BankBoston reports third quarter net income of $197 million before special items or $1.21 per share.

BOSTON--(BUSINESS WIRE)--Oct. 17, 1996--

15 percent growth in EPS from prior year; Raises cost

savings target from BayBanks integration to $230 million

Reporting combined results for the first time since the July 29 completion of its acquisition of BayBanks, BankBoston began to demonstrate the earnings power of the new entity. Record core earnings showing double-digit growth from the prior year were founded on continuing improvements in returns and operating efficiency, strong loan growth and sustained quarterly growth in operating income.

Highlights of the Third Quarter

--Record Earnings: Core net income (excluding special items) for the quarter was $197 million, or $1.21 per common share, up 13 percent for net income and 15 percent for EPS from the prior year.

--Superb Top-Line Growth: Operating income increased 11% from a year ago, reflecting favorable results from a diversified revenue stream and double-digit growth in fee income. Earnings momentum is being led by a number of domestic and global growth businesses, especially Latin America.

--Excellent Returns: Return on average common equity (ROE) was 17.6 percent, up 80 basis points in the last year.

Integration with BayBanks is proceeding very well. The corporation raised its cost-savings estimates from $190 million to $230 million. Related to this, the corporation incurred a $180 million restructuring and merger-related charge in the third quarter.

Other highlights of the quarter included: --Appointment of Henrique de Campos Meirelles as President and Chief Operating Officer of the company and consolidation of all line businesses under him, part of a realignment of the executive management. --Adoption of a new global brand identity, BankBoston, and the beginning of coordinated advertising featuring the benefits of the merger with BayBanks to customers. --Awarding of performance-based stock options to employees worldwide, as part of its effort to align employee and shareholder interests.

Bank of Boston Corporation (BankBoston; NYSE:BKB) reported today third quarter net income of $197 million, or $1.21 per common share on a fully diluted basis, before special items. This compares with $188 million, or $1.15 per share, in the second quarter of 1996 and $175 million, or $1.05 per share, in the third quarter of 1995. These operating results reflect the acquisition of BayBanks, which was consummated on July 29, 1996. The acquisition has been accounted for using the pooling of interests method of accounting and, accordingly, all prior period results have been restated to include the historical results of BayBanks.

Actual net income was $80 million, or $.45 per share, on a fully diluted basis, in the third quarter of 1996, compared with $214 million, or $1.32 per share, in the second quarter of 1996 and $175 million, or $1.05 per share, in the third quarter of 1995. The third quarter of 1996 included a charge for restructuring and merger-related costs of $180 million ($117 million after-tax) related to the BayBanks acquisition. The Corporation also raised its estimate of the cost savings it expects to achieve in connection with the BayBanks integration to $230 million. The major systems and branch conversions are expected to be completed by the middle of next year with full realization of these savings to occur by the latter half of 1997. The cost savings and the charge for restructuring and merger-related costs each represent increases of $40 million from the original estimates that were announced in December, 1995. The second quarter of 1996 included a $46 million gain ($28 million after-tax) related to the sale of the Corporation's mortgage banking subsidiary, and a $4 million charge ($2 million after-tax) associated with the accelerated vesting of restricted stock for certain BayBanks employees.

Net income for the first nine months of 1996 was $571 million, or $3.48 per share, before special items compared with net income of $498 million, or $3.00 per share, for the first nine months of 1995. Actual net income for the first nine months of 1996 was $449 million, or $2.69 per share, compared with $498 million, or $3.00 per share, for the first nine months of 1995.

Third quarter operating highlights were as follows (amounts shown are before special items):

-- Total revenues increased to $933 million on a fully taxable equivalent basis, compared with $913 million in the prior quarter and $880 million in the third quarter of 1995;

-- On a fully taxable equivalent basis, operating income (before credit costs) increased to $405 million in the third quarter, compared with $386 million in the prior quarter and $364 million in the third quarter of 1995;

-- Return on average common equity improved to 17.56% in third quarter, compared with 17.19% in the prior quarter and 16.75% in the third quarter of 1995. Return on average assets was 1.31% in the third quarter, 1.29% in the prior quarter and 1.22% in the third quarter of 1995;

-- Net credit losses were $55 million in the third quarter, compared with $49 million in the prior quarter and $45 million in the third quarter of 1995. The provision for credit losses was $57 million in the third and second quarters of 1996 compared with $51 million in the third quarter of 1995. Nonaccrual loans and OREO totaled $496 million at September 30, 1996, compared with $460 million at June 30, 1996 and $494 million at September 30, 1995;

-- Operating ratio was 56.6% in the third quarter of 1996 compared with 57.7% in the prior quarter and 58.7% in the third quarter of 1995.

Charles K. Gifford, Chief Executive Officer said, "We are enthused by the performance of our growth businesses which has enabled us to sustain double digit earnings growth. The third quarter began a new and exciting chapter in the history of our company with the addition of BayBanks. The integration efforts are proceeding very well. The increase in our cost savings estimate reflects our commitment to extract the maximum efficiencies and financial benefits from the combination. More importantly, this merger is all about expanding our customer base and creating the premier consumer franchise in our region. With the addition of Bill Crozier and the very capable BayBanks team, we are driving a brand identity in both our local and global markets. In addition, the recent appointment of Henrique de Campos Meirelles as President and Chief Operating Officer provides us with an individual with outstanding leadership skills and global banking experience who will direct our business activities."

Gifford added, "Our focus on value creation is as steadfast as ever. We constantly analyze each of our businesses in the context of competitive advantages, industry dynamics and growth potential. Only in this manner can we deploy capital as productively as possible and generate superior returns for our shareholders. This year we have awarded performance based stock options to every one of our employees worldwide to ensure that our interests are aligned with those of our owners."

William J. Shea, Vice Chairman and Chief Financial Officer, said, "We remain encouraged by our ongoing quarterly earnings improvement. The 15% growth in earnings per share over the past year reflects strong top line performance as demonstrated by the 11% increase in operating income. Our efforts to invest in our highest potential businesses are paying off. At the same time, our disciplined approach to balance sheet and expense management continues to drive improvement in returns and operating efficiency. In the past quarter, ROE increased by nearly 40 basis points and our operating ratio improved by over 100 basis points. As we enter a new phase with BayBanks, we look forward to carrying on our momentum."

Noninterest income

    The components of noninterest income are as follows:


Second
Quarter
                                   Third Quarter        Nine Months
1996  (in millions)              1996  1995  Change  1996  1995  Change

$135  Financial service fees     $140  $162   $(22)  $438  $465  ($27)
      Net equity and mezzanine
  77     profits                   51    25     26    165    65   100
  23  Mutual fund fees             24    18      6     69    48    21
  33  Personal trust fees          32    29      3     97    84    13
   6  Other trust and agency fees   6    18    (12)    15    54   (39)
      Trading profits and
  25     commissions               21     7     14     59    16    43
      Foreign exchange trading
  12     profits                   13    16     (3)    37    45    (8)
      Securities portfolio
   3     gains, net                 7     1      6     24     7    17
      Gain on sale of mortgage
   0     servicing                 13     6      7     13    10     3
  23  Other income                 30    24      6     93    73    20
$337  Subtotal                   $337  $306    $31  $1,010  867  $143
  46  Special items, net            0     0      0    (5)    75   (80)
$383  Total                      $337  $306    $31  $1,005  $942  $63

-- Changes in financial service fees are detailed below. The reduction from prior year periods was greatly influenced by the sale of the Corporation's mortgage banking subsidiary.

-- Equity and mezzanine profits continued strong, although down from the unusually high level attained in the second quarter. The higher level of realized profits compared with prior year periods is primarily due to a seasoning of the portfolio and favorable market conditions. The portfolio has been steadily growing and new investment activity in 1996 is expected to be about 50% above last year.

-- The increase in mutual fund fees compared with all prior periods was mainly due to higher levels of funds under management in Brazil. These funds stood at $3.5 billion at September 30, 1996 compared with $2.1 billion at September 30, 1995.

-- The comparisons with prior year periods for other trust and agency fees are mainly affected by the sale of the Corporation's corporate trust business and the movement of its stock transfer business into a joint venture.

-- Trading account profits and commissions declined from the second quarter due to a lower level of profits from Latin America. Compared with prior year periods, trading account profits and commissions improved significantly, mainly due to increases from the Corporation's capital markets areas and Latin American units.

-- Foreign exchange profits declined from prior year periods reflecting lower profits from Asia.

-- The $13 million gain on the sale of mortgage servicing in the third quarter of 1996 resulted from the sale of BayBanks' $4 billion servicing portfolio to HomeSide Lending.

-- The $7 million increase in other income from the prior quarter reflects the absence of a second quarter loss on the sale of approximately $300 million of residential mortgages in connection with the Corporation's program to remove low return assets from the balance sheet and a change in Chile's hedging strategy that yielded higher levels of noninterest income and lower levels of net interest revenue in the third quarter. Compared with the prior year, other income increased due, in part, to higher profits from various joint ventures, including those related to HomeSide Lending, Boston EquiServe (stock transfer business), and the Argentine pension management business.

The components of financial service fees are as follows:

Second
Quarter
                                   Third Quarter        Nine Months
1996  (in millions)             1996  1995  Change  1996  1995 Change
      Deposit and
$ 59    ATM-related fees        $ 61  $ 58   $  3   $180  $173   $  7
      Letters of credit
  16    and acceptance fees       18    18      0     51    55     (4)
  13  Syndication and agent fees  14    12      2     36    26     10
   8  Other loan-related fees      9     8      1     28    25      3
      Net mortgage servicing
        fees (before special
   4    items)                     3    25    (22)    29    76    (47)
  35  Other                       35    41     (6)   114   110      4
$135  Total                     $140  $162   $(22)  $438  $465   $(27)

-- Letter of credit and acceptance fees increased $2 million from the second quarter mainly due to higher fees earned by domestic commercial banking businesses.

-- The increases in syndication and agent fees from all prior periods reflect a higher volume of transactions generated by the Corporation's corporate finance business.

-- The declines in net mortgage servicing fees from prior year periods reflect the sale of the Corporation's mortgage banking subsidiary. Fees in the second and third quarters of 1996 relate to the BayBanks portfolio, which was sold to HomeSide Lending during the third quarter.

Special items included in noninterest income are composed of the
following:

Second
Quarter
                                   Third Quarter        Nine Months
1996  (in millions)             1996  1995  Change  1996  1995  Change
      Mortgage banking-related
        gains/losses:
      Sale of mortgage
$ 46    subsidiary             $  0   $  0   $  0  $ 106   $ 0  $ 106
      Contracts used to
        manage prepayment
   0    risk, net                 0      0      0  (111)     0   (111)
  46  Total                       0      0      0    (5)     0     (5)
      Gain on sale of
   0    banking subsidiaries      0      0      0     0     75    (75)
$ 46  Total                    $  0    $ 0   $  0   $(5)   $75   $(80)

-- During the first quarter of 1996 the Corporation recorded a net pre-tax loss of $51 million from mortgage banking-related special items. As a result of the first quarter's rising rate environment, a loss of $111 million, or $70 million after-tax, (net of decreased servicing amortization) was recorded from the change in market value of contracts used to manage prepayment risk in the mortgage servicing portfolio. In addition, the Corporation recognized a gain of $60 million, or $39 million after-tax, from the sale of its mortgage banking subsidiary to two equity investment firms. The second phase of this transaction was completed in the second quarter and resulted in an additional gain of $46 million, or $28 million after-tax. The Corporation now owns a 33% interest in HomeSide Lending, which ranks among the country's largest mortgage banking companies with a servicing portfolio of $86 billion.

-- The Corporation recognized a $75 million gain in the first quarter of 1995 from the sale of its Maine and Vermont banking subsidiaries.

Net interest revenue

Net interest revenue, on a fully taxable equivalent basis, was $596 million for the third quarter of 1996, compared with $576 million in the prior quarter and $574 million in the third quarter of 1995. Net interest margin was 4.40% for the third and second quarters of 1996 compared with 4.53% in the third quarter of last year. For the first nine months of 1996, net interest revenue, on a fully taxable equivalent basis, was $1,744 million, compared with $1,689 million in the first nine months of 1995. Net interest margin was 4.40% for the first nine months of 1996, compared with 4.61% for the first nine months of 1995.

The $20 million increase in net interest revenue from the prior quarter reflected a $1.1 billion growth in average loan volume and a higher domestic margin. The latter was mainly due to wider spreads from the credit card business, as the "promotional rate" period expired on a portion of the portfolio; the addition of $1.3 billion of retail deposits from the June 28 acquisition of Boston Bancorp; and a higher level of interest recoveries on loans. Partially offsetting these increases was a lower international margin which primarily resulted from narrower spreads in Latin America, including a change in Chile's hedging strategy that yielded lower levels of net interest revenue and higher levels of noninterest income in the third quarter.

Compared with the prior year periods, net interest revenue improved while net interest margin declined. These changes reflected a higher volume of average earning assets, a decline in the international margin and narrower domestic spreads. The latter was caused, in part, by the aggressive marketing of a new higher-rate savings deposit product during 1995, competitive pricing pressures and the introduction of a "promotional rate" credit card product in late 1995.

Noninterest expense
The components of noninterest expense are as follows:

Second Quarter


                                   Third Quarter        Nine Months
1996  (in millions)            1996  1995  Change  1996  1995  Change
$289  Employee costs           $293  $298  $ (5)   $875  $857   $18
  84  Occupancy & equipment      85    82     3     254   242    12
  14  Professional fees          15    17    (2)     42    50    (8)
      Advertising and
  31    public relations         26    19     7      84    60    24
  25  Communications             24    24     0      74    66     8
   5  Goodwill amortization       7     5     2      17    13     4
   1  FDIC insurance premiums     0     3    (3)      1    36   (35)
  78  Other                      78    68    10     234   199    35
      Subtotal before
        BayBanks and
 527    OREO costs              528   516    12   1,581 1,523    58

      BayBanks-related costs:

      Restructuring and
   0  merger-related costs      180    0    180     180    0    180
      Accelerated vesting of
   4  restricted stock            0    0      0       4    0      4
   1  OREO costs                  5    2      3       7    8     (1)
$532  Total                    $713  $518  $195  $1,772  $1,531  $241

Noninterest expense before BayBanks-related and OREO costs, was $528 million in the third quarter of 1996, compared with $527 million in the prior quarter and $516 million for the same quarter in 1995.

Noninterest expense was fairly flat with the second quarter of 1996 as declines associated with cost savings from the integration of BayBanks into the Corporation and lower advertising expense were offset by an increase from the June 28 acquisition of Boston Bancorp, as well as higher levels of expenses in the capital markets and Latin American businesses. The latter included expenses related to the opening of a new branch in Peru and a pension company in Uruguay.

Compared with prior year periods, the growth in noninterest expense reflected ongoing expansion and investment spending in several of the Corporation's growth businesses, mainly Latin America, capital markets, and retail banking, as well as an increase in consumer finance. Initiatives in the growth businesses included: branch expansion and growth in fee-based businesses in Latin America; start up of a high yield debt unit and the hiring of sales and trading professionals in all the capital markets businesses and the acquisition of Boston Bancorp in retail banking. The increase in consumer finance was due, in part, to marketing campaigns related to credit card, home equity and other products. Current year expense levels also included higher incentive compensation costs related to improved business unit performance. The comparison of noninterest expense with prior year periods is also affected by the absence of operating expenses associated with the mortgage banking business, which was sold in March, 1996, the absence of expenses from the corporate trust and stock transfer businesses, and the elimination of FDIC insurance premiums.

Total staff levels declined by about 7%, or 1,600, from September 1995 principally due to the mortgage banking transaction, the joint venture of the stock transfer business, and the BayBanks integration.

In connection with the acquisition of BayBanks, the Corporation estimates that it will achieve $230 million of annualized cost savings from the integration. The integration process is proceeding within the regional and corporate banking businesses, as well as in various systems and support areas. The major systems and branch conversions are expected to be completed by the middle of next year with full realization of the cost savings to occur by the latter half of 1997. During the third quarter of 1996, the Corporation recorded a $180 million ($117 million after-tax) charge for restructuring and merger-related costs associated with the acquisition of BayBanks. Included in this charge were employee-related severance and property-related costs; professional fees and other costs of effecting the merger; and systems and other conversion costs which occurred during the third quarter.

OREO expense increased $4 million from the second quarter mainly due to a writedown on one property.

Credit Profile
Loan and Lease Portfolio
  The segments of the lending portfolio are as follows:
(in millions)              9-30-96  6-30-96  3-31-96  12-31-95 9-30-95
United States Operations:
  Commercial, industrial
    and financial          $13,828 $12,915   $12,677  $12,809  $13,162
  Commercial real estate
    Construction               323     410       383      386      460
    Other commercial
     real estate             3,228   3,326     3,242    3,393    3,340
  Consumer-related loans:
    Residential mortgages    4,156   4,133     4,218    4,141    5,244
    Home equity loans        2,842   2,775     2,644    2,556    2,455
    Credit card              1,320   1,223       810      495      369
    Other                    5,349   5,218     5,200    5,059    4,820
  Lease financing            1,778   1,627     1,565    1,564    1,510
  Unearned income            (272)   (245)     (240)    (240)    (238)
                            32,552  31,382    30,499   30,163   31,122
International Operations:
  Loans and lease
    financing, net of
    unearned income          9,501   9,271     8,769    8,707    8,066
Total loans and lease
 financing                 $42,053 $40,653   $39,268  $38,870  $39,188

Loans and leases grew $1.4 billion from June 30, 1996 driven mainly by a $913 million increase in the domestic commercial and industrial loan portfolio due to increases in several portfolios including specialized industries, New England corporate banking and asset based lending. In addition, domestic consumer loans grew $318 million reflecting increases in the credit card, home equity and Ganis Credit Corp. portfolios, while the $230 million increase in the international portfolio reflected ongoing growth from Latin America, primarily in Brazil and Argentina.

Nonaccrual Loans and OREO

Nonaccrual loans and OREO amounted to $496 million at September 30, 1996, compared with $460 million at June 30, 1996, and $494 million at September 30, 1995. Nonaccrual loans and OREO represented 1.2% of related assets at September 30, 1996, compared with 1.1% at June 30, 1996 and 1.3% at September 30, 1995. The growth in nonaccrual loans and OREO from June 30 includes the placement of one large international loan on nonaccrual status and an increase resulting from conforming BayBanks consumer loan nonaccrual policies to those of the Corporation.

The components of consolidated nonaccrual loans and OREO are as
follows:

(in millions)             9-30-96  9-30-96  3-31-96  12-31-95  9-30-95
Domestic nonaccrual
  loans:
  Commercial, industrial
   and financial          $114      $140      $93       $88     $120
  Commercial real estate
    Construction             9        10       22        25       23
    Other commercial
      real estate           84        86      102       103      110
  Consumer-related loans
    Residential mortgages   60        45       46        42       43
    Home equity loans       22        20       16        14       17
    Credit card              5         2        0         0        0
    Other                   44        38       42        35       31
                           338       341      321       307      344
International
  nonaccrual loans         106        57       63        66       69
  Total nonaccrual loans   444       398      384       373      413
OREO                        52        62       65        69       81
  Total                   $496      $460     $449      $442     $494

Provision and Reserve for Credit Losses

The reserve for credit losses at September 30, 1996 was $897 million, or 2.13% of outstanding loans and leases, compared with $894 million, or 2.20% at June 30, 1996, and $858 million, or 2.19% at September 30, 1995. The reserve for credit losses was 202% of nonaccrual loans at September 30, 1996, 225% at June 30, 1996, and 208% at September 30, 1995.

The provision for credit losses was $57 million for the third and second quarters of 1996, compared with $51 million for the third quarter of last year. For the first nine months of 1996, the provision for credit losses was $171 million, compared with $194 million in the previous year, which included a special provision of $50 million.

Net credit losses were $55 million for the third quarter of 1996, compared with $49 million for the prior quarter and $45 million for the comparable period last year. The increase from the second quarter was due, in part, to conforming BayBanks consumer loan chargeoff policies to those of the Corporation. Net credit losses as a percent of average loans and leases on an annualized basis were .53% in 1996's third quarter, compared with .49% for the second quarter of 1996 and .46% for the third quarter of 1995.

Net credit losses were as follows:

Second Quarter
                                   Third Quarter        Nine Months
1996   (in millions)               1996    1995         1996   1995
       Domestic
       Commercial, industrial
$ 3      and financial              $ 0     $ 6          $ 5   $ 24
  2    Commercial real estate         1       4           15     27
       Consumer-related loans:
  2    Residential mortgages          2       5            9     14
  4    Credit card                    7       3           14      8
  1    Home equity loans              0       3            4      4
 27    Other                         35      12           83     33
 39                                  45      33          130    110
 10   International                  10      12           25     35
$49   Total                         $55     $45         $155   $145

The Corporation

BankBoston, with assets of $62.0 billion, is a focused financial institution engaged primarily in commercial and consumer banking in southern New England, providing financing to selected corporations and individuals nationally and internationally, and full-service banking in Latin America. New England's only global bank, the Corporation and its subsidiaries operate through a network of 650 offices in the U.S. and through more than 100 offices in 24 countries in Latin America, Europe and Asia, the third largest overseas network of any U.S. bank. The Corporation's common and preferred stocks are listed on the New York and Boston stock exchanges.

                    Consolidated Balance Sheet

(dollars in millions)
June 30                                          September 30
   1996                                        1996        1995
          Assets
           Securities:
$   686     Held to maturity                $   685    $  3,944
  8,459     Available for sale                7,413       3,619

 40,653   Loans and lease financing           42,053     39,188
   (894)  Reserve for credit losses            (897)      (858)
 39,759    Net loans and lease financing      41,156     38,330

  5,462   Other earning assets                 4,513      4,040
  8,021   Cash and other nonearning assets     8,196      7,626
$62,387    Total Assets                      $61,963    $57,559

         Liabilities and Stockholders' Equity
$43,494    Deposits                          $43,328    $39,624
  9,215    Funds borrowed                      9,250      9,473
  2,632    Notes payable                       2,846      2,109
  2,084    Other liabilities                   1,785      1,854
 57,425    Total Liabilities                  57,209     53,060

             Stockholders' Equity
    508   Preferred equity                       508        508
  4,454   Common equity                        4,246      3,991
  4,962   Total Stockholders' Equity           4,754      4,499
          Total Liabilities and
$62,387   Stockholders' Equity               $61,963    $57,559

                           Selected Average Balances

Quarter Ended                    Quarters Ended    Nine Months Ended
June 30                           September 30       September 30
1996                             1996      1995    1996        1995
         Assets
          Loans and lease
$40,114    financing           $41,223     $39,033  $40,176    $37,920
  8,065   Securities             8,249       7,468    8,153      7,342
 52,717   Total earning assets  53,924      50,265   52,941     48,985
 58,381   Total assets          60,049      56,712   59,010     55,053
         Liabilities and
          Stockholders' Equity
           Interest bearing
 34,233     deposits            35,432      31,980   34,408     31,305
           Noninterest bearing
  6,885     deposits             7,185       6,786    7,052      6,597
 41,118      Total deposits     42,617      38,766   41,460     37,902
  2,584    Notes payable         2,674       2,115    2,560      2,137
           Total interest
 45,099     bearing liabilities 46,407      43,715   45,515     42,498
           Common stockholders'
  4,180     equity               4,251       3,913    4,210      3,708
           Total stockholders'
  4,688     equity               4,759       4,421    4,718      4,216


                              Number of Employees

                                   Sept 30    June 30    Sept 30
                                      1996       1996       1995

Full time equivalent employees      22,600     22,700     24,200

Prior period results have been restated to give effect to the
Corporation's acquisition of BayBanks, Inc., completed on July 29,
1996 and accounted for as a pooling of interests.
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                     Consolidated Statement of Income

(dollars in millions, except per share amounts)

Quarters Ended                 Quarters Ended   Nine Months Ended
June 30                        September 30        September 30
  1996                       1996       1995       1996      1995

$1,202.5 Interest income    $1,199.5   $1,320.0    $3,642.3  $3,840.2
   631.0 Interest expense      608.1      750.4     1,913.9   2,164.4
         Net interest
   571.5   revenue             591.4      569.6     1,728.4   1,675.8
         Provision for
    57.1  credit losses         57.0       51.0       171.0     194.0
          Net interest revenue
            after provision for
   514.4     credit losses     534.4      518.6     1,557.4   1,481.8
         Noninterest income:
          Financial
   135.3   service fees        140.4      162.2       327.2     464.9
    61.9 Trust and agency fees  61.6       64.4       181.0     185.7
         Trading profits
    25.0  and commissions       20.7        7.2        58.6      15.7
         Securities portfolio
     3.4  gains, net             7.1         .8        24.0       7.2
   157.3 Other income          106.7       71.2       413.8     268.6
         Total noninterest
   382.9  income               336.5      305.8     1,004.6     942.1
         Noninterest expense:
   243.9  Salaries             244.2      245.9       728.9     703.6
    49.0  Employee benefits     49.1       52.2       150.4     153.1
    49.7  Occupancy expense     51.1       48.3       151.9     142.4
    33.9  Equipment expense     34.2       33.5       102.4      99.3
   154.6  Other expense        149.0      136.3       450.6     424.3
   531.1   Subtotal            527.6      516.2     1,584.2   1,522.7
         Acquisition-related
     0    expense              180.0          0       180.0         0
     1.1 OREO costs              4.8        1.7         7.4       7.7
          Total noninterest
   532.2   expense             712.4      517.9     1,771.6   1,530.4

         Income before
   365.1  income taxes         158.5      306.5       790.4     893.5
         Provision for
   151.3  income taxes          78.5      132.0       341.8     395.4
  $213.8 NET INCOME            $80.0     $174.5      $448.6    $498.1

         Net Income Per Common Share:

  $ 1.33 Primary                $.46      $1.06       $2.74     $3.07
  $ 1.32 Fully diluted          $.45      $1.05       $2.69     $3.00
         Dividends Paid
  $  .44 Per Common Share       $.44      $ .37       $1.25     $ .91

         Average number of common shares, in thousands:
 153,650 Primary             153,103    155,660     153,715   153,086
 155,183 Fully diluted       155,183    157,599     156,300   156,407

  $  9.3 Preferred dividends    $9.4       $9.4       $28.0     $28.1


Prior period results have been restated to give effect to the
Corporation's acquisition of BayBanks, Inc., completed on July 29,
1996 and accounted for as a pooling of interests.
-0-

                             Other Data

(dollars in millions, except per share amounts)


Quarter
Ended                          Quarters Ended       Nine Months Ended
June 30                          September 30          September 30
   1996                        1996        1995      1996       1995

       Earnings per share before special items-(a):

$ 1.16  Primary                $1.23     $1.06      $3.53      $3.07
$ 1.15  Fully diluted          $1.21     $1.05      $3.48      $3.00

       Return on average total assets (annualized):

 1.47%  Net income              .53%      1.22%      1.02%      1.21%
        Net income before
 1.29%   special items-(a)     1.31%      1.22%      1.29%      1.21%

       Return on average common equity (annualized):

19.68%  Net income             6.61%     16.75%     13.35%     16.95%
        Net income before
17.19%   special items-(a)    17.56%     16.75%     17.24%     16.95%

        -(a) Based on net income of $197.0 million in the
        third quarter of 1996, $187.9 million in the second
        quarter of 1996 and $174.5 million in the third
        quarter of 1995