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Exhibit 99.11
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
On April 10, 1998, BANC ONE CORPORATION ("BANC ONE"), First Chicago NBD
("FCN") and Hornet Reorganization Corporation, since renamed BANK ONE
CORPORATION ("BANK ONE") entered into an Agreement and Plan of Reorganization
(the "Agreement"), as subsequently amended, pursuant to which BANC ONE and FCN
will be merged seriatim with and into BANK ONE as the surviving corporation in
each case (such mergers together, the "Merger"). Common shareholders of FCN will
receive 1.62 shares of BANK ONE common stock for each share of FCN and common
shareholders of BANC ONE will receive one share of BANK ONE common stock for
each share of BANC ONE. The Merger will be accounted for as a pooling of
interests and pending regulatory and shareholder approval is expected to be
completed during the fourth quarter of 1998.
The following unaudited pro forma condensed combined financial
information and explanatory notes are presented to show the impact on the
historical financial position and results of operations of BANC ONE of the
Merger under the "pooling of interests" method of accounting. The unaudited pro
forma condensed combined financial information combines the historical financial
information of BANC ONE and FCN as of June 30, 1998 and for the six months ended
June 30, 1998 and 1997, respectively.
The pro forma condensed combined financial information as of June 30,
1998 and for the six months ended June 30, 1998 and 1997, is based on and
derived from, and should be read in conjunction with, (a) the historical
consolidated financial statements and the related notes thereto of BANC ONE,
which are incorporated by reference herein, and (b) the historical consolidated
financial statements and the related notes thereto of FCN, which are
incorporated by reference herein.
The pro forma financial information is presented for comparative
purposes only and is not necessarily indicative of the future financial position
or results of operations of the combined company or of the combined financial
position or the results of operations that would have been realized had the
merger been consummated during the periods or as of the dates for which the pro
forma financial information is presented.
The pro forma financial information noted above gives effect to BANC
ONE's acquisition of First Commerce Corporation ("FCC") which was consummated on
June 12, 1998. Previously presented unaudited pro forma financial information
for the years ended December 31, 1997, 1996 and 1995 have not been restated to
give effect to BANC ONE's acquisition of FCC as the acquisition is not material
to BANC ONE.
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BANK ONE CORPORATION & SUBSIDIARIES (CONSOLIDATED)
PRO FORMA CONDENSED COMBINED BALANCE SHEET AS OF JUNE 30, 1998 (UNAUDITED)
(IN MILLIONS)
The following unaudited pro forma condensed combined balance sheet as of June
30, 1998 is presented to show the impact on BANC ONE's historical financial
condition of the proposed Merger with FCN. The Merger has been reflected under
the "pooling of interests" method of accounting.
PROFORMA
BANC ONE FCN ADJUSTMENTS COMBINED
--------- --------- ----------- ---------
ASSETS
Total cash and due from banks $ 8,174 $ 8,049 $ 16,223
Short-term investments 765 13,570 14,335
Trading assets 1,214 4,128 5,342
Investment securities:
Securities held to maturity 691 691
Securities available for sale 18,357 12,604 30,961
--------- --------- --------- ---------
Total securities 19,048 12,604 31,652
Loans and leases (net of unearned income and
allowance for credit losses) 82,683 70,191 152,874
Other assets 12,135 11,239 23,374
--------- --------- --------- ---------
TOTAL ASSETS $ 124,019 $ 119,781 $ 243,800
========= ========= ========= =========
LIABILITIES
Deposits:
Non-interest bearing $ 21,482 $ 19,800 $ 41,282
Interest bearing 63,472 49,728 113,200
--------- --------- --------- ---------
Total deposits 84,954 69,528 154,482
Short-term borrowings 11,807 22,541 34,348
Long-term borrowings 11,656 10,591 22,247
Other liabilities 4,028 8,807 $ 837 13,672
--------- --------- --------- ---------
TOTAL LIABILITIES 112,445 111,467 837 224,749
--------- --------- --------- ---------
STOCKHOLDERS' EQUITY
Preferred stock 190 190
Common stock 3,521 320 2,011 5,852
Capital in excess of aggregrate stated value 6,772 1,948 (4,086) 4,634
Retained earnings 1,170 7,977 (837) 8,310
Other shareholders' equity 111 (46) 65
Less: Treasury stock (2,075) 2,075
--------- --------- --------- ---------
Total stockholders' equity 11,574 8,314 (837) 19,051
--------- --------- --------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 124,019 $ 119,781 $ 0 $ 243,800
========= ========= ========= =========
See accompanying notes to the pro forma financial information.
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BANK ONE CORPORATION & SUBSIDIARIES (CONSOLIDATED)
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME FOR THE SIX MONTHS ENDED
JUNE 30, 1998 (UNAUDITED)
(IN MILLIONS, EXCEPT PER SHARE DATA)
The following unaudited pro forma condensed combined statements of income are
presented to show the impact on BANC ONE's historical results of operations of
the proposed merger with FCN. Such statements assume that the companies had been
combined for each period presented.
PROFORMA
BANC ONE FCN COMBINED
-------- ------ --------
INTEREST INCOME
Loans and leases $4,273 $2,961 $7,234
Securities, including trading 664 440 1,104
Other interest income 29 374 403
------ ------ ------
Total 4,966 3,775 8,741
INTEREST EXPENSE
Deposits 1,393 1,120 2,513
Borrowings 726 910 1,636
------ ------ ------
Total 2,119 2,030 4,149
NET INTEREST INCOME 2,847 1,745 4,592
Provision for credit losses 406 385 791
------ ------ ------
Net interest income after provision for credit losses 2,441 1,360 3,801
NONINTEREST INCOME
Credit card revenue 948 468 1,416
Deposit fees 394 231 625
Other noninterest income 1,121 882 2,003
------ ------ ------
Total 2,463 1,581 4,044
NONINTEREST EXPENSE
Salaries and employee benefits 1,346 917 2,263
Other operating expense 2,043 842 2,885
------ ------ ------
Total 3,389 1,759 5,148
INCOME BEFORE INCOME TAXES 1,515 1,182 2,697
Income taxes 479 391 870
------ ------ ------
NET INCOME $1,036 $ 791 $1,827
====== ====== ======
NET INCOME PER COMMON SHARE
Basic $ 1.47 $ 2.73 $ 1.56
Diluted 1.45 2.68 1.53
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic 701.1 287.8 1,167.3
Diluted 716.0 292.8 1,190.4
See accompanying notes to the pro forma financial information.
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BANK ONE CORPORATION & SUBSIDIARIES (CONSOLIDATED)
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME FOR THE SIX MONTHS ENDED
JUNE 30, 1997 (UNAUDITED)
(IN MILLIONS, EXCEPT PER SHARE DATA)
PROFORMA
BANC ONE FCN COMBINED
-------- --- --------
INTEREST INCOME
Loans and leases $4,363 $2,885 $7,248
Securities, including trading 654 357 1,011
Other interest income 23 352 375
------ ------ ------
Total 5,040 3,594 8,634
INTEREST EXPENSE
Deposits 1,387 1,043 2,430
Borrowings 741 750 1,491
------ ------ ------
Total 2,128 1,793 3,921
NET INTEREST INCOME 2,912 1,801 4,713
Provision for credit losses 696 367 1,063
------ ------ ------
Net interest income after provision for credit losses 2,216 1,434 3,650
NONINTEREST INCOME
Credit card revenue 655 441 1,096
Deposit fees 369 221 590
Other noninterest income 697 661 1,358
------ ------ ------
Total 1,721 1,323 3,044
NONINTEREST EXPENSE
Salaries and employee benefits 1,219 851 2,070
Other operating expense 1,978 774 2,752
------ ------ ------
Total 3,197 1,625 4,822
INCOME BEFORE INCOME TAXES 740 1,132 1,872
Income taxes 280 374 654
------ ------ ------
NET INCOME $ 460 $ 758 $1,218
====== ====== ======
NET INCOME PER COMMON SHARE
Basic $ 0.66 $ 2.41 $ 1.01
Diluted 0.65 2.37 0.99
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic 676.2 309.4 1,177.5
Diluted 712.4 315.9 1,224.1
See accompanying notes to the pro forma financial information.
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BANK ONE CORPORATION
NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL INFORMATION
NOTE 1. BASIS OF PRESENTATION
The pro forma condensed combined financial information reflects the Merger
using the pooling of interests method of accounting. The pro forma information
presented is not necessarily indicative of the results of operations or the
combined financial position that would have resulted had the Merger been
consummated at the beginning of the periods indicated, nor is it necessarily
indicative of the results of operations in future periods or the future
financial position of the combined entities. It is anticipated that the Merger
will be consummated in the fourth quarter of 1998, subject to shareholder and
regulatory approval.
Certain reclassifications have been included in the unaudited pro forma
condensed combined balance sheet and statements of income to conform statement
presentations.
NOTE 2. ACCOUNTING POLICIES
The accounting policies of both companies are in the process of being
reviewed. As a result of this review, certain conforming accounting adjustments
may be necessary. The nature and extent of such adjustments have not been
determined and are not expected to be significant.
NOTE 3. MERGER-RELATED EFFECTS
In connection with the Merger, the managements of BANC ONE and FCN
estimate that a one-time restructuring charge of approximately $1.25 billion
($837 million after-tax) will be incurred at the time of the consummation of the
Merger. The estimated details of this overall charge have been summarized into
the following components: $800 million in personnel-related items, $350 million
related to facilities and equipment costs and $100 million on other
merger-related transaction costs. Actions incorporated in the business
combination and restructuring plan are principally targeted for implementation
over a 12-18 month period following the effective date of the Merger, currently
contemplated for the fourth quarter of 1998. There can be no assurance that the
actual restructuring charge and the details thereof will not differ materially
from the foregoing estimates.
Personnel-related items consist primarily of severance and benefits cost
for separated employees and costs associated with change in control provisions
of FCN's stock plans (currently estimated at $200 million). The benefit
package to be made available to certain affected employees has been approved by
management and communicated on a corporate-wide basis. Facilities and equipment
costs include the net cost associated with the closing and divestiture of
identified banking facilities, and from the consolidation of headquarters and
operational facilities. Other merger-related transaction costs include
investment banking fees, registration and listing fees, and various accounting,
legal and other related costs.
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These amounts, including the related tax effects, have been reflected in the
Unaudited Pro Forma Condensed Combined Balance Sheet as of June 30, 1998 and are
not reflected in the Unaudited Pro Forma Condensed Combined Statements of Income
due to their nonrecurring nature.
NOTE 4. PRO FORMA ADJUSTMENTS
The following pro forma adjustments have been reflected in the pro
forma condensed combined financial information:
a) Common stock and capital in excess of aggregate stated value
were adjusted by $2.011 billion to reflect the Merger
accounted for as a pooling of interests through the exchange
of 466.1 million shares of BANC ONE common stock for 287.7
million shares of FCN common stock using an exchange ratio of
1.62.
b) Treasury stock and capital in excess of aggregate stated value
were adjusted by $2.075 billion to reflect the retirement of
FCN treasury stock.
c) Other liabilities and retained earnings were adjusted by $1.25
billion to reflect the recording of the merger-related charge.
d) Other liabilities and retained earnings were adjusted by $413
million to reflect the tax benefit associated with the merger
related charge.
