EXHIBIT 99(a) BANK OF BOSTON REPORTS FOURTH QUARTER NET INCOME OF $142 MILLION OR $1.17 PER SHARE 17% ABOVE PRIOR YEAR 1995 NET INCOME OF $541 MILLION, 24% ABOVE PRIOR YEAR BOSTON, January 18, 1996 -- Bank of Boston Corporation (NYSE: BKB) reported today fourth quarter net income of $142 million, or $1.17 per common share on a fully diluted basis. This compares with $140 million, or $1.15 per share, in the third quarter of 1995 and $121 million, or $1.01 per share in the fourth quarter of 1994. Net income for the full year of 1995 was $541 million, or $4.43 per share, compared with net income of $435 million, or $3.61 per share, for 1994. Fourth quarter highlights were (amounts shown for the fourth quarter of 1995 are before special items discussed below): . Total revenues grew to $707 million on a fully taxable equivalent basis, compared with $689 million in the prior quarter and $634 million in the fourth quarter of 1994. Full year revenues grew by 15% to $2,714 million; . On a fully taxable equivalent basis, operating income (before credit costs) improved to $308 million in the fourth quarter, compared with $298 million in the prior quarter and $256 million in the fourth quarter of 1994. Full year operating income grew by 25% to $1,154 million; . Operating ratio improved to 56.5% in the fourth quarter. This compares with 56.7% in the prior quarter and 59.6% in the fourth quarter of 1994; . Nonaccrual loans and OREO declined to $359 million at December 31, 1995, compared with $417 million at September 30, 1995 and $441 million at December 31, 1994. The ratio of nonaccrual loans and OREO to related assets was 1.2% in the current quarter, 1.3% in the prior quarter and 1.4% in the fourth quarter of 1994; . Return on average common equity was 16.74% in the fourth quarter of 1995, compared with 17.13% in the prior quarter and 16.86% in the fourth quarter of 1994. Return on average assets was 1.22% in the fourth quarter of 1995, 1.23% in the prior quarter and 1.08% in the fourth quarter of 1994. In addition to the highlights discussed above, other fourth quarter actions taken by the Corporation were: . As a result of the quarter's declining rate environment, recognized $67 million of gains (net of increased servicing amortization) from contracts used to manage prepayment risk in the mortgage servicing portfolio; . Recognized a net gain of $20 million from the previously announced sale of its corporate trust business; . Strengthened loan loss reserves by recording a special $25 million loan loss provision, bringing the total provision to $75 million for the quarter. As a result, reserve coverage grew to 238% of nonaccrual loans and 2.4% of total loans; . Recorded charges of $28 million related mainly to the exiting, reorganizing and downsizing of certain business and corporate staff units; . As part of a program to remove low return assets from the balance sheet, recognized a loss of $17 million from the transfer of $1.3 billion of low yielding residential mortgage loans into a held for sale account, substantially all of which were sold by December 31. In addition, recognized $17 million of charges associated with certain investments and other assets. Net interest revenue Net interest revenue, on a fully taxable equivalent basis, was $447 million for the fourth quarter of 1995, compared with $441 million in the prior quarter and $435 million for the same period in 1994. On this same basis, net interest margin was 4.35% for the fourth quarter of 1995, compared with 4.39% in both the third quarter of 1995 and fourth quarter of last year. For full year 1995, net interest revenue, on a fully taxable equivalent basis, was $1,751 million, compared with $1,559 million for full year 1994 (excluding special revenue earned in Brazil as discussed below). On this same basis, net interest margin was 4.45% in 1995 and 4.09% in 1994. The $6 million increase in net interest revenue from the prior quarter and the $12 million increase from the fourth quarter of 1994 were due to growth in dividends from venture capital investments, higher amounts of interest recoveries and income from lease residuals, and a greater volume of average earning assets. The absence of a tax-related adjustment to the leveraged lease portfolio in the third quarter also contributed to the increase from that period. These factors were partially offset by higher domestic funding costs due, in part, to the aggressive marketing of a new savings deposit product, and narrower spreads in Latin America. The overall effect of these items resulted in a modest decline in consolidated margin in the quarterly comparisons. The growth in average earning assets reflected higher amounts of securities, as well as increases in average loans from the consumer lending and Latin American businesses, partially offset by lower levels of domestic commercial loans and residential mortgages. Net interest revenue and margin increased $192 million and 36 basis points, respectively, from full year 1994. The improvement in net interest revenue reflected an increase of over $1 billion in average earning assets as higher levels of domestic consumer loans, Latin American loans, and securities were partially offset by lower levels of domestic commercial loans. In addition, wider spreads from domestic and Latin American operations contributed to the improvements in both net interest revenue and margin. The Corporation's full year 1994 results included 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 Brazil's new economic program and, as such, was viewed as a special item. Noninterest income Noninterest income is composed of the following: Third Quarter Fourth Quarter Twelve Months ------- --------------- -------------- 1995 (in millions) 1995 1994 Change 1995 1994 Change ---- ----- ----- ------ ------ ------ ------ $118 Financial service fees $186 $105 $81 $523 $396 $127 58 Trust and agency fees 49 53 (4) 217 201 16 7 Trading profits and commissions 8 0 8 22 16 6 1 Securities portfolio gains, net 2 3 (1) 9 14 (5) 25 Mezzanine/venture capital profits, net 45 2 43 110 30 80 15 Foreign exchange trading profits, net 14 11 3 57 42 15 25 Other income (11) 25 (36) 58 102 (44) ----- ----- ----- ----- ------ ----- ----- 249 Subtotal 293 199 94 996 801 195 Gains from sales of businesses: 0 Corporate Trust business 20 0 20 20 0 20 0 Maine/Vermont bank subsidiaries 0 0 0 75 0 75 0 Domestic factoring business 0 0 0 0 27 (27) ----- ----- ----- ----- ------ ----- ----- $249 Total $313 $199 $114 $1,091 $828 $263 ===== ===== ===== ===== ====== ===== ===== Financial service fees The components of financial service fees are as follows: Third Quarter Fourth Quarter Twelve Months ----- --------------- -------------- 1995 (in millions) 1995 1994 Change 1995 1994 Change ----- ----- ----- ------ ----- ----- ------ $ 22 Mortgage servicing fees, net $ 93 $ 17 $76 $163 $ 57 $106 29 Deposit fees 29 33 (4) 117 126 (9) 18 Letters of credit and acceptance fees 16 17 (1) 69 61 8 20 Loan-related fees 20 16 4 70 60 10 29 Other 28 22 6 104 92 12 ----- ----- ----- ----- ----- ----- ----- $118 Total $186 $105 $81 $523 $396 $127 ===== ===== ===== ===== ===== ===== ===== Noninterest income (before gains from sales of businesses) increased $44 million from the third quarter of 1995 and $94 million from the fourth quarter of 1994. Compared with the full year of 1994, noninterest income (before business sale gains) grew $195 million. As a result of the fourth quarter's declining interest rate environment, the Corporation recognized $67 million of gains (net of increased servicing amortization) from the increase in the market value of contracts used to manage prepayment risk in the mortgage servicing portfolio. Excluding these gains, net mortgage servicing fees increased $4 million from the prior quarter, $9 million from the fourth quarter of 1994 and $39 million from full year 1994 reflecting growth in the servicing portfolio. The servicing portfolio was $42 billion at December 31, 1995, compared with $40 billion at September 30, 1995 and $38 billion at December 31, 1994. In December 1995, the Corporation announced its agreement to form a joint venture with two equity partners into which it will contribute its mortgage banking business for cash and a 45% interest in the new mortgage banking entity. The transaction is expected to close during the first half of 1996. The decline in deposit fees from prior year periods primarily reflected the first quarter 1995 sales of the Corporation's banking subsidiaries in Maine and Vermont. Letter of credit and acceptance fees improved in the full year comparison reflecting higher fees from operations in Brazil and Asia. The growth in loan-related and other financial service fees from prior year periods included, in part, higher syndication and advisory fees, reflecting the Corporation's increased emphasis on the capital markets business. The declines in trust and agency fees from the prior quarter and the fourth quarter of 1994 reflected the sale of the Corporation's corporate trust business and the transfer of its stock transfer business into a joint venture. Both of these transactions closed at the beginning of the fourth quarter of 1995. Excluding the effect of these transactions, trust and agency fees increased by $3 million from the prior quarter and $7 million from the fourth quarter of 1994 mainly as a result of higher fees from the Brazilian mutual fund business. In addition, the growth in these mutual fund fees was also primarily responsible for the $16 million increase in the full year comparison, partially offset by the absence of fourth quarter 1995 fees from the corporate trust and stock transfer businesses discussed above. Mutual funds under management in Brazil increased to $2.5 billion at December 31, 1995 from $1.7 billion at December 31, 1994. Compared with prior year periods, trading account profits benefited from higher profits associated with international securities trading. Mezzanine/venture capital profits showed improvement in all prior period comparisons as a result of a high level of sales activity, including large gains from two individual sale transactions. The size of the portfolio managed by the Corporation's private equity investing business was approximately $550 million at December 31, 1995. Foreign exchange profits were higher compared with 1994 periods as increases were posted by the Argentine, Asian and domestic treasury businesses. The declines in other income from all prior periods principally reflected the effect of two fourth quarter 1995 special items: (1) a loss of $17 million from the transfer of $1.3 billion of low yielding residential mortgage loans into a held for sale account, substantially all of which were sold by December 31 and (2) $17 million of valuation-related charges associated with certain investments and other assets, including assets being retained by the Corporation as a result of the mortgage banking joint venture. Excluding these two items, other income declined $2 million from both the prior quarter and the fourth quarter of 1994 and $10 million from the full year 1994 reflecting, in part, the absence of gains from the sale of mortgage servicing rights. In addition, the decline from the full year 1994 also reflected the absence of net gains recorded during the first quarter of 1994 from the sale of securities originally acquired in connection with loan restructurings. Noninterest expense The components of noninterest expense are as follows: Third Quarter Fourth Quarter Twelve Months ------- -------------- ------------- 1995 (in millions) 1995 1994 Change 1995 1994 Change ------- ----- ----- ------- ------ ------ ------- $233 Employee costs $227 $213 $14 $897 $813 $84 61 Occupancy & equipment 61 59 2 241 230 11 13 Professional fees 13 13 0 50 54 (4) (1) FDIC insurance premiums 2 13 (11) 24 51 (27) 85 Other 96 80 16 349 288 61 ----- ----- ----- ---- ------ ------ ---- Noninterest expense, before reorganization, 391 acquisition, and OREO-related costs 399 378 21 1,561 1,436 125 0 Reorganization and other charges 28 0 28 28 0 28 0 Acquisition-related charges 0 0 0 0 21 (21) 2 OREO costs 2 4 (2) 9 22 (13) ----- ----- ----- ---- ------ ------ ---- $393 Total $429 $382 $47 $1,598 $1,479 $119 ===== ===== ===== ==== ====== ====== ==== Noninterest expense, before reorganization, acquisition and OREO-related costs, was $399 million in the fourth quarter of 1995, compared with $391 million in the prior quarter and $378 million for the same quarter in 1994. The $6 million decline in employee costs from the third quarter included the effect of the corporate trust sale and the joint venture of the stock transfer business, partially offset by higher incentive compensation and a full quarter's effect of a wage increase negotiated with the employee union in Brazil. Compared with prior year periods, the growth in employee costs mainly reflected higher levels of incentive compensation, merit increases and higher expenses from the Corporation's Latin American, consumer finance, and capital markets growth businesses. The $11 million increase in occupancy and equipment from full year 1994 was the result of higher expenses from international operations, mainly Latin America. The decline in FDIC expense from prior year periods reflected a reduction in the FDIC assessment, effective in June of 1995. The increase from the prior quarter resulted from the absence of a rebate for the month of June, which was recorded during the third quarter. Other expense increased from prior periods as a result of growth and new business development in the Latin American and personal banking businesses. These increases included higher levels of advertising and marketing expense, including increases related to new retail deposit products, the Corporation's re-entry into the credit card business, introduction of a home banking product, and customer surveys. In addition, growth in travel expenses also contributed to the increases from all prior periods. Compared with prior year periods, other expense was also affected by increases in goodwill amortization, software costs and communications expense. During the fourth quarter of 1995, the Corporation recorded $28 million of charges related mainly to the exiting, reorganizing and downsizing of certain business and corporate staff units. Included within these charges were expenses related to reorganizations underway in the European business, corporate banking, and various other units, along with the closing of the Luxembourg office. In addition and in accordance with accounting guidelines, a charge was included for an expected change in the participation by mortgage banking employees in the Corporation's post-retirement and pension plans resulting from the joint venture of that business. The $21 million of acquisition-related charges recorded in 1994 related to the acquisitions of BankWorcester and Pioneer Financial. Credit Profile Loan and Lease Portfolio The segments of the lending portfolio are as follows: 12-31-95 9-30-95 6-30-95 3-31-95 12-31-94 (in millions) --------- -------- -------- -------- --------- United States Operations: Commercial, industrial and financial $ 11,439 $ 11,789 $ 11,907 $ 11,684 $ 11,805 Commercial real estate Construction 336 412 327 355 354 Other commercial real estate 2,272 2,303 2,489 2,645 3,141 Consumer-related loans Secured by 1-4 family residential properties 3,861 4,978 4,752 4,635 5,004 Other 3,397 3,131 2,834 2,603 2,462 Lease financing 1,409 1,373 1,356 1,350 1,366 Unearned income (216) (216) (211) (216) (216) --------- -------- -------- -------- --------- 22,498 23,770 23,454 23,056 23,916 --------- -------- -------- -------- --------- International Operations: Loans and leasefinancing, net of unearned income 8,569 7,921 7,934 7,383 7,089 --------- -------- -------- -------- --------- Total loans and lease financing $ 31,067 $ 31,691 $ 31,388 $ 30,439 $ 31,005 ========= ======== ======== ======== ========= Loans and leases declined $624 million from September 30, reflecting the transfer of $1.3 billion of low yielding residential mortgage loans into a held for sale account, substantially all of which were sold by December 31. This action was taken in connection with a program to remove low return assets from the Corporation's balance sheet, which also accounts for the decline in the commercial and industrial and real estate portfolios. These declines were partially offset by an increase in consumer loans driven mainly by Ganis Credit Corp. and the Corporation's re-entry into the credit card business. In addition, international loans increased as a result of growth experienced by various Latin American units. Nonaccrual Loans and OREO Nonaccrual loans and OREO amounted to $359 million at December 31, 1995, compared with $417 million at September 30, 1995 and $441 million at December 31, 1994. The decline from the third quarter included the payoff of several domestic commercial loans and a decrease in the inflow of new loans placed on nonaccrual. Nonaccrual loans and OREO represented 1.2% of related assets at December 31, 1995, compared with 1.3% at September 30, 1995 and 1.4% at December 31, 1994. The components of consolidated nonaccrual loans and OREO are as follows: (in millions) 12-31-95 9-30-95 6-30-95 3-31-95 12-31-94 --------- -------- -------- -------- --------- Domestic nonaccrual loans: Commercial, industrial and financial $66 $105 $106 $111 $113 Commercial real estate Construction 24 23 16 20 13 Other commercial real estate 78 82 85 97 106 Consumer-related loans Secured by 1-4 family residential properties 43 46 45 45 44 Other 32 30 21 21 24 ------- ------ ------ ------ ------- 243 286 273 294 300 ------- ------ ------ ------ ------- International nonaccrual loans 66 69 66 57 65 ------- ------ ------ ------ ------- Total nonaccrual loans 309 355 339 351 365 OREO 50 62 78 71 76 ------- ------ ------ ------ ------- Total $359 $417 $417 $422 $441 ======= ====== ====== ====== ======= Provision and Reserve for Credit Losses The reserve for credit losses at December 31, 1995 was $736 million, or 2.37% of outstanding loans and leases, compared with $704 million, or 2.22% at September 30, 1995, and $680 million, or 2.19% at December 31, 1994. The reserve for credit losses was 238% of nonaccrual loans at December 31, 1995, 198% at September 30, 1995, and 186% at December 31, 1994. The provision for credit losses was $75 million for the fourth quarter of 1995, including a special provision of $25 million, compared with $45 million in the third quarter and $35 million in the fourth quarter of 1994. For full year 1995, the provision for credit losses was $250 million, compared with $130 million in the previous year. Full year 1995 included special provisions of $75 million ($50 million recorded in the first quarter and $25 million recorded in the fourth quarter). The special provisions reflected management's intent to further strengthen the Corporation's loan loss reserve, and recognition of the growth in the Corporation's Latin American and consumer loan portfolios. Net credit losses were $44 million for the fourth quarter of 1995, compared with $39 million for the prior quarter and $31 million for the comparable period last year. Net credit losses as a percent of average loans and leases on an annualized basis were .55% in 1995's fourth quarter, compared with .49% for the third quarter of 1995 and .40% for the fourth quarter of 1994. Net credit losses were as follows: Third Quarter Fourth Quarter Twelve Months ------- --------------- -------------- 1995 (in millions) 1995 1994 1995 1994* ---- ---- ---- ---- ----- Domestic $ 6 Commercial, industrial and financial $ 6 $ 4 $ 30 $ 14 5 Commercial real estate 7 8 32 33 Consumer-related loans 5 Secured by 1-4 family residential properties 5 5 17 12 11 Other 16 7 45 37 ----- ----- ----- ----- ----- 27 Subtotal 34 24 124 96 12 International 10 7 44 30 ----- ----- ----- ----- ----- $ 39 Total $ 44 $ 31 $ 168 $ 126 ===== ===== ===== ===== ===== * Excludes $119 million of credit losses related to the transfer of assets to the accelerated disposition portfolio. The Corporation Bank of Boston Corporation, with assets of $47 billion, is a focused financial institution engaged primarily in commercial and consumer banking in southern New England, financing to selected corporations and individuals nationally and internationally, and indigenous banking in Latin America. New England's only global bank, the Corporation and its subsidiaries operate through a network of 500 offices across the U.S. and through more than 100 offices in 23 countries in Latin America, Europe and Asia, 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) September 30 December 31 ------------ ------------------------ 1995 1995 1994 ------- ------- ------- Assets Securities: $1,765 Held to maturity $ 628 $ 1,703 3,277 Available for sale 4,999 2,997 31,691 Loans and lease financing 31,067 31,005 (704) Reserve for credit losses (736) (680) ------- ------- ------- 30,987 Net loans and lease financing 30,331 30,325 3,637 Other earning assets 4,598 3,524 6,417 Cash and other nonearning assets 6,841 6,081 ------- ------- ------- $46,083 Total Assets $47,397 $44,630 ======= ======= ======= Liabilities and Stockholders' Equity $30,009 Deposits $30,948 $31,356 8,720 Funds borrowed 8,763 6,360 2,059 Notes payable 2,139 2,169 1,702 Other liabilities 1,796 1,603 ------- ------- ------- 42,490 Total Liabilities 43,646 41,488 ------- ------- ------- Stockholders' Equity 508 Preferred equity 508 508 3,085 Common equity 3,243 2,634 ------- ------- ------- 3,593 Total Stockholders' Equity 3,751 3,142 ------- ------- ------- $46,083 Total Liabilities and Stockholders' Equity $47,397 $44,630 ======= ======= ======= Selected Average Balances Quarter Ended Quarters Ended Twelve Months Ended September 30 December 31 December 31 ------------- ---------------- ----------------- 1995 1995 1994 1995 1994 ------------- ------- ------- -------- ------- Assets $31,625 Loans and lease financing $31,763 $31,076 $31,116 $29,790 4,824 Securities 5,247 4,435 4,724 3,510 39,867 Total earning assets 40,707 39,349 39,391 38,145 45,185 Total assets 46,233 44,400 44,612 43,061 Liabilities and Stockholders' Equity 24,476 Interest bearing deposits 25,354 25,263 24,559 24,301 4,792 Noninterest bearing deposits 4,949 5,182 4,742 5,000 ------- ------- ------- ------- ------- 29,268 Total deposits 30,303 30,445 29,301 29,301 2,065 Notes payable 2,109 2,141 2,092 2,069 35,220 Total interest bearing liabilities 35,975 34,598 34,818 33,550 3,022 Common stockholders' equity 3,154 2,621 2,938 2,515 3,530 Total stockholders' equity 3,662 3,129 3,446 3,023 Consolidated Statement of Income (dollars in millions, except per share amounts) Quarter Ended Quarters Ended Twelve Months Ended September 30 December 31 December 31 ------------- ------------------ ---------------------- 1995 1995 1994 1995 1994 ---- -------- -------- -------- ---------- $1,113.1 Interest income $1,069.6 $1,071.4 $4,319.4 $3,718.8 673.7 Interest expense 627.8 638.0 2,578.2 2,146.2 -------- -------- -------- -------- -------- 439.4 Net interest revenue 441.8 433.4 1,741.2 1,572.6 45.0 Provision for credit losses 75.0 35.0 250.0 130.0 -------- -------- -------- -------- -------- Net interest revenue after provision 394.4 for credit losses 366.8 398.4 1,491.2 1,442.6 -------- -------- -------- -------- -------- Noninterest income: 117.6 Financial service fees 186.2 105.5 522.6 396.1 58.2 Trust and agency fees 48.9 53.1 217.1 201.6 6.6 Trading profits and commissions 8.3 (.1) 22.1 15.8 .8 Securities portfolio gains, net 1.9 2.5 9.1 13.6 65.4 Other income 67.9 37.6 320.3 200.9 -------- -------- -------- -------- -------- 248.6 Total noninterest income 313.2 198.6 1,091.2 828.0 -------- -------- -------- -------- -------- Noninterest expense: 191.1 Salaries 188.8 177.8 735.8 665.3 41.5 Employee benefits 38.6 35.1 161.5 147.6 35.6 Occupancy expense 35.3 34.4 140.3 134.6 25.2 Equipment expense 25.4 24.9 100.4 96.0 97.8 Other expense 110.9 105.6 422.8 392.1 -------- -------- -------- -------- -------- 391.2 Subtotal 399.0 377.8 1,560.8 1,435.6 0 Reorganization and other charges 28.2 0 28.2 0 0 Acquisition-related charges 0 0 0 21.4 2.0 OREO costs 2.0 4.1 8.7 22.3 -------- -------- -------- -------- -------- 393.2 Total noninterest expense 429.2 381.9 1,597.7 1,479.3 -------- -------- -------- -------- -------- 249.8 Income before income taxes and extraordinary item 250.8 215.1 984.7 791.3 109.9 Provision for income taxes 108.4 94.3 443.7 349.4 -------- -------- -------- -------- -------- 139.9 Income before extraordinary item 142.4 120.8 541.0 441.9 Extraordinary loss from early extinguishment of debt, 0 net of tax 0 0 0 (6.6) -------- -------- -------- -------- -------- $ 139.9 NET INCOME $ 142.4 $ 120.8 $ 541.0 $ 435.3 ======== ======== ======== ======== ======== Per Common Share: Income before extraordinary item: $ 1.17 Primary $ 1.18 $ 1.04 $ 4.55 $ 3.79 $ 1.15 Fully diluted $ 1.17 $ 1.01 $ 4.43 $ 3.67 Net income: $ 1.17 Primary $ 1.18 $ 1.04 $ 4.55 $ 3.73 $ 1.15 Fully diluted $ 1.17 $ 1.01 $ 4.43 $ 3.61 $ .37 Dividends declared $ .37 $ .27 $ 1.28 $ .93 Average number of common shares, in thousands: 111,865 Primary 112,285 107,108 110,716 106,730 113,803 Fully diluted 114,036 111,831 113,560 111,427 $ 9.4 Preferred dividends $ 9.4 $ 9.4 $ 37.5 $ 37.5 Other Data (dollars in millions, except per share amounts) Quarter Ended Quarters Ended Twelve Months Ended September 30 December 31 December 31 ------------ ----------- ----------- 1995 1995 1994 1995 1994 ---- ----- ----- ----- ----- Return on average total assets (annualized): 1.23% Net income 1.22% 1.08% 1.21% 1.01% 1.23% Net income before extraordinary item 1.22% 1.08% 1.21% 1.03% Return on average common equity (annualized): 17.13% Net income 16.74% 16.86% 17.14% 15.82% 17.13% Net income before extraordinary item 16.74% 16.86% 17.14% 16.13% $440.9 Net interest revenue, fully taxable equivalent basis $446.7 $435.4 $1,751.0 $1,578.9 Net interest margin 4.39% Consolidated 4.35% 4.39% 4.45% 4.14%* 4.43% Domestic (estimated) 4.51% 4.61% 4.58% 4.34% 4.27% International (estimated) 3.98% 3.78% 4.10% 3.54%* * Excluding $20 million of special net interest revenue from Brazil in the third quarter of 1994, consolidated and international net interest margin would have been 4.09% and 3.34%, respectively. Number of Employees Dec 31 Sept 30 Dec 31 1995 1995 1994 ------ ------- ------ Full time equivalent employees 17,881 18,340 18,355 Capital (DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS) September 30 December 31 - ------------ -------------------- 1995 1995 1994 ---- -------- -------- Common stockholders' equity: $3,085 Common stockholders' equity $3,243 $2,634 112,159 Common shares outstanding, in thousands 112,086 106,547 Per common share: $27.50 Book value $28.93 $24.72 $47.63 Market value $46.25 $25.88 Regulatory capital: Risk-based capital ratios: Estimate 7.8% Tier 1 capital ratio (minimum required 4.00%) 8.0% 7.0% 12.7% Total capital ratio (minimum required 8.00%) 12.8% 12.2% 7.3% Leverage ratio 7.4% 6.5% $3,294 Tier 1 capital $3,391 $2,874 $5,346 Total capital $5,447 $4,974 $41,969 Total risk-adjusted assets $42,514 $40,786 Reserve for Credit Losses (dollars in millions) Quarter Ended Quarters Ended Twelve Months Ended September 30 December 31 December 31 - ------------ ---------------- ----------------- 1995 1995 1994 1995 1994 ------ ------ ------ ------- ------- $691.9 Beginning balance $704.4 $676.5 $680.2 $770.3 6.3 Reserve of acquired companies 0 0 6.3 24.7 0 Reserve of bank subsidiaries sold 0 0 (32.7) 0 45.0 Provision for credit losses 75.0 35.0 250.0 130.0 (54.8) Credit losses (63.2) (50.0) (229.9) (193.8) 16.0 Recoveries 19.3 18.7 61.6 68.0 ------ ------ ------ ------- ------- (38.8) Net credit losses (43.9) (31.3) (168.3) (125.8) Credit losses on exposure transferred to accelerated 0 disposition portfolio 0 0 0 (119.0) ------ ------ ------ ------- ------- $704.4 Ending balance $735.5 $680.2 $735.5 $680.2 ====== ====== ====== ======= ======= 2.22% Reserve as a % of loans and leases 2.37% 2.19% 2.37% 2.19% ====== ====== ====== ======= ======= 198% Reserve as a % of nonaccrual loans 238% 186% 238% 186% ====== ====== ====== ======= ======= Renegotiated Loans (IN MILLIONS) 1994 1995 Fourth First Second Third Fourth Qtr Qtr Qtr Qtr Qtr ------ ----- ---------------------- Renegotiated loans $68 $43 $29 $27 $27 === === === === ===