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CHEMICAL BANKING REPORTS EARNINGS

 CHEMICAL BANKING REPORTS EARNINGS
 /NOTE TO EDITORS: The following press release on Chemical Banking


Corporation's 1992 third quarter and nine months financial results reflects the Dec. 31, 1991, merger of Chemical Banking Corporation and Manufacturers Hanover Corporation in a pooling of interests. Therefore, amounts for all current and prior periods are reported on a consolidated basis./
 NEW YORK, Oct. 20 /PRNewswire/ -- Chemical Banking Corporation (NYSE: CHL) today reported third quarter net income of $282 million, a 35 percent increase from $209 million in the same period a year ago. For the first nine months, net income was $782 million, up 36 percent from $574 million in the first nine months of 1991.
 Net income per common share in the third quarter was $.98, up from $.95 per share in the year-ago quarter. For the first nine months, net income per common share was $2.81, up from $2.62 per share in the same period a year ago. The 1992 third quarter and year-to-date per share results reflect the sale in January of 57.5 million new shares of the corporation's common stock.
 "The continued success of our merger was reflected across all of our businesses. Higher net interest revenue, strong trading profits and improvements in fee-based services all contributed to a substantial increase in net income, despite continued high credit costs due to the weak economy," said John F. McGillicuddy, chairman and chief executive officer. "However, the provision for losses decreased for the second consecutive quarter and we expect both the provision and nonperforming assets to decline going forward."
 "Our merger-related expense savings continued ahead of schedule, and our underlying expenses remained in line with our operating plan," said Walter V. Shipley, president and chief operating officer. "The combination of these savings and strong revenue growth helped lower our noninterest operating expense to 63.6 percent of total operating revenue in the first nine months, compared with 69.8 percent in the year-ago period."
 The corporation's estimated Tier I risk-based capital ratio under the 1992 guidelines was 7.0 percent at Sept. 30, compared with 5.6 percent on the same date a year ago. The current capital ratio reflects approximately $1.7 billion in new common equity raised primarily through the sale in January of 57.5 million shares of common stock and $447 million in retained earnings generated during the first nine months of 1992. The 1992 ratio also reflects the issuance of $550 million in preferred stock in the first nine months, which was partially offset by the redemption in the third quarter of two existing series of adjustable-rate preferred stock totaling approximately $292 million.
 Total stockholders' equity at Sept. 30 was $9.64 billion, up $1.86 billion, or 24 percent, from $7.78 billion on the same date a year ago.
 Net Interest Income
 Net interest income in the third quarter was $1,158 million, up 15 percent from $1,003 million in the same year-ago period. For the first nine months, net interest income was $3,372 million, up 16 percent from $2,908 million in the year-ago nine months.
 The net yield on interest earning assets was 3.84 percent in the third quarter, compared with 3.27 percent in the year-ago third quarter. The net yield for the first nine months was 3.75 percent, compared with 3.16 percent in the same year-ago period.
 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.
 Average interest-earning assets for the third quarter were $120.8 billion, compared with $123.1 billion in the year-ago period. For the first nine months, average interest earning assets were $120.9 billion, versus $124.6 billion in the same period of 1991.
 Noninterest Revenue
 Noninterest revenue for the third quarter was $775 million, up from $768 million in the same period a year ago. For the first nine months, noninterest revenue was $2,329 million, up from $2,178 million a year ago.
 Combined revenues from all trading activities were $226 million in the third quarter, versus $231 million in the same year-ago period. These included foreign exchange trading revenues of $176 million, more than double the $73 million reported in the year-ago quarter. The results also included trading account revenues of $50 million, versus $158 million a year ago, reflecting the impact of market volatility on the corporation's European government securities and LDC debt trading portfolios in the latest quarter.
 For the first nine months, total trading revenues were $624 million, up 14 percent from $545 million in the year-ago period. These results included trading account revenues of $304 million, compared with $320 million in the year-ago period, and foreign exchange trading revenues of $320 million, up from $225 million in the nine months a year ago.
 Fees for other banking services in the third quarter were $271 million, up from $248 million in the year-ago third quarter. For the nine months, such fees were $797 million, up from $713 million in the same year-ago period.
 Corporate finance and loan syndication fees were $73 million in the third quarter, versus $72 million in the same period a year ago. Such fees for the first nine months were $206 million, versus $221 million a year ago.
 Investment securities gains in the third quarter were $8 million, versus $25 million a year ago. For the first nine months, investment securities gains were $55 million, compared with $69 million in the same 1991 period.
 Noninterest Expense
 Noninterest expense in the third quarter was $1,266 million, compared with $1,181 million in the third quarter of 1991. The latest quarter included a one-time charge of $30 million for London occupancy- related expenses in connection with the corporation's Canary Wharf lease arrangements. The 1991 third quarter included an $18 million reduction of expense relating to an insurance settlement. Foreclosed property expense increased to $92 million in the 1992 third quarter, from $35 million in the same year-ago period, reflecting more aggressive write- offs on these real estate assets. The latest quarter also includes an increase of $8 million in expenses related to overseas operations, reflecting the weakness of the U.S. dollar.
 Merger-related expense savings continued to be ahead of schedule and amounted to $75 million in the third quarter of 1992, following such savings of $65 million and $50 million in the second and first quarter of 1992, respectively. These savings, realized primarily through workforce reductions, totaled $190 million for the first nine months of 1992 (not including $20 million in merger savings realized in 1991). In addition, the underlying expense growth rate for the quarter and nine months is in line with the corporation's plan of 4 percent, despite the fact that noninterest expense for both periods of 1992 included certain costs related to continuing merger integration efforts.
 Noninterest expense for the first nine months was $3,656 million, versus $3,534 million a year ago. For the nine months, the ratio of noninterest operating expense to total operating revenue improved to 63.6 percent, from 69.8 percent in the same period a year ago.
 Total staff at Sept. 30, 1992 was 39,588, down 3,581 from the beginning of 1992. Merger-related staff reductions total 5,014 since July 15, 1991, when the merger was first announced.
 Provision and Allowance for Losses
 The provision for losses was $330 million in the third quarter, compared with $345 million in the second quarter of 1992 and $313 million in the year-ago third quarter. For the first nine months, the provision was $1,050 million, versus $895 million in the same year-ago period.
 Non-LDC net charge-offs were $330 million in the third quarter, compared with $307 million in the same quarter of 1991, and $1,050 million for the first nine months, versus $845 million in the year-ago period. LDC net charge-offs, including losses on sales and swaps, were $106 million in the third quarter, compared with $47 million in the same period a year ago, and $160 million for the first nine months, versus $590 million in the same year-ago period.
 At Sept. 30, the non-LDC allowance for losses was $2,210 million, up $312 million from $1,898 million on the same date a year ago. The increase partially reflects the transfer in the second quarter of 1992 of $200 million of the allowance for losses allocated to the LDC portfolio to the non-LDC portion of the allowance.
 The LDC allowance at Sept. 30 was $903 million, compared with $1,787 million on the same date a year ago. Total LDC medium- and long-term outstandings at Sept. 30 were $3.6 billion, down from $4.6 billion a year ago.
 Nonperforming Assets
 At Sept. 30, total nonperforming assets were $6,587 million, down from $6,664 million on the same date a year ago.
 Total non-LDC nonperforming assets at Sept. 30 were $5,140 million, compared with $5,100 million at June 30 and $4,895 million a year ago. Non-LDC nonperforming loans at Sept. 30 were $3,617 million, compared with $3,453 million at June 30 and $3,564 million on the same date a year ago. Assets acquired as loan satisfactions were $1,523 million at Sept. 30, down $124 million (including $85 million in sales of other real estate owned) from $1,647 million at June 30 and compared with $1,331 million on Sept. 30 of last year.
 LDC nonperforming loans were $1,447 million at Sept. 30, down $322 million from $1,769 million on the same date a year ago.
 Allowance for Losses
 (Dollars in millions)
 9/30/92 9/30/91
 Total allowance for losses $3,113 $3,685
 As a percent of total loans 3.8 pct 4.4 pct
 Non-LDC allowance for losses $2,210 $1,898
 As a percent of non-LDC loans 2.9 pct 2.4 pct
 LDC allowance for losses $ 903 $1,787
 As a percent of term outstandings
 including previous charge-offs
 with claims retained 56 pct(A) 58 pct
 (A) -- 25 percent excluding previous charge-offs with claims retained.
 Stockholders' Equity and Capital Ratios
 (Dollars in billions)
 9/30/92 6/30/92 9/30/91
 Total stockholders' equity $9.6 $9.6 $7.8
 Common stockholders' equity 7.8 7.6 6.2
 Tangible equity 8.5 8.4 6.6
 Ratios:
 Total equity to assets 6.9 pct 6.7 pct 5.5 pct
 Common equity to assets 5.6 5.3 4.4
 Tangible equity to assets 6.2 6.0 4.8
 Tier I Leverage 6.5 6.5 5.0
 Risk-based capital
 (1992 guidelines):
 Tier I (4.0 percent required) 7.0 pct(A) 7.0 pct 5.6 pct
 Total (8.0 percent required) 11.2 pct(A) 11.1 pct 9.7 pct
 (A) -- Estimated.
 Other Financial Data
 The corporation's effective tax rate in the third quarter was lower compared with the same year-ago period, reflecting a decline in foreign taxes.
 In 1992, income tax expense included federal income tax benefits of $93 million and $213 million in the third quarter and nine months, respectively. The corporation's 1991 income tax expense included federal income tax benefits of $42 million in the third quarter and $92 million for the first nine months. In addition, 1991 income tax expense was reduced by $55 million in the first nine months as a result of settlements with the Internal Revenue Service of taxes from prior years.
 Total assets at Sept. 30 were $138.8 billion, versus $142.4 billion on the same date a year ago. Total loans at Sept. 30 were $82.1 billion, compared with $84.1 billion a year ago. At the end of the third quarter, total deposits were $89.8 billion, compared with $92.0 billion at Sept. 30, 1991.
 The return on average total assets was .80 percent in the third quarter and .75 percent for the nine months, compared with .60 percent and .54 percent in the respective 1991 periods.
 The return on average common stockholders' equity was 12.49 percent for the third quarter and 12.03 percent in the nine months, versus 11.08 percent and 10.46 percent in the similar year-ago periods.
 Book value per common share was $31.67 at Sept. 30, versus $33.96 per share on the same date a year ago.
 Texas Commerce Bancshares
 Texas Commerce Bancshares (TCB) earned $45 million in the third quarter, up from $35 million in the year-ago period. Earnings for the first nine months were $134 million, versus $97 million in the same period of 1991.
 Nonperforming assets at TCB were reduced for the 17th consecutive quarter, to $525 million at Sept. 30, 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 4.11 percent in the third quarter and 4.13 percent for the first nine months, versus 3.90 percent and 3.78 percent in the respective 1991 periods.
 -0- 10/20/92
 /CONTACT: John Meyers (media), 212-270-7454; John Stefans (media), 212-270-7438; or John Borden (investors), 212-270-7318, all of Chemical Banking/
 (CHL) CO: Chemical Banking Corporation ST: New York IN: FIN SU: ERN


GK-LO -- NY082 -- 2408 10/20/92 14:36 EDT
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Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Date:Oct 20, 1992
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