<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-6152
THE BANK OF NEW YORK COMPANY, INC.
(Exact name of registrant as specified in its charter)
New York 13-2614959
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
48 Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
(212) 495-1784
(Registrant's telephone number, including area code)
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 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 issuer's Common Stock,
$7.50 par value, was 385,658,134 shares as of July 31, 1996.
<PAGE>2
THE BANK OF NEW YORK COMPANY, INC.
FORM 10-Q
TABLE OF CONTENTS
PART 1. FINANCIAL INFORMATION
- ------------------------------
Item 1. Financial Statements
Consolidated Balance Sheets
June 30, 1996 and December 31, 1995 3
Consolidated Statements of Income
For the Three Months and Six Months
Ended June 30, 1996 and 1995 4
Consolidated Statement of Changes In
Shareholders' Equity
For the Six Months Ended June 30, 1996 5
Consolidated Statements of Cash Flows
For the Six Months Ended June 30,
1996 and 1995 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART 2. OTHER INFORMATION
- --------------------------
Item 2. Changes in Securities 20
Item 4. Submissions of Matters to Vote of Security Holders 20
Item 6. Exhibits and Reports on Form 8-K 20
SIGNATURE 22
<PAGE> 3
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
- -----------------------------------------------------------------------------
THE BANK OF NEW YORK COMPANY, INC.
Consolidated Balance Sheets
(Dollars in millions, except per share amounts)
June 30, December 31,
1996 1995
---- ----
(Unaudited) (Note)
Assets
- ------
Cash and Due from Banks $ 3,845 $ 4,711
Interest-Bearing Deposits in Banks 992 982
Securities:
Held-to-Maturity (fair value of $1,164 in
1996 and $1,164 in 1995) 1,231 1,252
Available-for-Sale 3,954 3,618
------- -------
Total Securities 5,185 4,870
Trading Assets at Fair Value 586 762
Federal Funds Sold and Securities Purchased
Under Resale Agreements 1,318 936
Loans (less allowance for loan losses
of $982 in 1996 and $756 in 1995) 34,541 36,931
Premises and Equipment 888 902
Due from Customers on Acceptances 922 918
Accrued Interest Receivable 296 270
Other Assets 2,894 2,438
------- -------
Total Assets $51,467 $53,720
======= =======
Liabilities and Shareholders' Equity
- ------------------------------------
Deposits
Noninterest-Bearing (principally
domestic offices) $ 8,969 $10,465
Interest-Bearing
Domestic Offices 15,066 16,005
Foreign Offices 11,427 9,448
------- -------
Total Deposits 35,462 35,918
Federal Funds Purchased and Securities
Sold Under Repurchase Agreements 1,756 3,933
Other Borrowed Funds 4,385 3,706
Acceptances Outstanding 923 928
Accrued Taxes and Other Expenses 1,443 1,378
Accrued Interest Payable 177 190
Other Liabilities 341 587
Long-Term Debt 1,913 1,848
------- -------
Total Liabilities 46,400 48,488
------- -------
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 46,204 shares in 1996 and
49,504 shares in 1995 2 2
Common Stock-par value $7.50 per share,
authorized 800,000,000 shares, issued
412,554,238 shares in 1996 and
408,324,810 shares in 1995 3,094 3,062
Additional Capital 148 125
Retained Earnings 2,478 2,120
Securities Valuation Allowance 6 58
------- -------
5,839 5,478
Less: Treasury Stock-32,395,786 shares in
1996 and 12,052,096 shares in 1995, at cost 754 228
Loan to ESOP-1,317,060 shares, at cost 18 18
------- -------
Total Shareholders' Equity 5,067 5,232
------- -------
Total Liabilities and Shareholders' Equity $51,467 $53,720
======= =======
- -----------------------------------------------------------------------------
Note: The balance sheet at December 31, 1995 has been derived from the
audited financial statements at that date.
See accompanying Notes to Consolidated Financial Statements
<PAGE> 4
- -----------------------------------------------------------------------------
THE BANK OF NEW YORK COMPANY, INC.
Consolidated Statements of Income
(Unaudited)
(In millions, except per share amounts)
For the three For the six
months ended months ended
June 30, June 30,
1996 1995 1996 1995
---- ---- ---- ----
Interest Income
- ---------------
Loans $ 781 $ 812 $1,587 $1,577
Securities
Taxable 66 59 128 115
Exempt from Federal Income Taxes 5 12 10 24
----- ----- ------ ------
71 71 138 139
Deposits in Banks 21 30 43 60
Federal Funds Sold and Securities
Purchased Under Resale Agreements 32 62 61 128
Trading Assets 5 6 9 13
----- ----- ------ ------
Total Interest Income 910 981 1,838 1,917
----- ----- ------ ------
Interest Expense
- ----------------
Deposits 286 335 578 643
Federal Funds Purchased and
Securities Sold Under Repurchase
Agreements 48 36 99 68
Other Borrowed Funds 55 74 99 146
Long-Term Debt 33 32 65 65
---- ---- ------ ------
Total Interest Expense 422 477 841 922
---- ---- ------ ------
Net Interest Income 488 504 997 995
- -------------------
Provision for Loan Losses 425 62 515 112
----- ----- ------ ------
Net Interest Income After
Provision for Loan Losses 63 442 482 883
----- ----- ------ ------
Noninterest Income
- ------------------
Processing Fees
Securities 161 102 320 200
Other 51 48 101 92
----- ----- ------ ------
212 150 421 292
Trust and Investment Fees 40 32 77 64
Service Charges and Fees 120 109 226 222
Securities Gains 30 13 63 20
Other 444 46 479 70
----- ----- ------ ------
Total Noninterest Income 846 350 1,266 668
----- ----- ------ ------
Noninterest Expense
- -------------------
Salaries and Employee Benefits 249 223 496 444
Net Occupancy 42 43 85 87
Furniture and Equipment 23 21 46 43
Other 143 138 275 267
----- ----- ------ ------
Total Noninterest Expense 457 425 902 841
----- ----- ------ ------
Income Before Income Taxes 452 367 846 710
Income Taxes 174 141 325 272
----- ----- ------ ------
Net Income $ 278 $ 226 $ 521 $ 438
- ---------- ===== ===== ====== ======
Net Income Available to
Common Shareholders $ 276 $ 223 $ 516 $ 433
- ----------------------- ===== ===== ====== =====
Per Common Share Data:(1)
- -------------------------
Primary Earnings $0.68 $0.57 $1.25 $1.13
Fully Diluted Earnings 0.66 0.54 1.23 1.06
Cash Dividends 0.20 0.16 0.40 0.32
Fully Diluted Shares Outstanding 418 414 423 414
- -----------------------------------------------------------------------------
(1) Per Common Share Data has been adjusted to reflect the effect of the
2-for-1 common stock split effective July 19, 1996.
See accompanying Notes to Consolidated Financial Statements
<PAGE> 5
- -------------------------------------------------------------------------------
THE BANK OF NEW YORK COMPANY, INC.
Consolidated Statement of Changes in Shareholders' Equity
(Unaudited)
For the six months ended June 30, 1996
(In millions)
Class A
Pre- Pre- Addi- Securities Treas- Loan
ferred ferred Common tional Retained Valuation ury to
Stock Stock Stock Capital Earnings Allowance Stock ESOP
------ ------- ------ ------- -------- ---------- ------ ----
Balance,
January 1, 1996 $111 $ 2 $3,062 $125 $2,120 $ 58 $228 $18
Changes:
Net Income 521
Cash Dividends
Common Stock (157)
Preferred Stock (5)
Conversion of
Debentures 16 4
Issuance of
Common Stock 16 19 (36)
Treasury Stock
Acquired 562
Net Unrealized
Loss on Secur-
ities Avail-
able for Sale (52)
Change in
Cumulative
Foreign
Currency
Translation
Adjustment (1)
---- --- ------ ---- ------ ---- ---- ---
Balance,
June 30, 1996 $111 $ 2 $3,094 $148 $2,478 $ 6 $754 $18
==== === ====== ==== ====== ==== ==== ===
- -------------------------------------------------------------------------------
See accompanying Notes to Consolidated Financial Statements
<PAGE> 6
- -------------------------------------------------------------------------------
THE BANK OF NEW YORK COMPANY, INC.
Consolidated Statements of Cash Flows
(In millions)
(Unaudited)
For the six months ended
June 30,
1996 1995
---- ----
Operating Activities
Net Income $ 521 $ 438
Adjustments to Determine Net Cash Provided (Used)
by Operating Activities
Provision for Losses on Loans and Other Real Estate 524 115
Gain on Sale of Loans (400) -
Depreciation and Amortization 116 98
Deferred Income Taxes 16 94
Securities Gains (63) (20)
Change in Trading Assets 176 (415)
Change in Accruals and Other, Net (322) 28
------- -------
Net Cash Provided by Operating Activities 568 338
------- -------
Investing Activities
Change in Interest-Bearing Deposits in Banks (24) (86)
Purchases of Securities Held-to-Maturity (146) (148)
Maturities of Securities Held-to-Maturity 156 286
Purchases of Securities Available-for-Sale (796) (342)
Sales of Securities Available-for-Sale 237 177
Maturities of Securities Available-for-Sale 170 22
Net Principal Disbursed on Loans to Customers (1,697) (3,661)
Sales of Loans 3,884 250
Sales of Other Real Estate 46 11
Change in Federal Funds Sold and Securities
Purchased Under Resale Agreements (382) 40
Purchases of Premises and Equipment (23) (23)
Proceeds from the Sale of Premises and Equipment 2 1
Acquisitions, Net of Cash Acquired (321) 67
Other, Net (76) (19)
------- -------
Net Cash Provided (Used) by Investing Activities 1,030 (3,425)
------- -------
Financing Activities
Change in Deposits (408) 2,589
Change in Federal Funds Purchased and Securities
Sold Under Repurchase Agreements (2,177) 1,207
Change in Other Borrowed Funds 679 (303)
Proceeds from the Issuance of Long-Term Debt 100 -
Repayments of Long-Term Debt (17) (16)
Issuance of Common Stock 71 63
Treasury Stock Acquired (562) (67)
Cash Dividends Paid (162) (126)
------- -------
Net Cash Provided (Used) by Financing Activities (2,476) 3,347
------- -------
Effect of Exchange Rate Changes on Cash 12 26
------- -------
Change in Cash and Due From Banks (866) 286
Cash and Due from Banks at Beginning of Period 4,711 2,903
------- -------
Cash and Due from Banks at End of Period $ 3,845 $ 3,189
======= =======
- -----------------------------------------------------------------------------
Supplemental Disclosure of Cash Flow Information
Cash Paid During the Year for:
Interest $ 854 $ 893
Income Taxes 231 181
Noncash Investing Activity (Primarily Foreclosure
of Real Estate) 47 47
- -----------------------------------------------------------------------------
See accompanying Notes to Consolidated Financial Statements
<PAGE>7
THE BANK OF NEW YORK COMPANY, INC.
Notes to Consolidated Financial Statements
1. General
-------
The accounting and reporting policies of The Bank of New York
Company, Inc. (the Company), a bank holding company, and its
subsidiaries, conform with generally accepted accounting principles and
general practice within the banking industry. Such policies, except as
noted below, are consistent with those applied in the preparation of the
Company's annual financial statements.
The accompanying financial statements are unaudited. In the
opinion of management, all adjustments necessary for a fair presentation
of financial position, results of operations and cash flows for the
interim periods have been made. Such adjustments are of a normal
recurring nature.
The financial statements have been restated to reflect a 2-for-1
common stock split, effective July 19, 1996.
2. Allowance for Loan Losses
-------------------------
Transactions in the allowance for loan losses are summarized as
follows:
Six months ended
June 30,
(In millions) 1996 1995
---- -----
Balance, Beginning of Period $ 756 $ 792
Charge-offs (334) (227)
Recoveries 45 32
----- -----
Net Charge-Offs (289) (195)
Provision 515 112
Acquisition - 1
Credit Card Securitization - 3
----- -----
Balance, End of Period $ 982 $ 713
===== =====
3. Commitments and Contingent Liabilities
-------------------------------------
In the ordinary course of business, there are various claims
pending against the Company and its subsidiaries. In the opinion of
management, liabilities arising from such claims, if any, would not have
a material effect upon the Company's consolidated financial statements.
<PAGE>8
4. Dispositions
------------
On June 21, 1996, the Company sold its AFL-CIO Union Privilege
affinity credit card portfolio to Household International, Inc.,
effective June 1, 1996, for $575 million. After settling its
obligations to its marketing agent and other transactional costs, the
Company recorded a pre-tax gain of $400 million, included in other
noninterest income. The transaction related to approximately $3.4
billion in outstandings and included 2.2 million cards.
<PAGE>9
Management's Discussion and Analysis of Financial Condition
- -----------------------------------------------------------
and Results of Operations
- -------------------------
The Company reported record second quarter net income of $278
million, up 23% from $226 million earned in the same period last year.
Second quarter fully diluted earnings per share were a record 66 cents,
a 22% increase over the 54 cents earned in the second quarter of 1995.
Net income for the first six months was $521 million, an increase of 19%
over last year's $438 million. Earnings per share, on a fully diluted
basis, were $1.23 for the first half of 1996 compared with $1.06 in
1995. The dilutive effect of stock warrants reduced earnings per share
for the second quarter of 1996 by 4 cents compared with 3 cents in the
first quarter of 1996 and 2 cents in last year's second quarter. This
dilution was partially offset by the effect of the Company's stock buy
back program which increased earnings per share 2 cents in the second
quarter of 1996 and 1 cent in the first quarter of 1996.
In the second quarter, the Company recorded a $400 million pre-tax
gain on the sale of its AFL-CIO Union Privilege affinity credit card
portfolio. The Company also recorded a $350 million provision related
to its credit card portfolio in addition to its current quarterly
provision for loan losses of $75 million. Excluding both the gain on
the sale and the provision related to its credit card portfolio, the
Company reported earnings per share of 59 cents, also a record quarterly
result.
Net interest income, on a taxable equivalent basis, totaled $499
million in the second quarter compared with $514 million in the second
quarter of last year. Revenues from the Company's securities processing
business grew 58% over the second quarter of 1995. This significant
increase reflected continued strong internal growth as well as the
acquisition of the corporate trust business of Nationsbank and the
custody businesses of BankAmerica and J.P. Morgan. All areas of
securities processing contributed to an internal growth rate increase of
12% with ADR's, corporate trust, and government securities clearance
particularly strong.
Fees from other processing, which includes funds transfer, cash
management, and trade finance, grew 7% over last year's second quarter.
The largest contributor to this increase was fees from funds transfer
which were up 15%.
Fees from trust and investment grew 24% in the second quarter of
1996 over the second quarter of 1995 reflecting new business and
generally strong markets.
Return on average assets for the second quarter was a record 2.05%
versus 1.79% in the first quarter of 1996 and 1.68% in the second
quarter of 1995. Return on average common equity was a record 21.97% in
the second quarter of 1996, compared with 18.86% in the first quarter of
1996 and 19.85% in the second quarter of 1995. Excluding the effect of
the sale of the Union credit card portfolio and the provision related to
<PAGE>10
the credit card portfolio, return on average assets was also a record
1.82% while return on average common equity was 19.51%.
CAPITAL
- -------
The Company's estimated Tier 1 capital and Total capital ratios
were 7.97% and 12.92% at June 30, 1996 compared with 7.85% and 12.62% at
March 31, 1996, and 8.62% and 13.20% at June 30, 1995. Tangible common
equity as a percent of total assets was 7.51% at June 30, 1996 compared
with 7.58% at March 31, 1996 and 7.67% one year ago. The leverage ratio
was 7.75% at June 30, 1996 compared with 7.94% at March 31, 1996 and
8.17% one year ago. The decline in the capital ratios compared with
June 1995 reflects the goodwill associated with the securities
processing acquisitions and the repurchase of common stock.
On July 9, 1996, the Company's Board of Directors declared a 2-
for-1 common stock split. On August 8, 1996, holders of record as of
the close of business on July 19, 1996 will receive one additional
common share for every share held. The Company also increased its
quarterly cash dividend on its common stock to 44 cents per share (22
cents per share post-split) from 40 cents per share previously paid.
In the second quarter of 1996, the Company announced a plan to buy
back through the end of 1996 up to 10 million shares (20 million shares
post-split) of its common stock, in addition to the 16 million (32
million post-split) share buy back plan announced in 1995. As of July
31, 1996, 14.6 million shares (29.2 million shares post-split) had been
repurchased under both plans for $728 million. The Company expects to
complete its buy back plans by December 31, 1996.
NET INTEREST INCOME
- -------------------
2nd 1st 2nd
Quarter Quarter Quarter Year-to-date
------- ------- ------- ------------
(In millions) 1996 1996 1995 1996 1995
--------------------------- ----------------
Net Interest Income $499 $517 $514 $1,017 $1,017
Net Interest Rate
Spread 3.32% 3.43% 3.34% 3.38% 3.38%
Net Yield on Interest
Earning Assets 4.26 4.46 4.45 4.36 4.47
On a taxable equivalent basis, net interest income amounted to
$499 million in the second quarter of 1996, compared with $514 million
in the same period of 1995. The net interest rate spread was 3.32% in
the second quarter of 1996, compared with 3.43% in the first quarter of
1996 and 3.34% one year ago. The net yield on interest-earning assets
<PAGE>11
was 4.26% compared with 4.46% in the first quarter of 1996 and 4.45% in
last year's second quarter. The decrease in the net interest rate
spread and the net yield from the first quarter of 1996 reflects the
sale of the credit card receivables during the second quarter and
promotional rates on credit cards. The decline in the net yield also
reflects the financing of the stock buy back program. The Company
expects the net interest rate spread to decline further in the third
quarter due to the sale of the credit card receivables resulting in the
loss of income on these receivables for the entire three month period.
This decline is expected to be partially offset by the expiration of
promotional rates on credit cards and repricing of certain accounts
based on their credit scores.
For the first six months of 1996, net interest income, on a
taxable equivalent basis, amounted to $1,017 million the same as in the
first half of 1995. The year-to-date net interest rate spread was 3.38%
in 1996 compared with 3.38% in 1995, while the net yield on interest-
earning assets was 4.36% in 1996 and 4.47% in 1995.
Interest lost on loans on nonaccrual status at June 30, 1996 and
1995 reduced net interest income by $3 million and $5 million for the
three months ended June 30, 1996 and 1995, and by $8 million and $10
million for the six months ended June 30, 1996 and 1995.
NONINTEREST INCOME
- ------------------
2nd Quarter Year-to-date
----------- ------------
(In millions) 1996 1995 1996 1995
---------------- ------------------
Processing Fees
Securities $161 $102 $ 320 $200
Other 51 48 101 92
---- ---- ------ ----
212 150 421 292
Trust and Investment Fees 40 32 77 64
Service Charges and Fees 120 109 226 222
Securities Gains 30 13 63 20
Foreign Exchange and
Other Trading Activities 21 13 31 25
Sale of Credit Card Portfolio 400 - 400 -
Other 23 33 48 45
---- ---- ------ ----
Total Noninterest Income $846 $350 $1,266 $668
==== ==== ====== ====
Securities processing fees increased 58% to $161 million compared
with $102 million in the second quarter of 1995. In the first half of
1996, securities processing fees were $320 million compared with $200
million in 1995. Strong internal growth in all areas and acquisitions
contributed to the increase in revenue. Fees from other processing
increased 7% over the second quarter of last year. Service charges and
fees increased $11 million primarily due to higher syndication and
credit card interchange fees. The Company reported $30 million of
securities gains in the second quarter of 1996 compared with $33 million
<PAGE>12
in the first quarter and $13 million last year. The current quarter's
gains reflect sales of securities held in the Company's stock portfolio
as well as returns on certain limited partnership interests. Foreign
exchange revenues were strong increasing $10 million over the first
quarter of 1996 and $12 million over the second quarter of 1995.
NONINTEREST EXPENSE AND INCOME TAXES
- ------------------------------------
Total noninterest expense for the second quarter was $457 million,
up 8% from $425 million in the same period last year and up from $444
million in the first quarter of this year. The rise in expenses in the
second quarter was principally due to salary and other expenses related
to acquisitions of securities processing businesses from J.P. Morgan,
BankAmerica, and NationsBank as well as the acquisition of the Putnam
Trust Company. Year-to-date noninterest expense was $902 million
compared with $841 million in 1995. Occupancy expense was down 5%
compared with last year's second quarter.
Excluding the gain on the sale of the credit card portfolio, the
efficiency ratio for the second quarter was 49.9% compared with 49.4%
reported in the first quarter of 1996 and 50.4% one year ago.
The effective tax rates for the second quarter and first six
months of 1996 were 38.4% in both periods compared with 38.4% and 38.3%
for the second quarter and first six months of 1995.
<PAGE>13
NONPERFORMING ASSETS
- --------------------
Change
2Q 1996 vs
(Dollars in millions) 6/30/96 3/31/96 1Q 1996
-----------------------------
Loans:
Commercial Real Estate $ 9 $ 11 $ (2)
Other Commercial 76 101 (25)
Foreign 40 40 -
Community Banking 76 78 (2)
---- ----
Total Loans 201 230 (29)
Other Real Estate 70 58 12
---- ----
Total $271 $288 (17)
==== ====
Nonperforming Assets
Ratio 0.8% 0.7%
Allowance/Nonperforming
Loans 489.0 322.4
Allowance/Nonperforming
Assets 362.5 258.0
Nonperforming assets totaled $271 million at June 30, 1996
compared with $288 million at March 31, 1996, a decrease of $17 million
or 6%. This was the twentieth consecutive quarter of nonperforming
asset decreases.
At June 30, 1996, impaired loans (nonaccrual loans over $1
million) aggregated $140 million, of which $105 million exceeded their
fair value by $23 million. Impaired loans at June 30, 1995 totaled $162
million, of which $95 million exceeded their fair value by $26 million.
For the second quarter of 1996 and 1995, the average amount of impaired
loans was $154 million and $186 million and interest income (cash
received) on them was $158 thousand and $226 thousand.
Credit card loans are not placed on nonperforming status, but are
charged off when they become past due for certain periods. Additional
information regarding the credit quality of the Company's credit card
portfolio is provided below.
<PAGE>14
LOAN LOSS PROVISION AND NET CHARGE-OFFS
- ---------------------------------------
2nd 1st 2nd
Quarter Quarter Quarter Year-to-date
------- ------- ------- ------------
(In millions) 1996 1996 1995 1996 1995
----------------------- ------------
Provision $425* $ 90 $ 62 $515* $112
---- ---- ---- ---- ----
Net (Charge-offs) Recovery:
Commercial Real Estate - (3) (14) (3) (16)
Other Commercial (7) 1 (9) (6) (13)
Credit Card (187)** (96) (60) (283)** (121)
Other Consumer (2) (2) (1) (4) (3)
Foreign 13 (1) (12) 12 (36)
Other (2) (3) (3) (5) (6)
---- ---- ---- ---- ----
Total (185) (104) (99) (289) (195)
Other - - 1 - 4
---- ---- ---- ---- ----
Change in Allowance $240 $(14) $(36) $226 $(79)
==== ==== ==== ==== ====
Other Real Estate
Expenses (Recovery) $ 1 $ (2) $ 2 $ (1) $ 3
* Includes a provision of $350 million for credit card accounts.
** Includes $99 million attributed to charge-offs of past due and
bankrupt Union credit card accounts not sold to Household.
The allowance for loan losses was $982 million, or 2.76% of loans
at June 30, 1996, compared with $742 million, or 1.91% of loans at March
31, 1996.
In the second quarter of 1996, the Company recorded a provision
for credit card loans of $350 million. The provision principally
relates to a higher level of anticipated losses on certain Consumer's
Edge accounts opened in 1994 and 1995, and on the credit card portfolio
generally, following a review of information received during the second
quarter of performance data and industry and economic trends. The
provision also covers $99 million of charge-offs of the Union
receivables not sold to Household, all of which were classified as more
than 90 days past due or bankrupt.
The foreign recovery in the second quarter of 1996 reflects a $13
million settlement with the Republic of Slovenia related to Yugoslavian
debt. In July 1996, the Company received a $20 million settlement with
the Republic of Croatia also related to Yugoslavian debt.
<PAGE>15
SECTOR PROFITABILITY
- --------------------
The Company has an internal information system used for management
purposes that produces sector performance data for Trust, and Securities
and Other Processing, Retail Banking, Corporate Banking, and Other
Sectors. A set of measurement principles has been developed to help
ensure that reported results of the sectors track their economic
performance.
Net interest income is computed on a taxable equivalent basis.
Support and other indirect expenses are allocated to sectors based on
general guidelines. The provision for loan losses is based on net
charge-offs incurred by each sector. Assets and liabilities are match
funded.
Based on this system, the sectors contributed to the Company's
profitability for the second quarter and first six months as follows:
Trust, and
Securities
and Other Retail Corporate
(In millions) Processing Banking Banking
2nd Quarter 1996 1995 1996 1995 1996 1995
---- ---- ---- ---- ---- ----
Net Interest Income on a
Taxable Equivalent Basis $ 34 $ 41 $311 $326 $124 $132
Provision for Loan Losses 0 0 191 63 (5) 36
Noninterest Income 279 206 48 43 74 69
Noninterest Expense 199 154 175 179 52 62
---- ---- ---- ---- ---- ----
Income Before Taxes $114 $ 93 $ (7) $127 $151 $103
==== ==== ==== ==== ==== ====
(In millions) Other Total
--------- ------------
2nd Quarter 1996 1995 1996 1995
---- ---- ---- ----
Net Interest Income on a
Taxable Equivalent Basis $ 30 $ 15 $499 $514
Provision for Loan Losses 239 (37) 425 62
Noninterest Income 445 32 846 350
Noninterest Expense 31 30 457 425
---- ---- ---- ----
Income Before Taxes $205 $ 54 $463 $377
==== ==== ==== ====
Trust, and
Securities
and Other Retail Corporate
(In millions) Processing Banking Banking
---------- ---------- ----------
Year-to-date 1996 1995 1996 1995 1996 1995
Net Interest Income on a
Taxable Equivalent Basis $ 67 $ 77 $636 $631 $250 $265
Provision for Loan Losses 0 0 292 129 (2) 51
Noninterest Income 551 407 90 82 141 138
Noninterest Expense 392 305 339 352 108 120
---- ---- ---- ---- ---- ----
Income Before Taxes $226 $179 $ 95 $232 $285 $232
==== ==== ==== ==== ==== ====
(In millions) Other Total
--------- -------------
Year-to-date 1996 1995 1996 1995
---- ---- ------ ------
Net Interest Income on a
Taxable Equivalent Basis $ 64 $ 44 $1,017 $1,017
Provision for Loan Losses 225 (68) 515 112
Noninterest Income 484 41 1,266 668
Noninterest Expense 63 64 902 841
---- ---- ----- ------
Income Before Taxes $260 $ 89 $ 866 $ 732
==== ==== ====== ======
Trust, and Securities and Other Processing
- ------------------------------------------
In the Trust, and Securities and Other Processing Sector,
securities processing fees increased 58% to $161 million compared to
$102 million in the second quarter of 1995. In the first half of 1996,
securities processing fees were $320 million compared with $200 million
in 1995. Internally generated growth, which was 12% for the second
<PAGE>16
quarter, was led by ADRs, corporate trust, custody, and government
clearance. Fee revenue from issuer services, custody and securities
industry products were $54 million, $61 million, and $46 million in the
second quarter of 1996 compared with $39 million, $29 million, and $34
million in 1995. Fees from other processing increased 7% over the
second quarter of last year. Fees from trust and investment grew 24% in
the second quarter of 1996, reflecting new business and generally strong
markets. The rise in noninterest expense was principally due to salary
and other expenses related to acquisitions of securities processing
businesses from J.P. Morgan, BankAmerica and NationsBank.
Retail
- ------
On June 27, 1996 the Company sold its AFL-CIO Union Privilege
affinity credit card portfolio to Household International, Inc. for $575
million, effective June 1, 1996. The transaction related to
approximately $3.4 billion in outstandings and included 2.2 million
cards. The Company expects to continue to service the portfolio for
Household during the third quarter of 1996. The decrease in net
interest income in the Retail Banking Sector principally reflects the
sale of credit card receivables and promotional rates on credit cards.
The table below provides information relating to the Company's credit
card portfolio:
2nd 1st 2nd
Quarter Quarter Quarter Year-to-date
------- ------- ------- ------------
(In millions) 1996 1996 1995 1996 1995
Number of Accounts 4.639 6.652 6.013 4.639 6.013
Period End Balance $5,508 $8,842 $7,721 $5,508 $7,721
Loans Delinquent:
30-59 Days $ 74 $107 $ 81 $ 74 $ 81
60-89 Days 57 82 53 57 53
90 or More Days 165 193 112 165 112
---- ---- ---- ---- ----
Total Loans Delinquent $296 $382 $246 $296 $246
Net Charge-offs $88* $96 $60 $184* $121
As a Percent of Average
Loans Outstanding:
Net Charge-offs 4.57%* 4.48% 3.17% 4.51%* 3.24%
Accounts Delinquent
More Than 30 Days 5.35 4.32 3.19 5.35 3.19
As a Percent of Period
End Balances:
Net Charge-offs 6.43* 4.37 3.12 6.72* 3.16
Accounts Delinquent
More Than 30 Days 5.37 4.32 3.19 5.37 3.19
* Excludes $99 million attributed to charge-offs of past due and
bankrupt Union credit card accounts not sold to Household.
The increase in the provision for loan losses in the Retail
Banking Sector is primarily attributable to increased charge-offs on
Consumers Edge accounts opened in 1994 and 1995 and $99 million of
<PAGE>17
charge-offs of past due and bankrupt Union credit card accounts not sold
to Household. Although future levels of charge-offs are difficult to
predict because they depend upon numerous factors, some of which are
beyond the control of the Company, rising credit card delinquencies and
increased personal bankruptcies could result in future charge-offs
exceeding historic levels. The decline in total delinquent loans in the
second quarter of 1996 compared with the first quarter is due to the
sale of the Union portfolio. Lower FDIC insurance premiums contributed
to the decline in noninterest expense.
Corporate
- ---------
Net interest income declined in the Corporate Banking Sector due
to a decline in the value of noninterest bearing sources of funds. The
decrease in the provision reflects a net recovery primarily due to the
settlement with the Republic of Slovenia related to Yugoslavian debt and
a lower level of charge-offs in the second quarter of 1996. Noninterest
income benefitted from higher syndication fees recorded in the second
quarter of 1996 compared to last year's second quarter.
Other
- -----
The Other Sector reflects the difference between the total
provision for loan losses and that charged off by the sectors. The
increase primarily reflects the $350 million provision for credit card
loans. Securities gains and foreign exchange and other trading
activities increased $25 million from the second quarter of 1995. The
increase in noninterest income principally reflects the $400 million
gain on the sale of the credit card receivables to Household.
<PAGE> 18
THE BANK OF NEW YORK COMPANY, INC.
Average Balances and Rates on a Taxable Equivalent Basis
(Dollars in millions)
For the three months For the three months
ended June 30, 1996 ended June 30, 1995
------------------------ -------------------------
Average Average Average Average
Balance Interest Rate Balance Interest Rate
------- -------- ------- ------- -------- ------
ASSETS
- ------
Interest-Bearing
Deposits in Banks
(primarily foreign) $ 1,503 $ 21 5.52% $ 1,929 $ 30 6.32%
Federal Funds Sold and
Securities Purchased
Under Resale Agreements 2,422 32 5.30 4,074 62 6.06
Loans
Domestic Offices 25,812 588 9.17 24,239 609 10.09
Foreign Offices 11,995 196 6.58 10,990 204 7.46
------- ------ ------- ------
Total Loans 37,807 784 8.35 35,229 813 9.27
------- ------ ------- ------
Securities
U.S. Government
Obligations 2,988 43 5.78 2,911 42 5.74
U.S. Government Agency
Obligations 480 7 6.24 314 5 6.32
Obligations of States and
Political Subdivisions 652 15 8.92 664 18 10.89
Other Securities,
including Trading
Securities 1,326 19 5.62 1,260 21 6.58
------- ------ ------- ------
Total Securities 5,446 84 6.16 5,149 86 6.64
------- ------ ------- ------
Total Interest-Earning
Assets 47,178 921 7.85% 46,381 991 8.57%
------ ------
Allowance for Loan Losses (728) (737)
Cash and Due from Banks 2,527 2,782
Other Assets 5,521 5,456
------- -------
TOTAL ASSETS $54,498 $53,882
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Interest-Bearing Deposits
Money Market Rate
Accounts $ 3,713 39 4.23% $ 3,406 39 4.54%
Savings 8,264 55 2.70 7,787 62 3.18
Certificates of Deposit
$100,000 & Over 890 11 5.19 1,850 27 5.87
Other Time Deposits 2,533 29 4.68 2,588 34 5.33
Foreign Offices 12,383 152 4.90 12,056 173 5.75
------- ------ ------- ------
Total Interest-Bearing
Deposits 27,783 286 4.15 27,687 335 4.85
Federal Funds Purchased
and Securities Sold
Under Repurchase
Agreements 3,659 48 5.25 2,481 36 5.88
Other Borrowed Funds 4,081 55 5.41 4,680 74 6.29
Long-Term Debt 1,920 33 6.75 1,724 32 7.42
------- ------ ------- ------
Total Interest-Bearing
Liabilities 37,443 422 4.53% 36,572 477 5.23%
------ ------
Noninterest-Bearing
Deposits 8,472 8,686
Other Liabilities 3,420 4,000
Preferred Stock 113 117
Common Shareholders'
Equity 5,050 4,507
------- -------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $54,498 $53,882
======= =======
Net Interest Earnings
and Interest Rate Spread $ 499 3.32% $ 514 3.34%
====== ======
Net Yield on Interest-
Earning Assets 4.26% 4.45%
==== ====
<PAGE> 19
THE BANK OF NEW YORK COMPANY, INC.
Average Balances and Rates on a Taxable Equivalent Basis
(Dollars in millions)
For the six months For the six months
ended June 30, 1996 ended June 30, 1995
------------------------ -------------------------
Average Average Average Average
Balance Interest Rate Balance Interest Rate
------- -------- ------- ------- -------- ------
ASSETS
- ------
Interest-Bearing
Deposits in Banks
(primarily foreign) $ 1,540 $ 43 5.60% $ 1,918 $ 60 6.31%
Federal Funds Sold and
Securities Purchased
Under Resale Agreements 2,298 61 5.34 4,335 128 5.96
Loans
Domestic Offices 25,966 1,200 9.29 23,673 1,185 10.09
Foreign Offices 11,816 393 6.69 10,773 396 7.41
------- ------ ------- ------
Total Loans 37,782 1,593 8.47 34,446 1,581 9.26
------- ------ ------- ------
Securities
U.S. Government
Obligations 2,931 83 5.72 2,892 83 5.78
U.S. Government Agency
Obligations 466 15 6.28 316 10 6.33
Obligations of States and
Political Subdivisions 644 29 9.01 688 37 10.80
Other Securities,
including Trading
Securities 1,263 34 5.54 1,246 40 6.41
------- ------ ------- ------
Total Securities 5,304 161 6.13 5,142 170 6.64
------- ------ ------- ------
Total Interest-Earning
Assets 46,924 1,858 7.96% 45,841 1,939 8.53%
------ ------
Allowance for Loan Losses (726) (762)
Cash and Due from Banks 2,838 2,720
Other Assets 5,489 5,288
------- -------
TOTAL ASSETS $54,525 $53,087
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Interest-Bearing Deposits
Money Market Rate
Accounts $ 3,858 82 4.29% $ 3,410 74 4.40%
Savings 8,243 114 2.77 7,740 118 3.09
Certificates of Deposit
$100,000 & Over 1,005 27 5.32 1,857 54 5.82
Other Time Deposits 2,565 61 4.78 2,539 66 5.20
Foreign Offices 11,946 294 4.95 11,736 331 5.68
------- ------ ------- ------
Total Interest-Bearing
Deposits 27,617 578 4.21 27,282 643 4.75
Federal Funds Purchased
and Securities Sold
Under Repurchase
Agreements 3,766 99 5.30 2,379 68 5.83
Other Borrowed Funds 3,613 99 5.51 4,686 146 6.27
Long-Term Debt 1,901 65 6.85 1,753 65 7.39
------- ------ ------ ------
Total Interest-Bearing
Liabilities 36,897 841 4.58% 36,100 922 5.15%
------ ------
Noninterest-Bearing
Deposits 9,011 8,721
Other Liabilities 3,412 3,763
Preferred Stock 113 117
Common Shareholders'
Equity 5,092 4,386
------- ------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $54,525 $53,087
======= =======
Net Interest Earnings
and Interest Rate Spread $1,017 3.38% $1,017 3.38%
====== ======
Net Yield on Interest-
Earning Assets 4.36% 4.47%
==== ====
<PAGE>20
PART 2. OTHER INFORMATION
Item 2. Changes in Securities
- ------------------------------
On July 11, 1996 a Certificate of Amendment to Article FOURTH of
the Company's Certificate of Incorporation was filed by the Secretary of
State of the State of New York. The amendment increased the number of
shares of Common Stock, par value $7.50 per share, that the Company is
authorized to issue from 350,000,000 to 800,000,000.
Item 4. Submissions of Matters to Vote of Security Holders
- -----------------------------------------------------------
The Company held its annual meeting on May 14, 1996 at The Bank of
New York (NJ) in West Patterson, New Jersey. The following matters were
submitted to a vote of the shareholders:
-- Election of sixteen director nominees to new one-year terms was
approved with no nominee receiving less than 167.9 million votes.
-- Appointment of Ernst & Young LLP as the Company's independent
public accountants for 1996 was ratified by a vote of 168.3 million
affirmative to 1.6 million negative.
-- Amendment to Article Fourth of Certificate of Incorporation to
increase the number of authorized shares of common stock was approved by
a vote of 130.9 million affirmative to 37.8 million negative.
-- A proposal that cumulative voting rights be accorded to
shareholders was defeated by a vote of 30.1 million affirmative to 108.9
million negative.
-- A proposal to limit the number of terms that an outside
director can serve on the Company's board of directors was defeated by a
vote of 6.7 million affirmative to 147.6 million negative.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) The exhibits filed as part of this report are as follows:
Exhibit 4 - Certificate of Amendment to Certificate of
Incorporation
Exhibit 11 - Statement Re: Computation of Earnings Per Common
Share for the Three and Six Months Ended June 30, 1996 and 1995.
Exhibit 12 - Statement Re: Ratio of Earnings to Fixed Charges and
Ratio of Earnings to Combined Fixed Charges and Preferred Stock
Dividends for the Three and Six months Ended June 30, 1996 and
1995.
<PAGE>21
Exhibit 27 - Statement Re: Financial Data Schedule containing
selected financial data at June 30, 1996 and for the Six Months
ended June 30, 1996.
(b) The Company filed the following reports on Form 8-K since March 31,
1996:
On April 11, 1996, the Company filed a Form 8-K Current Report
(Items 5 and 7), which report included unaudited interim financial
information and accompanying discussion for the first quarter of
1996 contained in the Company's press release dated April 11, 1996.
On June 19, 1996, the Company filed a Form 8-K Current Report (Item
5), which report included the Company's press releases dated June
17, 1996 and June 19, 1996. The Company's press release dated June
17, 1996 contained the announcement of the sale by The Bank of New
York (Delaware), a subsidiary of the Company, of its AFL-CIO Union
Privilege credit card portfolio to Household International, Inc.,
and the approval by its Board of Directors to use a portion of the
proceeds of the sale to buy back up to 10 million common shares.
The Company's press release dated June 19, 1996 contained the
announcement of the establishment of a $350 million credit card
provision.
On July 17, 1996, the Company filed a Form 8-K Current Report
(Items 5 and 7), which report included unaudited interim financial
information and accompanying discussion for the second quarter of
1996 contained in the Company's press release dated July 17, 1996.
<PAGE>22
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.
THE BANK OF NEW YORK COMPANY, INC.
----------------------------------
(Registrant)
Date: August 13, 1996 By: \s\ Deno D. Papageorge
-----------------------
Name: Deno D. Papageorge
Title: Senior Executive Vice President
<PAGE>23
EXHIBIT INDEX
--------------
Exhibit Description
- ------- -----------
4 Certificate of Amendment to Certificate of
Incorporation
11 Computation of Earnings Per Common Share for
the Three Months Ended June 30, 1996 and 1995.
12 Ratio of Earnings to Fixed Charges and Ratio of
Earnings to Combined Fixed Charges and Preferred
Stock Dividends for the Three and Six Months Ended
June 30, 1996 and 1995.
27 Financial Data Schedule containing selected
financial data at June 30, 1996 and for the
Six Months Ended June 30, 1996.
EXHIBIT 4
CERTIFICATE OF AMENDMENT
OF THE CERTIFICATE OF INCORPORATION
OF THE BANK OF NEW YORK COMPANY, INC.
UNDER SECTION 805 OF THE BUSINESS CORPORATION LAW
1. The name of the corporation is The Bank of New York Company, Inc.
The corporation was originally formed under the name The B.N.Y. Company,
Inc.
2. The Certificate of Incorporation of the corporation was filed by the
Department of State on July 9, 1968. A Restated Certificate of
Incorporation was filed by the Department of State on August 16, 1994.
3. To increase the authorized Common Stock (par value $7.50 per share)
from 350,000,000 to 800,000,000 shares the first paragraph of Article
FOURTH of the Certificate of Incorporation is hereby amended to read, in
its entirety:
FOURTH: The aggregate number of shares which the Corporation shall
have the authority to issue is eight hundred ten million (810,000,000)
of which eight hundred million (800,000,000) shares (par value $7.50 per
share) shall be designated as Common Stock; five million (5,000,000)
shares, without par value, shall be designated as Preferred Stock; and
five million (5,000,000) shares (par value $2.00 per share) shall be
designated as Class A Preferred Stock.
4. The amendment of the Certificate of Incorporation was authorized
pursuant to Section 803(a) of the Business Corporation Law, by a vote of
the Board of Directors at a meeting duly convened and held on March 12,
1996 and by a vote of the holders of a majority of all outstanding
shares entitled to vote thereon at a meeting of shareholders duly
convened and held on May 14, 1996.
IN WITNESS WHEREOF, the undersigned have signed this Certificate of
Amendment on July 9, 1996 and affirm the statements contained herein as
true under the penalties of perjury.
/s/ J. Carter Bacot
-------------------------------
Name: J. Carter Bacot
Title: Chairman of the Board &
Chief Executive Officer
/s/ Jacqueline R. McSwiggan
-------------------------------
Name: Jacqueline R. McSwiggan
Title: Assistant Secretary
EXHIBIT 11
THE BANK OF NEW YORK COMPANY, INC.
Computation of Earnings Per Common Share
(In millions, except per share amounts)
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
1996 1995 1996 1995
---- ---- ---- ----
Weighted Average Number of Shares 387 381 391 378
Shares Assumed to be Issued on Conversion:
Warrants 21 10 21 5
----- ----- ----- -----
Weighted Average Number of Shares
of Common Stock for Primary Computation 408 391 412 383
Shares Assumed to be Issued on Conversion:
Debentures 10 19 10 22
Warrants - 3 1 8
Cumulative Preferred Stock - 1 - 1
----- ----- ----- -----
Weighted Average Number of Shares of
Common Stock Assuming Full Dilution 418 414 423 414
===== ===== ===== =====
Net Income $ 278 $ 226 $ 521 $ 438
Dividend Requirements on Preferred Stock 2 3 5 5
----- ----- ----- -----
Net Income Available
to Common Shareholders 276 223 516 433
Interest on Convertible
Debentures, Net of Tax 1 2 2 4
----- ----- ----- -----
Net Income Available to Common
Shareholders, Assuming Full Dilution $ 277 $ 225 $ 518 $ 437
===== ===== ===== =====
Earnings Per Share:
Primary $0.68 $0.57 $1.25 $1.13
Fully Diluted 0.66 0.54 1.23 1.06
Note: Restated to reflect the effect of the 2-for-1 common stock split
effective July 19, 1996.
EXHIBIT 12
THE BANK OF NEW YORK COMPANY, INC.
Ratios of Earnings to Fixed Charges and Ratios
of Earnings to Combined Fixed Charges
and Preferred Stock Dividends
(Dollars in millions)
For the three For the six
months ended months ended
June 30, June 30,
1996 1995 1996 1995
EARNINGS ---- ---- ---- ----
- --------
Income Before Income Taxes $452 $367 $ 846 $ 710
Fixed Charges, Excluding Interest
on Deposits 143 151 279 296
---- ---- ------ ------
Income Before Income Taxes and Fixed
Charges, Excluding Interest on Deposits 595 518 1,125 1,006
Interest on Deposits 286 335 578 643
---- ---- ------ ------
Income Before Income Taxes and Fixed
Charges, Including Interest on Deposits $881 $853 $1,703 $1,649
==== ==== ====== ======
FIXED CHARGES
- -------------
Interest Expense, Excluding Interest
on Deposits $136 $142 $ 263 $ 279
One-Third Net Rental Expense* 7 9 16 17
---- ---- ------ ------
Total Fixed Charges, Excluding Interest
on Deposits 143 151 279 296
Interest on Deposits 286 335 578 643
---- ---- ------ ------
Total Fixed Charges, Including Interest
on Deposits $429 $486 $ 857 $ 939
==== ==== ====== ======
PREFERRED STOCK DIVIDENDS, PRE-TAX BASIS $ 4 $ 4 $ 8 $ 8
- ---------------------------------------- ==== ==== ====== ======
EARNINGS TO FIXED CHARGES RATIOS
- --------------------------------
Excluding Interest on Deposits 4.16x 3.43x 4.03x 3.40x
Including Interest on Deposits 2.05 1.76 1.99 1.76
EARNINGS TO COMBINED FIXED CHARGES
& PREFERRED STOCK DIVIDENDS RATIOS
- ----------------------------------
Excluding Interest on Deposits 4.05 3.34 3.92 3.31
Including Interest on Deposits 2.03 1.74 1.97 1.74
* The proportion deemed representative of the interest factor.
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information which is qualified
entirely by reference to The Bank of New York Company, Inc.'s Form 10-Q
for the period ended June 30, 1996.
</LEGEND>
<CIK> 0000009626
<NAME> THE BANK OF NEW YORK COMPANY, INC.
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-1-1996
<PERIOD-END> JUN-30-1996
<CASH> 3,845
<INT-BEARING-DEPOSITS> 992
<FED-FUNDS-SOLD> 1,318
<TRADING-ASSETS> 586
<INVESTMENTS-HELD-FOR-SALE> 3,954
<INVESTMENTS-CARRYING> 1,231
<INVESTMENTS-MARKET> 1,164
<LOANS> 35,523
<ALLOWANCE> 982
<TOTAL-ASSETS> 51,467
<DEPOSITS> 35,462
<SHORT-TERM> 6,141
<LIABILITIES-OTHER> 1,961
<LONG-TERM> 1,913
0
113
<COMMON> 3,094
<OTHER-SE> 1,860
<TOTAL-LIABILITIES-AND-EQUITY> 51,467
<INTEREST-LOAN> 1,587
<INTEREST-INVEST> 138
<INTEREST-OTHER> 113
<INTEREST-TOTAL> 1,838
<INTEREST-DEPOSIT> 578
<INTEREST-EXPENSE> 841
<INTEREST-INCOME-NET> 997
<LOAN-LOSSES> 515
<SECURITIES-GAINS> 63
<EXPENSE-OTHER> 902
<INCOME-PRETAX> 846
<INCOME-PRE-EXTRAORDINARY> 521
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 521
<EPS-PRIMARY> 1.25<F1>
<EPS-DILUTED> 1.23<F1>
<YIELD-ACTUAL> 4.36
<LOANS-NON> 201
<LOANS-PAST> 219
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 756
<CHARGE-OFFS> 334
<RECOVERIES> 45
<ALLOWANCE-CLOSE> 982
<ALLOWANCE-DOMESTIC> 942
<ALLOWANCE-FOREIGN> 40
<ALLOWANCE-UNALLOCATED> 0
<FN>
<F1>Per Common Share data has been adjusted to reflect the effect of the 2-for-1
common stock split effective July 19, 1996. Prior Financial Data Schedules
have not been restated for this stock split.
</FN>
</TABLE>
