Return on common stockholders'
equity was 16.6%.
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<CAPTION>
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FIRST CHICAGO NBD KEY RATIOS
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1st Qtr., 1996 4th Qtr., 1995* 1st Qtr., 1995
<S> <C> <C> <C>
Earnings per common share $1.03 $0.96 $0.99
Return on common equity 16.6% 15.4% 17.7%
Return on assets 1.13% 1.02% 1.16%
Adjusted net interest margin 4.23% 3.93% 3.96%
Operating efficiency 53.8% 54.0% 56.3%
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*operating results
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HIGHLIGHTS
. The Corporation has made significant progress toward its target of reducing
securities and short-term assets by $25 billion. As of March 31, 1996,
asset reductions totaled almost $12 billion for those targeted asset
categories, compared with the related average balance for the first half of
1995.
. During the first quarter, the Corporation completed an important merger
objective of consolidating its international network under The First
National Bank of Chicago. First Chicago NBD now has 14 offices in 11
countries outside the United States.
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. Managed credit card outstandings were $17.3 billion at quarter-end,
compared with $13.0 billion at March 31, 1995, and $17.5 billion at year-
end 1995. The securitized portion of the managed portfolio was $7.6 billion
at the end of the first quarter. The net charge-off rate for the managed
portfolio increased to 4.8%, versus 4.4% in the fourth quarter and 3.8% one
year ago.
. Tier 1 and total risk-based capital ratios were approximately 8.0% and
12.2%, respectively, at quarter-end. These ratios remain significantly
higher than the "well-capitalized" regulatory guidelines.
. Book value per common share was $25.70 at March 31, up from $23.54 in the
year-ago quarter and $25.25 at year-end 1995.
NET INTEREST INCOME
NET INTEREST INCOME on a tax-equivalent basis was $913 million, up 12% from
the year-ago quarter. AVERAGE LOANS increased to $63.8 billion from $56.1
billion in the 1995 first quarter. Growth in both the credit card and regional
banking businesses accounted for much of this increase. AVERAGE EARNING ASSETS
were $104.6 billion for the quarter.
NET INTEREST MARGIN on a reported basis was 3.51%, versus 3.22% one year
ago and 3.23% in the fourth quarter. Adjusting for credit card securitizations
and the activities of First Chicago Capital Markets, Inc., net interest margin
was 4.23% for the quarter, compared with 3.96% in the 1995 first quarter and
3.93% in the fourth quarter.
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NONINTEREST INCOME
NONINTEREST INCOME for the first quarter was $626 million, an increase of
4% over the $603 million year-ago figure.
MARKET-DRIVEN REVENUE of $107 million was down slightly from a year
earlier. The decline in TRADING PROFITS to $36 million was mostly attributable
to lackluster performance in foreign exchange. EQUITY SECURITY GAINS were $49
million and INVESTMENT SECURITIES gains were $22 million for the quarter.
FIDUCIARY AND INVESTMENT MANAGEMENT FEES were $100 million, CREDIT CARD
FEES were $207 million, and SERVICE CHARGES AND COMMISSIONS were $189 million in
the first quarter.
NONINTEREST EXPENSE
NONINTEREST EXPENSE was $828 million for the first quarter, up 4% from the
year-ago quarter but essentially flat with fourth-quarter operating levels. The
Corporation expects to realize at least $200 million in merger-related cost
savings by the end of 1997. Furthermore, at least half of the total savings are
anticipated in 1996.
CREDIT QUALITY
THE PROVISION FOR CREDIT LOSSES was $175 million, up substantially from the
1995 first quarter due to growth in credit card receivables and charge-offs. The
provision related to the commercial portfolio equaled $39 million, while the
consumer portion was $136 million.
THE ALLOWANCE FOR CREDIT LOSSES was $1.4 billion at March 31, representing
354% of total nonperforming loans. The allowance related to credit card
outstandings was
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approximately $342 million. In addition, reserves of approximately $277 million
were held on the balance sheet for securitized credit card assets.
TOTAL NET CHARGE-OFFS in the first quarter were $145 million, of which $97
million was related to credit card receivables. Net charge-offs on the
securitized credit cards were $109 million. The net charge-off rate for total
managed credit cards was 4.8% for the quarter, compared with 3.8% for the first
quarter of last year.
OTHER RECENT DEVELOPMENTS
. In the first quarter, the sale of the Ohio branch network to Fifth Third
Bancorp generated an after-tax gain of $7.5 million.
. The Corporation's retail brokerage services were merged into First NBD
Investment Services during the first quarter. Additionally, the retail
mortgage businesses were combined into First Chicago NBD Mortgage Company.
. The Corporation announced the planned construction of a new credit card
facility in Springfield, Missouri, scheduled for occupancy in mid-1997.
This location will be the fifth operating site for the rapidly growing
credit card business.
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First Chicago NBD Corporation and Subsidiaries
Comparative Summary
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Three Months Ended March 31
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(Dollars in millions, except per share data) 1996 1995 Change
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<S> <C> <C> <C>
Net interest income--tax-equivalent basis....................... $ 913 $ 815 + 12%
Provision for credit losses..................................... 175 85 -
Noninterest income.............................................. 626 603 + 4
Noninterest expense............................................. 828 799 + 4
Net income...................................................... 340 336 + 1
Earnings per share
Primary
Net income................................................. $ 1.04 $ 1.01 + 3
Average common and common-equivalent shares (in millions).. 319.2 324.1 - 2
Fully diluted
Net income................................................. $ 1.03 $0.99 + 4
Average shares, assuming full dilution (in millions)....... 326.2 331.2 - 2
Average balances
Loans......................................................... $ 63,790 $ 56,127 + 14%
Earning assets................................................ 104,629 102,771 + 2
Total assets.................................................. 120,708 117,172 + 3
Common stockholders' equity................................... 8,053 7,458 + 8
Stockholders' equity.......................................... 8,543 8,069 + 6
Net interest margin............................................. 3.51 % 3.22 % + 9%
Return on assets................................................ 1.13 1.16 -
Return on common stockholders' equity........................... 16.6 17.7 - 6
At March 31
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1996 1995 Change
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Assets.......................................................... $115,465 $119,915 - 4%
Loans........................................................... 64,253 57,744 + 11
Deposits........................................................ 64,243 63,752 + 1
Common stockholders' equity..................................... 8,135 7,548 + 8
Stockholders' equity............................................ 8,624 8,159 + 6
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<CAPTION>
FIRST CHICAGO NBD CORPORATION
CAPITAL DATA
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3/31/96 12/31/95 9/30/95 6/30/95 3/31/95
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<S> <C> <C> <C> <C> <C>
Common Equity/Assets Ratio (1)................... 7.3% 6.9% 6.8% 6.7% 6.7%
Risk-Based Capital Ratios: (1)(2)................
Tier 1........................................ 8.0% 7.8% 8.2% 8.5% 8.4%
Total......................................... 12.2% 11.8% 12.4% 12.8% 12.7%
Leverage Ratio (1)(2)............................ 7.3% 6.9% 6.9% 7.0% 7.3%
Book Value of Common Equity...................... $25.70 $25.25 $24.96 $24.25 $23.54
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(1) Net of investment in First Chicago Capital Markets, Inc.
(2) 3/31/96 ratios are estimated.
