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CHEMICAL REPORTS 1991 EARNINGS OF $154 MILLION AFTER $625 MILLION MERGER-RELATED RESTRUCTURING CHARGE

CHEMICAL REPORTS 1991 EARNINGS OF $154 MILLION AFTER $625 MILLION
 MERGER-RELATED RESTRUCTURING CHARGE
 (The following press release on Chemical Banking Corporation's fourth quarter and full-year 1991 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, Jan. 9 /PRNewswire/ -- Chemical Banking Corporation (NYSE: CHL) today reported net income of $154 million, or $.11 per common share, for the full year 1991, and a net loss of $420 million, or ($2.49) per share, for the fourth quarter, reflecting the fourth quarter merger-related restructuring charge of $625 million. These results compare with net income of $440 million, or $1.84 per share, for all of 1990, and net income of $3 million, and a net loss per share of ($.16) after preferred dividends, for the fourth quarter of 1990.
 Excluding the restructuring charge, earnings for the full year would have been $779 million, or $3.56 per share, and earnings for the fourth quarter would have been $205 million, or $.93 per common share. There were no tax benefits recorded in connection with the restructuring charge.
 The restructuring charge reflects expenses associated with cost- saving actions arising from the merger. These actions include the consolidation of operations and the elimination of redundant expenses which management is confident will result in annual expense savings of approximately $750 million by 1995.
 "The corporation's performance for both the fourth quarter and full year benefited from an increase in net interest income, higher income from trading activities and other fee-based businesses and continued strong operating expense management," said John F. McGillicuddy, chairman and chief executive officer of Chemical Banking Corporation. "Although the weak economy continued to impact our loan portfolio, during the fourth quarter we had the capacity to generate strong operating earnings while at the same time absorbing a high level of charge-offs and adding $104 million to our non-LDC allowance for losses. During the same period, non-LDC nonperforming loans declined and total non-LDC nonperforming assets remained flat.
 "Despite the fourth-quarter restructuring charge, our capital position at year-end 1991 was strong, with $7.3 billion in stockholders' equity and a Tier I risk-based capital ratio of approximately 5.0 percent, well in excess of regulatory requirements," said McGillicuddy. "In keeping with plans to further strengthen the corporation's capital position and improve its credit standing, Chemical anticipates raising $1.25 billion in new common stock. After this equity offering, the corporation expects to have a Tier I risk-based capital ratio in excess of six percent."
 Net Interest Income
 Net interest income for the fourth quarter was $1,182 million, up 28 percent from $922 million in the same year-ago period. For the full year, net interest income was $4,113 million, up 15 percent from $3,562 million for all of 1990.
 The net yield on interest-earning assets was 3.79 percent in the fourth quarter and 3.33 percent for the year, compared with 2.89 percent and 2.81 percent in the respective 1990 periods.
 For the fourth quarter, average interest-earning assets were $125.6 billion, compared with $129.6 billion in the same year-ago period. Average interest-earning assets for the full year 1991 were $124.9 billion, versus $130.0 billion in 1990.
 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 for the fourth quarter include $107 million in interest payments received from Brazil during 1991, including $81 million of such payments which were received during prior quarters but had not been previously taken into income. The corporation recognized these payments in fourth quarter income in connection with an action taken to adjust its Brazilian medium- and long-term outstandings to an estimated net recoverable value.
 Noninterest Revenue
 Noninterest revenue for the fourth quarter was $691 million, compared to $651 million in the same period a year ago. For the full year, noninterest revenue was $2,846 million, compared with $2,781 million for all of 1990.
 The results for both periods reflected higher combined revenues from trading activities, including record annual trading revenues for the full year 1991, and higher fees from other banking services.
 Combined trading revenues for the fourth quarter were $126 million, up from $119 million in the same year-ago period, including trading account revenues of $62 million, up from $45 million in the year-ago fourth quarter, and foreign exchange trading revenues of $64 million, compared with $74 million in the 1990 fourth quarter. Combined trading revenues for all of 1991 were $671 million, up 29 percent from $519 million in 1990. The results for 1991 included trading account revenues of $382 million, compared with $206 million in 1990, and foreign exchange trading revenues of $289 million, versus $313 million a year ago.
 Noninterest Expense
 Noninterest expense in the fourth quarter was $1,165 million (excluding the $625 million restructuring charge), compared with $1,181 million in the third quarter of 1991 and with $1,133 million in the fourth quarter a year ago.
 For the full year, noninterest expense was $4,699 million (excluding the $625 million restructuring charge), compared with $4,501 million for all of last year (excluding a $152 million restructuring charge relating to the closing or downsizing of certain businesses and resulting staff reductions).
 The results for both the fourth quarter and the year 1991 reflected an increase in costs associated with foreclosed property and higher FDIC insurance premiums. These combined costs were $152 million higher for the full year 1991 than in 1990.
 Total staff at Dec. 31, 1991 was 43,169, down 2,467 from 45,636 on the same date a year ago.
 Provision and Allowance for Losses
 The provision for losses was $450 million for the fourth quarter, compared with $488 million in the fourth quarter of 1990. For the full year, the provision for losses was $1,345 million, compared with $1,161 million for all of 1990.
 The current quarter provision included a $104 million addition to the non-LDC allowance, while the year-ago fourth quarter provision included a $200 million addition to this allowance.
 At Dec. 31, 1991, the non-LDC allowance for losses was $2,012 million, up $160 million from $1,852 million on the same date a year ago.
 Non-LDC net charge-offs were $346 million in the fourth quarter, compared with $307 million in the third quarter of 1991 and $288 million in the fourth quarter of 1990. For the full year, such net charge-offs were $1,191 million, compared with $752 million for all of 1990.
 LDC net charge-offs, including losses on sales and swaps, were $524 million in the fourth quarter and $1,114 million for the full year, compared with $183 million and $1,505 million in the respective periods of 1990.
 The 1991 fourth quarter results reflected the decision to charge-off $491 million of Brazilian loans, after taking into consideration the corporation's own evaluation of its LDC portfolio and the actions of ICERC (Interagency Country Exposure Review Committee). This action had the effect of adjusting the corporation's Brazilian medium- and long- term outstandings to an estimated net recoverable value.
 The full year 1991 results included a total of $902 million in charge-offs of Brazilian loans. The 1990 full-year results included charge-offs of $295 million of loans to Argentina, $473 million in Brazilian loans and $350 million of Mexican loans, the latter in connection with the exchange of Mexican medium- and long-term loans for bonds collateralized by U.S. Treasury zero-coupon obligations.
 At Dec. 31, 1991, the LDC allowance was $1,263 million, compared with $2,377 million on the same date a year ago. Total LDC medium-and long-term outstandings at Dec. 31, 1991, were $3.9 billion, versus $5.5 billion at the end of 1990.
 Nonperforming Assets
 Non-LDC nonperforming loans at Dec. 31, 1991, were $3,380 million, down from $3,564 million at Sept. 30 and compared with $3,341 million on Dec. 31 a year ago.
 LDC nonperforming loans were $1,248 million at Dec. 31, down from $1,769 million at Sept. 30 and down $1,236 million from $2,484 million at the end of 1990.
 At Dec. 31, 1991, total nonperforming assets were $6,155 million, down from $6,664 million at Sept. 30 and from $6,699 million at Dec. 31, 1990.
 Nonperforming Assets
 ($ in millions) 12/31/91 9/30/91 12/31/90
 Non-LDC nonperforming loans $3,380 $3,564 $3,341
 Assets acquired as loan
 satisfactions 1,527 1,331 874
 Total non-LDC nonperforming assets 4,907 4,895 4,215
 LDC nonperforming loans:
 Brazil 745 1,235 1,721
 Argentina 315 327 437
 Other LDC countries 188 207 326
 Total LDC nonperforming loans 1,248 1,769 2,484
 Total nonperforming assets 6,155 6,664 6,699
 Allowance for Losses ($ in millions) 12/31/91 12/31/90
 Total allowance for losses $3,275 $4,229
 As a percent of total loans 3.9 4.9
 Non-LDC allowance for losses 2,012 1,852
 As a percent of non-LDC loans 2.5 2.3
 LDC allowance for losses 1,263 2,377
 As a percent of term outstandings including
 previous charge-offs with claims retained 59(A) 57
 (A) 27 percent excluding previous charge-offs with claims retained.
 Stockholders' Equity and Capital Ratios
 ($ in billions) 12/31/91 9/30/91 12/31/90
 Total stockholders' equity $7.3 $7.8 $7.2
 Common stockholders' equity 5.7 6.2 5.8
 Tangible equity 6.1 6.7 6.0
 Ratios:
 Total equity to assets 5.2 pct 5.5 pct 5.3 pct
 Common equity to assets 4.1 4.4 4.3
 Tangible equity to assets 4.4 4.8 4.4
 Tier I leverage 4.7 5.0 4.6
 Risk-based capital (1992 guidelines):
 Tier I (4.0 percent required) 5.0 pct(A) 5.6 pct 5.2 pct
 Total (8.0 percent required) 9.0 (A) 9.7 9.4
 (A) -- estimated.
 Other Financial Data
 The corporation's full-year 1991 income tax expense was reduced by $55 million in the first and second quarters as a result of settlements with the Internal Revenue Service of taxes from prior years.
 As a result of the merger, Manufacturers Hanover Corporation during the fourth quarter of 1991 adopted FASB 96, retroactive to Jan. 1, 1988, to conform with the method of accounting used by Chemical Banking Corporation. While the accounting change had no impact on fourth quarter 1991 results, it resulted in additions to net income of $31 million and $10 million in 1991 and 1990, respectively, and a $107 million reduction in the corporation's retained earnings at Dec. 31, 1989, on a restated basis.
 Total assets at Dec. 31 were $138.9 billion, versus $136.2 billion on the same date a year ago. Total loans at Dec. 31 were $84.2 billion, compared with $85.7 billion a year ago. At year-end 1991, total deposits were $93.0 billion, compared with $89.1 billion at the end of 1990.
 Excluding the restructuring charge, the return on average total assets for the fourth quarter of 1991 was .57 percent and the return on average common shareholders' equity for the same period was 10.81 percent.
 Excluding the restructuring charge, for the full year 1991 the return on average total assets was .55 percent (.11 percent including the restructuring charge) and the return on average common shareholders' equity was 10.62 percent (.33 percent including the restructuring charge).
 Book value per common share was $31.02 at Dec. 31, versus $33.00 per share at the end of 1990.
 Texas Commerce Bancshares
 Texas Commerce Bancshares (TCB) earned $126 million for the full year 1991, its highest level of earnings in six years and 21 percent above the $104 million reported for 1990. For the fourth quarter, TCB earned $29 million, versus $26 million in the year-ago fourth quarter.
 The fourth quarter 1991 results include a $7 million special provision taken in connection with the streamlining of certain businesses and a resulting reduction in staff.
 Nonperforming assets at TCB were reduced for the 14th consecutive quarter, to a total of $689 million at Dec. 31, 1991.
 The performance for both 1991 periods reflected an increase in net interest income and the net yield and higher noninterest revenue, partially offset by higher noninterest expense (primary related to foreclosed property and FDIC assessments). The net yield on interest- earnings assets was 3.72 percent in the fourth quarter and 3.76 percent for the full year, versus 3.54 percent and 3.43 percent in the respective 1990 periods.
 -0- 1/9/92
 /CONTACT: John Meyers, 212-270-7454, or 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-OS -- NY063 -- 8359 01/09/92 15:57 EST
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