Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : BANK ONE -- Ignore unavailable to you. Want to Upgrade?

To: hdl who wrote (433)	1/17/2001 6:42:09 PM
From: David C. Burns	Read Replies (1) \| Respond to of 466

what is story with earnings miss? Well, here's the official story..... also you can listen and view 4Q conf call at shareholder.com Bank One Reports Fourth Quarter Loss of 44 Cents Per Share Builds Loan Loss Reserve To 2.36% Of Total Loans Maintains Strong Tier 1 Capital Ratio Of 7.3% And Increases Tangible Equity To Managed Assets Ratio To 5.5% CHICAGO, January 17, 2001 - BANK ONE CORPORATION (NYSE: ONE) today announced a 2000 fourth quarter loss of $512 million, or $0.44 per diluted share. This compares with net income in the year-ago quarter of $411 million, or $0.36 per diluted share. For full-year 2000, the net loss was $511 million, or $0.45 per diluted share, compared with net income of $3.479 billion, or $2.95 per diluted share, in the prior year. "These short-term results are absolutely unacceptable to our shareholders - and to Bank One management," said James Dimon, chairman and chief executive officer. "But we remain dedicated to making decisions that are in the best long-term interest of our customers, employees and shareholders. "The fourth quarter results reflect the decisive actions we have taken as the result of our ongoing intensive review of businesses, systems, operations and the balance sheet as well as the deterioration of the economy and credit quality. We have dramatically increased our loan loss reserve, reduced expenses by more than $500 million annually, assembled an excellent management team and rededicated our efforts to serve customers and reward shareholders. "These actions bring us into 2001 with a strong balance sheet and capital position, an improved operating margin, a significantly stronger management team, improving customer service and solid core businesses," Dimon said. Significant actions during the fourth quarter included: A $1.0 billion pretax increase in the allowance for loan losses, increasing the period-end loan loss reserve ratio to 2.36% from 1.75% at September 30, 2000. A $200 million pretax charge for occupancy and fixed asset decisions. A $225 million pretax increase in the reserve for auto lease residual losses. A $100 million pretax charge for miscellaneous balance sheet adjustments and operational errors. A $50 million pretax charge for incremental severance. PROGRESS AT BANK ONE Significant progress made this year includes: Creating Financial Discipline . Ending the year with a strong loan loss reserve ratio of 2.36% and Tier 1 Capital ratio of 7.3%. . Reducing the common stock dividend 50% in the third quarter. . Implementing an aggressive waste-reduction program that will lower the expense base by an annualized $500 million while still providing for significant investments in technology and customer service. . Issuing $1.9 billion of new regulatory capital in the third quarter and ending the year with a strong Tier 1 capital ratio of 7.3%. . Reducing headcount 5,800, or 7%, over the course of the year. . Strengthening internal management reporting, including the creation of hundreds of detailed income statements that will foster well-informed decisions. Infrastructure improvements . Deciding in the second quarter to collapse the 20 domestic bank charters to three and convert the seven demand deposit systems into one. . Progressing on the Texas/Louisiana system conversion project, which is targeted to be completed in the third quarter of 2001. . Improving the commercial customer profitability system, including capital allocations and customer / product profitability analysis that will improve decision making in the Commercial Bank. . Increasing to 14,500 the total number of Internet-enabled banking platform PCs, enabling more effective customer marketing and service within the banking centers. Management team building . Significantly strengthening of the management team including the fourth quarter hiring of Philip Heasley, a highly respected and experienced executive, to head First USA. . Substantially changing compensation philosophies throughout the Company by decreasing entitlement benefits and increasing pay-for-performance incentives. "The substantial progress made this year on a number of fronts is crucial as we face a weakening economy with a possibility of further deterioration," Dimon said. "Our franchise is sound and the highest priority is to strengthen this company to become a top performer in all types of environments. So, we significantly fortified the balance sheet, sharpened our financial discipline and built a strong management team."