-----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, NhQjuWWa8QIfzkasXbqA5Ff7KMFRsXb43BFbOHNx0rviuHJ6d+vKp8iXG4jq/jUZ QoWLx+AfXzKYezj/6x9WgQ== 0000009626-96-000013.txt : 19960514 0000009626-96-000013.hdr.sgml : 19960514 ACCESSION NUMBER: 0000009626-96-000013 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960513 SROS: NYSE 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: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06152 FILM NUMBER: 96561372 BUSINESS ADDRESS: STREET 1: 48 WALL ST 15TH FL CITY: NEW YORK STATE: NY ZIP: 10296 BUSINESS PHONE: 2124951784 10-Q 1 1ST QUARTER 1996 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 1-6152 THE BANK OF NEW YORK COMPANY, INC. (Exact name of registrant as specified in its charter) New York 13-2614959 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification number) 48 Wall Street, New York, New York 10286 (Address of principal executive offices) (Zip code) (212) 495-1784 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ---- ---- The number of shares outstanding of the issuer's Common Stock, $7.50 par value, was 194,811,790 shares as of April 30, 1996 2 THE BANK OF NEW YORK COMPANY, INC. FORM 10-Q TABLE OF CONTENTS PART 1. FINANCIAL INFORMATION - ------------------------------ Item 1. Financial Statements Consolidated Balance Sheets At March 31, 1996 and December 31, 1995 3 Consolidated Statements of Income For the Three Months Ended March 31, 1996 and 1995 4 Consolidated Statement of Changes In Shareholders' Equity For the Three Months Ended March 31, 1996 5 Consolidated Statements of Cash Flows For the Three Months Ended March 31, 1996 and 1995 6 Notes to Consolidated Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 PART 2. OTHER INFORMATION - -------------------------- Item 6. Exhibits and Reports on Form 8-K 17 SIGNATURE 18 3 PART 1. FINANCIAL INFORMATION Item 1. Financial Statements - ------------------------------------------------------------------------------ THE BANK OF NEW YORK COMPANY, INC. Consolidated Balance Sheets (Dollars in millions, except per share amounts) (Unaudited) March 31, December 31, 1996 1995 ---- ---- Assets - ------ Cash and Due from Banks $ 2,634 $ 4,711 Interest-Bearing Deposits in Banks 1,152 982 Securities: Held-to-Maturity (fair value of $1,197 in 1996 and $1,164 in 1995) 1,262 1,252 Available-for-Sale 3,915 3,618 ------- ------- Total Securities 5,177 4,870 Trading Assets at Fair Value 728 762 Federal Funds Sold and Securities Purchased Under Resale Agreements 985 936 Loans (less allowance for loan losses of $742 in 1996 and $756 in 1995) 37,813 36,931 Premises and Equipment 898 902 Due From Customers on Acceptances 818 918 Accrued Interest Receivable 257 270 Other Assets 2,855 2,438 ------- ------- Total Assets $53,317 $53,720 ======= ======= Liabilities and Shareholders' Equity - ------------------------------------ Deposits Noninterest-Bearing (principally domestic offices) $ 8,351 $10,465 Interest-Bearing Domestic Offices 15,382 16,005 Foreign Offices 12,162 9,448 ------- ------- Total Deposits 35,895 35,918 Federal Funds Purchased and Securities Sold Under Repurchase Agreements 3,089 3,933 Other Borrowed Funds 4,387 3,706 Acceptances Outstanding 821 928 Accrued Taxes and Other Expenses 1,393 1,378 Accrued Interest Payable 180 190 Other Liabilities 378 587 Long-Term Debt 1,930 1,848 ------- ------- Total Liabilities 48,073 48,488 ------- ------- Shareholders' Equity Preferred Stock-no par value, authorized 5,000,000 shares, outstanding 184,000 shares 111 111 Class A Preferred Stock - par value $2.00 per share, authorized 5,000,000 shares, outstanding 46,804 shares in 1996 and 49,504 shares in 1995 2 2 Common Stock - par value $7.50 per share, authorized 350,000,000 shares, issued 205,847,437 shares in 1996 and 204,162,405 shares in 1995 1,544 1,531 Additional Capital 1,116 1,087 Retained Earnings 2,851 2,689 Securities Valuation Allowance 29 58 ------- ------- 5,653 5,478 Less: Treasury Stock - 8,961,644 shares in 1996 and 6,026,048 shares in 1995, at cost 391 228 Loan to ESOP - (658,530 shares), at cost 18 18 ------- ------- Total Shareholders' Equity 5,244 5,232 ------- ------- Total Liabilities and Shareholders' Equity $53,317 $53,720 ======= ======= - ------------------------------------------------------------------------------ See accompanying Notes to Consolidated Financial Statements 4 - ------------------------------------------------------------------------------ THE BANK OF NEW YORK COMPANY, INC. Consolidated Statements of Income (Unaudited) (In millions, except per share amounts) For the three months ended March 31, 1996 1995 ---- ---- Interest Income - --------------- Loans $ 806 $ 765 Securities Taxable 62 56 Exempt from Federal Income Taxes 5 12 ----- ----- 67 68 Deposits in Banks 22 30 Federal Funds Sold and Securities Purchased Under Resale Agreements 29 66 Trading Assets 4 7 ----- ----- Total Interest Income 928 936 ----- ----- Interest Expense - ---------------- Deposits 291 308 Federal Funds Purchased and Securities Sold Under Repurchase Agreements 51 32 Other Borrowed Funds 44 72 Long-Term Debt 33 33 ---- ---- Total Interest Expense 419 445 ---- ---- Net Interest Income 509 491 - ------------------- Provision for Loan Losses 90 50 ----- ----- Net Interest Income After Provision for Loan Losses 419 441 ----- ----- Noninterest Income - ------------------ Processing Fees Securities 159 98 Other 50 44 ----- ----- 209 142 Trust and Investment Fees 37 32 Service Charges and Fees 106 113 Securities Gains 33 7 Other 35 25 ----- ----- Total Noninterest Income 420 319 ----- ----- Noninterest Expense - ------------------- Salaries and Employee Benefits 247 222 Net Occupancy 44 44 Furniture and Equipment 22 22 Other 131 128 ----- ----- Total Noninterest Expense 444 416 ----- ----- Income Before Income Taxes 395 344 Income Taxes 152 131 ----- ----- Net Income $ 243 $ 213 - ---------- ===== ===== Net Income Available to Common Shareholders $ 241 $ 210 - ----------------------- ===== ===== Per Common Share Data: - ---------------------- Primary Earnings $1.16 $1.12 Fully Diluted Earnings 1.13 1.06 Cash Dividends 0.40 0.32 Fully Diluted Shares Outstanding 214 201 - ------------------------------------------------------------------------------ See accompanying Notes to Consolidated Financial Statements 5 - ------------------------------------------------------------------------------- THE BANK OF NEW YORK COMPANY, INC. Consolidated Statement of Changes in Shareholders' Equity (Unaudited) For the three months ended March 31, 1996 (In millions) Class A Pre- Pre- Addi- Securities Treas- Loan ferred ferred Common tional Retained Valuation ury to Stock Stock Stock Capital Earnings Allowance Stock ESOP ------ ------- ------ ------- -------- ---------- ------ ---- Balance, January 1, 1996 $111 $ 2 $1,531 $1,087 $2,689 $ 58 $228 $18 Changes: Net Income 243 Cash Dividends Common Stock (79) Preferred Stock (2) Conversion of Debentures 7 12 Issuance of Common Stock 6 17 (35) Treasury Stock Acquired 198 Net Unrealized Loss on Securities Available for Sale (29) ---- --- ------ ------ ------ ---- ---- --- Balance, March 31, 1996 $111 $ 2 $1,544 $1,116 $2,851 $ 29 $391 $18 ==== === ====== ====== ====== ==== ==== === - ------------------------------------------------------------------------------- See accompanying Notes to Consolidated Financial Statements 6 - ------------------------------------------------------------------------------- THE BANK OF NEW YORK COMPANY, INC. Consolidated Statements of Cash Flows (In millions) (Unaudited) For the three months ended March 31, 1996 1995 ---- ---- Operating Activities Net Income $ 243 $ 213 Adjustments to Determine Net Cash Provided (Used) by Operating Activities Provision for Losses on Loans and Other Real Estate 97 51 Depreciation and Amortization 57 48 Deferred Income Taxes 54 64 Securities Gains (33) (7) Change in Trading Assets 34 (695) Change in Accruals and Other, Net (341) 55 ------- ------- Net Cash Provided (Used) by Operating Activities 111 (271) ------- ------- Investing Activities Change in Interest-Bearing Deposits in Banks (174) 69 Purchases of Securities Held-to-Maturity (80) (78) Maturities of Securities Held-to-Maturity 64 159 Purchases of Securities Available-for-Sale (593) (38) Sales of Securities Available-for-Sale 197 15 Maturities of Securities Available-for-Sale 70 7 Net Principal Disbursed on Loans to Customers (1,097) (1,377) Sales of Loans 55 86 Sales of Other Real Estate 44 3 Change in Federal Funds Sold and Securities Purchased Under Resale Agreements (49) (392) Purchases of Premises and Equipment (14) (9) Acquisitions, Net of Cash Acquired (296) 67 Other, Net (30) (44) ------- ------- Net Cash Used by Investing Activities (1,903) (1,532) ------- ------- Financing Activities Change in Deposits - 594 Change in Federal Funds Purchased and Securities Sold Under Repurchase Agreements (844) 447 Change in Other Borrowed Funds 681 1,620 Proceeds from the Issuance of Long-Term Debt 100 - Repayments of Long-Term Debt - (2) Issuance of Common Stock 58 42 Treasury Stock Acquired (198) (55) Cash Dividends Paid (81) (63) ------- ------- Net Cash Provided (Used) by Financing Activities (284) 2,583 ------- ------- Effect of Exchange Rate Changes on Cash (1) 40 ------- ------- Change in Cash and Due From Banks (2,077) 820 Cash and Due from Banks at Beginning of Period 4,711 2,903 ------- ------- Cash and Due from Banks at End of Period $ 2,634 $ 3,723 ======= ======= - ----------------------------------------------------------------------------- Supplemental Disclosure of Cash Flow Information Cash Paid During the Year for: Interest $ 429 $ 412 Income Taxes 24 5 Noncash Investing Activity (Primarily Foreclosure of Real Estate) 30 5 - ----------------------------------------------------------------------------- See accompanying Notes to Consolidated Financial Statements 7 THE BANK OF NEW YORK COMPANY, INC. Notes to Consolidated Financial Statements 1. General ------- The accounting and reporting policies of The Bank of New York Company, Inc. (the Company), a bank holding company, and its subsidiaries, conform with generally accepted accounting principles and general practice within the banking industry. Such policies, except as noted below, are consistent with those applied in the preparation of the Company's annual financial statements. The accompanying financial statements are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of financial position, results of operations and cash flows for the interim periods have been made. Such adjustments are of a normal recurring nature. 2. Allowance for Loan Losses ------------------------- Transactions in the allowance for loan losses are summarized as follows: Three months ended March 31, (In millions) 1996 1995 ---- ----- Balance, Beginning of Period $ 756 $ 792 Charge-offs (124) (107) Recoveries 20 11 ----- ----- Net Charge-Offs (104) (96) Acquisition - 1 Credit Card Securitization - 2 Provision 90 50 ----- ----- Balance, End of Period $ 742 $ 749 ===== ===== 3. Commitments and Contingent Liabilities -------------------------------------- In the ordinary course of business, there are various claims pending against the Company and its subsidiaries. In the opinion of management, liabilities arising from such claims, if any, would not have a material effect upon the Company's consolidated financial statements. 8 4. Acquisitions ------------ In the first quarter of 1996, the Company made acquisitions related to its factoring and unit investment trust businesses. The pro forma effect of these acquisitions is not material. 5. Capital Resources ----------------- In 1995, the Company announced a plan to buy back through the end of 1996 up to 16 million shares of its common stock. As of April 30, 1996, 8.3 million shares had been repurchased. 9 Management's Discussion and Analysis of Financial Condition - ----------------------------------------------------------- and Results of Operations - ------------------------- The Company reported record first quarter net income of $243 million, up 14% from $213 million earned in the same period last year. First quarter fully diluted earnings per share were a record $1.13, a 7% increase over the $1.06 earned in the first quarter of 1995. The dilutive effect of stock warrants, which was partially offset by the Company's stock buyback program, reduced earnings per share for the first quarter of 1996 by 5 cents. Net interest income, on a taxable equivalent basis, totaled $517 million in the first quarter, a $15 million or 3% increase over the first quarter of last year reflecting modest loan growth. Revenues from the Company's securities processing business grew 62% over the first quarter of 1995. While this increase was largely due to the acquisitions of the corporate trust business of NationsBank and the custody businesses of BankAmerica and J.P. Morgan, all areas of securities processing continued to show strong internal growth. Internally generated growth, which was in excess of 14%, was led by ADRs, custody, corporate trust, and government clearance. Amortization of goodwill associated with the Company's securities processing acquisitions reduced earnings in the first quarter of 1996 by 2 cents per share. The Company completed conversion activities associated with the BankAmerica custody acquisition during the first quarter of 1996. The J.P. Morgan conversion was begun and is progressing on schedule. Fees from other processing, which includes funds transfer, cash management, and trade finance, grew 13% over last year's first quarter. The largest contributor to this increase was fees from funds transfer, which were up 28%. Fees from trust and investment grew 15% in the first quarter of 1996 reflecting new business and generally strong markets. As expected, the acquisition of Midlantic's factoring business in March 1996 immediately added to earnings in the first quarter. Notwithstanding moderate growth in outstandings, earnings from the Company's credit card business declined slightly in the first quarter of 1996 compared with 1995's first quarter, reflecting higher charge-offs. In the first quarter of 1996, charge-offs were $96 million compared with $81 million in the fourth quarter of 1995 and $61 million a year ago. Return on average assets for the first quarter was a record 1.79% versus 1.77% in the fourth quarter and 1.65% in the first quarter of 1995. Return on average common equity was 18.86% in the first quarter of 1996, compared with 18.87% in the fourth quarter of 1995 and 19.98% in the first quarter of last year. 10 CAPITAL - ------- The Company's estimated Tier 1 capital and Total capital ratios were 7.85% and 12.63% at March 31, 1996 compared with 8.42% and 13.08% at December 31, 1995, and 8.56% and 13.31% at March 31, 1995. Tangible common equity as a percent of total assets was 7.58% at March 31, 1996 compared with 8.00% at December 31, 1995 and 7.36% one year ago. The leverage ratio was 7.94% at March 31, 1996 compared with 8.46% at December 31, 1995 and 8.06% one year ago. The decline in the capital ratios reflects the goodwill associated with the securities processing acquisitions and the repurchase of $198 million of common stock in the first quarter of 1996. NET INTEREST INCOME - ------------------- 1st 4th 1st Quarter Quarter Quarter ------- ------- ------- (In millions) 1996 1995 1995 --------------------------- Net Interest Income $517 $531 $502 Net Interest Rate Spread 3.43% 3.41% 3.41% Net Yield on Interest- Earning Assets 4.46 4.58 4.49 On a taxable equivalent basis, net interest income amounted to $517 million in the first quarter of 1996, compared with $502 million in the same period of 1995, an increase of 3%. The net interest rate spread was 3.43% in the first quarter of 1996, up 2 basis points from 3.41% in the fourth quarter of 1995 and one year ago. The net yield on interest-earning assets was 4.46% compared with 4.58% in the fourth quarter of 1995 and 4.49% in last year's first quarter. Interest lost on loans on nonaccrual status at March 31, 1996 and 1995 reduced net income by $5 million for the three months ended March 31, 1996 and 1995. 11 NONINTEREST INCOME - ------------------ 1st Quarter ----------- (In millions) 1996 1995 ---------------- Processing Fees Securities $159 $ 98 Other 50 44 ---- ---- 209 142 Trust and Investment Fees 37 32 Service Charges and Fees 106 113 Securities Gains 33 7 Foreign Exchange and Other Trading Activities 10 12 Other 25 13 ---- ---- Total Noninterest Income $420 $319 ==== ==== Securities processing fees increased 62% to $159 million compared to $98 million in the first quarter of 1995. Acquisitions and strong internal growth in all areas contributed to the increase in revenue. Fees from other processing increased 13% over the first quarter of last year. Service charges and fees declined $7 million primarily due to lower syndication fees and the absence of mortgage servicing fees related to the Company's ARCS mortgage servicing portfolio, which was sold in the second quarter of 1995. The Company reported $33 million of securities gains in the first quarter of 1996 compared with $7 million last year reflecting sales of securities held in the Company's bond and bank stock portfolios as well as returns on certain limited partnership interests. Revenues from foreign exchange and other trading activities were disappointing, declining 17% to $10 million. Other income increased significantly as a result of strong performance by the Company's offshore banking subsidiaries. NONINTEREST EXPENSE AND INCOME TAXES - ------------------------------------ Total noninterest expense for the quarter was $444 million, up 7% from $416 million in the same period last year. The rise in expenses in the first quarter was principally due to salary and other expenses related to acquisitions of securities processing businesses from J.P. Morgan, BankAmerica, and NationsBank as well as the acquisition of the Putnam Trust Company. Despite the increases in noninterest expenses, the efficiency ratio for the first quarter was 49.4% compared with 49.5% reported in the fourth quarter of 1995 and substantially improved from 51.0% one year ago. The effective tax rate for the first quarter of 1996 was 38.4% compared with 38.2% for the first quarter of 1995. 12 NONPERFORMING ASSETS - -------------------- Change 1Q 1996 vs (Dollars in millions) 3/31/96 12/31/95 4Q 1995 ------------------------------------- Loans: Commercial Real Estate $ 11 $ 42 $(31) Other Commercial 101 75 26 Foreign 19 20 (1) LDC 21 21 - Community Banking 78 67 11 ---- ---- Total Loans 230 225 5 Other Real Estate 58 72 (14) ---- ---- Total $288 $297 (9) ==== ==== Nonperforming Assets Ratio 0.7% 0.8% Allowance/Nonperforming Loans 322.4 335.5 Allowance/Nonperforming Assets 258.0 254.4 Nonperforming assets totaled $288 million at March 31, 1996, compared with $297 million at December 31, 1995, a decrease of $9 million or 3%. This was the nineteenth consecutive quarter of nonperforming asset decreases. The largest decline was in real estate nonperforming assets due to the sale of a large office complex in California. The increase in other commercial loans reflects the addition of several smaller loans. At March 31, 1996, impaired loans (nonaccrual loans over $1 million) aggregated $167 million, of which $132 million exceeded their fair value by $27 million. Impaired loans at March 31, 1995 totaled $209 million, of which $170 million exceeded their fair value by $41 million. For the first quarter of 1996 and 1995, the average amount of impaired loans was $164 million and $213 million and interest income (cash received) recognized on them was $92 thousand and $1 million. 13 LOAN LOSS PROVISION AND NET CHARGE-OFFS - --------------------------------------- 1st 4th 1st Quarter Quarter Quarter ------- ------- ------- (In millions) 1996 1995 1995 ----------------------------- Provision $ 90 $105 $ 50 ---- ---- ---- Net Charge-offs: Commercial Real Estate (3) - (4) Other Commercial 1 (4) (4) Credit Card (96) (81) (61) Other Consumer (2) (2) (2) Foreign (1) - (11) Other (3) (8) (3) ---- ---- ---- Total (104) (95) (85) Acquisition - - 1 Credit Card Securitization - - 2 ---- ---- ---- Change in Regular Allowance $(14) $ 10 $(32) ==== ==== ==== Other Real Estate Expenses (Recovery) $ (2) $ - $ 1 The allowance for loan losses was $742 million, or 1.91% of loans at March 31, 1996, compared with $756 million, or 2.01% of loans at December 31, 1995. 14 SECTOR PROFITABILITY - -------------------- The Company has an internal information system used for management purposes that produces sector performance data for Trust, and Securities and Other Processing, Retail Banking, Corporate Banking, and Other Sectors. A set of measurement principles has been developed to help correlate reported results of the sectors with their economic performance. Based on this system, the sectors contributed to the Company's profitability for the first quarter as follows: Trust, and Securities and Other Retail Corporate Processing Banking Banking ---------- ---------- ---------- (In millions) 1996 1995 1996 1995 1996 1995 ---- ---- ---- ---- ---- ---- Net Interest Income on a Taxable Equivalent Basis $ 33 $ 36 $330 $305 $126 $133 Provision for Loan Losses - - 101 66 3 15 Noninterest Income 272 201 42 39 67 69 Noninterest Expense 193 151 164 173 56 58 ---- ---- ---- ---- ---- ---- Income before Taxes $112 $ 86 $107 $105 $134 $129 ==== ==== ==== ==== ==== ==== Other Total ---------- ---------- (In millions) 1996 1995 1996 1995 ---- ---- ---- ---- Net Interest Income on a Taxable Equivalent Basis $ 28 $ 28 $517 $502 Provision for Loan Losses (14) (31) 90 50 Noninterest Income 39 10 420 319 Noninterest Expense 31 34 444 416 ---- ---- ---- ---- Income before Taxes $ 50 $ 35 $403 $355 ==== ==== ==== ==== In the Trust, and Securities and Other Processing Sector, securities processing fees increased 62% to $159 million compared to $98 million in the first quarter of 1995. Acquisitions and strong internal growth contributed to the increase in revenue. Internally generated growth, which was in excess of 14%, was led by ADRs, custody, corporate trust, and government clearance. Fee revenue from issuer services, custody and securities industry products were $53 million, $60 million, and $46 million in the first quarter of 1996 compared with $35 million, $30 million, and $33 million in 1995. Fees from other processing increased 13% over the first quarter of last year. The largest contributor to this increase was fees from funds transfer, which were up 28%. Fees from trust and investment grew 15% in the first quarter of 1996 reflecting new business and generally strong markets. The rise in noninterest expense was principally due to salary and other expenses related to acquisitions of securities processing businesses from J.P. Morgan, BankAmerica and NationsBank. The increase in net interest income in the Retail Banking Sector principally reflects growth in the Company's credit card business compared to last year. Managed outstandings were up 16% to $8.8 billion from $7.6 billion and the number of card accounts increased by 18% to 6.7 million from 5.7 million one year ago. The increases are primarily attributable to the Company's Consumers Edge (registered trademark) card. Initial responses to the Company's co-branded cards with Toys-R-Us (registered trademark) and Stop & Shop (registered trademark) continue to exceed expectations. Credit card interchange income increased 18% to $20 million in the first quarter of 1996 from $17 million in the same period last year. Notwithstanding this growth in outstandings, earnings from the Company's credit card business declined slightly in the first quarter of 1996 compared with 1995's first quarter, reflecting higher charge-offs. In the first 15 quarter of 1996, net credit card charge-offs as a percentage of average managed outstandings were 4.48% compared with 3.91% in the fourth quarter of 1995 and 3.31% in the first quarter of 1995. Credit card accounts past due over 30 days were 4.32% of managed outstandings at the end of the first quarter of 1996 compared with 4.50% at the end of the fourth quarter of 1995 and 3.53% at the end of the first quarter of 1995. Noninterest income for the first quarter of 1995 includes servicing fees related to the Company's ARCS mortgage servicing portfolio, which was sold in the second quarter of 1995. Lower FDIC insurance premiums contributed to the decline in noninterest expense in the Retail Banking Sector. Net interest income declined in the Corporate Banking Sector due to a decline in the interest rate spread. Noninterest income benefitted from strong performance in the Company's offshore banking subsidiaries, however, syndication fees were lower in the first quarter of 1996 compared to last year's first quarter. The Other Sector reflects a credit for the difference between the provision for loan losses and that allocated to the sectors. Securities gains and foreign exchange and other trading activity increased $24 million from the first quarter of 1995. 16 THE BANK OF NEW YORK COMPANY, INC. Average Balances and Rates on a Taxable Equivalent Basis (Dollars in millions) For the three months For the three months ended March 31, 1996 ended March 31, 1995 ------------------------ ------------------------- Average Average Average Average Balance Interest Rate Balance Interest Rate ------- -------- ------- ------- -------- ------ ASSETS - ------ Interest-Bearing Deposits in Banks (primarily foreign) $ 1,577 $ 22 5.68% $ 1,907 $ 30 6.31% Federal Funds Sold and Securities Purchased Under Resale Agreements 2,175 29 5.39 4,598 66 5.86 Loans Domestic Offices 26,119 610 9.40 23,101 575 10.10 Foreign Offices 11,636 198 6.81 10,554 192 7.36 ------- ------ ------- ------ Total Loans 37,755 808 8.60 33,655 767 9.24 ------- ------ ------- ------ Securities U.S. Government Obligations 2,874 40 5.65 2,871 41 5.82 U.S. Government Agency Obligations 452 7 6.32 318 5 6.33 Obligations of States and Political Subdivisions 635 14 9.09 713 19 10.71 Other Securities, including Trading Securities 1,201 16 5.46 1,232 19 6.24 ------- ------ ------- ------ Total Securities 5,162 77 6.09 5,134 84 6.63 ------- ------ ------- ------ Total Interest-Earning Assets 46,669 936 8.07% 45,294 947 8.48% ------ ------ Allowance for Loan Losses (725) (787) Cash and Due from Banks 3,148 2,658 Other Assets 5,458 5,118 ------- ------- TOTAL ASSETS $54,550 $52,283 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ Interest-Bearing Deposits Money Market Rate Accounts $ 4,003 43 4.34% $ 3,414 36 4.26% Savings 8,221 58 2.84 7,692 57 2.99 Certificates of Deposit $100,000 & Over 1,120 15 5.42 1,863 26 5.76 Other Time Deposits 2,598 31 4.87 2,489 31 5.07 Foreign Offices 11,510 144 5.01 11,412 158 5.61 ------- ------ ------- ------ Total Interest-Bearing Deposits 27,452 291 4.27 26,870 308 4.65 Federal Funds Purchased and Securities Sold Under Repurchase Agreements 3,874 51 5.34 2,277 32 5.76 Other Borrowed Funds 3,146 44 5.64 4,691 72 6.25 Long-Term Debt 1,881 33 6.94 1,781 33 7.36 ------- ------ ------- ------ Total Interest-Bearing Liabilities 36,353 419 4.64% 35,619 445 5.07% ------ ------ Noninterest-Bearing Deposits 9,550 8,757 Other Liabilities 3,401 3,527 Preferred Stock 113 117 Common Shareholders' Equity 5,133 4,263 ------- ------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $54,550 $52,283 ======= ======= Net Interest Earnings and Interest Rate Spread $ 517 3.43% $ 502 3.41% ====== ====== Net Yield on Interest- Earning Assets 4.46% 4.49% ==== ==== 17 PART 2. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K - ----------------------------------------- (a) The exhibits filed as part of this report are as follows: Exhibit 11 - Statement Re: Computation of Earnings Per Common Share for the Three Months Ended March 31, 1996 and 1995. Exhibit 12 - Statement Re: Ratio of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends for the Three Months Ended March 31, 1996 and 1995. Exhibit 27 - Statement Re: Financial Data Schedule containing selected financial data at March 31, 1996 and for the Three Months Ended March 31, 1996. (b) The Company filed the following reports on Form 8-K since December 31, 1995: The Company filed a Form 8-K Current Report (Items 5 and 7), dated January 16, 1996, which report included unaudited interim financial information and accompanying discussion for the fourth quarter of 1995 contained in the Company's press release dated January 16, 1996. The Company filed a Form 8-K Current Report (Item 4), as amended, dated March 12, 1996, which report included the Company's disclosure statement with respect to dismissing Deloitte & Touche LLP and appointing Ernst & Young LLP as the Company's independent accountants. The Company filed a Form 8-K Current Report (Items 5 and 7), dated April 11, 1996, which report included unaudited interim financial information and accompanying discussion for the first quarter of 1996 contained in the Company's press release dated April 11, 1996. 18 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 thereunto duly authorized. THE BANK OF NEW YORK COMPANY, INC. ---------------------------------- (Registrant) Date: May 13, 1996 \s\ Deno D. Papageorge ---------------------------- Deno D. Papageorge, Chief Financial Officer 19 EXHIBIT INDEX -------------- Exhibit Description - ------- ----------- 11 Computation of Earnings Per Common Share for the Three Months Ended March 31, 1996 and 1995. 12 Ratio of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends for the Three Months Ended March 31, 1996 and 1995. 27 Financial Data Schedule containing selected financial data at March 31, 1996 and for the Three Months Ended March 31, 1996. EX-11 2 EXHIBIT 11 EXHIBIT 11 THE BANK OF NEW YORK COMPANY, INC. Computation of Earnings Per Common Share (In millions, except per share amounts) For the Three Months Ended March 31, 1996 1995 ---- ---- Weighted Average Number of Shares 197 188 Shares Assumed to be issued on Conversion: Warrants 11 - ----- ----- Weighted Average Number of Shares of Common Stock for Primary Computation 208 188 Shares Assumed to be Issued on Conversion: Debentures 5 12 Warrants 1 - Cumulative Preferred Stock - 1 ----- ----- Weighted Average Number of Shares of Common Stock Assuming Full Dilution 214 201 ===== ===== Net Income $ 243 $ 213 Dividend Requirements on Preferred Stock 2 3 ----- ----- Net Income Available to Common Shareholders 241 210 Interest on Convertible Debentures, Net of Tax 1 2 ----- ----- Net Income Available to Common Shareholders, Assuming Full Dilution $ 242 $ 212 ===== ===== Earnings Per Share: Primary $1.16 $1.12 Fully Diluted 1.13 1.06 EX-12 3 EXHIBIT 12 EXHIBIT 12 THE BANK OF NEW YORK COMPANY, INC. Ratios of Earnings to Fixed Charges and Ratios of Earnings to Combined Fixed Charges and Preferred Stock Dividends (Dollars in Millions) For the three months ended March 31, 1996 1995 EARNINGS ---- ---- - -------- Income Before Income Taxes $395 $344 Fixed Charges, Excluding Interest on Deposits 136 145 ---- ---- Income Before Income Taxes and Fixed Charges, Excluding Interest on Deposits 531 489 Interest on Deposits 291 308 ---- ---- Income Before Income Taxes and Fixed Charges, Including Interest on Deposits $822 $797 ==== ==== FIXED CHARGES - ------------- Interest Expense, Excluding Interest on Deposits $129 $137 One-Third Net Rental Expense* 7 8 ---- ---- Total Fixed Charges, Excluding Interest on Deposits 136 145 Interest on Deposits 291 308 ---- ---- Total Fixed Charges, Including Interest on Deposits $427 $453 ==== ==== PREFERRED STOCK DIVIDENDS, PRE-TAX BASIS $ 4 $ 4 - ---------------------------------------- ==== ==== EARNINGS TO FIXED CHARGES RATIOS - -------------------------------- Excluding Interest on Deposits 3.90x 3.37x Including Interest on Deposits 1.93 1.76 EARNINGS TO COMBINED FIXED CHARGES & PREFERRED STOCK DIVIDENDS RATIOS - ---------------------------------- Excluding Interest on Deposits 3.79 3.28 Including Interest on Deposits 1.91 1.74 * The proportion deemed representative of the interest factor. EX-27 4 EXHIBIT 27
9 This schedule contains summary financial information which is qualified entirely by reference to The Bank of New York Company, Inc.'s Form 10-Q for the period ended March 31, 1996 0000009626 THE BANK OF NEW YORK COMPANY, INC. 1,000,000 3-MOS DEC-31-1996 JAN-1-1996 MAR-31-1996 2,634 1,152 985 728 3,915 1,262 1,197 38,555 742 53,317 35,895 7,476 2,155 1,930 0 113 1,544 3,587 53,317 806 67 55 928 291 419 509 90 33 444 395 243 0 0 243 1.16 1.13 4.46 230 247 0 0 756 124 20 742 661 81 0
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