SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 27, 1999
HSBC AMERICAS, INC.
(Exact name of registrant as specified in charter)
DELAWARE I-2940 22-1093160
(State or other juris- (Commission (IRS Employer
diction of incorporation) File Number) Identification No.)
ONE MARINE MIDLAND CENTER, BUFFALO, NEW YORK 14203
(Address of principal executive offices)
Registrant's telephone number, including area code: (716) 841-2424
Not Applicable
(Former name or former address,
if changed since report)
2.
Item 5. Other Events
On January 26, 1999, the Registrant issued a press release announcing its
earnings for the fourth quarter and the year 1998. A copy of such press
release is filed herein as Exhibit 99.
Item 7. Financial Statements Pro Forma Financial Information and Exhibits
(C) Exhibit
99. Copy of Press Release of HSBC Americas, Inc. dated January 26,
1999.
3.
EXHIBIT 99
Press Release HSBC Americas, Inc.
Member HSBC Group
- -----------------------------------------------------------------------------
For Release: January 26, 1999 Contact: Linda Stryker
(212) 658-1028
Kathie Rizzo-Young
(716) 841-5003
HSBC AMERICAS, INC.
1998 RESULTS - HIGHLIGHTS
- - Full-year 1998 pre-tax income rose 15 per cent to US$765 million and full-
year 1998 net income increased by 12 per cent to US$527 million
- - Fourth quarter 1998 pre-tax income was up 25 per cent to US$204 million
and net income for the quarter rose 32 per cent to US$159 million.
- - Return on equity for the year was 24.93 per cent and 29.07 per cent for
the fourth quarter.
- - Cost:income ratio for 1998 was 48 percent compared with 51 per cent for
the year 1997.
HSBC AMERICAS, INC. REPORTS STRONG 1998 RESULTS
HSBC Americas, Inc. recorded pre-tax income of US$765 million for the twelve
months ended December 31, 1998, up 15 per cent from US$664 million in 1997.
Full-year net income rose 12 per cent to US$527 million from US$471 million in
1997.
Pre-tax income for the fourth quarter of 1998 rose 25 per cent to US$204
million from US$163 million in the fourth quarter of 1997. Net income for the
quarter increased 32 per cent to US$159 million from US$120 million in the
same period last year.
In the fourth quarter, HSBC Americas benefited from a settlement with the U.S.
Internal Revenue Service on Brazilian tax credits disallowed in the 1980s.
The settlement contributed US$33 million to pre-tax income and reduced taxes
by a net amount of US$10 million.
In the first half of 1998, HSBC Americas recorded gains on the sale of credit
card portfolios of US$28 million. Excluding both the benefit of the Brazil
settlement and the credit card gains, full-year pre-tax income would have been
US$704 million, up 6 per cent from 1997. Fourth quarter pre-tax income would
have been US$171 million, excluding the Brazil settlement, up 5 per cent from
the fourth quarter of 1997.
-more-
4.
HSBC Americas, Inc.
- -------------------------------------------------------------------------------
The effective tax rate for the year rose to 31 per cent from 29 per cent last
year. Tax losses, which had led to reduced tax charges in the past, have been
fully utilised, causing the effective tax rate to rise toward the statutory
rate. Without the Brazilian settlement in the fourth quarter, the full-year
tax rate would have been 34 per cent.
Return on average common equity for the quarter was 29.07 per cent compared
with 22.93 per cent last year, while that for the full-year results was 24.93
per cent compared with 22.93 per cent in 1997. The cost:income ratio improved
to 48 per cent compared to 51 per cent in 1997. HSBC Americas, Inc.
consistently ranks among the top performing regional bank holding companies
based on these measures.
Assets grew by 8 per cent to US$33.9 billion at December 31, 1998 from US$31.5
billion at December 31, 1997.
Gross loans at December 31, 1998 totalled US$24.0 billion, up 11 per cent
from US$21.6 billion in 1997, due primarily to growth in commercial loans.
This also reflected the fourth quarter acquisition of approximately US$1.7
billion of commercial loans of the U.S. branches of The Hongkong and Shanghai
Banking Corporation Limited by Marine Midland Bank, completing the
consolidation of the HSBC Group's commercial banking activities in the U.S.
Malcolm Burnett, chief executive officer of HSBC Americas, Inc. said: "Last
year's record results were helped by a one-off tax settlement, solid earnings
and strong expense discipline.
"In November, we announced that, subject to regulatory approval, Marine Midland
Bank will change its name to HSBC Bank USA as part of a global branding
initiative by our parent HSBC Holdings plc. The new name will emphasize our
commitment to providing excellent service locally, while offering customers
access to the global resources of one of the world's leading financial
services companies."
Marine Midland Bank is the principal subsidiary of HSBC Americas, Inc.
Headquartered in Buffalo, New York, Marine Midland is a New York state
regional banking institution with more than 375 offices statewide.
HSBC Americas, Inc. is an indirectly-held, wholly-owned subsidiary of HSBC
Holdings plc, which is headquartered in London. With over 5,500 offices in 79
countries and territories and assets of US$484 billion at June 30, 1998, the
HSBC Group is among the world's largest banking and financial services
organizations.
5.
<TABLE>
<CAPTION>
HSBC Americas, Inc. Quarterly summary (in US$ millions)
- --------------------------------------------------------------------------------------------
Quarter ended Quarter ended Year-to-date Year-to-date
December 31, December 31, December 31, December 31,
1998 1997 1998 1997
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
Net income $ 158.6 $ 120.3 $ 527.1 $ 471.0
Income before taxes 204.1 163.0 765.2 664.0
Profitability Ratios
Return on average assets 1.87% 1.55% 1.60% 1.62%
Return on average
common equity 29.07 22.93 24.93 22.93
Cost:income ratio 47.07 51.72 48.00 50.98
Staff numbers
(full time equivalents) 9,293 9,188
Average Balances
Loans $22,064 $21,474 $ 21,392 $ 20,049
Earning assets 31,562 29,064 30,849 27,271
Total assets 33,657 30,899 32,847 29,026
Deposits 25,912 22,216 24,947 21,156
Net Yields on a
Taxable Equivalent Basis
Net yield on earning assets 3.72% 3.97% 3.79% 4.31%
Net yield on total assets 3.49 3.73 3.56 4.05
Capital (at end of period)
Common equity $2,228.3 $2,039.0
As a percent of total assets 6.56% 6.47%
</TABLE>
6.
<TABLE>
<CAPTION>
HSBC Americas, Inc. Consolidated statement of income (in US$ thousands)
- --------------------------------------------------------------------------------------------
Quarter ended Quarter ended
December 31, December 31,
1998 1997
------------- -------------
<S> <C> <C>
Interest income
Loans $449,478 $451,952
Securities 61,114 55,031
Trading assets 12,560 14,922
Deposits with banks 47,686 33,974
Federal funds sold and securities purchased
under resale agreements 12,079 9,023
------- -------
Total interest income 582,917 564,902
Interest expense
Deposits
In domestic offices 161,954 155,610
In foreign offices 56,535 28,485
Short-term borrowings 45,666 61,351
Long-term debt 23,465 29,358
------- -------
Total interest expense 287,620 274,804
------- -------
Net interest income 295,297 290,098
Provision for credit losses 21,000 24,000
------- -------
Net interest income, after provision
for credit losses 274,297 266,098
------- -------
Other operating income
Trust income 12,249 11,320
Service charges 30,152 27,746
Mortgage servicing income 3,138 5,893
Other fees and commissions 38,048 35,999
Trading revenues (1,845) 1,369
Interest on Brazilian tax settlement 32,700 -
Other income 15,600 15,008
------- -------
Total other operating income 130,042 97,335
------- -------
Total income from operations 404,339 363,433
Other operating expenses
Salaries and employee benefits 103,403 97,700
Net occupancy expense 22,478 23,276
Other expenses 74,329 79,412
------- -------
Total other operating expenses 200,210 200,388
------- -------
Income before taxes 204,129 163,045
Applicable income tax expense 45,500 42,700
------- -------
Net income $158,629 $120,345
======= =======
</TABLE>
7.
<TABLE>
<CAPTION>
HSBC Americas, Inc. Consolidated statement of income (in US$ thousands)
- --------------------------------------------------------------------------------------------
Year ended Year ended
December 31, December 31,
1998 1997
------------ ------------
<S> <C> <C>
Interest income
Loans $1,785,122 $1,732,705
Securities 232,440 218,977
Trading assets 50,843 58,796
Deposits with banks 136,594 98,750
Federal funds sold and securities purchased
under resale agreements 127,982 51,786
--------- ---------
Total interest income 2,332,981 2,161,014
Interest expense
Deposits
In domestic offices 656,361 583,904
In foreign offices 211,030 95,150
Short-term borrowings 204,171 196,727
Long-term debt 96,079 111,848
--------- ---------
Total interest expense 1,167,641 987,629
--------- ---------
Net interest income 1,165,340 1,173,385
Provision for credit losses 80,000 87,400
--------- ---------
Net interest income, after provision
for credit losses 1,085,340 1,085,985
--------- ---------
Other operating income
Trust income 47,290 42,995
Service charges 115,382 103,975
Mortgage servicing income 18,949 21,529
Other fees and commissions 145,505 134,828
Trading revenues 3,700 6,089
Interest on Brazilian tax settlement 32,700 -
Other income 96,571 50,009
--------- ---------
Total other operating income 460,097 359,425
--------- ---------
Total income from operations 1,545,437 1,445,410
Other operating expenses
Salaries and employee benefits 410,323 397,966
Net occupancy expense 89,423 90,989
Other expenses 280,524 292,505
--------- ---------
Total other operating expenses 780,270 781,460
--------- ---------
Income before taxes 765,167 663,950
Applicable income tax expense 238,100 193,000
--------- ---------
Net income $ 527,067 $ 470,950
========= =========
</TABLE>
8.
<TABLE>
<CAPTION>
HSBC Americas, Inc. Consolidated balance sheet (in US$ thousands)
- --------------------------------------------------------------------------------------------
December 31, December 31,
1998 1997
------------ ------------
<S> <C> <C>
Assets
Cash and due from banks $ 1,262,423 $ 928,691
Interest bearing deposits with banks 2,373,550 2,643,010
Federal funds sold and securities purchased
under resale agreements 86,919 497,992
Trading assets 826,019 979,454
Securities available for sale 4,237,679 3,998,773
Loans 24,049,499 21,622,232
Less - allowance for credit losses 379,652 409,409
---------- ----------
Loans, net 23,669,847 21,212,823
Premises and equipment 207,685 225,753
Accrued interest receivable 238,790 233,849
Intangible assets 469,194 481,953
Other assets 571,980 315,275
---------- ----------
Total assets $33,944,086 $31,517,573
========== ==========
Liabilities
Deposits in domestic offices
Noninterest bearing $ 3,552,303 $ 4,195,248
Interest bearing 18,168,438 15,981,866
Interest bearing deposits in foreign offices 4,545,069 2,640,050
---------- ----------
Total deposits 26,265,810 22,817,164
Short-term borrowings 2,961,063 4,202,175
Interest, taxes and other liabilities 741,269 751,217
Long-term debt 1,747,691 1,708,064
---------- ----------
Total liabilities 31,715,833 29,478,620
Shareholders' equity
Common stock 5 5
Capital surplus 1,806,563 1,804,527
Retained earnings 377,179 205,112
Accumulated other comprehensive income 44,506 29,309
---------- ----------
Total shareholders' equity 2,228,253 2,038,953
---------- ----------
Total liabilities and shareholders' equity $33,944,086 $31,517,573
========== ==========
</TABLE>
9.
SIGNATURES
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.
HSBC AMERICAS, INC.
(REGISTRANT)
/s/ Gerald A. Ronning
NAME: GERALD A. RONNING
TITLE: EXECUTIVE VICE PRESIDENT &
CONTROLLER
Date: January 27, 1999
