EX-99 3 r4q01ex99.txt EX-99 1 EXHIBIT 99 The Bank of New York Company, Inc. NEWS ------------------------------------------------------------------------------ One Wall Street, New York, NY 10286 ----------------------------------- Contact: PUBLIC AND INVESTOR RELATIONS IMMEDIATELY ----------- Media: Investors: ----- --------- Robert T. Grieves, SVP John M. Roy, MD (212) 635-1590 (212) 635-8005 Cary J. Giacalone, VP Thomas C. McCrohan, VP (212) 635-1590 (212) 635-1578 THE BANK OF NEW YORK COMPANY, INC. REPORTS Fourth Quarter E.P.S. of 45 Cents Securities Servicing Fees Up 3% From Normalized Third Quarter and Up 7% for Full Year NEW YORK, N.Y., January 17, 2002 -- The Bank of New York Company, Inc. (NYSE: BK) reports fourth quarter diluted earnings per share of 45 cents, compared with 50 cents earned in the fourth quarter of 2000. As previously disclosed, net income for the quarter of $331 million includes a $235 million pre-tax special provision and charge associated with creation of an accelerated loan disposition program for exposures to 24 emerging telecommunication companies and an energy trading company as well as an initial pre-tax insurance recovery of $175 million related to the World Trade Center disaster (the "WTC disaster"). The net impact of these two items is a loss of 5 cents per share. For the year, reported net income was $1,343 million and earnings per share were $1.81 compared to $1,429 million and $1.92 earned in 2000. In addition to the special items booked in the fourth quarter, the full year results in 2001 include the pre-tax loss of $242 million associated with the WTC disaster. 2 On a normalized basis, which is described later in this release, the Company reports diluted earnings per share of $2.01 for the year 2001, up 5% from the $1.92 earned last year. Normalized net income for the year was $1,492 million, an increase of 4% over $1,429 million earned last year. Chairman and CEO Thomas A. Renyi stated, "We were encouraged by the increase in our securities servicing revenues in the fourth quarter, which we hope portends a gradual improvement in the global capital markets. We also took decisive action this quarter with respect to our emerging telecom portfolio. This action is consistent with our ongoing capital management process and improves our risk-adjusted return profile as we enter 2002. "Notwithstanding the very difficult operating environment in 2001, exacerbated by the WTC disaster, we met the challenges through continued success on the new business front as well as careful expense management. We are poised to benefit as the global capital markets recover." SUMMARY OF REPORTED RESULTS In the Company's securities servicing businesses, fee revenues were $441 million in the fourth quarter compared with $416 million in the prior quarter and $448 million one year ago. For 2001, securities servicing fees were $1,750 million, a 6% increase, compared with $1,650 million in 2000. Areas leading the increase for the year included: execution services, corporate trust, broker-dealer services, and global liquidity services. The Company continues to be the world's leading custodian with year-end assets under custody of $6.9 trillion, including $1.9 trillion of cross-border custody assets, up from $6.4 trillion at the end of the third quarter. Foreign exchange and other trading revenues were $78 million for the quarter, compared with $79 million in the third quarter and up 39% from the $56 million earned a year ago. For the year 2001, foreign exchange and other trading revenues were $338 million, up 30% from $261 million last year. The results reflect continued strong demand for interest rate risk management 3 products driven by declining interest rates and higher volatility. In addition, strong foreign exchange transaction flows continued from the Company's securities servicing clients. Global payment services fees were $72 million for the quarter, compared to the $75 million in the third quarter and up 11% from the $65 million earned a year ago. For the year 2001, global payment services were $287 million, up 10% compared with $261 million last year. Fees increased primarily as a result of customers electing to pay for services in fees rather than maintaining higher compensating balances in a declining interest rate environment, as well as new business growth in cash management, reflecting the continued success of CA$H-Register Plus(registered trademark), the Company's internet-based electronic banking service. Private client services and asset management fees were $76 million for the quarter, up slightly from $74 million last quarter and essentially flat from the $77 million one year ago. For the year 2001, private client services and asset management fees were $308 million, up 4% compared with $296 million in 2000. Lower asset price levels have been partially offset by strength in alternative investment and short-term money market product lines. The Company's continued focus on fee-based businesses resulted in noninterest income growing to 68% of total revenue for the year 2001, up from 64% last year. In the fourth quarter of 2001, the Company created an accelerated loan disposition program for 25 credit relationships totaling $758 million and related outstandings of $488 million. At December 31, 2001, loans available for sale had exposures of $445 million and outstandings of $197 million. The Company's estimated Tier 1 capital and Total capital ratios were 8.05% and 11.52% at December 31, 2001, compared with 7.51% and 11.02% at September 30, 2001, and 8.60% and 12.92% at December 31, 2000. The improvement compared to the prior quarter reflects the balance sheet returning to pre-September 11th operating levels. The leverage ratio was 6.70% at 4 December 31, 2001, compared with 6.78% at September 30, 2001, and 7.49% one year ago. Tangible common equity as a percent of total assets was 5.36% at December 31, 2001, compared with 4.94% at September 30, 2001, and 5.78% one year ago. In 2001, the Company repurchased 19 million shares under its common stock repurchase programs. As of December 31, 2001, the Company had 11 million shares left to repurchase of the 16 million share repurchase program announced in mid-December 2001. Return on average common equity for the fourth quarter of 2001 was 20.42% compared with 24.82% in the fourth quarter of 2000. Return on average assets for the fourth quarter of 2001 was 1.53% compared with 1.92% in the fourth quarter of 2000. For the year 2001, return on average common equity totaled 21.58% compared with 26.08% in 2000. Return on average assets was 1.64% for the year compared with 1.85% in 2000. Tangible diluted earnings per share (earnings before the amortization of goodwill and intangibles) were 47 cents per share in the fourth quarter of 2001, compared with 53 cents per share in the fourth quarter of 2000. Tangible return on average common equity was 31.72% in the fourth quarter of 2001 compared with 37.04% in the fourth quarter of 2000; and tangible return on average assets was 1.65% in the fourth quarter of 2001 compared with 2.08% in the fourth quarter of 2000. Tangible diluted earnings per share were $1.91 per share for the year 2001 compared with $2.03 per share in 2000. Tangible return on average common equity was 33.42% in 2001 compared with 40.00% in 2000; and tangible return on average assets was 1.78% in 2001 compared with 2.00% last year. Amortization of intangibles for the fourth quarter and the year was $29 million and $112 million compared with $30 million and $115 million in 2000. The Company currently estimates that the application of a new accounting pronouncement for goodwill and intangibles will add approximately 9 cents per share in 2002. 5 SUMMARY OF NORMALIZED RESULTS Given the extent of the impact on the Company's financial results caused by the WTC disaster and related insurance recovery, as well as the strategic action taken with respect to the emerging telecom portfolio, this section of the release adjusts the Company's reported results to a "normalized" estimate of operating results. The impact of the disaster net of insurance recoveries recorded to date are excluded from operating results. In addition, of the $235 million special provision and charge associated with the creation of the accelerated loan disposition program, the normalized results exclude $190 million related to the exit of emerging telecommunications relationships. The remaining $45 million related to disposal of a loan to an energy trading company is included in normalized results. Management believes that the normalized disclosure assists the reader in making comparisons with prior periods to determine trends in the business.
Normalized --------------------------------- (In millions, 3rd 4th except per share amounts) Quarter Quarter Year-to-date ------- ------- ------------ 2001 2001 2001 ---- ---- ---- Reported Net Income $243 $331 $1,343 WTC Disaster Impact 242 - 242 WTC Insurance Recovery - (175) (175) Special Provision - Emerging Telecom Disposition - 190 190 Tax Effects (102) (6) (108) ---- ---- ------ Normalized Net Income $383 $340 $1,492 ==== ==== ====== Per Common Share Data: --------------------- Basic Earnings $0.52 $0.47 $2.04 Diluted Earnings 0.52 0.46 2.01 Diluted Shares Outstanding 741 738 741
On a normalized basis, the Company earned $340 million, or 46 cents in the quarter. (See "Appendix A".) Diluted earnings per share were $2.01 for 6 the year 2001, up 5% from the $1.92 earned last year. Net income for the year was $1,492 million, an increase of 4% over $1,429 million earned last year. In the Company's securities servicing businesses, fee revenues were $441 million in the fourth quarter, up 3% from the normalized $430 million in the third quarter. Areas leading the increase in the quarter were execution services, ADRs, and securities lending. For the year 2001, normalized fees from securities servicing businesses totaled a record $1,764 million, a 7% increase compared with $1,650 million in 2000. Areas leading the increase for the year included execution services, corporate trust, broker-dealer services, and global liquidity services. Foreign exchange and other trading revenues were $78 million for the quarter, compared with the normalized $84 million in the third quarter. For the year 2001, normalized foreign exchange and other trading revenues were $343 million, up 31% from $261 million last year. The results reflect continued strong demand for interest rate risk management products driven by declining interest rates and higher volatility. In addition, strong foreign exchange transaction flows continued from the Company's securities servicing clients. Global payment services fees were $72 million for the quarter, compared to the normalized $78 million in the third quarter. For the year 2001, global payment services were a normalized $290 million, up 11% compared with $261 million last year. Fees increased primarily as a result of customers electing to pay for services in fees rather than maintaining higher compensating balances in a declining interest rate environment, as well as new business growth in cash management, reflecting the continued success of CA$H-Register Plus(registered trademark), the Company's internet-based electronic banking service. Private client services and asset management fees were $76 million for the quarter, up slightly from a normalized $75 million last quarter. For the year 2001, private client and asset management fees were a normalized 7 $309 million, up 4% compared with $296 million in 2000. Lower asset price levels have been partially offset by strength in alternative investment and short-term money market product lines. The Company's continued focus on fee-based businesses resulted in normalized noninterest income growing to 66% of total revenue for the year 2001, up from 64% last year. Normalized return measures have been computed using both normalized net income and balance sheets. Return on average common equity for the fourth quarter of 2001 was 20.52% compared with 24.82% in the fourth quarter of 2000. Return on average assets for the fourth quarter of 2001 was 1.68% compared with 1.92% in the fourth quarter of 2000. For the year 2001, return on average common equity totaled 23.84% compared with 26.08% in 2000. Return on average assets was 1.92% for the year compared with 1.85% in 2000. On a normalized basis, tangible diluted earnings per share (earnings before the amortization of goodwill and intangibles) were 49 cents per share in the fourth quarter of 2001, compared with 53 cents per share in the fourth quarter of 2000. Tangible return on average common equity was 31.49% in the fourth quarter of 2001 compared with 37.04% in the fourth quarter of 2000; and tangible return on average assets was 1.82% in the fourth quarter of 2001 compared with 2.08% in the fourth quarter of 2000. Normalized tangible diluted earnings per share were $2.11 per share for the year 2001, up 4%, compared with $2.03 per share in 2000. Tangible return on average common equity was 36.63% in 2001 compared with 40.00% in 2000; and tangible return on average assets was 2.07% in 2001 compared with 2.00% last year. 8 NONINTEREST INCOME
4th 3rd 4th 3rd 4th Quarter Quarter Quarter Quarter Quarter Year-to-date ------- ------- --------- ------- ------- ---------------------------- 2001 2001 2001 2001 2001 2001 (In millions) Reported Reported Normalized Normalized 2000 Reported Normalized 2000 -------- ---------- ---------- ---------- ---- -------- ---------- ---- Servicing Fees Securities $ 441 $416 $441 $430 $448 $1,750 $1,764 $1,650 Global Payment Services 72 75 72 78 65 287 290 261 ---- ---- ---- ----- ---- ------ ------ ------ 513 491 513 508 513 2,037 2,054 1,911 Private Client Services and Asset Management Fees 76 74 76 75 77 308 309 296 Service Charges and Fees 89 81 89 87 85 356 362 364 Foreign Exchange and Other Trading Activities 78 79 78 84 56 338 343 261 Securities Gains 40 22 40 22 44 154 154 150 Other 208 76 33 76 30 347 172 127 ------ ---- ---- ---- ---- ------ ------ ------ Total Noninterest Income $1,004 $823 $829 $852 $805 $3,540 $3,394 $3,109 ====== ==== ==== ==== ==== ====== ====== ======
On a normalized basis, total noninterest income reached $829 million, up 3% from $805 million in last year's fourth quarter, and resulted in noninterest income growing to 65% of total revenue in the fourth quarter, up from 64% last year. Securities servicing fees were $441 million for the fourth quarter, compared with $448 million last year. Global payment services fees for the quarter were $72 million, up 11% over last year. Private client services and asset management fees were $76 million for the quarter, down slightly from $77 million last year. Foreign exchange and other trading revenues were $78 million for the quarter, up 39% from $56 million last year. Securities gains were $40 million for the quarter, down from $44 million last year. Year-to-date securities gains were $154 million. Other income, normalized for $175 million of insurance recoveries in the fourth quarter, decreased to $33 million from the third quarter, reflecting the $43 million gain on the sale of the Company's interest in New York Cash Exchange in the third quarter. As part of its capital management program, the Company has been reallocating capital away from corporate lending and equity capital investing. As such, it anticipates that its securities and special gains, which rely significantly on capital allocated to equity investing, may be lower in 2002 by 8-10 cents per share. 9 NET INTEREST INCOME
4th 3rd 4th 3rd 4th Quarter Quarter Quarter Quarter Quarter Year-to-date ------- ------- ------- ------- ------- --------------------------- (Dollars in millions on 2001 2001 2001 2001 2001 2001 a tax equivalent basis) Reported Reported Normalized Normalized 2000 Reported Normalized 2000 -------- -------- ---------- ---------- ---- -------- ---------- ---- Net Interest Income $452 $402 $452 $447 $468 $1,741 $1,786 $1,811 Net Interest Rate Spread 2.15% 1.53% 2.21% 2.01% 1.81% 1.88% 2.00% 1.85% Net Yield on Interest Earning Assets 2.55 2.24 2.70 2.71 2.84 2.57 2.74 2.79
Normalized net interest income on a taxable equivalent basis was $452 million in the fourth quarter of 2001 compared with $447 million in the third quarter of 2001 and $468 million in the fourth quarter of 2000. The normalized net interest rate spread was 2.21% in the fourth quarter of 2001, compared with 2.01% in the third quarter of 2001 and 1.81% one year ago. Normalized net yield on interest earning assets was 2.70% in the fourth quarter of 2001, compared with 2.71% in the third quarter of 2001 and 2.84% in last year's fourth quarter. For the year 2001, normalized net interest income on a taxable equivalent basis amounted to $1,786 million compared with $1,811 million in 2000. The normalized net interest rate spread for the year was 2.00% in 2001 compared with 1.85% in 2000, while the normalized net yield on interest earning assets was 2.74% in 2001 and 2.79% in 2000. The effect of the lower interest rate environment in the fourth quarter and year 2001 was largely offset by an increase in the Company's investment securities portfolio, which is part of an ongoing strategy to shift the Company's asset mix from loans towards highly rated investment securities and short-term liquid assets. On a normalized basis, average loans in the year 2001 declined $2.0 billion to $37.3 billion representing 48% of assets compared with 51% of assets in 2000. 10 NONINTEREST EXPENSE AND INCOME TAXES On a reported basis, noninterest expense for the fourth quarter of 2001 was $667 million compared with $814 million in the third quarter and $644 million a year ago. Expenses in the third quarter of 2001 reflect the impact of the WTC disaster. The increase versus last year reflects higher operating expenses associated with acquisitions and investment in technology. On a normalized basis, noninterest expense for the fourth quarter of 2001 was $667 million compared with $646 million in the third quarter and $644 million in 2000. The increase from the third quarter reflects higher operating expenses resulting primarily from variable volume-related expenses, higher performance-based compensation, expenses associated with the movement of employees out of contingency sites, and acquisitions. The efficiency ratio for the fourth quarter of 2001 was 47.1% compared with 52.4% in the fourth quarter of 2000. For the year 2001, the efficiency ratio was 54.8% compared with 52.5% last year. The normalized efficiency ratio for the fourth quarter of 2001 was 53.7% compared with 52.4% in the fourth quarter of 2000. The normalized efficiency ratio for 2001 of 52.5% was flat compared with the 52.5% reported last year. The efficiency ratios have been restated to reflect the classification of preferred trust securities as long-term debt as is expected to be required by a proposed accounting standard. This change increased the normalized efficiency ratio by approximately 105 basis points for the year 2001 and approximately 122 basis points for the year 2000. The reported effective tax rates for the fourth quarter and the year 2001 were 33.8% and 34.7% compared with 35.9% and 36.5% in the fourth quarter and the year 2000. The normalized effective tax rates for the fourth quarter and year 2001 were 34.0% and 35.6%, respectively. The difference between the reported and the normalized effective tax rates primarily relates to tax benefits associated with the WTC disaster in the third quarter. 11 NONPERFORMING ASSETS
Change 12/31/01 vs. (Dollars in millions) 12/31/01 9/30/01 9/30/01 -------- -------- -------- Category of Loans: Other Commercial $138 $214 $(76) Foreign 64 42 22 Regional Commercial 18 20 (2) ---- ---- --- Total Nonperforming Loans 220 276 (56) Other Real Estate 2 2 - ---- ---- --- Total Nonperforming Assets $222 $278 $(56) ==== ==== === Nonperforming Assets Ratio 0.6% 0.7% Allowance/Nonperforming Loans 280.0 223.3 Allowance/Nonperforming Assets 277.6 222.0
Nonperforming assets totaled $222 million at December 31, 2001, compared with $278 million at September 30, 2001. The decrease in nonperforming loans during the quarter primarily reflects the sale of loans and charge-offs associated with the Company's accelerated loan disposition program. The increase in foreign nonperforming loans primarily relates to a loan to a transportation company. CREDIT LOSS PROVISION AND NET CHARGE-OFFS
4th 3rd 4th Quarter Quarter Quarter Year-to-date ------- ------- ------- ------------ (In millions) 2001 2001 2000 2001 2000 ---- ---- ---- ---- ---- Provision $275 $ 40 $ 35 $375 $105 ==== ==== ==== ==== ==== Net Charge-offs: Other Commercial $(253) $(35) $(34) $(342) $(73) Consumer (5) (4) (2) (14) (5) Foreign (12) - - (12) (3) Other (5) (1) - (7) (3) ------ ----- ----- ------ ----- Total $(275) $(40) $(36) $(375) $(84) ====== ===== ===== ====== ===== Other Real Estate Expenses $ - $ - $ 1 $ 2 $ 4
The allowance for credit losses was $616 million, or 1.72% of loans at December 31, 2001, compared with $616 million, or 1.35% of loans at 12 September 30, 2001, and $616 million, or 1.70% of loans at December 31, 2000. The September 30, 2001 ratio includes above average loan levels associated with the balance sheet impact of the WTC disaster. The ratio of the allowance to nonperforming assets was 277.6% at December 31, 2001, compared with 222.0% at September 30, 2001, and 319.6% at December 31, 2000. The increase in charge-offs in the fourth quarter reflects the Company's accelerated loan disposition program. *************************** All statements in this press release other than statements of historical fact are forward looking statements including, among other things, projections with respect to revenue and earnings growth, contribution to future results of various business lines, reallocating assets and the Company's plans and objectives and, as such, are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward looking statements. In addition to risks and uncertainties incident to our industry such as interest rate fluctuations and borrower defaults, these also include lower than expected performance or higher than expected costs in connection with acquisitions and integration of acquired businesses, our ability to attract and retain customers, the level of capital market activity, inaccuracies in management projections or market forecasts, the actions that management could take in response to these changes and other factors described under the heading "Forward Looking Statements" in the Company's 2000 Form 10-K and September 30, 2001 Form 10-Q which have been filed with the SEC and are available at the SEC's website (www.sec.gov). Forward looking statements speak only as of the date they are made. The Company will not update forward looking statements to reflect factual assumptions, circumstances or events which have changed after a forward looking statement was made. (Financial highlights and detailed financial statements are attached. Accounting Change - Company-Obligated Mandatory Redeemable Preferred Trust Securities of Subsidiary Trust Holding Solely Junior Subordinated Debentures have been reclassified to Long-Term Debt.) 13 Appendix A, Page 1 THE BANK OF NEW YORK COMPANY, INC. Consolidated Statements of Income (In millions, except per share amounts)
For the three months ended December 31, 2001 -------------------------------------------- Reported Normalized Adjustments Comments -------- ---------- ----------- -------- Net Interest Income $ 438 $ 438 $ - Provision for Credit Losses 275 85 190 Special Provision ----- ----- ----- Net Interest Income After Provision for Credit Losses 163 353 (190) Noninterest Income ------------------ Servicing Fees Securities 441 441 - Global Payment Services 72 72 - Private Client Services and Asset Management Fees 76 76 - Service Charges and Fees 89 89 - Foreign Exchange and Other Trading 78 78 - Securities Gains 40 40 - Other 208 33 175 Insurance Recovery ----- ----- ------ Total Noninterest Income 1,004 829 175 Noninterest Expense ------------------- Salaries and Employee Benefits 386 386 - Net Occupancy 48 48 - Furniture and Equipment 30 30 - Other 203 203 - ----- ----- ------ Total Noninterest Expense 667 667 - ----- ----- ------ Income Before Income Taxes 500 515 (15) Income Taxes 169 175 (6) Tax Effects ----- ----- ------ Net Income Available to Common Shareholders $ 331 $ 340 $ (9) ===== ===== ====== Per Common Share Data: --------------------- Basic Earnings $0.45 $0.47 $(0.02) Diluted Earnings 0.45 0.46 (0.01) Cash Dividends Paid 0.18 0.18 - Diluted Shares Outstanding 738 738 -
14 Appendix A, Page 2 THE BANK OF NEW YORK COMPANY, INC. Consolidated Statements of Income (In millions, except per share amounts)
For the year ended December 31, 2001 -------------------------------------------- Reported Normalized Adjustments Comments -------- ---------- ----------- --------- Net Interest Income $1,681 $1,726 $ (45) WTC Disaster Provision for Credit Losses 375 185 190 Special Provision ------ ------ ------ Net Interest Income After Provision for Credit Losses 1,306 1,541 (235) Noninterest Income ------------------ Servicing Fees Securities 1,750 1,764 (14) WTC Disaster Global Payment Services 287 290 (3) WTC Disaster Private Client Services and Asset Management Fees 308 309 (1) WTC Disaster Service Charges and Fees 356 362 (6) WTC Disaster Foreign Exchange and Other Trading 338 343 (5) WTC Disaster Securities Gains 154 154 - Other 347 172 175 Insurance Recovery ------ ------ ------ Total Noninterest Income 3,540 3,394 146 Noninterest Expense ------------------- Salaries and Employee Benefits 1,588 1,554 34 WTC Disaster Net Occupancy 232 194 38 WTC Disaster Furniture and Equipment 178 123 55 WTC Disaster Other 790 749 41 WTC Disaster ------ ------ ------ Total Noninterest Expense 2,788 2,620 168 ------ ------ ------ Income Before Income Taxes 2,058 2,315 (257) Income Taxes 715 823 (108) Tax Effects ------ ------ ------ Net Income Available to Common Shareholders $1,343 $1,492 $(149) ====== ====== ====== Per Common Share Data: --------------------- Basic Earnings $1.84 $2.04 $(0.20) Diluted Earnings 1.81 2.01 (0.20) Cash Dividends Paid 0.72 0.72 - Diluted Shares Outstanding 741 741 -
15 THE BANK OF NEW YORK COMPANY, INC. Financial Highlights (Dollars in millions, except per share amounts) (Unaudited)
Change 2001 2001 2001 Normalized Reported Normalized 2000 vs. 2000 -------- ---------- ---- ------------ For the Three Months Ended December 31: ---------------------------------------- Net Income $ 331 $ 340 $ 372 (8.4)% Per Common Share: Basic $0.45 $0.47 $0.51 (7.8) Diluted 0.45 0.46 0.50 (8.0) Cash Dividends Paid 0.18 0.18 0.18 - Return on Average Common Shareholders' Equity 20.42% 20.52% 24.82% Return on Average Assets 1.53 1.68 1.92 For the Twelve Months Ended December 31: --------------------------------------- Net Income $ 1,343 $ 1,492 $ 1,429 4.4% Per Common Share: Basic $1.84 $2.04 $1.95 4.6 Diluted 1.81 2.01 1.92 4.7 Cash Dividends Paid 0.72 0.72 0.66 9.1 Return on Average Common Shareholders' Equity 21.58% 23.84% 26.08% Return on Average Assets 1.64 1.92 1.85 Change 2001 Reported vs. 2000 ---------- As of December 31: ------------------- Assets $81,028 $77,114 5.1% Loans 35,744 36,261 (1.4) Securities 12,912 7,401 74.5 Deposits - Domestic 28,812 28,560 0.9 - Foreign 26,927 27,816 (3.2) Long-Term Debt 4,976 4,536 9.7 Common Shareholders' Equity 6,317 6,151 2.7 Common Shareholders' Equity Per Share 8.66 8.31 4.2 Market Value Per Share of Common Stock 40.80 55.19 (26.1) Allowance for Credit Losses as a Percent of Loans 1.72% 1.70% Tier 1 Capital Ratio 8.05 8.60 Total Capital Ratio 11.52 12.92 Leverage Ratio 6.70 7.49 Tangible Common Equity Ratio 5.36 5.78
16 THE BANK OF NEW YORK COMPANY, INC. Consolidated Statements of Income (In millions, except per share amounts) (Unaudited)
For the three For the twelve months ended months ended December 31, December 31, 2001 2000 2001 2000 ---- ---- ---- ---- Interest Income --------------- Loans $ 477 $ 727 $2,303 $2,910 Securities Taxable 143 87 463 323 Exempt from Federal Income Taxes 18 16 74 63 ----- ----- ----- ----- 161 103 537 386 Deposits in Banks 53 70 252 273 Federal Funds Sold and Securities Purchased Under Resale Agreements 16 78 159 277 Trading Assets 66 151 401 531 ----- ----- ----- ----- Total Interest Income 773 1,129 3,652 4,377 ----- ----- ----- ----- Interest Expense ---------------- Deposits 220 516 1,406 2,011 Federal Funds Purchased and Securities Sold Under Repurchase Agreements 21 46 103 153 Other Borrowed Funds 35 31 185 139 Long-Term Debt 59 82 277 317 ----- ----- ----- ----- Total Interest Expense 335 675 1,971 2,620 ----- ----- ----- ----- Net Interest Income 438 454 1,681 1,757 ------------------- Provision for Credit Losses 275 35 375 105 ----- ----- ----- ----- Net Interest Income After Provision for Credit Losses 163 419 1,306 1,652 ----- ----- ----- ----- Noninterest Income ------------------ Servicing Fees Securities 441 448 1,750 1,650 Global Payment Services 72 65 287 261 ----- ----- ----- ----- 513 513 2,037 1,911 Private Client Services and Asset Management Fees 76 77 308 296 Service Charges and Fees 89 85 356 364 Foreign Exchange and Other Trading Activities 78 56 338 261 Securities Gains 40 44 154 150 Other 208 30 347 127 ----- ----- ----- ----- Total Noninterest Income 1,004 805 3,540 3,109 ----- ----- ----- ----- Noninterest Expense ------------------- Salaries and Employee Benefits 386 391 1,588 1,488 Net Occupancy 48 48 232 184 Furniture and Equipment 30 28 178 108 Other 203 177 790 730 ----- ----- ----- ----- Total Noninterest Expense 667 644 2,788 2,510 ----- ----- ----- ----- Income Before Income Taxes 500 580 2,058 2,251 Income Taxes 169 208 715 822 ----- ----- ------ ------ Net Income $ 331 $ 372 $1,343 $1,429 ---------- ===== ===== ====== ====== Net Income Available to Common Shareholders $ 331 $ 372 $1,343 $1,429 ------------------------------------------- ===== ===== ====== ====== Per Common Share Data: ---------------------- Basic Earnings $0.45 $0.51 $1.84 $1.95 Diluted Earnings 0.45 0.50 1.81 1.92 Cash Dividends Paid 0.18 0.18 0.72 0.66 Diluted Shares Outstanding 738 748 741 745
17 THE BANK OF NEW YORK COMPANY, INC. Consolidated Balance Sheets (Dollars in millions, except per share amounts) (Unaudited)
December 31, December 31, 2001 2000 ---- ---- Assets ------ Cash and Due from Banks $ 3,192 $ 3,125 Interest-Bearing Deposits in Banks 6,619 5,337 Securities: Held-to-Maturity 1,211 752 Available-for-Sale 11,701 6,649 ------- ------- Total Securities 12,912 7,401 Trading Assets at Fair Value 8,290 12,051 Federal Funds Sold and Securities Purchased Under Resale Agreements 4,807 5,790 Loans (less allowance for credit losses of $616 in 2001 and $616 in 2000) 35,128 35,645 Premises and Equipment 992 924 Due from Customers on Acceptances 313 447 Accrued Interest Receivable 237 354 Other Assets 8,538 6,040 ------- ------- Total Assets $81,028 $77,114 ======= ======= Liabilities and Shareholders' Equity ------------------------------------ Deposits Noninterest-Bearing (principally domestic offices) $12,663 $13,255 Interest-Bearing Domestic Offices 16,557 15,774 Foreign Offices 26,519 27,347 ------- ------- Total Deposits 55,739 56,376 Federal Funds Purchased and Securities Sold Under Repurchase Agreements 1,756 1,108 Trading Liabilities 2,264 2,070 Other Borrowed Funds 2,334 1,687 Acceptances Outstanding 358 450 Accrued Taxes and Other Expenses 3,766 3,283 Accrued Interest Payable 93 127 Other Liabilities 3,425 1,325 Long-Term Debt 4,976 4,536 ------- ------- Total Liabilities 74,711 70,962 ------- ------- Shareholders' Equity Class A Preferred Stock - par value $2.00 per share, authorized 5,000,000 shares, outstanding 3,500 shares in 2001 and 16,320 shares in 2000 - 1 Common Stock-par value $7.50 per share, authorized 2,400,000,000 shares, issued 990,773,101 shares in 2001 and 985,528,475 shares in 2000 7,431 7,391 Additional Capital 741 521 Retained Earnings 4,383 3,566 Accumulated Other Comprehensive Income 80 207 ------- ------- 12,635 11,686 Less: Treasury Stock (260,449,527 shares in 2001 and 244,460,032 shares in 2000), at cost 6,312 5,526 Loan to ESOP (823,810 shares in 2001 and 1,142,939 in 2000), at cost 6 8 ------- ------- Total Shareholders' Equity 6,317 6,152 ------- ------- Total Liabilities and Shareholders' Equity $81,028 $77,114 ======= ======= ---------------------------------------------------------------------------------------- Note: The balance sheet at December 31, 2000 has been derived from the audited financial statements at that date.
18 THE BANK OF NEW YORK COMPANY, INC. Average Balances and Rates on a Taxable Equivalent Basis (Preliminary) (Dollars in millions)
Normalized for the three months For the three months ended December 31, 2001 ended December 31, 2000 ------------------------------- ------------------------------ Average Average Average Average Balance Interest Rate Balance Interest Rate ------- -------- ------- ------- -------- ------- ASSETS ------------ Interest-Bearing Deposits in Banks (primarily foreign) $ 6,596 $ 53 3.16% $ 5,046 $ 70 5.50% Federal Funds Sold and Securities Purchased Under Resale Agreements 3,128 16 2.08 4,940 78 6.33 Loans Domestic Offices 19,649 267 5.39 18,979 354 7.42 Foreign Offices 17,024 178 4.14 19,528 373 7.60 ------- ----- ------- ----- Total Loans 36,673 445 4.81 38,507 727 7.51 ------- ----- ------- ----- Securities U.S. Government Obligations 817 11 5.23 1,483 22 5.84 U.S. Government Agency Obligations 3,227 46 5.76 1,749 30 6.93 Obligations of States and Political Subdivisions 612 10 6.85 649 13 8.12 Other Securities 8,302 108 5.11 3,260 52 6.30 Trading Securities 7,179 66 3.69 9,852 151 6.10 ------- ----- ------- ----- Total Securities 20,137 241 4.77 16,993 268 6.28 ------- ----- ------- ----- Total Interest-Earning Assets 66,534 755 4.50% 65,486 1,143 6.94% ----- ----- Allowance for Credit Losses (610) (613) Cash and Due from Banks 2,280 3,007 Other Assets 11,966 9,319 ------- ------- NORMALIZED ASSETS 80,170 77,199 Impact of WTC Disaster 6,035 - ------- ------- TOTAL ASSETS $86,205 $77,199 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------ Interest-Bearing Deposits Money Market Rate Accounts $ 6,179 $ 29 1.84% $ 6,107 $ 80 5.22% Savings 7,745 30 1.56 7,508 50 2.67 Certificates of Deposit $100,000 & Over 596 5 3.53 464 7 6.40 Other Time Deposits 1,828 15 3.17 1,923 26 5.28 Foreign Offices 27,074 141 2.06 27,163 353 5.16 ------- ----- ------- ----- Total Interest-Bearing Deposits 43,422 220 2.01 43,165 516 4.76 Federal Funds Purchased and Securities Sold Under Repurchase Agreements 2,451 12 2.01 2,982 46 6.13 Other Borrowed Funds 1,795 12 2.62 1,808 31 6.90 Long-Term Debt 4,854 59 4.81 4,519 82 7.26 ------- ----- ------- ----- Total Interest-Bearing Liabilities 52,522 303 2.29% 52,474 675 5.13% ----- ----- Noninterest-Bearing Deposits 11,263 11,362 Other Liabilities 9,803 7,404 Shareholders' Equity 6,582 5,959 ------- ------- NORMALIZED LIABILITIES AND SHAREHOLDERS' EQUITY 80,170 77,199 Normalized Net Interest Earnings and Interest Rate Spread 452 2.21% ==== Normalized Yield on Interest-Earning Assets 2.70% ==== Impact of WTC Disaster 6,035 - - ------- ----- ------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $86,205 $77,199 ======= ======= Net Interest Earnings and Interest Rate Spread $ 452 2.15% $ 468 1.81% ===== ==== ===== ==== Net Yield on Interest-Earning Assets 2.55% 2.84% ==== ====
19 THE BANK OF NEW YORK COMPANY, INC. Average Balances and Rates on a Taxable Equivalent Basis (Preliminary) (Dollars in millions)
Normalized for the twelve months For the twelve months ended December 31, 2001 ended December 31, 2000 -------------------------------- ------------------------------ Average Average Average Average Balance Interest Rate Balance Interest Rate ------- -------- --------- ------- -------- ------- ASSETS ------------ Interest-Bearing Deposits in Banks (primarily foreign) $ 6,105 $ 252 4.13% $ 5,385 $ 273 5.07% Federal Funds Sold and Securities Purchased Under Resale Agreements 3,307 130 3.93 4,468 277 6.20 Loans Domestic Offices 19,423 1,233 6.35 19,342 1,430 7.39 Foreign Offices 17,868 1,016 5.68 19,920 1,482 7.44 ------- ------ ------- ----- Total Loans 37,291 2,249 6.03 39,262 2,912 7.41 ------- ------ ------- ----- Securities U.S. Government Obligations 1,014 56 5.50 1,994 119 5.98 U.S. Government Agency Obligations 2,925 181 6.19 1,332 91 6.85 Obligations of States and Political Subdivisions 654 49 7.48 621 50 8.06 Other Securities 5,529 310 5.60 2,904 179 6.15 Trading Securities 8,437 401 4.76 8,913 530 5.95 ------- ------ ------- ----- Total Securities 18,559 997 5.37 15,764 969 6.15 ------- ------ ------- ----- Total Interest-Earning Assets 65,262 3,628 5.56% 64,879 4,431 6.83% ------ ----- Allowance for Credit Losses (612) (608) Cash and Due from Banks 2,438 3,181 Other Assets 10,696 9,789 ------- ------- NORMALIZED ASSETS 77,784 77,241 Impact of WTC Disaster 3,915 - ------- ------- TOTAL ASSETS $81,699 $77,241 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------ Interest-Bearing Deposits Money Market Rate Accounts $ 6,176 $ 199 3.23% $ 5,827 $ 290 4.98% Savings 7,632 156 2.05 7,599 197 2.59 Certificates of Deposit $100,000 & Over 446 21 4.79 448 26 5.80 Other Time Deposits 1,884 79 4.18 1,998 101 5.07 Foreign Offices 26,506 927 3.49 27,606 1,397 5.06 ------- ------ ------- ----- Total Interest-Bearing Deposits 42,644 1,382 3.24 43,478 2,011 4.63 Federal Funds Purchased and Securities Sold Under Repurchase Agreements 2,590 94 3.63 2,673 153 5.73 Other Borrowed Funds 1,960 89 4.55 2,099 139 6.62 Long-Term Debt 4,609 277 6.00 4,384 317 7.23 ------- ------ ------- ----- Total Interest-Bearing Liabilities 51,803 1,842 3.56% 52,634 2,620 4.98% ------ ----- Noninterest-Bearing Deposits 10,774 11,277 Other Liabilities 8,946 7,850 Shareholders' Equity 6,261 5,480 ------- ------- NORMALIZED LIABILITIES AND SHAREHOLDERS' EQUITY 77,784 77,241 Normalized Net Interest Earnings and Interest Rate Spread 1,786 2.00% ==== Normalized Yield on Interest-Earning Assets 2.74% ==== Impact of WTC Disaster 3,915 (45) - ------- ------- ------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $81,699 $77,241 ======= ======= Net Interest Earnings and Interest Rate Spread $1,741 1.88% $1,811 1.85% ====== ==== ====== ==== Net Yield on Interest-Earning Assets 2.57% 2.79% ==== ====