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FIRST CHICAGO REPORTS NET INCOME OF $169 MILLION

    CHICAGO, July 14 /PRNewswire/ -- First Chicago Corporation (NYSE: FNB) today reported net income of $169 million, or $1.81 per common share, for the second quarter of 1993.  Return on common stockholders' equity was 21 percent.
    Net income for the second quarter of 1992 was $35 million, or $0.32 per share. Earnings for the first quarter of 1993 were $179 million, or $1.97 per share.
    Chairman Richard L. Thomas said:  "This marks the third consecutive quarter of strong earnings, reflecting continuing improvement in all of our core businesses.  The credit card and capital markets businesses, in particular, made exceptional contributions to our results this quarter."
    Thomas added:  "We have also benefitted from substantially lower credit costs since the launching of the accelerated asset disposition program last September.  And in the second quarter our operating efficiency -- the relationship of operating expenses to revenue -- improved to 59 percent, when adjusted for the earnings of the venture capital business."
    SECOND QUARTER HIGHLIGHTS
    Combined trading activities generated record profits of $92 million, reflecting excellent results from interest rate and bond derivatives, as well as from emerging markets. Foreign exchange trading profits were also strong for the quarter.
    Equity securities gains from the venture capital portfolio were $42 million, compared with the substantial market appreciation of $118 million in the first quarter.  The entire venture capital business -- including revenues, the portfolio's cost-to-carry and other expenses -- contributed $19 million, or 22 cents per share, to second quarter earnings.  Venture capital earnings were $57 million, or 67 cents per share, in the first quarter.  This business generated a loss of $21 million, or 29 cents per share, in 1992's second quarter.
    The credit card business continued to produce excellent results. Earnings increased significantly from the year-ago quarter and total managed credit card receivables reached $8.9 billion at June 30, up 19 percent from last year.  During the second quarter, $1 billion of receivables were sold in a securitization transaction.
    The corporation completed the previously announced bulk sale of real estate assets from the accelerated disposition portfolio to GE Capital. Overall, the pace and pricing of sales in this program have exceeded management's expectations.  At June 30, approximately 66 percent of the original disposition portfolio had been liquidated, and the carrying value of remaining assets represented 38 percent of original contractual exposure.  Given this conservative valuation, it was appropriate to bring the net gain of $10 million from portfolio activity during the quarter into earnings.
    A $12 million charge was recorded to accelerate theamortization of certain acquired intangible assets.
    Combined commercial credit provisions were $25 million, or 66 basis points of related assets, significantly improved from 190 basis points one year ago.
    Nonperforming assets, excluding the disposition portfolio, increased modestly to $415 million, or 10 percent, from March 31. The corporation's nonperforming asset ratio of 1.9 percent remains one of the lowest among major U.S. banks.
    Capital ratios, at the corporate level and at all major bank subsidiaries, continue to exceed the regulatory guidelines for "well- capitalized" status.  The corporation's estimated Tier 1 risk-adjusted capital ratio was 8.0 percent, and the total risk adjusted ratio was approximately 12.9 percent.
    For the first six months of 1993, net income was $348 million, or $3.78 per common share.  For the 1992 first half, net income was $121 million, or $1.39 per common share, before the cumulative impact of changes in accounting principles.  Return on common stockholders' equity for the first half of 1993 was 22 percent.
    NET INTEREST INCOME
    Net interest income on a tax-equivalent basis was $312 million in the second quarter. Net interest margin was 2.56 percent, and average earning assets were $48.7 billion.
    Adjusted for the effects of credit card securitization and the activities of the corporation's capital markets subsidiary, net interest margin was 3.58 percent.  Adjusted net interest margin was 3.35 percent in the second quarter of 1992 and 3.61 percent in the first quarter of 1993.  The slight decline in adjusted net interest margin from the first quarter was due principally to a substantial increase in the average volume of trading assets.
    NONINTEREST INCOME
    Total noninterest income was $504 million for the second quarter. Trading activities generated record profits of $92 million.
    Equity securities gains of $79 million included $42 million from the venture capital portfolio and $37 million from other equity securities principally held in conjunction with corporate financing activities.
    The net gain of $10 million from accelerated disposition activities was recorded in other revenue.
    NONINTEREST EXPENSE
    Operating noninterest expense was $454 million for the second quarter, excluding the $12 million accelerated amortization of intangibles and provisions for other real estate.  This reflects a 12 percent increase from $403 million in the second quarter of 1992.
    Marketing expenses and operating costs related to the growth of the credit card business contributed to the increase.  In addition, salaries and benefits expense reflected annual merit increases and higher incentive compensation accruals, which are linked primarily to the corporation's overall performance.
    CREDIT QUALITY
    The carrying value of the accelerated asset disposition portfolio was $402 million at June 30, down from $595 million at March 31.  The corporation liquidated $386 million of contractual exposure during the quarter, resulting in a reduction of $193 million in carrying value.  At June 30, the portfolio's carrying value was 38 percent of original contractual value, compared with 41 percent at March 31.
    The provision for credit losses was $70 million for the second quarter.  This included $46 million for the consumer portfolio and $24 million for commercial credits.  The provision for other real estate was $1 million.
    The corporation's allowance for credit losses was $820 million, representing 3.8 percent of total loans and 222 percent of nonperforming loans at quarter-end.  Of the total allowance, $487 million was related to the commercial segment and $333 million to the consumer portfolio.
    Net charge-offs for the second quarter were $32 million. Commercial net charge-offs were $6 million.  Consumer net charge-offs, mainly in the credit card portfolio, were $26 million. The net charge-off rate for credit card receivables was 3.9 percent, down substantially from 4.6 percent a year earlier due to lower personal bankruptcy filings.
     FIRST CHICAGO CORPORATION AND SUBSIDIARIES COMPARATIVE SUMMARY
             (Dollars in millions, except per share data)
    Three months ended June 30               1993      1992    Change
    Net interest income--tax-
     equivalent basis                      $311.5    $300.9   +  4 pct.
    Combined credit provisions               71.0     127.0   - 44
    Noninterest income                      503.5     287.8   + 75
    Noninterest expense
     (excluding provision for
     other real estate)                     465.6     403.1   + 16
    Net income                              168.5      34.5      -
    Earnings per share  Primary             $1.81     $0.32      -
    Average common and common-equivalent
     shares (in millions)                    84.5      73.1   + 16 pct.
    Fully diluted                           $1.72     $0.32      -
    Average shares, assuming full
     dilution (in millions)                  91.4      76.5   + 19 pct.
    Average balances
     Loans                                $21,974   $25,113   - 12 pct.
     Earning assets                        48,749    46,240   +  5
     Total assets                          56,951    53,836   +  6
     Common stockholders' equity            2,937     2,749   +  7
    Stockholders' equity                    3,806     3,318   + 15
    Net interest margin                     2.56 pct. 2.62 pct. -2 pct.
    Return on assets                        1.19      0.26        -
    Return on common stockholders' equity   20.9       3.5        -
              (Dollars in millions, except per share data)
    For the Six Months Ended June 30       1993      1992    Change
    Net interest income--tax-equivalent
     basis                                $616.5    $597.1     +  3 pct.
    Combined credit provisions             136.5     245.0     - 44
    Noninterest income                     994.0     667.4     + 49
    Noninterest expense (excluding
     provision for other real estate)      899.2     817.8     + 10
    Income before cumulative effect of
     changes in accounting principles      347.6     121.3        -
    Cumulative effect of changes in
     accounting principles--
      Valuation of venture capital
       investment securities                   -     220.7        -
      Recognition of credit card
       solicitation costs                      -     (12.7)       -
    Net income                             347.6     329.3     +  6
    Earnings per share
    Primary
     Income before cumulative effect of
      changes in accounting principles     $3.78     $1.39        -
     Cumulative effect of changes in
      accounting principles                    -      2.91        -
      Net income                            3.78      4.30     - 12
     Average common and common-equivalent
      shares (in millions)                  84.1      71.5     + 18 pct.
    Fully diluted
     Income before cumulative effect of
      changes in accounting principles     $3.64     $1.39        -
     Cumulative effect of changes in
      accounting principles                    -      2.78        -
      Net income                            3.64      4.17     - 13
    Average shares, assuming full
     dilution (in millions)                 89.5      74.8     + 20
    Average balances
     Loans                               $22,068   $25,383     - 13
     Earning assets                       48,344    46,120     +  5
     Total assets                         56,389    53,956     +  5
     Common stockholders' equity           2,870     2,693     +  7
     Stockholders' equity                  3,663     3,262     + 12
    Net interest margin                    2.57 pct.  2.60 pct. -1pct.
    Return on assets                       1.24      1.23     +  1
    Return on common stockholders' equity  22.4      23.0     -  3
    At June 30                           1993      1992    Change
    Total assets                       $49,936   $47,709     +  5 pct.
    Total deposits                      27,794    29,623     -  6
    Loans                               21,621    24,458     - 12
    Common stockholders' equity          3,018     2,987     +  1
    Stockholders' equity                 3,887     3,556     +  9
               FIRST CHICAGO CORPORATION AND SUBSIDIARIES
                        Consolidated Balance Sheet
                          (Dollars in millions)
    June 30                                          1993      1992
    Assets
    Cash and due from banks--noninterest bearing   $ 4,161   $ 3,576
    Due from banks--interest bearing                 6,290     6,203
    Federal funds sold and securities under resale
    agreements                                       7,852     4,146
    Trading account assets                           3,427     2,724
    Investment securities                            2,185     2,209
    Loans                                           21,621    24,458
      Less Allowance for credit losses                 820       858
      Loans, net                                    20,801    23,600
    Assets held for accelerated disposition            355         -
    Premises and equipment                             602       575
    Accrued income receivable                          536       494
    Customers' acceptance liability                    498       586
    Currency options purchased                         617       752
    Other assets                                      2,612     2,844
              Total assets                          $49,936   $47,709
    Liabilities
    Deposits
      Demand                                        $ 6,964   $ 6,377
      Savings                                         7,545     7,130
      Time                                            5,063     7,608
      Foreign offices                                 8,222     8,508
              Total deposits                         27,794    29,623
    Federal funds purchased and securities under
     repurchase agreements                            6,359     5,545
    Commercial paper                                    119       246
    Other funds borrowed                              5,508     3,264
    Long-term debt                                    2,366     1,718
    Acceptances outstanding                             498       586
    Currency options written                            499       669
    Other liabilities                                 2,906     2,502
              Total liabilities                      46,049    44,153
    Stockholders' Equity
    Preferred stock--without par value, authorized
    15,000,000                                          869       569
    Common stock--$5 par value                          417       398
                                        1993          1992
      Number of shares authorized   150,000,000   150,000,000
      Number of shares issued        83,369,073    79,509,301
      Number of shares outstanding   83,217,811    79,413,213
    Surplus                               1,617         1,563
    Retained earnings                       989         1,027
    Translation adjustments                  -              2
              Total                       3,892         3,559
    Less Treasury stock at cost 151,262 shares in 1993
    and 96,088 shares in 1992                     5         3
              Stockholders' equity            3,887     3,556
              Total liabilities and stockholders'
              equity                        $49,936   $47,709
              FIRST CHICAGO CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED INCOME STATEMENT
                  (In millions, except per share data)
                                  Three Months         Six Months
    Periods ended June 30,       1993      1992      1993      1992
    Interest Income
    Interest and fees on loans  $416.3    $490.7  $  839.1  $  995.2
    Interest on bank balances     75.9      88.8     154.7     184.7
    Interest on federal funds sold
     and securities under resale
     agreements                   82.0      73.4     166.6     145.2
    Interest on trading account
     assets                       55.7      65.4     106.4     128.2
    Interest on investment
     securities (including
     dividends)                   18.6      19.4      40.9      39.4
          Total                  648.5     737.7   1,307.7   1,492.7
    Interest Expense
    Interest on deposits         160.6     263.9     331.6     558.0
    Interest on federal funds
     purchased and securities under
     repurchase agreements        71.6      89.3     152.8     175.3
    Interest on commercial paper   1.4       2.3       3.2       4.6
    Interest on other funds
     borrowed                     75.5      58.6     149.0     113.0
    Interest on long-term debt    36.2      33.5      69.1      66.4
              Total              345.3     447.6     705.7     917.3
    Net Interest Income          303.2     290.1     602.0     575.4
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Date:Jul 14, 1993
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