-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, cbI8ugx/TW46tDD8KtcpN2y1vD9ArQrP16TtMTIRkjHEo2IAxWxWUWiHzHS1Q4zj FDm6u8PgZYGUthzRS33+iQ== 0000950109-95-002891.txt : 19950803 0000950109-95-002891.hdr.sgml : 19950803 ACCESSION NUMBER: 0000950109-95-002891 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19950720 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19950802 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BANK OF BOSTON CORP CENTRAL INDEX KEY: 0000036672 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 042471221 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06522 FILM NUMBER: 95558432 BUSINESS ADDRESS: STREET 1: 100 FEDERAL ST CITY: BOSTON STATE: MA ZIP: 02110 BUSINESS PHONE: 6174342200 FORMER COMPANY: FORMER CONFORMED NAME: FIRST NATIONAL BOSTON CORP DATE OF NAME CHANGE: 19830414 8-K 1 FORM 8-K - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): July 20, 1995 BANK OF BOSTON CORPORATION (Exact name of registrant as specified in its charter) Massachusetts 1-6522 04-2471221 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 100 Federal Street, Boston, Massachusetts 02110 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (617) 434-2200 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- -2- Item 5. Other Events. - ---------------------- On July 20, 1995, Bank of Boston Corporation (the Corporation) issued a press release announcing its earnings for the quarter ended June 30, 1995. The financial information that is included herewith as Exhibit 99(a) was included in the Corporation's press release and is incorporated herein by reference. On July 27, 1995, the Corporation issued a press release announcing that it had increased its common dividend and declared preferred dividends. Included herewith as Exhibit 99(b) is the Corporation's press release related to dividends and such information is incorporated herein by reference. On July 27, 1995, the Corporation issued a press release announcing the retirement of Ira Stepanian as Chairman and Chief Executive Officer and the election of Charles K. Gifford as the Corporation's new Chairman and Chief Executive Officer. Included herewith as Exhibit 99(c) is the Corporation's press release related to these changes in management and such information is incorporated herein by reference. Item 7. Financial Statements and Exhibits. - ------------------------------------------- (c) Exhibits. 99(a) Financial information included in the Corporation's Press Release dated July 20, 1995. 99(b) The Corporation's Press Release dated July 27, 1995 related to dividends. 99(c) The Corporation's Press Release dated July 27, 1995 related to management changes. -3- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. BANK OF BOSTON CORPORATION Dated: August 2, 1995 /s/ William J. Shea --------------------------------------------------- William J. Shea Vice Chairman, Chief Financial Officer and Treasurer EX-99.A 2 PRESS RELEASE DATED JULY 20TH BOSTON, July 20, 1995 -- Bank of Boston Corporation (NYSE: BKB) reported today second quarter net income of $133 million, or $1.10 per common share on a fully diluted basis. This compares with $125 million, or $1.04 per share, in the first quarter of 1995 and $95 million, or $.77 per share ($104 million, or $.86 per share, before acquisition-related charges) in the second quarter of 1994. Net income for the first half of 1995 was $259 million, or $2.14 per share, compared with net income of $191 million, or $1.56 per share ($207 million, or $1.71 per share, before acquisition-related charges and extraordinary items), for the first half of 1994. Second quarter highlights were: . Total revenues grew to $672 million on a fully taxable equivalent basis, compared with $646 million in the prior quarter (excluding gains from the sales of businesses) and $568 million in the second quarter of 1994; . On a fully taxable equivalent basis, operating income (before credit costs and special items) improved to $283 million in the second quarter, compared with $265 million in the prior quarter and $219 million in the second quarter of 1994; . Operating ratio improved further to 57.9% in the second quarter. This compares with 59.0% in the prior quarter and 61.4% in the second quarter of 1994; . Nonaccrual loans and OREO totaled $417 million at June 30, 1995, compared with $422 million at March 31, 1995 and $518 million at June 30, 1994. The ratio of nonaccrual loans and OREO to related assets declined to 1.3% from 1.4% in the prior quarter and 1.7% in the second quarter of 1994; . Return on average common equity was 17.22% in the second quarter of 1995, compared with 17.43% in the prior quarter and 13.87% (15.36% before acquisition-related charges) in the second quarter of 1994. Return on average assets was 1.21% in the second quarter of 1995, compared with 1.19% in the prior quarter and .89% (.97% before acquisition-related charges) in the second quarter of 1994. Net interest revenue Net interest revenue, on a fully taxable equivalent basis, was $436 million for the second quarter of 1995, compared with $427 million in the prior quarter and $376 million for the same period in 1994. Net interest margin was 4.49% for the second quarter of 1995, compared with 4.56% in the first quarter of 1995 and 3.98% in the second quarter of last year. For the first half of 1995, net interest revenue, on a fully taxable equivalent basis, was $863 million, compared with $718 million for the first half of 1994. Net interest margin was 4.52% for the first half of 1995, compared with 3.89% for the first half of 1994. The $9 million increase in net interest revenue from the prior quarter was mainly due to wider Latin American spreads and higher loan volume principally in Latin America and in domestic consumer lending portfolios. These items were partially offset by higher domestic deposit costs. The decline in margin from the first quarter principally reflected narrower domestic spreads and lower interest recoveries from problem loans. The increases in net interest revenue and margin of $60 million and 51 basis points, respectively, from the second quarter of 1994 and $145 million and 63 basis points, respectively, from the first six months of 1994 mainly reflected wider spreads from both domestic and international operations. Domestically, the Corporation benefited from loan yields growing at a faster pace than retail deposit rates, while the international margin improvement was primarily driven by Argentina and Brazil. Net interest revenue also benefited from higher domestic consumer and Latin American loan levels. Noninterest income Noninterest income is composed of the following:
First Quarter Second Quarter Six Months - ------- -------------- ------------ 1995 (in millions) 1995 1994 Change 1995 1994 Change - ------- ----- ----- ------ ----- ----- ------ $ 106 Financial service fees $ 113 $ 94 $19 $ 219 $ 186 $ 33 53 Trust and agency fees 57 50 7 110 98 12 1 Trading profits and commissions 6 1 5 7 5 2 6 Securities portfolio gains, net 0 6 (6) 6 10 (4) 16 Mezzanine/venture capital profits, net 23 5 18 39 19 20 12 Foreign exchange trading profits, net 16 11 5 28 20 8 24 Other income 21 25 (4) 45 62 (17) ----- ----- ----- --- ----- ----- ---- 218 Subtotal 236 192 44 454 400 54 Gains from sales of businesses: 75 Maine/Vermont bank subsidiaries 0 0 0 75 0 75 0 Domestic factoring business 0 0 0 0 27 (27) ----- ----- ----- --- ----- ----- ---- $ 293 Total $ 236 $ 192 $44 $ 529 $ 427 $102 ===== ===== ===== === ===== ===== ====
Noninterest income increased $18 million from the first quarter of 1995, before gains from sales of bank subsidiaries. Financial service fees, detailed below, increased $7 million from the prior quarter. The improvement in trust and agency fees from prior periods mainly reflected seasonal tax preparation fees and higher fees from the Latin American mutual fund business, principally Brazil. Trading account profits improved from the prior quarter due to higher profits from both Latin American securities trading and the domestic treasury business. The former was mainly responsible for the increases in trading account profits from prior year periods. Mezzanine/venture capital profits continued strong in the second quarter and showed improvement in all prior period comparisons as a result of a higher level of sales activity. Foreign exchange profits were higher compared with all prior periods as increases were posted by Latin America and domestic treasury. The decline in other income from the prior quarter and the second quarter of 1994 reflected lower gains from the sale of mortgage servicing rights, while the decline from the first half of 1994 was mainly due 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. Financial service fees The components of financial service fees are as follows:
First - ------- Quarter Second Quarter Six Months - ------- -------------- ------------ 1995 (in millions) 1995 1994 Change 1995 1994 Change - ------- ----- ----- ------- ----- ----- ------- $ 30 Deposit fees $ 29 $ 31 $(2) $ 59 $ 61 $(2) 19 Letters of credit and acceptance fees 16 14 2 35 27 8 21 Net mortgage servicing fees 27 13 14 48 23 25 13 Loan-related fees 17 15 2 30 29 1 23 Other 24 21 3 47 46 1 ----- ----- ----- --- ----- ----- --- $ 106 Total $ 113 $ 94 $19 $ 219 $ 186 $33 ===== ===== ===== === ===== ===== ===
The increase in net mortgage servicing fee income from the prior quarter included a higher level of profits from contracts used to manage prepayment risk in the servicing portfolio partially offset by higher amortization of the servicing asset. The positive comparisons with prior year periods also reflect the growth in the servicing portfolio to $38 billion from $33 billion a year ago. Letter of credit and acceptance fees declined from the first quarter of 1995 due to lower import-related fees in Latin America. The growth in loan-related fees from the first quarter was due to higher syndication revenues reflecting the Corporation's increased emphasis on capital markets activities. Noninterest expense The components of noninterest expense are as follows:
First - ------- Quarter Second Quarter Six Months - ------- -------------- ------------ 1995 (in millions) 1995 1994 Change 1995 1994 Change - ------- ----- ----- ------- ----- ----- ------- $ 217 Employee costs $ 220 $ 199 $ 21 $ 437 $ 394 $ 43 59 Occupancy & equipment 60 56 4 119 111 8 13 Professional fees 11 14 (3) 24 26 (2) 12 FDIC insurance premiums 11 13 (2) 23 24 (1) 80 Other 87 67 20 167 135 32 ----- ----- ----- ---- ----- ----- ---- Noninterest expense, before acquisition- 381 related charges and OREO costs 389 349 40 770 690 80 0 Acquisition-related charges 0 16 (16) 0 16 (16) 2 OREO costs 3 7 (4) 5 13 (8) ----- ----- ----- ---- ----- ----- ---- $ 383 Total $ 392 $ 372 $ 20 $ 775 $ 719 $ 56 ===== ===== ===== ==== ===== ===== ====
Noninterest expense, before acquisition-related charges and OREO costs, was $389 million in the second quarter of 1995, compared with $381 million in the prior quarter and $349 million for the same quarter in 1994. Using this expense base, the Corporation's operating ratio of expenses to revenue improved to 57.9% in the second quarter of 1995, compared with 59.0% in the first quarter and 61.4% in the second quarter of last year. Compared with all prior periods, the increase in noninterest expense reflects increases from the Corporation's Latin American and personal banking growth businesses. The increase in employee costs includes merit increases and higher levels of incentive compensation. The increase in nonemployee costs reflects, in part, higher levels of advertising and travel expenses, including spending for key business initiatives, such as the Corporation's Global Initiative, 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) 6-30-95 3-31-95 12-31-94 9-30-94 6-30-94 ------- ------- -------- ------- ------- United States Operations: Commercial, industrial and financial $11,907 $11,684 $11,805 $11,987 $11,871 Commercial real estate Construction 327 355 354 464 499 Other commercial real estate 2,489 2,645 3,141 3,110 3,084 Consumer-related loans Secured by 1-4 family residential properties 4,752 4,635 5,004 4,878 4,215 Other 2,834 2,603 2,462 2,373 2,283 Lease financing 1,356 1,350 1,366 1,312 1,263 Unearned income (211) (216) (216) (199) (198) ------- ------- ------- ------- ------- 23,454 23,056 23,916 23,925 23,017 ------- ------- ------- ------- ------- International Operations: Loans and lease financing, net of unearned income 7,934 7,383 7,089 6,956 6,949 ------- ------- ------- ------- ------- Total loans and lease financing $31,388 $30,439 $31,005 $30,881 $29,966 ======= ======= ======= ======= =======
Loans and leases grew over $900 million from March 31 due to increases in consumer-related and Latin American loans. The growth in the consumer-related category included increases from the Corporation's national consumer finance companies, Fidelity Acceptance Corp. and Ganis Credit Corp. Loans purchased from Century Acceptance Corp. are not included in the June 30 total since this transaction did not close until July. Total commercial loans were essentially flat this quarter as an increase in the commercial and industrial portfolio, principally in New England, was offset by the continued decline in the real estate portfolio. The international portfolio increased by over $500 million mainly due to ongoing growth in the Latin American portfolio. Nonaccrual Loans and OREO Nonaccrual loans and OREO amounted to $417 million at June 30, 1995, compared with $422 million at March 31, 1995, and $518 million at June 30, 1994. Nonaccrual loans and OREO represented 1.3% of related assets at June 30, 1995, compared with 1.4% at March 31, 1995 and 1.7% at June 30, 1994. The components of consolidated nonaccrual loans and OREO are as follows:
(in millions) 6-30-95 3-31-95 12-31-94 9-30-94 6-30-94 ------- ------- -------- ------- ------- Domestic nonaccrual loans: Commercial, industrial and financial $106 $111 $113 $119 $131 Commercial real estate Construction 16 20 13 18 30 Other commercial real estate 85 97 106 119 160 Consumer-related loans Secured by 1-4 family residential properties 45 45 44 35 30 Other 21 21 24 15 9 ---- ---- ---- ---- ---- 273 294 300 306 360 ---- ---- ---- ---- ---- International nonaccrual loans 66 57 65 71 87 ---- ---- ---- ---- ---- Total nonaccrual loans 339 351 365 377 447 OREO 78 71 76 93 71 ---- ---- ---- ---- ---- Total $417 $422 $441 $470 $518 ==== ==== ==== ==== ====
Provision and Reserve for Credit Losses The reserve for credit losses at June 30, 1995 was $692 million, or 2.20% of outstanding loans and leases, compared with $696 million, or 2.29% at March 31, 1995, and $676 million, or 2.26% at June 30, 1994. The reserve for credit losses was 204% of nonaccrual loans at June 30, 1995, 198% at March 31, 1995, and 151% at June 30, 1994. The provision for credit losses was $40 million for the second quarter of 1995 and $90 million for the first quarter of 1995, including a special provision of $50 million reflecting management's intent to further strengthen the Corporation's loan loss reserve. The provision for the second quarter of 1994 was $25 million. Net credit losses were $44 million for the second quarter of 1995, compared with $42 million for the prior quarter and $30 million for the comparable period last year. Net credit losses as a percent of average loans and leases on an annualized basis were .57% in 1995's second quarter, compared with .56% for the first quarter of 1995 and .41% for the second quarter of 1994. Net credit losses were as follows:
First ----- Quarter Second Quarter Six Months - ------- ---------------- ----------------- 1995 (in millions) 1995 1994 1995 1994* ---- ---- ---- ---- ----- Domestic $ 9 Commercial, industrial and financial $ 9 $ 6 $ 18 $ 4 6 Commercial real estate 14 10 20 17 Consumer-related loans 4 Secured by 1-4 family residential properties 3 2 7 5 8 Other 10 9 18 20 ----- ----- ----- ----- ----- 27 Subtotal 36 27 63 46 15 International 8 3 23 16 ----- ----- ----- ----- ----- $ 42 Total $ 44 $ 30 $ 86 $ 62 ===== ===== ===== ===== =====
* Excludes credit losses related to the transfer of assets to the accelerated disposition portfolio. The Corporation Bank of Boston Corporation, New England's only global bank, with assets of $45.3 billion, is a superregional bank holding company that operates in three principal businesses: Personal Banking, Corporate Banking and Global Banking. Its major banking subsidiaries are The First National Bank of Boston, in Massachusetts, Bank of Boston Connecticut and Rhode Island Hospital Trust National Bank. The Corporation and its subsidiaries provide a broad range of financial services to individual, corporate, institutional and governmental customers, as well as to other banks in New England and in selected markets across the nation and around the world. The Corporation's common and preferred stocks are listed on the New York and Boston exchanges. Consolidated Balance Sheet
(dollars in millions) March 31 June 30 -------- ------------------ 1995 1995 1994 ------ ------- ------- Assets Securities: $1,857 Held to maturity $ 1,821 $ 1,666 2,388 Available for sale 3,011 1,936 30,439 Loans and lease financing 31,388 29,966 (696) Reserve for credit losses (692) (676) ------- ------- ------- 29,743 Net loans and lease financing 30,696 29,290 3,285 Other earning assets 3,532 3,689 6,189 Cash and other nonearning assets 6,194 6,856 ------- ------- ------- $43,462 Total Assets $45,254 $43,437 ======= ======= ======= Liabilities and Stockholders' Equity $28,275 Deposits $29,121 $29,395 7,752 Funds borrowed 9,045 7,175 2,093 Notes payable 2,110 2,050 2,014 Other liabilities 1,513 1,812 ------- ------- ------- 40,134 Total Liabilities 41,789 40,432 ------- ------- ------- Stockholders' Equity 508 Preferred equity 508 508 2,820 Common equity 2,957 2,497 ------- ------- ------- 3,328 Total Stockholders' Equity 3,465 3,005 ------- ------- ------- $43,462 Total Liabilities and Stockholders' Equity $45,254 $43,437 ======= ======= =======
Selected Average Balances
Quarter Ended Quarters Ended Six Months Ended March 31 June 30 June 30 ---------- ---------------- ---------------- 1995 1995 1994 1995 1994 ------ ------- ------- ------- ------- Assets $30,123 Loans and lease financing $30,928 $29,105 $30,528 $28,860 4,288 Securities 4,526 3,164 4,408 3,054 37,987 Total earning assets 38,970 37,882 38,483 37,193 42,845 Total assets 44,101 42,702 43,473 41,958 Liabilities and Stockholders' Equity 24,145 Interest bearing deposits 24,195 23,436 24,170 23,459 4,609 Noninterest bearing deposits 4,612 4,796 4,611 4,963 ------- ------- ------- ------- ------- 28,754 Total deposits 28,807 28,232 28,781 28,422 2,133 Notes payable 2,062 1,957 2,098 2,075 33,562 Total interest bearing liabilities 34,431 33,531 34,001 32,619 2,699 Common stockholders' equity 2,889 2,463 2,790 2,450 3,207 Total stockholders' equity 3,397 2,971 3,298 2,958
Number of Employees
June 30 Mar 31 June 30 1995 1995 1994 --------- -------- -------- Full time equivalent employees 18,113 17,926 18,600
Consolidated Statement of Income
(dollars in millions, except per share amounts) Quarter Ended Quarters Ended Six Months Ended March 31 June 30 June 30 ---------- ------------------ ---------------------- 1995 1995 1994 1995 1994 ---------- -------- -------- -------- ---------- $1,033.3 Interest income $1,103.4 $ 840.0 $2,136.7 $1,563.7 607.4 Interest expense 669.3 465.5 1,276.7 848.5 -------- -------- -------- -------- -------- 425.9 Net interest revenue 434.1 374.5 860.0 715.2 90.0 Provision for credit losses 40.0 25.0 130.0 70.0 -------- -------- -------- -------- -------- Net interest revenue after provision 335.9 for credit losses 394.1 349.5 730.0 645.2 -------- -------- -------- -------- -------- Noninterest income: 105.6 Financial service fees 113.3 93.9 218.9 186.3 52.7 Trust and agency fees 57.2 50.3 109.9 98.0 1.1 Trading profits and commissions 6.1 1.2 7.2 5.1 6.1 Securities portfolio gains, net .2 5.9 6.4 9.8 127.7 Other income 59.3 41.0 187.0 128.2 -------- -------- -------- -------- -------- 293.2 Total noninterest income 236.1 192.3 529.4 427.4 -------- -------- -------- -------- -------- Noninterest expense: 176.4 Salaries 179.6 161.5 356.0 319.3 40.4 Employee benefits 40.9 37.0 81.3 74.0 34.9 Occupancy expense 34.4 33.1 69.4 65.0 24.1 Equipment expense 25.7 23.4 49.8 47.0 105.3 Other expense 108.8 94.2 214.1 185.3 -------- -------- -------- -------- -------- 381.1 Subtotal 389.4 349.2 770.6 690.6 0 Acquisition-related charge 0 16.4 0 16.4 2.1 OREO costs 2.7 6.8 4.7 12.1 -------- -------- -------- -------- -------- 383.2 Total noninterest expense 392.1 372.4 775.3 719.1 -------- -------- -------- -------- -------- 245.9 Income before income taxes and extraordinary item 238.1 169.4 484.1 353.5 120.6 Provision for income taxes 104.8 74.9 225.4 156.3 -------- -------- -------- -------- -------- 125.3 Income before extraordinary item 133.3 94.5 258.7 197.2 Extraordinary loss from early extinguishment of debt, 0 net of tax 0 0 0 (6.6) -------- -------- -------- -------- -------- $ 125.3 NET INCOME $ 133.3 $ 94.5 $ 258.7 $ 190.6 ======== ======== ======== ======== ======== Per Common Share: Income before extraordinary item: $ 1.08 Primary $ 1.11 $ .80 $ 2.19 $ 1.68 $ 1.04 Fully diluted $ 1.10 $ .77 $ 2.14 $ 1.62 Net income: $ 1.08 Primary $ 1.11 $ .80 $ 2.19 $ 1.62 $ 1.04 Fully diluted $ 1.10 $ .77 $ 2.14 $ 1.56 $ .27 Dividends declared $ .27 $ .22 $ .54 $ .44 Average number of common shares, in thousands: 107,278 Primary 111,369 106,619 109,335 106,410 111,820 Fully diluted 112,933 111,286 112,718 111,055 $ 9.4 Preferred dividends $ 9.3 $ 9.4 $ 18.7 $ 18.7
Other Data
(dollars in millions, except per share amounts) Quarter Quarters Ended Six Months Ended Ended June 30 June 30 March 31 ------- ------- -------- 1995 1995 1994 1995 1994 ------ ------ ------ ------ ------ Net income before acquisition-related charges and extraordinary item: $125.3 Net income $133.3 $ 94.5 $258.7 $190.6 Merger and restructuring charges, 0 net of tax 0 9.2 0 9.2 0 Extraordinary item, net of tax 0 0 0 6.6 ------ ------ ------ ------ ------ $125.3 Net income before merger and restructuring charges $133.3 $103.7 $258.7 $206.4 ====== and extraordinary item ====== ====== ====== ====== Earnings per share before acquisition-related charges and extraordinary item: $1.08 Primary $ 1.11 $ .89 $ 2.19 $ 1.77 $1.04 Fully diluted $ 1.10 $ .86 $ 2.14 $ 1.71 Return on average total assets (annualized): 1.19% Net income 1.21% .89% 1.20% .92% Net income before acquisition-related charges and 1.19% extraordinary item 1.21% .97% 1.20% .99% Return on average common equity (annualized): 17.43% Net income 17.22% 13.87% 17.35% 14.15% Net income before acquisition-related charges and 17.43% extraordinary item 17.22% 15.36% 17.35% 15.45% Consolidated net interest revenue and margin: $427.4 Net interest revenue, fully taxable equivalent basis $436.0 $376.0 $863.4 $718.2 4.56% Net interest margin 4.49% 3.98% 4.52% 3.89% 4.85% Domestic net interest margin (estimated) 4.54% 4.27% 4.69% 4.17% 3.81% International net interest margin (estimated) 4.35% 3.14% 4.08% 3.09% March 31 June 30 -------- -------------------------- 1995 1995 1994 ------- ------ ------ Common stockholders' equity: $2,820 Common stockholders' equity $ 2,957 $ 2,497 111,167 Common shares outstanding, in thousands 111,612 106,851 Per common share: $25.36 Book value $ 26.49 $ 23.36 29.88 Market value 37.50 24.63 Regulatory capital: Risk-based capital ratios: Estimate 7.8% Tier 1 capital ratio (minimum required 4.00%) 7.7% 7.1% 13.3% Total capital ratio (minimum required 8.00%) 13.0% 12.3% 7.3% Leverage ratio 7.3% 6.6% $ 3,090 Tier 1 capital $ 3,209 $ 2,780 5,282 Total capital 5,424 4,813 39,827 Total risk-adjusted assets 41,653 39,140
Reserve for Credit Losses
(dollars in millions) Quarter Ended Quarters Ended Six Months Ended March 31 June 30 June 30 ------------- ----------------- ------------------ 1995 1995 1994 1995 1994 ------- ------- -------- -------- -------- $680.2 Beginning balance $695.5 $664.2 $ 680.2 $ 770.3 0 Reserve of acquired company 0 16.6 0 16.6 (32.7) Reserve of bank subsidiaries sold 0 0 (32.7) 0 90.0 Provision for credit losses 40.0 25.0 130.0 70.0 (53.5) Credit losses (58.4) (46.3) (111.9) (92.0) 11.5 Recoveries 14.8 16.3 26.3 29.9 ------- ------ ------ ------- ------- (42.0) Net credit losses (43.6) (30.0) (85.6) (62.1) Credit losses on exposure transferred 0 to accelerated disposition portfolio 0 0 0 (119.0) ------- ------ ------ ------- ------- $ 695.5 Ending balance $691.9 $675.8 $ 691.9 $ 675.8 ======= ====== ====== ======= ======= 2.29% Reserve as a % of loans and leases 2.20% 2.26% 2.20% 2.26% ======= ====== ====== ======= ======= 198% Reserve as a % of nonaccrual loans 204% 151% 204% 151% ======= ====== ====== ======= =======
Renegotiated Loans
1994 1995 Second Third Fourth First Second Qtr Qtr Qtr Qtr Qtr ------ ----- ------ ----- ------ Renegotiated loans $81 $72 $68 $43 $29 ====== ===== ====== ===== ======
EX-99.B 3 PRESS RELEASE DATED JULY 27TH BANK OF BOSTON INCREASES COMMON DIVIDEND BY 37 PERCENT TO --------------------------------------------------------- 37 CENTS PER SHARE AND DECLARES PREFERRED DIVIDENDS --------------------------------------------------- BOSTON, MA, July 27, 1995 - Bank of Boston Corporation (NYSE:BKB) reported that its Board of Directors today approved an increase in its quarterly dividend on the Corporation's common stock to 37 cents from 27 cents per share. The dividend is payable August 25, 1995 to stockholders of record on August 7, 1995. Bank of Boston Chairman and Chief Executive Officer Ira Stepanian said, "Our financial performance continues to be quite strong with second quarter earnings exceeding the prior year's levels by over 40 percent. The significant increase in our common dividend demonstrates our ongoing commitment to improve shareholder returns. This step also brings our payout ratio more in line with our peer group average." Separately, the Board declared quarterly dividends on its five outstanding series of preferred stock as follows: $.76 per share for Series A, $.76 per share for Series B, $1.39 per share for Series C, $.5375 per depositary share representing Series E, and $.49219 per depositary share representing Series F. These dividends are payable on September 15, 1995 to stockholders of record on August 15, 1995. The dividend rates on the adjustable rate preferred stocks are 6.00% for Series A, 6.00% for Series B and 5.50% for Series C. Bank of Boston Corporation, with assets of $45.3 billion as of June 30, 1995, is New England's only global bank. The Corporation and its subsidiaries provide a broad range of financial services to individual, corporate, institutional and governmental customers, as well as to other banks. The Corporation's common and preferred stocks are listed on the New York and Boston stock exchanges. ### EX-99.C 4 PRESS RELEASE DATED JULY 27TH BANK OF BOSTON CHAIRMAN IRA STEPANIAN RETIRES: ---------------------------------------------- CHARLES K. GIFFORD ASSUMES LEADERSHIP ------------------------------------- OF 211-YEAR-OLD INSTITUTION --------------------------- BOSTON, MA, JULY 27, 1995 -- Bank of Boston Corporation tonight announced that Ira Stepanian has decided to retire as Chairman and Chief Executive Officer and that Charles K. Gifford has been elected by the Board as the Corporation's new Chairman and Chief Executive Officer, effective immediately, retaining his current position as President. The Board released the following statement: "We are very grateful to Ira Stepanian for his steadfast leadership of this company. Ira consistently demonstrated integrity, strength and conviction and led the company in achieving remarkable and historic results for our shareholders, customers, employees and the communities it serves. He has done an extraordinary job and leaves behind an impressive legacy that reflects proudly on this institution and this City. We wish him all the best." "In selecting Chad Gifford as the Corporation's new Chairman and CEO, we have ensured continuity of leadership and direction. Chad is energetic, knowledgeable and a proven leader in both the industry and the community. We have confidence that his business savvy, management competence and personal values will promote the interests of all the Corporation's key constituencies and that he will take Bank of Boston to a new plateau of performance and distinction." Chad Gifford made the following statement: "Ira Stepanian has guided Bank of Boston through what is arguably our most difficult period and has provided steady leadership that has resulted in record earnings, revenue growth and substantially enhanced shareholder value. We have been of one mind during this period, and I am thankful to him for his friendship and wise stewardship." "We retain our commitment to improving shareholder value while maintaining our position as an important New England-based institution. Ira and I have agreed on the direction of this 211-year-old institution and I intend to continue to pursue the policies we together have put in place during his tenure as Chairman." Mr. Stepanian issued the following statement: "After 32 years at Bank of Boston, I feel that it is time to move on and let others help direct this fine institution." "Perhaps the greatest source of satisfaction during my tenure has been the fierce determination and enduring commitment of our 18,000 employees, who have helped transform this proud institution into a customer-focused, high-performance bank for the future. Through difficult times for the industry and the region, Bank of Boston's people continued to believe in our strategy, in our importance to New England, in our commitments to the community, and in our obligations to our two million customers and thousands of shareholders." (more) "Our people continue to face their responsibilities with integrity and with faith in one another, and helping this company to not only survive but to thrive. Together, we have transformed Bank of Boston into a unique banking institution--one that is local as well as global, one that has achieved great financial success while at the same time making a major difference in the communities that we serve. "I am proud of many things, most especially the responsible leadership role this great bank and its talented employees play in our industry, in this great city, in our region and in the lives and businesses of so many communities and customers we serve throughout the nation and around the world." Mr. Gifford commented further: "I am looking forward to these new responsibilities with enthusiasm and with the knowledge that, with Bill Shea and Ed O'Neal as Vice Chairmen, and with a terrifically talented Corporate Working Committee, we have a winning team for the future." Chad Gifford has been President and Chief Operating Officer of Bank of Boston since 1989. Joining the bank some 29 years ago as a loan officer, Mr. Gifford moved up through the ranks of the bank, assuming the position of Group Executive of the Corporate Banking Group in 1984 and in March 1987, was elected Vice Chairman of both Bank of Boston Corporation and its principal subsidiary, the First National Bank of Boston. Mr. Gifford was elected President in March 1989. Mr. Gifford serves as a director of Massachusetts Mutual Life Insurance Company and of Boston Edison Company, and he also serves as a trustee of the Boston Plan for Excellence in the Public Schools, the Boston Private Industry Council, and the Dana Farber Cancer Institute, where he is also a member of the executive committee. Mr. Gifford is chairman of the Massachusetts Minority Enterprise Investment Corporation (MEIC) and chairman of the United Way "Success By 6" Leadership Council, and is on the executive committees of both the Boston Chamber of Commerce and the United Way. He is also involved with WGBH Public Broadcasting, Northeastern University, the New England Aquarium and Junior Achievement. Mr. Gifford was awarded a B.A. degree from Princeton University in 1964. He and his wife Anne have four children. Bank of Boston Corporation (NYSE: BKB), New England's only global bank, has assets of $45.3 billion as of June 30, 1995. The Corporation and its subsidiaries provide a broad range of financial services to individual, corporate, institutional and governmental customers, as well as to other banks. The Corporation's common and preferred stocks are listed on the New York and Boston stock exchanges. Earlier in the day, the Board approved a 37% increase in the Corporation's common stock dividend, from $.27 per share to $.37 per share. ### -----END PRIVACY-ENHANCED MESSAGE-----