Page | ||||
Item 1. |
Financial Statements: |
|||
2 | ||||
3 | ||||
4 | ||||
5 | ||||
6 | ||||
Managements Discussion and Analysis of Results of Operations and Financial Condition |
17 | |||
Quantitative and Qualitative Disclosures about Market Risk |
65 | |||
Controls and Procedures |
65 | |||
Part II Other Information | ||||
Legal Proceedings |
65 | |||
Changes in Securities and Use of Proceeds |
66 | |||
Exhibits and Reports on Form 8-K |
67 | |||
68 | ||||
69 | ||||
70 | ||||
71 |
Three Months Ended September 30 |
Nine Months Ended September 30 | |||||||||||||
(Dollars in millions, except per share information) |
2002 |
2001 |
2002 |
2001 | ||||||||||
Interest income |
||||||||||||||
Interest and fees on loans and leases |
$ |
5,553 |
|
$ |
6,543 |
$ |
16,528 |
|
$ |
21,455 | ||||
Interest and dividends on securities |
|
1,104 |
|
|
892 |
|
2,974 |
|
|
2,631 | ||||
Federal funds sold and securities purchased under agreements to resell |
|
177 |
|
|
321 |
|
662 |
|
|
1,161 | ||||
Trading account assets |
|
1,006 |
|
|
930 |
|
2,832 |
|
|
2,712 | ||||
Other interest income |
|
345 |
|
|
636 |
|
1,044 |
|
|
1,529 | ||||
|
|
|
|
|
|
|
|
|
| |||||
Total interest income |
|
8,185 |
|
|
9,322 |
|
24,040 |
|
|
29,488 | ||||
|
|
|
|
|
|
|
|
|
| |||||
Interest expense |
||||||||||||||
Deposits |
|
1,414 |
|
|
2,097 |
|
4,142 |
|
|
7,173 | ||||
Short-term borrowings |
|
526 |
|
|
869 |
|
1,532 |
|
|
3,467 | ||||
Trading account liabilities |
|
342 |
|
|
285 |
|
971 |
|
|
887 | ||||
Long-term debt |
|
601 |
|
|
867 |
|
1,846 |
|
|
3,088 | ||||
|
|
|
|
|
|
|
|
|
| |||||
Total interest expense |
|
2,883 |
|
|
4,118 |
|
8,491 |
|
|
14,615 | ||||
|
|
|
|
|
|
|
|
|
| |||||
Net interest income |
|
5,302 |
|
|
5,204 |
|
15,549 |
|
|
14,873 | ||||
Noninterest income |
||||||||||||||
Consumer service charges |
|
763 |
|
|
712 |
|
2,189 |
|
|
2,120 | ||||
Corporate service charges |
|
585 |
|
|
528 |
|
1,717 |
|
|
1,538 | ||||
|
|
|
|
|
|
|
|
|
| |||||
Total service charges |
|
1,348 |
|
|
1,240 |
|
3,906 |
|
|
3,658 | ||||
|
|
|
|
|
|
|
|
|
| |||||
Consumer investment and brokerage services |
|
373 |
|
|
386 |
|
1,174 |
|
|
1,164 | ||||
Corporate investment and brokerage services |
|
174 |
|
|
142 |
|
522 |
|
|
415 | ||||
|
|
|
|
|
|
|
|
|
| |||||
Total investment and brokerage services |
|
547 |
|
|
528 |
|
1,696 |
|
|
1,579 | ||||
|
|
|
|
|
|
|
|
|
| |||||
Mortgage banking income |
|
218 |
|
|
109 |
|
545 |
|
|
426 | ||||
Investment banking income |
|
318 |
|
|
305 |
|
1,123 |
|
|
1,106 | ||||
Equity investment gains (losses) |
|
(216 |
) |
|
22 |
|
(226 |
) |
|
340 | ||||
Card income |
|
685 |
|
|
618 |
|
1,881 |
|
|
1,792 | ||||
Trading account profits(1) |
|
71 |
|
|
433 |
|
679 |
|
|
1,508 | ||||
Other income |
|
249 |
|
|
174 |
|
537 |
|
|
541 | ||||
|
|
|
|
|
|
|
|
|
| |||||
Total noninterest income |
|
3,220 |
|
|
3,429 |
|
10,141 |
|
|
10,950 | ||||
|
|
|
|
|
|
|
|
|
| |||||
Total revenue |
|
8,522 |
|
|
8,633 |
|
25,690 |
|
|
25,823 | ||||
Provision for credit losses |
|
804 |
|
|
1,251 |
|
2,532 |
|
|
2,886 | ||||
Gains on sales of securities |
|
189 |
|
|
97 |
|
326 |
|
|
82 | ||||
Noninterest expense |
||||||||||||||
Personnel |
|
2,368 |
|
|
2,304 |
|
7,200 |
|
|
7,239 | ||||
Occupancy |
|
457 |
|
|
448 |
|
1,330 |
|
|
1,309 | ||||
Equipment |
|
291 |
|
|
273 |
|
832 |
|
|
835 | ||||
Marketing |
|
210 |
|
|
165 |
|
550 |
|
|
516 | ||||
Professional fees |
|
126 |
|
|
144 |
|
339 |
|
|
411 | ||||
Amortization of intangibles |
|
54 |
|
|
219 |
|
164 |
|
|
665 | ||||
Data processing |
|
295 |
|
|
175 |
|
726 |
|
|
552 | ||||
Telecommunications |
|
119 |
|
|
121 |
|
361 |
|
|
368 | ||||
Other general operating |
|
700 |
|
|
757 |
|
2,102 |
|
|
2,186 | ||||
Business exit costs |
|
|
|
|
1,305 |
|
|
|
|
1,305 | ||||
|
|
|
|
|
|
|
|
|
| |||||
Total noninterest expense |
|
4,620 |
|
|
5,911 |
|
13,604 |
|
|
15,386 | ||||
|
|
|
|
|
|
|
|
|
| |||||
Income before income taxes |
|
3,287 |
|
|
1,568 |
|
9,880 |
|
|
7,633 | ||||
Income tax expense |
|
1,052 |
|
|
727 |
|
3,245 |
|
|
2,899 | ||||
|
|
|
|
|
|
|
|
|
| |||||
Net income |
$ |
2,235 |
|
$ |
841 |
$ |
6,635 |
|
$ |
4,734 | ||||
|
|
|
|
|
|
|
|
|
| |||||
Net income available to common shareholders |
$ |
2,233 |
|
$ |
839 |
$ |
6,631 |
|
$ |
4,730 | ||||
|
|
|
|
|
|
|
|
|
| |||||
Per common share information |
||||||||||||||
Earnings |
$ |
1.49 |
|
$ |
0.52 |
$ |
4.34 |
|
$ |
2.95 | ||||
|
|
|
|
|
|
|
|
|
| |||||
Diluted earnings |
$ |
1.45 |
|
$ |
0.51 |
$ |
4.22 |
|
$ |
2.90 | ||||
|
|
|
|
|
|
|
|
|
| |||||
Dividends |
$ |
0.60 |
|
$ |
0.56 |
$ |
1.80 |
|
$ |
1.68 | ||||
|
|
|
|
|
|
|
|
|
| |||||
Average common shares issued and outstanding (in thousands) |
|
1,504,017 |
|
|
1,599,692 |
|
1,526,946 |
|
|
1,603,340 | ||||
|
|
|
|
|
|
|
|
|
|
(1) |
Trading account profits for the nine months ended September 30, 2001 included the $83 million, or $0.03 per share, transition adjustment loss resulting from
the adoption of Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities," (SFAS 133) on January 1, 2001. |
(Dollars in millions) |
September 30 2002 |
December 31 2001 |
||||||
Assets |
||||||||
Cash and cash equivalents |
$ |
24,469 |
|
$ |
26,837 |
| ||
Time deposits placed and other short-term investments |
|
6,397 |
|
|
5,932 |
| ||
Federal funds sold and securities purchased under agreements to resell (includes $40,353 and $27,910 pledged as
collateral) |
|
40,371 |
|
|
28,108 |
| ||
Trading account assets (includes $21,758 and $22,550 pledged as collateral) |
|
56,907 |
|
|
47,344 |
| ||
Derivative assets |
|
32,838 |
|
|
22,147 |
| ||
Securities: |
||||||||
Available-for-sale (includes $49,610 and $37,422 pledged as collateral) |
|
88,571 |
|
|
84,450 |
| ||
Held-to-maturity, at cost (market value $975 and $1,009) |
|
1,010 |
|
|
1,049 |
| ||
|
|
|
|
|
| |||
Total securities |
|
89,581 |
|
|
85,499 |
| ||
|
|
|
|
|
| |||
Loans and leases |
|
341,091 |
|
|
329,153 |
| ||
Allowance for credit losses |
|
(6,861 |
) |
|
(6,875 |
) | ||
|
|
|
|
|
| |||
Loans and leases, net of allowance for credit losses |
|
334,230 |
|
|
322,278 |
| ||
|
|
|
|
|
| |||
Premises and equipment, net |
|
6,758 |
|
|
6,414 |
| ||
Mortgage banking assets |
|
2,129 |
|
|
3,886 |
| ||
Goodwill |
|
11,389 |
|
|
10,854 |
| ||
Core deposits and other intangibles |
|
1,127 |
|
|
1,294 |
| ||
Other assets |
|
53,812 |
|
|
61,171 |
| ||
|
|
|
|
|
| |||
Total assets |
$ |
660,008 |
|
$ |
621,764 |
| ||
|
|
|
|
|
| |||
Liabilities |
||||||||
Deposits in domestic offices: |
||||||||
Noninterest-bearing |
$ |
116,847 |
|
$ |
112,064 |
| ||
Interest-bearing |
|
228,174 |
|
|
220,703 |
| ||
Deposits in foreign offices: |
||||||||
Noninterest-bearing |
|
1,928 |
|
|
1,870 |
| ||
Interest-bearing |
|
30,466 |
|
|
38,858 |
| ||
|
|
|
|
|
| |||
Total deposits |
|
377,415 |
|
|
373,495 |
| ||
|
|
|
|
|
| |||
Federal funds purchased and securities sold under agreements to repurchase |
|
61,823 |
|
|
47,727 |
| ||
Trading account liabilities |
|
26,031 |
|
|
19,452 |
| ||
Derivative liabilities |
|
23,701 |
|
|
14,868 |
| ||
Commercial paper |
|
149 |
|
|
1,558 |
| ||
Other short-term borrowings |
|
34,272 |
|
|
20,659 |
| ||
Accrued expenses and other liabilities |
|
22,393 |
|
|
27,459 |
| ||
Long-term debt |
|
59,954 |
|
|
62,496 |
| ||
Trust preferred securities |
|
6,031 |
|
|
5,530 |
| ||
|
|
|
|
|
| |||
Total liabilities |
|
611,769 |
|
|
573,244 |
| ||
|
|
|
|
|
| |||
Commitments and contingencies (Note Seven) |
||||||||
Shareholders equity |
||||||||
Preferred stock, $0.01 par value; authorized 100,000,000 shares; issued and
outstanding 1,391,749 and 1,514,478 shares |
|
60 |
|
|
65 |
| ||
Common stock, $0.01 par value; authorized 5,000,000,000 shares; issued and
outstanding 1,502,161,891 and 1,559,297,220 shares |
|
674 |
|
|
5,076 |
| ||
Retained earnings |
|
46,870 |
|
|
42,980 |
| ||
Accumulated other comprehensive income |
|
613 |
|
|
437 |
| ||
Other |
|
22 |
|
|
(38 |
) | ||
|
|
|
|
|
| |||
Total shareholders equity |
|
48,239 |
|
|
48,520 |
| ||
|
|
|
|
|
| |||
Total liabilities and shareholders equity |
$ |
660,008 |
|
$ |
621,764 |
| ||
|
|
|
|
|
|
(Dollars in millions, shares in thousands) |
Preferred Stock |
Common Stock |
Retained Earnings |
Accumulated Other Comprehensive Income (Loss)(1) |
Other |
Total Shareholders' Equity |
Comprehensive Income |
||||||||||||||||||||||||
Shares |
Amount |
||||||||||||||||||||||||||||||
Balance, December 31, 2000 |
$ |
72 |
|
1,613,632 |
|
$ |
8,613 |
|
$ |
39,815 |
|
$ |
(746 |
) |
$ |
(126 |
) |
$ |
47,628 |
|
|||||||||||
Net income |
|
4,734 |
|
|
4,734 |
|
$ |
4,734 |
| ||||||||||||||||||||||
Other comprehensive income, net of tax: |
|||||||||||||||||||||||||||||||
Net unrealized gains on available-for-sale and marketable equity securities |
|
1,029 |
|
|
1,029 |
|
|
1,029 |
| ||||||||||||||||||||||
Net unrealized losses on foreign currency translation adjustments |
|
(4 |
) |
|
(4 |
) |
|
(4 |
) | ||||||||||||||||||||||
Net gains on derivatives |
|
1,452 |
|
|
1,452 |
|
|
1,452 |
| ||||||||||||||||||||||
|
|
| |||||||||||||||||||||||||||||
Comprehensive income |
$ |
7,211 |
| ||||||||||||||||||||||||||||
|
|
| |||||||||||||||||||||||||||||
Cash dividends: |
|||||||||||||||||||||||||||||||
Common |
|
(2,691 |
) |
|
(2,691 |
) |
|||||||||||||||||||||||||
Preferred |
|
(4 |
) |
|
(4 |
) |
|||||||||||||||||||||||||
Common stock issued under employee plans |
22,096 |
|
|
830 |
|
|
73 |
|
|
903 |
|
||||||||||||||||||||
Common stock repurchased |
(53,826 |
) |
|
(3,016 |
) |
|
(3,016 |
) |
|||||||||||||||||||||||
Conversion of preferred stock |
|
(5 |
) |
226 |
|
|
5 |
|
|||||||||||||||||||||||
Other |
1 |
|
|
59 |
|
|
3 |
|
|
58 |
|
|
120 |
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance, September 30, 2001 |
$ |
67 |
|
1,582,129 |
|
$ |
6,491 |
|
$ |
41,857 |
|
$ |
1,731 |
|
$ |
5 |
|
$ |
50,151 |
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance, December 31, 2001 |
$ |
65 |
|
1,559,297 |
|
$ |
5,076 |
|
$ |
42,980 |
|
$ |
437 |
|
$ |
(38 |
) |
$ |
48,520 |
|
|||||||||||
Net income |
|
6,635 |
|
|
6,635 |
|
$ |
6,635 |
| ||||||||||||||||||||||
Other comprehensive income, net of tax: |
|||||||||||||||||||||||||||||||
Net unrealized gains on available-for-sale and marketable equity securities |
|
1,256 |
|
|
1,256 |
|
|
1,256 |
| ||||||||||||||||||||||
Net unrealized gains on foreign currency translation adjustments |
|
2 |
|
|
2 |
|
|
2 |
| ||||||||||||||||||||||
Net losses on derivatives |
|
(1,082 |
) |
|
(1,082 |
) |
|
(1,082 |
) | ||||||||||||||||||||||
|
|
| |||||||||||||||||||||||||||||
Comprehensive income |
$ |
6,811 |
| ||||||||||||||||||||||||||||
|
|
| |||||||||||||||||||||||||||||
Cash dividends: |
|||||||||||||||||||||||||||||||
Common |
|
(2,744 |
) |
|
(2,744 |
) |
|||||||||||||||||||||||||
Preferred |
|
(4 |
) |
|
(4 |
) |
|||||||||||||||||||||||||
Common stock issued under employee plans |
41,834 |
|
|
2,143 |
|
|
14 |
|
|
2,157 |
|
||||||||||||||||||||
Common stock repurchased |
(99,200 |
) |
|
(6,798 |
) |
|
(6,798 |
) |
|||||||||||||||||||||||
Conversion of preferred stock |
|
(5 |
) |
206 |
|
|
5 |
|
|||||||||||||||||||||||
Other |
25 |
|
|
248 |
|
|
3 |
|
|
46 |
|
|
297 |
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance, September 30, 2002 |
$ |
60 |
|
1,502,162 |
|
$ |
674 |
|
$ |
46,870 |
|
$ |
613 |
|
$ |
22 |
|
$ |
48,239 |
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
At September 30, 2002 and December 31, 2001, Accumulated Other Comprehensive Income (Loss) consisted of net unrealized gains (losses) on available-for-sale
and marketable equity securities of $776 and $(480), respectively; foreign currency translation adjustments of $(169) and $(171), respectively; and net gains on derivatives of $6 and $1,088, respectively. |
Nine Months Ended September 30 |
||||||||
(Dollars in millions) |
2002 |
2001 |
||||||
Operating activities |
||||||||
Net income |
$ |
6,635 |
|
$ |
4,734 |
| ||
Reconciliation of net income to net cash used in operating activities: |
||||||||
Provision for credit losses |
|
2,532 |
|
|
2,886 |
| ||
Gains on sales of securities |
|
(326 |
) |
|
(82 |
) | ||
Business exit costs |
|
|
|
|
1,305 |
| ||
Depreciation and premises improvements amortization |
|
663 |
|
|
641 |
| ||
Amortization of intangibles |
|
164 |
|
|
665 |
| ||
Deferred income tax expense |
|
278 |
|
|
272 |
| ||
Net increase in trading and hedging instruments |
|
(5,049 |
) |
|
(19,788 |
) | ||
Net increase in other assets |
|
(4,153 |
) |
|
(11,412 |
) | ||
Net increase (decrease) in accrued expenses and other liabilities |
|
(6,188 |
) |
|
16,135 |
| ||
Other operating activities, net |
|
5,105 |
|
|
2,628 |
| ||
|
|
|
|
|
| |||
Net cash used in operating activities |
|
(339 |
) |
|
(2,016 |
) | ||
|
|
|
|
|
| |||
Investing activities |
||||||||
Net (increase) decrease in time deposits placed and other short-term investments |
|
(465 |
) |
|
819 |
| ||
Net (increase) decrease in federal funds sold and securities purchased under |
||||||||
agreements to resell |
|
(12,263 |
) |
|
1,605 |
| ||
Proceeds from sales of available-for-sale securities |
|
104,085 |
|
|
95,361 |
| ||
Proceeds from maturities of available-for-sale securities |
|
17,191 |
|
|
5,632 |
| ||
Purchases of available-for-sale securities |
|
(123,058 |
) |
|
(99,971 |
) | ||
Proceeds from maturities of held-to-maturity securities |
|
39 |
|
|
40 |
| ||
Proceeds from sales and securitizations of loans and leases |
|
20,904 |
|
|
9,874 |
| ||
Other changes in loans and leases, net |
|
(24,581 |
) |
|
11,565 |
| ||
Purchases and originations of mortgage banking assets |
|
(648 |
) |
|
(932 |
) | ||
Net purchases of premises and equipment |
|
(757 |
) |
|
(580 |
) | ||
Proceeds from sales of foreclosed properties |
|
117 |
|
|
230 |
| ||
Acquisition of business activities |
|
(110 |
) |
|
(417 |
) | ||
|
|
|
|
|
| |||
Net cash provided by (used in) investing activities |
|
(19,546 |
) |
|
23,226 |
| ||
|
|
|
|
|
| |||
Financing activities |
||||||||
Net increase (decrease) in deposits |
|
3,920 |
|
|
(4,374 |
) | ||
Net increase in federal funds purchased and securities sold under |
||||||||
agreements to repurchase |
|
14,096 |
|
|
10,428 |
| ||
Net increase (decrease) in commercial paper and other short-term borrowings |
|
12,204 |
|
|
(19,258 |
) | ||
Proceeds from issuance of long-term debt and trust preferred securities |
|
8,556 |
|
|
10,905 |
| ||
Retirement of long-term debt and trust preferred securities |
|
(13,824 |
) |
|
(18,239 |
) | ||
Proceeds from issuance of common stock |
|
2,157 |
|
|
903 |
| ||
Common stock repurchased |
|
(6,798 |
) |
|
(3,016 |
) | ||
Cash dividends paid |
|
(2,748 |
) |
|
(2,695 |
) | ||
Other financing activities, net |
|
(29 |
) |
|
(77 |
) | ||
|
|
|
|
|
| |||
Net cash provided by (used in) financing activities |
|
17,534 |
|
|
(25,423 |
) | ||
|
|
|
|
|
| |||
Effect of exchange rate changes on cash and cash equivalents |
|
(17 |
) |
|
(20 |
) | ||
|
|
|
|
|
| |||
Net decrease in cash and cash equivalents |
|
(2,368 |
) |
|
(4,233 |
) | ||
Cash and cash equivalents at January 1 |
|
26,837 |
|
|
27,513 |
| ||
|
|
|
|
|
| |||
Cash and cash equivalents at September 30 |
$ |
24,469 |
|
$ |
23,280 |
| ||
|
|
|
|
|
|
Three Months Ended September 30 |
Nine Months Ended September 30 | |||||||||||
(Dollars in millions) |
2002 |
2001 |
2002 |
2001 | ||||||||
Trading account profits as reported |
$ |
71 |
$ |
433 |
$ |
679 |
$ |
1,508 | ||||
Trading-related net interest income (1) |
|
485 |
|
417 |
|
1,387 |
|
1,182 | ||||
|
|
|
|
|
|
|
| |||||
Total trading-related revenue |
$ |
556 |
$ |
850 |
$ |
2,066 |
$ |
2,690 | ||||
|
|
|
|
|
|
|
| |||||
Trading-related revenue by product |
||||||||||||
Foreign exchange |
$ |
126 |
$ |
138 |
$ |
389 |
$ |
419 | ||||
Interest rate |
|
96 |
|
229 |
|
585 |
|
608 | ||||
Credit (2) |
|
255 |
|
267 |
|
717 |
|
768 | ||||
Equities |
|
77 |
|
190 |
|
318 |
|
743 | ||||
Commodities |
|
2 |
|
26 |
|
57 |
|
152 | ||||
|
|
|
|
|
|
|
| |||||
Total trading-related revenue |
$ |
556 |
$ |
850 |
$ |
2,066 |
$ |
2,690 | ||||
|
|
|
|
|
|
|
| |||||
(1) Presented on a taxable-equivalent basis.
| ||||||||||||
(2) Credit includes fixed income and credit default swaps and hedges of credit
exposure. |
(Dollars in millions) |
September 30 2002 |
December 31 2001 | ||||
Trading account assets |
||||||
U.S. Government & Agency securities |
$ |
17,705 |
$ |
15,009 | ||
Foreign sovereign debt |
|
8,613 |
|
6,809 | ||
Corporate & other debt securities |
|
11,366 |
|
11,596 | ||
Equity securities |
|
4,725 |
|
2,976 | ||
Mortgage-backed securities |
|
4,991 |
|
3,070 | ||
Other |
|
9,507 |
|
7,884 | ||
|
|
|
| |||
Total |
$ |
56,907 |
$ |
47,344 | ||
|
|
|
| |||
Trading account liabilities |
||||||
U.S. Government & Agency securities |
$ |
12,940 |
$ |
4,121 | ||
Foreign sovereign debt |
|
2,255 |
|
3,096 | ||
Corporate & other debt securities |
|
2,683 |
|
1,501 | ||
Equity securities |
|
3,151 |
|
6,151 | ||
Other |
|
5,002 |
|
4,583 | ||
|
|
|
| |||
Total |
$ |
26,031 |
$ |
19,452 | ||
|
|
|
|
Derivatives(1) |
||||||||||||
September 30, 2002 |
December 31, 2001 | |||||||||||
(Dollars in millions) |
Contract/ Notional |
Credit Risk |
Contract/ Notional |
Credit Risk | ||||||||
Interest rate contracts |
||||||||||||
Swaps |
$ |
6,219,606 |
$ |
18,249 |
$ |
5,267,608 |
$ |
9,550 | ||||
Futures and forwards |
|
2,517,913 |
|
416 |
|
1,663,109 |
|
67 | ||||
Written options |
|
985,494 |
|
|
|
678,242 |
|
| ||||
Purchased options |
|
855,444 |
|
3,406 |
|
704,159 |
|
2,165 | ||||
Foreign exchange contracts |
||||||||||||
Swaps |
|
166,708 |
|
2,342 |
|
140,778 |
|
2,274 | ||||
Spot, futures and forwards |
|
689,154 |
|
1,676 |
|
654,026 |
|
2,496 | ||||
Written options |
|
74,184 |
|
|
|
57,963 |
|
| ||||
Purchased options |
|
72,608 |
|
392 |
|
55,050 |
|
496 | ||||
Equity contracts |
||||||||||||
Swaps |
|
14,905 |
|
999 |
|
14,504 |
|
562 | ||||
Futures and forwards |
|
81,379 |
|
|
|
46,970 |
|
44 | ||||
Written options |
|
22,481 |
|
|
|
21,009 |
|
| ||||
Purchased options |
|
26,670 |
|
2,673 |
|
28,902 |
|
2,511 | ||||
Commodity contracts |
||||||||||||
Swaps |
|
11,515 |
|
1,029 |
|
6,600 |
|
1,152 | ||||
Futures and forwards |
|
4,393 |
|
|
|
2,176 |
|
| ||||
Written options |
|
18,390 |
|
|
|
8,231 |
|
| ||||
Purchased options |
|
23,907 |
|
351 |
|
8,219 |
|
199 | ||||
Credit derivatives |
|
82,399 |
|
1,305 |
|
57,182 |
|
631 | ||||
|
|
|
|
|
|
|
| |||||
Net replacement cost |
$ |
32,838 |
$ |
22,147 | ||||||||
|
|
|
| |||||||||
(1) Includes both long and short derivative positions. |
Outstanding loans and leases at September 30, 2002 and December 31, 2001 were: | ||||||||||||
September 30, 2002 |
December 31, 2001 |
|||||||||||
(Dollars in millions) |
Amount |
Percent |
Amount |
Percent |
||||||||
Commercial domestic |
$ |
105,240 |
30.8 |
% |
$ |
118,205 |
35.9 |
% | ||||
Commercial foreign |
|
20,677 |
6.1 |
|
|
23,039 |
7.0 |
| ||||
Commercial real estate domestic |
|
20,707 |
6.1 |
|
|
22,271 |
6.8 |
| ||||
Commercial real estate foreign |
|
447 |
0.1 |
|
|
383 |
0.1 |
| ||||
|
|
|
|
|
|
|
| |||||
Total commercial |
|
147,071 |
43.1 |
|
|
163,898 |
49.8 |
| ||||
|
|
|
|
|
|
|
| |||||
Residential mortgage |
|
105,617 |
31.0 |
|
|
78,203 |
23.8 |
| ||||
Home equity lines |
|
23,464 |
6.9 |
|
|
22,107 |
6.7 |
| ||||
Direct/Indirect consumer |
|
30,417 |
8.9 |
|
|
30,317 |
9.2 |
| ||||
Consumer finance |
|
9,495 |
2.8 |
|
|
12,652 |
3.9 |
| ||||
Bankcard |
|
23,062 |
6.8 |
|
|
19,884 |
6.0 |
| ||||
Foreign consumer |
|
1,965 |
0.5 |
|
|
2,092 |
0.6 |
| ||||
|
|
|
|
|
|
|
| |||||
Total consumer |
|
194,020 |
56.9 |
|
|
165,255 |
50.2 |
| ||||
|
|
|
|
|
|
|
| |||||
Total outstanding loans and leases |
$ |
341,091 |
100.0 |
% |
$ |
329,153 |
100.0 |
% | ||||
|
|
|
|
|
|
|
|
Three Moths Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||
(Dollars in millions) |
2002 |
2001 |
2002 |
2001 |
||||||||||||
Balance, beginning of period |
$ |
6,873 |
|
$ |
6,911 |
|
$ |
6,875 |
|
$ |
6,838 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Loans and leases charged off |
|
(1,002 |
) |
|
(1,654 |
) |
|
(3,147 |
) |
|
(3,523 |
) | ||||
Recoveries of loans and leases previously charged off |
|
198 |
|
|
163 |
|
|
615 |
|
|
473 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net charge-offs |
|
(804 |
) |
|
(1,491 |
) |
|
(2,532 |
) |
|
(3,050 |
) | ||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Provision for credit losses |
|
804 |
|
|
1,251 |
|
|
2,532 |
|
|
2,886 |
| ||||
Other, net |
|
(12 |
) |
|
(6 |
) |
|
(14 |
) |
|
(9 |
) | ||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Balance, September 30 |
$ |
6,861 |
|
$ |
6,665 |
|
$ |
6,861 |
|
$ |
6,665 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in millions) |
September 30, 2002 |
December 31, 2001 | ||||
Commercial domestic |
$ |
2,991 |
$ |
3,138 | ||
Commercial foreign |
|
882 |
|
501 | ||
Commercial real estate domestic |
|
214 |
|
240 | ||
Commercial real estate foreign |
|
2 |
|
| ||
|
|
|
| |||
Total impaired loans |
$ |
4,089 |
$ |
3,879 | ||
|
|
|
|
(Dollars in millions) |
Total Corporation |
Consumer and Commercial Banking |
Asset Management |
Global Corporate and Investment Banking |
Equity Investments | |||||||||||||
Balance, January 1, 2002 |
$ |
10,854 |
|
$ |
7,726 |
$ |
943 |
|
$ |
2,051 |
|
$ |
134 | |||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Goodwill additions |
|
550 |
|
|
|
|
550 |
|
|
|
|
|
| |||||
Other(1) |
|
(15 |
) |
|
|
|
(1 |
) |
|
(14 |
) |
|
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Balance, September 30, 2002 |
$ |
11,389 |
|
$ |
7,726 |
$ |
1,492 |
|
$ |
2,037 |
|
$ |
134 | |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Includes certain other reclassifications. |
September 30, 2002 |
December 31, 2001 | |||||||||||
(Dollars in millions) |
Gross Carrying Value |
Accumulated Amortization |
Gross Carrying Value
|
Accumulated Amortization
| ||||||||
Core deposits |
$ |
1,495 |
$ |
686 |
$ |
1,495 |
$ |
566 | ||||
Other intangibles |
|
735 |
|
417 |
|
730 |
|
365 | ||||
|
|
|
|
|
|
|
| |||||
Total core deposits and other intangibles |
$ |
2,230 |
$ |
1,103 |
$ |
2,225 |
$ |
931 | ||||
|
|
|
|
|
|
|
|
(Dollars in millions) |
September 30 2002 |
December 31 2001 | ||||
Loan commitments |
$ |
220,477 |
$ |
221,529 | ||
Standby letters of credit and financial guarantees |
|
31,179 |
|
32,416 | ||
Commercial letters of credit |
|
3,970 |
|
3,581 | ||
|
|
|
| |||
Legally binding commitments |
$ |
255,626 |
$ |
257,526 | ||
|
|
|
| |||
Credit card lines |
$ |
73,120 |
$ |
73,644 | ||
|
|
|
| |||
Total commitments |
$ |
328,746 |
$ |
331,170 | ||
|
|
|
|
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||
(Dollars in millions, except per share information; shares in thousands) |
2002 |
2001 |
2002 |
2001 |
||||||||||||
Earnings per common share |
||||||||||||||||
Net income |
$ |
2,235 |
|
$ |
841 |
|
$ |
6,635 |
|
$ |
4,734 |
| ||||
Preferred stock dividends |
|
(2 |
) |
|
(2 |
) |
|
(4 |
) |
|
(4 |
) | ||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net income available to common shareholders |
$ |
2,233 |
|
$ |
839 |
|
$ |
6,631 |
|
$ |
4,730 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Average common shares issued and outstanding |
|
1,504,017 |
|
|
1,599,692 |
|
|
1,526,946 |
|
|
1,603,340 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Earnings per common share |
$ |
1.49 |
|
$ |
0.52 |
|
$ |
4.34 |
|
$ |
2.95 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Diluted earnings per common share |
||||||||||||||||
Net income available to common shareholders |
$ |
2,233 |
|
$ |
839 |
|
$ |
6,631 |
|
$ |
4,730 |
| ||||
Preferred stock dividends |
|
2 |
|
|
2 |
|
|
4 |
|
|
4 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net income available to common shareholders and assumed conversions |
$ |
2,235 |
|
$ |
841 |
|
$ |
6,635 |
|
$ |
4,734 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Average common shares issued and outstanding |
|
1,504,017 |
|
|
1,599,692 |
|
|
1,526,946 |
|
|
1,603,340 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Incremental shares from assumed conversions: |
||||||||||||||||
Convertible preferred stock |
|
2,346 |
|
|
2,633 |
|
|
2,415 |
|
|
2,705 |
| ||||
Stock options |
|
39,984 |
|
|
31,738 |
|
|
43,842 |
|
|
26,883 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Dilutive potential common shares(1) |
|
42,330 |
|
|
34,371 |
|
|
46,257 |
|
|
29,588 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total diluted average common shares issued and outstanding |
|
1,546,347 |
|
|
1,634,063 |
|
|
1,573,203 |
|
|
1,632,928 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Diluted earnings per common share |
$ |
1.45 |
|
$ |
0.51 |
|
$ |
4.22 |
|
$ |
2.90 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
For the three months and nine months ended September 30, 2002, average options to purchase 23 million and 22 million shares, respectively, were outstanding
but not included in the computation of earnings per share because they were antidilutive. For the three months and nine months ended September 30, 2001, average options to purchase 43 million and 87 million shares, respectively, were outstanding but
not included in the computation of earnings per share because they were antidilutive. |
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||
(Dollars in millions) |
2002 |
2001 |
2002 |
2001 |
||||||||||||
Segments net income |
$ |
1,920 |
|
$ |
1,841 |
|
$ |
5,970 |
|
$ |
5,589 |
| ||||
Adjustments, net of taxes: |
||||||||||||||||
Earnings associated with unassigned capital |
|
94 |
|
|
38 |
|
|
300 |
|
|
151 |
| ||||
Asset/liability management mortgage portfolio |
|
165 |
|
|
89 |
|
|
273 |
|
|
224 |
| ||||
Liquidating businesses |
|
(1 |
) |
|
48 |
|
|
20 |
|
|
82 |
| ||||
SFAS 133 transition adjustment net loss |
|
|
|
|
|
|
|
|
|
|
(68 |
) | ||||
Provision for credit losses in excess of net charge-offs |
|
|
|
|
|
|
|
|
|
|
(49 |
) | ||||
Gains on sales of securities |
|
137 |
|
|
67 |
|
|
234 |
|
|
70 |
| ||||
Exit charges |
|
|
|
|
(1,250 |
) |
|
|
|
|
(1,250 |
) | ||||
Other |
|
(80 |
) |
|
8 |
|
|
(162 |
) |
|
(15 |
) | ||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Consolidated net income |
$ |
2,235 |
|
$ |
841 |
|
$ |
6,635 |
|
$ |
4,734 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income totaled $6.6 billion, or $4.22 per common share (diluted), compared to $4.7 billion, or $2.90 per common share (diluted). The return on average
common shareholders equity was 18.71 percent. Net income for the three months ended September 30, 2002 totaled $2.2 billion, or $1.45 per common share (diluted), compared to $841 million, or $0.51 per common share (diluted) for the three
months ended September 30, 2001. The return on average common shareholders equity was 19.02 percent. As a result of the adoption of Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets on
January 1, 2002, the Corporation no longer amortizes goodwill. The impact of goodwill amortization on net income was $467 million or $0.29 per share (diluted) for the nine months ended September 30, 2001 and $153 million or $0.09 per share (diluted)
for the three months ended September 30, 2001. Prior year results also included $1.25 billion of after-tax business exit charges in the third quarter of 2001, which impacted diluted earnings per share by $0.77 and $0.76 for the three months and nine
months ended September 30, 2001, respectively. |
|
Total revenue includes net interest income and noninterest income. Total revenue was $25.7 billion, a decrease of $133 million. |
|
Net interest income increased $676 million to $15.5 billion. The increase was driven by the net impact of higher discretionary portfolio levels and interest
rate changes, higher levels of core deposit funding, consumer loan growth, losses associated with auto lease financing in 2001 and the margin impact of higher trading-related activities, partially offset by the securitization of subprime real estate
loans and reduced commercial loan levels. |
|
Noninterest income was $10.1 billion, an $809 million decrease. This decrease was primarily due to a sharp decline in trading account profits and higher equity
investment impairment charges, partially offset by increases in service charges, investment and brokerage services, mortgage banking income and card income. |
|
The provision for credit losses decreased $354 million to $2.5 billion, primarily due to $395 million in 2001 associated with exiting the subprime real estate
lending business. Net charge-offs were $2.5 billion, or 1.01 percent of average loans and leases, a decrease of seven basis points. The decrease in net charge-offs of $518 million was primarily due to $635 million of charge-offs in 2001 related to
exiting the subprime real estate lending business and decreases in commercial domestic and consumer finance net charge-offs, partially offset by increases in bankcard and commercial foreign net charge-offs.
|
|
Nonperforming assets were $5.1 billion, or 1.50 percent of loans, leases and foreclosed properties at September 30, 2002, a $223 million increase from December
31, 2001. Nonperforming assets continued to be affected by the weakened economic environment. The allowance for credit losses totaled $6.9 billion, or 2.01 percent of total loans and leases, at September 30, 2002 compared to 2.09 percent at December
31, 2001. |
|
Noninterest expense was $13.6 billion, a decrease of $1.8 billion. Excluding goodwill amortization of $502 million in 2001, noninterest expense declined $1.3
billion, or nine percent, in 2002 compared to the prior year, primarily due to $1.30 billion of business exit costs in 2001 and reductions in professional fees, partially offset by increased data processing expense. |
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||
(Dollars in millions, except per share information) |
2002 |
2001 |
2002 |
2001 |
||||||||||||
Income statement |
||||||||||||||||
Net interest income |
$ |
5,302 |
|
$ |
5,204 |
|
$ |
15,549 |
|
$ |
14,873 |
| ||||
Noninterest income |
|
3,220 |
|
|
3,429 |
|
|
10,141 |
|
|
10,950 |
| ||||
Total revenue |
|
8,522 |
|
|
8,633 |
|
|
25,690 |
|
|
25,823 |
| ||||
Provision for credit losses |
|
804 |
|
|
1,251 |
|
|
2,532 |
|
|
2,886 |
| ||||
Gains on sales of securities |
|
189 |
|
|
97 |
|
|
326 |
|
|
82 |
| ||||
Noninterest expense |
|
4,620 |
|
|
5,911 |
|
|
13,604 |
|
|
15,386 |
| ||||
Income before income taxes |
|
3,287 |
|
|
1,568 |
|
|
9,880 |
|
|
7,633 |
| ||||
Income tax expense |
|
1,052 |
|
|
727 |
|
|
3,245 |
|
|
2,899 |
| ||||
Net income |
|
2,235 |
|
|
841 |
|
|
6,635 |
|
|
4,734 |
| ||||
Average common shares issued and outstanding (in thousands) |
|
1,504,017 |
|
|
1,599,692 |
|
|
1,526,946 |
|
|
1,603,340 |
| ||||
Average diluted common shares issued and outstanding (in thousands) |
|
1,546,347 |
|
|
1,634,063 |
|
|
1,573,203 |
|
|
1,632,928 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Performance ratios |
||||||||||||||||
Return on average assets |
|
1.33 |
% |
|
0.52 |
% |
|
1.36 |
% |
|
0.98 |
% | ||||
Return on average common shareholders' equity |
|
19.02 |
|
|
6.78 |
|
|
18.71 |
|
|
13.03 |
| ||||
Efficiency ratio (taxable-equivalent basis) |
|
53.19 |
|
|
67.79 |
|
|
52.09 |
|
|
59.00 |
| ||||
Total equity to total assets (period end) |
|
7.31 |
|
|
7.83 |
|
|
7.31 |
|
|
7.83 |
| ||||
Total average equity to total average assets |
|
6.97 |
|
|
7.66 |
|
|
7.29 |
|
|
7.49 |
| ||||
Dividend payout ratio |
|
40.25 |
|
|
106.49 |
|
|
41.37 |
|
|
56.88 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Per common share data |
||||||||||||||||
Earnings |
$ |
1.49 |
|
$ |
0.52 |
|
$ |
4.34 |
|
$ |
2.95 |
| ||||
Diluted earnings |
|
1.45 |
|
|
0.51 |
|
|
4.22 |
|
|
2.90 |
| ||||
Cash dividends paid |
|
0.60 |
|
|
0.56 |
|
|
1.80 |
|
|
1.68 |
| ||||
Book value |
|
32.07 |
|
|
31.66 |
|
|
32.07 |
|
|
31.66 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Average balance sheet |
||||||||||||||||
Total loans and leases |
$ |
340,484 |
|
$ |
357,726 |
|
$ |
334,703 |
|
$ |
376,261 |
| ||||
Total assets |
|
669,149 |
|
|
642,184 |
|
|
651,257 |
|
|
648,789 |
| ||||
Core deposits |
|
331,761 |
|
|
306,766 |
|
|
326,535 |
|
|
303,303 |
| ||||
Total deposits |
|
373,933 |
|
|
363,328 |
|
|
368,142 |
|
|
360,793 |
| ||||
Common shareholders' equity |
|
46,592 |
|
|
49,134 |
|
|
47,396 |
|
|
48,528 |
| ||||
Total shareholders' equity |
|
46,652 |
|
|
49,202 |
|
|
47,457 |
|
|
48,597 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Risk-based capital ratios (period end) |
||||||||||||||||
Tier 1 capital |
|
8.13 |
% |
|
7.95 |
% |
|
8.13 |
% |
|
7.95 |
% | ||||
Total capital |
|
12.38 |
|
|
12.12 |
|
|
12.38 |
|
|
12.12 |
| ||||
Leverage ratio |
|
6.35 |
|
|
6.59 |
|
|
6.35 |
|
|
6.59 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Market price per share of common stock |
||||||||||||||||
Closing |
$ |
63.80 |
|
$ |
58.40 |
|
$ |
63.80 |
|
$ |
58.40 |
| ||||
High |
|
71.94 |
|
|
65.54 |
|
|
77.08 |
|
|
65.54 |
| ||||
Low |
|
57.90 |
|
|
50.25 |
|
|
57.51 |
|
|
45.00 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
As a result of the adoption of SFAS 142 on January 1, 2002, the Corporation no longer amortizes goodwill. Goodwill amortization expense for the three months
and nine months ended September 30, 2001 was $165 million and $502 million, respectively. The impact on net income was $153 million or $0.09 per share (diluted) for the three months ended September 30, 2001. The impact on net income was $467 million
or $0.29 per share (diluted) for the nine months ended September 30, 2001. |
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||
(Dollars in millions, except per share information) |
2002 |
2001 |
2002 |
2001 |
||||||||||||
Performance metricsexcludes nonrecurring charges(1,2) |
||||||||||||||||
Earnings excluding nonrecurring charges |
$ |
2,235 |
|
$ |
2,091 |
|
$ |
6,635 |
|
$ |
5,984 |
| ||||
Earnings excluding nonrecurring charges per common share |
|
1.49 |
|
|
1.31 |
|
|
4.34 |
|
|
3.73 |
| ||||
Diluted earnings excluding nonrecurring charges per common share |
|
1.45 |
|
|
1.28 |
|
|
4.22 |
|
|
3.66 |
| ||||
Shareholder value added |
|
880 |
|
|
824 |
|
|
2,546 |
|
|
2,293 |
| ||||
Return on average assets |
|
1.33 |
% |
|
1.29 |
% |
|
1.36 |
% |
|
1.23 |
% | ||||
Return on average common shareholders' equity |
|
19.02 |
|
|
16.87 |
|
|
18.71 |
|
|
16.48 |
| ||||
Efficiency ratio (taxable-equivalent basis) |
|
53.19 |
|
|
52.82 |
|
|
52.09 |
|
|
53.99 |
| ||||
Dividend payout ratio |
|
40.25 |
|
|
42.79 |
|
|
41.37 |
|
|
44.99 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Taxable-equivalent basis data |
||||||||||||||||
Net interest income |
$ |
5,465 |
|
$ |
5,290 |
|
$ |
15,974 |
|
$ |
15,128 |
| ||||
Total revenue |
|
8,685 |
|
|
8,719 |
|
|
26,115 |
|
|
26,078 |
| ||||
Net interest yield |
|
3.75 |
% |
|
3.78 |
% |
|
3.78 |
% |
|
3.59 |
% | ||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Nonrecurring charges represent provision for credit losses of $395 million and noninterest expense of $1.3 billion, both of which are related to the exit of
certain consumer finance businesses in the third quarter of 2001. Noninterest expense charges consisted of goodwill write-offs, auto lease residual charges, real estate servicing asset charges and other transaction costs. The impact of business exit
charges on net income was $1.25 billion. The impact on diluted earnings per share was $0.77 and $0.76 for the three months and nine months ended September 30, 2001, respectively. The Corporation defines nonrecurring charges as charges associated
with events that are not reasonably expected to recur in the foreseeable future. |
(2) |
The three months ended September 30, 2001 included goodwill amortization of $165 million. The impact on net income was $153 million, or $0.09 per share
(diluted). The nine months ended September 30, 2001 included goodwill amortization of $502 million. The impact on net income was $467 million, or $0.29 per share (diluted). |
Three Months Ended September
30 |
Increase/ (Decrease) |
Nine Months Ended September
30 |
Increase/ (Decrease) |
|||||||||||||||||||
(Dollars in millions) |
2002 |
2001 |
2002 |
2001 |
||||||||||||||||||
Net interest income |
||||||||||||||||||||||
As reported(1) |
$ |
5,465 |
|
$ |
5,290 |
|
3.3 |
% |
$ |
15,974 |
|
$ |
15,128 |
|
5.6 |
% | ||||||
Less: Trading-related net interest income |
|
(485 |
) |
|
(417 |
) |
|
(1,387 |
) |
|
(1,182 |
) |
||||||||||
Add: Impact of revolving securitizations |
|
112 |
|
|
172 |
|
|
412 |
|
|
529 |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Core net interest income |
$ |
5,092 |
|
$ |
5,045 |
|
0.9 |
% |
$ |
14,999 |
|
$ |
14,475 |
|
3.6 |
% | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Average earning assets |
||||||||||||||||||||||
As reported |
$ |
580,248 |
|
$ |
557,108 |
|
4.2 |
% |
$ |
563,964 |
|
$ |
562,038 |
|
0.3 |
% | ||||||
Less: Trading-related earning assets |
|
(126,280 |
) |
|
(105,953 |
) |
|
(121,307 |
) |
|
(101,305 |
) |
||||||||||
Add: Impact of revolving securitizations |
|
5,276 |
|
|
9,809 |
|
|
6,743 |
|
|
10,335 |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Core average earning assets |
$ |
459,244 |
|
$ |
460,964 |
|
(0.4 |
)% |
$ |
449,400 |
|
$ |
471,068 |
|
(4.6 |
)% | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Net interest yield on earning assets(1,2) |
||||||||||||||||||||||
As reported |
|
3.75 |
% |
|
3.78 |
% |
(3 |
)bps |
|
3.78 |
% |
|
3.59 |
% |
19 |
bps | ||||||
Add: Impact of trading-related activities |
|
0.62 |
|
|
0.52 |
|
10 |
|
|
0.62 |
|
|
0.45 |
|
17 |
| ||||||
Add: Impact of revolving securitizations |
|
0.04 |
|
|
0.06 |
|
(2 |
) |
|
0.05 |
|
|
0.06 |
|
(1 |
) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Core net interest yield on earning assets |
|
4.41 |
% |
|
4.36 |
% |
5 |
bps |
|
4.45 |
% |
|
4.10 |
% |
35 |
bps | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Net interest income is presented on a taxable-equivalent basis. |
(2) |
Bps denotes basis points; 100 bps equals 1%. |
Third Quarter 2002 |
Second Quarter 2002 |
|||||||||||||||||
(Dollars in millions) |
Average Balance |
Interest Income/ Expense |
Yield/ Rate |
Average Balance |
Interest Income/ Expense |
Yield/ Rate |
||||||||||||
Earning assets |
||||||||||||||||||
Time deposits placed and other short-term investments |
$ |
10,396 |
$ |
63 |
2.41 |
% |
$ |
10,673 |
$ |
63 |
2.37 |
% | ||||||
Federal funds sold and securities purchased under agreements to resell |
|
40,294 |
|
178 |
1.76 |
|
|
48,426 |
|
270 |
2.23 |
| ||||||
Trading account assets |
|
85,129 |
|
1,017 |
4.76 |
|
|
78,113 |
|
961 |
4.93 |
| ||||||
Securities(1) |
|
76,484 |
|
1,120 |
5.85 |
|
|
67,291 |
|
939 |
5.59 |
| ||||||
Loans and leases(2): |
||||||||||||||||||
Commercial domestic |
|
106,039 |
|
1,728 |
6.47 |
|
|
111,522 |
|
1,887 |
6.78 |
| ||||||
Commercial foreign |
|
21,256 |
|
206 |
3.85 |
|
|
21,454 |
|
212 |
3.97 |
| ||||||
Commercial real estate domestic |
|
20,576 |
|
265 |
5.10 |
|
|
21,486 |
|
258 |
4.83 |
| ||||||
Commercial real estate foreign |
|
425 |
|
4 |
3.92 |
|
|
393 |
|
5 |
5.14 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Total commercial |
|
148,296 |
|
2,203 |
5.90 |
|
|
154,855 |
|
2,362 |
6.12 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Residential mortgage |
|
104,590 |
|
1,733 |
6.61 |
|
|
94,726 |
|
1,602 |
6.77 |
| ||||||
Home equity lines |
|
23,275 |
|
314 |
5.35 |
|
|
22,579 |
|
305 |
5.41 |
| ||||||
Direct/Indirect consumer |
|
30,029 |
|
530 |
7.01 |
|
|
30,021 |
|
542 |
7.25 |
| ||||||
Consumer finance |
|
10,043 |
|
201 |
7.97 |
|
|
11,053 |
|
226 |
8.20 |
| ||||||
Bankcard |
|
22,263 |
|
583 |
10.38 |
|
|
20,402 |
|
510 |
10.01 |
| ||||||
Foreign consumer |
|
1,988 |
|
19 |
3.83 |
|
|
2,048 |
|
19 |
3.71 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Total consumer |
|
192,188 |
|
3,380 |
7.00 |
|
|
180,829 |
|
3,204 |
7.10 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Total loans and leases |
|
340,484 |
|
5,583 |
6.52 |
|
|
335,684 |
|
5,566 |
6.65 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Other earning assets |
|
27,461 |
|
387 |
5.61 |
|
|
22,005 |
|
353 |
6.42 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Total earning assets(3) |
|
580,248 |
|
8,348 |
5.73 |
|
|
562,192 |
|
8,152 |
5.81 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Cash and cash equivalents |
|
20,202 |
|
21,200 |
||||||||||||||
Other assets, less allowance for credit losses |
|
68,699 |
|
63,207 |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Total assets |
$ |
669,149 |
$ |
646,599 |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Interest-bearing liabilities |
||||||||||||||||||
Domestic interest-bearing deposits: |
||||||||||||||||||
Savings |
$ |
22,047 |
$ |
36 |
0.64 |
% |
$ |
21,841 |
$ |
34 |
0.64 |
% | ||||||
NOW and money market deposit accounts |
|
132,939 |
|
362 |
1.08 |
|
|
129,856 |
|
346 |
1.07 |
| ||||||
Consumer CDs and IRAs |
|
67,179 |
|
746 |
4.40 |
|
|
68,015 |
|
764 |
4.51 |
| ||||||
Negotiable CDs, public funds and other time deposits |
|
4,254 |
|
51 |
4.73 |
|
|
4,635 |
|
30 |
2.43 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Total domestic interest-bearing deposits |
|
226,419 |
|
1,195 |
2.09 |
|
|
224,347 |
|
1,174 |
2.10 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Foreign interest-bearing deposits(4): |
||||||||||||||||||
Banks located in foreign countries |
|
17,044 |
|
123 |
2.85 |
|
|
14,048 |
|
108 |
3.10 |
| ||||||
Governments and official institutions |
|
2,188 |
|
10 |
1.85 |
|
|
2,449 |
|
12 |
1.89 |
| ||||||
Time, savings and other |
|
18,686 |
|
86 |
1.83 |
|
|
18,860 |
|
90 |
1.91 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Total foreign interest-bearing deposits |
|
37,918 |
|
219 |
2.29 |
|
|
35,357 |
|
210 |
2.38 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Total interest-bearing deposits |
|
264,337 |
|
1,414 |
2.12 |
|
|
259,704 |
|
1,384 |
2.14 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Federal funds purchased, securities sold under agreements to repurchase and other short-term borrowings
|
|
108,281 |
|
526 |
1.93 |
|
|
97,579 |
|
529 |
2.17 |
| ||||||
Trading account liabilities |
|
33,038 |
|
342 |
4.11 |
|
|
31,841 |
|
344 |
4.34 |
| ||||||
Long-term debt and trust preferred securities |
|
64,880 |
|
601 |
3.71 |
|
|
65,940 |
|
633 |
3.84 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Total interest-bearing liabilities(3) |
|
470,536 |
|
2,883 |
2.44 |
|
|
455,064 |
|
2,890 |
2.55 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Noninterest-bearing sources: |
||||||||||||||||||
Noninterest-bearing deposits |
|
109,596 |
|
106,282 |
||||||||||||||
Other liabilities |
|
42,365 |
|
36,979 |
||||||||||||||
Shareholders equity |
|
46,652 |
|
48,274 |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Total liabilities and shareholders equity |
$ |
669,149 |
$ |
646,599 |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Net interest spread |
3.29 |
|
3.26 |
| ||||||||||||||
Impact of noninterest-bearing sources |
0.46 |
|
0.49 |
| ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Net interest income/yield on earning assets |
$ |
5,465 |
3.75 |
% |
$ |
5,262 |
3.75 |
% | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
The average balance and yield on securities are based on the average of historical amortized cost balances.
|
(2) |
Nonperforming loans are included in the respective average loan balances. Income on such nonperforming loans is recognized on a cash basis.
|
(3) |
Interest income includes the impact of interest rate risk management contracts, which increased interest income on the underlying assets $397, $509 and $560
in the third, second and first quarters of 2002 and $473 and $284 in the fourth and third quarters of 2001, respectively. These amounts were substantially offset by corresponding decreases in the income earned on the underlying assets. Interest
expense includes the impact of interest rate risk management contracts, which (increased) decreased interest expense on the underlying liabilities $(69), $(65) and $55 in the third, second and first quarters of 2002 and $(40) and $31 in the fourth
and third quarters of 2001, respectively. These amounts were substantially offset by corresponding decreases or increases in the interest paid on the underlying liabilities. For further information on interest rate contracts, see Asset and
Liability Management Activities beginning on page 60. |
(4) |
Primarily consists of time deposits in denominations of $100,000 or more. |
First Quarter 2002 |
Fourth Quarter 2001 |
Third Quarter 2001 |
|||||||||||||||||||||||||
(Dollars in millions) |
Average Balance |
Interest Income/ Expense |
Yield/ Rate |
Average Balance |
Interest Income/ Expense |
Yield/ Rate |
Average Balance |
Interest Income/ Expense |
Yield/ Rate |
||||||||||||||||||
Earning assets |
|||||||||||||||||||||||||||
Time deposits placed and other short-term investments |
$ |
10,242 |
$ |
61 |
2.43 |
% |
$ |
7,255 |
$ |
64 |
3.47 |
% |
$ |
5,881 |
$ |
71 |
4.84 |
% | |||||||||
Federal funds sold and securities purchased under agreements to resell |
|
44,682 |
|
215 |
1.94 |
|
|
38,825 |
|
253 |
2.60 |
|
|
36,133 |
|
321 |
3.54 |
| |||||||||
Trading account assets |
|
70,613 |
|
888 |
5.06 |
|
|
67,535 |
|
920 |
5.43 |
|
|
68,258 |
|
937 |
5.46 |
| |||||||||
Securities(1) |
|
73,542 |
|
963 |
5.24 |
|
|
71,454 |
|
1,090 |
6.10 |
|
|
58,930 |
|
902 |
6.12 |
| |||||||||
Loans and leases(2): |
|||||||||||||||||||||||||||
Commercial domestic |
|
116,160 |
|
1,978 |
6.90 |
|
|
121,399 |
|
2,138 |
6.99 |
|
|
129,673 |
|
2,343 |
7.17 |
| |||||||||
Commercial foreign |
|
21,917 |
|
226 |
4.17 |
|
|
23,789 |
|
278 |
4.63 |
|
|
25,267 |
|
353 |
5.54 |
| |||||||||
Commercial real estate domestic |
|
22,251 |
|
275 |
5.01 |
|
|
23,051 |
|
316 |
5.45 |
|
|
24,132 |
|
395 |
6.50 |
| |||||||||
Commercial real estate foreign |
|
389 |
|
4 |
4.00 |
|
|
375 |
|
4 |
4.49 |
|
|
366 |
|
5 |
5.78 |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Total commercial |
|
160,717 |
|
2,483 |
6.26 |
|
|
168,614 |
|
2,736 |
6.44 |
|
|
179,438 |
|
3,096 |
6.85 |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Residential mortgage |
|
81,104 |
|
1,389 |
6.88 |
|
|
78,366 |
|
1,385 |
7.05 |
|
|
80,526 |
|
1,457 |
7.22 |
| |||||||||
Home equity lines |
|
22,010 |
|
294 |
5.42 |
|
|
22,227 |
|
340 |
6.07 |
|
|
22,115 |
|
394 |
7.06 |
| |||||||||
Direct/Indirect consumer |
|
30,360 |
|
550 |
7.34 |
|
|
30,363 |
|
583 |
7.61 |
|
|
30,670 |
|
607 |
7.85 |
| |||||||||
Consumer finance |
|
12,134 |
|
255 |
8.46 |
|
|
13,035 |
|
296 |
9.04 |
|
|
25,169 |
|
505 |
8.00 |
| |||||||||
Bankcard |
|
19,383 |
|
490 |
10.26 |
|
|
18,656 |
|
498 |
10.58 |
|
|
17,632 |
|
493 |
11.11 |
| |||||||||
Foreign consumer |
|
2,093 |
|
19 |
3.71 |
|
|
2,093 |
|
21 |
4.02 |
|
|
2,176 |
|
28 |
5.28 |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Total consumer |
|
167,084 |
|
2,997 |
7.24 |
|
|
164,740 |
|
3,123 |
7.54 |
|
|
178,288 |
|
3,484 |
7.78 |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Total loans and leases |
|
327,801 |
|
5,480 |
6.76 |
|
|
333,354 |
|
5,859 |
6.99 |
|
|
357,726 |
|
6,580 |
7.31 |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Other earning assets |
|
22,231 |
|
358 |
6.52 |
|
|
36,782 |
|
707 |
7.67 |
|
|
30,180 |
|
597 |
7.89 |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Total earning assets(3) |
|
549,111 |
|
7,965 |
5.86 |
|
|
555,205 |
|
8,893 |
6.37 |
|
|
557,108 |
|
9,408 |
6.72 |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Cash and cash equivalents |
|
22,037 |
|
23,182 |
|
20,753 |
|||||||||||||||||||||
Other assets, less allowance for credit losses |
|
66,530 |
|
73,410 |
|
64,323 |
|||||||||||||||||||||
|
|
|
|
|
|
||||||||||||||||||||||
Total assets |
$ |
637,678 |
$ |
651,797 |
$ |
642,184 |
|||||||||||||||||||||
|
|
|
|
|
|
||||||||||||||||||||||
Interest-bearing liabilities |
|||||||||||||||||||||||||||
Domestic interest-bearing deposits: |
|||||||||||||||||||||||||||
Savings |
$ |
20,716 |
$ |
33 |
0.64 |
% |
$ |
20,132 |
$ |
42 |
0.83 |
% |
$ |
20,076 |
$ |
53 |
1.04 |
% | |||||||||
NOW and money market deposit accounts |
|
127,218 |
|
335 |
1.07 |
|
|
121,758 |
|
426 |
1.39 |
|
|
116,638 |
|
588 |
2.00 |
| |||||||||
Consumer CDs and IRAs |
|
69,359 |
|
730 |
4.27 |
|
|
71,895 |
|
898 |
4.96 |
|
|
73,465 |
|
918 |
4.95 |
| |||||||||
Negotiable CDs, public funds and other time deposits |
|
4,671 |
|
32 |
2.82 |
|
|
5,196 |
|
44 |
3.39 |
|
|
5,085 |
|
57 |
4.44 |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Total domestic interest-bearing deposits |
|
221,964 |
|
1,130 |
2.06 |
|
|
218,981 |
|
1,410 |
2.56 |
|
|
215,264 |
|
1,616 |
2.98 |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Foreign interest-bearing deposits(4): |
|||||||||||||||||||||||||||
Banks located in foreign countries |
|
15,464 |
|
107 |
2.79 |
|
|
20,771 |
|
170 |
3.22 |
|
|
24,097 |
|
257 |
4.22 |
| |||||||||
Governments and official institutions |
|
2,904 |
|
14 |
1.96 |