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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 14, 1997
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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 14, 1997 By: /s/ Robert A. Rosholt
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Title: Executive Vice President and
Chief Financial Officer
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Attachment A
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CHICAGO, April 14, 1997 -- First Chicago NBD Corporation today reported
record net income of $380 million, or $1.17 per fully diluted common share, for
the first quarter of 1997. Net income for the year-ago quarter was $340 million,
or $1.03 per share. Return on common stockholders' equity was 17.8%, compared
with 16.6% a year ago.
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First Chicago NBD Key Ratios
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1st Qtr. 1997 4th Qtr. 1996 1st Qtr. 1996
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<S> <C> <C> <C>
Earnings per common share $1.17 1.14 1.03
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Return on common equity 17.8% 17.2 16.6
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Return on assets 1.47% 1.46 1.13
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Adjusted net interest margin 4.73% 4.64 4.23
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Operating efficiency 50.4% 51.2 53.8
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HIGHLIGHTS
. Adjusted net interest margin was a record 4.73% for the quarter, an
increase of 50 basis points from a year ago and 9 basis points from the
fourth quarter.
. Market-driven revenues totaled $107 million for the quarter, a substantial
improvement from the previous two quarters. Combined trading profits were
$28 million, and total equity and investment securities gains were $79
million.
. Credit card fees grew 45% from a year ago on a presecuritized basis. All
other fee-based revenue increased 10%.
. Operating expenses totaled $800 million for the quarter, compared with $828
million for the year-ago quarter and $813 million for the fourth quarter of
1996.
. Commercial credit quality continued to be excellent, with nonperforming
assets of $285 million at March 31, 1997, or 0.4% of total loans and other
real estate.
. The Corporation bought 7.7 million shares of its common stock during the
first quarter, for a total of 15.1 million shares repurchased since October
1996. Remaining authorization under the current stock repurchase program is
24.9 million shares.
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. Tier 1 and total risk-based capital ratios were 9.0% and 13.1%,
respectively, at March 31, 1997. During the quarter, the Corporation issued
$250 million of trust preferred securities, which qualify as tax-advantaged
Tier 1 capital. Additionally, the Corporation redeemed its Series B
Convertible Preferred Stock on April 1, 1997. Book value per common share
was $27.20 at March 31, 1997, up from $25.70 one year ago.
NET INTEREST INCOME
Net interest income on a tax-equivalent basis was $907 million for the
first quarter, compared with $913 million in the year-ago quarter. Average
loans grew to $65.2 billion from $63.8 billion a year ago. Average credit card
receivables were $17.5 billion for the quarter, versus $17.2 billion for the
first quarter of 1996. Average earning assets were $89.4 billion for the
quarter ending March 31, 1997.
Net interest margin on a reported basis was 4.11% for the quarter. Adjusted
for credit card securitizations and the activities of First Chicago Capital
Markets, Inc., the net interest margin was 4.73% for the first quarter, versus
4.23% for the year-ago quarter and 4.64% for the fourth quarter.
NONINTEREST INCOME
Noninterest income was $679 million for the first quarter. Market-driven
revenue was $107 million. Equity securities gains were $54 million, combined
trading profits totaled $28 million, and investment securities gains were $25
million.
Credit card fee revenue was $234 million, up from $207 million a year ago.
Adjusted to exclude the effect of securitization, credit card fees were $199
million for the quarter, compared with $137 million a year ago. Fiduciary and
investment management fees rose to $105 million, despite the 1996 decision to
exit the master trust and institutional custody business segments. Service
charges and commissions were $213 million for the first quarter.
NONINTEREST EXPENSE
Noninterest expense was $800 million for the first quarter, compared with
operating expense of $828 million for the year-ago quarter. The first-quarter
operating efficiency ratio was 50.4%, compared with 53.8% a year ago.
CREDIT QUALITY
The provision for credit losses was $187 million for the first quarter,
versus $175 million for the year-ago quarter and $190 million for the fourth
quarter of 1996.
The allowance for credit losses stood at $1.408 billion at March 31,
representing 548% of total nonperforming loans.
Net charge-offs for the first quarter totaled $187 million, of which $157
million was
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related to credit card receivables. The net charge-off rate for managed credit
card receivables was 7.4% for the first quarter, up from 4.8% a year ago and
6.7% for the fourth quarter. The 30-day delinquency ratio for managed credit
card receivables was 4.4% at quarter-end, versus 3.6% one year ago and 4.5% at
year-end 1996.
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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) 1997 1996 Change
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<S> <C> <C> <C>
Net interest income--tax-equivalent basis................................................ $ 907 $ 913 - 1 %
Provision for credit losses.............................................................. 187 175 + 7
Noninterest income....................................................................... 679 626 + 8
Noninterest expense...................................................................... 800 828 - 3
Net income............................................................................... 380 340 + 12
Earnings per share
Primary
Net income.......................................................................... $1.18 $1.04 + 13
Average common and common-equivalent shares (in millions)........................... 316.5 319.2 - 1
Fully diluted
Net income.......................................................................... $1.17 $1.03 + 14
Average shares, assuming full dilution (in millions)................................ 320.8 326.2 - 2
Average balances
Loans.................................................................................. $ 65,177 $ 63,790 + 2 %
Earning assets......................................................................... 89,352 104,629 - 15
Total assets........................................................................... 105,133 120,708 - 13
Common stockholders' equity............................................................ 8,517 8,053 + 6
Stockholders' equity................................................................... 8,936 8,543 + 5
Net interest margin...................................................................... 4.11 % 3.51 % + 17 %
Return on assets......................................................................... 1.47 1.13 + 30
Return on common stockholders' equity.................................................... 17.8 16.6 + 7
At March 31
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1997 1996 Change
Assets................................................................................... $ 109,133 $ 115,465 - 5 %
Loans.................................................................................... 66,536 64,253 + 4
Deposits................................................................................. 64,927 64,243 + 1
Common stockholders' equity.............................................................. 8,495 8,135 + 4
Stockholders' equity..................................................................... 8,785 8,624 + 2
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FIRST CHICAGO NBD CORPORATION
CAPITAL DATA
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3/31/97 12/31/96 9/30/96 6/30/96 3/31/96
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<S> <C> <C> <C> <C> <C>
Common Equity/Assets Ratio (1).............................. 7.9% 8.2% 8.1% 7.6% 7.3%
Risk-Based Capital Ratios: (1)(2)...........................
Tier 1.................................................... 9.0% 9.2% 8.4% 8.1% 8.1%
Total..................................................... 13.1% 13.3% 12.4% 12.2% 12.3%
Leverage Ratio (1)(2)....................................... 9.2% 9.3% 8.1% 7.6% 7.3%
Book Value of Common Equity................................. $27.20 $27.31 $27.11 $26.31 $25.70
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(1) Net of Investment in First Chicago Capital Markets, Inc.
(2) 3/31/97 ratios are estimated.
