<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): April 14, 1997
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
------------
First Quarter of 1997 Financial Results
---------------------------------------
On April 14, 1997 The Bank of New York Company,
Inc. (the "Company") issued a press release
containing unaudited interim financial information
and accompanying discussion for the first quarter
of 1997. 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 first quarter
of 1997 contained in the press
release dated April 14, 1997, 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: April 14, 1997
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 first quarter
of 1997 contained in the press
release dated April 14, 1997, 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
Nicholas C. Silitch, VP
(212) 495-1721
Gregory A. Burton, AT
(212) 495-1619
THE BANK OF NEW YORK COMPANY, INC. REPORTS
------------------------------------------
First Quarter E.P.S. Increased 14% To 65 Cents;
-----------------------------------------------
Return On Average Common Equity Was 20.90%; and
-----------------------------------------------
Return On Average Assets Was 1.86%
----------------------------------
NEW YORK, N.Y., April 14, 1997 -- The Bank of New York Company, Inc.
(NYSE: BK) reports first quarter fully diluted earnings per share were 65
cents, a 14% increase over the 57 cents earned in the first quarter of
1996. First quarter net income was $265 million, up 9% from $243 million
earned in the same period last year. Return on average common equity
totaled 20.90% in the first quarter of 1997 compared with 19.48% in the
fourth quarter of 1996 and 18.86% in the first quarter of 1996. First
quarter net income, E.P.S., and return on average common equity were
records, excluding the non-recurring gain on the sale of the Union card
portfolio in the second quarter of 1996.
Return on average assets for the first quarter was 1.86% compared
with 1.84% in the fourth quarter and 1.79% in the first quarter of 1996.
Revenues from the Company's securities processing businesses
<PAGE> 2
continued their substantial growth and were up 16% over the first quarter
of 1996 to $185 million. ADR's, mutual funds, government securities
clearance, corporate trust, and stock transfer were particularly strong.
Overall, fees from other processing were up 11% over last year's
first quarter to $55 million. Cash management fees were ahead a strong
13% and trade finance fees were up by 11%, while fees from the funds
transfer business were up 10%.
Trust and investment continued to benefit from new business and
strong markets which combined to push fees 16% higher to $43 million in
the first quarter of 1997.
Net interest income, on a taxable equivalent basis, declined to $496
million in the first quarter from $521 million in the first quarter of
last year, reflecting the sale of approximately $900 million in credit
card receivables to Associates National Bank effective January 1, 1997 and
the sale of the Union credit card receivables in the second quarter of
1996.
Tangible fully diluted earnings per share (earnings before the
amortization of goodwill and intangibles) were $0.70 per share in the
first quarter of 1997 compared with $0.61 per share in the first quarter
of 1996. On the same basis, tangible return on average assets was 2.05%
in the first quarter of 1997 compared with 1.98% in the first quarter of
1996; and tangible return on average common equity was 29.69% in the first
quarter of 1997 compared with 25.62% in the first quarter of 1996.
Average fully diluted shares outstanding were 405 million for the
quarter, down slightly from the 407 million in the fourth quarter and down
significantly from the 428 million in the prior year period. The decline
<PAGE> 3
from the fourth quarter was the result of the Company's stock buyback
program, largely offset by the conversion of warrants and the issuance of
stock to benefit plans. The reduction from the prior year period was the
result of the cumulative favorable impact of the Company's stock buyback
programs.
The Company's estimated Tier 1 capital and Total capital ratios
remained strong at 7.95% and 12.32% at March 31, 1997 compared with 8.34%
and 12.78% at December 31, 1996, and 7.85% and 12.62% at March 31, 1996.
Tangible common equity as a percent of total assets was 6.39% at March 31,
1997 compared with 7.00% at December 31, 1996 and 7.58% one year ago. The
leverage ratio was 7.83% at March 31, 1997 compared with 8.70% at December
31, 1996 and 7.93% one year ago.
<PAGE> 4
NET INTEREST INCOME
- -------------------
1st 4th 1st
Quarter Quarter Quarter
------- ------- -------
(In millions) 1997 1996 1996
---------------------------
Net Interest Income $496 $500 $521
Net Interest Rate
Spread 3.30% 3.35% 3.47%
Net Yield on Interest-
Earning Assets 4.24 4.33 4.49
The net interest rate spread was 3.30% in the first quarter of 1997,
compared with 3.35% in the fourth quarter of 1996 and 3.47% one year ago.
The net yield on interest-earning assets was 4.24% compared with 4.33% in
the fourth quarter of 1996 and 4.49% in last year's first quarter. The
decline in the spread and yield was primarily attributable to the sale of
approximately $900 million in credit card receivables to Associates in the
first quarter of 1997 and the sale of the Union portfolio in the second
quarter of 1996.
The decline in net interest income on a taxable equivalent basis to
$496 million in the first quarter of 1997 from $521 million in the first
quarter of 1996 was primarily the result of the credit card sales
partially offset by continued growth in the Company's corporate loan
portfolio.
<PAGE> 5
NONINTEREST INCOME
- ------------------
1st Quarter
-----------
(In millions) 1997 1996
--------------
Processing Fees
Securities $185 $159
Other 55 50
---- ----
240 209
Trust and Investment Fees 43 37
Service Charges and Fees 94 101
Securities Gains 7 33
Foreign Exchange and
Other Trading Activities 27 10
Other 44 25
---- ----
Total Noninterest Income $455 $415
==== ====
Securities processing fees increased 16% to $185 million compared
with $159 million in the first quarter of 1996. Strong internal growth
in all areas drove the increase in revenue. The Company reported $7
million of securities gains in the first quarter of 1997 compared with $33
million last year. Revenues from foreign exchange and other trading
activities were $27 million compared with $10 million last year. Included
in other noninterest income in the first quarter of 1997 was a $27 million
pre-tax gain on the sale of a portion of the Company's interest in Wing
Hang Bank, Ltd.
NONINTEREST EXPENSE AND INCOME TAXES
- ------------------------------------
Total noninterest expense for the quarter was $446 million, down 7.2%
from the $480 million reported in the fourth quarter and up only slightly,
.7%, from the $443 million reported a year ago. Strong cost controls in
all areas combined with reductions in credit card servicing expenses drove
this performance. During the quarter the Company continued to service the
credit card receivables sold to Associates under an interim servicing
<PAGE> 6
agreement. When the servicing agreement expires, employees associated
with the servicing of these receivables will be transferred to Associates.
The efficiency ratio for the first quarter was a record 47.3%
compared with 51.7% reported in the fourth quarter of 1996 and 49.4% one
year ago.
The effective tax rate for the first quarter of 1997 was 36.7%
compared with 38.4% for the first quarter of 1996.
NONPERFORMING ASSETS
- -------------------- Change
1Q 1997 vs
(Dollars in millions) 3/31/97 12/31/96 4Q 1996
-------------------------------------
Loans:
Commercial Real Estate $ 20 $ 20 $ -
Other Commercial 79 90 (11)
Foreign 37 38 (1)
Community Banking 72 65 7
---- ----
Total Loans 208 213 (5)
Other Real Estate 40 41 (1)
---- ----
Total $248 $254 (6)
==== ====
Nonperforming Assets Ratio 0.7% 0.7%
Allowance/Nonperforming Loans 418.3 423.7
Allowance/Nonperforming Assets 350.2 355.3
Nonperforming assets totaled $248 million at March 31, 1997, compared
with $254 million at December 31, 1996, a decrease of $6 million.
<PAGE> 7
LOAN LOSS PROVISION AND NET CHARGE-OFFS
- ---------------------------------------
1st 4th 1st
Quarter Quarter Quarter
------- ------- -------
(In millions) 1997 1996 1996
---------------------------
Provision $ 60 $ 45 $ 90
---- ---- ----
Net (Charge-offs) Recoveries:
Commercial Real Estate 1 (1) (3)
Other Commercial (3) (2) 1
Credit Card (93) (93) (96)
Other Consumer (2) (2) (2)
Foreign 4 (1) (1)
Other 1 (2) (3)
---- ---- ----
Total (92) (101) (104)
---- ---- ----
Change in Allowance $(32) $(56) $(14)
==== ==== ====
Other Real Estate
Expenses (Recoveries) $ - $ 3 $ (2)
Net charge-offs of credit card loans were $93 million for the
first quarter. Credit card loans outstanding were $4.251 billion at
March 31, 1997 compared with $5.414 billion at December 31, 1996.
The allowance for loan losses was $869 million, or 2.36% of loans at
March 31, 1997, compared with $901 million, or 2.44% of loans at December
31, 1996. The ratio of the allowance to nonperforming assets was 350% at
March 31, 1997.
***************************
(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)
1997 1996 Change
---- ---- ------
For the Three Months Ended March 31:
- ------------------------------------
Net Income $265 $243 9.1%
Per Common Share:
Primary Earnings $0.65 $0.58 12.1
Fully Diluted Earnings 0.65 0.57 14.0
Cash Dividends 0.24 0.20 20.0
Return on Average Common Shareholders'
Equity 20.90% 18.86%
Return on Average Assets 1.86 1.79
As of March 31:
- ---------------
Assets $58,384 $53,314 9.5%
Loans 36,771 38,555 -4.6
Securities 4,991 5,177 -3.6
Deposits - Domestic 26,222 23,696 10.7
- Foreign 15,040 12,199 23.3
Long-Term Debt 1,817 1,926 -5.7
Preferred Shareholders' Equity 112 113 -0.9
Common Shareholders' Equity 4,908 5,131 -4.3
Common Shareholders' Equity Per Share 12.79 13.06 -2.1
Market Value Per Share of Common Stock 36.75 25.75 42.7
Allowance for Loan Losses as a Percent
of Loans 2.36% 1.92%
Tier 1 Capital Ratio 7.95 7.85
Total Capital Ratio 12.32 12.62
Leverage Ratio 7.83 7.93
Tangible Common Equity Ratio 6.39 7.58
<PAGE> 9
THE BANK OF NEW YORK COMPANY, INC.
Consolidated Statements of Income
(Unaudited)
(In millions, except per share amounts)
For the three months ended
March 31,
1997 1996
---- ----
Interest Income
- ---------------
Loans $ 746 $ 810
Securities
Taxable 61 58
Exempt from Federal Income Taxes 9 9
----- -----
70 67
Deposits in Banks 34 22
Federal Funds Sold and Securities
Purchased Under Resale Agreements 33 29
Trading Assets 4 4
----- -----
Total Interest Income 887 932
----- -----
Interest Expense
- ----------------
Deposits 301 291
Federal Funds Purchased and
Securities Sold Under Repurchase
Agreements 28 51
Other Borrowed Funds 39 44
Long-Term Debt 31 33
---- ----
Total Interest Expense 399 419
---- ----
Net Interest Income 488 513
- -------------------
Provision for Loan Losses 60 90
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Net Interest Income After
Provision for Loan Losses 428 423
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Noninterest Income
- ------------------
Processing Fees
Securities 185 159
Other 55 50
----- -----
240 209
Trust and Investment Fees 43 37
Service Charges and Fees 94 101
Securities Gains 7 33
Other 71 35
----- -----
Total Noninterest Income 455 415
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Noninterest Expense
- -------------------
Salaries and Employee Benefits 257 247
Net Occupancy 41 44
Furniture and Equipment 24 23
Other 124 129
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Total Noninterest Expense 446 443
----- -----
Income Before Income Taxes 437 395
Income Taxes 160 152
Distribution on Preferred Securities 12 -
----- -----
Net Income $ 265 $ 243
- ---------- ===== =====
Net Income Available to
Common Shareholders $ 263 $ 241
- ----------------------- ===== =====
Per Common Share Data:
- ----------------------
Primary Earnings $0.65 $0.58
Fully Diluted Earnings 0.65 0.57
Cash Dividends 0.24 0.20
Fully Diluted Shares Outstanding 405 428
<PAGE> 10
THE BANK OF NEW YORK COMPANY, INC.
Consolidated Balance Sheets
(Unaudited)
(Dollars in millions, except per share amounts)
March 31, December 31,
1997 1996
---- ----
Assets
- ------
Cash and Due from Banks $ 8,301 $ 6,032
Interest-Bearing Deposits in Banks 1,648 1,387
Securities:
Held-to-Maturity 1,129 1,170
Available-for-Sale 3,862 3,883
------- -------
Total Securities 4,991 5,053
Trading Assets at Fair Value 1,736 1,547
Federal Funds Sold and Securities Purchased
Under Resale Agreements 482 562
Loans (less allowance for loan losses
of $869 in 1997 and $901 in 1996) 35,902 36,105
Premises and Equipment 865 875
Due from Customers on Acceptances 1,153 985
Accrued Interest Receivable 272 315
Other Assets 3,034 2,904
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Total Assets $58,384 $55,765
======= =======
Liabilities and Shareholders' Equity
- ------------------------------------
Deposits
Noninterest-Bearing (principally
domestic offices) $11,173 $11,812
Interest-Bearing
Domestic Offices 15,598 15,268
Foreign Offices 14,491 12,263
------- -------
Total Deposits 41,262 39,343
Federal Funds Purchased and Securities
Sold Under Repurchase Agreements 2,083 1,737
Other Borrowed Funds 4,342 4,144
Acceptances Outstanding 1,160 1,015
Accrued Taxes and Other Expenses 1,404 1,417
Accrued Interest Payable 154 167
Other Liabilities 542 399
Long-Term Debt 1,817 1,816
------- -------
Total Liabilities 52,764 50,038
------- -------
Minority Interest - Preferred Securities 600 600
------- -------
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 27,279 shares in 1997 and
40,429 shares in 1996 1 1
Common Stock-par value $7.50 per share,
authorized 800,000,000 shares, issued
451,398,969 shares in 1997 and
444,317,786 shares in 1996 3,385 3,332
Additional Capital 399 344
Retained Earnings 2,964 2,798
Securities Valuation Allowance 57 82
------- -------
6,917 6,668
Less: Treasury Stock (66,670,816 shares in
1997 and 57,849,845 shares in 1996),
at cost 1,880 1,524
Loan to ESOP (1,195,719), at cost 17 17
------- -------
Total Shareholders' Equity 5,020 5,127
------- -------
Total Liabilities and Shareholders' Equity $58,384 $55,765
======= =======
<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 March 31, 1997 ended March 31, 1996
------------------------ ------------------------
Average Average Average Average
Balance Interest Rate Balance Interest Rate
------- -------- ------- ------- -------- -------
ASSETS
- ------
Interest-Bearing
Deposits in Banks
(primarily foreign) $ 2,439 $ 34 5.64% $ 1,577 $ 22 5.68%
Federal Funds Sold and
Securities Purchased
Under Resale Agreements 2,550 33 5.32 2,175 29 5.39
Loans
Domestic Offices 22,752 524 9.30 26,119 615 9.43
Foreign Offices 14,296 223 6.33 11,636 197 6.81
------- ------ ------- ------
Total Loans 37,048 747 8.15 37,755 812 8.62
------- ------ ------- ------
Securities
U.S. Government
Obligations 2,754 39 5.79 2,874 40 5.65
U.S. Government Agency
Obligations 424 7 6.35 452 7 6.32
Obligations of States and
Political Subdivisions 643 14 8.64 635 14 9.09
Other Securities,
including Trading
Securities 1,522 21 5.56 1,201 16 5.46
------- ------ ------- ------
Total Securities 5,343 81 6.11 5,162 77 6.09
------- ------ ------- ------
Total Interest-Earning
Assets 47,380 895 7.66% 46,669 940 8.11%
------ ------
Allowance for Loan Losses (870) (725)
Cash and Due from Banks 4,047 3,148
Other Assets 7,294 5,458
------- -------
TOTAL ASSETS $57,851 $54,550
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Interest-Bearing Deposits
Money Market Rate
Accounts $ 3,886 41 4.23% $ 4,003 43 4.34%
Savings 8,120 51 2.56 8,221 58 2.84
Certificates of Deposit
$100,000 & Over 697 9 5.29 1,120 15 5.42
Other Time Deposits 2,495 30 4.74 2,598 31 4.86
Foreign Offices 14,602 170 4.73 11,510 144 5.01
------- ------ ------- ------
Total Interest-Bearing
Deposits 29,800 301 4.09 27,452 291 4.27
Federal Funds Purchased
and Securities Sold
Under Repurchase
Agreements 2,266 28 5.10 3,874 51 5.34
Other Borrowed Funds 3,252 39 4.91 3,146 44 5.64
Long-Term Debt 1,817 31 6.84 1,881 33 6.94
------- ------ ------- ------
Total Interest-Bearing
Liabilities 37,135 399 4.36% 36,353 419 4.64%
------ ------
Noninterest-Bearing
Deposits 9,269 9,550
Other Liabilities 5,641 3,401
Minority Interest -
Preferred Securities 600 -
Preferred Stock 112 113
Common Shareholders'
Equity 5,094 5,133
------- -------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $57,851 $54,550
======= =======
Net Interest Earnings
and Interest Rate Spread $ 496 3.30% $ 521 3.47%
====== ======
Net Yield on Interest-
Earning Assets 4.24% 4.49%
==== ====
