Chase Manhattan Reports Third Quarter Results.
Business Editors
NEW YORK--(BUSINESS WIRE)--Oct. 18, 2000--The Chase Manhattan
Corporation (NYSE:CMB) today announced third quarter results.
Operating earnings: On an operating basis, which excludes special
items, diluted earnings per share for the third quarter of 2000 were
$0.68 per share, compared with $0.92 per share for the same 1999
period. Earnings in the 2000 third quarter were $905 million, compared
with $1.19 billion in the same quarter of 1999. On the same basis,
diluted earnings per share were $2.68 per share for the first nine
months of 2000, compared with $2.83 per share for the same period of
the prior year. Earnings in the first nine months of 2000 were $3.48
billion, compared with $3.71 billion for the first nine months of
1999.
Reported earnings: On a reported basis, which includes special
items, diluted earnings per share for the third quarter of 2000 were
$0.66 per share, compared with $0.92 per share for the same 1999
period. Net income in the 2000 third quarter was $884 million,
compared with $1.19 billion in the same quarter of 1999. On the same
basis, diluted earnings per share were $2.57 per share for the first
nine months of 2000, compared with $2.86 per share for the same period
of the prior year. Net income in the first nine months of 2000 was
$3.34 billion, compared with $3.75 billion for the first nine months
of 1999.
Third Quarter Highlights:
Earnings for the third quarter of 2000 were lower than last year's
third quarter results and lower than analysts' estimates primarily due
to lower income in Chase Capital Partners and to a lesser extent in
the Investment Bank:
-- In Chase Capital Partners, unrealized write-downs, primarily
due to price declines in publicly-held securities, more
than offset record realized (cash) gains of $538 million on
the sales of investments. (See page 7 for a comparison of the
corporation's key financial measures including and excluding
Chase Capital Partners for the current and previous quarters
of 2000 and those of 1999.)
-- In the Investment Bank, trading revenues and corporate finance
fees were up from the third quarter of 1999 but down from the
second quarter of 2000 due to lower market volatility and
trading volumes and a slowdown in leveraged finance. The
expense growth rate was high because of the buildup of the
investment banking platform.
Strengths during the third quarter of 2000 included:
-- Record earnings in Global Services, National Consumer Services
and Wealth Management.
-- Sound management of credit and market risk. Credit losses and
nonperforming assets in the quarter were lower than the
previous quarter and the year ago quarter. There were no days
in the third quarter in which Chase had a trading loss.
"While third quarter performance did not meet our expectations,
the results do not diminish the confidence we have in the growth
capacity of our businesses," said William B. Harrison, Jr., Chairman
and Chief Executive Officer. "Though the value of our private equity
investment portfolio may vary from quarter to quarter, we remain
firmly committed to Chase Capital Partners' with its ability to create
substantial long-term cash returns on investments. In addition, we are
focused on achieving a better balance of expense to revenue growth in
the Investment Bank. Across the franchise, our Global Services,
National Consumer Services and Wealth Management businesses achieved
record results, underscoring the importance of a diverse business
mix."
Merger Update:
On September 13, 2000, The Chase Manhattan Corporation and J.P.
Morgan & Co. Incorporated agreed to merge. The merged firm will be
named J.P. Morgan Chase & Co. The merger is expected to be consummated
by the first quarter of 2001. Since the merger was announced, the
following progress has been made:
-- Over 35 senior positions were named upon the announcement of
the merger; an additional 250 key positions will have been
announced by the end of this week.
-- The major U.S. regulatory applications have been filed; the
joint proxy statement was filed with the SEC on October 5.
-- Clients are reacting favorably to the proposed merger by
inviting Chase and J.P. Morgan to make joint pitches for
business; the two firms have won a number of joint investment
banking mandates as a result.
"Integration efforts have been proceeding swiftly," said Mr.
Harrison. "We have more evidence that the combined and complementary
product mix and client base of the new firm will promote growth
opportunities and business synergies ahead. We will have a broader and
more diversified wholesale banking platform, along with significant
opportunities to moderate investment spending and to improve operating
efficiencies."
Financial Information:
Third quarter 2000 results reflect the acquisitions of The Beacon
Group, LLC, on July 6, and Robert Fleming Holdings Limited on August
1.
INVESTMENT BANK
Operating revenues in the investment bank were $1.87 billion in
the third quarter of 2000, up 16 percent from $1.62 billion in the
third quarter of 1999. Cash operating earnings in the third quarter of
2000 were $384 million, down nine percent from $420 million in the
third quarter of 1999. A decline in shareholder value added during the
third quarter to $46 million reflected both the decline in cash
operating earnings and the higher equity allocated to the Investment
Bank as a result of the acquisition of Flemings.
-- Total trading revenues, including related net interest income,
were $680 million, compared with $679 million in the third
quarter of 1999 and $841 million in the second quarter of
2000. Gains in fixed income trading were offset by declines in
foreign exchange and interest rate derivatives due to slower
trading activity and an overall decline in market volatility,
which adversely affected the flows and spreads of those
businesses.
-- Investment banking fees were $613 million, up 26 percent from
third quarter 1999 levels, and down from $639 million in the
second quarter of 2000. Growth in fees from merger and
acquisition advisory services and equity underwriting was
partially offset by lower fees from loan syndication and high
yield bond underwriting due to a slowdown in the leveraged
lending markets.
-- Cash expenses of $1.26 billion in the third quarter of 2000
were up 47 percent from the 1999 third quarter, and up from
$1.06 billion in the second quarter of 2000. Increases were
driven by acquisitions and spending to build up the investment
banking platform.
CHASE CAPITAL PARTNERS
Private equity gains in the third quarter of 2000 were negative
$25 million, compared with gains of $377 million in the same 1999
quarter and $298 million in the second quarter of 2000. Gains included
cash realized from the sale of both private and public securities that
were held in the portfolio and the unrealized change in the value of
investments held in the portfolio, primarily publicly traded
securities. Realized (cash) gains on the sale of securities in the
third quarter of 2000 were $538 million, more than double the amount
of cash gains realized in the third quarter of 1999. These gains were
more than offset by declines in the carrying values of investments
(primarily in telecommunications) in the publicly held portion of the
portfolio. Despite these declines, the current carrying value of the
investments in the publicly traded portfolio is approximately 2.6
times their original cost. Approximately 80 percent of the carrying
value of the Chase Capital Partners' portfolio consist of
privately-held securities.
GLOBAL SERVICES
In the third quarter of 2000, Global Services' operating revenues
increased nine percent over the third quarter of 1999 to $875 million,
reflecting increased activity in its securities businesses. Cash
operating earnings for Global Services for the third quarter of 2000
were up 24 percent compared with the third quarter of 1999.
Shareholder value added increased to $93 million, an 82 percent
increase over the prior-year quarter.
Operating revenues in Global Investor Services (custody) increased
14 percent from last year, reflecting net asset growth and higher
transaction volume and net interest income, partially offset by a
decline in foreign exchange revenue. Capital Markets Fiduciary
Services' (institutional trust) operating revenues increased 20
percent from last year primarily in structured finance in the U.S. and
U.K. Chase Treasury Solutions' (cash management) operating revenues
increased two percent over the 1999 third quarter, driven by higher
product revenues across all products and higher balances, partially
offset by the repositioning of the trade finance business. Operating
leverage continues to improve, with expenses growing at a slower rate
than revenues.
WEALTH MANAGEMENT
Chase's wealth management businesses include private banking and
asset management.
-- Revenues from the Global Private Bank increased to $305
million, up 36 percent from the third quarter of 1999. These
results reflect broad-based global growth. Cash operating
earnings grew 16 percent compared with the prior year. As of
September 30, the Global Private Bank had over $180 billion in
client assets.
-- Revenues from Asset Management increased to $165 million,
compared with $43 million in the third quarter of 1999.
Results include revenues from Flemings. As of September 30,
assets under management were $182 billion.
NATIONAL CONSUMER SERVICES
Operating revenues for National Consumer Services increased to
$2.6 billion, an increase of three percent over the third quarter of
1999. Cash operating earnings of $492 million increased by 13 percent
over the third quarter of 1999. All five businesses reported
double-digit earnings growth.
-- Cash operating earnings for cardmember services for the third
quarter of 2000 were up 14 percent compared with the third
quarter of 1999, reflecting significantly improved credit
quality. Operating revenues were essentially flat from the
prior year and up six percent from the second quarter of 2000,
as higher consumer purchase volume and higher fee-based
revenues offset the impact of higher interest rates and a
lower level of late fees. Expenses were up reflecting the
impact of higher marketing spending. New account acquisitions
were significantly higher, and credit card outstandings were
up over $1 billion from the second quarter of this year.
-- Home finance cash operating earnings were up 21 percent, and
revenues increased 13 percent, from the third quarter of 1999.
The improved results were due to growth in servicing fee
income and gains on securities to hedge mortgage servicing,
partially offset by declines in residential mortgage warehouse
activity.
-- Regional banking group cash operating earnings grew 36
percent, and revenues rose seven percent, from the third
quarter of 1999, reflecting higher deposit levels in the
consumer and small business sector, higher banking, debit
card, and brokerage fee income and disciplined expense
management.
-- Diversified consumer services cash operating earnings were up
24 percent, and revenues increased five percent from the same
1999 quarter. Income growth was positively affected by a
change in internal cost allocation as well as improving auto
origination volumes and growth in the discount brokerage
business, which was partially offset by the effect of higher
interest rates. Brown & Co., Chase's online trading business,
averaged over 41,000 trades per day during the third quarter
of 2000 versus 32,000 trades per day during the same period of
1999.
-- Middle markets cash operating earnings were up 13 percent and
revenues increased four percent from the third quarter of
1999. These results reflect new business and disciplined
expense management.
ADDITIONAL FINANCIAL INFORMATION
-- The merger agreement between Chase and J.P. Morgan & Co.
Incorporated, which has been approved by the boards of
directors of both companies, provides that 3.7 shares of Chase
common stock will be exchanged for each share of J.P. Morgan
common stock. Each series of preferred stock of J.P. Morgan
will be exchanged for a similar series of preferred stock of
Chase, the surviving corporation of the merger. The
transaction is expected to be accounted for as a pooling of
interests and to be tax-free to J.P. Morgan and Chase
stockholders and is subject to approval by stockholders of
both companies, as well as by the U.S. Federal and state and
foreign regulatory authorities.
-- Chase's operating revenues, excluding the impact of Flemings
and Chase Capital Partners, were up five percent compared with
the third quarter of 1999. Cash expenses, on the same basis,
were up nine percent compared with the third quarter of 1999.
Amortization of goodwill, a non-cash charge to earnings,
amounted to $0.11 per share, or $149 million, in the third
quarter of 2000, compared with $0.05 per share, or $70
million, in the third quarter of 1999. Similarly, the non-cash
charge for the first nine months of 2000 was $0.25 per share,
or $318 million, compared with $0.17 per share, or $219
million, for the first nine months of 1999.
-- On September 1, Chase announced it had agreed to sell its Hong
Kong-based retail banking business, including Chase Manhattan
Card Company Limited, to Standard Chartered PLC for
approximately $1.3 billion in cash. Subject to regulatory
approvals and satisfaction of certain conditions, the sale is
expected to be completed by December 2000.
-- On October 16, Chase agreed to sell its interest in
ChaseMellon Shareholder Services, currently a 50-50 joint
venture between Chase and Mellon Financial Corporation. The
transaction, the terms of which were not disclosed, is
expected to be completed during the fourth quarter of this
year, pending regulatory approvals.
-- Total assets at September 30, 2000 were $426 billion, compared
with $396 billion at June 30, 2000 and $371 billion at
September 30, 1999. Chase's Tier One capital ratio was 7.9
percent at September 30, 2000, compared with 8.7 percent on
June 30, 2000. The decline is due to the acquisition of
Flemings. There were no repurchases of Chase common stock
during the third quarter of 2000.
-- On a managed basis, including securitizations, net credit
losses were $541 million in the third quarter of 2000, down
from $574 million in the second quarter of 2000 and down from
$633 million in the third quarter of 1999. Consumer net
charge-offs on a managed basis were $476 million, down from
$482 million in the second quarter of 2000 and $531 million in
the third quarter of 1999, primarily reflecting a decline in
the credit card net charge-off ratio to 4.97 percent.
Commercial net charge-offs in the third quarter of 2000 were
$65 million, compared with $92 million in the second quarter
of 2000 and $102 million in the third quarter of 1999. For the
third quarter of 2000, total net charge-offs on a reported
basis were $305 million, and the provision for loan losses was
$305 million. The allowance for loan losses was $3.49 billion
at the end of the third quarter of 2000, compared with $3.46
billion at the end of the second quarter of 2000.
Nonperforming assets at September 30, 2000 were $1.82 billion,
compared with $1.90 billion at June 30, 2000 and $2.02 billion
at September 30, 1999.
-- Operating results (revenues, expenses and earnings) exclude
the impact of credit card securitizations, restructuring costs
and special items. In the third quarter of 2000, special items
included a gain of $53 million (after-tax) from the sale of a
business in Panama, a loss of $23 million (after-tax)
resulting from the economic hedge of the purchase price of
Robert Fleming Holdings Limited prior to its acquisition, and
the restructuring costs of $51 million (after-tax) associated
with previously announced relocation initiatives. There were
no special items in the third quarter of 1999. For the first
nine months of 2000, special items included a loss of $115
million (after-tax) resulting from the economic hedge of the
purchase price of Flemings prior to its acquisition, $83
million (after-tax) of restructuring costs associated with
previously announced relocation initiatives, and the $53
million (after-tax) gain from the sale of a business in
Panama. For the first nine months of 1999, special items
included a $61 million (after-tax) gain on the sale of a
building, a $46 million (after-tax) gain on the sale of
branches in Texas, and a $65 million (after-tax) special
contribution to The Chase Manhattan Foundation.
Chase, with $426 billion in assets, is one of the world's premier
financial services institutions, with operations in more than 50
countries around the world. Chase has top-tier rankings in many areas
of investment banking, asset management, private banking, trading and
global markets activities as well as information and transaction
processing. Chase is a leading provider of financial solutions to
large corporations, government entities, commercial banking clients,
small businesses and individuals, and has relationships with more than
30 million consumers across the United States. Chase can be reached on
the web at www.chase.com.
Chase will hold a presentation for the investment community on
October 18, 2000 to discuss its third quarter earnings and to update
information about its proposed merger with J.P. Morgan & Co.
Incorporated. A live audio webcast of that presentation will be
available through the investor relations site of www.chase.com at 11
a.m. on October 18. In addition, persons interested in listening to
the presentation by telephone may dial in at (973) 872-3100.
-----------------------
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Those
statements are based on management's current expectations or beliefs
and are subject to a number of factors and uncertainties that could
cause actual results to differ materially from those described in the
forward-looking statements. For a discussion of certain factors that
could cause actual results to differ materially from those described
in the forward-looking statements, please refer to Chase's filings
with the Securities and Exchange Commission, particularly the section
entitled "Important Factors that may Affect Future Results" in Chase's
Annual Report on Form 10-K for the year ended December 31, 1999 and
the section entitled "Risk Factors" in the Registration Statement on
Form S-4 filed by Chase on October 5, 2000.
Stockholders of Chase and J.P. Morgan should read the definitive
joint proxy statement/prospectus regarding the proposed merger when it
becomes available, because it will contain important information.
Stockholders will be able to obtain a free copy of the definitive
joint proxy statement/prospectus, as well as other filings containing
information about Chase and J.P. Morgan, without charge, at the SEC's
internet site (http://www.sec.gov). Copies of the definitive joint
proxy statement/prospectus and the SEC filings that will be
incorporated by reference in the definitive joint proxy
statement/prospectus can also be obtained, without charge, by
directing a request to The Chase Manhattan Corporation, 270 Park
Avenue, New York, NY 10017, Attention: Office of the Corporate
Secretary (212-270-6000) or to J.P. Morgan, 60 Wall Street, New York,
NY 10260, Attention: Investor Relations (212-483-2323). Information
regarding the participants in the proxy solicitation and a description
of their direct and indirect interest, by security holdings or
otherwise, is contained in the materials filed with the SEC by each of
J.P. Morgan and Chase on September 13 and 14, 2000, respectively.
-0-
*T
THE CHASE MANHATTAN CORPORATION
SUMMARY OF SELECTED FINANCIAL HIGHLIGHTS - OPERATING BASIS (a)
(in millions, except per share and ratio data)
INCLUDING CHASE CAPITAL PARTNERS
2000
Third Second First
Quarter Quarter Quarter
Operating Revenue $ 5,590 $ 5,799 $ 6,179
Operating Noninterest Expense 3,656 3,357 3,490
Operating Earnings 905 1,215 1,360
Operating Diluted Earnings Per
Share 0.68 0.95 1.06
Return on Average Common
Equity (b) 13.5 % 21.0 % 24.0 %
Overhead Ratio (c) 65 58 56
Cash Operating Earnings $ 1,054 $ 1,299 $ 1,445
Cash Diluted Earnings Per
Share 0.79 1.02 1.13
Shareholder Value Added 181 542 701
Cash Return on Average Common
Equity (b) 15.8 % 22.5 % 25.5 %
Cash Overhead Ratio (c) 63 56 55
1999
Fourth Third Second First
Quarter Quarter Quarter Quarter
Operating Revenue $ 6,444 $ 5,429 $ 5,696 $ 5,413
Operating Noninterest Expense 3,179 2,981 2,968 2,945
Operating Earnings 1,683 1,187 1,351 1,173
Operating Diluted Earnings Per
Share 1.31 0.92 1.03 0.88
Return on Average Common
Equity (b) 30.2 % 21.7 % 24.3 % 20.6%
Overhead Ratio (c) 49 55 52 54
Cash Operating Earnings $ 1,761 $ 1,257 $ 1,427 $ 1,246
Cash Diluted Earnings Per
Share 1.38 0.97 1.09 0.94
Shareholder Value Added 1,027 539 696 501
Cash Return on Average Common
Equity (b) 31.6 % 23.0 % 25.7 % 21.9%
Cash Overhead Ratio (c) 48 53 51 53
EXCLUDING CHASE CAPITAL PARTNERS
2000
Third Second First
Quarter Quarter Quarter
Operating Revenue $ 5,678 $ 5,550 $ 5,729
Operating Noninterest Expense 3,566 3,303 3,410
Operating Earnings 1,017 1,088 1,121
Operating Diluted Earnings Per
Share 0.77 0.85 0.88
Return on Average Common
Equity (b) 20.2 % 26.0 % 27.0 %
Overhead Ratio (c) 63 59 59
Cash Operating Earnings $ 1,160 $ 1,169 $ 1,204
Cash Diluted Earnings Per
Share 0.88 0.92 0.94
Shareholder Value Added 501 619 658
Cash Return on Average Common
Equity (b) 23.2 % 28.0 % 29.0 %
Cash Overhead Ratio (c) 60 58 58
1999
Fourth Third Second First
Quarter Quarter Quarter Quarter
Operating Revenue $ 5,134 $ 5,110 $ 5,193 $ 5,108
Operating Noninterest Expense 3,125 2,937 2,929 2,909
Operating Earnings 879 1,011 1,054 1,001
Operating Diluted Earnings Per
Share 0.68 0.78 0.80 0.75
Return on Average Common
Equity (b) 20.4 % 23.2 % 23.0 % 20.9 %
Overhead Ratio (c) 61 57 56 57
Cash Operating Earnings $ 956 $ 1,081 $ 1,130 $ 1,074
Cash Diluted Earnings Per
Share 0.74 0.84 0.86 0.81
Shareholder Value Added 391 508 526 446
Cash Return on Average Common
Equity (b) 22.2 % 24.9 % 24.6 % 22.5 %
Cash Overhead Ratio (c) 59 56 55 56
INCLUDING CHASE CAPITAL PARTNERS
Nine Months Over/(Under)
2000 1999 1999
Operating Revenue $17,568 $16,538 6%
Operating Noninterest Expense 10,503 8,894 18%
Operating Earnings 3,480 3,711 (6%)
Operating Diluted Earnings Per
Share 2.68 2.83 (5%)
Return on Average Common
Equity (b) 19.2 % 22.2 % (300)bp
Overhead Ratio (c) 60 54 600
Cash Operating Earnings $ 3,798 $ 3,930 (3%)
Cash Diluted Earnings Per
Share 2.93 3.00 (2%)
Shareholder Value Added 1,424 1,736 (18%)
Cash Return on Average Common
Equity (b) 21.0 % 23.6 % (260)bp
Cash Overhead Ratio (c) 58 52 600
EXCLUDING CHASE CAPITAL PARTNERS
Nine Months Over/(Under)
2000 1999 1999
Operating Revenue $16,957 $15,411 10%
Operating Noninterest Expense 10,279 8,775 17%
Operating Earnings 3,226 3,066 5%
Operating Diluted Earnings Per
Share 2.49 2.34 6%
Return on Average Common
Equity (b) 24.1 % 22.3 % 180bp
Overhead Ratio (c) 60 57 300
Cash Operating Earnings $ 3,533 $ 3,285 8%
Cash Diluted Earnings Per
Share 2.73 2.51 9%
Shareholder Value Added 1,778 1,480 20%
Cash Return on Average Common
Equity (b) 26.5 % 23.9 % 260bp
Cash Overhead Ratio (c) 59 56 300
Unaudited
THE CHASE MANHATTAN CORPORATION
SUMMARY OF SELECTED FINANCIAL HIGHLIGHTS - REPORTED BASIS (Continued)
(in millions, except per share and ratio data)
%
As of or for the period ended Third Quarter Over/(Under)
2000 1999 1999
---- ---- ----
AS REPORTED BASIS
Revenue $ 5,400 $ 5,191 4%
Noninterest Expense
(Excluding Restructuring Costs) 3,656 2,981 23%
Restructuring Costs 79 - NM
Provision for Loan Losses 305 398 (23%)
Net Income $ 884 $ 1,187 (26%)
Net Income Per Share:
Basic $ 0.69 $ 0.95 (27%)
Diluted 0.66 0.92 (28%)
Cash Dividends Declared 0.32 0.27 19%
Common Shares Outstanding:
Average Common Shares:
Basic 1,267.3 1,232.3 3%
Diluted 1,311.8 1,274.5 3%
Performance Ratios:
Return on Average Total Assets (b) 0.85% 1.29%
Return on Average Common Equity (b) 13.2 21.7
%
As of or for the period ended Nine Months Over/(Under)
2000 1999 1999
---- ---- ----
Revenue $ 16,741 $ 15,951 5%
Noninterest Expense
(Excluding Restructuring Costs) 10,503 8,994 17%
Restructuring Costs 129 - NM
Provision for Loan Losses 979 1,167 (16%)
Net Income $ 3,335 $ 3,753 (11%)
Net Income Per Share:
Basic $ 2.66 $ 2.96 (10%)
Diluted 2.57 2.86 (10%)
Cash Dividends Declared 0.96 0.81 19%
Share Price at Period End 46.19 50.25 (8%)
Book Value at Period End 21.84 17.34 26%
Common Shares Outstanding:
Average Common Shares:
Basic 1,235.4 1,248.9 (1%)
Diluted 1,279.1 1,291.4 (1%)
Common Shares at Period End 1,310.0 1,234.8 6%
Performance Ratios:
Return on Average Total Assets (b) 1.11% 1.38%
Return on Average Common Equity (b) 18.4 22.5
Selected Balance Sheet Items
at Period End:
Loans $ 191,258 $ 173,458 10%
Total Assets 425,816 371,044 15%
Deposits 229,601 219,623 5%
Total Stockholders' Equity 29,440 22,341 32%
Capital Ratios:
Tier I Capital Ratio 7.9%(d) 8.2%
Total Capital Ratio 11.6(d) 11.8
Tier I Leverage 6.3(d) 6.7
Notes: Share-related data for all periods have been restated to
reflect a 3-for-2 common stock split, effective June 12, 2000. On
August 1, 2000, Chase acquired Robert Fleming Holdings Limited
("Flemings") which was accounted for under the purchase method,
and accordingly, results for Flemings are included from the date
of acquisition. On September 13, 2000, Chase and J.P. Morgan & Co.
Incorporated ("J.P. Morgan") agreed to merge. This merger is
expected to close by the end of the first quarter of 2001. The
results for J.P. Morgan are not included in these financials.
(a) Excludes the impact of credit card securitizations, restructuring
costs and special items. For a reconciliation of Reported Results
as shown on the Consolidated Statement of Income to results on an
Operating Basis, see the schedule entitled "Operating Income
Reconciliation."
(b) Based on annualized amounts.
(c) Noninterest expense as a percentage of the total of net interest
income and noninterest revenue (excluding restructuring costs,
special items and costs associated with the REIT). The cash
overhead ratio excludes the impact of amortization of goodwill and
certain other intangibles.
(d) Estimated
NM - Not meaningful
Unaudited
THE CHASE MANHATTAN CORPORATION
LINES OF BUSINESS RESULTS
(in millions, except ratios)
INVESTMENT BANK (a)
Third Quarter 2000 Over/(Under) 1999
Operating Revenue $ 1,870 $ 251 16%
Operating Earnings 349 (60) (15)
Cash Operating Earnings 384 (36) (9)
Average Common Equity 10,204 1,840 22
Average Managed Assets (b) 230,598 20,827 10
Shareholder Value Added (SVA) (c) 46 (93) (67)
Cash Return on Common Equity 14.8% (480)bp
Cash Overhead Ratio 67 1,400
CHASE CAPITAL PARTNERS
Third Quarter 2000 Over/(Under) 1999
Operating Revenue $ (88) $(407) NM
Operating Earnings (112) (288) NM
Cash Operating Earnings (106) (282) NM
Average Common Equity 6,472 2,177 51%
Average Managed Assets (b) 12,377 3,811 44
Shareholder Value Added (SVA) (c) (320) (352) NM
Cash Return on Common Equity NM NM
Cash Overhead Ratio NM NM
GLOBAL SERVICES
Third Quarter 2000 Over/(Under) 1999
Operating Revenue $ 875 $ 75 9%
Operating Earnings 167 34 26
Cash Operating Earnings 183 35 24
Average Common Equity 2,706 (199) (7)
Average Managed Assets (b) 16,230 (212) (1)
Shareholder Value Added (SVA) (c) 93 42 82
Cash Return on Common Equity 26.7% 680bp
Cash Overhead Ratio 67 (400)
WEALTH MANAGEMENT (a)
Third Quarter 2000 Over/(Under) 1999
Operating Revenue $ 470 $ 203 76%
Operating Earnings 53 9 20
Cash Operating Earnings 95 51 116
Average Common Equity 3,582 2,720 316
Average Managed Assets (b) 21,845 8,447 63
Shareholder Value Added (SVA) (c) (23) (38) NM
Cash Return on Common Equity 10.4% (950)bp
Cash Overhead Ratio 72 -
NATIONAL CONSUMER SERVICES
Third Quarter 2000 Over/(Under) 1999
Operating Revenue $ 2,587 $ 73 3%
Operating Earnings 455 56 14
Cash Operating Earnings 492 57 13
Average Common Equity 8,033 298 4
Average Managed Assets (b) 148,165 17,119 13
Shareholder Value Added (SVA) (c) 227 52 30
Cash Return on Common Equity 24.2% 220bp
Cash Overhead Ratio 50 (100)
TOTAL (d)
Third Quarter 2000 Over/(Under) 1999
Operating Revenue $ 5,590 $ 161 3%
Operating Earnings 905 (282) (24)
Cash Operating Earnings 1,054 (203) (16)
Average Common Equity 26,290 4,962 23
Average Managed Assets (b) 432,853 50,759 13
Shareholder Value Added (SVA) (c) 181 (358) (66)
Cash Return on Common Equity 15.8% (720)bp
Cash Overhead Ratio 63 1,000
INVESTMENT BANK - KEY FINANCIAL MEASURES
Third Quarter 2000
Cash Cash
Operating Operating Overhead
Revenues Earnings Ratio
Global Markets $ 880 $ 170 73%
Global Investment Banking 623 74 80
Corporate Lending & Portfolio Management 389 143 26
Other Investment Bank (22) (3) NM
-------- --------
Totals $ 1,870 $ 384 67%
========= ========
INVESTMENT BANK - KEY FINANCIAL MEASURES
Over/(Under) 1999
Cash Cash
Operating Operating Overhead
Revenues Earnings Ratio
Global Markets (4%) (35%) 1,700bp
Global Investment Banking 54 (15) 1,600
Corporate Lending & Portfolio Management 1 4 (200)
Other Investment Bank NM NM NM
Totals 16% (9%) 1,400bp
NATIONAL CONSUMER SERVICES - KEY FINANCIAL MEASURES
Third Quarter 2000
Cash Cash
Operating Operating Overhead
Revenues Earnings Ratio
Chase Cardmember Services $ 943 $ 141 36%
Regional Banking Group 771 139 64
Chase Home Finance 354 94 56
Diversified Consumer Services 160 36 49
Middle Markets 274 70 52
Other NCS 85 12 NM
--------- --------
Totals $ 2,587 $ 492 50%
========= ========
NATIONAL CONSUMER SERVICES - KEY FINANCIAL MEASURES
Over/(Under) 1999
Cash Cash
Operating Operating Overhead
Revenues Earnings Ratio
Chase Cardmember Services -% 14% 200bp
Regional Banking Group 7 36 (600)
Chase Home Finance 13 21 -
Diversified Consumer Services 5 24 (700)
Middle Markets 4 13 (200)
Other NCS NM NM NM
Totals 3% 13% (100)bp
(a) Prior periods have been restated to reflect refinements in
management reporting policies or changes to the management
organization. For example, commencing with the third quarter
of 2000, Chase's previously reported Global Bank has been
reorganized into Investment Bank (Global Markets, Investment
Banking and Corporate Lending) and Wealth Management (Global
Private Bank and Asset Management).
(b) Excludes the impact of credit card securitizations.
(c) SVA is Chase's primary measure of business unit performance.
SVA represents operating earnings excluding the amortization
of goodwill and certain other intangibles (i.e., cash
operating earnings), minus preferred dividends and an explicit
charge for capital.
(d) Total column includes Support Units and the effects remaining
at the Corporate level after the implementation of management
accounting policies.
NM - Not meaningful
bp - basis points
Unaudited
THE CHASE MANHATTAN CORPORATION
LINES OF BUSINESS RESULTS
(in millions, except ratios)
INVESTMENT BANK (a)
Nine Months 2000 Over/(Under) 1999
Operating Revenue $ 5,989 $ 749 14%
Operating Earnings 1,464 (42) (3)
Cash Operating Earnings 1,531 (8) (1)
Average Common Equity 9,127 517 6
Average Managed Assets (b) 225,976 15,753 7
Shareholder Value Added (SVA) (c) 628 (53) (8)
Cash Return on Common Equity 22.2% (140)bp
Cash Overhead Ratio 58 1,000
WEALTH MANAGEMENT (a)
Nine Months 2000 Over/(Under) 1999
Operating Revenue $ 1,168 $ 401 52%
Operating Earnings 180 67 59
Cash Operating Earnings 225 111 97
Average Common Equity 1,834 986 116
Average Managed Assets (b) 17,465 4,651 36
Shareholder Value Added (SVA) (c) 44 14 47
Cash Return on Common Equity 16.2% (150)bp
Cash Overhead Ratio 70 (400)
CHASE CAPITAL PARTNERS
Nine Months 2000 Over/(Under) 1999
Operating Revenue $ 611 $ (517) (46%)
Operating Earnings 254 (392) (61)
Cash Operating Earnings 265 (381) (59)
Average Common Equity 6,261 2,373 61
Average Managed Assets (b) 11,862 4,024 51
Shareholder Value Added (SVA) (c) (354) (612) NM
Cash Return on Common Equity 5.4% (1,650)bp
Cash Overhead Ratio 34 2,300
NATIONAL CONSUMER SERVICES
Nine Months 2000 Over/(Under) 1999
Operating Revenue $ 7,487 $ 104 1%
Operating Earnings 1,176 51 5
Cash Operating Earnings 1,287 42 3
Average Common Equity 8,084 427 6
Average Managed Assets (b) 144,650 15,969 12
Shareholder Value Added (SVA) (c) 487 5 1
Cash Return on Common Equity 21.0% (40)bp
Cash Overhead Ratio 52 200
GLOBAL SERVICES
Nine Months 2000 Over/(Under) 1999
Operating Revenue $ 2,604 $ 304 13%
Operating Earnings 447 100 29
Cash Operating Earnings 495 102 26
Average Common Equity 2,703 (197) (7)
Average Managed Assets (b) 15,912 (721) (4)
Shareholder Value Added (SVA) (c) 227 123 118
Cash Return on Common Equity 24.2% 640bp
Cash Overhead Ratio 70 (300)
TOTAL (d)
Nine Months 2000 Over/(Under) 1999
Operating Revenue $17,568 $1,030 6%
Operating Earnings 3,480 (231) (6)
Cash Operating Earnings 3,798 (132) (3)
Average Common Equity 23,913 1,916 9
Average Managed Assets (b) 419,397 37,493 10
Shareholder Value Added (SVA) (c) 1,424 (312) (18)
Cash Return on Common Equity 21.0% (260)bp
Cash Overhead Ratio 58 600
INVESTMENT BANK - KEY FINANCIAL MEASURES
Nine Months 2000
Cash Cash
Operating Operating Overhead
Revenues Earnings Ratio
Global Markets $3,100 $ 880 57%
Global Investment Banking 1,938 317 72
Corporate Lending & Portfolio
Management 1,115 397 28
Other Investment Bank (164) (63) NM
-------- --------
Totals $5,989 $1,531 58%
======== ========
Over/(Under) 1999
Cash Cash
Operating Operating Overhead
Revenues Earnings Ratio
Global Markets (3%) (17%) 900bp
Global Investment Banking 75 55 400
Corporate Lending & Portfolio
Management (2) (1) 100
Other Investment Bank NM NM NM
Totals 14% (1%) 1,000bp
NATIONAL CONSUMER SERVICES - KEY FINANCIAL MEASURES
Nine Months 2000
Cash Cash
Operating Operating Overhead
Revenues Earnings Ratio
Chase Cardmember Services $2,719 $ 348 35%
Regional Banking Group 2,277 390 65
Chase Home Finance 997 239 59
Diversified Consumer Services 404 53 62
Middle Markets 811 196 53
Other NCS 279 61 NM
-------- --------
Totals $7,487 $1,287 52%
======== ========
Over/(Under) 1999
Cash Cash
Operating Operating Overhead
Revenues Earnings Ratio
Chase Cardmember Services (4%) 1% 200bp
Regional Banking Group 8 29 (400)
Chase Home Finance 13 10 200
Diversified Consumer Services (11) (44) 1,000
Middle Markets 6 15 (300)
Other NCS NM NM NM
Totals 1% 3% 200bp
(a) Prior periods have been restated to reflect refinements in
management reporting policies or changes to the management
organization. For example, commencing with the third quarter of
2000, Chase's previously reported Global Bank has been reorganized
into Investment Bank (Global Markets, Investment Banking and
Corporate Lending) and Wealth Management (Global Private Bank and
Asset Management).
(b) Excludes the impact of credit card securitizations.
(c) SVA is Chase's primary measure of business unit performance. SVA
represents operating earnings excluding the amortization of
goodwill and certain other intangibles (i.e., cash operating
earnings), minus preferred dividends and an explicit charge for
capital.
(d) Total column includes Support Units and the effects remaining at
the Corporate level after the implementation of management
accounting policies.
NM - Not meaningful
bp - basis points
Unaudited
THE CHASE MANHATTAN CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(in millions, except per share data)
%
Third Quarter Over/(Under)
2000 1999 1999
-
INTEREST INCOME
Loans $ 3,997 $ 3,288
Securities 994 762
Trading Assets 530 399
Federal Funds Sold and Securities
Purchased Under Resale Agreements 452 352
Deposits with Banks 96 195
-------- ----------
Total Interest Income 6,069 4,996
-------- ----------
INTEREST EXPENSE
Deposits 2,251 1,650
Short-Term and Other Borrowings 1,333 870
Long-Term Debt 492 306
-------- ----------
-------- ----------
Total Interest Expense 4,076 2,826
-------- ----------
NET INTEREST INCOME 1,993 2,170 (8%)
Provision for Loan Losses 305 398 (23%)
-------- ----------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 1,688 1,772 (5%)
-------- ----------
NONINTEREST REVENUE
Investment Banking Fees 613 486 26%
Trust, Custody and Investment
Management Fees 664 457 45%
Credit Card Revenue 471 441 7%
Fees for Other Financial Services 775 637 22%
Trading Revenue 603 462 31%
Securities Gains (Losses) 96 (1) NM
Private Equity Gains (Losses) (25) 377 NM
Other Revenue 210 162 30%
-------- ---------
Total Noninterest Revenue 3,407 3,021 13%
-------- ---------
NONINTEREST EXPENSE
Salaries 1,761 1,417 24%
Employee Benefits 256 238 8%
Occupancy Expense 247 218 13%
Equipment Expense 297 255 16%
Other Expense 1,095 853 28%
-------- ---------
Total Noninterest Expense Before
Restructuring Costs 3,656 2,981 23%
Restructuring Costs 79 -- NM
-------- ---------
Total Noninterest Expense 3,735 2,981 25%
-------- ---------
INCOME BEFORE INCOME TAX EXPENSE 1,360 1,812 (25%)
Income Tax Expense 476 625 (24%)
-------- ---------
NET INCOME $ 884 $ 1,187 (26%)
======== =========
NET INCOME APPLICABLE TO COMMON
STOCK $ 871 $ 1,168 (25%)
======== =========
NET INCOME PER COMMON SHARE:
Basic $ 0.69 $ 0.95 (27%)
Diluted $ 0.66 $ 0.92 (28%)
%
Nine Months Over/(Under)
2000 1999 1999
INTEREST INCOME
Loans $ 11,108 $ 9,662
Securities 2,879 2,344
Trading Assets 1,425 1,228
Federal Funds Sold and Securities
Purchased Under Resale Agreements 1,349 1,122
Deposits with Banks 331 540
-------- --------
Total Interest Income 17,092 14,896
-------- --------
INTEREST EXPENSE
Deposits 6,302 4,806
Short-Term and Other Borrowings 3,678 2,635
Long-Term Debt 1,243 936
-------- --------
Total Interest Expense 11,223 8,377
-------- --------
NET INTEREST INCOME 5,869 6,519 (10%)
Provision for Loan Losses 979 1,167 (16%)
-------- --------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 4,890 5,352 (9%)
-------- --------
NONINTEREST REVENUE
Investment Banking Fees 1,900 1,388 37%
Trust, Custody and Investment
Management Fees 1,718 1,332 29%
Credit Card Revenue 1,311 1,258 4%
Fees for Other Financial Services 2,201 1,777 24%
Trading Revenue 2,448 1,606 52%
Securities Gains (Losses) 167 160 4%
Private Equity Gains (Losses) 773 1,215 (36%)
Other Revenue 354 696 (49%)
------- ---------
Total Noninterest Revenue 10,872 9,432 15%
------- ---------
NONINTEREST EXPENSE
Salaries 5,128 4,217 22%
Employee Benefits 795 731 9%
Occupancy Expense 689 642 7%
Equipment Expense 856 737 16%
Other Expense 3,035 2,667 14%
-------- ---------
Total Noninterest Expense Before
Restructuring Costs 10,503 8,994 17%
Restructuring Costs 129 -- NM
-------- ---------
Total Noninterest Expense 10,632 8,994 18%
-------- ---------
INCOME BEFORE INCOME TAX EXPENSE 5,130 5,790 (11%)
Income Tax Expense 1,795 2,037 (12%)
-------- ---------
NET INCOME $ 3,335 $ 3,753 (11%)
======== =========
NET INCOME APPLICABLE TO COMMON
STOCK $ 3,289 $ 3,698 (11%)
======== =========
NET INCOME PER COMMON SHARE:
Basic $ 2.66 $ 2.96 (10%)
Diluted $ 2.57 $ 2.86 (10%)
NM - Not meaningful
Unaudited
THE CHASE MANHATTAN CORPORATION
NONINTEREST REVENUE AND NONINTEREST EXPENSE DETAIL
(in millions)
% %
Third Quarter Over/ Nine Months Over/
(Under) (Under)
NONINTEREST REVENUE 2000 1999 1999 2000 1999 1999
Fees for Other
Financial Services:
Mortgage Servicing Fees $ 140 $ 96 46% $ 421 $ 238 77%
Brokerage and Investment
Services 150 43 249% 333 136 145%
Service Charges on
Deposit Accounts 103 104 (1%) 305 289 6%
Fees in Lieu of
Compensating Balances 81 106 (24%) 256 287 (11%)
Commissions on Letters
of Credit and
Acceptances 51 69 (26%) 179 207 (14%)
Insurance Fees 58 44 32% 154 124 24%
Loan Commitment Fees 36 44 (18%) 108 111 (3%)
Other Fees 156 131 19% 445 385 16%
------- ------ ------ ------
Total $ 775 $ 637 22% $ 2,201 $ 1,777 24%
======= ====== ====== ======
Trading-Related
Revenue: (a)
Interest Rate Contracts $ 117 $ 223 (48%) $ 654 $ 805 (19%)
Foreign Exchange Revenue 207 199 4% 744 616 21%
Equities and Commodities 167 129 29% 574 303 89%
Debt Instruments and
Other 189 128 48% 594 525 13%
------- ------ ------ ------
Total $ 680 $ 679 -- $ 2,566 $ 2,249 14%
======= ====== ====== ======
Other Revenue:
Residential Mortgage
Origination/Sales
Activities $ 50 $ 95 (47%) $ 135 $ 275 (51%)
Loss on Economic
Hedge of the
Flemings Purchase (b) (35) -- NM (176) -- NM
Gains on Sales of
Nonstrategic Assets (c) 81 -- NM 81 166 (51%)
All Other Revenue 114 67 70% 314 255 23%
------- ------ ------ ------
Total $ 210 $ 162 30% $ 354 $ 696 (49%)
======= ====== ====== ======
NONINTEREST EXPENSE
Other Expense:
Professional Services $ 212 $ 170 25% $ 569 $ 510 12%
Marketing Expense 146 128 14% 367 356 3%
Amortization of
Intangibles 149 70 113% 318 219 45%
Telecommunications 112 96 17% 316 284 11%
Travel and Entertainment 86 54 59% 229 163 40%
Minority Interest (d) 12 12 -- 42 37 14%
Foreclosed Property
Expense 1 6 (83%) (2) 14 NM
Special Contribution
to the Foundation (e) -- -- -- -- 100 NM
All Other 377 317 19% 1,196 984 22%
------- ------ ------ ------
Total $1,095 $ 853 28% $ 3,035 $ 2,667 14%
======= ====== ====== ======
(a) Trading-related revenue includes net interest income attributable
to trading activities.
(b) Loss is the result of the economic hedge of the purchase price of
Flemings prior to its acquisition.
(c) Third quarter and nine months 2000 includes an $81 million gain on
the sale of a business in Panama. Nine months 1999 includes a $95
million gain on the sale of One New York Plaza and a $71 million
gain on the sale of branches in Beaumont, Texas.
(d) Includes REIT minority interest of $11 million in each quarter and
$33 million in each nine months.
(e) Represents a $100 million special contribution to The Chase
Manhattan Foundation.
NM - Not meaningful
Unaudited
THE CHASE MANHATTAN CORPORATION
OPERATING INCOME RECONCILIATION
(in millions, except per share data)
THIRD QUARTER 2000
REPORTED CREDIT SPECIAL OPERATING
RESULTS CARD ITEMS BASIS
(a) (b) (c)
EARNINGS
Market-Sensitive Revenue $ 1,364 $ - $ - $ 1,364
Less Market-Sensitive Revenue 4,036 236 (46) 4,226
------- ------- ------- ------
Total Revenue 5,400 236 (46) 5,590
Noninterest Expense 3,656 - - 3,656
------- ------- ------- ------
Operating Margin 1,744 236 (46) 1,934
Credit Costs 305 236 - 541
------- ------- ------- ------
Income Before Restructuring
Costs 1,439 - (46) 1,393
Restructuring Costs 79 - (79) -
------- ------- ------- ------
Income Before Income Tax
Expense 1,360 - 33 1,393
Tax Expense 476 - 12 488
------- ------- ------- ------
Net Income $ 884 $ - $ 21 $ 905
------- ------- ------- ------
NET INCOME PER COMMON SHARE
Basic $ 0.69 $ 0.70
Diluted $ 0.66 $ 0.68
THIRD QUARTER 1999
REPORTED CREDIT SPECIAL OPERATING
RESULTS CARD ITEMS BASIS
(a) (b) (c)
EARNINGS
Market-Sensitive Revenue $ 1,541 $ - $ - $ 1,541
Less Market-Sensitive Revenue 3,650 238 - 3,888
------- ------- ------- ------
Total Revenue 5,191 238 - 5,429
Noninterest Expense 2,981 - - 2,981
------- ------- ------- ------
Operating Margin 2,210 238 - 2,448
Credit Costs 398 238 - 636
------- ------- ------- ------
Income Before Restructuring
Costs 1,812 - - 1,812
Restructuring Costs - - - -
------- ------- ------- --------
Income Before Income Tax
Expense 1,812 - - 1,812
Tax Expense 625 - - 625
------- ------- ------- --------
Net Income $ 1,187 $ - $ - $ 1,187
------- ------- ------- --------
NET INCOME PER COMMON SHARE
Basic $ 0.95 $ 0.95
Diluted $ 0.92 $ 0.92
NINE MONTHS 2000
REPORTED CREDIT SPECIAL OPERATING
RESULTS CARD ITEMS BASIS
(a) (b) (c)
EARNINGS
Market-Sensitive Revenue $ 5,406 $ - $ - $ 5,406
Less Market-Sensitive
Revenue 11,335 732 95 12,162
------- ------- ------- --------
Total Revenue 16,741 732 95 17,568
Noninterest Expense 10,503 - - 10,503
------- ------- ------- --------
Operating Margin 6,238 732 95 7,065
Credit Costs 979 732 - 1,711
------- ------- ------- --------
Income Before Restructuring
Costs 5,259 - 95 5,354
Restructuring Costs 129 - (129) -
------- ------- ------- --------
Income Before Income Tax
Expense 5,130 - 224 5,354
Tax Expense 1,795 - 79 1,874
------- ------- ------- --------
Net Income $ 3,335 $ - $ 145 $ 3,480
------- ------- ------- --------
NET INCOME PER COMMON SHARE
Basic $ 2.66 $ 2.78
Diluted $ 2.57 $ 2.68
NINE MONTHS 1999
REPORTED CREDIT SPECIAL OPERATING
RESULTS CARD ITEMS BASIS
(a) (b) (c)
EARNINGS
Market-Sensitive Revenue $ 5,012 $ - $ - $ 5,012
Less Market-Sensitive
Revenue 10,939 753 (166) 11,526
------- ------- ------- --------
Total Revenue 15,951 753 (166) 16,538
Noninterest Expense 8,994 - (100) 8,894
------- ------- ------- --------
Operating Margin 6,957 753 (66) 7,644
Credit Costs 1,167 753 - 1,920
------- ------- ------- --------
Income Before Restructuring
Costs 5,790 - (66) 5,724
Restructuring Costs - - - -
------- ------- ------- --------
Income Before Income Tax
Expense 5,790 - (66) 5,724
Tax Expense 2,037 - (24) 2,013
------- ------- ------- --------
Net Income $ 3,753 $ - $ (42) $ 3,711
------- ------- ------- --------
NET INCOME PER COMMON SHARE
Basic $ 2.96 $ 2.93
Diluted $ 2.86 $ 2.83
(a) Represent results as reported in Chase's financial statements. The
only exception is that revenues are categorized between
market-sensitive and less market-sensitive revenues. Market-sensitive
revenue includes investment banking fees, trading-related revenue
(including trading-related net interest income), securities gains and
private equity gains.
(b) This column excludes the impact of credit card securitizations.
For securitized receivables, amounts that previously would have been
reported as net interest income and as provision for loan losses are
instead reported as components of noninterest revenue.
(c) Includes restructuring costs and special items. The 2000 third
quarter includes an $81 million gain (the same for the nine months)
from the sale of a business in Panama, a $35 million loss ($176
million loss in the nine months) resulting from the economic hedge of
the purchase price of Flemings prior to its acquisition, and $79
million ($129 million for the nine months) of restructuring costs
associated with previously announced relocation initiatives. The 1999
nine months included $166 million in gains from sales of nonstrategic
assets, of which $95 million was from the sale of a building and $71
million was from the sale of branches in Texas, and a special
contribution to The Chase Manhattan Foundation of $100 million.
Unaudited
THE CHASE MANHATTAN CORPORATION
CONSOLIDATED BALANCE SHEET
(in millions)
%
September 30, Over/(Under)
----------------------------
2000 1999 1999
------------ ------------ -----------
ASSETS
Cash and Due from Banks $ 19,403 $ 16,490 18%
Deposits with Banks 3,513 5,856 (40%)
Federal Funds Sold
and Securities
Purchased Under
Resale Agreements 27,175 28,368 (4%)
Trading Assets:
Debt and Equity Instruments 36,113 26,069 39%
Risk Management Instruments 31,479 31,123 1%
Securities 66,232 55,113 20%
Loans (Net of Allowance for
Loan Losses of $3,491
in 2000 and $3,555
in 1999) 187,767 169,903 11%
Other Assets 54,134 38,122 42%
------------ ------------
TOTAL ASSETS $ 425,816 $ 371,044 15%
============ ============
LIABILITIES
Deposits:
Domestic:
Noninterest-Bearing $ 47,067 $ 49,722 (5%)
Interest-Bearing 81,003 78,993 3%
Foreign:
Noninterest-Bearing 6,054 6,363 (5%)
Interest-Bearing 95,477 84,545 13%
------- -------
Total Deposits 229,601 219,623 5%
Federal Funds Purchased
and Securities
Sold Under Repurchase
Agreements 61,943 43,879 41%
Commercial Paper 7,338 5,996 22%
Other Borrowed Funds 7,252 7,046 3%
Trading Liabilities 40,688 37,084 10%
Accounts Payable, Accrued
Expenses and Other
Liabilities, Including
the Allowance for
Credit Losses
of $170 in 2000 and 1999 22,058 15,343 44%
Long-Term Debt 24,157 16,644 45%
Guaranteed Preferred
Beneficial Interests
in Corporation's
Junior Subordinated
Deferrable Interest
Debentures 2,789 2,538 10%
------------ ------------
TOTAL LIABILITIES 395,826 348,153 14%
------------ ------------
PREFERRED STOCK
OF SUBSIDIARY 550 550 --
------------ ------------
STOCKHOLDERS' EQUITY
Preferred Stock 828 928 (11%)
Common Stock 1,323 882 50%
Capital Surplus 9,300 9,635 (3%)
Retained Earnings 19,626 16,210 21%
Accumulated Other
Comprehensive Loss (1,005) (1,038) (3%)
Treasury Stock, at Cost (632) (4,276) (85%)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 29,440 22,341 32%
------------ ------------
TOTAL LIABILITIES,
PREFERRED STOCK
OF SUBSIDIARY
AND STOCKHOLDERS' EQUITY $ 425,816 $ 371,044 15%
============ ============
Unaudited
THE CHASE MANHATTAN CORPORATION
CONSOLIDATED STATEMENT OF CHANGES
IN STOCKHOLDERS' EQUITY
(in millions)
Nine Months
----------------------------
2000 1999
---------- ----------
Preferred Stock
Balance at Beginning of Year $ 928 $ 1,028
Redemption of Stock (100) (100)
---------- ----------
Balance at End of Period $ 828 $ 928
---------- ----------
Common Stock
Balance at Beginning of Year $ 882 $ 882
Issuance of Common Stock for
a Three-for-Two Stock Split 441 -
---------- ----------
Balance at End of Period $ 1,323 $ 882
---------- ----------
Capital Surplus
Balance at Beginning of Year $ 9,714 $ 9,836
Issuance of Common Stock for
a Three-for-Two Stock Split (441) -
Issuance of Common Stock for
(Purchase Accounting) Acquisitions (a) 136 -
Shares Issued and Commitments
to Issue Common Stock for Employee
Stock-Based Awards and
Related Tax Effects (109) (201)
---------- ----------
Balance at End of Period $ 9,300 $ 9,635
---------- ----------
Retained Earnings
Balance at Beginning of Year $ 17,547 $ 13,544
Net Income 3,335 3,753
Cash Dividends Declared:
Preferred Stock (46) (55)
Common Stock (1,210) (1,032)
---------- ----------
Balance at End of Period $ 19,626 $ 16,210
---------- ----------
Accumulated Other Comprehensive Loss
Balance at Beginning of Year $(1,454) $ 392
Other Comprehensive Income (Loss) 449 (1,430)
---------- ----------
Balance at End of Period $(1,005) $(1,038)
---------- ----------
Treasury Stock, at Cost
Balance at Beginning of Year $(4,000) $(1,844)
Purchase of Treasury Stock (1,072) (4,172)
Reissuance of Treasury Stock 1,025 1,740
Reissuance of Treasury Stock
for (Purchase Accounting)
Acquisitions (a) 3,415 -
---------- ----------
Balance at End of Period $ (632) $(4,276)
---------- ----------
Total Stockholders' Equity $ 29,440 $ 22,341
========== ==========
Comprehensive Income
Net Income $ 3,335 $ 3,753
Other Comprehensive
Income (Loss) 449 (1,430)
---------- ----------
Comprehensive Income $ 3,784 $ 2,323
========== ==========
(a) In the 2000 third quarter, Chase acquired Robert Fleming Holdings
Limited, The Beacon Group LLC and Goldman, Lichtenberg, Wasserman &
Grossman. These transactions were accounted for under the purchase
method.
Unaudited
THE CHASE MANHATTAN CORPORATION
CREDIT RELATED INFORMATION
(in millions)
%
Credit-Related Assets Over/(Under)
---------------------------------------
September 30, 2000 1999 1999
------------------------------------------ ------------ --------
CONSUMER LOANS
Domestic Consumer:
1-4 Family Residential
Mortgages $ 48,858 $42,134 16%
Credit Card - Reported 14,981 14,246 5%
Credit Card
Securitizations (b) 18,022 18,028 --
----------- ------------
Credit Card - Managed 33,003 32,274 2%
Auto Financings 19,921 18,429 8%
Other Consumer 6,931 6,536 6%
----------- ------------
Total Domestic Consumer 108,713 99,373 9%
Total Foreign Consumer 2,551 2,822 (10%)
----------- ------------
Total Consumer Loans 111,264 102,195 9%
----------- ------------
COMMERCIAL LOANS
Domestic Commercial:
Commercial and Industrial 55,668 51,994 7%
Commercial Real Estate 3,151 3,363 (6%)
----------- ------------
Total Domestic Commercial 58,819 55,357 6%
Total Foreign Commercial 39,197 33,934 16%
----------- ------------
Total Commercial Loans 98,016 89,291 10%
Derivative and FX Contracts (c) 31,926 31,408 2%
----------- ------------
Total Commercial Credit-Related 129,942 120,699 8%
----------- ------------
----------- ------------
Total Managed Credit-Related $241,206 $222,894 8%
=========== ============
%
Nonperforming Assets Over/(Under)
--------------------------
September 30, 2000 1999 1999
------------------------------- ----------- ---------- ----------
CONSUMER LOANS
Domestic Consumer:
1-4 Family Residential
Mortgages $ 273 $ 308 (11%)
Credit Card - Reported 30 (a) -- NM
Credit Card
Securitizations (b) -- -- NM
----------- ----------
Credit Card - Managed 30 -- NM
Auto Financings 80 73 10%
Other Consumer 4 5 (20%)
----------- ----------
Total Domestic Consumer 387 386 --
Total Foreign Consumer 9 30 (70%)
----------- ----------
Total Consumer Loans 396 416 (5%)
----------- ----------
COMMERCIAL LOANS
Domestic Commercial:
Commercial and Industrial 581 458 27%
Commercial Real Estate 64 50 28%
----------- ----------
Total Domestic Commercial 645 508 27%
Total Foreign Commercial 642 950 (32%)
----------- ----------
Total Commercial Loans 1,287 1,458 (12%)
Derivative and FX Contracts (c) 52 36 44%
----------- ----------
Total Commercial Credit-Related 1,339 1,494 (10%)
----------- ----------
Total Managed Credit-Related 1,735 1,910 (9%)
----------- ----------
Assets Acquired as Loan
Satisfactions 81 105 (23%)
----------- ----------
----------- ----------
Total Nonperforming Assets $ 1,816 $ 2,015 (10%)
=========== ==========
%
Third Quarter Over/(Under)
-------------------
------- ---------
Net Charge-Offs 2000 1999 1999
----------------------------------------- --------- --------
CONSUMER LOANS
Domestic Consumer:
1-4 Family Residential
Mortgages $ 7 $ 9 (22%)
Credit Card - Reported 167 207 (19%)
Credit Card
Securitizations (b) 236 238 (1%)
------- ---------
Credit Card - Managed (d) 403 445 (9%)
Auto Financings 20 19 5%
Other Consumer 38 49 (22%)
------- ---------
Total Domestic Consumer 468 522 (10%)
Total Foreign Consumer 8 9 (11%)
------- ---------
Total Consumer Loans 476 531 (10%)
------- ---------
COMMERCIAL LOANS
Domestic Commercial:
Commercial and Industrial 65 68 (4%)
Commercial Real Estate (3) (2) NM
------- ---------
Total Domestic Commercial 62 66 (6%)
Total Foreign Commercial 3 36 (92%)
------- ---------
Total Commercial Loans 65 102 (36%)
------- ---------
Total Managed Net Charge-offs $ 541 $ 633 (15%)
======= =========
%
Nine Months Over/(Under)
----------------------
---------- ---------
Net Charge-Offs 2000 1999 1999
--------------------------------- ---------- --------- ------
CONSUMER LOANS
Domestic Consumer:
1-4 Family Residential
Mortgages $ 26 $ 19 37%
Credit Card - Reported 521 641 (19%)
Credit Card
Securitizations (b) 732 753 (3%)
---------- ---------
Credit Card - Managed (d) 1,253 1,394 (10%)
Auto Financings 63 57 11%
Other Consumer 113 144 (22%)
---------- ---------
Total Domestic Consumer 1,455 1,614 (10%)
Total Foreign Consumer 27 27 --
---------- ---------
Total Consumer Loans 1,482 1,641 (10%)
---------- ---------
COMMERCIAL LOANS
Domestic Commercial:
Commercial and Industrial 184 145 27%
Commercial Real Estate (6) (13) NM
---------- ---------
Total Domestic Commercial 178 132 35%
Total Foreign Commercial 51 143 (64%)
---------- ---------
Total Commercial Loans 229 275 (17%)
---------- ---------
Total Managed Net Charge-offs $ 1,711 $ 1,916 (11%)
========== =========
(a) Includes currently performing loans placed on a cash basis
because of concerns as to collectibility.
(b) Represents the portion of Chase's credit card receivables that
have been securitized.
(c) Charge-offs for risk management instruments are included in
trading revenue.
(d) Including domestic and international consumer and commercial
credit card activity, net charge-offs as a percentage of
average managed credit card receivables for the third quarter
of 2000 and 1999 and first nine months of 2000 and 1999 were
4.97%, 5.53%, 5.16% and 5.81%, respectively.
NM - Not meaningful
Unaudited
THE CHASE MANHATTAN CORPORATION
CONDENSED AVERAGE CONSOLIDATED BALANCE SHEET, INTEREST AND RATES
(Taxable-Equivalent Interest and Rates; in millions)
Third Quarter 2000
--------------------------------------
Average Rate
Balance Interest (Annualized)
------- -------- ------------
ASSETS
Liquid Interest-Earning Assets $ 70,002 $ 1,078 6.12%
Securities 64,740 1,000 6.15%
Loans 187,210 3,997 8.50%
-------- ------
Total Interest-Earning Assets 321,952 6,075 7.51%
Noninterest-Earning Assets 91,908
COPYRIGHT 2000 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2000, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.
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