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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)-November 28, 1994
MELLON BANK CORPORATION
(Exact name of registrant as specified in charter)
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<S> <C> <C>
Pennsylvania 1-7410 25-1233834
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
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One Mellon Bank Center
500 Grant Street
Pittsburgh, Pennsylvania 15258
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code-(412) 234-5000
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ITEM 5. OTHER EVENT
A. Mellon Bank Corporation announced on November 28 that it expects to take a
one-time, after tax charge of approximately $130 million against its fourth
quarter 1994 earnings as a result of actions it will undertake on behalf of
its securities lending clients.
B. In a separate release dated November 29, the Corporation announced that its
Board of Directors authorized the repurchase of up to 3,000,000 shares of
the Corporation's common stock. The repurchased shares will be added to the
Corporation's treasury shares and used to meet the Corporation's current and
near-term common stock requirements for its stock-based benefit plans and
its dividend reinvestment plan.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibit
Number Description
99.1 Mellon Bank Corporation's Press Release, dated November 28, 1994,
announcing a one time charge to earnings to reposition clients'
securities lending investment portfolios.
99.2 Mellon Bank Corporation's Press Release, dated November 29, 1994,
announcing that its Board of Directors has authorized the
Corporation's repurchase of up to 3,000,000 shares of its common
stock.
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.
MELLON BANK CORPORATION
Date: November 29, 1994 By: James M. Gockley
James M. Gockley
Assistant General Counsel
and Secretary
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EXHIBIT INDEX
Number Description Method of Filing
99.1 Press Release dated Filed herewith
November 28, 1994
99.2 Press Release dated Filed herewith
November 29, 1994
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EX-99.1
MELLON NEWS RELEASE
ANALYSTS:
Donald J. MacLeod John W. Calnan
(412) 234-5601 (412) 234-4633
Contact: MEDIA:
Corporate Affairs Group
Margaret K. Cohen One Mellon Bank Center
(412) 234-0850 Pittsburgh, PA 15258-0001
FOR IMMEDIATE RELEASE
MELLON ANNOUNCES $130 MILLION ONE-TIME CHARGE TO EARNINGS TO
REPOSITION CLIENTS' SECURITIES LENDING INVESTMENT PORTFOLIOS
PITTSBURGH, NOV. 28, 1994 -- Mellon Bank Corporation today
announced that it expects to take a one-time, after-tax charge of
approximately $130 million against its fourth quarter 1994 earnings
as a result of actions it will undertake on behalf of its
securities lending clients. These actions will reduce the interest
rate sensitivity of certain clients' securities lending portfolios
in light of current market conditions.
Mellon said it expects to arrange for a third party to enter into
interest rate swap contracts that will convert the income generated
by certain securities lending collateral investments to a
short-term floating rate. The securities lending portfolios
involved were managed primarily by an investment unit of The Boston
Company, which Mellon acquired in May 1993.
Mellon said the charge to earnings, which reflects the estimated
cost of the transactions, is expected to reduce 1994 earnings by
approximately 88 cents per common share. After the charge, Mellon
expects to report a profit in the fourth quarter of 1994. The
action taken by Mellon is not expected to have any effect on 1995
earnings. Mellon said that, after taking the charge, it will
remain the highest capitalized large bank holding company, with
an equity to total assets ratio of approximately 9.4 percent. This
ranking is based upon the 25 largest bank holding companies in
the United States, using Sept. 30, 1994 figures.
-more-
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Nov. 28, 1994
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"We have initiated this action unilaterally for the benefit of our clients
because we determined that the interest rate sensitivity of certain client
portfolios is not appropriate under current conditions for the unique
requirements of the securities lending business," said Frank V. Cahouet,
chairman, president and chief executive officer of Mellon Bank Corporation.
"We have managed client portfolios so they have a high degree of credit
quality. In light of the sharp rise in interest rates, however, we believe our
decision to change the income characteristics of these securities lending
portfolios is in the best interests of our clients and shareholders and
reflects Mellon's continued commitment to the institutional trust and custody
businesses."
Under a securities lending program, banks, acting as agent on behalf of
their trust and custody clients, lend participating clients' securities
primarily to broker-dealers that periodically need these securities. Agents
typically receive cash collateral from the borrowing brokers--paying an
overnight interest rate for the use of cash--and then invest this cash
collateral in fixed-income investment securities. Clients benefit when returns
from these investment securities exceed interest paid to the brokers for use of
their cash.
With balance sheet assets of approximately $39 billion and assets under
management or administration of more than $850 billion, Mellon Bank
Corporation is a major financial services company headquartered in Pittsburgh.
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EX-99.2
MELLON NEWS RELEASE
ANALYSTS:
Donald J. MacLeod
(412) 234-5601
Contact: MEDIA:
Corporate Affairs Group
Margaret K. Cohen One Mellon Bank Center
(412) 234-0850 Pittsburgh, PA 15258-0001
FOR IMMEDIATE RELEASE
MELLON ANNOUNCES STOCK PURCHASE PLAN
PITTSBURGH, Nov. 29, 1994 -- Mellon Bank Corporation announced today
that its board of directors has authorized the repurchase of up to
3 million shares of the Corporation's common stock.
The Corporation expects to make the repurchases from time to time
in the open market or through privately negotiated transactions.
Repurchased common shares will be added to the Corporation's
treasury shares and will be used to meet the Corporation's current
and near-term common stock requirements for its stock-based benefit
plans and its dividend reinvestment plan. The Corporation has
approximately 147 million shares outstanding after taking into
effect a three-for-two stock split on Nov. 15.
With balance sheet assets of approximately $39 billion and assets
under management and administration of more than $850 billion,
Mellon Bank Corporation is a major financial services company
headquartered in Pittsburgh, providing a full range of banking and
investment products and services to individuals and small,
mid-sized and large businesses and institutions.
