Chase Reports 67 Percent Increase In Third Quarter Operating Earnings Per Share to $1.37.NEW YORK--(BUSINESS WIRE)--Oct. 20, 1999-- The Chase Manhattan Corporation The Chase Manhattan Corporation was a bank holding company formed as parent of the Chase Manhattan Bank. During its time as the parent company, it was led in succession by David Rockefeller, Willard C. Butcher, and Thomas G. Labrecque. (NYSE NYSE See: New York Stock Exchange : CMB Noun 1. CMB - (cosmology) the cooled remnant of the hot big bang that fills the entire universe and can be observed today with an average temperature of about 2. ) today announced earnings per share on an operating basis of $1.37 in the third quarter of 1999, up 67 percent from $0.82 in the 1998 third quarter (a). Earnings in the third quarter of 1999 were $1.2 billion, up 61 percent from the prior-year quarter. Earnings per share for the first nine months of 1999 were $4.25, up 33 percent from $3.20 for the same period of the prior year. Earnings in the first nine months of 1999 were $3.7 billion, up 29 percent from the first nine months of 1998. On a reported basis, earnings per share were $1.37 in the third quarter of 1999, up 46 percent from $0.94 in the third quarter of 1998. Net income in the third quarter of 1999 was $1.2 billion, up 42 percent from the prior-year quarter. Earnings per share for the first nine months of 1999 were $4.30, up 47 percent from the same period of the prior year. Net income in the first nine months of 1999 was $3.8 billion, up 42 percent from the corresponding period of the prior year. Reported earnings in all periods include any nonrecurring Non`re`cur´ring a. 1. Nonrecurrent; as, the costs of a layoff are considered as a nonrecurring expense s>. items. Third Quarter Financial Highlights -- Operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. of $5.4 billion, up 26 percent -- Operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before per share of $1.37, up 67 percent -- Return on average common stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. of 22 percent, with Shareholder Value Added Value Added The enhancement a company gives its product or service before offering the product to customers. Notes: This can either increase the products price or value. (SVA SVA School of Visual Arts SVA Severe (Thunderstorm) Advisory SVA Statens Veterinärmedicinska Anstalt (National Veterinary Institute, Sweden) SVA Shareholder Value Added ) of $539 million -- Common stock repurchases Stock repurchase A firm's repurchase of outstanding shares of its common stock. of $780 million, on a net basis, with a Tier 1 capital Tier 1 Capital A term used to describe the capital adequacy of a bank. Tier I capital is core capital, this includes equity capital and disclosed reserves. Notes: Equity capital includes instruments that can't be redeemed at the option of the holder. ratio of 8.2 percent "This is another strong quarter, with each of our major business lines - Global Banking, Global Services, and National Consumer Services Consumer Services refers to the formulation, deformulation, technical consulting and testing of most consumer products, such as food, herbs, beverages, vitamins, pharmaceuticals, cosmetics, hair products, household cleaners, [paints, plastics, metals, waxes, coatings, minerals, - producing income growth of 25 percent or more and return on equity in excess of 20 percent," said William B. Harrison William Benjamin Harrison was mayor of Louisville, Kentucky from 1927 to 1933. He graduated from Louisville Male High School in 1907 and the University of Virginia School of Law in 1910. He served as a captain in the United States Army during World War I. , Jr., president and chief executive officer. "These earnings continue to demonstrate Chase's disciplined approach to managing capital and making investments that propel pro·pel tr.v. pro·pelled, pro·pel·ling, pro·pels To cause to move forward or onward. See Synonyms at push. [Middle English propellen, from Latin future growth. Those investments are ongoing, and in particular our Chase.com initiatives and our announced acquisition of Hambrecht & Quist will accelerate our ability to take advantage of the significant growth opportunities that we see in the Chase franchise." (a) All earnings per share numbers are on a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis. Press contacts: Jim Finn Jim Finn (born December 9, 1976 in Fair Lawn, New Jersey) is an American football fullback for the New York Giants of the NFL. High school career Finn grew up in Fair Lawn, New Jersey, and attended Bergen Catholic High School in Oradell, New Jersey where he starred in , 212/270-7438 John Meyers John Douglas Meyers (born January 16, 1940 in Forest City, Iowa) was an American football defensive tackle in the NFL for the Dallas Cowboys and Philadelphia Eagles. He played college football at the University of Washington. , 212/270-7454 Investor contact: John Borden Bor·den , Gail 1801-1874. American surveyor and inventor who developed condensed milk (1853) and other food products. Borden, Lizzie Andrew 1860-1927. , 212/270-7318
Line of Business Results
--------------- -------------------------- ---------------------------
GLOBAL BANK Third Quarter Nine Months
--------------- -------------------------- ---------------------------
(dollars in O(U) O(U) O(U)
millions) 1999 1998 2Q1999 1999 1998
---- ------ -------- ---- ------
Operating
Revenues $2,234 61% (12)% $7,179 $1,415 25%
Cash Operating
Earnings 674 124 (25) 2,371 641 37
Shareholder
Value Added 247 N/M (48) 1,117 595 114
Cash Return on
Common Equity 20.7% 1,110bp (770)bp 24.bal Bank were $674 million
in
the 1999 third quher than in the 1998 third quarter and compared with $2.55
billion
in the 1999 second quarter. Cash operating earnings in the 1999 third
quarter were more than double the9 second quarter when the company
benefited frod
quarter, and shareholder value added of $478 million in the 1999
second quarter. For the first nine monthsr.
-- Total trading revenues were $679 millcts, tempered by a decline in overall
market activity from the second quarter.
-- Investment bankinct market share gains in loan syndications, merg same
nine
month period of 1998.
-- Plude gains on
investments in companies that had initial public offerings and on
sales of companies-
GLOBAL SERVICES Third Quarter 2Q1999 1999 1998
397 48 14
Shareholder
Value Added 55 4 17 116 (34) (23
---------------------------
Cash operatwere $801 million, up 13 percent over the 1998 million
increased four
percent over the prior y ---- ------ -------- ---- Value
Added 173 101 5 ded increased to $173
million in the 1999 thirdificantly improved credit
quality.
-- inations
and servicing levels.
-- Reg1998. Cash operating earnings increased 15 perceal Information
-- Total operating noninteretively flat
compared with second quarter 1gn commercial nonperforming loans.
Commercial neas
reclassified net charge-offs of $108 mi with $357 billion at June 30,
1999 and $356 urchased approximately $780 million,
net, impact of credit card securitizations, restruct One New York Plaza,
a $46 million (after-tax) ounced its agreement to
acquire Hambrecht $4.45 per share. H&Q is one of the leading
proCORPORATION
Speriod ended Third Quarter Over/ 566 13%
Operating Earnings 539 68 693%
Operating $5,191 $4,218 23%
Nonin 398 272 46%
Net Inco
1999 1998 1998
8,880 7,942 12%
Credit Costs (b) 4.50 3.42 32%
Sharehoty (c) 22.2 17.8
Common Divid $ 191,486 $ 185,544 3% $
15,951 $ 13,596 17%
Noni 1,167 932 25%
Net Income 4.30 2.93 47%
Cash Di6.24 (1%)
Performance Ratios:
Common Equi at Period End:
Loans $173,458 219,623 200,319
10%
Total Stockholders' Equity 22,341 23,218 (4%)
Capital Ratios:
Tier I Capital Ratio 8.2%(f) 8.3%
Total Capital Ratio 11.8(f) 12.1
Tier I Leverage 6.7(f) 6.6
Full-Time Equivalent Employees 73,018 71,344 2%
(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 resul as a percentage
of the total of net interest
dit card securitizations.
(f) Estimated
CORATION
Lines of BusinessQuarter 1999
Over/(Unde 663 372 128
Cash Operating Earnings 674 373 124
tional Consumer Services
----------
Operating Revenue $ 2,498 $ 203 9%
Operating Earnings 399 92 30
Cash Operating Eash Efficiency Ratio 50 (100)
Global Services
----------- 17
Cash Operating Earnings 150 2 4
Cash Return on Common Eq -----------------------------
Third Quarter 1999 Over/(Under) 1998
------------- ---- --------------------
Operating Revenue $ 5,429 $ 1,104 26%
Operating Earnings d Assets (b) 382,094 802 -- (600)
GLOBAL BA Cash
Cash
Operating Operating Efficiency
Revenues Earnings Ratio
-------------------------------------lobal Private
Bank 229 49 ======== =========
ash
Operating Operating Efficiency
Revenues Earnings Ratio
--------------- 8 7 --
Other Global Banking NM NM NM
Totals ating Operating Efficiency
Revenues Earnings Ratio
--------------------------------------
Chase Cardmember Services $1,003 $ 133 35%
Regional Consum 63 27 NM
8
--------------------------------------
Cash Cash
Operating Opera 18 (100)
Diversified Consumer Services 13 -- 400
Middle Markets less preferred dividends and an explicit charge
for allocated
capital. Additionally, organizational changes within each of
Chase's three major franchises are reflected in the lines of
business results. The Middle Markeports into the Global Bank franchise.
Prior peri(b) Excludes the impact of credit card securit Lines of
Business Results
1999 Over/(Under) 1998
------------- ---- --------------------
Operating Revenue $ 7,ue Added (SVA) 1,117 595
114
Cash Return on Common Equity 24.9% 610bp
Cash Efficiency Ratio 45
Operating Revenue $ 7,3 7,726 (1) --
Average Managed Assets (b) 127,119 9,130 8
Shareholder Value Added (SVA) 481 235 96
Cash Return on Common Equity 21.3% 400bp
Cash Efficiency Ratio 50 --
perating Earnings
351 17 5
Cash Operating Earnings 397 48 14
Average Common Equity 2,821 840 42
Average Managed Assets (b) 15,
Total(a)
-----------------------------
Nigs 3,930 872 29
Average Common Equity 21,997 998 5
Average Managed Assets (b) 381,904 (7,520) (2)
Shareholder Value Added (SVA) 1,736 800 85
Cash Return on Common Equity 23.6% Nine
Months 1999 ncy
Revenues Earn ---------
--------
---------------------------------
Cash Cash
rtners 82 95 (600)
Global Private Bank 4 (5) 300
Other Global Bank NM NM NM
To Cash Cash
ber Services $3,020 $ 383 35%
Re 729 172 55
Other NCS erating Efficiency
Revenues Earnings Ratio
--------------------------------------
Chase Cardmember Services 5% 17% - bp
Regional Consumer Banking 9 18 (300)
Chase Home Finance 16 15 100
Diversified Consume NM NM NM
Totals will and certain intangibles (i.e., cash operatilected in the
lines of
business results. TFunds business, which previously was in Corporat the
implementation of management accounting
Third Quarter Over/(Under)
EREST INCOME
Loans Sold
and Securities Purchased
Under Resale Aense 2,826 3,226
--------- ---------
NONINTEREST REVENUE
Investment Banking Fees 486 322 51%
Trust, Custody
and Investment Manage (1) 261 NM
Private Equity GainsEmployee Benefits 23
853 804 6%
--------- --------- --------
---------
INCOME BEFORE INCO
NET INCOME $ 1,187 $ 837 42%
========= ========
ssets
1,228 1,9 540 450
--------- ---------
Total Interest Income
INTEREST EXPENSE
------
FOR LOAN LOSSES 5,352 5,474 (2%)
Credit Card Revenue 1,2
160 442 (64%)
Private Equ Total Noninterest Revenue 9,43
Salaries 4,217 3,729 13%
Employee Benefits nse 737 640
Before Restructuring Costs nse 8,994 8,510 6%
Income Tax Expense 2,037 1,518 34%
========= =========
NET INCOME APPLICAB
47%
NM- Not Meaningful
Unaudited
%
Third Quarter Over/(Under)
--------- Compensating Balances
106 85 25%
Mortgage Servicing Fees 9)
Brokerage and Investment
Servi 42%
Other Fees 131 124 6%
--------- ---------
Total $ 637 $ 522 22%
========= =========
Trading-Related Revenue: (b)
Interest Rate C50 (20%)
Equities and Commoditi Total $ 679 $ 76
793%
========= $ 95 $ 105 (10%)
Ga
---------
-------------------------------------------------Telecommunications
96 90(7%)
Minority Interest (d) 12 12 --
Foreclosed Property Expe ========= =========
----------------------
NONINTes on
Deposit Accounts $ 289 $ 275 5%
Fees in Lieu of
Commissions on Letters of
Credit and Accept 20%
Loan Commitment Fees $ 1,541 15%
16 796 (23%)
Equities and $ 2,249 $ 1,263 78%
on Sales of a
Nonstrategic Building and
Branches 166 (c) -- Total
$ 696 $ 466 ional Services $ 510 $ 483
6%
Marketing Expense 356 306 219 188
16%
Travel and $ 2,667 $ 2,374 12%
========== =========
venue
captions.
(b) Charge-offs for risk manludes a $95 million gain on the sale of One New
York Plaza and
a $71 million gain on the sale of branches in illion in each nine month period.
(e) Represe
OPERATING INCOME RECONCILI----------
REPORTE --------- -------- --------
3,888
------- --------- -------- --------
---------
Operating Margin 2,216 238 -------- -------- ---------
Income----- -------- -------- ---------
N $ 1.42 $ 1.42
Diluted $ 1.37 RD QUARTER 1998
--------------------------------------------
(a) (b) (c) et-Sensitive
Revenue 3,499 1 - (37) 2,614
-------- -------- -------- --------
Income Before
Income Tax
Expense -------- -------- -------- ------- $ 0.96
$ 0.84
Dilu
------- (a) (b) (c)
arket-Sensitive
Revenue 10,939 753 (166) 11,526
rest Expense 8,980 - (100) 753
- 1,934
- -
--------- -------- -------- ---------
Income Before Income
Tax Expense 5,790 - (66) 5,724
Income Tax Expense 2,037 - (24) 2,013
--------- -------- -------- ---------
Net Income $ 3,753 $ - $ (42) $ 3,711
NET INCOME PER
COMMON SHARE
Basic (a) (b) (c)
--------- -------- -------- ------ Revenue
10,047 864 (37) 7,942
- -------- -------- -------- --------
-------- --------
Income Before Income
--
Net Income $ 2,636 $ - $ 234 $ 2,870
======== ======== ======== ========
NET INCOME PER
COMMON SHARE
en restated.
(a) Represent results as reporteest expense to credit costs, and restructuring
cprivate
equity gains.
(b) This column excludes the impact of credit card securitizations.
(c) Includes ets, of which $95 million was from the sale of Oe from prior
years' tax
refunds of $191 milliontreamline support functions, and merger-related
restructuring costs
of $19 million.
Unaudited
llions)
1998 1998
and Securities Purchased
Under Resale Agre 31,123 33,313 (7%)
Secu 38,122 32,110 19%
---------- ----------
eposits:
Domestic:
Noninterest-Bearing earing 84,545 74,096 14%
---------- ----------
Ts Payable, Accrued
Expenses and Other
Liabilities, Including
the Allowance for Credit
Losses of $170 %
Guaranteed Preferred
Beneficial Interests ES 348,153 332,682 5%
Y
Preferred Stock 928 12,722 27%
Accumulated Other
Comprehensive Income (Loss) (1,038) 701 NM
Treasury SRS' EQUITY 22,341 23,218 (4%)
========== =========TY
(in millions)
Nine Month 1998
demption of Stock
(100) --------- ---------
e Stock Split - -- ---------
Capital Surplus
Balance at Beginning of Year $ 9,836 $ 10,tments
to Issue Common Stock for
Employee iod $ 9,635 $ 9,852
3,753 2,636
Cash Divid --------- ---------
Balance at End of Period $ 16,210 $ 12,722
inning of Year $ 392 $ 112
Other Comprehensive Income (Loss) (1,430) 8) $ 701
(1,038)
Reissuance of Treasury Sto ---------
--------------------------------------
Compre-------- ---------
Comprehensive Income $ 2,323 $ 3,225
Unaudited
THE C 1998 1998
--------------------------------------- ---- ---- ----
CONSUMER LOANS ted 14,246 12,472 14%
31,444 3%
Auto Financings al Domestic Consumer 99,373
102,195 97,150 5%
------------ ---------- al Real
Estate 3,363 5,071 33,934 35,312 (4%)
------------ ----------
Total Commercial Loans 89,291 88,394 1%
------------ ----------
Derivative and FX Contracts 31,408 33,547 (6%)
------------ ----------
Total Commercial Credit-Related 120,699 121,941 (1%)
-----------------------
September 30, 1999 199Credit
Card - Reported -- -- -- --
Auto Financings 73 46 59%
Ot
Total Domestic Consumer 386 397 (3%)
Total Foreign Consumer 416 418 --
950 559 70%
Derivative and FX Contracts 36 19 89%
------------ ----------
Total Managed Creditquired as Loan Satisfactions 105
============ ==========
----------------------------------------------------------------------
(Under)
Consumer:
1-4 Family Residential Mortgages ------------
---------- 49 39 26%
50%
------------ ---------
Total Consumer Loans Domestic Commercial:
Commercial and Industal Domestic Commercial 66
(62) NM
Total Foreign Commercial 102 92
11%
==========
----------------------------------------------------------------------
4 Family Residential Mortgages $ 19 ------------
----------
Credit 17%
-- ------------
---------- ercial and Industrial 145 132
(86) NM
Total Foreign Commercial 143 326 (56%)
--------ion of Chase's credit
card receivables that
which are netted against trading
revenues. For The As of or For The
Three Months Ended Nine Months Ended
MANAG------ -----------------
(in millions,
ex $31,607 $32,510 $31,991
Past Due 90 D% 2.11%
Net Charge-offs $ ational credit card activity.
----------------------------------------------------------------------
At September 30, 1999
Lending- Trading- )
Argentina 1.9 0.2 0.3 (0.3)
Mexico .1)
Colombia 0.7 - - -
Venezuela 0.3 - - -
All Other Latin
America (d) 0.4 0.5 0.7 (0.7)
----- ----- ----- ------
Total Latin America $ 6.2 $ 1.7 $ 2.5 $ (0.2
0.1 0.8 (0.4)
Hong Kong 0.6 0.1 4.9 (4.9)
Si ----- ----- ----- ------
Total Asia excluding
Japan, Australia
and New Zealand $ 4.0 $ 1.1 $ 7.9 $
----- ----- ----- At September 30, 1999
At Dec. 31, 1998
--------------------- ----------------
ments
------------- ----------- exico 1.7 0.4
0.3 0.2 0.4 -
Al $ 2.5 $ 9.5 $ 1.8
---------------- $ 2.4 $ -
Indonesia 1.0 - 1.2 -
Thailand 0.7 - 0.9 -
---------------- 0.8 -
0.8 - 0.6 -
All Other Asia 0.4 - 0.5 -
----- ----- ----- ------
Total Asia excluding
Japan, Australia
and New Zealand $ 6.6 $ 0.1 $ 8.4 $ -
----- ----- ----- ------
0.4 0.1
0.6 7.2 $ 1.1 $ 7.7 $ 1.7
nstitutions Examination Council ("FFIEC") guidelowever, does not
consider the cross-border(b) Includes loans and accrued interest, intere
equity instruments and
the mark-to-markett of legally enforceable master netting agreements.
(d) Excludes Bermuda and Cayman Islands.
Unaudited
(Taxable-Equivalent Interest and Rates; In Rate
Balance Interest (Annualized)
$ 63,983 $ 946 5.86%
Securities 53,016 767 5.7
Total Assets $364,8
Short-Term and
Long-Term Debt 90,399 1,176 5.16%
------- ------
Total Interest-Bearing
Liabilities 251,219 2,826 4.46%
------
Noninterest-Bearing
Deposits 48,636 42,086
-------
PREFERRED 1,026
Common Stockholders' Equity 21,328
========= LD
ON INTEREST-EARNING ASSETS ,508 3.24%
Average g
Assets $ 63,853 $ 1,271 7.89%
Securities 5 -------- ------
Total Interest-Earning ========
LIABILITIES
Interest-Bearing Deposits $150,787 1,524 (b) 4.01 ------
Total Interest-Bearing
Liabilitnterest-Bearing
Liabilities ---
STOCKHOLDERS' EQUITY
Preferred Stock 1,166
Com ------
Total Liabilities, Preferred
Stock of Subsidiary
and Stockholde 2.23%
== =====
NET INTEREST INCOME
AND NE Nine Months 1999
------------------------------------
Average Rate
Balance Interest (Annualized)
--------- ---------- ------------
ASSETS
Liquid Interest-Earning
Assets $ 61,997 $ 2,890 6.23%
Securities 54,948 2,355 6.87%
Noninterest-Earning
Asset
= 89,729 3,571 5.32%
------
Nonin ------- ARY
550
----
STOCKHOLDERS' EQUITY
Preferred Stoc -------
INTEREST RATE SPREAD $ 6,534 3.01%
======= Average
Rate
$ 71,187 $ 4,188 7.86%
Securities 56,511 2,668 6.31%
Loans 168,128 10,012 7.96%
========
LIABILITIES
Interest-Bearing
De---
Total Interest-Bearing
Liabilities 251,540 10,442 5.55%
---
STOCKHOLDERS' EQUITY
Preferred Stock 1,365
Common Stockholders' Equity 20,999
------
Total Sto =====
AND NET YIELD
ON INTEREST-EARNING
ASSETS (a) $ 7,519 3.20% (b)ons.
(b) Includes $191 million pre-tax income for prior years' tax
refunds. Excluding this amount, the net yield on interest-earning
assets would be 3.11% for the 1998 third quarter and 3.12% for
the 1998 first nine months.
Unaudited
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