-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UFECw9RoMBvqznpS0piEn0DJEjmsmoH33yIGJP0ZnakakI4mGm5ruo85BcDKaul8 Y+KEPP+aODVNaQwgy7aN0Q== 0000009626-03-000004.txt : 20030122 0000009626-03-000004.hdr.sgml : 20030122 20030122092435 ACCESSION NUMBER: 0000009626-03-000004 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20021231 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030122 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BANK OF NEW YORK CO INC CENTRAL INDEX KEY: 0000009626 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 132614959 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06152 FILM NUMBER: 03520252 BUSINESS ADDRESS: STREET 1: ONE WALL ST 10TH FL CITY: NEW YORK STATE: NY ZIP: 10286 BUSINESS PHONE: 212-495-1784 MAIL ADDRESS: STREET 1: ONE WALL STREET 31ST FLOOR CITY: NEW YORK STATE: NY ZIP: 10286 8-K 1 r4q028k.txt 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8 - K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): January 22, 2003 THE BANK OF NEW YORK COMPANY, INC. ---------------------------------- (exact name of registrant as specified in its charter) NEW YORK -------- (State or other jurisdiction of incorporation) 001-06152 13-2614959 --------- ---------- (Commission file number) (I.R.S. employer identification number) One Wall Street, New York, NY 10286 ----------------------------- ----- (Address of principal executive offices) (Zip code) 212-495-1784 ------------ (Registrant's telephone number, including area code) 2 ITEM 5. Other Events ------------ Fourth Quarter of 2002 Financial Results ---------------------------------------- On January 22, 2003, The Bank of New York Company, Inc. issued a press release containing unaudited interim financial information and accompanying discussion for the fourth quarter of 2002. Exhibit 99 is a copy of such press release and is incorporated herein by reference. ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits ------------------------------------------------------------------ (c) Exhibit Description ------- ----------- 99 Unaudited interim financial information and accompanying discussion for the fourth quarter of 2002 contained in the press release dated January 22, 2003, of The Bank of New York Company, Inc. 3 SIGNATURE --------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: January 22, 2003 THE BANK OF NEW YORK COMPANY, INC. (Registrant) By: /s/ Thomas J. Mastro ------------------------- Name: Thomas J. Mastro Title: Comptroller 4 EXHIBIT INDEX ------------- Exhibit No. Description - ----------- ----------- 99 Unaudited interim financial information and accompanying discussion for the fourth quarter of 2002 contained in the press release dated January 22, 2003, of The Bank of New York Company, Inc. EX-99 3 r4q02ex99.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 Gregg A. Scheuing, VP (212) 635-1590 (212) 635-1578 THE BANK OF NEW YORK COMPANY, INC. REPORTS FOURTH QUARTER E.P.S. OF 14 CENTS SECURITIES SERVICING REVENUES UP 7% IN 2002 RESULTS IN LINE WITH PREVIOUS GUIDANCE NEW YORK, N.Y., January 22, 2003 -- The Bank of New York Company, Inc. (NYSE: BK) reports fourth quarter net income of $100 million, or 14 cents per fully diluted share. For the year, net income was $902 million, or $1.24 per fully diluted share. As previously announced, net income for the fourth quarter of 2002 includes a $390 million pre-tax loan loss provision and a related $240 million charge-off, primarily for aircraft leasing exposure to United Airlines, as well as the potential for losses on leases to other domestic carriers. The impact of this additional provisioning reduced net income by 32 cents per share. All of the Company's major revenue categories were up slightly from the third quarter in spite of the continued soft global capital markets environment. Fourth quarter securities servicing fees increased to $484 million from $480 million last quarter, and represented the fifth consecutive sequential quarter increase. Private client services and asset management fees also increased, to $88 million, compared with $85 million in the third quarter. Although still at relatively weak levels, revenues from 2 foreign exchange and other trading activities also showed a modest increase, to $51 million from $49 million in the third quarter. Earlier this month, the Company announced the signing of a definitive purchase agreement with Credit Suisse First Boston to acquire its Pershing unit for a $2 billion cash purchase price, subject to certain adjustments. Pershing is the largest global provider of correspondent clearing services and outsourcing solutions for asset managers, brokers, and other financial intermediaries. This acquisition, which is expected to close by the end of the second quarter, solidifies the Company's position as a leading securities servicing outsourcer to financial institutions. Chairman and Chief Executive Officer Thomas A. Renyi stated, "The fourth quarter results are in line with our prior guidance and reflect a persistently weak market environment. Nonetheless, each of our major business areas showed growth, with securities servicing revenues increasing for the fifth consecutive quarter. "Our commitment to reinvest in our core businesses is evidenced by the acquisition of Pershing, which offers a great strategic fit and an excellent opportunity to further leverage our global franchise. Pershing will provide new clients, augment our product line and solidify our position of market leadership. "With respect to the additional provisioning we took in the fourth quarter, this action addressed our exposure to the U.S. airline industry and significantly increased our loan reserves, which created flexibility for our credit risk reduction efforts." Fees from the Company's securities servicing businesses increased to $484 million for the fourth quarter from $480 million last quarter. Excluding the benefit of an acquisition that closed in the quarter, revenues were essentially flat. Corporate trust, securities lending and clearing services performed well in the quarter. Corporate trust benefited from traditional seasonal strength in the fourth quarter and a rebound in structured finance products in the U.S. as well as global issuance. Securities lending benefited from higher volumes and was positively impacted by the reduction in interest rates by the Federal Reserve in early November. Clearing services benefited 3 from the full quarter impact of new clients. Areas in which results were not as strong included ADRs, reflecting the continued absence of capital raising activity and decreased trading volumes, global custody and mutual funds, due primarily to reduced transaction volumes. As of December 31, 2002, the Company had assets under custody of $6.8 trillion, compared with $6.6 trillion at September 30, 2002. The increase primarily resulted from higher equity price levels and a favorable trend in the Euro exchange rate, as well as new business wins that closed in the fourth quarter. Cross border custody assets increased to $1.9 trillion from $1.8 trillion at September 30, 2002. Private client services and asset management fees increased to $88 million for the fourth quarter, compared with $85 million last quarter. The increase reflects the impact of the Lockwood acquisition, as well as continued strong flows into alternative investment funds offered by the Company's Ivy Asset Management subsidiary. Total assets under management were up to $76 billion from $71 billion at September 30, 2002. Foreign exchange and other trading revenues increased to $51 million in the fourth quarter of 2002, from $49 million last quarter. Foreign exchange activity continues to be constrained by reduced client flows from fund managers, low volatility and narrow spreads. Other trading revenues benefited from increased client-related interest rate hedging activity as a result of the cut in interest rates during the quarter. Net interest income on a taxable equivalent basis for the fourth quarter was $423 million, compared with $429 million last quarter, reflecting continued spread compression on deposits, an increase in average non-accrual loans and continued reductions in the Company's corporate loan portfolio. In 2002, the Company achieved its $7 billion target for reductions in corporate credit exposures and continued to reallocate capital towards its fee-based businesses. Return on average common equity for the fourth quarter of 2002 was 5.99%, compared with 4.73% in the third quarter of 2002, and 20.42% in the fourth quarter of 2001. Return on average assets for the fourth quarter of 2002 was 0.49%, compared with 0.40% in the third quarter of 2002, and 1.53% in the 4 fourth quarter of 2001. For the year 2002, return on average common equity was 13.96%, compared with 21.58% in 2001. Return on average assets was 1.13% for the year 2002, compared with 1.64% in 2001. The Company's estimated Tier 1 capital and Total capital ratios were 7.60% and 11.98% at December 31, 2002, compared with 7.70% and 11.73% at September 30, 2002, and 8.11% and 11.57% at December 31, 2001. The leverage ratio was 6.48% at December 31, 2002, compared with 6.77% at September 30, 2002, and 6.70% one year ago. The Company's tangible common equity as a percentage of total assets was 5.51% at December 31, 2002, compared with 5.38% at September 30, 2002, and 5.36% at December 31, 2001. NONINTEREST INCOME
4th 3rd 4th Quarter Quarter Quarter Year-to-date ------- ------- ------- ----------------- (In millions) 2002 2002 2001 2002 2001 ----- ---- ---- ---- ---- Servicing Fees Securities $484 $480 $ 446 $1,896 $1,775 Global Payment Services 75 73 71 292 287 ---- ---- ------ ------ ------ 559 553 517 2,188 2,062 Private Client Services and Asset Management Fees 88 85 78 344 314 Service Charges and Fees 93 91 89 361 356 Foreign Exchange and Other Trading Activities 51 49 78 234 338 Securities Gains 13 (188) 40 (118) 154 Other 29 46 208 134 347 ---- ---- ------ ------ ------ Total Noninterest Income* $833 $636 $1,010 $3,143 $3,571 ==== ==== ====== ====== ====== * See Accounting Changes on page 11.
Total noninterest income for the fourth quarter of 2002 was $833 million, or 67% of total revenues. Comparisons with prior periods include the impact of equity valuation adjustments in the third quarter of 2002 and, in 2001, the World Trade Center disaster ("WTC disaster"). Securities servicing fees for the fourth quarter were up 1% from the prior quarter, and 9% from the fourth quarter of 2001. For the full year, total securities servicing fees increased by 7% from the previous year, reflecting acquisitions and the benefit of well-diversified businesses. Global payment services fees increased by 3% from the prior quarter, 6% from the fourth quarter of 2001, and 2% for the full year. The increased 5 revenues reflect higher funds transfer volumes and increased multi-currency activity from existing clients, as well as the addition of new clients. This offset continued weakness in global trade services. Private client services and asset management fees for the fourth quarter were up 4% from the prior quarter, and 13% from the fourth quarter of 2001. For the year 2002, private client services and asset management fees were up 9% from the previous year, reflecting several acquisitions and core growth in alternative investments and retail investment products. Ivy Asset Management's assets under management increased 30% on a year-over-year basis. Service charges and fees were up 2% from the prior quarter, and 4% from one year ago. The sequential quarter increase reflects increased fees to offset the adverse impact of lower rates on compensating balances. Foreign exchange and other trading revenues were up slightly compared with the prior quarter, and down 35% from one year ago. For the full year, foreign exchange and other trading revenues decreased 31% due to a significant decrease in volatility in the currency markets and reduced client activity in the second half of 2002. Other trading was negatively impacted by a sharp fall off in client interest rate hedging activities compared to the previous year. Securities gains were $13 million in the quarter, compared with a $188 million loss in the prior quarter, and a $40 million gain one year ago. The loss in the third quarter included a $210 million equity writedown that accelerated the substantial liquidation of the Company's bank stock portfolio. At December 31, 2002, the Company had a total of $91 million in bank stock investments, excluding its investment in Wing Hang Bank. Other income was $29 million, compared with $46 million in the third quarter, and $208 million one year ago. Other income in the third quarter included a grant from the Empire State Development Corporation ("ESDC"). Other income in the fourth quarter of 2001 included $175 million of insurance recoveries associated with the WTC disaster. 6 NET INTEREST INCOME
4th 3rd 4th Quarter Quarter Quarter Year-to-date -------- ------- ------- ------------------ (Dollars in millions on a tax equivalent basis) 2002 2002 2001 2002 2001 ---- ---- ---- ---- ---- Net Interest Income* $423 $429 $452 $1,714 $1,741 Net Interest Rate Spread* 2.25% 2.32% 2.19% 2.29% 1.89% Net Yield on Interest Earning Assets* 2.54 2.66 2.55 2.62 2.57 * See Accounting Changes on page 11.
Net interest income on a taxable equivalent basis was $423 million in the fourth quarter of 2002, compared with $429 million in the third quarter of 2002, and $452 million in the fourth quarter of 2001. The net interest rate spread was 2.25% in the fourth quarter of 2002, compared with 2.32% in the third quarter of 2002, and 2.19% in the fourth quarter of 2001. The net yield on interest earning assets was 2.54% in the fourth quarter of 2002, compared with 2.66% in the third quarter of 2002, and 2.55% in the fourth quarter of 2001. The decrease in net interest income from the third quarter of 2002 is primarily due to continued spread compression on both retail and securities servicing deposits, an increase in average non-accrual loans and a continued decline in average corporate loans. For the full year, net interest income on a taxable equivalent basis amounted to $1,714 million, compared with $1,741 million in 2001. The full year net interest rate spread was 2.29%, compared with 1.89% in 2001, while the net yield on interest earning assets was 2.62% in 2002 and 2.57% in 2001. Comparisons with 2001 include the impact of the WTC disaster. 7 NONINTEREST EXPENSE AND INCOME TAXES Noninterest expense for the fourth quarter of 2002 was $700 million, compared with $706 million in the prior quarter. Fourth quarter expenses included an $18 million reduction in salaries and benefits that reflects tight expense control and lower incentive compensation. Net occupancy expense decreased by $20 million, reflecting a $22 million loss estimate in the third quarter for a lease termination associated with the Company's move to a new facility in Brooklyn, N.Y. Excluding that cost, net occupancy expenses increased by $2 million. Other noninterest expenses increased by $27 million, primarily due to the Lockwood acquisition, seasonal year-end factors, and continued technology and business continuity investments. For the full year, noninterest expense decreased by 2% to $2,751 million from $2,819 million last year, reflecting higher expenses in 2001 due to the impact of the WTC disaster and goodwill amortization, partially offset by growth in 2002 expenses related to acquisitions and business continuity spending. As a result of new accounting standards related to goodwill and intangibles, effective January 1, 2002, amortization in the fourth quarter and the full year 2002 declined to $3 million and $8 million, compared with $29 million and $112 million in 2001. The efficiency ratios for the fourth quarter and full year 2002 were 56.3% and 55.3% compared to 56.1% in the previous quarter and 54.8% in 2001. The effective tax rates for the fourth quarter and the year 2002 were 35.9% and 34.3%, compared with 33.7% and 34.7% in the fourth quarter and year 2001. The effective tax rate for the third quarter of 2002 was 35.9%. The effective tax rate was higher in the third and fourth quarters of 2002 due to the charges taken in these periods. The tax rate in 2001 was impacted by the WTC disaster. 8 NONPERFORMING ASSETS
Change 12/31/02 vs. (Dollars in millions) 12/31/02 9/30/02 9/30/02 -------- -------- -------- Loans: Commercial $321 $427 $(106) Foreign 84 89 (5) Other 34 34 - ---- ---- ----- Total Nonperforming Loans 439 550 (111) Other Real Estate 1 1 - ---- ---- ----- Total Nonperforming Assets $440 $551 $(111) ==== ==== ===== Nonperforming Assets Ratio 1.4% 1.6% Allowance/Nonperforming Loans 189.1 123.7 Allowance/Nonperforming Assets 188.7 123.5
Nonperforming assets totaled $440 million at December 31, 2002, down 20% from $551 million at September 30, 2002. The decrease in commercial nonperforming loans primarily reflects the Company's partial sale of exposure to a cable operator that is categorized as nonperforming. CREDIT LOSS PROVISION AND NET CHARGE-OFFS
4th 3rd 4th Quarter Quarter Quarter Year-to-date ------- ------- ------- ------------ (In millions) 2002 2002 2001 2002 2001 ---- ---- ---- ---- ---- Provision $390 $225 $275 $685 $375 ==== ==== ==== ==== ==== Net Charge-offs: Commercial $(210) $(150) $(253) $(388) $(342) Foreign (18) (5) (12) (21) (12) Other (7) - (5) (41) (7) Consumer (5) (5) (5) (20) (14) ------ ------ ------ ------ ------ Total $(240) $(160) $(275) $(470) $(375) ====== ====== ====== ====== ====== Other Real Estate Expenses $ - $ - $ - $ - $ 2
The Company increased its quarterly loan loss provision above a base provision of $40 million to a total of $390 million. Included in the total provision was $225 million related to the Company's airline leasing portfolio. Of this, $125 million was charged-off, which represented substantially all of its United Airlines aircraft leasing exposure of $130 million. The remaining $100 million provision, combined with previous reserves, gives the Company substantial reserves to cover its remaining leasing exposure of approximately 9 $290 million to major U.S. carriers, the industry segment which faces the most severe operating challenges. Of the remaining provision, $75 million was charged-off to recognize losses on three specific credits. These include: a nonperforming retailer that experienced further impairment during the quarter; an insurance company that became nonperforming during the quarter; and a partial sale of exposure to the cable operator. The allowance for credit losses was $831 million, or 2.65% of loans at December 31, 2002, compared with $681 million, or 1.99% of loans at September 30, 2002, and $616 million, or 1.72% of loans at December 31, 2001. The ratio of the allowance to nonperforming assets was 188.7% at December 31, 2002, compared with 123.5% at September 30, 2002, and 277.6% at December 31, 2001. At December 31, 2002, exposures related to the remaining 6 borrowers in the Company's accelerated loan disposition programs totaled $36 million with related outstandings of $35 million. WORLD TRADE CENTER DISASTER UPDATE During the fourth quarter and year 2002, the Company incurred $60 million and $173 million in expenses associated with interim space, business interruption, and the restoration of facilities. The Company has also estimated and recorded losses associated with subletting of its interim operating facilities of $75 million and $296 million in the fourth quarter and year 2002. The sublease loss expense in the fourth quarter of 2002 reflects a significant decline in the Manhattan real estate market late in 2002. At December 31, 2002, the Company has reserved for approximately 51% of the future costs associated with the subleases. The Company expects the remainder of the costs to be covered by income from subletting these properties. The expenses incurred in 2002 have been netted against offsetting insurance recoveries. Since the WTC disaster, the Company has recorded insurance recoveries of $644 million and received cash advances on its claim of $400 million. Future cash advances will largely relate to the sublease loss and business interruption costs. 10 ADDITIONAL INFORMATION Thomas A. Renyi, chairman and chief executive officer, and Bruce W. Van Saun, senior executive vice president and chief financial officer, will review the quarterly results in a live conference call and audio webcast today at 9:00 am ET. The presentation will be accessible from the Company's website at www.bankofny.com/4q2002 and also by telephone at (888)790-0319 within the United States or (610)769-3531 internationally. The replay will be available through the Company's website and also by telephone at (800)876-9209 within the United States or (402)220-5333 internationally through 5:00 p.m. ET on Wednesday, January 29, 2003. The call may include forward looking statements. See "Forward Looking Statements" below. The Bank of New York Company, Inc. (NYSE: BK) is a financial holding company with total assets of over $77 billion as of December 31, 2002. The Company provides a complete range of banking and other financial services to corporations and individuals worldwide through its basic businesses, namely, Securities Servicing and Global Payment Services, Corporate Banking, BNY Asset Management and Private Client Services, Retail Banking, and Global Market Services. Additional information on the Company is available at www.bankofny.com. *************************** 11 FORWARD LOOKING STATEMENTS 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 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. These include lower than expected performance or higher than expected costs in connection with acquisitions and integration of acquired businesses, the level of capital market activity, changes in customer credit quality, the effects of capital reallocation, portfolio performance, ultimate differences from 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 2001 Form 10-K and Third Quarter 2002 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. ACCOUNTING CHANGES In the fourth quarter of 2001, the Company reclassified Company-Obligated Mandatory Redeemable Preferred Trust Securities of Subsidiary Trust Holding Solely Junior Subordinated Debentures to Long-Term Debt. Prior periods have been restated. In the second quarter of 2002, the Company adopted a new accounting pronouncement related to the recognition of reimbursable client-related expenses as revenue and the costs as operating expense. Prior periods have been restated. (Financial highlights and detailed financial statements are attached.) 12 THE BANK OF NEW YORK COMPANY, INC. Financial Highlights (Dollars in millions, except per share amounts) (Unaudited)
2002 2001 Change ---- ---- ------ For the Three Months Ended December 31: - ---------------------------------------- Net Income $ 100 $ 331 (69.7)% Per Common Share: Basic $ 0.14 $ 0.45 (68.9) Diluted 0.14 0.45 (68.9) Cash Dividends Paid 0.19 0.18 5.6 Return on Average Common Shareholders' Equity 5.99% 20.42% Return on Average Assets 0.49 1.53 For the Twelve Months Ended December 31: - --------------------------------------- Net Income $ 902 $ 1,343 (32.8)% Per Common Share: Basic $ 1.25 $ 1.84 (32.1) Diluted 1.24 1.81 (31.5) Cash Dividends Paid 0.76 0.72 5.6 Return on Average Common Shareholders' Equity 13.96% 21.58% Return on Average Assets 1.13 1.64 As of December 31: - ------------------- Assets $77,170 $81,025 (4.8)% Loans 31,339 35,747 (12.3) Securities 18,300 12,862 42.3 Deposits - Domestic 33,094 28,780 15.0 - Foreign 22,285 26,931 (17.3) Long-Term Debt 5,440 4,976 9.3 Common Shareholders' Equity 6,684 6,317 5.8 Common Shareholders' Equity Per Share 9.21 8.66 6.4 Market Value Per Share of Common Stock 23.96 40.80 (41.3) Allowance for Credit Losses as a Percent of Loans 2.65% 1.72% Tier 1 Capital Ratio 7.60 8.11 Total Capital Ratio 11.98 11.57 Leverage Ratio 6.48 6.70 Tangible Common Equity Ratio 5.51 5.36
13 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, 2002 2001 2002 2001 ---- ---- ---- ---- Interest Income - --------------- Loans $ 347 $ 445 $1,470 $2,271 Securities Taxable 166 143 639 463 Exempt from Federal Income Taxes 14 18 61 74 ----- ----- ----- ----- 180 161 700 537 Deposits in Banks 26 53 133 252 Federal Funds Sold and Securities Purchased Under Resale Agreements 14 16 51 159 Trading Assets 61 66 259 401 ----- ----- ----- ----- Total Interest Income 628 741 2,613 3,620 ----- ----- ----- ----- Interest Expense - ---------------- Deposits 160 206 644 1,392 Federal Funds Purchased and Securities Sold Under Repurchase Agreements 5 21 29 103 Other Borrowed Funds 6 17 73 167 Long-Term Debt 44 59 202 277 ----- ----- ----- ----- Total Interest Expense 215 303 948 1,939 ----- ----- ----- ----- Net Interest Income 413 438 1,665 1,681 - ------------------- Provision for Credit Losses 390 275 685 375 ----- ----- ----- ----- Net Interest Income After Provision for Credit Losses 23 163 980 1,306 ----- ----- ----- ----- Noninterest Income - ------------------ Servicing Fees Securities 484 446 1,896 1,775 Global Payment Services 75 71 292 287 ----- ----- ----- ----- 559 517 2,188 2,062 Private Client Services and Asset Management Fees 88 78 344 314 Service Charges and Fees 93 89 361 356 Foreign Exchange and Other Trading Activities 51 78 234 338 Securities Gains 13 40 (118) 154 Other 29 208 134 347 ----- ----- ----- ----- Total Noninterest Income 833 1,010 3,143 3,571 ----- ----- ----- ----- Noninterest Expense - ------------------- Salaries and Employee Benefits 379 386 1,581 1,593 Net Occupancy 56 48 230 233 Furniture and Equipment 37 30 138 178 Other 228 209 802 815 ----- ----- ----- ----- Total Noninterest Expense 700 673 2,751 2,819 ----- ----- ----- ----- Income Before Income Taxes 156 500 1,372 2,058 Income Taxes 56 169 470 715 ----- ----- ------ ------ Net Income $ 100 $ 331 $ 902 $1,343 - ---------- ===== ===== ====== ====== Per Common Share Data: - ---------------------- Basic Earnings $0.14 $0.45 $1.25 $1.84 Diluted Earnings 0.14 0.45 1.24 1.81 Cash Dividends Paid 0.19 0.18 0.76 0.72 Diluted Shares Outstanding 726 738 728 741 - -------------------------------------------------------------------------------------------------
14 THE BANK OF NEW YORK COMPANY, INC. Consolidated Balance Sheets (Dollars in millions, except per share amounts) (Unaudited)
December 31, December 31, 2002 2001 ---- ---- Assets - ------ Cash and Due from Banks $ 4,748 $ 3,222 Interest-Bearing Deposits in Banks 5,104 6,619 Securities Held-to-Maturity 955 1,211 Available-for-Sale 17,345 11,651 ------- ------- Total Securities 18,300 12,862 Trading Assets at Fair Value 7,368 8,270 Federal Funds Sold and Securities Purchased Under Resale Agreements 1,385 4,795 Loans (less allowance for credit losses of $831 in 2002 and $616 in 2001) 30,508 35,131 Premises and Equipment 992 992 Due from Customers on Acceptances 351 313 Accrued Interest Receivable 209 236 Goodwill 2,497 2,065 Intangible Assets 78 19 Other Assets 5,630 6,501 ------- ------- Total Assets $77,170 $81,025 ======= ======= Liabilities and Shareholders' Equity - ------------------------------------ Deposits Noninterest-Bearing (principally domestic offices) $13,300 $12,635 Interest-Bearing Domestic Offices 19,997 16,553 Foreign Offices 22,082 26,523 ------- ------- Total Deposits 55,379 55,711 Federal Funds Purchased and Securities Sold Under Repurchase Agreements 636 1,756 Trading Liabilities 2,860 2,264 Other Borrowed Funds 625 2,363 Acceptances Outstanding 349 358 Accrued Taxes and Other Expenses 4,011 3,766 Accrued Interest Payable 101 92 Other Liabilities 1,085 3,422 Long-Term Debt 5,440 4,976 ------- ------- Total Liabilities 70,486 74,708 ------- ------- Shareholders' Equity Class A Preferred Stock - par value $2.00 per share, authorized 5,000,000 shares, outstanding 3,000 shares in 2002 and 3,500 shares in 2001 - - Common Stock-par value $7.50 per share, authorized 2,400,000,000 shares, issued 993,697,297 shares in 2002 and 990,773,101 shares in 2001 7,453 7,431 Additional Capital 847 741 Retained Earnings 4,736 4,383 Accumulated Other Comprehensive Income 134 80 ------- ------- 13,170 12,635 Less: Treasury Stock (267,240,854 shares in 2002 and 260,449,527 shares in 2001), at cost 6,483 6,312 Loan to ESOP (485,533 shares in 2002 and 823,810 shares in 2001), at cost 3 6 ------- ------- Total Shareholders' Equity 6,684 6,317 ------- ------- Total Liabilities and Shareholders' Equity $77,170 $81,025 ======= ======= - ---------------------------------------------------------------------------------------- Note: The balance sheet at December 31, 2001 has been derived from the audited financial statements at that date.
15 THE BANK OF NEW YORK COMPANY, INC. Average Balances and Rates on a Taxable Equivalent Basis (Preliminary) (Dollars in millions)
For the three months For the three months ended December 31, 2002 ended December 31, 2001 ------------------------------- ------------------------------ Average Average Average Average Balance Interest Rate Balance Interest Rate -------- -------- ------- ------- -------- ------- ASSETS - ------------ Interest-Bearing Deposits in Banks (primarily foreign) $ 4,266 $ 26 2.44% $ 6,596 $ 53 3.16% Federal Funds Sold and Securities Purchased Under Resale Agreements 4,021 14 1.37 3,528 16 1.84 Loans Domestic Offices 19,860 236 4.70 23,109 267 4.59 Foreign Offices 13,480 112 3.29 17,024 178 4.14 ------- ----- ------- ----- Total Loans 33,340 348 4.13 40,133 445 4.40 ------- ----- ------- ----- Securities U.S. Government Obligations 433 4 4.05 817 12 5.76 U.S. Government Agency Obligations 3,726 43 4.57 3,227 46 5.76 Obligations of States and Political Subdivisions 430 7 6.56 612 10 6.85 Other Securities 12,670 135 4.27 8,302 107 5.06 Trading Securities 6,983 61 3.46 7,179 66 3.69 ------- ----- ------- ----- Total Securities 24,242 250 4.12 20,137 241 4.77 ------- ----- ------- ----- Total Interest-Earning Assets 65,869 638 3.84% 70,394 755 4.26% ----- ----- Allowance for Credit Losses (677) (610) Cash and Due from Banks 2,731 3,249 Other Assets 12,592 13,172 ------- ------- TOTAL ASSETS $80,515 $86,205 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ Interest-Bearing Deposits Money Market Rate Accounts $ 7,440 $ 21 1.10% $ 7,179 $ 29 1.58% Savings 8,241 20 0.99 7,745 30 1.56 Certificates of Deposit $100,000 & Over 4,445 22 1.98 596 5 3.53 Other Time Deposits 1,390 7 2.04 1,828 15 3.17 Foreign Offices 23,995 90 1.49 28,824 127 1.75 ------- ----- ------- ----- Total Interest-Bearing Deposits 45,511 160 1.40 46,172 206 1.77 Federal Funds Purchased and Securities Sold Under Repurchase Agreements 1,633 5 1.24 4,229 21 2.01 Other Borrowed Funds 1,133 6 2.18 2,763 17 2.41 Long-Term Debt 5,402 44 3.19 4,853 59 4.81 ------- ----- ------- ----- Total Interest-Bearing Liabilities 53,679 215 1.59% 58,017 303 2.07% ----- ----- Noninterest-Bearing Deposits 11,501 11,263 Other Liabilities 8,689 10,483 Shareholders' Equity 6,646 6,442 ------- ------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $80,515 $86,205 ======= ======= Net Interest Earnings and Interest Rate Spread $ 423 2.25% $ 452 2.19% ===== ==== ===== ==== Net Yield on Interest-Earning Assets 2.54% 2.55% ==== ====
16 THE BANK OF NEW YORK COMPANY, INC. Average Balances and Rates on a Taxable Equivalent Basis (Preliminary) (Dollars in millions)
For the twelve months For the twelve months ended December 31, 2002 ended December 31, 2001 ------------------------------ ------------------------------ Average Average Average Average Balance Interest Rate Balance Interest Rate ------- -------- ------- ------- -------- ------- ASSETS - ------------ Interest-Bearing Deposits in Banks (primarily foreign) $ 4,809 $ 133 2.76% $ 6,105 $ 252 4.13% Federal Funds Sold and Securities Purchased Under Resale Agreements 3,225 51 1.60 4,260 159 3.72 Loans Domestic Offices 19,419 966 4.98 20,902 1,257 6.01 Foreign Offices 14,886 505 3.38 17,868 1,016 5.68 ------- ------ ------- ----- Total Loans 34,305 1,471 4.29 38,770 2,273 5.86 ------- ------ ------- ----- Securities U.S. Government Obligations 605 31 5.08 1,014 57 5.61 U.S. Government Agency Obligations 3,407 177 5.20 2,925 181 6.19 Obligations of States and Political Subdivisions 520 34 6.57 654 49 7.48 Other Securities 10,849 505 4.66 5,529 308 5.58 Trading Securities 7,655 260 3.39 8,437 401 4.76 ------- ------ ------- ----- Total Securities 23,036 1,007 4.37 18,559 996 5.37 ------- ------ ------- ----- Total Interest-Earning Assets 65,375 2,662 4.07% 67,694 3,680 5.44% ------ ----- Allowance for Credit Losses (631) (612) Cash and Due from Banks 2,675 3,289 Other Assets 12,236 11,329 ------- ------- TOTAL ASSETS $79,655 $81,700 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ Interest-Bearing Deposits Money Market Rate Accounts $ 6,857 $ 87 1.27% $ 6,750 $ 199 2.95% Savings 8,154 90 1.11 7,632 156 2.05 Certificates of Deposit $100,000 & Over 2,393 52 2.17 446 21 4.79 Other Time Deposits 1,508 34 2.25 1,884 79 4.18 Foreign Offices 24,210 381 1.57 27,922 937 3.35 ------- ------ ------- ----- Total Interest-Bearing Deposits 43,122 644 1.49 44,634 1,392 3.12 Federal Funds Purchased and Securities Sold Under Repurchase Agreements 2,018 29 1.43 3,183 103 3.24 Other Borrowed Funds 2,877 73 2.53 2,204 167 7.60 Long-Term Debt 5,338 202 3.79 4,609 277 6.00 ------- ------ ------- ----- Total Interest-Bearing Liabilities 53,355 948 1.78% 54,630 1,939 3.55% ------ ----- Noninterest-Bearing Deposits 10,673 11,644 Other Liabilities 9,162 9,201 Shareholders' Equity 6,465 6,225 ------- ------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $79,655 $81,700 ======= ======= Net Interest Earnings and Interest Rate Spread $1,714 2.29% $1,741 1.89% ====== ==== ====== ==== Net Yield on Interest-Earning Assets 2.62% 2.57% ==== ====
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