UNITED STATES
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: October 22, 1999
REPUBLIC NEW YORK CORPORATION
(Exact name of registrant as specified in its charter)
Maryland 1-7436 13-2764867
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
452 Fifth Avenue, New York, New York 10018
(Address of principal executive (Zip Code)
Registrant's telephone number, including area code: (212) 525-6100
<PAGE>
Item 5. Other Events
Republic New York Corporation is hereby filing the document listed
under Item 7 below. Such document is hereby incorporated herein by reference in
this Current Report on Form 8-K and a copy of the same is attached hereto as an
exhibit.
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits.
c. Exhibits
99 Press Release dated October 22, 1999, with attached
financial statements, Announcing Results for the Third
Quarter and Nine Month Periods Ended September 30, 1999.
<PAGE>
SIGNATURE
Pursuant to the requirement of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
REPUBLIC NEW YORK CORPORATION
By: /s/ William F. Rosenblum, Jr.
-----------------------------------------------
William F. Rosenblum, Jr.
Senior Vice President
Date: October 22, 1999
<PAGE>
Exhibit 99
Republic New York Corporation
News Release
For Immediate Release
Press Contact : Melissa M. Krantz (212) 525-3800
NYSE Symbol: RNB
Investor Contact: Michael G. Levine (212) 525-8870
To request release by e-mail: [email protected]
Press Releases: http://www.rnb.com
REPUBLIC NEW YORK CORPORATION
ANNOUNCES THIRD QUARTER RESULTS
New York - October 20, 1999: Republic New York Corporation today reported net
income for the third quarter of 1999 of $126.5 million, or earnings per common
share of $1.17 basic and $1.15 diluted. For the nine months ended September 30,
1999, net income was $316.1 million, which included on an after-tax basis,
restructuring and one-time special charges of $67.6 million and a gain of $45.4
million on a real estate investment. Earnings per common share for the
nine-month period of 1999 were $2.88 basic and $2.84 diluted.
Dov C. Schlein, chairman and chief executive officer, said, "The third
quarter's good results build upon the solid performance of the first half of
1999. Our core and special niche businesses have continued to perform to our
expectations."
Highlights of the quarter include:
Net income was $126.5 million in the third quarter of 1999, or $1.15 per
share diluted, compared to a net loss of $92.7 million in the third
quarter of 1998, or 96 cents per share diluted.
Net interest rate differential was 2.51 percent in the third quarter of
1999, compared to 2.20 percent in the third quarter of 1998 and 2.60
percent in the second quarter of 1999. Net interest income for the third
quarter of 1999 was $260.6 million, compared to $256.4 million in the
third quarter of 1998 and $271.2 million in the second quarter of 1999.
The board of directors declared dividends of 26 cents per common share,
30.7534 cents per depositary share on the adjustable rate cumulative
preferred stock, 45.3125 cents per share on the $1.8125 cumulative
preferred stock and 71.4375 cents per share on the $2.8575 cumulative
preferred stock. All dividends are payable January 1, 2000 to stockholders
of record on December 15, 1999.
Total revenue associated with trading activities in the third quarter of
1999 rose to $57.0 million, compared to $48.0 million in the third quarter
of 1998, an increase of 19 percent. Such revenues were $56.5 million in
the second quarter of 1999.
<PAGE>
Equity in the earnings of Safra Republic Holdings S.A. ("SRH") was $34.4
million in the third quarter of 1999, compared to $29.9 million in the
third quarter of 1998 and $41.9 million in the second quarter of 1999.
The total of the corporation's and SRH's private client account assets,
both on- and off-balance-sheet, were $59.8 billion at September 30, 1999,
compared to $53.0 billion at September 30, 1998 and $59.2 billion at June
30, 1999.
On May 10, the corporation entered into an agreement providing for the
acquisition of the corporation by HSBC Holdings plc ("HSBC") in consideration
of its payment of $72 in cash per common share. Consummation of the transaction
requires, in addition to various regulatory approvals, the approval of the
corporation's common stockholders. As announced on October 19, 1999, the
special meeting of common stockholders called to vote on the proposed
acquisition will be adjourned until November 30, 1999. On September 1, 1999,
the corporation announced that it had commenced an investigation of the Futures
Division of its subsidiary Republic New York Securities Corporation ("RNYSC")
as a result of a letter received from the Financial Supervisory Agency ("FSA")
of Japan concerning the FSA's investigation of the Tokyo branch of an affiliate
of Princeton Global Management Ltd, a client of RNYSC's Philadelphia office.
The corporation is also cooperating with the relevant U.S. regulatory and law
enforcement authorities in their investigation of this matter.
HSBC has also offered $72 per share for the outstanding common shares of Safra
Republic Holdings S.A. ("SRH") owned by shareholders other than the corporation
and has extended the expiration of the period for SRH shareholders to respond
to the offer until October 29, 1999.
Net interest income
The net interest rate differential was 2.51 percent in the third quarter of
1999, compared to 2.20 percent in the third quarter of 1998 and 2.60 percent in
second quarter of 1999. The increase in the net interest rate differential in
the third quarter from the year ago period reflected reductions of higher cost
short-term liabilities and a corresponding decline in interest-bearing deposits
with banks, investment securities, and federal funds. Average interest-earning
assets were $42.3 billion in the third quarter of 1999, compared to $47.4
billion in the third quarter of 1998 and $42.7 billion in the second quarter of
1999.
Net interest income on a fully taxable equivalent basis was $267.3 million in
the third quarter of 1999, compared to $262.8 million in the third quarter of
1998 and $277.3 million in the second quarter of 1999. Included in the third
quarters of 1999 and 1998 was mortgage prepayment income of $6.3 million and
$6.9 million, respectively. Net interest income in the second quarter of 1999
included $3.0 million of past-due interest received on previously written down
Russian obligations and $5.2 million of mortgage prepayment income.
The net interest rate differential rose to 2.54 percent for the first nine
months of 1999, compared to 2.29 percent for the corresponding period of 1998.
Net interest income on a fully taxable equivalent basis was $808.2 million for
the first nine months of 1999, compared to $806.1 million in the corresponding
period of 1998. Average interest-earning assets declined to $42.5 billion for
the first nine months of 1999, compared to $47.1 billion for the respective
period of 1998.
<PAGE>
Provision for trading and credit losses
The corporation's aggregate allowance for credit losses, which is presented in
the table below, is available to absorb all credit losses:
<TABLE>
1999 1998
-------------------------- --------------
3rd Qtr 2nd Qtr 3rd Qtr
<S> <C> <C> <C>
(In thousands)
Provision for trading and
credit losses $4,000 $4,000 $4,000
============== ============== ==============
Net charge-offs $431 $4,615 $55,197
============== ============== ==============
Aggregate allowance
for credit losses:
Credit losses $293,161 $290,669 $290,490
Trading accounts 17,485 17,485 4,950
Off balance-sheet credit
commitments 8,314 7,216 5,520
------------- -------------- --------------
$318,960 $315,370 $300,960
============== ============== ==============
</TABLE>
The aggregate provisions in the second and third quarters of 1999 related to
credit losses. The aggregate provision in the third quarter of 1998 related to
trading credit losses. Net charge-offs in the third quarter of 1998 included
$50.7 million attributable to the corporation's Russian exposure.
The following table presents non-accrual loans and other non-performing assets
at periods ended:
<TABLE>
1999 1998
--------------------------------- ---------------
Sept. 30 June 30 Sept. 30
<S> <C> <C> <C>
(In thousands)
Non-accrual loans $48,907 $57,994 $79,593
Other assets and real
estate owned 12,176 10,785 15,378
-------------- --------------- ---------------
Total non-performing
assets $61,083 $68,779 $94,971
============== =============== ===============
</TABLE>
The corporation's Latin American exposure consists primarily of sovereign
securities. The mark-to-market value of these securities is fully reflected,
after tax benefit, as an adjustment to stockholders' equity through accumulated
other comprehensive income.
The following table presents information on the corporation's estimated
cross-border exposure to Latin American countries at September 30, 1999:
<TABLE>
Net FASB 115 Net Outstandings
Cross-border Pre-tax Market Less FASB 115
($ millions) Outstandings* Value Adjustments Adjustments
---------------------- ----------------------- ------------------
<S> <C> <C> <C>
Brazil** $ 415 $ (63) $ 352
Mexico 273 (10) 263
Argentina 238 (22) 216
Venezuela 87 (16) 71
Chile 63 1 64
</TABLE>
* Net cross-border outstandings include foreign office local country claims
on local residents less local country liabilities.
<PAGE>
** Net outstandings exclude $662 million of sovereign risk assets, before the
FASB 115 depreciation adjustment of $6 million, funded with U.S. dollars where
the providers of funds agree that, in the event their claims cannot be repaid
in the designated currency due to sovereign default or currency exchange
restrictions in a given country, they will wait to receive the non-local
currency until such time as such default is cured or the currency restrictions
removed or such currency becomes available in the local market; under limited
circumstances, the providers may receive either local currency or local market
debt instruments. Also excluded is net exposure of approximately $155 million,
which represented the corporation's share of SRH's net exposure.
Other operating income (loss)
Total trading revenue, including associated net interest income which is
reported as net interest income, was $57.0 million in the third quarter of
1999, compared to $48.0 million in the third quarter of 1998 and $56.5 million
in the second quarter of 1999. The third quarter to third quarter change
reflected increased precious metals income and trading account profits and
commissions, partially offset by a decrease in foreign exchange trading. For
the nine-month period of 1999, such revenue amounted to $203.5 million,
compared to $177.6 million for the nine-month period of 1998.
The items of net interest income (expense) in the following table 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.
<TABLE>
3rd Qtr 9 Months
------------------------ ------------------------
1999 1998 1999 1998
<S> <C> <C> <C> <C>
(In thousands)
Precious metals:
Trading revenue (loss) $17,810 $(3,213) $19,864 $407
Net interest income 12,921 18,689 43,473 54,127
---------- ---------- ---------- ----------
Total 30,731 15,476 63,337 54,534
---------- ---------- ---------- ----------
Foreign exchange:
Trading revenue 22,202 42,765 113,470 114,987
Net interest (expense) (2,950) (1,773) (5,457) (4,604)
---------- ---------- ---------- ----------
Total 19,252 40,992 108,013 110,383
---------- ---------- ---------- ----------
Trading account profits
and commissions:
Trading revenue (loss) 3,720 (9,285) 24,126 (1,526)
Net interest income 3,256 4,804 12,023 18,226
---------- ---------- ---------- ----------
Total 6,976 (4,481) 36,149 16,700
---------- ---------- ---------- ----------
Provision for trading
credit losses - 4,000 4,000 4,000
---------- ---------- ---------- ----------
Total:
Trading revenue 43,732 26,267 153,460 109,868
Net interest income 13,227 21,720 50,039 67,749
---------- ---------- ---------- ----------
Total $56,959 $47,987 $203,499 $177,617
========== ========== ========== ==========
</TABLE>
Net investment securities gains were $18.4 million in the third quarter of
1999, compared to net losses of $200.5 million in the third quarter of 1998 and
net gains of $11.0 million in the second quarter of 1999. The net gains in the
third quarter of 1999 were realized primarily on sales of the corporation's
remaining sovereign Russian securities and certain sovereign Brazilian
securities amounting to $11.8 million and $4.3 million, respectively. The net
losses in the third quarter of 1998 included $210.9 million ($190.7 million
after tax), on the corporation's Russian investment securities. The net gains
in the second quarter of 1999 were realized from the repayment and sales of
Russian securities.
<PAGE>
Commission income consists primarily of securities brokerage commissions, fees
for the issuance of bankers acceptances and letters of credit and retail
services. Such income was $25.8 million in the third quarter of 1999, compared
to $25.1 million in the third quarter of 1998 and $24.6 million in the second
quarter of 1999.
Equity in the earnings of SRH was $34.4 million in the second quarter of 1999,
compared to $29.9 million in the third quarter of 1998 and $41.9 million in the
second quarter of 1999. Client account assets at SRH, both on- and off-balance
sheet, were $34.1 billion at September 30, 1999 compared to $31.7 billion at
September 30, 1998 and $33.9 billion at June 30, 1999.
Other income was $26.5 million in the third quarter of 1999, compared to $19.1
million in the third quarter of 1998 and $90.1 million in the second quarter of
1999 which included a $69.8 million pre-tax gain relating to an investment in
the Canary Wharf Group and the completion of its initial public offering. The
consumer financial services group and the private banking group generate fee
income through service charges to clients for deposit accounts and trust and
securities activities. Other income included revenues of $19.2 million from
these activities in the third quarter of 1999, compared to $15.6 million in the
third quarter of 1998 and $17.0 million in the second quarter of 1999.
Other operating expenses
Total operating expenses were $232.4 million in the third quarter of 1999,
$230.4 million in the third quarter of 1998 excluding $13.7 million of one-time
expenses discussed below, and $251.4 million in the second quarter of 1999
excluding $20.3 million of merger-related executive pension and incentive
accruals and certain other merger-related expenses. Included in total operating
expenses were Year 2000 expenses of $1.8 million in the third quarter of 1999,
$4.5 million in the third quarter of 1998 and $3.5 million in the second
quarter of 1999.
Salaries and employee benefits were $128.0 million in the third quarter of 1999
and $124.1 million in the third quarter of 1998. Such expenses were $141.1
million in the second quarter of 1999, excluding the charge of $16.5 million
related to the implementation of a Supplemental Executive Retirement Plan to
retain the services of certain executive officers. The third quarter to third
quarter increase was due primarily to higher levels of incentive compensation
accruals.
Occupancy expense was $19.2 million in the third quarter of 1999, compared to
$19.4 million in the third quarter of 1998 and $17.8 million in the second
quarter of 1999.
All other expenses were $85.2 million in the third quarter of 1999, $87.0
million in the third quarter of 1998 excluding one-time expenses of $11.2
million for losses related to unauthorized transactions in an offshore
subsidiary and $2.5 million for losses on banknote shipments, and $92.5 million
in the second quarter of 1999 excluding $3.8 million of merger-related
professional fees.
Amortization of goodwill and other intangible assets was $6.8 million in the
third and second quarters of 1999 and $6.9 million in the third quarter of
1998.
Income taxes
Income taxes were $47.3 million in the third quarter of 1999, compared to $5.1
million in the third quarter of 1998 and $57.7 million in the second quarter of
1999. The effective book income tax rate was 27.2 percent in the third quarter
of 1999 and 28.7 percent in the second quarter. The effective tax rate for the
third quarter of 1998 was not meaningful due to the loss reported for the
period.
<PAGE>
Capital
The following table presents return on average common stockholders' equity
(ROAE) and return on average total assets (ROAA), based on net income
applicable to common stock - diluted:
<TABLE>
3rd Qtr 9 Months
--------------------------- ----------------------------
1999 1998 1999 1998
<S> <C> <C> <C> <C>
ROAE 17.27% (14.18)% 14.66% 5.62%
ROAA 1.02% (0.72)% 0.84% 0.30%
</TABLE>
The book value of the corporation's common stock was $26.98 per share at
September 30, 1999.
At September 30, 1999, the corporation's total intangibles were $312 million,
of which $207 million was goodwill.
The following table presents capital ratios at periods ending:
<TABLE>
1999 1998
---------------------- ---------
Sept. 30 June 30 Sept. 30
<S> <C> <C> <C>
Common stockholders'
equity/assets 5.24% 5.41% 4.92%
Leverage 7.00%* 6.73% 5.95%
Tier 1 "core" ratio 13.45%* 13.27% 13.45%
Total capital ratio 21.40%* 21.61% 22.22%
*Estimated
</TABLE>
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 SRH on a consolidated
basis in accordance with the requirements of the Federal Reserve Board
specifically applied to the corporation. These ratios do not reflect the effect
on stockholders' equity related to the FASB 115 valuation of the corporation's
portfolio of securities available for sale which is included in accumulated
other comprehensive loss, net of taxes.
###
In connection with the status of the merger transaction with HSBC, this
press release 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
press release. With respect to the proposed merger with HSBC, uncertainties
could include the timing and receipt of regulatory approvals and
stockholder approval, the effect, if any, of the matters relating to the
investigation of the Futures Division of RNYSC, and the satisfaction of
other customary closing conditions to the proposed merger. Readers are
cautioned not to place undue reliance on these forward-looking statements,
which speak only to the date of this report.
<PAGE>
<TABLE>
REPUBLIC NEW YORK CORPORATION
CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in thousands)
<CAPTION>
September 30,
----------------------------------
1999 1998
<S> <C> <C>
ASSETS
Cash and due from banks $ 836,086 $ 799,624
Interest-bearing deposits with banks 6,854,973 2,943,079
Precious metals 960,019 974,875
Securities held to maturity 5,266,123 7,398,835
Securities available for sale 16,441,611 16,423,528
-------------- -------------
Total investment securities 21,707,734 23,822,363
Trading account assets 2,896,278 3,568,791
Federal funds sold and securities purchased
under resale agreements 2,188,012 789,443
Loans, net of unearned income 14,730,939 13,552,915
Allowance for credit losses (293,161) (290,490)
Customers' liability on acceptances 57,724 73,420
Accounts receivable and accrued interest 866,265 1,923,273
Investment in affiliate 838,601 809,468
Premises and equipment 427,388 460,830
Other assets 980,743 945,795
-------------- -------------
Total assets $ 53,051,601 $ 50,373,386
============== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing deposits:
In domestic offices $ 2,801,907 $ 2,807,638
In foreign offices 208,060 206,625
Interest-bearing deposits:
In domestic offices 10,422,728 11,028,492
In foreign offices 18,423,525 17,795,693
-------------- -------------
Total deposits 31,856,220 31,838,448
Trading account liabilities 3,141,539 4,030,960
Short-term borrowings 8,584,987 4,491,399
Acceptances outstanding 59,743 73,599
Accounts payable and accrued expenses 1,033,810 1,244,181
Due to factored clients 792,705 696,283
Other liabilities 165,067 254,634
Long-term debt 1,164,745 1,764,306
Subordinated long-term debt and perpetual
capital notes 2,624,700 2,650,000
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
7,501,250 shares outstanding
in 1999 and 1998 500,000 500,000
Common stock, $5 par value 150,000,000
shares authorized; 104,756,204 shares
issued in 1999 and 107,333,650 in 1998 523,781 536,668
Surplus 117,405 88,430
Retained earnings 2,589,320 2,302,168
Accumulated other comprehensive
loss, net of taxes (366,239) (444,050)
Common stock in treasury, at cost
1,770,875 shares in 1999 and
55,928 in 1998 (86,182) (3,640)
------------- -------------
Total stockholders' equity 3,278,085 2,979,576
------------- -------------
Total liabilities and
stockholders' equity $ 53,051,601 $ 50,373,386
============= =============
</TABLE>
<PAGE>
<TABLE>
REPUBLIC NEW YORK CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share data)
<CAPTION>
Three Months Ended
-------------------------------------------
Sept. 30, June 30, Sept. 30,
1999 1999 1998
------------ ------------ ------------
<S> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans $ 260,291 $ 261,695 $ 287,095
Interest on deposits with banks 31,623 32,663 75,466
Interest and dividends on investment
securities:
Taxable 335,770 343,185 385,960
Exempt from federal income taxes 19,265 17,994 19,153
Interest on trading account assets 17,861 18,250 17,128
Interest on federal funds sold and
securities purchased under
resale agreements 22,632 24,959 46,326
------------ ------------ ------------
Total interest income 687,442 698,746 831,128
------------ ------------ ------------
INTEREST EXPENSE:
Interest on deposits 302,704 286,304 383,285
Interest on short-term borrowings 57,729 76,014 113,520
Interest on long-term debt 66,415 65,208 77,904
------------ ------------ ------------
Total interest expense 426,848 427,526 574,709
------------ ------------ ------------
NET INTEREST INCOME 260,594 271,220 256,419
Provision for credit losses 4,000 4,000 -
Net interest income after ------------ ------------ ------------
provision for credit losses 256,594 267,220 256,419
------------ ------------ ------------
OTHER OPERATING INCOME (LOSS):
Trading revenue 43,732 37,425 26,267
Investment securities
transactions, net 18,390 11,038 (200,499)
Loans sold or held for sale, net 757 239 229
Commission income 25,800 24,647 25,100
Equity in earnings of affiliate 34,366 41,887 29,947
Other income 26,512 90,062 19,079
------------ ------------ ------------
Total other operating
income (loss) 149,557 205,298 (99,877)
------------ ------------ ------------
OTHER OPERATING EXPENSES:
Salaries and employee benefits 128,020 157,554 124,079
Occupancy, net 19,224 17,810 19,366
Other expenses 85,182 96,309 100,701
------------ ------------ ------------
Total other operating
expenses 232,426 271,673 244,146
------------ ------------ ------------
INCOME (LOSS) BEFORE INCOME TAXES 173,725 200,845 (87,604)
Income taxes 47,256 57,719 5,055
------------ ------------ ------------
NET INCOME (LOSS) $ 126,469 $ 143,126 $ (92,659)
============ ============ ============
NET INCOME (LOSS) APPLICABLE
TO COMMON STOCK - DILUTED $ 119,817 $ 136,669 $ (99,424)
============ ============ ============
Net income (loss) per
common share:
Basic $1.17 $1.33 $(0.96)
Diluted 1.15 1.31 (0.96)
Average common shares outstanding:
Basic 102,331 102,541 103,985
Diluted 104,006 104,086 103,985
</TABLE>
<PAGE>
<TABLE>
REPUBLIC NEW YORK CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share data)
<CAPTION>
Nine Months Ended
September 30,
--------------------------------
1999 1998
-------------- --------------
<S> <C> <C>
INTEREST INCOME:
Interest and fees on loans $ 770,179 $ 835,989
Interest on deposits
with banks 106,554 221,776
Interest and dividends on
investment securities:
Taxable 1,024,945 1,171,282
Exempt from federal income taxes 55,774 61,969
Interest on trading account assets 53,034 61,275
Interest on federal funds sold and securities
purchased under resale agreements 69,463 138,023
-------------- --------------
Total interest income 2,079,949 2,490,314
-------------- --------------
INTEREST EXPENSE:
Interest on deposits 884,194 1,132,543
Interest on short-term borrowings 208,542 342,260
Interest on long-term debt 198,100 230,456
-------------- --------------
Total interest expense 1,290,836 1,705,259
-------------- --------------
NET INTEREST INCOME 789,113 785,055
Provision for credit losses 12,000 8,000
-------------- --------------
Net interest income after
provision for credit losses 777,113 777,055
-------------- --------------
OTHER OPERATING INCOME:
Trading revenue 153,460 109,868
Investment securities transactions, net 35,711 (196,550)
Loans sold or held for sale, net 839 3,733
Commission income 76,232 73,268
Equity in earnings of affiliate 106,769 102,673
Other income 136,325 74,043
-------------- --------------
Total other operating income 509,336 167,035
-------------- --------------
OTHER OPERATING EXPENSES:
Salaries and employee benefits 431,119 390,728
Occupancy, net 55,884 56,373
Restructuring charge 97,000 -
Other expenses 272,945 292,173
------------- --------------
Total other operating expenses 856,948 739,274
-------------- --------------
INCOME BEFORE INCOME TAXES 429,501 204,816
Income taxes 113,404 61,164
------------- --------------
NET INCOME $ 316,097 $ 143,652
============== ==============
NET INCOME APPLICABLE TO
COMMON STOCK - DILUTED $ 296,597 $ 122,848
============== ==============
Net income per common share:
Basic $2.88 $1.16
Diluted 2.84 1.15
Average common shares outstanding:
Basic 102,727 104,522
Diluted 104,378 106,396
</TABLE>
<PAGE>
<TABLE>
REPUBLIC NATIONAL BANK OF NEW YORK
CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in thousands)
<CAPTION>
September 30,
--------------------------------
1999 1998
--------------- -------------
<S> <C> <C>
ASSETS
Cash and due from banks $ 779,609 $ 786,210
Interest-bearing deposits with banks 6,557,236 2,964,278
Precious metals 958,630 973,730
Securities held to maturity 4,966,736 7,034,709
Securities available for sale 15,174,923 14,844,967
------------- -------------
Total investment securities 20,141,659 21,879,676
Trading account assets 2,632,837 3,277,341
Federal funds sold and
securities purchased under
resale agreements 2,188,012 788,526
Loans, net of unearned income 13,340,263 12,283,253
Allowance for credit losses (268,779) (263,398)
Customers' liability on acceptances 56,857 73,372
Accounts receivable and accrued interest 817,177 1,210,412
Investment in affiliate 838,601 809,468
Premises and equipment 407,870 410,745
Other assets 740,262 713,519
------------- -------------
Total assets $ 49,190,234 $ 45,907,132
============= =============
LIABILITIES AND STOCKHOLDER'S EQUITY
Noninterest-bearing deposits:
In domestic offices $ 2,665,737 $ 2,720,762
In foreign offices 208,547 207,466
Interest-bearing deposits:
In domestic offices 10,176,808 10,792,550
In foreign offices 18,533,780 18,178,313
------------- -------------
Total deposits 31,584,872 31,899,091
Trading account liabilities 2,985,719 3,710,959
Short-term borrowings 8,273,623 3,442,347
Acceptances outstanding 56,857 73,427
Accounts payable and accrued expenses 952,155 924,393
Other liabilities 113,584 206,888
Long-term debt 1,064,620 1,654,740
Subordinated long-term debt with parent 950,000 950,000
Stockholder's equity:
Common stock, $100 par value 4,800,000
shares authorized; 4,000,000 shares
outstanding 400,000 400,000
Surplus 1,634,603 1,635,316
Retained earnings 1,481,348 1,338,755
Accumulated other comprehensive
loss, net of taxes (307,147) (328,784)
------------- -------------
Total stockholder's equity 3,208,804 3,045,287
------------- -------------
Total liabilities and
stockholder's equity $ 49,190,234 $ 45,907,132
============= =============
</TABLE>
<PAGE>
<TABLE>
REPUBLIC NEW YORK CORPORATION
AVERAGE BALANCES, NET INTEREST DIFFERENTIAL,
AVERAGE RATES EARNED AND PAID
(Fully taxable equivalent basis)
(Dollars in thousands)
<CAPTION>
Quarter Ended
-------------------------------------------------------------------
September 30, 1999 June 30, 1999
-------------------------------------------------------------------
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 $ 2,709,345 $ 31,623 4.63% $ 2,894,968 $ 32,663 4.53%
Investment securities:(1)
Taxable 20,613,347 335,770 6.46 20,996,437 343,185 6.56
Exempt from federal income taxes 1,367,773 25,947 7.53 1,330,929 24,105 7.26
---------- ------- ---------- -------
Total investment securities 21,981,120 361,717 6.53 22,327,366 367,290 6.60
Trading account assets(2) 1,166,693 17,861 6.07 1,241,788 18,250 5.89
Federal funds sold and securities
purchased under resale agreements 1,761,695 22,632 5.10 2,057,333 24,959 4.87
Loans, net of unearned income:
Domestic offices 10,773,353 199,382 7.34 10,461,297 189,887 7.28
Foreign offices 3,894,178 60,909 6.21 3,755,721 71,808 7.67
---------- ------- ---------- -------
Total loans, net of unearned income 14,667,531 260,291 7.04 14,217,018 261,695 7.38
---------- ------- ---------- -------
Total interest-earning assets 42,286,384 $694,124 6.51% 42,738,473 $704,857 6.61%
======== ==== ======== ====
Cash and due from banks 927,770 918,170
Other assets 3,356,376 3,898,983
----------- -----------
Total assets $46,570,530 $47,555,626
=========== ===========
Interest-bearing funds:
Consumer and other time deposits $ 9,782,489 $ 80,169 3.25% $9,982,356 $ 80,164 3.22%
Certificates of deposit 688,824 7,377 4.25 654,344 6,564 4.02
Deposits in foreign offices 16,987,002 215,158 5.03 15,858,709 199,576 5.05
---------- ------- ---------- -------
Total interest-bearing deposits 27,458,315 302,704 4.37 26,495,409 286,304 4.33
Trading account liabilities(2) 281,315 479 0.68 318,465 594 0.75
Short-term borrowings 5,123,435 57,250 4.43 6,596,960 75,420 4.59
Total long-term debt 4,260,765 66,415 6.18 4,345,990 65,208 6.02
---------- ------- ---------- -------
Total interest-bearing funds 37,123,830 $426,848 4.56% 37,756,824 $427,526 4.54%
======== ==== ======== ====
Noninterest-bearing deposits:
In domestic offices 2,896,060 2,918,842
In foreign offices 170,260 204,607
Other liabilities 3,128,046 3,388,111
Stockholders' equity:
Preferred stock 500,000 500,000
Common stockholders' equity 2,752,334 2,787,242
----------- -----------
Total stockholders' equity 3,252,334 3,287,242
----------- -----------
Total liabilities
and stockholders' equity $46,570,530 $47,555,626
=========== ===========
Interest income/earning assets $694,124 6.51% $704,857 6.61%
Interest expense/earning assets 426,848 4.00 427,526 4.01
-------- ---- -------- ----
Net interest differential $267,276 2.51% $277,331 2.60%
======== ==== ======== ====
<FN>
(1) Based on amortized or historic cost with the mark-to-market adjustment on securities available for sale included in other assets
(2) Excludes noninterest-bearing balances, which are included in other assets or other liabilities, respectively.
</FN>
</TABLE>
<PAGE>
<TABLE>
REPUBLIC NEW YORK CORPORATION
AVERAGE BALANCES, NET INTEREST DIFFERENTIAL,
AVERAGE RATES EARNED AND PAID
(Fully taxable equivalent basis)
(Dollars in thousands)
<CAPTION>
Quarter Ended
-------------------------------
September 30, 1998
-------------------------------
AVERGAE
INTEREST RATES
AVERAGE INCOME/ EARNED/
BALANCE EXPENSE PAID
----------- -------- ------
<S> <C> <C> <C>
Interest-earning assets:
Interest-bearing deposits with banks $4,487,169 $75,466 6.67%
Investment securities:(1)
Taxable 23,236,182 385,960 6.59
Exempt from federal income taxes 1,349,946 25,533 7.50
---------- -------
Total investment securities 24,586,128 411,493 6.64
Trading account assets(2) 1,018,907 17,128 6.67
Federal funds sold and securities
purchased under resale agreements 3,275,722 46,326 5.61
Loans, net of unearned income:
Domestic offices 10,013,229 209,880 8.32
Foreign offices 3,995,738 77,215 7.67
---------- -------
Total loans, net of unearned income 14,008,967 287,095 8.13
---------- -------
Total interest-earning assets 47,376,893 $837,508 7.01%
======== ====
Cash and due from banks 872,644
Other assets 6,159,305
----------
Total assets $54,408,842
===========
Interest-bearing funds:
Consumer and other time deposits $10,264,566 $97,879 3.78%
Certificates of deposit 1,050,679 13,142 4.96
Deposits in foreign offices 18,067,907 272,264 5.98
---------- ------- ----
Total interest-bearing deposits 29,383,152 383,285 5.18
Trading account liabilities(2) 449,127 1,999 1.77
Short-term borrowings 8,500,697 111,521 5.20
Total long-term debt 4,827,355 77,904 6.40
---------- ------- ----
Total interest-bearing funds 43,160,331 $574,709 5.28%
======== ====
Noninterest-bearing deposits:
In domestic offices 2,696,884
In foreign offices 218,525
Other liabilities 5,050,954
Stockholders' equity:
Preferred stock 500,000
Common stockholders' equity 2,782,148
---------
Total stockholders' equity 3,282,148
---------
Total liabilities
and stockholders' equity $54,408,842
===========
Interest income/earning assets $837,508 7.01%
Interest expense/earning assets 574,709 4.81
-------- ----
Net interest differential $262,799 2.20%
======== ====
<FN>
(1) Based on amortized or historic cost with the mark-to-market adjustment on securities available for sale included in other assets
(2) Excludes noninterest-bearing balances, which are included in other assets or other liabilities, respectively.
</FN>
</TABLE>
<PAGE>
<TABLE>
REPUBLIC NEW YORK CORPORATION
AVERAGE BALANCES NET INTEREST DIFFERENTIAL,
AVERAGE RATES EARNED AND PAID
(Fully taxable equivalent basis)
(Dollars in thousands)
<CAPTION>
Nine Months Ended September 30,
--------------------------------------------------------------------------------
1999 1998
--------------------------------------------------------------------------------
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 $2,858,877 $106,554 4.98% $4,530,358 $221,776 6.55%
Investment securities:(1)
Taxable 21,038,334 1,024,945 6.51 23,224,016 1,171,282 6.74
Exempt from federal income taxes 1,344,085 74,889 7.45 1,421,288 83,055 7.81
---------- --------- ----------- -----------
Total investment securities 22,382,419 1,099,834 6.57 24,645,304 1,254,337 6.80
Trading account assets(2) 1,214,797 53,034 5.84 1,094,672 61,275 7.48
Federal funds sold and securities
purchased under resale agreements 1,886,172 69,463 4.92 3,310,576 138,023 5.57
Loans, net of unearned income:
Domestic offices 10,428,574 573,673 7.35 9,531,669 593,760 8.33
Foreign offices 3,733,961 196,506 7.04 3,982,318 242,229 8.13
----------- --------- ----------- ----------
Total loans, net of unearned income 14,162,535 770,179 7.27 13,513,987 835,989 8.27
----------- --------- ----------- ----------
Total interest-earning assets 42,504,800 $2,099,064 6.60% 47,094,897 $2,511,400 7.13%
========== ==== ========== ====
Cash and due from banks 930,398 856,123
Other assets 3,903,942 7,302,764
----------- ----------
Total assets $47,339,140 $55,253,784
=========== ===========
Interest-bearing funds:
Consumer and other time deposits $9,954,036 $242,615 3.26% $10,442,183 $301,502 3.86%
Certificates of deposit 703,435 22,238 4.23 1,289,526 49,068 5.09
Deposits in foreign offices 16,254,207 619,341 5.09 17,722,120 781,973 5.90
----------- -------- ----------- ----------
Total interest-bearing deposits 26,911,678 884,194 4.39 29,453,829 1,132,543 5.14
Trading account liabilities(2) 327,324 1,968 0.80 413,049 10,849 3.51
Short-term borrowings 6,037,147 206,574 4.57 8,480,191 331,411 5.23
Total long-term debt 4,356,120 198,100 6.08 4,778,470 230,456 6.45
----------- -------- ----------- ----------
Total interest-bearing funds 37,632,269 $1,290,836 4.59% 43,125,539 $1,705,259 5.29%
========== ==== ========== ====
Noninterest-bearing deposits:
In domestic offices 2,886,316 2,634,408
In foreign offices 201,370 244,468
Other liabilities 3,414,139 5,825,957
Stockholders' equity:
Preferred stock 500,000 500,000
Common stockholders' equity 2,705,046 2,923,412
----------- -----------
Total stockholders' equity 3,205,046 3,423,412
----------- -----------
Total liabilities
and stockholders' equity $47,339,140 $55,253,784
============ ===========
Interest income/earning assets $2,099,064 6.60% $2,511,400 7.13%
Interest expense/earning assets 1,290,836 4.06 1,705,259 4.84
----------- ---- ---------- ----
Net interest differential $808,228 2.54% $806,141 2.29%
=========== ==== ========== ====
<FN>
(1) Based on amortized or historic cost with the mark-to-market adjustment on securities available for sale included in other assets
(2) Excludes noninterest-bearing balances, which are included in other assets or other liabilities, respectively.
</FN>
</TABLE>
