<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8 - K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported): January 16, 1996
THE BANK OF NEW YORK COMPANY, INC.
----------------------------------
(exact name of registrant as specified in its charter)
NEW YORK
--------
(State or other jurisdiction of incorporation)
1-6152 13-2614959
------ ----------
(Commission file number) (I.R.S. employer identification
number)
48 Wall Street, New York, NY 10286
---------------------------- -----
(Address of principal executive (Zip code)
offices)
212 - 495 - 1784
----------------
(Registrant's telephone number,
including area code)
<PAGE> 2
ITEM 5. Other Events
------------
Fourth Quarter Financial Results
--------------------------------
On January 16, 1996 The Bank of New York Company,
Inc. (the "Company") issued a press release
containing unaudited interim financial information
and accompanying discussion for the fourth quarter
of 1995. Exhibit 99 is a copy of such press
release and is incorporated herein by reference.
ITEM 7. Financial Statements, Pro Forma Financial Information
and Exhibits
-----------------------------------------------------
(c) Exhibit Description
------- -----------
99 Unaudited interim financial
information and accompanying
discussion for the fourth quarter
of 1995 contained in the press
release dated January 16, 1996, of The
Bank of New York Company, Inc.
<PAGE> 3
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly
authorized.
Dated: January 16, 1996
THE BANK OF NEW YORK COMPANY, INC.
(Registrant)
By: /s/ Robert E. Keilman
------------------------
Name: Robert E. Keilman
Title: Comptroller
<PAGE> 4
EXHIBIT INDEX
Exhibit No. Description
99 Unaudited interim financial
information and accompanying
discussion for the fourth quarter
of 1995 contained in the press
release dated January 16, 1996, of
The Bank of New York Company, Inc.
<PAGE> 1
Exhibit 99
The Bank of New York Company, Inc. NEWS
- -----------------------------------------------------------------------
48 Wall Street, New York, NY 10286
Contact:
For Release: PUBLIC AND INVESTOR RELATIONS DEPT.
IMMEDIATELY Paul J. Leyden, SVP
- ----------- (212) 495-1041
Andrew M. Merrill, VP
(212) 495-1721
Gregory A. Burton, AT
(212) 495-1619
THE BANK OF NEW YORK COMPANY, INC. REPORTS RECORD FOURTH QUARTER
----------------------------------------------------------------
AND FULL YEAR NET INCOME AND E.P.S.
-----------------------------------
Fourth Quarter Net Income Rises 20% to $241 Million;
Fourth Quarter E.P.S. Increases 12% to $1.12;
Full Year Net Income Rises 22% to $914 Million;
Full Year E.P.S. Increases 16% to $4.30;
Spreads, Yields, ROA, ROE Set Annual Records
NEW YORK, N.Y., January 16, 1996 -- The Bank of New York Company, Inc.
(NYSE: BK) reported record fourth quarter net income of $241 million, up
20% from $201 million earned in the same period last year. Fourth quarter
fully diluted earnings per share were $1.12, a 12% increase over the $1.00
earned in the fourth quarter of 1994. Net income for the full year was
$914 million, an increase of 22% over last year's $749 million. Earnings
per share, on a fully diluted basis, were $4.30 for the full year of 1995
compared with $3.70 in 1994. Earnings per share for the fourth quarter
and full year of 1995 were reduced by $.05 and $.21, respectively for the
dilutive effect of stock warrants.
<PAGE> 2
Net interest income, on a taxable equivalent basis, was a record $529
million in the fourth quarter, a $43 million or 9% increase over the
fourth quarter of last year. Loan demand remained strong, particularly
in corporate lending across the United States, and in all of the special
industry lending areas. Revenues from the Company's securities processing
business grew 19% over the fourth quarter of 1994 and 14% for the full
year. All areas of securities processing increased, led by ADRs,
corporate trust, and master trust. Securities processing revenues did not
include any revenue from the acquisitions of the custody businesses of
J.P. Morgan or BankAmerica. Transition activities associated with these
acquisitions will continue throughout 1996. Fees from the acquisition of
NationsBank's corporate trust business were included in securities
processing revenues for the month of December. In 1995, other processing
fees grew 11% over last year led by increases in funds transfer and trade
finance revenues.
For the year, returns on average common equity and on average assets
established all-time highs. Return on average common equity totaled
19.42% compared with 18.49% last year, and return on average assets was
1.72% compared with 1.49% in 1994.
Return on average assets for the fourth quarter was 1.77%, down only
slightly from the third quarter of 1995's record 1.78% and above the
fourth quarter of 1994's 1.55%. Return on average common equity was
18.87% in the fourth quarter of 1995, compared with 19.28% in the third
quarter of 1995 and 19.03% in the fourth quarter of last year.
The Company's estimated Tier 1 capital and Total capital ratios were
8.39% and 13.04% at December 31, 1995 compared with 8.89% and 13.62% at
<PAGE> 3
September 30, 1995, and 8.45% and 13.43% at December 31, 1994. The
leverage ratio was 8.46% at December 31, 1995 compared with 8.96% at
September 30, 1995 and 7.89% one year ago.
NET INTEREST INCOME
- -------------------
4th 3rd 4th
Quarter Quarter Quarter
(In millions) ------- ------- -------
1995 1995 1994 1995 1994
----------------------------- ------------------
Net Interest Income $529 $521 $486 $2,068 $1,763
Net Interest Rate
Spread 3.41% 3.47% 3.44% 3.41% 3.30%
Net Yield on Interest-
Earning Assets 4.58 4.61 4.39 4.53 4.11
On a taxable equivalent basis, net interest income amounted to $529
million in the fourth quarter of 1995, compared with $486 million in the
same period of 1994, an increase of 9%. The net interest rate spread was
3.41% in the fourth quarter of 1995 compared with 3.47% in the third
quarter of 1995 and 3.44% one year ago. The net yield on interest-earning
assets was 4.58% compared with 4.61% in the third quarter of 1995 and
4.39% in last year's fourth quarter.
For 1995, net interest income, on a taxable equivalent basis,
amounted to a record $2,068 million compared with $1,763 million for 1994,
an increase of 17%. The net interest rate spread was a record 3.41% for
1995 compared with 3.30% for 1994, while the net yield on interest-earning
assets was a record 4.53% for 1995 compared with 4.11% for 1994.
Growth in the Company's credit card business continued. Compared
with last year's fourth quarter, managed outstandings were up 13% to $8.7
billion from $7.7 billion.
<PAGE> 4
NONINTEREST INCOME
- ------------------
4th Quarter
(In millions) -----------
1995 1994 1995 1994
---------------- ----------------
Processing Fees
Securities $108 $ 91 $ 411 $ 359
Other 49 42 189 171
---- ---- ------ ------
157 133 600 530
Trust and Investment Fees 39 25 136 126
Income from Credit Card
Securitization - 5 3 38
Other Service Charges and Fees 104 106 425 427
Securities Gains 78 - 115 15
Foreign Exchange and
Other Trading Activities 17 5 60 44
Other 27 24 157 109
---- ---- ------ ------
Total Noninterest Income $422 $298 $1,496 $1,289
==== ==== ====== ======
Securities processing fees increased 19% to $108 million compared to
$91 million in the fourth quarter of 1994. Securities processing fees
were $411 million, up 14% from $359 million in 1994. All areas of
securities processing contributed to this growth with the largest gains
in ADRs, corporate trust and master trust. Other processing revenues
increased 17% over the fourth quarter of last year. Credit card
interchange income and syndication fees, included in other charges and
fees, also showed substantial strength. Securities gains of $78 million
were partially offset by a $13 million one-time charge to settle the
Company's litigation with Northeast Bancorp. The balance was offset by
an increase in the loan loss reserve. Foreign exchange and other trading
<PAGE> 5
activity increased $12 million over the fourth quarter of 1994.
The return of the securitized credit card receivables to the balance
sheet reduced noninterest income by $5 million in the fourth quarter and
$35 million for the full year.
NONINTEREST EXPENSE AND INCOME TAXES
- ------------------------------------
Noninterest expense for the year was up only 4% to $1,713 million
compared with $1,646 million in 1994.
Total noninterest expense for the quarter was $447 million, up 8%
from $413 million in the same period last year. The rise in expenses in
the fourth quarter was due principally to the inclusion of conversion
expenses related to acquisitions in the Company's securities processing
business and, to a lesser extent, the purchase of Putnam Trust.
Noninterest expense for both the quarter and the full year include
the $13 million one-time charge for the settlement of litigation related
to Northeast Bancorp.
Excluding the settlement with Northeast Bancorp., the efficiency
ratios for the fourth quarter and full year 1995 were 49.7% and 50.0%
The effective tax rates for both the fourth quarter and full year of
1995 were 38.4% and 38.3% compared with 37.4% and 37.5% for the same
periods last year.
<PAGE> 6
NONPERFORMING ASSETS
- --------------------
Change
4Q 1995 vs
(Dollars in millions) 12/31/95 9/30/95 3Q 1995
--------------------------------------
Loans:
HLT $ 15 $ 15 $ -
Commercial Real Estate 42 49 (7)
Other Commercial 60 48 12
Foreign 20 18 2
LDC 21 21 -
Community Banking 67 82 (15)
---- ----
Total Loans 225 233 (8)
Other Real Estate 72 81 (9)
---- ----
Total $297 $314 (17)
==== ====
Nonperforming Assets Ratio 0.8% 0.8%
Allowance/Nonperforming Loans 336.0 320.6
Allowance/Nonperforming Assets 254.5 237.9
This was the eighteenth consecutive quarter of net declines in
nonperforming assets. NPAs totaled $297 million at December 31, 1995,
compared with $314 million at September 30, 1995.
<PAGE> 7
LOAN LOSS PROVISION AND NET CHARGE-OFFS
- ---------------------------------------
4th 3rd 4th
Quarter Quarter Quarter
(In millions) ------- ------- -------
1995 1995 1994 1995 1994
----------------------------- ----------------
Provision $105 $113 $ 39 $ 330 $ 162
---- ---- ---- ----- -----
Net Charge-offs:
HLT - (1) (1) (6) (33)
Commercial Real Estate - - - (16) (5)
Other Commercial (4) (4) (16) (17) (67)
Consumer (83) (66) (48) (272) (156)
Foreign - (9) (17) (22) (31)
Other (8) (6) (1) (20) (44)
---- ---- ---- ----- -----
Total (95) (86) (83) (353) (336)
Acquisition - 7 - 8 -
Credit Card Securitization - - 3 3 14
---- ---- ---- ----- -----
Change in Regular Allowance $ 10 $ 34 $(41) $ (12) $(160)
==== ==== ==== ===== =====
Other Real Estate Expenses $ - $ 1 $ 4 $ 5 $ 11
The allowance for loan losses was $756 million, or 2.01% of loans at
December 31, 1995, compared with $747 million, or 1.99% of loans at
September 30, 1995.
***************************
(Financial highlights and detailed financial statements are attached.)
<PAGE> 8
THE BANK OF NEW YORK COMPANY, INC.
Financial Highlights
(Unaudited)
(Dollars in millions, except per share amounts)
1995 1994 Change
---- ---- ------
For the Three Months Ended December 31:
- ---------------------------------------
Net Income $241 $201 19.9%
Per Common Share:
Primary Earnings $1.15 $1.06 8.5
Fully Diluted Earnings 1.12 1.00 12.0
Cash Dividends 0.36 0.32 12.5
Return on Average Common Shareholders'
Equity 18.87% 19.03%
Return on Average Assets 1.77 1.55
For the Twelve Months Ended December 31:
- ----------------------------------------
Net Income $914 $749 22.0%
Per Common Share:
Primary Earnings $4.57 $3.92 16.6
Fully Diluted Earnings 4.30 3.70 16.2
Cash Dividends 1.36 1.095 24.2
Return on Average Common Shareholders'
Equity 19.42% 18.49%
Return on Average Assets 1.72 1.49
As of December 31:
- ------------------
Assets $53,685 $48,879 9.8%
Loans 37,687 33,083 13.9
Securities 4,854 4,651 4.4
Deposits - Domestic 26,430 23,381 13.0
- Foreign 9,513 10,710 -11.2
Long-Term Debt 1,848 1,774 4.2
Preferred Shareholders' Equity 113 119 -5.0
Common Shareholders' Equity 5,110 4,177 22.3
Common Shareholders' Equity Per Share 25.86 22.32 15.9
Market Value Per Share of Common Stock 48.75 29.00 68.1
Allowance for Loan Losses as a Percent
of Loans 2.01% 2.40%
Tier 1 Capital Ratio 8.39 8.45
Total Capital Ratio 13.04 13.43
Leverage Ratio 8.46 7.89
Tangible Common Equity Ratio 7.99 7.39
<PAGE> 9
THE BANK OF NEW YORK COMPANY, INC.
Consolidated Statements of Income
(Unaudited)
(In millions, except per share amounts)
For the three For the twelve
months ended months ended
December 31, December 31,
1995 1994 1995 1994
---- ---- ---- ----
Interest Income
- ---------------
Loans $ 835 $ 701 $3,226 $2,405
Securities
Taxable 60 57 235 227
Exempt from Federal Income Taxes 10 13 43 56
----- ----- ------ ------
70 70 278 283
Deposits in Banks 23 22 106 68
Federal Funds Sold and Securities
Purchased Under Resale Agreements 34 53 193 161
Trading Assets 5 7 28 45
----- ----- ------ ------
Total Interest Income 967 853 3,831 2,962
----- ----- ------ ------
Interest Expense
- ----------------
Deposits 313 258 1,265 842
Federal Funds Purchased and
Securities Sold Under Repurchase
Agreements 52 28 161 106
Other Borrowed Funds 49 64 246 191
Long-Term Debt 32 28 130 106
---- ---- ------ ------
Total Interest Expense 446 378 1,802 1,245
---- ---- ------ ------
Net Interest Income 521 475 2,029 1,717
- -------------------
Provision for Loan Losses 105 39 330 162
----- ----- ------ ------
Net Interest Income After
Provision for Loan Losses 416 436 1,699 1,555
----- ----- ------ ------
Noninterest Income
- ------------------
Processing Fees
Securities 108 91 411 359
Other 49 42 189 171
----- ----- ------ ------
157 133 600 530
Trust and Investment Fees 39 25 136 126
Service Charges and Fees 104 111 428 465
Securities Gains 78 - 115 15
Other 44 29 217 153
----- ----- ------ ------
Total Noninterest Income 422 298 1,496 1,289
----- ----- ------ ------
Noninterest Expense
- -------------------
Salaries and Employee Benefits 237 210 913 852
Net Occupancy 43 43 175 178
Furniture and Equipment 23 22 87 88
Other 144 138 538 528
----- ----- ------ ------
Total Noninterest Expense 447 413 1,713 1,646
----- ----- ------ ------
Income Before Income Taxes 391 321 1,482 1,198
Income Taxes 150 120 568 449
----- ----- ------ ------
Net Income $ 241 $ 201 $ 914 $ 749
- ---------- ===== ===== ====== ======
Net Income Available to
Common Shareholders $ 239 $ 198 $ 904 $ 736
- ----------------------- ===== ===== ====== ======
Per Common Share Data:
- ----------------------
Primary Earnings $1.15 $1.06 $4.57 $3.92
Fully Diluted Earnings 1.12 1.00 4.30 3.70
Cash Dividends 0.36 0.32 1.36 1.095
Fully Diluted Shares Outstanding 215 201 212 202
<PAGE> 10
THE BANK OF NEW YORK COMPANY, INC.
Consolidated Balance Sheets
(Unaudited)
(Dollars in millions, except per share amounts)
December 31, December 31,
1995 1994
---- ----
Assets
- ------
Cash and Due from Banks $ 4,711 $ 2,903
Interest-Bearing Deposits in Banks 982 992
Securities:
Held-to-Maturity 1,252 2,930
Available-for-Sale 3,602 1,721
------- -------
Total Securities 4,854 4,651
Trading Assets at Fair Value 743 940
Federal Funds Sold and Securities Purchased
Under Resale Agreements 936 3,019
Loans (less allowance for loan losses
of $756 in 1995 and $792 in 1994) 36,931 32,291
Premises and Equipment 902 914
Due from Customers on Acceptances 918 810
Accrued Interest Receivable 270 290
Other Assets 2,438 2,069
------- -------
Total Assets $53,685 $48,879
======= =======
Liabilities and Shareholders' Equity
- ------------------------------------
Deposits
Noninterest-Bearing (principally
domestic offices) $10,465 $ 8,579
Interest-Bearing
Domestic Offices 16,030 14,871
Foreign Offices 9,448 10,641
------- -------
Total Deposits 35,943 34,091
Federal Funds Purchased and Securities
Sold Under Repurchase Agreements 3,933 1,502
Other Borrowed Funds 3,662 4,738
Acceptances Outstanding 928 812
Accrued Taxes and Other Expenses 1,371 1,049
Accrued Interest Payable 190 213
Other Liabilities 587 404
Long-Term Debt 1,848 1,774
------- -------
Total Liabilities 48,462 44,583
------- -------
Shareholders' Equity
Preferred Stock-no par value, authorized
5,000,000 shares, outstanding 184,000 shares 111 111
Class A Preferred Stock - par value $2.00
per share, authorized 5,000,000 shares,
outstanding 49,504 shares in 1995 and
322,104 shares in 1994 2 8
Common Stock-par value $7.50 per share,
authorized 350,000,000 shares, issued
204,162,405 shares in 1995 and
190,213,322 shares in 1994 1,531 1,427
Additional Capital 1,087 858
Retained Earnings 2,689 2,048
Securities Valuation Allowance 49 (58)
------- -------
5,469 4,394
Less: Treasury Stock (6,026,048 shares in 1995
and 2,566,071 shares in 1994), at cost 228 78
Loan to ESOP (658,530 shares in 1995 and
712,695 shares in 1994), at cost 18 20
------- -------
Total Shareholders' Equity 5,223 4,296
------- -------
Total Liabilities and Shareholders' Equity $53,685 $48,879
======= =======
<PAGE> 11
THE BANK OF NEW YORK COMPANY, INC.
Average Balances and Rates on a Taxable Equivalent Basis
Preliminary
(Dollars in millions)
For the three months For the three months
ended December 31, 1995 ended December 31, 1994
------------------------ -------------------------
Average Average Average Average
Balance Interest Rate Balance Interest Rate
------- -------- ------- ------- -------- ------
ASSETS
- ------
Interest-Bearing
Deposits in Banks
(primarily foreign) $ 1,448 $ 23 6.29% $ 1,497 $ 22 5.90%
Federal Funds Sold and
Securities Purchased
Under Resale Agreements 2,359 34 5.79 4,016 53 5.27
Loans
Domestic Offices 25,614 632 9.80 22,999 533 9.20
Foreign Offices 11,428 204 7.07 10,279 169 6.51
------- ------ ------- ------
Total Loans 37,042 836 8.96 33,278 702 8.37
------- ------ ------- ------
Securities
U.S. Government
Obligations 2,934 42 5.64 2,962 43 5.76
U.S. Government Agency
Obligations 456 7 6.35 322 5 6.58
Obligations of States and
Political Subdivisions 607 15 10.12 778 21 10.68
Other Securities,
including Trading
Securities 1,193 18 6.18 1,173 18 5.94
------- ------ ------- ------
Total Securities 5,190 82 6.35 5,235 87 6.58
------- ------ ------- ------
Total Interest-Earning
Assets 46,039 975 8.41% 44,026 864 7.79%
------ ------
Allowance for Loan Losses (726) (834)
Cash and Due from Banks 3,532 2,813
Other Assets 5,087 5,236
------- -------
TOTAL ASSETS $53,932 $51,241
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Interest-Bearing Deposits
Money Market Rate
Accounts $ 3,613 41 4.50% $ 3,627 33 3.66%
Savings 8,171 62 3.00 7,840 51 2.60
Certificates of Deposit
$100,000 & Over 1,395 19 5.46 1,353 17 4.94
Other Time Deposits 2,708 45 6.65 2,378 26 4.41
Foreign Offices 10,918 146 5.30 10,720 131 4.79
------- ------ ------- ------
Total Interest-Bearing
Deposits 26,805 313 4.64 25,918 258 3.94
Federal Funds Purchased
and Securities Sold
Under Repurchase
Agreements 3,597 52 5.72 2,272 28 4.82
Other Borrowed Funds 3,143 49 6.09 4,700 64 5.46
Long-Term Debt 1,819 32 7.01 1,537 28 7.19
------- ------ ------- ------
Total Interest-Bearing
Liabilities 35,364 446 5.00% 34,427 378 4.35%
------ ------
Noninterest-Bearing
Deposits 9,831 8,969
Other Liabilities 3,606 3,592
Preferred Stock 113 123
Common Shareholders'
Equity 5,018 4,130
------- -------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $53,932 $51,241
======= =======
Net Interest Earnings
and Interest Rate Spread $ 529 3.41% $ 486 3.44%
====== ======
Net Yield on Interest-
Earning Assets 4.58% 4.39%
==== ====
<PAGE> 12
THE BANK OF NEW YORK COMPANY, INC.
Average Balances and Rates on a Taxable Equivalent Basis
Preliminary
(Dollars in millions)
For the twelve months For the twelve months
ended December 31, 1995 ended December 31, 1994
------------------------ -------------------------
Average Average Average Average
Balance Interest Rate Balance Interest Rate
------- -------- ------- ------- -------- ------
ASSETS
- ------
Interest-Bearing
Deposits in Banks
(primarily foreign) $ 1,682 $ 106 6.28% $ 1,266 $ 68 5.33%
Federal Funds Sold and
Securities Purchased
Under Resale Agreements 3,280 193 5.89 3,653 161 4.39
Loans
Domestic Offices 24,366 2,428 9.97 21,889 1,848 8.44
Foreign Offices 11,055 805 7.28 10,140 564 5.56
------- ------ ------- ------
Total Loans 35,421 3,233 9.13 32,029 2,412 7.53
------- ------ ------- ------
Securities
U.S. Government
Obligations 2,929 167 5.71 3,178 175 5.51
U.S. Government Agency
Obligations 372 24 6.33 338 22 6.51
Obligations of States and
Political Subdivisions 650 68 10.49 893 89 10.02
Other Securities,
including Trading
Securities 1,309 79 6.14 1,532 81 5.30
------- ------ ------- ------
Total Securities 5,260 338 6.45 5,941 367 6.19
------- ------ ------- ------
Total Interest-Earning
Assets 45,643 3,870 8.48% 42,889 3,008 7.01%
------ ------
Allowance for Loan Losses (739) (906)
Cash and Due from Banks 2,971 2,827
Other Assets 5,178 5,470
------- -------
TOTAL ASSETS $53,053 $50,280
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Interest-Bearing Deposits
Money Market Rate
Accounts $ 3,451 153 4.44% $ 3,593 108 3.01%
Savings 7,909 243 3.07 8,166 190 2.32
Certificates of Deposit
$100,000 & Over 1,673 95 5.68 1,041 42 4.03
Other Time Deposits 2,560 143 5.60 2,296 97 4.24
Foreign Offices 11,403 631 5.54 9,990 405 4.05
------- ------ ------- ------
Total Interest-Bearing
Deposits 26,996 1,265 4.69 25,086 842 3.35
Federal Funds Purchased
and Securities Sold
Under Repurchase
Agreements 2,804 161 5.75 2,843 106 3.73
Other Borrowed Funds 3,962 246 6.22 4,135 191 4.63
Long-Term Debt 1,773 130 7.30 1,530 106 6.93
------- ------ ------ ------
Total Interest-Bearing
Liabilities 35,535 1,802 5.07% 33,594 1,245 3.71%
------ ------
Noninterest-Bearing
Deposits 9,065 8,955
Other Liabilities 3,695 3,594
Preferred Stock 115 157
Common Shareholders'
Equity 4,643 3,980
------- ------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $53,053 $50,280
======= =======
Net Interest Earnings
and Interest Rate Spread $2,068 3.41% $1,763 3.30%
====== ======
Net Yield on Interest-
Earning Assets 4.53% 4.11%
==== ====
