SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[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.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File No. 1-7436
REPUBLIC NEW YORK CORPORATION
(Exact name of registrant specified in its charter)
Maryland 13-2764867
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
452 Fifth Avenue, New York, New York 10018
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 525-6100
Not Applicable
Former name, former address and former fiscal year, if changed since last report
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 for 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 registrant's common stock, was
54,630,474 at October 31, 1997.
<PAGE>
REPUBLIC NEW YORK CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
Page No.
Item 1. Financial Statements:
Consolidated Statements of Condition - Unaudited
September 30, 1997 and December 31, 1996 2
Consolidated Statements of Income - Unaudited
Nine Months and Three Months Ended September 30,
1997 and 1996 3
Consolidated Statements of Cash Flows - Unaudited
Nine Months Ended September 30, 1997 and 1996 4
Consolidated Statement of Changes in Stockholders' Equity-
Unaudited Nine Months Ended September 30, 1997 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis 8-16
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 17
The information contained in the financial statements
furnished in this report is unaudited. However, in the opinion of
management, all adjustments, consisting of normal recurring accruals,
necessary for a fair presentation of the results of operations for the
interim periods presented, have been included.
-1-
<PAGE>
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
REPUBLIC NEW YORK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION
UNAUDITED
(Dollars in thousands)
<CAPTION>
September 30, December 31,
1997 1996
------------ ------------
<S> <C> <C>
Assets
Cash and due from banks $ 862,840 $ 710,183
Interest-bearing deposits with banks 3,674,729 5,909,195
Precious metals 1,006,686 1,231,319
Securities held to maturity (approximate market
value of $9,571,775 in 1997 and $8,144,518 in 1996) 9,451,299 8,135,068
Securities available for sale (at approximate market value) 14,686,765 13,040,445
------------ ------------
Total investment securities 24,138,064 21,175,513
Trading account assets (note 2) 5,705,698 4,807,788
Federal funds sold and securities purchased
under resale agreements 3,833,416 2,109,109
Loans (net of unearned income of $20,035
in 1997 and $25,306 in 1996) 13,004,684 11,721,936
Allowance for possible credit losses (note 2) (326,091) (350,358)
Customers' liability on acceptances 411,730 938,615
Accounts receivable and accrued interest 3,502,503 2,108,318
Investment in affiliate 874,058 806,274
Premises and equipment 466,050 469,231
Other assets 637,398 661,728
------------ ------------
Total assets $ 57,791,765 $ 52,298,851
============ ============
Liabilities and Stockholders' Equity
Noninterest-bearing deposits:
In domestic offices $ 2,263,102 $ 2,296,267
In foreign offices 238,565 177,675
Interest-bearing deposits:
In domestic offices 12,290,956 12,559,554
In foreign offices 18,645,258 16,692,083
------------ ------------
Total deposits 33,437,881 31,725,579
Trading account liabilities 4,901,850 4,402,085
Short-term borrowings 7,441,423 5,446,841
Acceptances outstanding 411,949 939,598
Accounts payable and accrued expenses 2,450,099 1,405,822
Due to factored clients 725,596 604,686
Other liabilities (note 2) 150,595 218,910
Long-term debt 1,691,564 1,498,710
Subordinated long-term debt and perpetual
capital notes (note 3) 2,650,000 2,400,000
Company-obligated mandatorily redeemable preferred securities of
subsidiary trusts holding solely junior subordinated debt securities 350,000 350,000
Stockholders' equity:
Cumulative preferred stock, no par value
7,501,750 shares outstanding in 1997 and 8,502,308 in 1996 (note 4) 550,000 555,800
Common stock, $5 par value
150,000,000 shares authorized; 54,753,009 shares
outstanding in 1997 and 55,009,549 in 1996 273,765 275,048
Surplus 457,283 502,425
Retained earnings 2,148,892 1,918,880
Net unrealized appreciation on securities available
for sale, net of taxes 150,868 54,467
------------ ------------
Total stockholders' equity 3,580,808 3,306,620
------------ ------------
Total liabilities and stockholders' equity $ 57,791,765 $ 52,298,851
============ ============
<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
-2-
<PAGE>
<TABLE>
REPUBLIC NEW YORK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
UNAUDITED
(In thousands except per share data)
<CAPTION>
Nine Months Ended Three Months Ended
September 30, September 30,
------------------------ -----------------------
1997 1996 1997 1996
----------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Interest Income:
Interest and fees on loans $ 796,002 $ 674,312 $ 273,458 $ 235,994
Interest on deposits with banks 225,912 294,734 72,355 91,926
Interest and dividends on investment securities:
Taxable 1,106,529 933,764 388,198 324,900
Exempt from federal income taxes 66,785 71,473 21,336 23,716
Interest on trading account assets 92,188 49,676 31,357 17,426
Interest on federal funds sold and securities
purchased under resale agreements 77,799 69,483 31,127 27,865
---------- ---------- ---------- ----------
Total interest income 2,365,215 2,093,442 817,831 721,827
---------- ---------- ---------- ----------
Interest Expense:
Interest on deposits 1,070,340 952,444 370,890 322,036
Interest on short-term borrowings 328,196 238,821 117,690 88,047
Interest on long-term debt 205,154 190,692 72,501 65,260
---------- ---------- ---------- ----------
Total interest expense 1,603,690 1,381,957 561,081 475,343
---------- ---------- ---------- ----------
Net Interest Income 761,525 711,485 256,750 246,484
Provision for credit losses 12,000 28,000 4,000 20,000
---------- ---------- ---------- ----------
Net interest income after provision for
credit losses 749,525 683,485 252,750 226,484
---------- ---------- ---------- ----------
Other Operating Income:
Income from precious metals 12,761 18,233 918 6,622
Foreign exchange trading income 86,309 73,896 26,572 23,295
Trading account profits and commissions 33,210 39,189 12,164 13,632
Investment securities gains, net 11,093 15,444 9,730 5,556
Net gain (loss) on loans sold or held for sale 13,233 350 3,338 (1,393)
Commission income 63,204 52,834 21,947 18,188
Equity in earnings of affiliate 90,710 68,271 32,036 23,777
Other income 70,527 58,015 22,868 20,106
---------- ---------- ---------- ----------
Total other operating income 381,047 326,232 129,573 109,783
---------- ---------- ---------- ----------
Other Operating Expenses:
Salaries 205,981 189,792 70,937 64,587
Employee benefits 144,710 121,106 46,481 40,977
Occupancy, net 53,721 55,086 18,598 20,596
Other expenses 245,163 212,546 84,877 72,134
---------- ---------- ---------- ----------
Total other operating expenses 649,575 578,530 220,893 198,294
---------- ---------- ---------- ----------
Income Before Income Taxes 480,997 431,187 161,430 137,973
Income taxes 147,960 120,893 49,142 30,321
---------- ---------- ---------- ----------
Net Income $ 333,037 $ 310,294 $ 112,288 $ 107,652
========== ========== ========== ==========
Net Income Applicable to Common Stock $ 315,905 $ 286,727 $ 106,868 $ 99,677
========== ========== ========== ==========
Net income per common share $5.77 $5.15 $1.95 $1.80
Average common shares outstanding 54,747 55,711 54,844 55,396
<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
-3-
<PAGE>
<TABLE>
REPUBLIC NEW YORK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
(In thousands)
<CAPTION>
Nine Months Ended
September 30,
--------------------------
1997 1996
----------- -----------
<S> <C> <C>
Cash Flows From Operating Activities:
Net income $ 333,037 $ 310,294
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization, net 66,138 65,979
Provision for credit losses 12,000 28,000
Investment securities gains, net (11,093) (15,444)
Net gain on loans sold or held for sale (13,233) (1,743)
Equity in earnings of affiliate (90,710) (68,271)
Net change in precious metals 224,633 (79,751)
Net change in trading accounts (398,145) (338,504)
Net change in loans held for sale - (118,558)
Net change in accounts receivable and accrued interest (1,338,780) (895,200)
Net change in accounts payable and accrued expenses 1,017,312 176,016
Other, net (138,083) (76,371)
----------- -----------
Net cash used in operating activities (336,924) (1,013,553)
----------- -----------
Cash Flows From Investing Activities:
Interest-bearing deposits with banks 2,234,466 673,163
Federal funds sold and securities purchased under resale agreements (1,724,307) 406,924
Short-term investments (37,805) 155,157
Purchases of securities held to maturity (1,001,775) (2,840,101)
Proceeds from maturities of securities held to maturity 642,316 383,275
Purchases of securities available for sale (6,015,934) (5,166,717)
Proceeds from sales of securities available for sale 1,245,617 1,699,769
Proceeds from maturities of securities available for sale 2,459,896 3,053,610
Loans (1,461,891) (640,943)
Payment for purchase of Brooklyn Bancorp, Inc., net of cash received - (486,002)
Investment in affiliate 38,953 30,296
----------- -----------
Net cash used in investing activities (3,620,464) (2,731,569)
----------- -----------
Cash Flows From Financing Activities:
Deposits 1,712,302 2,443,681
Short-term borrowings 1,997,426 1,266,180
Due to factored clients 120,910 142,678
Proceeds from issuance of long-term debt 797,218 427,136
Repayment of long-term debt (603,722) (313,334)
Proceeds from issuance of subordinated long-term debt 250,000 100,000
Repayment of subordinated long-term debt - (100,000)
Net proceeds from issuance of cumulative preferred stock 146,900 -
Repurchase of preferred stock (155,800) -
Repurchase of common stock (63,611) (113,033)
Cash dividends paid (90,359) (86,114)
Other, net 7,620 21,579
----------- -----------
Net cash provided by financing activities 4,118,884 3,788,773
----------- -----------
Effect of exchange rate changes on cash and due from banks (8,839) (1,989)
----------- -----------
Net increase in cash and due from banks 152,657 41,662
Cash and due from banks at beginning of period 710,183 675,683
----------- -----------
Cash and due from banks at end of period $ 862,840 $ 717,345
=========== ===========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 1,494,970 $ 1,157,226
Income taxes 87,133 95,233
Transfers from securities available for sale
to securities held to maturity 949,079 1,008,547
<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
-4-
<PAGE>
<TABLE>
REPUBLIC NEW YORK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
UNAUDITED
(Dollars in thousands)
<CAPTION>
Nine Months
Ended
September 30,
1997
-------------
<S> <C>
Cumulative Preferred Stock:
Balance at beginning of period $ 555,800
Issuance of 3,000,000 shares of $2.8575 cumulative preferred stock 150,000
Retirement of 4,000,000 shares of $1.9375 cumulative preferred
stock and 558 shares of remarketed preferred stock (155,800)
-------------
Balance at end of period $ 550,000
=============
Common Stock:
Balance at beginning of period $ 275,048
Net issuance under stock option, restricted stock and
restricted stock election plans of 442,807 shares 2,214
Retirement of 699,347 shares (3,497)
-------------
Balance at end of period $ 273,765
=============
Surplus:
Balance at beginning of period $ 502,425
Net issuance of common stock under stock option,
restricted stock and restricted stock election plans
of 442,807 shares 18,374
Cost of issuing preferred stock (3,100)
Treasury stock transactions of affiliate (302)
Retirement of 699,347 common shares (60,114)
-------------
Balance at end of period $ 457,283
=============
Retained Earnings:
Balance at beginning of period $ 1,918,880
Net income 333,037
Foreign currency translation, net of taxes (10,357)
Dividends declared on common stock (75,536)
Dividends declared on issues of preferred stock (17,132)
-------------
Balance at end of period $ 2,148,892
=============
Net Unrealized Appreciation on Securities
Available for Sale, Net of Taxes:
Balance at beginning of period $ 54,467
Unrealized appreciation 148,309
Income tax expense (51,908)
-------------
Balance at end of period $ 150,868
=============
Total Stockholders' Equity:
Balance at beginning of period $ 3,306,620
Net changes during the period 274,188
-------------
Balance at end of period $ 3,580,808
=============
<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
-5-
<PAGE>
REPUBLIC NEW YORK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
COVERING THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
1. In February 1997, SFAS No.128, "Earnings per Share", was issued.
This statement establishes standards for computing and presenting earnings
per share ("EPS") and changes the method of calculating EPS whereby primary
EPS will become "Basic" EPS and fully diluted EPS will become "Diluted"
EPS. This statement simplifies the standards for computing earnings per
share previously found in Accounting Principles Board Opinion No. 15, and
makes them comparable to international EPS standards. Basic EPS, unlike
primary EPS, excludes dilution and is computed by dividing income available
to common stockholders by the weighted-average number of common shares
outstanding for the period. Diluted EPS reflects the dilution that could
occur if securities or other contracts to issue common stock were exercised
or converted into common stock or resulted in the issuance of common stock
that then shared in the earnings of the Corporation. This SFAS will be
adopted by the Corporation on December 31, 1997. The adoption of this SFAS
will have no material effect on the Corporation's results of operations or
its financial position.
In June 1997, SFAS No. 130, "Reporting Comprehensive Income", was
issued. This statement establishes standards for reporting and displaying
comprehensive income and its components when a full set of financial
statements that report financial position, results of operations and cash
flows are provided. Items such as foreign currency translation adjustments
and unrealized gains and losses on available for sale securities are
currently included as a component of stockholders' equity until realized.
Such items will be included in determining comprehensive income. Under the
SFAS, any items that qualify for comprehensive income disclosure may be
presented separately in a dual step income statement, that displays net
income and comprehensive income components, in a separate statement of
comprehensive income that begins with net income and displays other
comprehensive income components to arrive at total comprehensive income or
alternatively in the statement of changes in stockholders' equity. This
SFAS will be adopted by the Corporation on January 1, 1998. The adoption of
this SFAS will have no material effect on the Corporation's results of
operations or its financial position.
In June 1997, SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information", was issued and supersedes SFAS No. 14
"Financial Reporting for Segments of a Business Enterprise". This statement
establishes standards for reporting information about segments of a
business in annual financial statements and will require selected segment
information in interim reports to shareholders. The statement requires
among other things, disclosure on a business segment basis, as defined by
the Corporation, to include a description of products and services, major
customers, interest income and expense, profit or loss as measured by the
Corporation's management in assessing segment performance and geographic
information on assets and revenue. This SFAS is effective, as it relates to
the Corporation, on January 1, 1998 and need not be applied to interim
periods during 1998. The adoption of this SFAS will have no material effect
on the Corporation's results of operations or its financial position.
-6-
<PAGE>
2. During the second quarter of 1997, the Corporation changed its
method of reporting the aggregate allowance for possible credit losses in
order to be consistent with industry practice. The Corporation's aggregate
allowance for possible credit losses at September 30, 1997 was $353.1
million, consisting of $17.0 million applicable to trading account assets,
which is a reduction of "trading account assets," $10.0 million included in
"other liabilities" for off-balance-sheet extensions of credit, such as
standby letters of credit, guarantees and commitments, and $326.1 million,
which is available to absorb all other possible credit losses. Prior period
amounts have not been restated to reflect the change in reporting the
allowance for possible credit losses.
The following table presents data related to the Corporation's
aggregate allowance for possible credit losses for the nine-month periods
ended September 30, 1997 and 1996.
1997 1996
--------- ---------
(In thousands)
Aggregate balance at beginning of period $ 350,358 $ 300,593
Charge-offs (17,559) (36,023)
Recoveries 9,412 14,804
--------- ---------
Net charge-offs (8,147) (21,219)
Provision charged to operating expense 12,000 28,000
Allowance acquired from Brooklyn Bancorp, Inc. - 42,579
Translation adjustment (1,120) 374
--------- ---------
Aggregate balance at end of period $ 353,091 $ 350,327
========= =========
3. On July 22, 1997, the Corporation sold, in a public offering, $250
million principal amount of 7.20% Subordinated Debentures Due 2097. The
Debentures are direct, unsecured general obligations of the Corporation and
are subordinated to all present and future senior indebtedness of the
Corporation. The Debentures are subject to the Corporation's right to
shorten the maturity of the Debentures and/or to redeem the Debentures upon
the occurrence of certain events. The net proceeds received by the
Corporation from the sale of the Debentures were used for general corporate
purposes.
4. On September 24, 1997, the Corporation sold, in a public offering, 3
million shares of $2.8575 Cumulative Preferred Stock ($50 Stated Value)
with an aggregate stated value of $150 million. The Preferred Stock may be
redeemed at the option of the Corporation, in whole or in part, at any time
or from time to time, on or after October 1, 2007 at $50 per share, plus,
in each case, dividends accrued and unpaid to the redemption date. The net
proceeds received by the Corporation will be used for general corporate
purposes including the redemption of at least $50 million of the
Corporation's other outstanding issues of preferred stock or the reduction
or refinancing of subsidiary borrowings.
-7-
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Management's discussion and analysis of the summary of operations should be
read in conjunction with the consolidated financial statements (unaudited)
and notes shown elsewhere in this Report. In the following discussion, the
interest income earned on tax exempt obligations has been adjusted
(increased) to a fully-taxable equivalent basis. The rate used for this
adjustment was approximately 43% in 1997 and 44% in 1996. This tax
equivalent adjustment permits all interest income and net interest income
to be analyzed on a comparable basis. The following table presents a
comparative summary of the increases (decreases) in income and expense for
the third quarter and nine months ended September 30, 1997 compared to the
corresponding periods of 1996.
<TABLE>
<CAPTION>
Increase (Decrease)
----------------------------------------------------------------
3rd Qtr. 1997 vs. Nine Months 1997 vs.
3rd Qtr. 1996 Nine Months 1996
--------------------------- ----------------------------
Amount Percent Amount Percent
--------- ------- ---------- -------
(Dollars in thousands)
<S> <C> <C> <C> <C>
Interest income $ 95,472 13.1 $ 271,238 12.8
Interest expense 85,738 18.0 221,733 16.0
--------- ----------
Net interest income 9,734 3.8 49,505 6.7
Provision for credit losses (16,000) (80.0) (16,000) (57.1)
--------- ----------
Net interest income after
provision for credit losses 25,734 11.0 65,505 9.3
Other operating income 19,790 18.0 54,815 16.8
Other operating expenses 22,599 11.4 71,045 12.3
--------- ----------
Income before income taxes 22,925 15.7 49,275 10.8
--------- ----------
Applicable income taxes 18,821 62.1 27,067 22.4
Tax equivalent adjustment (532) (6.7) (535) (2.2)
--------- ----------
Total applicable income taxes 18,289 47.8 26,532 18.2
--------- ----------
Net income $ 4,636 4.3 $ 22,743 7.3
========= ======= ========== =======
Net income applicable to
common stock $ 7,191 7.2 $ 29,178 10.2
========= ======= ========== =======
</TABLE>
Net Interest Income - on a fully-taxable equivalent basis was $264.2
million in the third quarter of 1997, compared to $254.4 million in the
third quarter of 1996. As shown in the table on page 9, average
interest-earning assets rose to $45.9 billion in the third quarter of 1997,
compared to $41.0 billion in the third quarter of 1996. The net interest
rate differential was 2.28% in the third quarter of 1997, compared to 2.47%
in the third quarter of 1996. The change in the net interest rate margin in
the third quarter of 1997, from the third quarter of last year, reflects
the Corporation's extension of its short-term funding to further reduce its
exposure to a rising interest rate scenario. In addition, the growth in
average interest-earning assets was a result of increased deposits,
particularly in foreign offices, that were invested in high quality assets
at narrow spreads, further compressing the net interest rate differential.
-8-
<PAGE>
<TABLE>
AVERAGE BALANCES, NET INTEREST DIFFERENTIAL,
AVERAGE RATES EARNED AND PAID
UNAUDITED
(Fully taxable equivalent basis)
(Dollars in thousands)
<CAPTION>
Quarter Ended September 30,
---------------------------------------------------------------------------------
1997 1996
---------------------------------------- --------------------------------------
Average Average
Interest Rates Interest Rates
Average Income/ Earned/ Average Income/ Earned/
Balance Expense Paid % Balance Expense Paid %
------------- ----------- ------- ------------- ----------- -------
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Interest-bearing deposits with banks $ 4,647,094 $ 72,355 6.18 $ 5,906,911 $ 91,926 6.19
Investment securities:(1)<F1>
Taxable 21,955,458 388,198 7.01 18,300,015 324,900 7.06
Exempt from federal income taxes 1,412,796 28,769 8.08 1,490,059 31,681 8.46
------------- ----------- ------------- -----------
Total investment securities 23,368,254 416,967 7.08 19,790,074 356,581 7.17
Trading account assets(2)<F2> 1,489,447 31,357 8.35 1,168,008 17,426 5.94
Federal funds sold and securities
purchased under resale agreements 2,315,180 31,127 5.33 2,012,720 27,865 5.51
Loans, net of unearned income:
Domestic offices 9,474,790 194,338 8.14 8,384,193 171,023 8.11
Foreign offices 4,628,691 79,120 6.78 3,775,928 64,971 6.85
------------- ----------- ------------- -----------
Total loans, net of unearned income 14,103,481 273,458 7.69 12,160,121 235,994 7.72
------------- ----------- ------------- -----------
Total interest-earning assets 45,923,456 $ 825,264 7.13 41,037,834 $ 729,792 7.07
=========== ======= =========== =======
Cash and due from banks 897,655 705,730
Other assets 8,991,394 7,667,665
------------- -------------
Total assets $ 55,812,505 $ 49,411,229
============= =============
Interest-bearing funds:
Consumer and other time deposits $ 10,714,973 $ 109,702 4.06 $ 11,148,550 $ 110,114 3.93
Certificates of deposit 1,619,257 21,020 5.15 1,087,844 13,577 4.97
Deposits in foreign offices 16,905,634 240,168 5.64 15,078,686 198,345 5.23
------------- ----------- ------------- -----------
Total interest-bearing deposits 29,239,864 370,890 5.03 27,315,080 322,036 4.69
Trading account liabilities(2)<F2> 138,751 2,442 6.98 259,863 4,546 6.96
Short-term borrowings 9,141,274 115,248 5.00 6,784,006 83,501 4.90
Total long-term debt 4,458,342 72,501 6.45 4,101,227 65,260 6.33
------------- ----------- ------------- -----------
Total interest-bearing funds 42,978,231 $ 561,081 5.18 38,460,176 $ 475,343 4.92
=========== ======= =========== =======
Noninterest-bearing deposits:
In domestic offices 2,318,170 2,099,582
In foreign offices 162,900 120,752
Other liabilities 6,982,172 5,612,465
Stockholders' equity:
Preferred stock 411,413 575,000
Common stockholders' equity 2,959,619 2,543,254
------------- -------------
Total stockholders' equity 3,371,032 3,118,254
------------- -------------
Total liabilities and stockholders' equity $ 55,812,505 $ 49,411,229
============= =============
Interest income/earning assets $ 825,264 7.13 $ 729,792 7.07
Interest expense/earning assets 561,081 4.85 475,343 4.60
----------- ------- ----------- -------
Net interest differential $ 264,183 2.28 $ 254,449 2.47
=========== ======= =========== =======
<FN>
<F1> (1) Based on amortized or historic cost with the mark-to-market adjustment on securities available for sale included in
other assets.
<F2> (2) Excludes noninterest-bearing balances, which are included in other assets or other liabilities, respectively.
</FN>
</TABLE>
-9-
<PAGE>
<TABLE>
AVERAGE BALANCES, NET INTEREST DIFFERENTIAL,
AVERAGE RATES EARNED AND PAID
UNAUDITED
(Fully taxable equivalent basis)
(Dollars in thousands)
<CAPTION>
Nine Months Ended September 30,
---------------------------------------------------------------------------------
1997 1996
---------------------------------------- --------------------------------------
Average Average
Interest Rates Interest Rates
Average Income/ Earned/ Average Income/ Earned/
Balance Expense Paid % Balance Expense Paid %
------------- ----------- ------- ------------- ----------- -------
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Interest-bearing deposits with banks $ 4,788,211 $ 225,912 6.31 $ 5,867,614 $ 294,734 6.71
Investment securities:(1)<F1>
Taxable 21,033,547 1,106,529 7.03 17,476,242 933,764 7.14
Exempt from federal income taxes 1,496,131 90,792 8.11 1,527,790 96,015 8.39
------------- ----------- ------------- -----------
Total investment securities 22,529,678 1,197,321 7.11 19,004,032 1,029,779 7.24
Trading account assets(2)<F2> 1,600,882 92,188 7.70 1,134,622 49,676 5.85
Federal funds sold and securities
purchased under resale agreements 1,943,328 77,799 5.35 1,677,765 69,483 5.53
Loans, net of unearned income:
Domestic offices 9,115,978 558,217 8.19 8,200,512 498,260 8.12
Foreign offices 4,699,467 237,785 6.76 3,505,034 176,052 6.71
------------- ----------- ------------- -----------
Total loans, net of unearned income 13,815,445 796,002 7.70 11,705,546 674,312 7.69
------------- ----------- ------------- -----------
Total interest-earning assets 44,677,544 $2,389,222 7.15 39,389,579 $2,117,984 7.18
=========== ======= =========== =======
Cash and due from banks 820,446 721,336
Other assets 9,336,132 7,813,877
------------- -------------
Total assets $ 54,834,122 $ 47,924,792
============= =============
Interest-bearing funds:
Consumer and other time deposits $ 10,834,753 $ 325,305 4.01 $ 10,698,902 $ 319,919 3.99
Certificates of deposit 1,607,161 61,305 5.10 886,255 33,207 5.00
Deposits in foreign offices 16,838,100 683,730 5.43 14,384,972 599,318 5.57
------------- ----------- ------------- -----------
Total interest-bearing deposits 29,280,014 1,070,340 4.89 25,970,129 952,444 4.90
Trading account liabilities(2)<F2> 188,568 9,584 6.80 137,512 7,470 7.26
Short-term borrowings 8,454,331 318,612 5.04 6,309,266 231,351 4.90
Total long-term debt 4,284,318 205,154 6.40 3,990,853 190,692 6.38
------------- ----------- ------------- -----------
Total interest-bearing funds 42,207,231 $1,603,690 5.08 36,407,760 $1,381,957 5.07
=========== ======= =========== =======
Noninterest-bearing deposits:
In domestic offices 2,267,157 1,956,280
In foreign offices 178,856 136,199
Other liabilities 6,888,416 6,357,895
Stockholders' equity:
Preferred stock 430,240 575,000
Common stockholders' equity 2,862,222 2,491,658
------------- -------------
Total stockholders' equity 3,292,462 3,066,658
------------- -------------
Total liabilities and stockholders' equity $ 54,834,122 $ 47,924,792
============= =============
Interest income/earning assets $2,389,222 7.15 $2,117,984 7.18
Interest expense/earning assets 1,603,690 4.80 1,381,957 4.68
----------- ------- ----------- -------
Net interest differential $ 785,532 2.35 $ 736,027 2.50
=========== ======= =========== =======
<FN>
<F1> (1) Based on amortized or historic cost with the mark-to-market adjustment on securities available for sale included in
other assets.
<F2> (2) Excludes noninterest-bearing balances, which are included in other assets or other liabilities, respectively.
</FN>
</TABLE>
-10-
<PAGE>
As shown in the table on page 10, net interest income on a fully-taxable
equivalent basis was $785.5 million for the first nine months of 1997,
compared to $736.0 million in the nine-month period of 1996. Average
interest-earning assets rose to $44.7 billion for the first nine months of
1997, compared to $39.4 billion for the corresponding period of 1996. The
net interest rate differential was 2.35% for the first nine months of 1997,
compared to 2.50% in the respective period of 1996. The decline in the net
interest rate differential for the nine months of 1997, was attributable to
the same factors that contributed to the decline in the third quarter of
1997.
Provision for credit losses - was $4.0 million and $12.0 million in the
third quarter and first nine months of 1997, respectively, compared to
$20.0 million and $28.0 million for the corresponding periods of last year.
While no specific credit concerns existed in the third quarter of 1996,
management considered the $20.0 million provision for credit losses to be
prudent in the context of increased domestic and international exposures.
Net charge-offs were $3.3 million in the third quarter of 1997, compared to
net charge-offs of $9.0 million in the third quarter of 1996. For the first
nine months of 1997, net charge-offs were $8.1 million, compared to $21.2
million for the nine-month period of 1996. See Note 2 of notes to
consolidated financial statements for additional information related to the
allowance for possible credit losses and net charge-offs.
During the second quarter of 1997, the Corporation changed its method of
reporting the aggregate allowance for possible credit losses in order to be
consistent with industry practice. The Corporation's aggregate allowance
for possible credit losses at September 30, 1997 was $353.1 million,
consisting of $17.0 million applicable to trading account assets which is a
reduction of "trading account assets", $10.0 million included in "other
liabilities" for off-balance-sheet extensions of credit, such as standby
letters of credit, guarantees and commitments, and $326.1 million, which is
available to absorb all other possible credit losses.
Approximately $294 million of assets acquired from Brooklyn Bancorp, Inc.
("BBI") are currently subject to a loss-sharing agreement with the FDIC.
Under this agreement, the Corporation will be reimbursed by the FDIC for
80-percent of any losses it incurs through June 30, 1998, when the
agreement terminates.
The following table presents summary data related to non-accrual loans for
the periods ended:
Sept. 30, June 30, Dec. 31,
(in thousands) 1997 1997 1996
-------- -------- --------
Non-accrual loans:
Domestic $ 84,875 $ 86,773 $ 94,137
Foreign 9,324 8,795 10,956
-------- -------- --------
Total non-accrual loans (1) $ 94,199 $ 95,568 $105,093
======== ======== ========
Non-accrual loans as a percentage of
loans outstanding at period end 0.72% 0.75% 0.90%
======== ======== ========
(1) Includes non-performing loans acquired in the purchase of BBI with a
carrying value at September 30, 1997, June 30, 1997 and December 31, 1996
of $15.0 million, $23.6 million and $46.3 million, respectively, which are
covered by a loss-sharing agreement with the FDIC. The covered amounts were
$16.8 million, $23.2 million and $49.6 million, respectively. See
"Statement of Condition" below for information on total non-performing
assets.
-11-
<PAGE>
Other Operating Income - was $129.6 million in the third quarter of 1997,
compared to $109.8 million in the third quarter a year-earlier and $125.1
million in the second quarter of 1997. For the first nine months of 1997,
such income was $381.0 million, compared to $326.2 million in the
corresponding period of 1996.
Reported trading revenue (excluding associated net interest income) was
$39.7 million in the third quarter of 1997, compared to $43.5 million in
the third quarter of 1996 and $46.5 million in the second quarter of 1997.
Net interest income associated with trading activities (which is reported
in net interest income) totaled an estimated $20.6 million in the third
quarter of 1997 and $10.0 million in the second quarter of 1997. Total
revenue associated with trading businesses was $60.2 million in the third
quarter of 1997, compared to $56.5 million in the second quarter of 1997.
The items of net interest income/(expense) in the table below represent the
net interest earned or paid on instruments held for trading, as well as an
allocation by management to reflect the funding benefit or cost associated
with the trading positions.
3rd Qtr 2nd Qtr Nine Months
1997 1997 1997
---------- ---------- ----------
(In thousands)
Income from precious metals:
Trading revenue $ 918 $ 1,045 $ 12,761
Net interest income 13,355 7,371 25,544
---------- ---------- ----------
Total 14,273 8,416 38,305
---------- ---------- ----------
Foreign exchange trading income:
Trading revenue 26,572 32,612 86,309
Net interest (expense) (2,339) (2,764) (7,918)
---------- ---------- ----------
Total 24,233 29,848 78,391
---------- ---------- ----------
Trading account profits and
commissions:
Trading revenue 12,164 12,820 33,210
Net interest income 9,570 5,419 20,124
---------- ---------- ----------
Total 21,734 18,239 53,334
---------- ---------- ----------
Total:
Trading revenue 39,654 46,477 132,280
Net interest income 20,586 10,026 37,750
---------- ---------- ----------
Total $ 60,240 $ 56,503 $ 170,030
========== ========== ==========
Investment securities gains were $9.7 million in the third quarter of 1997,
compared to $5.6 million in the third quarter of 1996. For the first nine
months of 1997, investment securities gains were $11.1 million, compared to
$15.4 million last year. In the nine-month periods, these gains were from
sales of securities available for sale and, to a lesser degree, redemptions
prior to maturity of securities held to maturity.
-12-
<PAGE>
Net gain on sales of loans was $3.3 million in the third quarter of 1997,
compared to a net loss of $1.4 million in the third quarter of 1996. For
the nine-month period of 1997 such gain amounted to $13.2 million, which
was primarily attributable to the sale of non-accrual commercial real
estate loans, compared to a gain of $0.4 million in the corresponding
period of 1996.
Commission income, which consists primarily of fees for the issuance of
banker acceptances and letters of credit, retail services and securities
brokerage commissions was $21.9 million in the third quarter of 1997,
compared to $18.2 million in the third quarter of 1996. The increase in
commission income in the third quarter of 1997 compared to the third
quarter of last year reflects increased revenue from the securities
division, bankers acceptances and letters of credit, domestic private
banking and international private banking. For the first nine months of
1997, commission income amounted to $63.2 million, compared to $52.8
million for the nine-month period of 1996.
Equity in the earnings of affiliate increased to $32.0 million in the third
quarter of 1997, an increase of 35% from $23.8 million in the corresponding
quarter of 1996. This income represents the Corporation's share of the
earnings of Safra Republic Holdings S.A. ("Safra Republic"), a European
international private banking group of which the Corporation owns
approximately 49%. The increase in earnings of affiliate was primarily due
to higher levels of commission income partially offset by increased other
operating expenses at Safra Republic. The growth in client assets at Safra
Republic, combined with higher levels of client activities in portfolio
securities, contributed to the increase. Safra Republic's total client
accounts, both on- and off-balance-sheet, increased to $29.0 billion at
September 30, 1997 from $20.8 billion at September 30, 1996. This change
consisted of increases of $7.2 billion, or 74%, in client portfolio assets
and $1.0 billion, or 9%, in client deposits, and includes assets and
deposits from the acquisition by Safra Republic of Mercury Bank A.G. in
February 1997. For the nine-month period of 1997, equity in the earnings of
Safra Republic was $90.7 million, compared to $68.3 million for the
corresponding period of 1996.
The Corporation's other income, which consists primarily of service charges
on deposit accounts, mortgage fees and trust income, was $22.9 million in
the third quarter of 1997 compared to $20.1 million in the third quarter of
last year. The increase in other income in the third quarter of 1997
compared to the third quarter of last year reflected increased commission
income earned at Safra Republic Investments Limited, the Corporation's
50-percent-owned investment management subsidiary. Also included in the
third quarter of 1997 was an affiliate service fee of $3.4 million as
reimbursement for prior-period shared representative office expense.
Included in the third quarter of 1996 was $2.3 million of income related to
net gains on the sale of other real estate owned. Other income for the
nine-month periods ended September 30, 1997 and 1996, was $70.5 million and
$58.0 million, respectively. Included in the 1997 nine-month amount was a
gain of $7.4 million on the unwinding of a real estate financing
transaction, approximately $3.6 million of annual investment management
performance fees and the above mentioned affiliate service fee of $3.4
million.
Other Operating Expenses - totaled $220.9 million in the third quarter and
$649.6 million for the first nine-months of 1997, compared to $198.3
million and $578.5 million in the corresponding periods of 1996. The third
quarter-to-quarter comparison continues to reflect the impact of retail
banking acquisitions made during 1996 and the opening of new foreign
offices late in 1996 and early 1997. Total operating expenses also includes
ongoing investments in trading, risk management and profitability reporting
systems and other technology and electronic banking initiatives which were
begun in the second half of 1996.
-13-
<PAGE>
Included in expenses for the third quarter of 1997 are $4.5 million of
expenses related to the "Year 2000 Problem." The Corporation, like most
commercial and financial institutions, is working to assure that its
operating and processing systems will continue to function when the year
2000 arrives. The Corporation has developed and implemented a comprehensive
plan to complete all system conversions by the end of 1998. A significant
part of that plan involves contracts the Corporation has entered into with
vendors to provide facilities and manpower to carry out required
conversions and follow-up testing. Based on this plan, it is estimated that
incremental expenses for the Year 2000 project will be approximately $60
million, spread over the ten quarters ending December 31, 1999. The exact
timing and amount of such expenses depends on the progress of individual
systems and applications conversion and testing; but, based on its plan,
the Corporation expects that quarterly expense levels related to the Year
2000 Problem will increase from the current levels to a peak in mid-1998
and then decline significantly through 1999.
Salaries and employee benefits were $117.4 million in the third quarter of
1997, compared to $105.6 million in the third quarter of last year. The
increase in the third quarter of 1997 from the same quarter of 1996
reflects the opening of new foreign offices as well as higher levels of
staffing. For the nine months ended September 30, 1997, such expenses rose
to $350.7 million from $310.9 million in the year-earlier period, due to
the initiatives discussed above.
Occupancy expense was $18.6 million in the third quarter and $53.7 million
for the nine-month period of 1997, compared to $20.6 million and $55.1
million in the comparable periods of 1996. Included in the third quarter of
1996 was a one-time charge of $2.0 million incurred in the consolidation of
14 retail branches.
All other expenses were $84.9 million in the third quarter of 1997,
compared to $72.1 million in the third quarter of last year. The third
quarter-to-quarter increase reflects the impact of the initiatives
discussed above. For the nine-month period of 1997, all other expenses were
$245.2 million, compared to $212.5 million in the same period last year.
The nine-month 1997 expenses include $1.6 million related to the
Corporation's non-accrual assets included in other real estate owned
compared to none in the nine month period in the prior year.
Total Applicable Income Taxes - have been adjusted (increased) to reflect
the inclusion of interest income on tax exempt obligations as if they were
subject to federal, state and local taxes, after giving effect to the
deductibility of state and local taxes for federal income tax purposes.
Total applicable income taxes increased $18.3 million in the third quarter
of 1997 and increased $26.5 million during the first nine months of 1997
when compared to the corresponding periods of 1996. Included in the third
quarter of 1996 was a one-time $12.0 million income tax benefit related to
a tax law change. The effective tax rates, total applicable income taxes as
a percentage of income before income taxes, were 34% for both the third
quarter and the nine-month period of 1997, compared to 26% and 32%,
respectively, in the corresponding periods of last year.
-14-
<PAGE>
STATEMENT OF CONDITION
Stockholders' Equity and Capital Ratios
At September 30, 1997, stockholders' equity of $3.6 billion included $150.9
million, which represented the after-tax unrealized appreciation in the
valuation of the Corporation's portfolio of securities available for sale,
and approximately 49% of Safra Republic's unrealized appreciation in its
portfolio of securities available for sale, compared to an unrealized
appreciation in both such portfolios of $54.5 million at December 31, 1996.
The Corporation's leverage ratio, Tier 1 capital to quarterly average
assets, and its risk-based capital ratios, Tier 1 and total qualifying
capital to risk-weighted assets, include the assets and capital of Safra
Republic on a consolidated basis in accordance with the requirements of the
Federal Reserve Board specifically applied to the Corporation. These ratios
exclude the effect on stockholders' equity related to the FASB 115
valuation of securities available for sale.
In accordance with regulatory guidelines, the Corporation excludes Republic
New York Securities Corporation's assets and off-balance-sheet contracts
from the Corporation's capital calculations. The guidelines require the
Corporation to deduct one-half of its investment in this subsidiary from
each of Tier 1 and Tier 2 capital.
The following table presents the Corporation's risk-based capital ratios:
Sept. 30, Dec. 31,
1997 1996
---------- ---------
Risk-based capital ratios:
Tier 1 risk-based capital ratio 13.19% 13.80%
Total risk-based capital ratio 22.05% 23.28%
Leverage ratio 5.77% 5.87%
At September 30, 1997, the ratio of the Corporation's total common
stockholders' equity to total assets was 5.24%, compared to 5.26% at
December 31, 1996.
-15-
<PAGE>
Non-performing Assets
The following is a summary of the Corporation's non-performing assets for
periods ended:
Sept. 30, June 30, Dec. 31,
(In thousands) 1997 1997 1996
--------- --------- ---------
Total non-accrual loans $ 94,199 $ 95,568 $ 105,093
Other real estate owned 21,165 33,215 36,278
--------- --------- ---------
Total non-performing assets 115,364 128,783 141,371
Less: FDIC loss-sharing (1) (22,167) (29,677) (52,359)
--------- --------- ---------
Total $ 93,197 $ 99,106 $ 89,012
========= ========= =========
Total non-performing assets as a
percentage of period end total assets 0.20% 0.23% 0.27%
========= ========= =========
(1) Represents the carrying value of non-performing assets, acquired in the
purchase of BBI which are covered by a loss-sharing agreement with the
Federal Deposit Insurance Corporation. The agreement expires on June 30,
1998. The covered amounts were $23.8 million, $29.2 million and $55.6
million, at September 30, 1997, June 30, 1997 and December 31, 1996,
respectively.
Forward-looking Information
In connection with the information relating to the Year 2000, this Report
contains statements that constitute forward-looking statements and are
subject to certain risks and uncertainties that could cause the actual
facts to differ materially from those contained in this Report. Such
uncertainties could include unanticipated events relating to work on the
developments or modifications to computer systems and to software,
including work performed by suppliers or vendors to the Corporation and may
be beyond its control in responding to such events. Readers are cautioned
not to place undue reliance on these forward looking statements which speak
only to the date of this Report.
-16-
<PAGE>
PART II- OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
11. Computation of Earnings Per Common Share
27. Financial Data Schedule
(b) Reports on Form 8-K
(i) On July 18, 1997, a report on Form 8-K was filed submitting the
Corporation's press release dated July 16, 1997, announcing results
for the second quarter and six month period ended June 30, 1997, in
connection with the filing of a Prospectus Supplement dated July 17,
1997 relating to the offering of $250,000,000 aggregate principal
amount of the Corporation's 7.20% Subordinated Debentures due 2097.
On July 21, 1997, a report on Form 8-K was filed submitting the
calculation of ratios of earnings to fixed charges-consolidated, in
connection with the filing of a Prospectus Supplement dated July 17,
1997 relating to the offering of $250,000,000 aggregate principal
amount of the Corporation's 7.20% Subordinated Debentures due 2097.
On September 24, 1997, a report on Form 8-K was filed submitting the
Notice of Change of Principal Office and Resident Agent filed with the
Maryland State Department of Assessments and Taxation, the calculation
of ratios of earnings to combined fixed charges and preferred stock
dividends-consolidated and Articles Supplementary, classifying shares
of the Corporation's $2.8575 Cumulative Preferred Stock ($50 Stated
Value) in connection with the filing of a Prospectus Supplement dated
September 17, 1997 relating to the offering of 3,000,000 shares of
such preferred stock.
-17-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchanges Act of
1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
Dated: November 14, 1997 By /s/Walter H. Weiner
----------------------------
Walter H. Weiner
Chairman of the Board
Dated: November 14, 1997 By /s/Kenneth F. Cooper
-----------------------------
Kenneth F. Cooper
Executive Vice President and
Chief Financial Officer
-18-
<PAGE>
FORM 10-Q
QUARTERLY REPORT
For the fiscal quarter ended September 30, 1997
REPUBLIC NEW YORK CORPORATION
EXHIBIT INDEX
No. Exhibit Description
11 Computation of Earnings Per Common Share
27 Financial Data Schedule
<TABLE>
<CAPTION>
EXHIBIT 11
REPUBLIC NEW YORK CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
UNAUDITED
(In thousands except per share data)
Nine Months Ended Three Months Ended
September 30, September 30,
---------------------- -----------------------
1997 1996 1997 1996
--------- --------- --------- ----------
<S> <C> <C> <C> <C>
Net income per common share:
Earnings:
Net income $ 333,037 $ 310,294 $ 112,288 $ 107,652
Less preferred stock dividends (17,132) (23,567) (5,420) (7,975)
--------- --------- --------- ---------
Net income applicable to common stock $ 315,905 $ 286,727 $ 106,868 $ 99,677
========= ========= ========= =========
Shares:
Average number of common and common
equivalent shares outstanding 54,747 55,711 54,844 55,396
========= ========= ========= =========
Net income per common share $ 5.77 $ 5.15 $ 1.95 $ 1.80
========= ========= ========= =========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 862,840
<INT-BEARING-DEPOSITS> 3,674,729
<FED-FUNDS-SOLD> 3,833,416
<TRADING-ASSETS> 5,705,698
<INVESTMENTS-HELD-FOR-SALE> 14,686,765
<INVESTMENTS-CARRYING> 9,451,299
<INVESTMENTS-MARKET> 9,571,775
<LOANS> 13,004,684
<ALLOWANCE> 326,091
<TOTAL-ASSETS> 57,791,765
<DEPOSITS> 33,437,881
<SHORT-TERM> 7,441,423
<LIABILITIES-OTHER> 150,595
<LONG-TERM> 4,341,564
<COMMON> 273,765
550,000
0
<OTHER-SE> 2,757,043
<TOTAL-LIABILITIES-AND-EQUITY> 57,791,765
<INTEREST-LOAN> 796,002
<INTEREST-INVEST> 1,173,314
<INTEREST-OTHER> 395,899
<INTEREST-TOTAL> 2,365,215
<INTEREST-DEPOSIT> 1,070,340
<INTEREST-EXPENSE> 1,603,690
<INTEREST-INCOME-NET> 761,525
<LOAN-LOSSES> 12,000
<SECURITIES-GAINS> 11,093
<EXPENSE-OTHER> 649,575
<INCOME-PRETAX> 480,997
<INCOME-PRE-EXTRAORDINARY> 333,037
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 333,037
<EPS-PRIMARY> 5.77
<EPS-DILUTED> 5.77
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
