-----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, S0zEoha3290TvCuKmUpo+/7yxNt0m16a5sH4bE/sJhC4epx/1ZAWFdxd0IUFurxZ hPkxi+YcueOcoqFhxEko9w== 0000009626-97-000011.txt : 19971115 0000009626-97-000011.hdr.sgml : 19971115 ACCESSION NUMBER: 0000009626-97-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971113 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: SEC FILE NUMBER: 001-06152 FILM NUMBER: 97717196 BUSINESS ADDRESS: STREET 1: 48 WALL ST 15TH FL CITY: NEW YORK STATE: NY ZIP: 10296 BUSINESS PHONE: 2124951784 10-Q 1 THIRD 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 September 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 376,669,871 shares as of October 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 September 30, 1997 and December 31, 1996 3 Consolidated Statements of Income For the Three Months and Nine Months Ended September 30, 1997 and 1996 4 Consolidated Statement of Changes In Shareholders' Equity For the Nine Months Ended September 30, 1997 5 Consolidated Statements of Cash Flows For the Nine Months Ended September 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 6. Exhibits and Reports on Form 8-K 19 SIGNATURE 20 3 PART 1. FINANCIAL INFORMATION Item 1. Financial Statements - ----------------------------------------------------------------------------- THE BANK OF NEW YORK COMPANY, INC. Consolidated Balance Sheets (Unaudited) (Dollars in millions, except per share amounts)
September 30, December 31, 1997 1996 ---- ---- (Unaudited) (Note) Assets - ------ Cash and Due from Banks $ 5,049 $ 6,032 Interest-Bearing Deposits in Banks 1,986 1,387 Securities: Held-to-Maturity (fair value of $1,101 in 1997 and $1,127 in 1996 1,117 1,170 Available-for-Sale 4,263 3,883 ------- ------- Total Securities 5,380 5,053 Trading Assets at Fair Value 2,116 1,547 Federal Funds Sold and Securities Purchased Under Resale Agreements 3,158 562 Loans (less allowance for loan losses of $771 in 1997 and $901 in 1996) 37,625 36,105 Premises and Equipment 851 875 Due from Customers on Acceptances 1,464 985 Accrued Interest Receivable 298 315 Other Assets 3,295 2,904 ------- ------- Total Assets $61,222 $55,765 ======= ======= Liabilities and Shareholders' Equity - ------------------------------------ Deposits Noninterest-Bearing (principally domestic offices) $12,904 $11,812 Interest-Bearing Domestic Offices 15,605 15,268 Foreign Offices 13,969 12,263 ------- ------- Total Deposits 42,478 39,343 Federal Funds Purchased and Securities Sold Under Repurchase Agreements 1,936 1,737 Other Borrowed Funds 4,945 4,144 Acceptances Outstanding 1,473 1,015 Accrued Taxes and Other Expenses 1,672 1,417 Accrued Interest Payable 177 167 Other Liabilities 722 399 Long-Term Debt 1,827 1,816 ------- ------- Total Liabilities 55,230 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 24,144 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 457,806,793 shares in 1997 and 444,317,786 shares in 1996 3,434 3,332 Additional Capital 435 344 Retained Earnings 3,314 2,798 Securities Valuation Allowance 262 82 ------- ------- 7,557 6,668 Less: Treasury Stock (81,945,277 shares in 1997 and 57,849,845 shares in 1996), at cost 2,548 1,524 Loan to ESOP (1,195,719 shares), at cost 17 17 ------- ------- Total Shareholders' Equity 4,992 5,127 ------- ------- Total Liabilities and Shareholders' Equity $61,222 $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 nine months ended months ended September 30, September 30, 1997 1996 1997 1996 ---- ---- ---- ---- Interest Income - --------------- Loans $ 766 $ 724 $2,278 $2,318 Securities Taxable 59 61 178 181 Exempt from Federal Income Taxes 9 9 26 28 ----- ----- ------ ------ 68 70 204 209 Deposits in Banks 45 22 118 65 Federal Funds Sold and Securities Purchased Under Resale Agreements 37 36 105 96 Trading Assets 5 4 16 13 ----- ----- ------ ------ Total Interest Income 921 856 2,721 2,701 ----- ----- ------ ------ Interest Expense - ---------------- Deposits 331 282 960 860 Federal Funds Purchased and Securities Sold Under Repurchase Agreements 30 26 88 125 Other Borrowed Funds 42 49 124 148 Long-Term Debt 32 32 94 97 ----- ----- ------ ------ Total Interest Expense 435 389 1,266 1,230 ----- ----- ------ ------ Net Interest Income 486 467 1,455 1,471 - ------------------- Provision for Loan Losses 60 40 180 555 ----- ----- ------ ------ Net Interest Income After Provision for Loan Losses 426 427 1,275 916 ----- ----- ------ ------ Noninterest Income - ------------------ Processing Fees Securities 202 164 577 484 Other 63 54 177 157 ----- ----- ------ ------ 265 218 754 641 Trust and Investment Fees 46 42 134 119 Service Charges and Fees 92 101 280 315 Securities Gains 51 15 91 78 Other 50 56 189 536 ----- ----- ------ ------ Total Noninterest Income 504 432 1,448 1,689 ----- ----- ------ ------ Noninterest Expense - ------------------- Salaries and Employee Benefits 269 253 789 750 Net Occupancy 42 41 126 127 Furniture and Equipment 23 22 70 68 Other 139 139 399 410 ----- ----- ------ ------ Total Noninterest Expense 473 455 1,384 1,355 ----- ----- ------ ------ Income Before Income Taxes 457 404 1,339 1,250 Income Taxes 165 155 488 480 Distribution on Preferred Securities 19 - 45 - ----- ----- ------ ------ Net Income $ 273 $ 249 $ 806 $ 770 - ---------- ===== ===== ====== ====== Net Income Available to Common Shareholders $ 270 $ 246 $ 799 $ 762 - ----------------------- ===== ===== ====== ====== Per Common Share Data: - ---------------------- Primary Earnings $0.69 $0.60 $ 2.00 $ 1.86 Fully Diluted Earnings 0.69 0.60 2.00 1.81 Cash Dividends 0.24 0.22 0.72 0.62 Fully Diluted Shares Outstanding 394 414 400 422 - ------------------------------------------------------------------------------ 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 nine months ended September 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 806 Cash Dividends Common Stock (276) Preferred Stock (8) Exercise of Warrants 69 73 Issuance of Common Stock 33 18 (34) Treasury Stock Acquired 1,058 Net Unrealized Gain on Secur- ities Avail- able for Sale 180 Change in Cumulative Foreign Currency Translation Adjustment (6) ---- --- ------ ---- ------ ---- ------ --- Balance, September 30, 1997 $111 $ 1 $3,434 $435 $3,314 $262 $2,548 $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 nine months ended September 30, 1997 1996 ---- ---- Operating Activities Net Income $ 806 $ 770 Adjustments to Determine Net Cash Provided (Used) by Operating Activities Provision for Losses on Loans and Other Real Estate 181 564 Gain on Sale of Loans - (400) Depreciation and Amortization 154 178 Deferred Income Taxes 190 11 Securities Gains (91) (78) Change in Trading Activities (325) 114 Change in Accruals and Other, Net 184 (434) ------- ------- Net Cash Provided by Operating Activities 1,099 725 ------- ------- Investing Activities Change in Interest-Bearing Deposits in Banks (662) (204) Purchases of Securities Held-to-Maturity (234) (231) Maturities of Securities Held-to-Maturity 278 256 Purchases of Securities Available-for-Sale (1,034) (1,112) Sales of Securities Available-for-Sale 394 309 Maturities of Securities Available-for-Sale 614 515 Net Principal Disbursed on Loans to Customers (3,173) (2,392) Sales of Loans 1,244 3,988 Sales of Other Real Estate 19 58 Change in Federal Funds Sold and Securities Purchased Under Resale Agreements (2,596) 433 Purchases of Premises and Equipment (30) (38) Proceeds from the Sale of Premises and Equipment - 2 Acquisitions, Net of Cash Acquired (178) (380) Partial Sale of Unconsolidated Subsidiary - 45 Other, Net (75) (144) ------- ------- Net Cash Provided (Used) by Investing Activities (5,433) 1,105 ------- ------- Financing Activities Change in Deposits 3,302 702 Change in Federal Funds Purchased and Securities Sold Under Repurchase Agreements 199 (2,017) Change in Other Borrowed Funds 561 279 Proceeds from the Issuance of Tax Deductible Preferred Securities 400 - Proceeds from the Issuance of Long-Term Debt 25 100 Repayments of Long-Term Debt (16) (17) Issuance of Common Stock 226 205 Treasury Stock Acquired (1,058) (934) Cash Dividends Paid (284) (250) ------- ------- Net Cash Provided (Used) by Financing Activities 3,355 (1,932) ------- ------- Effect of Exchange Rate Changes on Cash (4) 8 ------- ------- Change in Cash and Due From Banks (983) (94) Cash and Due from Banks at Beginning of Period 6,032 4,711 ------- ------- Cash and Due from Banks at End of Period $ 5,049 $ 4,617 ======= ======= - ----------------------------------------------------------------------------- Supplemental Disclosure of Cash Flow Information Cash Paid During the Year for: Interest $ 1,267 $ 1,225 Income Taxes 263 485 Noncash Investing Activity (Primarily Foreclosure of Real Estate) 9 50 - ----------------------------------------------------------------------------- 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. 2. Allowance for Loan Losses ------------------------- Transactions in the allowance for loan losses are summarized as follows: Nine months ended September 30, (In millions) 1997 1996 ----- ----- Balance, Beginning of Period $ 901 $ 756 Charge-offs (355) (461) Recoveries 45 107 ----- ----- Net Charge-Offs (310) (354) Provision 180 555 ----- ----- Balance, End of Period $ 771 $ 957 ===== ===== 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 October 31, 1997, 26.4 million shares had been repurchased at a cost of $1,105 million. In the second quarter of 1997, the Company issued $400 million of 7.80% trust preferred securities. During the third quarter of 1997, warrant holders converted 0.6 million warrants into 2.5 million common shares, providing the Company 8 with $39 million in capital. In October 1997, warrant holders converted an additional 0.4 million warrants into 1.6 million common shares, providing the Company with $24 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. The effect of the new accounting pronouncement is not expected to be material. Basic and diluted EPS for the three and nine months ended September 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 third quarter fully diluted earnings per share were a record 69 cents, up 15% from the 60 cents earned in the third quarter of 1996. Third quarter net income was $273 million, up 10% from $249 million earned in the same period last year. The Company has agreed to sell substantially all of its remaining credit card operations to Chase Manhattan Bank USA, National Association. In another transaction, the Company has agreed to sell almost all of its remaining portfolio of late cycle delinquent and bankrupt accounts. These transactions are expected to close prior to year end and include approximately $4.2 billion in receivables and 3.7 million cards. The Company expects to recognize a net gain on these sales of approximately $200 million in the fourth quarter. Earnings per share, on a fully diluted basis, were a record $2.00 for the first nine months of 1997, up 15% from the $1.74 earned last year on a normalized basis. In the second quarter of 1996, the Company recorded a net gain of $31 million, or 7 cents per share, on the sale of its Union credit card portfolio. Net income for the first nine months of 1997 was a record $806 million, an increase of 9% over last year's $739 million on a normalized basis. Including the $400 million pre-tax gain on the sale of the Union portfolio and the $350 million provision related to credit cards in 1996, net income was $770 million for the nine month period and earnings per share was $1.81. Return on average common equity was a record 22.06% in the third quarter of 1997, compared with 21.84% in the second quarter of 1997 and 19.63% in the third quarter of 1996. Return on average assets for the third quarter was 1.81% compared with 1.83% in the second quarter of 1997 and 1.92% in the third quarter of 1996. Tangible fully diluted earnings per share (earnings before the amortization of goodwill and intangibles) were $0.74 per share in the third quarter of 1997 compared with $0.64 per share in the third quarter of 1996. Tangible return on average common equity was 32.29% in the third quarter of 1997 compared with 27.83% in the third quarter of 1996; and tangible return on average assets was 2.00% in the third quarter of 1997 compared with 2.12% in the third quarter of 1996. Revenues from the Company's securities processing business continued their strong broad based performance and were up 23% over the third quarter of 1996, to $202 million. ADRs, 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 15% over last year's third quarter 10 with strong growth in all areas. Trust and investment continued to benefit from new business and strong markets in the third quarter of 1997 which combined to increase fees 10% to $46 million compared with $42 million last year. Net interest income, on a taxable equivalent basis, totaled $495 million in the third quarter compared with $476 million in the third quarter of last year. Average fully diluted shares outstanding were 394 million for the quarter, down from 399 million in the second quarter and down significantly from 414 million in the prior year period. The decline from the second 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 7.54% and 11.52% at September 30, 1997, compared with 7.83% and 12.00% at June 30, 1997, and 7.66% and 12.26% at September 30, 1996. Tangible common equity as a percent of total assets was 5.97% at September 30, 1997, compared with 5.92% at June 30, 1997, and 7.44% one year ago. The leverage ratio was 7.81% at September 30, 1997, compared with 8.04% at June 30, 1997, and 8.17% one year ago. The Company increased its quarterly cash stock dividend to 26 cents per share, an 8% increase over the 24 cents previously paid. This increase will result in an annual rate of $1.04 per share, the largest in the Company's history. The new dividend was payable on November 6, 1997 to holders of record as of October 24, 1997. In October, the Company authorized the redemption on December 1 of all shares outstanding of its 8.60% cumulative preferred stock at a stated value of $625, plus cumulative and unpaid dividends. NET INTEREST INCOME - ------------------- 3rd 2nd 3rd Quarter Quarter Quarter Year-to-date ------- ------- ------- ------------ (In millions) 1997 1997 1996 1997 1996 --------------------------- ---------------- Net Interest Income $495 $489 $476 $1,480 $1,499 Net Interest Rate Spread 2.97% 3.12% 3.29% 3.13% 3.37% Net Yield on Interest Earning Assets 4.02 4.08 4.28 4.11 4.35 11 Net interest income on a taxable equivalent basis increased to $495 million in the third quarter of 1997 from $489 million in the second quarter of 1997 and $476 million in the third quarter of 1996. The net interest rate spread was 2.97% in the third quarter of 1997, compared with 3.12% in the second quarter of 1997 and 3.29% one year ago. The net yield on interest-earning assets was 4.02% compared with 4.08% in the second quarter of 1997 and 4.28% in last year's third quarter. For the first nine months of 1997, net interest income, on a taxable equivalent basis, amounted to $1,480 million compared with $1,499 million in the same period of 1996. The year-to-date net interest rate spread was 3.13% in 1997 compared with 3.37% in 1996, while the net yield on interest-earning assets was 4.11% in 1997 and 4.35% in 1996. The increase in net interest income compared with the third quarter of 1996 was primarily attributable to growth in corporate lending. Interest lost on loans on nonaccrual status at September 30, 1997 and 1996 reduced net interest income by $4 million for the three months ended September 30, 1997 and 1996, and by $10 million and $12 million for the nine months ended September 30, 1997 and 1996. NONINTEREST INCOME - ------------------ 3rd Quarter Year-to-date ----------- -------------- (In millions) 1997 1996 1997 1996 ----------------- ----------------- Processing Fees Securities $202 $164 $ 577 $ 484 Other 63 54 177 157 ---- ---- ------ ------ 265 218 754 641 Trust and Investment Fees 46 42 134 119 Service Charges and Fees 92 101 280 315 Securities Gains 51 15 91 78 Foreign Exchange and Other Trading Activities 35 12 87 43 Sale of Credit Card Portfolio - - - 400 Other 15 44 102 93 ---- ---- ------ ------ Total Noninterest Income $504 $432 $1,448 $1,689 ==== ==== ====== ====== Securities processing fees increased 23% to $202 million compared with $164 million in the third quarter of 1996. In the first nine months of 1997, securities processing fees were $577 million compared with $484 million in 1996. Strong internal growth in almost all areas drove the increase in revenue. The Company reported $51 million of securities gains in the third quarter of 1997 compared with $33 million in the second quarter and $15 million last year. Revenues from foreign exchange and other trading activities were $35 million compared with $25 12 million in the second quarter and $12 million in the third quarter of 1996. Included in other income in the third quarter of 1996 was a gain of $21 million on the sale of a portion of the Company's interest in Wing Hang Bank. TRADING ACTIVITIES - ------------------ The fair value and notional amounts of the Company's financial instruments held for trading purposes at September 30, 1997 are as follows: 3rd Quarter September 30, 1997 1997 - Average --------------------------- ------------------ Trading Account Trading Account Notional ------------------ ------------------ (In millions) Amount Assets Liabilities Assets Liabilities -------- ------ ----------- ------ ----------- Interest Rate Contracts: Futures and Forward Contracts $ 8,129 $ 4 $ - $ 3 $ - Swaps 11,614 109 89 91 92 Written Options 20,225 - 27 - 27 Purchased Options 22,948 45 - 40 - Foreign Exchange Contracts: Swaps 56 - - - - Written Options 46,374 - 802 - 938 Purchased Options 50,678 774 - 850 - Commitments to Purchase and Sell Foreign Exchange 57,892 655 636 966 848 Securities 529 20 329 11 ------ ------ ------ ------ Total Trading Account $2,116 $1,574 $2,279 $1,916 ====== ====== ====== ====== 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 triggers, 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 $3.6 million for the third quarter of 1997, and ranged from approximately $1.7 million to $5.9 million. During the 13 third quarter of 1997, daily trading revenue before brokerage expense averaged approximately $0.7 million, and ranged from approximately a gain of $3.5 million to a loss of $0.6 million. During this period, total trading losses did not exceed the Company's total earnings at risk estimates on any given trading day. NONINTEREST EXPENSE AND INCOME TAXES - --------------------------------------- Total noninterest expense for the quarter was $473 million, up 4% from $455 million in the same period last year. Year-to-date noninterest expense was $1,384 million compared with $1,355 million in 1996. Noninterest expense for the third quarter included $7 million, approximately 1 cent per share, related to making computer systems year 2000 compliant. The efficiency ratio for the third quarter was 50.1% versus 50.9% one year ago. For the first nine months of 1997 the efficiency ratio was 48.8% compared with 50.0% last year. The effective tax rates for the third quarter and first nine months of 1997 were 36.1% and 36.4% compared with 38.4% for both periods in 1996. NONPERFORMING ASSETS - -------------------- Change 3Q 1997 vs (Dollars in millions) 9/30/97 6/30/97 2Q 1997 -------------------------------- Loans: Commercial Real Estate $ 19 $ 57 $(38) Other Commercial 90 42 48 Foreign 36 36 - Community Banking 59 67 (8) ---- ---- Total Loans 204 202 2 Other Real Estate 32 41 (9) ---- ---- Total $236 $243 (7) ==== ==== Nonperforming Assets Ratio 0.6% 0.6% Allowance/Nonperforming Loans 376.8 411.0 Allowance/Nonperforming Assets 326.5 342.1 The increase in the other commercial category was the result of a large loan to a retailer. The decline in commercial real estate is attributable to the sale of two properties, one in California and one in Pennsylvania. Overall nonperforming assets declined for the twenty- fifth consecutive quarter to $236 million at September 30, 1997, down from $243 million at June 30, 1997. 14 At September 30, 1997, impaired loans (nonaccrual loans over $1 million) aggregated $155 million, of which $120 million exceeded their fair value by $56 million. Impaired loans at September 30, 1996, totaled $136 million, of which $98 million exceeded their fair value by $28 million. For the third quarters of 1997 and 1996, the average amount of impaired loans was $152 million and $138 million and interest income (cash received) on them was $140 thousand and $79 thousand. LOAN LOSS PROVISION AND NET CHARGE-OFFS - --------------------------------------- 3rd 2nd 3rd Quarter Quarter Quarter Year-to-date ------- ------- ------- ------------ (in millions) 1997 1997 1996 1997 1996 ----------------------- ------------ Provision $ 60 $ 60 $ 40 $ 180 $555* ---- ---- ---- ----- ---- Net (Charge-offs) Recoveries: Commercial Real Estate 1 - (7) 2 (10) Other Commercial (26) (6) (12) (35) (18) Credit Card** (95) (88) (65) (276) (348) Other Consumer (1) (1) (3) (3) (7) Foreign 1 - 27 4 39 Other (1) (2) (5) (2) (10) ---- ---- ---- ----- ---- Total (121) (97) (65) (310) (354) ---- ---- ---- ----- ---- Change in Allowance $(61) $(37) $(25) $(131) $201 ==== ==== ==== ===== ==== Other Real Estate Expenses (Recoveries) $ (2) $ 1 $ - $ (1) $ (1) * Includes a provision of $350 million for credit card accounts. ** Includes a $21 million recovery in the third quarter of 1996 and a $99 million charge-off in the second quarter of 1996 related to past due and bankrupt Union credit card accounts not sold to Household. Net charge-offs of credit card loans were $95 million for the third quarter. Credit card loans outstanding were $4.2 billion at September 30, 1997, and June 30, 1997. The allowance for loan losses was $771 million, or 2.01% of loans at September 30, 1997, compared with $832 million, or 2.13% of loans at June 30, 1997. The ratio of the allowance to nonperforming assets was 327% at September 30, 1997. 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 15 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 third quarter and first nine months as follows: Trust, and Securities and Other Retail Corporate (In millions) Processing Banking Banking ---------- ---------- ---------- 3rd Quarter 1997 1996 1997 1996 1997 1996 ---- ---- ---- ---- ---- ---- Net Interest Income on a Taxable Equivalent Basis $ 68 $ 54 $235 $252 $148 $140 Provision for Loan Losses 0 0 97 68 25 (3) Noninterest Income 332 282 44 55 65 59 Noninterest Expense 228 199 138 168 60 49 ---- ---- ---- ---- ---- ---- Income Before Taxes $172 $137 $ 44 $ 71 $128 $153 ==== ==== ==== ==== ==== ==== (In millions) Other Total ---------- ------------- 3rd Quarter 1997 1996 1997 1996 ---- ---- ------ ------ Net Interest Income on a Taxable Equivalent Basis $ 44 $ 30 $ 495 $ 476 Provision for Loan Losses (62) (25) 60 40 Noninterest Income 63 36 504 432 Noninterest Expense 47 39 473 455 ---- ---- ------ ------ Income Before Taxes $122 $ 52 $ 466 $ 413 ==== ==== ====== ====== 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 $196 $158 $703 $834 $465 $416 Provision for Loan Losses 0 1 279 355 32 (2) Noninterest Income 951 809 139 168 190 192 Noninterest Expense 658 580 413 502 170 158 ---- ---- ---- ---- ---- ---- Income Before Taxes $489 $386 $150 $145 $453 $452 ==== ==== ==== ==== ==== ==== (In millions) Other Total ---------- ------------- Year-to-date 1997 1996 1997 1996 ---- ---- ------ ------ Net Interest Income on a Taxable Equivalent Basis $116 $ 91 $1,480 $1,499 Provision for Loan Losses (131) 201 180 555 Noninterest Income 168 520 1,448 1,689 Noninterest Expense 143 115 1,384 1,355 ---- ---- ------ ------ Income Before Taxes $272 $295 $1,364 $1,278 ==== ==== ====== ====== 16 Trust, and Securities and Other Processing - ------------------------------------------ In the Trust, and Securities and Other Processing Sector, securities processing fees increased 23% to $202 million compared with $164 million in the third quarter of 1996. In the first nine months of 1997, securities processing fees were $577 million compared with $484 million in 1996. Strong internal growth in almost all areas drove the increase in revenue. ADRs, corporate trust, government securities clearance, mutual funds, and stock transfer were particularly strong. Fee revenues from issuer services, custody, and securities industry products were $80 million, $68 million, and $54 million in the third quarter of 1997 compared with $55 million, $61 million, and $48 million in 1996. Fees from other processing increased 15% over the third quarter of last year. Fees from trust and investment grew 10% in the third quarter of 1997, reflecting new business and generally strong markets. The rise in noninterest expense is primarily related to this 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 accounts opened in 1994 and 1995. Corporate - --------- Net interest income increased in the Corporate Banking Sector due to strong loan growth particularly in the U.S. Commercial Banking Group. For the third quarter of 1997, average outstandings in U.S. Commercial Banking increased 27% from the third quarter of last year. Average outstandings in the Special Industries Group and Community and Secured Lending Group each increased more than 7% from last year's third quarter. Income from the Company's offshore banking subsidiaries was lower in the third quarter of 1997 compared to last year. The 1996 provision for loan losses included recoveries of $20 million from the Republic of Croatia in the third quarter and $13 million from the Republic of Slovenia in the second quarter. Other - ----- The Other Sector includes the difference between the total provision for loan losses and that charged off by the sectors. Securities gains increased to $51 million from $15 million in the third quarter of 1996. Noninterest income includes gains of $21 million in the third quarter of 1996 and $27 million in the first quarter of 1997 on the sale of portions of the Company's interest in Wing Hang Bank and $400 million on the sale of credit card loans in the second quarter of 1996. 17 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 September 30, 1997 ended September 30, 1996 ------------------------ ------------------------- Average Average Average Average Balance Interest Rate Balance Interest Rate ------- -------- ------- ------- -------- ------ ASSETS - ------ Interest-Bearing Deposits in Banks (primarily foreign) $ 3,207 $ 45 5.55% $ 1,469 $ 22 5.92% Federal Funds Sold and Securities Purchased Under Resale Agreements 2,677 37 5.43 2,607 36 5.41 Loans Domestic Offices 22,346 515 9.15 22,531 523 9.23 Foreign Offices 15,041 252 6.65 12,178 202 6.61 ------- ------ ------- ------ Total Loans 37,387 767 8.14 34,709 725 8.31 ------- ------ ------- ------ Securities U.S. Government Obligations 2,788 40 5.74 2,950 43 5.84 U.S. Government Agency Obligations 360 6 6.47 449 7 6.35 Obligations of States and Political Subdivisions 659 14 8.56 671 15 8.85 Other Securities, including Trading Securities 1,721 21 4.89 1,353 17 4.94 ------- ------ ------- ------ Total Securities 5,528 81 5.86 5,423 82 6.03 ------- ------ ------- ------ Total Interest-Earning Assets 48,799 930 7.56% 44,208 865 7.78% ------ ------ Allowance for Loan Losses (821) (971) Cash and Due from Banks 3,661 2,516 Other Assets 7,959 5,724 ------- ------- TOTAL ASSETS $59,598 $51,477 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ Interest-Bearing Deposits Money Market Rate Accounts $ 4,399 51 4.62% $ 3,766 41 4.30% Savings 7,874 50 2.53 8,167 55 2.70 Certificates of Deposit $100,000 & Over 751 11 5.55 811 11 5.32 Other Time Deposits 2,421 31 5.07 2,595 31 4.74 Foreign Offices 15,044 188 4.96 11,755 144 4.88 ------- ------ ------- ------ Total Interest-Bearing Deposits 30,489 331 4.31 27,094 282 4.14 Federal Funds Purchased and Securities Sold Under Repurchase Agreements 2,277 30 5.18 1,977 26 5.11 Other Borrowed Funds 3,053 42 5.54 3,485 49 5.60 Long-Term Debt 1,807 32 6.96 1,862 32 6.86 ------- ------ ------- ------ Total Interest-Bearing Liabilities 37,626 435 4.59% 34,418 389 4.49% ------ ------ Noninterest-Bearing Deposits 9,795 8,312 Other Liabilities 6,205 3,648 Minority Interest- Preferred Securities 1,000 - Preferred Stock 112 113 Common Shareholders' Equity 4,860 4,986 ------- ------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $59,598 $51,477 ======= ======= Net Interest Earnings and Interest Rate Spread $ 495 2.97% $ 476 3.29% ====== ==== ====== ==== Net Yield on Interest- Earning Assets 4.02% 4.28% ==== ====
18 THE BANK OF NEW YORK COMPANY, INC. Average Balances and Rates on a Taxable Equivalent Basis (Dollars in millions)
For the nine months For the nine months ended September 30, 1997 ended September 30, 1996 ------------------------ ------------------------ Average Average Average Average Balance Interest Rate Balance Interest Rate ------- -------- ------- ------- -------- ------- ASSETS - ------ Interest-Bearing Deposits in Banks (primarily foreign) $ 2,866 $ 118 5.49% $ 1,516 $ 65 5.70% Federal Funds Sold and Securities Purchased Under Resale Agreements 2,587 105 5.42 2,402 96 5.37 Loans Domestic Offices 22,529 1,563 9.28 24,812 1,728 9.31 Foreign Offices 14,704 718 6.53 11,937 595 6.66 ------- ------ ------- ------ Total Loans 37,233 2,281 8.19 36,749 2,323 8.45 ------- ------ ------- ------ Securities U.S. Government Obligations 2,742 119 5.79 2,937 127 5.76 U.S. Government Agency Obligations 390 19 6.43 460 22 6.30 Obligations of States and Political Subdivisions 645 42 8.63 653 44 8.95 Other Securities, including Trading Securities 1,652 62 5.10 1,293 52 5.33 ------- ------ ------- ------ Total Securities 5,429 242 5.97 5,343 245 6.09 ------- ------ ------- ------ Total Interest-Earning Assets 48,115 2,746 7.63% 46,010 2,729 7.92% ------ ------ Allowance for Loan Losses (843) (808) Cash and Due from Banks 3,820 2,730 Other Assets 7,703 5,568 ------- ------- TOTAL ASSETS $58,795 $53,500 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ Interest-Bearing Deposits Money Market Rate Accounts $ 4,183 141 4.49% $ 3,827 123 4.29% Savings 8,005 152 2.54 8,217 169 2.75 Certificates of Deposit $100,000 & Over 721 29 5.44 940 37 5.32 Other Time Deposits 2,494 93 4.94 2,575 92 4.76 Foreign Offices 14,951 545 4.88 11,882 439 4.93 ------- ------ ------- ------ Total Interest-Bearing Deposits 30,354 960 4.23 27,441 860 4.18 Federal Funds Purchased and Securities Sold Under Repurchase Agreements 2,256 88 5.20 3,165 125 5.26 Other Borrowed Funds 3,168 124 5.23 3,570 148 5.54 Long-Term Debt 1,810 94 6.91 1,888 97 6.86 ------- ------ ------ ------ Total Interest-Bearing Liabilities 37,588 1,266 4.50% 36,064 1,230 4.55% ------ ------ Noninterest-Bearing Deposits 9,418 8,776 Other Liabilities 5,958 3,491 Minority Interest- Preferred Securities 773 - Preferred Stock 112 113 Common Shareholders' Equity 4,946 5,056 ------- ------ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $58,795 $53,500 ======= ======= Net Interest Earnings and Interest Rate Spread $1,480 3.13% $1,499 3.37% ====== ==== ====== ==== Net Yield on Interest- Earning Assets 4.11% 4.35% ==== ====
19 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 and Nine Months Ended September 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 Nine Months Ended September 30, 1997 and 1996. Exhibit 27 - Statement Re: Financial Data Schedule containing selected financial data at September 30, 1997 and for the Nine Months Ended September 30, 1997. (b) The Company filed the following reports on Form 8-K since June 30, 1997: 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. On October 21, 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 third quarter of 1997 contained in the Company's press release dated October 21, 1997. 20 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: November 13, 1997 By: \s\ Robert E. Keilman ----------------------- Name: Robert E. Keilman Title: Comptroller 21 EXHIBIT INDEX -------------- Exhibit Description - ------- ----------- 11 Computation of Earnings Per Common Share for the Three and Nine Months Ended September 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 Nine Months Ended September 30, 1997 and 1996. 27 Financial Data Schedule containing selected financial data at September 30, 1997 and for the Nine Months Ended September 30, 1997. 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 Nine Months Ended Months Ended September 30, September 30, 1997 1996 1997 1996 ---- ---- ---- ---- Weighted Average Number of Shares 377 386 382 389 Shares Assumed to be Issued on Conversion: Warrants 17 21 17 21 ----- ----- ----- ----- Weighted Average Number of Shares of Common Stock for Primary Computation 394 407 399 410 Shares Assumed to be Issued on Conversion: Debentures - 5 - 8 Warrants - 2 1 4 ----- ----- ----- ----- Weighted Average Number of Shares of Common Stock Assuming Full Dilution 394 414 400 422 ===== ===== ===== ===== Net Income $ 273 $ 249 $ 806 $ 770 Dividend Requirements on Preferred Stock 3 3 7 8 ----- ----- ----- ----- Net Income Available to Common Shareholders 270 246 799 762 Interest on Convertible Debentures, Net of Tax - 1 - 3 ----- ----- ----- ----- Net Income Available to Common Shareholders, Assuming Full Dilution $ 270 $ 247 $ 799 $ 765 ===== ===== ===== ===== Earnings Per Share: Primary $0.69 $0.60 $2.00 $1.86 Fully Diluted 0.69 0.60 2.00 1.81 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 ======== ======== ======== 1997 ------------------ 3rd Qtr Nine Mos. -------- -------- OLD RULES EPS (As Reported-APB 15) Primary $ 0.69 $ 2.00 Fully Diluted $ 0.69 $ 2.00 NEW RULES EPS (Restated-FAS 128) Basic $ 0.72 $ 2.09 Diluted $ 0.69 $ 2.00 Computation Under FAS 128: - -------------------------- Weighted Average Common Shares Outstanding-Basic 376,826 381,723 Shares Issued on Conversion: Debentures - - Warrants 16,670 17,101 Convertible Preferred Stock 90 102 -------- -------- Weighted Average Shares 393,586 398,926 ======== ======== Net Income $272,645 $806,231 Preferred Dividends (2,484) (7,454) -------- -------- Net Income Available to Common Shareholders 270,161 798,777 -------- -------- Interest on Convertible Debentures, Net of Tax - - Dividends on Conv. Preferred 12 38 -------- -------- Diluted Net Income $270,173 $798,815 ======== ======== 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 Nine Months Ended Months Ended September 30, September 30, 1997 1996 1997 1996 EARNINGS ---- ---- ---- ---- - -------- Income Before Income Taxes $457 $404 $1,339 $1,250 Fixed Charges, Excluding Interest on Deposits 112 116 329 394 ---- ---- ------ ------ Income Before Income Taxes and Fixed Charges, Excluding Interest on Deposits 569 520 1,668 1,644 Interest on Deposits 331 282 960 860 ---- ---- ------ ------ Income Before Income Taxes and Fixed Charges, Including Interest on Deposits $900 $802 $2,628 $2,504 ==== ==== ====== ====== FIXED CHARGES - ------------- Interest Expense, Excluding Interest on Deposits $104 $107 $ 306 $ 370 One-Third Net Rental Expense* 8 9 23 24 ---- ---- ------ ------ Total Fixed Charges, Excluding Interest on Deposits 112 116 329 394 Interest on Deposits 331 282 960 860 ---- ---- ------ ------ Total Fixed Charges, Including Interest on Deposits $443 $398 $1,289 $1,254 ==== ==== ====== ====== DISTRIBUTION ON TRUST PREFERRED SECURITIES, - ------------------------------------------- PRE-TAX BASIS - ------------- $ 19 $ - $ 45 $ - ==== ==== ====== ====== PREFERRED STOCK DIVIDENDS, PRE-TAX BASIS $ 4 $ 4 $ 12 $ 12 - ---------------------------------------- ==== ==== ====== ====== EARNINGS TO FIXED CHARGES RATIOS - -------------------------------- Excluding Interest on Deposits 5.08x 4.48x 5.07x 4.17x Including Interest on Deposits 2.03 2.02 2.04 2.00 EARNINGS TO COMBINED FIXED CHARGES & PREFERRED STOCK DIVIDENDS RATIOS - ---------------------------------- Excluding Interest on Deposits 4.21 4.33 4.32 4.05 Including Interest on Deposits 1.93 2.00 1.95 1.98 * 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 September 30, 1997. 0000009626 THE BANK OF NEW YORK COMPANY, INC. 1,000,000 9-MOS DEC-31-1997 JAN-1-1997 SEP-30-1997 5,049 1,986 3,158 2,116 4,263 1,117 1,101 38,396 771 61,222 42,478 6,881 2,571 1,827 0 112 3,434 1,446 61,222 2,278 204 239 2,721 960 1,266 1,455 180 91 1,384 1,339 806 0 0 806 $2.00 $2.00 4.11 204 241 0 0 901 355 45 771 663 39 69
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