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CHEMICAL BANKING CORPORATION'S EARNINGS RISE 48 PERCENT IN FOURTH QUARTER TO $304 MILLION

 NEW YORK, Jan. 19 /PRNewswire/ -- Chemical Banking Corporation (NYSE: CHL) today reported net income of $304 million, or $1.09 per common share, for the fourth quarter of 1992, up 48 percent from 1991 fourth quarter earnings of $205 million before a $625 million merger- related restructuring charge. Net income for the full year 1992 was $1.086 billion, or $3.90 per common share, up 39 percent from 1991 earnings of $779 million before the restructuring charge.
 Including the $625 million restructuring charge, the corporation reported a net loss of $420 million, or ($2.49) per share, for the 1991 fourth quarter, and net income of $154 million, or $.11 per share, for the full year 1991.
 "Our strong earnings for both the quarter and the year clearly validate the merger of Manufacturers Hanover and Chemical," said John F. McGillicuddy, chairman and chief executive officer. "On the revenue side, we posted gains across the board, even as we continued the complex task of integrating the two organizations. On the expense side, we achieved our updated goal of $280 million in merger-related cost savings, versus the $225 million we had previously targeted, while keeping underlying expenses in line with our operating plan.
 "Earnings for the year further increased our capital base by adding $638 million in retained earnings. Coupled with a common stock offering and several preferred issues, we added more than $2.5 billion in equity in 1992," Mr. McGillicuddy said.
 "Our performance was all the more significant given continued high credit costs," said Walter V. Shipley, president. "On that score, however, the provision for loan losses declined for the fourth consecutive quarter and non-LDC charge-offs declined for the third consecutive quarter. Moreover, after peaking in the third quarter, as we had forecasted, nonperforming assets declined in the fourth quarter by $495 million, and we expect more improvements in 1993."
 Total stockholders' equity at Dec. 31, 1992 was $9.85 billion, up $2.57 billion, or 35 percent, from $7.28 billion on the same date a year ago. The increase includes approximately $1.7 billion in new common equity raised primarily through the sale in January of 57.5 million shares of common stock; $638 million in retained earnings; and the issuance of $550 million in preferred stock, which was partially offset by the redemption of two existing series of preferred totaling $292 million.
 The corporation's estimated Tier I risk-based capital ratio under the 1992 guidelines was 7.2 percent at Dec. 31, compared with 5.1 percent on the same date a year ago. The estimated total risk-based capital ratio was 11.3 percent on Dec. 31, compared with 9.1 percent a year ago. The Tier I leverage ratio at year-end 1992 was 6.6 percent, versus 4.7 percent on Dec. 31, 1991.
 Net Interest Income
 Net interest income in the fourth quarter was $1,226 million, up 5 percent from $1,172 million in the same year-ago period. For the full year, net interest income was $4,598 million, up 13 percent from $4,080 million in 1991.
 The net yield on interest-earning assets was 4.01 percent in the fourth quarter, compared with 3.76 percent in the year-ago fourth quarter. The net yield for the full year was 3.82 percent, compared with 3.30 percent for all of 1991.
 The increases in both net interest income and the net yield reflected a lower interest rate environment, decreased funding costs and effective asset/liability management. Net interest income in the fourth quarter of 1992 included a special cash payment of $33 million in connection with further progress in the Brazilian restructuring. This payment represents a portion of that country's past due interest. The 1991 fourth quarter included approximately $107 million of past due Brazilian interest.
 Average interest-earning assets for the fourth quarter were $122.4 billion, compared with $125.6 billion in the year-ago period. For the year, average interest-earning assets were $121.2 billion, versus $124.9 billion in 1991.
 Noninterest Revenue
 Noninterest revenue for the fourth quarter was $717 million, up from $697 million in the same period a year ago. For the full year, noninterest revenue was $3,026 million, up from $2,862 million in all of 1991.
 For the full year, the corporation reported record total trading revenues of $853 million, up 27 percent from $671 million in 1991. These included trading account profits and commissions of $377 million, compared with $382 million in 1991, and foreign exchange revenues of $476 million, versus $289 million for all of last year.
 Combined revenues from all trading activities in the fourth quarter were $229 million, up 82 percent from $126 million in the year-ago quarter. These included trading account profits and commissions of $73 million, compared with $62 million in the year-ago quarter, and foreign exchange revenues of $156 million, versus $64 million a year ago.
 Fees for other banking services in the fourth quarter were $263 million, compared with $259 million in the year-ago fourth quarter. For the year, such fees were $1,040 million, compared with $959 million in all of 1991.
 Corporate finance and loan syndication fees were $59 million in the fourth quarter, versus $81 million in the same period a year ago. Such fees for all of 1992 were $265 million, versus $302 million in the previous year.
 Securities losses in the fourth quarter were $2 million, versus securities gains of $41 million in the fourth quarter of 1991. For full year 1992, securities gains were $53 million, down from $110 million in 1991.
 Noninterest Expense
 Noninterest expense in the fourth quarter was $1,294 million, compared with $1,786 million in the fourth quarter of 1991. The latest fourth quarter included a one-time charge of $41 million related to costs incurred in combining the corporation's employee benefit plans, which was completed at year end. Foreclosed property expense was $101 million in the 1992 fourth quarter, up from $45 million in the same year-ago period. The 1992 fourth quarter also included higher accruals for incentive compensation costs related to increased revenues, particularly in trading activities. Noninterest expense in the 1991 fourth quarter included the $625 million restructuring charge.
 For the full year, noninterest expense was $4,930, compared with $5,307 million for all of 1991. Foreclosed property expense in 1992 was $283 million, up from $154 million in 1991. Expenses in 1992 included the $41 million one-time charge noted above, a charge in the third quarter of $30 million for London occupancy-related expenses in connection with the corporation's Canary Wharf lease arrangements, and higher accruals for incentive compensation costs.
 For the full year 1992, the ratio of noninterest operating expense (exclusive of one-time charges) to total operating revenue improved to 63.7 percent, from 67.4 percent in 1991.
 Merger-related expense savings of $90 million were realized in the fourth quarter, bringing total savings to $280 million, meeting management's updated target for the year. In addition, the underlying expense growth rate for the year of 4.2 percent was in line with the corporation's plan, despite the fact that noninterest expense for 1992 included certain costs related to continuing merger integration efforts and costs related to acquisitions and new spending within growth businesses.
 Merger-related staff reductions total 5,450 since July 15, 1991, when the merger was first announced.
 Provision and Allowance for Losses
 The provision for losses was $315 million in the fourth quarter, down from $330 million in the third quarter of 1992 and from $450 million in the year-ago fourth quarter. For the full year, the provision for losses was $1,365 million, versus $1,345 million in 1991.
 Non-LDC net charge-offs were $315 million in the fourth quarter, compared with $330 million in the 1992 third quarter and $346 million in the fourth quarter a year ago. For the full year, non-LDC net charge- offs were $1,365 million, compared with $1,191 million for all of 1991.
 LDC net charge-offs, including losses on sales and swaps, were $84 million in the fourth quarter and $244 million for the full year, compared with $524 million in the year-ago quarter and $1,114 million for all of 1991. The 1991 results include $491 million and $902 million in charge-offs of Brazilian loans in the fourth quarter and full year, respectively.
 At Dec. 31, the non-LDC allowance for losses was $2,206 million, up from $2,012 million on the same date a year ago. The LDC allowance at Dec. 31 was $819 million, compared with $1,263 million on the same date a year ago. Total LDC medium- and long-term outstandings at Dec. 31 were $3.5 billion, compared with $3.9 billion a year ago.
 Nonperforming Assets
 At Dec. 31, total nonperforming assets were $6,092 million, down $495 million from $6,587 million at Sept. 30 and down from $6,155 million on Dec. 31 a year ago.
 Total non-LDC nonperforming assets at Dec. 31 were $4,744 million, down from $5,140 million at Sept. 30 and from $4,907 million a year ago. Non-LDC nonperforming loans at Dec. 31 were $3,468 million, down from $3,617 million at Sept. 30 and compared with $3,380 million at the end of 1991. Assets acquired as loan satisfactions were $1,276 million at Dec. 31, down $247 million from $1,523 million at Sept. 30 and down from $1,527 million on Dec. 31, 1991.
 LDC nonperforming loans were $1,348 million at Dec. 31, compared with $1,248 million on the same date a year ago.
 CHEMICAL BANKING CORPORATION
 Nonperforming Assets
 (Dollars in millions)
 12/31/92 9/30/92 12/31/91
 Non-LDC nonperforming loans $3,468 $3,617 $3,380
 Assets acquired as
 loan satisfactions 1,276 1,523 1,527
 Total non-LDC nonperforming
 assets 4,744 5,140 4,907
 LDC nonperforming loans:
 Brazil 713 726 745
 Argentina 316 319 315
 Other LDC countries 319 402 188
 Total LDC nonperforming loans 1,348 1,447 1,248
 Total nonperforming assets $6,092 $6,587 $6,155
 Allowance for Losses
 (Dollars in millions)
 12/31/92 12/31/91
 Total allowance for losses $3,025 $3,275
 As a percentage of total loans 3.7 3.9
 Non-LDC allowance for losses $2,206 $2,012
 As a percentage of non-LDC loans 2.8 2.5
 LDC allowance for losses $ 819 $1,263
 As a percentage of term outstandings
 including previous charge-offs
 with claims retained 57(A) 59
 (A) -- 24 percent excluding previous charge-offs with claims retained.
 Stockholders' Equity and Capital Ratios
 (Dollars in billions)
 12/31/92 9/30/92 12/31/91
 Total stockholders' equity $9.9 $9.6 $7.3
 Common stockholders' equity $8.0 $7.8 $5.7
 Tangible equity $8.7 $8.5 $6.1
 Ratios (in percent):
 Total equity to assets 7.1 6.9 5.2
 Common equity to assets 5.7 5.6 4.1
 Tangible equity to assets 6.3 6.2 4.5
 Tier I leverage 6.6 6.5 4.7
 Risk-based capital (1992 guidelines)
 (in percent):
 Tier I (4.0 percent required) 7.2(A) 7.2 5.1
 Total (8.0 percent required) 11.3(A) 11.5 9.1
 (A) -- Estimated.
 Other Financial Data
 In 1992, income tax expense included federal income tax benefits of $65 million and $278 million in the fourth quarter and full year, respectively. The corporation's 1991 income tax expense included federal income tax benefits of $38 million in the fourth quarter and $130 million for the year. The fourth quarter of 1992 included a $25 million reduction in 1992 tax expense related to lower state and local taxes. In addition, full year 1991 income tax expense was reduced by $55 million as a result of settlements with the Internal Revenue Service of taxes from prior years.
 Total assets at Dec. 31 were $139.7 billion, versus $138.9 billion on the same date a year ago. Total loans at Dec. 31 were $82.0 billion, compared with $84.2 billion a year ago. At the end of 1992, total deposits were $94.2 billion, compared with $92.9 billion at Dec. 31, 1991.
 The return on average total assets was .86 percent in the fourth quarter and .78 percent for the full year 1992.
 The return on average common stockholders' equity was 13.36 percent for the fourth quarter and 12.36 percent for all of 1992.
 Book value per common share was $32.43 at Dec. 31, versus $31.02 per share on the same date a year ago.
 Accounting Development
 Effective Sept. 30, 1992, the corporation revised its investment securities accounting policy. Securities that may be sold prior to maturity as part of asset/liability management are now carried at the lower of aggregate amortized cost or market value. This resulted in a reclassification of approximately $8 billion to the "Securities at Lower of Aggregate Cost or Market" category. Debt securities that the corporation has the ability and intent to hold to maturity continue to be carried at cost. The revised accounting policy had no effect on the corporation's capital ratios, liquidity or net income for 1992.
 Texas Commerce Bancshares
 Texas Commerce Bancshares (TCB) reported earnings of $180 million for all of 1992, compared with earnings of $126 million in the full year 1991. For the fourth quarter, TCB earned $46 million, up from $29 million in the same year-ago period.
 Nonperforming assets at TCB were reduced for the 18th consecutive quarter, to $433 million at Dec. 31, 1992.
 The performance reflected an increase in net interest income and higher noninterest revenue, partially offset by higher noninterest expense (primarily related to foreclosed property and FDIC assessments). The net yield on interest-earning assets was 4.28 percent in the fourth quarter and 4.17 percent for the full year, versus 3.72 percent and 3.76 percent in the respective 1991 periods.
 -0- 1/19/93
 /CONTACT: John Meyers (media), 212-270-7454; John Stefans (media), 212-270-7438; or John Borden (investors), 212-270-7318, all of Chemical/
 (CHL)


CO: Chemical Banking Corporation ST: New York IN: FIN SU: ERN

GK-LS -- NY063 -- 6441 01/19/93 14:29 EST
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Date:Jan 19, 1993
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