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CHEMICAL BANKING REPORTS RESULTS

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


Corporation's 1992 second quarter and six 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, July 21 /PRNewswire/ -- Chemical Banking Corporation (NYSE: CHL) today reported second quarter net income of $240 million, a 30 percent increase from $184 million in the same period a year ago. For the first six months, net income was $500 million, up 37 percent from $365 million in the first half of 1991.
 Net income per common share in the second quarter was $.83, unchanged from the year-ago quarter. For the first six months, net income per common share was $1.83, versus $1.67 per share in the same period a year ago. The 1992 second quarter and six months per share results reflect the sale in January of 57.5 million new shares of the corporation's common stock, which raised more than $1.5 billion in new common equity.
 "Our earnings momentum continued in the second quarter with strong results in most of our businesses. Pre-tax earnings rose 72 percent from a year ago, further underscoring the success of our merger," said John F. McGillicuddy, chairman and chief executive officer of Chemical Banking Corporation. "This performance was again achieved against a high level of provision for losses and net charge-offs, the result of a continued weak economy. However, the provision is down from its peak in the 1992 first quarter and we expect it to decline further during the remainder of the year."
 "We successfully completed the merger of our flagship banks on June 19. Our efforts to date are ahead of schedule and the merger process resulted in cost savings of approximately $65 million in the second quarter," said Walter V. Shipley, president and chief operating officer. "We now expect to realize merger related expense savings of $280 million by the end of 1992, up from our original estimate of $225 million and well on the way to exceeding the $750 million in annual savings we have targeted in 1995."
 The corporation's estimated Tier I risk-based capital ratio under the 1992 guidelines was 6.8 percent at June 30, compared with 5.5 percent on the same date a year ago. The current results include approximately $1.6 billion in new common equity raised primarily through the sale in January of 57.5 million shares of common stock, $281 million in retained earnings generated during the first six months and the issuance in the 1992 second quarter of $350 million of perpetual preferred stock.
 Total stockholders' equity at June 30 was $9.56 billion, up $1.92 billion, or 25 percent, from $7.64 billion on June 30 a year ago.
 Net Interest Income
 Net interest income in the second quarter was $1,099 million, up 14 percent from $963 million in the same year-ago period. For the first six months, net interest income was $2,214 million, up 16 percent from $1,905 million in the year-ago six months.
 The net yield on interest-earning assets was 3.69 percent in the second quarter, compared with 3.16 percent in the year-ago second quarter. The net yield for the first six months was 3.70 percent, compared with 3.10 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 second quarter were $120.4 billion, compared with $124.8 billion in the year-ago period. For the first six months, average interest-earning assets were $120.9 billion, versus $125.4 billion in the same period of 1991.
 Noninterest Revenue
 Noninterest revenue for the second quarter was $744 million, up from $713 million in the same period a year ago. For the first six months, noninterest revenue was $1,554 million, up from $1,410 million a year ago.
 The results for both periods reflected increases in total trading revenues and fees for other banking services.
 Combined revenues from all trading activities were $170 million in the second quarter, up 15 percent from $148 million in the same year-ago period. These results included trading account revenues of $121 million, up from $82 million in the year-ago second quarter, and foreign exchange trading revenues of $49 million, down from $66 million in the 1991 second quarter.
 For the first six months, total trading revenues were $398 million, up 27 percent from $314 million in the year-ago period. This included trading account revenues of $254 million, up from $162 million, and foreign exchange trading revenues of $144 million, compared with $152 million in the year-ago six months.
 Fees for other banking services in the second quarter were $265 million, up from $240 million in the year-ago second quarter. For the six months, such fees were $526 million, up from $465 million in the same year-ago period.
 Corporate finance and loan syndication fees were $79 million in the second quarter, versus $100 million in the same period a year ago. Such fees for the first six months were $133 million, versus $149 million a year ago.
 Investment securities gains in the second quarter were $15 million, versus $5 million a year ago. For the first six months, investment securities gains were $47 million, compared with $44 million in the same 1991 period.
 Noninterest Expense
 Noninterest expense in the second quarter was $1,191 million, down from $1,195 million in the second quarter of 1991. For the first six months, noninterest expense was $2,390 million, versus $2,353 million a year ago.
 The results for the 1992 second quarter included an increase in FDIC insurance premiums (up $6 million from the year-ago period). Noninterest expense for the first six months included increases in costs associated with foreclosed property and higher FDIC insurance costs, which together were up $29 million from the same 1991 period. Both 1992 periods included higher accruals for incentive compensation costs related to increased revenues in several capital markets activities.
 For the first six months, the ratio of noninterest operating expense to total operating revenue improved to 63.8 percent, from 71.0 percent in the same period a year ago.
 Noninterest expense in the second quarter reflected expense savings related to the Dec. 31, 1991 merger of Chemical Banking Corporation and Manufacturers Hanover Corporation. The corporation realized such savings of approximately $65 million in the second quarter and $115 million in the first six months, primarily from workforce reductions as a result of attrition and layoffs.
 Total staff at June 30, 1992 was 39,974, down 4,528 from July 15, 1991, when the merger was first announced.
 Provision and Allowance for Losses
 The provision for losses was $345 million in the second quarter, compared with $303 million in the second quarter of 1991. For the first six months, the provision was $720 million, versus $582 million in the same year-ago period.
 Non-LDC net charge-offs were $345 million in the second quarter, compared with $273 million in the same quarter in 1991, and $720 million for the first six months, versus $538 million in the year-ago period. LDC net charge-offs, including losses on sales and swaps, were $53 million in the second quarter, compared with $486 million in the same period a year ago, and $54 million for the first six months, versus $543 million in the year-ago period.
 During the second quarter, the corporation transferred $200 million of the allowance for losses allocated to the LDC portfolio to the non- LDC portion of the allowance. The transfer reflects recent progress in debt negotiations with Brazil and Argentina and the corporation's ongoing analysis and evaluation of its LDC loan portfolio.
 At June 30, the non-LDC allowance for losses was $2,211 million, up $318 million from $1,893 million on the same date a year ago.
 The LDC allowance at June 30 was $1,009 million, compared with $1,834 million on the same date a year ago. Total LDC medium- and long- term outstandings at June 30 were $3.8 billion, down from $4.7 billion a year ago.
 Nonperforming Assets
 Non-LDC nonperforming loans at June 30 were $3,453 million, compared with $3,437 million at June 30 a year ago. Total non-LDC nonperforming assets at June 30 were $5,100 million, compared with $4,700 million a year ago.
 LDC nonperforming loans were $1,465 million at June 30, down $368 million from $1,833 million on the same date a year ago. The 1992 results include approximately $257 million in loans to Yugoslavia that were placed on nonperforming status in the second quarter.
 At June 30, total nonperforming assets were $6,565 million, compared with $6,533 million on the same date a year ago.
 CHEMICAL BANKING CORPORATION
 Nonperforming assets
 ($ in millions)
 6/30/92 3/31/92 6/30/91
 Non-LDC nonperforming loans $3,453 $3,421 $3,437
 Assets acquired as loan satisfactions 1,647 1,584 1,263
 Total non-LDC nonperforming assets 5,100 5,005 4,700
 LDC nonperforming loans:
 Brazil 734 737 1,240
 Argentina 322 317 327
 Other LDC countries 409 182 266
 Total LDC nonperforming loans 1,465 1,236 1,833
 Total nonperforming assets $6,565 $6,241 $6,533
 CHEMICAL BANKING CORPORATION
 Allowance for losses
 ($ in millions)
 June 30: 1992 1991
 Total allowance for losses $3,220 $3,727
 As a percentage of total loans 3.8 4.4
 Non-LDC allowance for losses 2,211 1,893
 As a percentage of non-LDC loans 2.7 2.4
 LDC allowance for losses 1,009 1,834
 As a percentage of term outstandings
 including previous charge-offs with
 claims retained 56(A) 58
 (A) -- 27 percent excluding previous charge-offs with claims retained.
 Stockholders' equity and capital ratios
 ($ in billions)
 6/30/92 3/31/92 6/30/91
 Total stockholders' equity $9.6 $9.0 $7.6
 Common stockholders' equity 7.6 7.4 6.1
 Tangible equity 8.4 7.8 6.5
 Ratios (as a percent):
 Total equity to assets 6.7 pct 6.6 pct 5.5 pct
 Common equity to assets 5.3 5.4 4.4
 Tangible equity to assets 6.0 5.8 4.7
 Tier I Leverage 6.5 6.0 5.0
 Risk-Based capital
 (1992 guidelines):
 Tier I (4.0 percent required) 6.8 6.6 5.5
 Total (8.0 percent required) 10.8 10.7 9.6
 (A) -- Estimated
 Other Financial Data
 In 1992, income tax expense included Federal income tax benefits of $65 million and $120 million in the second quarter and six months, respectively. The corporation's 1991 income tax expense included Federal income tax benefits of $33 million in the second quarter and $50 million for the first six months. In addition, 1991 income tax expense was reduced by $32 million in the second quarter and $55 million in the first six months as a result of settlements with the Internal Revenue Service of taxes from prior years.
 Total assets at June 30 were $142.4 billion, versus $138.3 billion on the same date a year ago. Total loans at June 30 were $85.0 billion, compared with $84.1 billion a year ago. At the end of the second quarter, total deposits were $92.8 billion, compared with $88.2 billion at June 30, 1991.
 The return on average total assets was .70 percent in the second quarter and .73 percent for the first six months, compared with .53 percent and .52 percent in the respective 1991 periods.
 The return on average common stockholders' equity was 10.48 percent for the second quarter and 11.80 percent in the six months, versus 10.13 percent and 10.15 percent in the similar year-ago periods.
 Book value per common share was $31.03 at June 30, versus $33.39 per share on the same date a year ago.
 Texas Commerce Bancshares
 Texas Commerce Bancshares (TCB) earned $45 million in the second quarter, up from $34 million in the year-ago period. Earnings for the first six months were $89 million, versus $62 million in the same period of 1991.
 Nonperforming assets at TCB were reduced for the 16th consecutive quarter, to a total of $602 million at June 30, 1992.
 The performance reflected an increase in net interest income and higher non-interest revenue, partially offset by higher noninterest expense (primarily related to foreclosed property and FDIC assessments). The net yield on interest-earning assets was 4.17 percent in the second quarter and 4.14 percent for the first six months, versus 3.88 percent and 3.71 percent in the respective 1991 periods.
 -0- 7/21/92
 /CONTACT: John Meyers, 212-270-7454, John Stefans, 212-270-7438, or investor contact, John Borden, 212-270-7318, all of Chemical Banking/
 (CHL) CO: Chemical Banking Corporation ST: New York IN: FIN SU: ERN


KD-OT -- NY069 -- 1397 07/21/92 13:42 EDT
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Date:Jul 21, 1992
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