BANK OF BOSTON REPORTS THIRD QUARTER NET INCOME OF $140 MILLION OR $1.15 PER SHARE 13% ABOVE PRIOR YEAR BOSTON, October 19, 1995 -- Bank of Boston Corporation (NYSE: BKB) reported today third quarter net income of $140 million, or $1.15 per common share on a fully diluted basis. This compares with $133 million, or $1.10 per share, in the second quarter of 1995 and $124 million, or $1.04 per share ($116 million, or $.96 per share before special revenue items and acquisition-related costs) in the third quarter of 1994. Net income for the first nine months of 1995 was $399 million, or $3.27 per share, compared with net income of $315 million, or $2.60 per share ($322 million, or $2.67 per share before special revenue items and acquisition-related costs) for the first nine months of 1994. Third quarter highlights were (amounts shown for the third quarter of 1994 are before special items): . Total revenues grew to $689 million on a fully taxable equivalent basis, compared with $672 million in the prior quarter and $607 million in the third quarter of 1994; . On a fully taxable equivalent basis, operating income (before credit costs) improved to $298 million in the third quarter, compared with $283 million in the prior quarter and $240 million in the third quarter of 1994; . Operating ratio improved to 56.7% in the third quarter. This compares with 57.9% in the prior quarter and 60.4% in the third quarter of 1994; . Nonaccrual loans and OREO totaled $417 million at September 30, 1995 and June 30, 1995, compared with $470 million at September 30, 1994. The ratio of nonaccrual loans and OREO to related assets was 1.3% in the current and prior quarter, compared with 1.5% in the third quarter of 1994; . Provision for credit losses was increased to $45 million in the third quarter of 1995 from $40 million in the prior quarter and $25 million in the third quarter of 1994. Net credit losses were $39 million in the current quarter, compared with $44 million in the prior quarter and $32 million in the third quarter of 1994; . Return on average common equity was 17.13% in the third quarter of 1995, compared with 17.22% in the prior quarter and 16.65% in the third quarter of 1994. Return on average assets was 1.23% in the third quarter of 1995, compared with 1.21% in the prior quarter and 1.05% in the third quarter of 1994. NET INTEREST REVENUE Net interest revenue, on a fully taxable equivalent basis, was $441 million for the third quarter of 1995, compared with $436 million in the prior quarter and $405 million for the same period in 1994 (excluding special revenue earned in Brazil as discussed below). On this same basis, net interest margin was 4.39% for the third quarter of 1995, compared with 4.49% in the second quarter of 1995 and 4.14% in the third quarter of last year. For the first nine months of 1995, net interest revenue, on a fully taxable equivalent basis, was $1,304 million, compared with $1,123 million for the first nine months of 1994 (excluding special revenue earned in Brazil as discussed below). On this same basis, net interest margin was 4.48% for the first nine months of 1995, compared with 3.98% for the same period in 1994. The $5 million increase in net interest revenue from the prior quarter was due to a $700 million increase in average loans and leases, mainly from the domestic consumer-related and international portfolios, offset, in part, by a 10 basis point decline in net interest margin. The lower margin reflects a cumulative adjustment to the leveraged lease portfolio, which resulted from changes in the Massachusetts income tax rate, and narrower spreads from domestic and Argentine operations, partially offset by wider spreads from Brazilian and Chilean operations. Net interest revenue and margin increased $36 million and 25 basis points, respectively, from the third quarter of 1994 and $181 million and 50 basis points, respectively, from the first nine months of 1994. The improvements in net interest revenue reflected increases of over $1 billion in average loans and leases as growth from domestic consumer-related and international loans was partially offset by declines in the domestic commercial portfolio. In addition, wider spreads from Latin American operations contributed to the improvements in net interest revenue and margin in both comparisons, while wider domestic spreads helped to boost net interest revenue and margin in the nine month comparison. During the third quarter of 1994, the Corporation recognized approximately $20 million ($11 million after-tax, or 10 cents per share) of incremental net interest revenue from Brazilian operations. This revenue resulted from the Corporation successfully positioning itself to take advantage of interest rate movements during the initial phase of Brazils new economic program and, as such, was viewed as a special item. NONINTEREST INCOME Noninterest income is composed of the following: Second Quarter Third Quarter Nine Months - ------- ------------- --------------- 1995 (in millions) 1995 1994 Change 1995 1994 Change ---- ---- ---- ------ ---- ---- ------ $ 113 Financial service fees $ 118 $ 104 $14 $ 337 $ 291 $ 46 57 Trust and agency fees 58 51 7 168 148 20 6 Trading profits and commissions 7 11 (4) 14 16 (2) 0 Securities portfolio gains, net 1 1 0 7 11 (4) 23 Mezzanine/venture capital profits, net 25 9 16 65 27 38 16 Foreign exchange trading profits, net 15 11 4 43 31 12 21 Other income 25 15 10 69 78 (9) ----- ----- ----- --- ----- ----- ---- 236 Subtotal 249 202 47 703 602 101 Gains from sales of businesses: 0 Maine/Vermont bank subsidiaries 0 0 0 75 0 75 0 Domestic factoring business 0 0 0 0 27 (27) ----- ----- ----- --- ----- ----- ---- $ 236 Total $ 249 $ 202 $47 $ 778 $ 629 $149 ===== ===== ===== === ===== ===== ==== Noninterest income increased $13 million from the second quarter of 1995 and $47 million from the third quarter of 1994. Compared with the first nine months of 1994, noninterest income (before business sale gains) grew $101 million. Increases in financial service fee categories are detailed below. The improvement in trust and agency fees from all prior periods mainly reflected higher fees from the Brazilian mutual fund business, as the total funds under management there increased to $2.1 billion at September 30, 1995 from $1.0 billion a year ago, and from the domestic stock transfer business, which has been spun off into a joint venture effective in the fourth quarter of 1995. Trading account profits were down from the third quarter of 1994, which benefited from an unusually high level of profits from international securities trading. Mezzanine/venture capital profits remained strong in the third quarter and showed improvement in all prior period comparisons as a result of a high level of sales activity. Foreign exchange profits were higher compared with prior year periods as increases were posted by international and domestic treasury operations. The increases in other income from the prior quarter and the third quarter of 1994 included higher gains from the sale of mortgage servicing rights, while the decline from the first nine months of 1994 was due, in part, to the absence of net gains recorded during the first quarter of 1994 from the sale of securities originally acquired in connection with loan restructurings. Other income in the third quarter of 1994 included $15 million of exchange rate-related profits stemming from the strengthening of Brazils currency against the U.S. dollar subsequent to the implementation of that countrys new economic program on July 1, 1994. In addition, other income in the third quarter of last year also included the effect of approximately $15 million of charges associated with certain investments, including investments in foreign equity subsidiaries and writedowns of domestic investments acquired in connection with loan restructurings. FINANCIAL SERVICE FEES The components of financial service fees are as follows: Second Quarter Third Quarter Nine Months - ------- ------------- ------------ 1995 (in millions) 1995 1994 Change 1995 1994 Change ----- ----- ----- ------ ----- ----- ------- $ 29 Deposit fees $ 29 $ 32 $(3) $ 88 $ 93 $(5) 16 Letters of credit and acceptance fees 18 17 1 53 44 9 27 Net mortgage servicing fees 22 16 6 70 40 30 17 Loan-related fees 20 15 5 50 44 6 24 Other 29 24 5 76 70 6 ----- ----- ----- --- ----- ----- --- $ 113 Total $ 118 $ 104 $14 $ 337 $ 291 $46 ===== ===== ===== === ===== ===== === The growth in loan-related and other financial service fees is mainly driven by higher syndication and advisory fees reflecting the Corporation's increased emphasis on the capital markets business. Letter of credit and acceptance fees increased compared with all prior periods due to a higher volume of business. The decline in net mortgage servicing fee income from the prior quarter reflected the absence of profits earned in the second quarter from contracts used to manage prepayment risk in the servicing portfolio. Total noninterest income from the mortgage banking business, however, was comparable to the prior quarter due to an increase in gains from the sale of servicing rights as noted above. The positive comparisons with prior year periods reflected growth in the servicing portfolio to $40 billion from $35 billion a year ago. NONINTEREST EXPENSE The components of noninterest expense are as follows: Second Quarter Third Quarter Nine Months - ------- -------------- --------------- 1995 (in millions) 1995 1994 Change 1995 1994 Change ---- ---- ---- ------ ---- ---- ------ $ 220 Employee costs $ 233 $ 207 $ 26 $ 670 $ 600 $ 70 60 Occupancy & equipment 61 59 2 180 171 9 11 Professional fees 13 16 (3) 36 41 (5) 11 FDIC insurance premiums (1) 13 (14) 22 38 (16) 87 Other 85 72 13 254 208 46 ----- ----- ----- ---- ------ ------ ---- Noninterest expense, before acquisition- 389 related charges and OREO costs 391 367 24 1,162 1,058 104 0 Acquisition-related charges 0 5 (5) 0 21 (21) 3 OREO costs 2 6 (4) 6 18 (12) ----- ----- ----- ---- ------ ------ ---- $ 392 Total $ 393 $ 378 $ 15 $1,168 $1,097 $ 71 ===== ===== ===== ==== ====== ====== ==== Noninterest expense, before acquisition-related charges and OREO costs, was $391 million in the third quarter of 1995, compared with $389 million in the prior quarter and $367 million for the same quarter in 1994. Using this expense base, the Corporation's operating ratio of expenses to revenue improved to 56.7% in the third quarter of 1995, compared with 57.9% in the second quarter and 60.4% in the third quarter of last year. The $13 million increase in employee costs from the second quarter was mainly due to higher levels of incentive compensation expense, including stock awards made to senior management under a plan tied to the Corporations common stock price, the acquisitions of Bell Mortgage Company and Century Acceptance Corporation, an expansion of the capital markets business, and higher expenses from Latin American operations. The latter included a higher number of employees and the effect of a wage increase negotiated with the employee union in Brazil. FDIC insurance premiums declined $12 million from the second quarter reflecting a reduction by the FDIC in the assessment rate, retroactive to the month of June. Compared with prior year periods, the increase in noninterest expense mainly reflected increases from the Corporation's Latin American and personal banking growth businesses. The increase in employee costs included merit increases and higher levels of incentive compensation. The increase in nonemployee costs reflected, in part, higher levels of advertising and travel expenses, including spending for key domestic and international business initiatives and the promotion of new products. In addition, the 1995 periods reflect higher levels of goodwill amortization over the comparative 1994 periods. CREDIT PROFILE Loan and Lease Portfolio The segments of the lending portfolio are as follows: (in millions) 9-30-95 6-30-95 3-31-95 12-31-94 9-30-94 ------- ------- ------- -------- ------- United States Operations: Commercial, industrial and financial $ 11,789 $ 11,907 $ 11,684 $ 11,805 $ 11,987 Commercial real estate Construction 412 327 355 354 464 Other commercial real estate 2,303 2,489 2,645 3,141 3,110 Consumer-related loans Secured by 1-4 family residential 4,978 4,752 4,635 5,004 4,878 properties Other 3,131 2,834 2,603 2,462 2,373 Lease financing 1,373 1,356 1,350 1,366 1,312 Unearned income (216) (211) (216) (216) (199) -------- -------- -------- --------- -------- 23,770 23,454 23,056 23,916 23,925 -------- -------- -------- --------- -------- International Operations: Loans and lease financing, net of unearned income 7,921 7,934 7,383 7,089 6,956 -------- -------- -------- --------- -------- Total loans and lease financing $ 31,691 $ 31,388 $ 30,439 $ 31,005 $ 30,881 ======== ======== ======== ========= ======== Loans and leases grew $303 million from June 30 due to an increase in consumer-related loans driven mainly by the Corporation's national consumer finance companies, Ganis Credit Corp. and Fidelity Acceptance Corp. The latter included the addition of loans from the acquisition of Century Acceptance Corp, which closed in July. The growth in the consumer-related categories was partially offset by a drop in domestic commercial loans due to declines in the commercial and industrial and real estate portfolios. Nonaccrual Loans and OREO Nonaccrual loans and OREO amounted to $417 million at September 30, 1995 and June 30, 1995, compared with $470 million at September 30, 1994. Nonaccrual loans and OREO represented 1.3% of related assets at September 30, 1995 and June 30, 1995, compared with 1.5% at September 30, 1994. The components of consolidated nonaccrual loans and OREO are as follows: (in millions) 9-30-95 6-30-95 3-31-95 12-31-94 9-30-94 -------- -------- -------- --------- -------- Domestic nonaccrual loans: Commercial, industrial and financial $ 105 $ 106 $ 111 $ 113 $ 119 Commercial real estate Construction 23 16 20 13 18 Other commercial real estate 82 85 97 106 119 Consumer-related loans Secured by 1-4 family residential 46 45 45 44 35 properties Other 30 21 21 24 15 -------- -------- -------- --------- -------- 286 273 294 300 306 -------- -------- -------- --------- -------- International nonaccrual loans 69 66 57 65 71 -------- -------- -------- --------- -------- Total nonaccrual loans 355 339 351 365 377 OREO 62 78 71 76 93 -------- -------- -------- --------- -------- Total $ 417 $ 417 $ 422 $ 441 $ 470 ======== ======== ======== ========= ======== Provision and Reserve for Credit Losses The reserve for credit losses at September 30, 1995 was $704 million, or 2.22% of outstanding loans and leases, compared with $692 million, or 2.20% at June 30, 1995, and $677 million, or 2.19% at September 30, 1994. The reserve for credit losses was 198% of nonaccrual loans at September 30, 1995, 204% at June 30, 1995, and 179% at September 30, 1994. The provision for credit losses was $45 million for the third quarter of 1995, compared with $40 million for the prior quarter and $25 million for the comparable period last year. For the first nine months of 1995, the provision for credit losses was $175 million, compared with $95 million in the previous year. The first quarter of 1995 included a special provision of $50 million reflecting managements intent to further strengthen the Corporations loan loss reserve. Net credit losses were $39 million for the third quarter of 1995, compared with $44 million for the prior quarter and $32 million for the comparable period last year. Net credit losses as a percent of average loans and leases on an annualized basis were .49% in 1995's third quarter, compared with .57% for the second quarter of 1995 and .42% for the third quarter of 1994. Net credit losses were as follows: Second Quarter Third Quarter Nine Months - ------- ----------------- ----------------- 1995 (in millions) 1995 1994 1995 1994* ---- ---- ---- ---- ----- Domestic $ 9 Commercial, industrial and financial $ 6 $ 6 $ 24 $ 10 14 Commercial real estate 5 7 25 25 Consumer-related loans 3 Secured by 1-4 family residential properties 5 2 12 7 10 Other 11 10 29 30 ----- ----- ----- ----- ----- 36 Subtotal 27 25 90 72 8 International 12 7 34 23 ----- ----- ----- ----- ----- $ 44 Total $ 39 $ 32 $ 124 $ 95 ===== ===== ===== ===== ===== * Excludes credit losses related to the transfer of assets to the accelerated disposition portfolio. THE CORPORATION Bank of Boston Corporation, with assets of $46.1 billion, is New England's only global bank. The Corporation and its subsidiaries provide comprehensive personal, corporate and global banking through a network of 500 offices across the U.S. and through more than 100 offices in 24 countries around the world, the third largest overseas network of any U.S. bank. The Corporation's common and preferred stocks are listed on the New York and Boston stock exchanges. CONSOLIDATED BALANCE SHEET (dollars in millions) June 30 September 30 ------- ------------------------------- 1995 1995 1994 ------- ------- ------- Assets Securities: $1,821 Held to maturity $ 1,765 $ 2,023 3,011 Available for sale 3,277 2,214 31,388 Loans and lease financing 31,691 30,881 (692) Reserve for credit losses (704) (677) ------- -------- -------- 30,696 Net loans and lease financing 30,987 30,204 3,532 Other earning assets 3,637 4,318 6,194 Cash and other nonearning assets 6,417 5,535 ------- ------- ------- $45,254 Total Assets $46,083 $44,294 ======= ======= ======= Liabilities and Stockholders' Equity $29,121 Deposits $30,009 $30,313 9,045 Funds borrowed 8,720 7,283 2,110 Notes payable 2,059 2,131 1,513 Other liabilities 1,702 1,454 ------- ------- ------- 41,789 Total Liabilities 42,490 41,181 ------- ------- ------- Stockholders' Equity 508 Preferred equity 508 508 2,957 Common equity 3,085 2,605 ------- ------- ------- 3,465 Total Stockholders' Equity 3,593 3,113 ------- ------- ------- $45,254 Total Liabilities and Stockholders' Equity $46,083 $44,294 ======= ======= ======= SELECTED AVERAGE BALANCES Quarter Ended Quarters Ended Nine Months Ended June 30 September 30 September 30 ------- ------------------- -------------------- 1995 1995 1994 1995 1994 ---- ----- ----- ------ ------ Assets $30,928 Loans and lease financing $31,625 $30,362 $30,897 $29,366 4,526 Securities 4,824 3,489 4,548 3,203 38,970 Total earning assets 39,867 38,846 38,948 37,750 44,101 Total assets 45,185 43,925 44,049 42,621 Liabilities and Stockholders' Equity 24,195 Interest bearing deposits 24,476 25,012 24,273 23,982 4,612 Noninterest bearing deposits 4,792 4,892 4,672 4,939 ------- ------- ------- ------- ------- 28,807 Total deposits 29,268 29,904 28,945 28,921 2,062 Notes payable 2,065 1,987 2,087 2,045 34,431 Total interest bearing liabilities 35,220 34,360 34,412 33,205 2,889 Common stockholders' equity 3,022 2,540 2,866 2,481 3,397 Total stockholders' equity 3,530 3,048 3,374 2,989 NUMBER OF EMPLOYEES Sept 30 June 30 Sept 30 1995 1995 1994 -------- -------- -------- Full time equivalent employees 18,257 18,113 18,600 CONSOLIDATED STATEMENT OF INCOME (dollars in millions, except per share amounts) Quarter Ended Quarters Ended Nine Months Ended June 30 September 30 September 30 -------- ------------------- ------------------ 1995 1995 1994 1995 1994 ------- ---- ---- ---- ---- $1,103.4 Interest income $1,113.1 $1,083.6 $3,249.7 $2,647.3 669.3 Interest expense 673.7 659.7 1,950.3 1,508.2 -------- ------- ------ ------- ------- 434.1 Net interest revenue 439.4 423.9 1,299.4 1,139.1 40.0 Provision for credit losses 45.0 25.0 175.0 95.0 -------- ------- ------ ------- ------- Net interest revenue after provision 394.1 for credit losses 394.4 398.9 1,124.4 1,044.1 -------- ------- ------ ------- ------- Noninterest income: 113.3 Financial service fees 117.6 104.3 336.5 290.6 57.2 Trust and agency fees 58.2 50.6 168.1 148.5 6.1 Trading profits and commissions 6.6 10.9 13.8 15.9 .2 Securities portfolio gains, net .8 1.3 7.2 11.2 59.3 Other income 65.4 35.1 252.4 163.3 -------- ------- ------ ------- ------- 236.1 Total noninterest income 248.6 202.2 778.0 629.5 -------- ------- ------ ------- ------- Noninterest expense: 179.6 Salaries 191.1 168.1 547.0 487.4 40.9 Employee benefits 41.5 38.6 122.9 112.5 34.4 Occupancy expense 35.6 35.2 105.0 100.2 25.7 Equipment expense 25.2 24.2 75.0 71.1 108.8 Other expense 97.8 101.0 311.9 286.4 -------- ------- ------ ------- ------- 389.4 Subtotal 391.2 367.1 1,161.8 1,057.6 0 Acquisition-related charges 0 5.0 0 21.4 2.7 OREO costs 2.0 6.2 6.7 18.3 -------- ------- ------ ------- ------- 392.1 Total noninterest expense 393.2 378.3 1,168.5 1,097.3 -------- ------- ------ ------- ------- 238.1 Income before income taxes and extraordinary item 249.8 222.8 733.9 576.3 104.8 Provision for income taxes 109.9 98.8 335.3 255.1 -------- ------- ------ ------- ------- 133.3 Income before extraordinary item 139.9 124.0 398.6 321.2 Extraordinary loss from early extinguishment of debt, 0 net of tax 0 0 0 (6.6) -------- ------- ------ ------- ------- $ 133.3 NET INCOME $139.9 $124.0 $398.6 $314.6 ======== ======= ====== ======= ======= PER COMMON SHARE: Income before extraordinary item: $ 1.11 Primary $ 1.17 $ 1.07 $ 3.36 $ 2.75 $ 1.10 Fully diluted $ 1.15 $ 1.04 $ 3.27 $ 2.66 Net income: $ 1.11 Primary $ 1.17 $ 1.07 $ 3.36 $ 2.69 $ 1.10 Fully diluted $ 1.15 $ 1.04 $ 3.27 $ 2.60 $ .27 Dividends declared $ .37 $ .22 $ .91 $ .66 Average number of common shares, in thousands: 111,369 Primary 111,865 106,981 110,188 106,602 112,933 Fully diluted 113,803 111,690 113,458 111,391 $ 9.3 Preferred dividends $ 9.4 $ 9.4 $ 28.1 $ 28.1 OTHER DATA (dollars in millions, except per share amounts) Quarter Ended Quarters Ended Nine Months Ended June 30 September 30 September 30 ------- ---------------- ------------------ 1995 1995 1994 1995 1994 ---- ---- ---- ---- ---- NET INCOME BEFORE SPECIAL REVENUE ITEMS, ACQUISITION- RELATED CHARGES AND EXTRAORDINARY ITEM: $133.3 Net income $139.9 $124.0 $ 398.6 $ 314.6 0 Special revenue items, net of tax 0 (11.0) 0 (11.0) 0 Merger and restructuring charges, net of tax 0 3.0 0 12.2 0 Extraordinary item, net of tax 0 0 0 6.6 ------ ------ ------ -------- -------- Net income before special items, acquisition-related $133.3 charges and extraordinary item $139.9 $116.0 $ 398.6 $ 322.4 ====== ====== ====== ======== ======== EARNINGS PER SHARE BEFORE SPECIAL REVENUE ITEMS, ACQUISITION-RELATED CHARGES AND EXTRAORDINARY ITEM: $1.11 Primary $ 1.17 $ 1.00 $ 3.36 $ 2.77 $1.10 Fully diluted $ 1.15 $ .96 $ 3.27 $ 2.67 RETURN ON AVERAGE TOTAL ASSETS (ANNUALIZED): 1.21% Net income 1.23% 1.12% 1.21% .99% Net income before special revenue items, acquisition 1.21% related charges and extraordinary item 1.23% 1.05% 1.21% 1.01% RETURN ON AVERAGE COMMON EQUITY (ANNUALIZED): 17.22% Net income 17.13% 17.90% 17.28% 15.44% Net income before special revenue items, acquisition- 17.22% related charges and extraordinary item 17.13% 16.65% 17.28% 15.86% CONSOLIDATED NET INTEREST REVENUE AND MARGIN: Including special items: $436.0 Net interest revenue, fully taxable equivalent basis $440.9 $425.2 $1,304.3 $1,143.4 4.49% Net interest margin 4.39% 4.34% 4.48% 4.05% Excluding special items: $436.0 Net interest revenue, fully taxable equivalent basis $440.9 $405.2 $1,304.3 $1,123.4 4.49% Net interest margin 4.39% 4.14% 4.48% 3.98% 4.54% DOMESTIC NET INTEREST MARGIN (ESTIMATED) 4.43% 4.41% 4.60% 4.25% INTERNATIONAL NET INTEREST MARGIN (ESTIMATED): 4.35% Including special items 4.27% 4.15% 4.15% 3.46% 4.35% Excluding special items 4.27% 3.36% 4.15% 3.18% CAPITAL (dollars in millions, except per share amounts) June 30 September 30 ------- --------------------------------- 1995 1995 1994 ---- ---- ---- COMMON STOCKHOLDERS' EQUITY: $2,957 Common stockholders' equity $3,085 $ 2,605 111,612 Common shares outstanding, in thousands 112,161 107,169 Per common share: $26.49 Book value $27.50 $ 24.30 37.50 Market value 47.63 26.63 REGULATORY CAPITAL: Risk-based capital ratios: Estimate 7.7% Tier 1 capital ratio (minimum required 4.00%) 7.8% 6.9% 13.0% Total capital ratio (minimum required 8.00%) 12.6% 11.9% 7.3% Leverage ratio 7.3% 6.4% $ 3,209 Tier 1 capital $3,294 $ 2,806 5,423 Total capital 5,352 4,873 41,578 Total risk-adjusted assets 42,493 40,854 RESERVE FOR CREDIT LOSSES (dollars in millions) Quarter Ended Quarters Ended Nine Months Ended June 30 September 30 September 30 ------- ------------------- ----------------- 1995 1995 1994 1995 1994 ------- ------ ------ ------- ------ $695.5 Beginning balance $691.9 $675.8 $680.2 $770.3 0 Reserve of acquired company 6.3 8.1 6.3 24.7 0 Reserve of bank subsidiaries sold 0 0 (32.7) 0 40.0 Provision for credit losses 45.0 25.0 175.0 95.0 (58.4) Credit losses (54.8) (51.8) (166.7) (143.8) 14.8 Recoveries 16.0 19.4 42.3 49.3 ----- ------ ------ ------- ------- (43.6) Net credit losses (38.8) (32.4) (124.4) (94.5) Credit losses on exposure transferred to accelerated 0 disposition portfolio 0 0 0 (119.0) ------ ------ ------ ------- ------- $ 691.9 Ending balance $704.4 $676.5 $704.4 $676.5 ======= ====== ====== ======= ======= 2.20% Reserve as a % of loans and leases 2.22% 2.19% 2.22% 2.19% ======= ====== ====== ======= ======= 204% Reserve as a % of nonaccrual loans 198% 179% 198% 179% ===== ====== ====== ======= ======= RENEGOTIATED LOANS 1994 1995 Third Fourth First Second Third Qtr Qtr Qtr Qtr Qtr ------- --------- -------- --------------------- Renegotiated loans $72 $68 $43 $29 $27 ==== ==== ==== ==== ====