-----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, K8LFdvyx1Ak01vSxNjHhOekQsAhIcDZvLFvf0/B8ZS5cq2WuRu3rFDpH8d9ILOAn pB0aM5HR2U6hMfsLtXf0xg== 0000009626-97-000009.txt : 19970815 0000009626-97-000009.hdr.sgml : 19970815 ACCESSION NUMBER: 0000009626-97-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970814 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: 97663658 BUSINESS ADDRESS: STREET 1: 48 WALL ST 15TH FL CITY: NEW YORK STATE: NY ZIP: 10296 BUSINESS PHONE: 2124951784 10-Q 1 SECOND QTR 1997 10-Q 1 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 June 30, 1997 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 379,492,344 shares as of July 31, 1997. 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 June 30, 1997 and December 31, 1996 3 Consolidated Statements of Income For the Three Months and Six Months Ended June 30, 1997 and 1996 4 Consolidated Statement of Changes In Shareholders' Equity For the Six Months Ended June 30, 1997 5 Consolidated Statements of Cash Flows For the Six Months Ended June 30, 1997 and 1996 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 4. Submissions of Matters to Vote of Security Holders 21 Item 6. Exhibits and Reports on Form 8-K 21 SIGNATURE 23 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)
June 30, December 31, 1997 1996 ---- ---- (Unaudited) (Note) Assets - ------ Cash and Due from Banks $ 7,782 $ 6,032 Interest-Bearing Deposits in Banks 2,226 1,387 Securities: Held-to-Maturity (fair value of $1,060 in 1997 and $1,127 in 1996) 1,091 1,170 Available-for-Sale 3,919 3,883 ------- ------- Total Securities 5,010 5,053 Trading Assets at Fair Value 1,646 1,547 Federal Funds Sold and Securities Purchased Under Resale Agreements 650 562 Loans (less allowance for loan losses of $832 in 1997 and $901 in 1996) 38,192 36,105 Premises and Equipment 857 875 Due from Customers on Acceptances 1,358 985 Accrued Interest Receivable 295 315 Other Assets 3,226 2,904 ------- ------- Total Assets $61,242 $55,765 ======= ======= Liabilities and Shareholders' Equity - ------------------------------------ Deposits Noninterest-Bearing (principally domestic offices) $11,951 $11,812 Interest-Bearing Domestic Offices 16,183 15,268 Foreign Offices 15,680 12,263 ------- ------- Total Deposits 43,814 39,343 Federal Funds Purchased and Securities Sold Under Repurchase Agreements 1,573 1,737 Other Borrowed Funds 4,694 4,144 Acceptances Outstanding 1,377 1,015 Accrued Taxes and Other Expenses 1,477 1,417 Accrued Interest Payable 144 167 Other Liabilities 425 399 Long-Term Debt 1,801 1,816 ------- ------- Total Liabilities 55,305 50,038 ------- ------- Guaranteed Preferred Beneficial Interests in the Company's Junior Subordinated Deferrable Interest Debentures 1,000 600 ------- ------- 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 24,344 shares in 1997 and 40,429 shares in 1996 1 1 Common Stock-par value $7.50 per share, authorized 800,000,000 shares, issued 454,221,461 shares in 1997 and 444,317,786 shares in 1996 3,407 3,332 Additional Capital 409 344 Retained Earnings 3,139 2,798 Securities Valuation Allowance 150 82 ------- ------- 7,217 6,668 Less: Treasury Stock (75,849,342 shares in 1997 and 57,849,845 shares in 1996), at cost 2,263 1,524 Loan to ESOP (1,195,719 shares), at cost 17 17 ------- ------- Total Shareholders' Equity 4,937 5,127 ------- ------- Total Liabilities and Shareholders' Equity $61,242 $55,765 ======= ======= - ----------------------------------------------------------------------------- Note: The balance sheet at December 31, 1996 has been derived from the audited financial statements at that date. 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 For the six months ended months ended June 30, June 30, 1997 1996 1997 1996 ---- ---- ---- ---- Interest Income - --------------- Loans $ 765 $ 784 $1,511 $1,594 Securities Taxable 58 62 119 120 Exempt from Federal Income Taxes 8 9 18 18 ----- ----- ------ ------ 66 71 137 138 Deposits in Banks 39 21 73 43 Federal Funds Sold and Securities Purchased Under Resale Agreements 35 32 68 61 Trading Assets 7 5 10 9 ----- ----- ------ ------ Total Interest Income 912 913 1,799 1,845 ----- ----- ------ ------ Interest Expense - ---------------- Deposits 328 286 629 578 Federal Funds Purchased and Securities Sold Under Repurchase Agreements 30 48 58 99 Other Borrowed Funds 42 55 81 99 Long-Term Debt 31 33 62 65 ----- ----- ------ ------ Total Interest Expense 431 422 830 841 ----- ----- ------ ------ Net Interest Income 481 491 969 1,004 - ------------------- Provision for Loan Losses 60 425 120 515 ----- ----- ------ ------ Net Interest Income After Provision for Loan Losses 421 66 849 489 ----- ----- ------ ------ Noninterest Income - ------------------ Processing Fees Securities 190 161 375 320 Other 59 52 114 103 ----- ----- ------ ------ 249 213 489 423 Trust and Investment Fees 44 40 87 77 Service Charges and Fees 94 115 187 215 Securities Gains 33 30 40 63 Other 69 444 141 478 ----- ----- ------ ------ Total Noninterest Income 489 842 944 1,256 ----- ----- ------ ------ Noninterest Expense - ------------------- Salaries and Employee Benefits 263 249 520 496 Net Occupancy 42 42 84 85 Furniture and Equipment 24 23 48 46 Other 136 142 259 272 ----- ----- ------ ------ Total Noninterest Expense 465 456 911 899 ----- ----- ------ ------ Income Before Income Taxes 445 452 882 846 Income Taxes 162 174 322 325 Distribution on Trust Preferred Securities 14 - 26 - ----- ----- ------ ------ Net Income $ 269 $ 278 $ 534 $ 521 - ---------- ===== ===== ====== ====== Net Income Available to - ----------------------- Common Shareholders $ 266 $ 276 $ 529 $ 516 ------------------- ===== ===== ====== ===== Per Common Share Data: - ---------------------- Primary Earnings $0.67 $0.68 $1.32 $1.25 Fully Diluted Earnings 0.67 0.66 1.31 1.23 Cash Dividends 0.24 0.20 0.48 0.40 Fully Diluted Shares Outstanding 399 418 402 423 - ----------------------------------------------------------------------------- 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 six months ended June 30, 1997 (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, 1997 $111 $ 1 $3,332 $344 $2,798 $ 82 $1,524 $17 Changes: Net Income 534 Cash Dividends Common Stock (186) Preferred Stock (5) Exercise of Warrants 51 53 Issuance of Common Stock 24 12 (34) Treasury Stock Acquired 773 Net Unrealized Gain on Secur- ities Avail- able for Sale 68 Change in Cumulative Foreign Currency Translation Adjustment (2) ---- --- ------ ---- ------ ---- ------ --- Balance, June 30, 1997 $111 $ 1 $3,407 $409 $3,139 $150 $2,263 $17 ==== === ====== ==== ====== ==== ====== === - ------------------------------------------------------------------------------- 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 six months ended June 30, 1997 1996 ---- ---- Operating Activities Net Income $ 534 $ 521 Adjustments to Determine Net Cash Provided (Used) by Operating Activities Provision for Losses on Loans and Other Real Estate 121 524 Gain on Sale of Loans - (400) Depreciation and Amortization 102 116 Deferred Income Taxes 108 16 Securities Gains (40) (63) Change in Trading Activities (254) (73) Change in Accruals and Other, Net (104) (322) ------- ------- Net Cash Provided by Operating Activities 467 319 ------- ------- Investing Activities Change in Interest-Bearing Deposits in Banks (893) (24) Purchases of Securities Held-to-Maturity (131) (146) Maturities of Securities Held-to-Maturity 202 156 Purchases of Securities Available-for-Sale (383) (796) Sales of Securities Available-for-Sale 198 237 Maturities of Securities Available-for-Sale 281 170 Net Principal Disbursed on Loans to Customers (3,433) (1,697) Sales of Loans 1,054 3,884 Sales of Other Real Estate 6 46 Change in Federal Funds Sold and Securities Purchased Under Resale Agreements (88) (382) Purchases of Premises and Equipment (17) (23) Proceeds from the Sale of Premises and Equipment - 2 Acquisitions, Net of Cash Acquired (133) (321) Other, Net (36) (76) ------- ------- Net Cash Provided (Used) by Investing Activities (3,373) 1,030 ------- ------- Financing Activities Change in Deposits 4,559 (408) Change in Federal Funds Purchased and Securities Sold Under Repurchase Agreements (164) (2,177) Change in Other Borrowed Funds 673 928 Proceeds from the Issuance of Tax Deductible Preferred Securities 400 - Proceeds from the Issuance of Long-Term Debt - 100 Repayments of Long-Term Debt (16) (17) Issuance of Common Stock 173 71 Treasury Stock Acquired (773) (562) Cash Dividends Paid (191) (162) ------- ------- Net Cash Provided (Used) by Financing Activities 4,661 (2,227) ------- ------- Effect of Exchange Rate Changes on Cash (5) 12 ------- ------- Change in Cash and Due From Banks 1,750 (866) Cash and Due from Banks at Beginning of Period 6,032 4,711 ------- ------- Cash and Due from Banks at End of Period $ 7,782 $ 3,845 ======= ======= - ----------------------------------------------------------------------------- Supplemental Disclosure of Cash Flow Information Cash Paid During the Year for: Interest $ 865 $ 854 Income Taxes 209 231 Noncash Investing Activity (Primarily Foreclosure of Real Estate) 7 47 - ----------------------------------------------------------------------------- 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 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. The financial statements reflect a 2-for-1 common stock split effective July 19, 1996. 2. Allowance for Loan Losses ------------------------- Transactions in the allowance for loan losses are summarized as follows: Six months ended June 30, (In millions) 1997 1996 ----- ----- Balance, Beginning of Period $ 901 $ 756 Charge-offs (220) (334) Recoveries 31 45 ----- ----- Net Charge-Offs (189) (289) Provision 120 515 ----- ----- Balance, End of Period $ 832 $ 982 ===== ===== 3. Capital Transactions -------------------- In 1996, the Company announced a plan to buy back through the end of 1997 up to 30 million shares of its common stock. As of July 31, 1997, 20.8 million shares had been repurchased at a cost of $841 million. In the second quarter of 1997, the Company issued $400 million of 7.80% trust preferred securities. 8 During the second quarter of 1997, warrant holders converted 0.4 million warrants into 1.6 million common shares, providing the Company with $25 million in capital. In July 1997, warrant holders converted an additional 0.6 million warrants into 2.4 million common shares, providing the Company with $37 million in capital. 4. New Accounting Pronouncement ---------------------------- In the fourth quarter of 1997, the Company will calculate earnings per share (EPS) based on a new accounting pronouncement. The presentation of "primary" and "fully diluted" EPS will be replaced with "basic" and "diluted" EPS. Basic and diluted EPS for the three and six months ended June 30, 1997, for each previously reported period in 1996, and for the years 1993 to 1996 are presented in Exhibit 11.1. 5. 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. 9 Management's Discussion and Analysis of Financial Condition - ----------------------------------------------------------- and Results of Operations - ------------------------- The Company's reported second quarter fully diluted earnings per share were a record 67 cents, up 14% from the 59 cents earned on a normalized basis in the second quarter of 1996. Second quarter net income was $269 million, up 9% from the $248 million earned on a normalized basis in the same period last year. In the second quarter of 1996, the Company reported a $400 million pre-tax gain on the sale of its Union credit card portfolio. In 1996 the Company also recorded a $350 million provision related to its credit card portfolio. The net after-tax effect of these two items was $31 million, or 7 cents per share. Earnings per share, on a fully diluted basis, were a record $1.31 for the first half of 1997, up 14% from the $1.15 earned on a normalized basis last year. Net income for the first six months was a record $534 million, an increase of 9% over last year's $491 million on a normalized basis. Return on average assets for the second quarter was 1.83% compared with 1.86% in the first quarter of 1997 and 1.82% on a normalized basis in the second quarter of 1996. Return on average common equity was a record, on a normalized basis, of 21.84% in the second quarter of 1997 compared with 20.90% in the first quarter of 1997 and 19.51% in the second quarter of 1996. Including the gain on the sale of the Union portfolio and the $350 million provision related to the credit card portfolio in 1996 net income was $278 million and $521 million for the second quarter and year-to-date periods while earnings per share were 66 cents and $1.23. On the same basis, for the second quarter of 1996 and for the first half of 1996 return on average assets was 2.05% and 1.92% while return on average common equity was 21.97% and 20.40%. Tangible fully diluted earnings per share (earnings before the amortization of goodwill and intangibles) were $0.72 per share in the second quarter of 1997 compared with $0.64 on a normalized basis in the second quarter of 1996. On the same basis, tangible return on average assets was 2.01% in the second quarter of 1997 compared with a normalized 2.02% in the second quarter of 1996; and tangible return on average common equity was 31.75% in the second quarter of 1997 compared with a normalized 27.59% in the second quarter of 1996. Revenues from the Company's securities processing businesses continued their strong broad based performance and were up 18% over the second quarter of 1996 to $190 million. ADR's, corporate trust, government securities clearance, mutual funds, and stock transfer were particularly strong. Fees from other processing, which includes funds transfer, cash management, and trade finance, grew 14% over last year's second quarter with strong growth in all areas. 10 Trust and investment continued to benefit from new business and strong markets in the second quarter of 1997 which combined to increase fees 11% to $44 million compared with $40 million last year. Net interest income, on a taxable equivalent basis, totaled $489 million in the second quarter down from $502 million in the second quarter of last year due to the sale of $4.3 billion in credit card receivables. Average fully diluted shares outstanding were 399 million for the quarter, down from the 405 million in the first quarter and from the 418 million in the prior year period. The decline from the first quarter and prior year was the result of the Company's stock buyback program. CAPITAL - ------- The Company's estimated Tier 1 capital and Total capital ratios remained strong at 7.83% and 11.99% at June 30, 1997 compared with 7.92% and 12.28% at March 31, 1997, and 7.98% and 12.93% at June 30, 1996. Tangible common equity as a percent of total assets was 5.88% at June 30, 1997 compared with 6.39% at March 31, 1997 and 7.51% one year ago. The decline in the tangible common equity ratio is primarily attributable to the repurchase of common stock and growth in assets. The leverage ratio was 8.04% at June 30, 1997 compared with 7.83% at March 31, 1997 and 7.76% one year ago. NET INTEREST INCOME - ------------------- 2nd 1st 2nd Quarter Quarter Quarter Year-to-date ------- ------- ------- ------------ (In millions) 1997 1997 1996 1997 1996 --------------------------- ---------------- Net Interest Income $489 $496 $502 $986 $1,024 Net Interest Rate Spread 3.12% 3.30% 3.34% 3.21% 3.41% Net Yield on Interest Earning Assets 4.08 4.24 4.28 4.16 4.39 Net interest income on a taxable equivalent basis declined to $489 million in the second quarter of 1997 from $496 million in the first quarter of 1997 and from $502 million in the second quarter of 1996. The net interest rate spread was 3.12% in the second quarter of 1997, compared with 3.30% in the first quarter of 1997 and 3.34% one year ago. The net yield on interest-earning assets was 4.08% compared with 4.24% in the first quarter of 1997 and 4.28% in last year's second quarter. For the first six months of 1997, net interest income, on a 11 taxable equivalent basis, amounted to $986 million compared with $1,024 million in the first half of 1996. The year-to-date net interest rate spread was 3.21% in 1997 compared with 3.41% in 1996, while the net yield on interest-earning assets was 4.16% in 1997 and 4.39% in 1996. The declines in net interest income, the spread, and the yield were primarily attributable to the sale of approximately $900 million of credit card receivables in the first quarter of 1997 and $3.4 billion of credit card receivables in June of 1996, partially offset by continued growth in the Company's corporate loan portfolio. Interest lost on loans on nonaccrual status at June 30, 1997 and 1996 reduced net interest income by $2 million and $3 million for the three months ended June 30, 1997 and 1996, and by $6 million and $8 million for the six months ended June 30, 1997 and 1996. NONINTEREST INCOME - ------------------ 2nd Quarter Year-to-date ----------- ------------ (In millions) 1997 1996 1997 1996 ----------------- ---------------- Processing Fees Securities $190 $161 $375 $ 320 Other 59 52 114 103 ---- ---- ---- ------ 249 213 489 423 Trust and Investment Fees 44 40 87 77 Service Charges and Fees 94 115 187 215 Securities Gains 33 30 40 63 Foreign Exchange and Other Trading Activities 25 21 52 31 Sale of Credit Card Portfolio - 400 - 400 Other 44 23 89 47 ---- ---- ---- ------ Total Noninterest Income $489 $842 $944 $1,256 ==== ==== ==== ====== Securities processing fees increased 18% to $190 million compared with $161 million in the second quarter of 1996. In the first half of 1997, securities processing fees were $375 million compared with $320 million in 1996. Strong internal growth in almost all areas drove the increase in revenue. The Company reported $33 million of securities gains in the second quarter of 1997 compared with $7 million in the first quarter and $30 million last year. Revenues from foreign exchange and other trading activities were $25 million compared with $27 million in the first quarter and $21 million in the second quarter of 1996. 12 TRADING ACTIVITIES - ------------------ The fair value and notional amounts of the Company's financial instruments held for trading purposes at June 30, 1997 are as follows: 2nd Quarter June 30, 1997 1997 - Average --------------------------- ------------------ Trading Account Trading Account Notional ------------------ ------------------ (In millions) Amount Assets Liabilities Assets Liabilities -------- ------ ----------- ------ ----------- Interest Rate Contracts: Futures and Forward Contracts $ 8,283 $ 1 $ - $ - $ - Swaps 9,624 89 79 94 87 Written Options 14,314 - 23 - 19 Purchased Options 16,759 23 - 40 - Foreign Exchange Contracts: Swaps 66 - - - - Written Options 44,737 - 523 - 1,221 Purchased Options 48,039 526 - 977 - Commitments to Purchase and Sell Foreign Exchange 58,876 669 649 661 706 Securities 338 43 408 20 ------ ------ ------ ------ Total Trading Account $1,646 $1,317 $2,180 $2,053 ====== ====== ====== ====== The Company expanded its offering of foreign exchange risk management products in 1996 as a result of an agreement it entered into with Susquehanna Trading, a firm with significant expertise in foreign exchange options. In 1997, the Company expanded its activities with Susquehanna Trading to include interest rate management products. Activity related to Susquehanna Trading is the primary reason for the increase in the notional amounts and trading account balances for foreign exchange option contracts and commitments to purchase and sell foreign exchange in 1997. The Company manages trading risk through a system of position limits, an earnings at risk methodology, stop loss advisory limits, and other market sensitivity measures. Earnings at risk is designed to measure with 95% certainty the Company's exposure to changes in earnings resulting from price fluctuations in the trading portfolio over a 24 hour period. The total trading portfolio's pre-tax earnings at risk averaged approximately $2.2 million for the second quarter of 1997, and ranged from approximately $1.5 million to $3.7 million. During the second quarter of 1997 daily trading revenue averaged approximately $0.4 million, and ranged from approximately a gain of $2.6 million to a loss of $1.6 million. During this period, total trading losses did not exceed the Company's total earnings at risk estimates on any given trading day. 13 NONINTEREST EXPENSE AND INCOME TAXES - ------------------------------------ Total noninterest expense for the quarter was $465 million, up only 2% from $456 million in the same period last year. Year-to-date noninterest expense was $911 million compared with $899 million in 1996. The efficiency ratio for the second quarter was 49.1% and 49.8% one year ago. For the first half of 1997 the efficiency ratio was 48.1% compared with 49.5% last year. The effective tax rates for the second quarter and first six months of 1997 were 36.5% and 36.6% compared with 38.4% for both the second quarter and first six months of 1996. NONPERFORMING ASSETS - -------------------- Change 2Q 1997 vs (Dollars in millions) 6/30/97 3/31/97 1Q 1997 -------------------------------- Loans: Commercial Real Estate $ 57 $ 20 $ 37 Other Commercial 42 79 (37) Foreign 36 37 (1) Community Banking 67 72 (5) ---- ---- Total Loans 202 208 (6) Other Real Estate 41 40 1 ---- ---- Total $243 $248 (5) ==== ==== Nonperforming Assets Ratio 0.6% 0.7% Allowance/Nonperforming Loans 411.0 418.3 Allowance/Nonperforming Assets 342.1 350.2 Nonperforming assets totaled $243 million at June 30, 1997, compared with $248 million at March 31, 1997. The increase in commercial real estate was attributable to the addition of a $37 million loan on an office building in Pennsylvania. Subsequent to June 30, 1997 a substantial loan to a retailer became nonperforming. As a result, nonperforming assets are expected to increase in the third quarter of 1997. At June 30, 1997, impaired loans (nonaccrual loans over $1 million) aggregated $148 million, of which $106 million exceeded their fair value by $18 million. Impaired loans at June 30, 1996 totaled $140 million, of which $105 million exceeded their fair value by $23 million. For the second quarters of 1997 and 1996, the average amount of impaired loans was $149 million and $154 million and interest income (cash received) on them was $361 thousand and $158 thousand. 14 Credit card loans are not placed on nonperforming status, but are charged off when they become past due for certain periods. Additional information regarding the credit quality of the Company's credit card portfolio is provided in the sections "Loan Loss Provision and Net Charge-Offs" and "Sector Profitability". LOAN LOSS PROVISION AND NET CHARGE-OFFS - --------------------------------------- 2nd 1st 2nd Quarter Quarter Quarter Year-to-date ------- ------- ------- ------------ (in millions) 1997 1997 1996 1997 1996 ----------------------- ------------ Provision $ 60 $ 60 $425* $120 $515* ---- ---- ---- ---- ---- Net (Charge-offs) Recoveries: Commercial Real Estate - 1 - 1 (3) Other Commercial (6) (3) (7) (9) (6) Credit Card (88) (93) (187)** (181) (283)** Other Consumer (1) (2) (2) (3) (4) Foreign - 4 13 4 12 Other (2) 1 (2) (1) (5) ---- ---- ---- ---- ---- Total (97) (92) (185) (189) (289) ---- ---- ---- ---- ---- Change in Allowance $(37) $(32) $240 $(69) $226 ==== ==== ==== ==== ==== Other Real Estate Expenses (Recoveries) $ 1 $ - $ 1 $ 1 $ (1) * Includes a provision of $350 million for credit card accounts. ** Includes $99 million attributed to charge-offs of past due and bankrupt Union credit card accounts not sold to Household. Net charge-offs of credit cards loans were $88 million for the second quarter. Credit card loans outstanding were $4.2 billion at June 30, 1997 compared with $4.3 billion at March 31, 1997. The allowance for loan losses was $832 million, or 2.13% of loans at June 30, 1997, compared with $869 million, or 2.36% of loans at March 31, 1997. The ratio of the allowance to nonperforming assets was 342% at June 30, 1997. 15 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 insure that reported results of the sectors track their economic performance. Sector results are subject to restatement whenever improvements are made in the measurement principles or organizational changes are made. Prior year results have been restated to reflect the transfer of custom banking from the Retail Sector to the Trust, and Securities and Other Processing Sector and middle market and certain real estate lending from the Retail Sector to the Corporate Sector. Changes were also made in the allocation of long-term debt and certain foreign branch costs. Net interest income is computed on a taxable equivalent basis. Support and other indirect expenses are allocated to sectors based on general guidelines. The provision for loan losses is based on net charge-offs incurred by each sector. Assets and liabilities are match funded. The Trust, and Securities and Other Processing Sector provides a broad array of fee based services. Trust includes personal trust and investment management. Securities processing includes services to both institutional issuers and investors. The Retail Banking Sector includes credit card financing, consumer lending, and residential mortgage lending. The Corporate Banking Sector is divided into special industries banking, U.S. commercial banking, middle market banking, international banking, and factoring. The Other Sector includes trading and investing activities, treasury services to other sectors, general administration, and the difference between the recorded provision for loan losses and that allocated to the other sectors. Based on this system, the sectors contributed to the Company's profitability for the second quarter and first six months as follows: Trust, and Securities and Other Retail Corporate (In millions) Processing Banking Banking ---------- ---------- ---------- 2nd Quarter 1997 1996 1997 1996 1997 1996 ---- ---- ---- ---- ---- ---- Net Interest Income on a Taxable Equivalent Basis $ 68 $ 50 $229 $280 $154 $138 Provision for Loan Losses - - 90 189 6 (4) Noninterest Income 314 266 49 60 66 71 Noninterest Expense 217 192 139 172 57 54 ---- ---- ---- ---- ---- ---- Income Before Taxes $165 $124 $ 49 $(21) $157 $159 ==== ==== ==== ==== ==== ==== (In millions) Other Total ---------- ------------- 2nd Quarter 1997 1996 1997 1996 ---- ---- ---- ---- Net Interest Income on a Taxable Equivalent Basis $ 38 $ 34 $489 $502 Provision for Loan Losses (36) 240 60 425 Noninterest Income 60 445 489 842 Noninterest Expense 52 38 465 456 ---- ---- ---- ---- Income Before Taxes $ 82 $201 $453 $463 ==== ==== ==== ==== 16 Trust, and Securities and Other Retail Corporate (In millions) Processing Banking Banking ---------- ---------- ---------- Year-to-date 1997 1996 1997 1996 1997 1996 ---- ---- ---- ---- ---- ---- Net Interest Income on a Taxable Equivalent Basis $128 $104 $468 $582 $317 $276 Provision for Loan Losses - 1 182 287 7 1 Noninterest Income 619 527 95 113 125 133 Noninterest Expense 430 381 275 334 110 109 ---- ---- ---- ---- ---- ---- Income Before Taxes $317 $249 $106 $ 74 $325 $299 ==== ==== ==== ==== ==== ==== (In millions) Other Total ---------- ------------- Year-to-date 1997 1996 1997 1996 ---- ---- ---- ------ Net Interest Income on a Taxable Equivalent Basis $ 73 $ 62 $986 $1,024 Provision for Loan Losses (69) 226 120 515 Noninterest Income 105 483 944 1,256 Noninterest Expense 96 75 911 899 ---- ---- ---- ------ Income Before Taxes $151 $244 $899 $ 866 ==== ==== ==== ====== Trust, and Securities and Other Processing - ------------------------------------------ In the Trust, and Securities and Other Processing Sector, securities processing fees increased 18% to $190 million compared with $161 million in the second quarter of 1996. In the first half of 1997, securities processing fees were $375 million compared with $320 million in 1996. Strong internal growth in almost all areas drove the increase in revenue. ADR's, corporate trust, government securities clearance, mutual funds, and stock transfer were particularly strong. Fee revenue from issuer services, custody, and securities industry products was $74 million, $62 million, and $54 million in the second quarter of 1997 compared with $54 million, $61 million, and $46 million in 1996. Fees from other processing increased 14% over the second quarter of last year. Fees from trust and investment grew 11% in the second quarter of 1997, reflecting new business and generally strong markets. The rise in noninterest expense is primarily related to the abovementioned growth. Retail - ------ The decrease in net interest income, noninterest income, and noninterest expense in the Retail Banking Sector principally reflects the sale of approximately $900 million of credit card receivables in the first quarter of 1997 and $3.4 billion of credit card receivables in the second quarter of 1996. The provision for loan losses in the Retail Banking Sector principally reflects charge-offs on Consumers Edge (registered trademark) accounts opened in 1994 and 1995. The table and discussion below provide information relating to the Company's credit card portfolio excluding the Union portfolio: 17 2nd 1st 2nd Quarter Quarter Quarter Year-to-date ------- ------- ------- ---------------- (In millions) 1997 1997 1996 1997 1996 --------------------------- ---------------- Number of Accounts 3.665 3.667 4.639 3.665 4.639 New Account Originations .025 .020 .189 .045 .546 Period End Balance $4,235 $4,251 $5,508 $4,235 $5,508 Loans Delinquent: 30-59 Days $ 65 $ 72 $ 74 $ 65 $ 74 60-89 Days 54 65 57 54 57 90 or More Days 173 146 165 173 165 ---- ---- ---- ---- ---- Total Loans Delinquent $292 $283 $296 $292 $296 Net Charge-offs $88 $93 $88* $181 $184* As a Percent of Average Loans Outstanding: Net Charge-offs 8.39% 7.56% 4.57%* 7.96% 4.51%* Accounts Delinquent More Than 30 Days 6.92 5.70 5.35 6.36 5.35 As a Percent of Period End Balances: Net Charge-offs 8.33 8.87 6.43* 8.62 6.72* Accounts Delinquent More Than 30 Days 6.89 6.66 5.37 6.89 5.37 * Excludes $99 million attributed to charge-offs of past due and bankrupt Union credit card accounts not sold to Household. Loans delinquent more than 30 days increased to $292 million at June 30, 1997 from $283 million at March 31, 1997 while slightly down from $296 million at June 30, 1996. Loans past due more than 90 days increased to $173 million at June 30, 1997 from $146 million at March 31, 1997 and from $165 million at June 30, 1996. The increase in loans 90 days past due in the second quarter of 1997 compared with the first quarter is primarily attributable to the Associates sale. Credit card loans delinquent more than 90 days have a significant risk of loss. This adverse trend in credit quality reflects an industry-wide deterioration in consumer credit performance as well as increased losses attributable to bankruptcies resulting from a 1994 change in the bankruptcy laws. At June 30, 1997 bankrupt accounts included $4 million that were not yet 30 days past due. The deterioration in credit quality also reflects increased losses on Consumers Edge (registered trademark) accounts opened in 1994 and 1995. As a result of rising delinquencies related to its Consumers Edge (registered trademark) accounts, the Company reduced Consumers Edge (registered trademark) new account originations to 330 thousand in 1996 down from 851 thousand accounts in 1995 and 1.029 million accounts in 1994. For the first half of 1997 the Company originated 3 thousand Consumers Edge (registered trademark) accounts. Future levels of charge-offs are difficult to predict because they depend upon future economic trends, consumer behavior, growth in the portfolio, competition, and other factors. Some of these factors are beyond the control of the Company. The rising trend in credit card delinquencies and personal bankruptcies may result in future charge-offs 18 exceeding historic levels. Corporate - --------- Net interest income increased in the Corporate Banking Sector due to strong loan growth in the U.S. Commercial Banking and Special Industries sectors. Income from the Company's offshore banking subsidiaries was lower in the second quarter of 1997 compared to last year. Other - ----- The Other Sector includes the difference between the total provision for loan losses and that charged off by the sectors. The decrease primarily reflects the $350 million provision for credit card loans in the second quarter of 1996. Foreign exchange revenues increased to $21 million in the second quarter of 1997 from $18 million in the same period last year. Securities gains increased to $33 million from $30 million in the second quarter of 1996. The decrease in noninterest income principally reflects the $400 million gain on the sale of credit card receivables in the second quarter of 1996. 19 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 June 30, 1997 ended June 30, 1996 ------------------------ ------------------------- Average Average Average Average Balance Interest Rate Balance Interest Rate ------- -------- ------- ------- -------- ------ ASSETS - ------ Interest-Bearing Deposits in Banks (primarily foreign) $ 2,942 $ 39 5.31% $ 1,503 $ 21 5.52% Federal Funds Sold and Securities Purchased Under Resale Agreements 2,531 35 5.50 2,422 32 5.30 Loans Domestic Offices 22,469 523 9.34 25,812 591 9.21 Foreign Offices 14,792 243 6.58 11,995 196 6.58 ------- ------ ------- ------ Total Loans 37,261 766 8.25 37,807 787 8.38 ------- ------ ------- ------ Securities U.S. Government Obligations 2,683 39 5.86 2,988 43 5.78 U.S. Government Agency Obligations 386 6 6.46 480 7 6.24 Obligations of States and Political Subdivisions 632 14 8.69 652 15 8.92 Other Securities, including Trading Securities 1,712 21 4.90 1,326 19 5.62 ------- ------ ------- ------ Total Securities 5,413 80 5.93 5,446 84 6.16 ------- ------ ------- ------ Total Interest-Earning Assets 48,147 920 7.67% 47,178 924 7.87% ------ ------ Allowance for Loan Losses (837) (728) Cash and Due from Banks 3,756 2,527 Other Assets 7,853 5,521 ------- ------- TOTAL ASSETS $58,919 $54,498 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ Interest-Bearing Deposits Money Market Rate Accounts $ 4,259 49 4.59% $ 3,713 39 4.23% Savings 8,022 51 2.53 8,264 55 2.70 Certificates of Deposit $100,000 & Over 715 10 5.46 890 11 5.19 Other Time Deposits 2,569 31 5.02 2,533 29 4.68 Foreign Offices 15,200 187 4.93 12,383 152 4.90 ------- ------ ------- ------ Total Interest-Bearing Deposits 30,765 328 4.28 27,783 286 4.15 Federal Funds Purchased and Securities Sold Under Repurchase Agreements 2,226 30 5.33 3,659 48 5.25 Other Borrowed Funds 3,195 42 5.25 4,081 55 5.41 Long-Term Debt 1,808 31 6.94 1,920 33 6.75 ------- ------ ------- ------ Total Interest-Bearing Liabilities 37,994 431 4.55% 37,443 422 4.53% ------ ------ Noninterest-Bearing Deposits 9,183 8,472 Other Liabilities 6,028 3,420 Minority Interest - Preferred Securities 714 - Preferred Stock 112 113 Common Shareholders' Equity 4,888 5,050 ------- ------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $58,919 $54,498 ======= ======= Net Interest Earnings and Interest Rate Spread $ 489 3.12% $ 502 3.34% ====== ====== Net Yield on Interest- Earning Assets 4.08% 4.28% ==== ====
20 THE BANK OF NEW YORK COMPANY, INC. Average Balances and Rates on a Taxable Equivalent Basis (Dollars in millions)
For the six months For the six months ended June 30, 1997 ended June 30, 1996 ------------------------ ------------------------- Average Average Average Average Balance Interest Rate Balance Interest Rate ------- -------- ------- ------- -------- ------ ASSETS - ------ Interest-Bearing Deposits in Banks (primarily foreign) $ 2,692 $ 73 5.46% $ 1,540 $ 43 5.60% Federal Funds Sold and Securities Purchased Under Resale Agreements 2,541 68 5.41 2,298 61 5.34 Loans Domestic Offices 22,610 1,048 9.32 25,966 1,206 9.34 Foreign Offices 14,545 466 6.46 11,816 393 6.69 ------- ------ ------- ------ Total Loans 37,155 1,514 8.22 37,782 1,599 8.51 ------- ------ ------- ------ Securities U.S. Government Obligations 2,718 78 5.82 2,931 83 5.72 U.S. Government Agency Obligations 405 13 6.40 466 15 6.28 Obligations of States and Political Subdivisions 637 28 8.67 644 29 9.01 Other Securities, including Trading Securities 1,617 42 5.21 1,263 35 5.54 ------- ------ ------- ------ Total Securities 5,377 161 6.03 5,304 162 6.13 ------- ------ ------- ------ Total Interest-Earning Assets 47,765 1,816 7.67% 46,924 1,865 7.99% ------ ------ Allowance for Loan Losses (854) (726) Cash and Due from Banks 3,901 2,838 Other Assets 7,576 5,489 ------- ------- TOTAL ASSETS $58,388 $54,525 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ Interest-Bearing Deposits Money Market Rate Accounts $ 4,074 89 4.42% $ 3,858 82 4.29% Savings 8,071 102 2.55 8,243 114 2.77 Certificates of Deposit $100,000 & Over 706 19 5.38 1,005 27 5.32 Other Time Deposits 2,531 61 4.88 2,565 61 4.78 Foreign Offices 14,904 357 4.83 11,946 294 4.95 ------- ------ ------- ------ Total Interest-Bearing Deposits 30,286 628 4.19 27,617 578 4.21 Federal Funds Purchased and Securities Sold Under Repurchase Agreements 2,246 58 5.22 3,766 99 5.30 Other Borrowed Funds 3,223 81 5.08 3,613 99 5.51 Long-Term Debt 1,812 63 6.89 1,901 65 6.85 ------- ------ ------- ------ Total Interest-Bearing Liabilities 37,567 830 4.46% 36,897 841 4.58% ------ ------ Noninterest-Bearing Deposits 9,226 9,011 Other Liabilities 5,836 3,412 Minority Interest - Preferred Securities 657 - Preferred Stock 112 113 Common Shareholders' Equity 4,990 5,092 ------- ------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $58,388 $54,525 ======= ======= Net Interest Earnings and Interest Rate Spread $ 986 3.21% $1,024 3.41% ====== ====== Net Yield on Interest- Earning Assets 4.16% 4.39% ==== ====
21 PART 2. OTHER INFORMATION Item 4. Submissions of Matters to Vote of Security Holders - ----------------------------------------------------------- The Company held its annual meeting on May 13, 1997 at The Greenwich Library, Cole Auditorium, in Greenwich, CT. The following matters were submitted to a vote of the shareholders: -- Election of sixteen director nominees to new one-year terms was approved with no nominee receiving less than 322.9 million votes. -- Appointment of Ernst & Young LLP as the Company's independent public accountants for 1997 was ratified by a vote of 326.9 million affirmative to 0.6 million negative. -- Amendment to the Company's 1993 Long Term Incentive Savings Plan to limit the number of shares an employee may receive in stock option grants in any year was approved by a vote of 312.9 million affirmative to 10.7 million negative. -- A proposal that cumulative voting rights be accorded to shareholders was defeated by a vote of 66.7 million affirmative to 186.2 million negative. -- A proposal to have the annual meeting take place each year in a major city where The Bank of New York has branches was defeated by a vote of 7.7 million affirmative to 279.7 million negative. 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 and Six Months Ended June 30, 1997 and 1996. Exhibit 11.1 - Statement Re: Restated Computation of Earnings Per Common Share under Statement of Financial Accounting Standards No. 128, "Earnings per Share". Exhibit 12 - Statement Re: Ratio of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed Charges, Distribution on Trust Preferred Securities, and Preferred Stock Dividends for the Three and Six Months Ended June 30, 1997 and 1996. Exhibit 27 - Statement Re: Financial Data Schedule containing selected financial data at June 30, 1997 and for the Six Months Ended June 30, 1997. (For SEC Purposes) (b) The Company filed the following reports on Form 8-K since March 31, 1997: On April 14, 1997, the Company filed a Form 8-K Current Report (Items 5 and 7), which report included unaudited interim financial 22 information and accompanying discussion for the first quarter of 1997 contained in the Company's press release dated April 14, 1997. On June 5, 1997, the Company filed a Form 8-K Current Report (Items 5 and 7), related to the issuance by BNY Capital II, a statutory business trust (the "Trust") of 16,000,000 of its 7.80% Trust Preferred Securities, Series C (Liquidation amount $25 per Trust Preferred Security)(the "Trust Preferred Securities"), which represent beneficial interests in the Trust, in a public offering (Registration Nos. 333-15951 and 333-15951-01 through 05). The following exhibits, all relating to the issuance of the Trust Preferred Securities, were included in the filing: a Pricing Agreement, Junior Subordinated Indenture, Specimen of the 7.80% Junior Subordinated Deferrable Interest Debentures, Series C, of the Company, Amended and Restated Trust Agreement, Specimens of the 7.80% Capital Securities, Series C, of the Trust, Guarantee Agreement, and Agreement as to Expenses and Liabilities all relating to the issuance of the Trust Preferred Securities. On July 14, 1997, the Company filed a Form 8-K Current Report (Items 5 and 7), which report included unaudited interim financial information and accompanying discussion for the second quarter of 1997 contained in the Company's press release dated July 14, 1997. 23 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: August 14, 1997 By: \s\ Robert E. Keilman ----------------------- Name: Robert E. Keilman Title: Comptroller 24 EXHIBIT INDEX -------------- Exhibit Description - ------- ----------- 11 Computation of Earnings Per Common Share for the Three and Six Months Ended June 30, 1997 and 1996. 11.1 Restated Computation of Earnings Per Common Share under Statement of Financial Accounting Standards No. 128, "Earnings per Share". 12 Ratio of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed Charges, Distribution on Trust Preferred Securities, and Preferred Stock Dividends for the Three and Six Months Ended June 30, 1997 and 1996. 27 Financial Data Schedule containing selected financial data at June 30, 1997 and for the Six Months Ended June 30, 1997. (For SEC Purposes) EX-11 2 EPS EXHIBIT 11 THE BANK OF NEW YORK COMPANY, INC. Computation of Earnings Per Common Share (In millions, except per share amounts) For the Three For the Six Months Ended Months Ended June 30, June 30, 1997 1996 1997 1996 ---- ---- ---- ---- Weighted Average Number of Shares 381 387 384 391 Shares Assumed to be Issued on Conversion: Warrants 17 21 18 21 ----- ----- ----- ----- Weighted Average Number of Shares of Common Stock for Primary Computation 398 408 402 412 Shares Assumed to be Issued on Conversion: Debentures - 10 - 10 Warrants 1 - - 1 ----- ----- ----- ----- Weighted Average Number of Shares of Common Stock Assuming Full Dilution 399 418 402 423 ===== ===== ===== ===== Net Income $ 269 $ 278 $ 534 $ 521 Dividend Requirements on Preferred Stock 3 2 5 5 ----- ----- ----- ----- Net Income Available to Common Shareholders 266 276 529 516 Interest on Convertible Debentures, Net of Tax - 1 - 2 ----- ----- ----- ----- Net Income Available to Common Shareholders, Assuming Full Dilution $ 266 $ 277 $ 529 $ 518 ===== ===== ===== ===== Earnings Per Share: Primary $0.67 $0.68 $1.32 $1.25 Fully Diluted 0.67 0.66 1.31 1.23 EX-11 3 RESTATED EPS EXHIBIT 11.1 THE BANK OF NEW YORK COMPANY, INC. Calculation of Earnings Per Share Under New Rules $ in Thousands, except EPS 1997 ---------------------------- 1st Qtr 2nd Qtr Six Mos. -------- -------- -------- OLD RULES EPS (As Reported-APB 15) Primary $ 0.65 $ 0.67 $ 1.32 Fully Diluted $ 0.65 $ 0.67 $ 1.31 NEW RULES EPS (Restated-FAS 128) Basic $ 0.68 $ 0.70 $ 1.38 Diluted $ 0.65 $ 0.67 $ 1.32 Computation Under FAS 128: - -------------------------- Weighted Average Common Shares Outstanding-Basic 387,130 381,327 384,213 Shares Issued on Conversion: Debentures - - - Warrants 17,691 16,942 17,317 Convertible Preferred Stock 118 97 108 -------- -------- -------- Weighted Average Shares 404,939 398,366 401,638 ======== ======== ======== Net Income $264,973 $268,613 $533,586 Preferred Dividends (2,492) (2,478) (4,970) -------- -------- -------- Net Income Available to Common Shareholders 262,481 266,135 528,616 -------- -------- -------- Interest on Convertible Debentures, Net of Tax - - - Dividends on Conv. Preferred 20 6 26 -------- -------- -------- Diluted Net Income $262,501 $266,141 $528,642 ======== ======== ======== 1996 ---------------------------- 1st Qtr 2nd Qtr Six Mos. -------- -------- -------- OLD RULES EPS (As Reported-APB 15) Primary $ 0.58 $ 0.68 $ 1.25 Fully Diluted $ 0.57 $ 0.66 $ 1.23 NEW RULES EPS (Restated-FAS 128) Basic $ 0.61 $ 0.71 $ 1.32 Diluted $ 0.57 $ 0.66 $ 1.23 Computation Under FAS 128: - -------------------------- Weighted Average Common Shares Outstanding-Basic 394,836 386,788 390,812 Shares Issued on Conversion: Debentures 10,740 9,700 10,220 Warrants 21,156 21,096 21,126 Convertible Preferred Stock 178 170 174 -------- -------- -------- Weighted Average Shares 426,910 417,754 422,332 ======== ======== ======== Net Income $243,151 $278,321 $521,472 Preferred Dividends (2,496) (2,494) (4,990) -------- -------- -------- Net Income Available to Common Shareholders 240,655 275,827 516,482 -------- -------- -------- Interest on Convertible Debentures, Net of Tax 1,058 841 1,899 Dividends on Conv. Preferred 23 21 44 -------- -------- -------- Diluted Net Income $241,736 $276,689 $518,425 ======== ======== ======== 1996 ---------------------------- 3rd Qtr Nine Mos 4th Qtr -------- -------- -------- OLD RULES EPS (As Reported-APB 15) Primary $ 0.60 $ 1.86 $ 0.61 Fully Diluted $ 0.60 $ 1.81 $ 0.61 NEW RULES EPS (Restated-FAS 128) Basic $ 0.64 $ 1.96 $ 0.64 Diluted $ 0.60 $ 1.83 $ 0.61 Computation Under FAS 128: - -------------------------- Weighted Average Common Shares Outstanding-Basic 385,740 389,109 387,970 Shares Issued on Conversion: Debentures 4,719 8,373 - Warrants 21,310 21,188 18,769 Convertible Preferred Stock 171 173 165 -------- -------- -------- Weighted Average Shares 411,940 418,843 406,904 ======== ======== ======== Net Income $248,509 $769,981 $249,720 Preferred Dividends (2,494) (7,484) (2,493) -------- -------- -------- Net Income Available to Common Shareholders 246,015 762,497 247,227 -------- -------- -------- Interest on Convertible Debentures, Net of Tax 478 2,377 - Dividends on Conv. Preferred 21 65 21 -------- -------- -------- Diluted Net Income $246,514 $764,939 $247,248 ======== ======== ======== YEAR ---------------------------------------- 1996 1995 1994 1993 ---------- -------- -------- -------- OLD RULES EPS (As Reported-APB 15) Primary $ 2.47 $ 2.29 $ 1.96 $ 1.43 Fully Diluted $ 2.41 $ 2.15 $ 1.85 $ 1.36 NEW RULES EPS (Restated-FAS 128) Basic $ 2.60 $ 2.35 $ 1.96 $ 1.43 Diluted $ 2.44 $ 2.20 $ 1.85 $ 1.36 Computation Under FAS 128: - -------------------------- Weighted Average Common Shares Outstanding-Basic 388,354 385,130 375,778 372,168 Shares Issued on Conversion: Debentures 6,270 18,392 25,564 25,576 Warrants 20,583 10,370 - - Convertible Preferred Stock 171 544 2,960 4,956 ---------- -------- -------- -------- Weighted Average Shares 415,378 414,436 404,302 402,700 ========== ======== ======== ======== Net Income $1,019,701 $913,891 $749,200 $559,312 Preferred Dividends (9,977) (10,149) (13,107) (25,566) ---------- -------- -------- -------- Net Income Available to Common Shareholders 1,009,724 903,742 736,093 533,746 ---------- -------- -------- -------- Interest on Convertible Debentures, Net of Tax 2,377 6,845 10,454 10,463 Dividends on Conv. Preferred 86 258 1,463 3,074 ---------- -------- -------- -------- Diluted Net Income $1,012,187 $910,845 $748,010 $547,283 ========== ======== ======== ======== EX-12 4 FIXED CHARGES EXHIBIT 12 THE BANK OF NEW YORK COMPANY, INC. Ratios of Earnings to Fixed Charges and Ratios of Earnings to Combined Fixed Charges, Distribution on Trust Preferred Securities and Preferred Stock Dividends (Dollars in millions) For the Three For the Six Months Ended Months Ended June 30, June 30, 1997 1996 1997 1996 EARNINGS ---- ---- ---- ---- - -------- Income Before Income Taxes $445 $452 $ 882 $ 846 Fixed Charges, Excluding Interest on Deposits 111 143 218 279 ---- ---- ------ ------ Income Before Income Taxes and Fixed Charges, Excluding Interest on Deposits 556 595 1,100 1,125 Interest on Deposits 328 286 629 578 ---- ---- ------ ------ Income Before Income Taxes and Fixed Charges, Including Interest on Deposits $884 $881 $1,729 $1,703 ==== ==== ====== ====== FIXED CHARGES - ------------- Interest Expense, Excluding Interest on Deposits $103 $136 $ 201 $ 263 One-Third Net Rental Expense* 8 7 17 16 ---- ---- ------ ------ Total Fixed Charges, Excluding Interest on Deposits 111 143 218 279 Interest on Deposits 328 286 629 578 ---- ---- ------ ------ Total Fixed Charges, Including Interest on Deposits $439 $429 $ 847 $ 857 ==== ==== ====== ====== DISTRIBUTION ON TRUST PREFERRED SECURITIES, - ------------------------------------------- PRE-TAX BASIS - ------------- $ 14 $ - $ 26 $ - ==== ==== ====== ====== PREFERRED STOCK DIVIDENDS, PRE-TAX BASIS $ 4 $ 4 $ 8 $ 8 - ---------------------------------------- ==== ==== ====== ====== EARNINGS TO FIXED CHARGES RATIOS - -------------------------------- Excluding Interest on Deposits 5.01x 4.16x 5.05x 4.03x Including Interest on Deposits 2.01 2.05 2.04 1.99 EARNINGS TO COMBINED FIXED CHARGES & PREFERRED STOCK DIVIDENDS RATIOS - ---------------------------------- Excluding Interest on Deposits 4.31 4.05 4.37 3.92 Including Interest on Deposits 1.93 2.03 1.96 1.97 * The proportion deemed representative of the interest factor. EX-27 5
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 June 30, 1997. 0000009626 THE BANK OF NEW YORK COMPANY, INC. 1,000,000 6-MOS DEC-31-1997 JAN-1-1997 JUN-30-1997 7,782 2,226 650 1,646 3,919 1,091 1,060 39,024 832 61,242 43,814 6,267 2,046 1,801 0 112 3,407 1,418 61,242 1,511 137 151 1,799 629 830 969 120 40 911 882 534 0 0 534 $1.32 $1.31 4.16 202 224 0 105 901 220 31 832 645 38 149
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