<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 20, 1998
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 1998 Financial Results
----------------------------------------
On April 20, 1998 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 1998. 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 1998 contained in the press
release dated April 20, 1998, 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 20, 1998
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 1998 contained in the press
release dated April 20, 1998, 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:
PUBLIC AND INVESTOR RELATIONS DEPT.
For release:
IMMEDIATELY Paul J. Leyden, SVP
- ----------- (212) 495-1041
Nicholas C. Silitch, SVP
(212) 495-1721
Gregory A. Burton, AVP
(212) 495-1725
THE BANK OF NEW YORK COMPANY, INC. REPORTS
------------------------------------------
First Quarter Diluted E.P.S. of 73 Cents, Up 14%;
-------------------------------------------------
Return on Average Common Equity Was a Record 24.99% and;
--------------------------------------------------------
Return on Average Assets Was 1.93%
----------------------------------
NEW YORK, N.Y., April 20, 1998 -- The Bank of New York Company, Inc.
(NYSE: BK) reports first quarter diluted earnings per share of 73 cents
up 14% from the 64 cents earned in the first quarter of 1997. Net income
for the first quarter was $284 million, up 7% from the $265 million earned
in the same period last year.
High levels of securities transaction volumes, combined with
expansion of the global client base and the cross-selling of new and
traditional products led to 27% revenue growth in our securities
servicing, cash processing, and foreign exchange businesses. Net interest
margin and yield on assets rose from the fourth quarter of 1997 as a
result of an improving asset mix and the recent U.K. asset based lending
acquisitions, but declined from the first quarter a year ago due to the
sale of the credit card business. Financial discipline remained a
<PAGE> 2
hallmark for the Company as the efficiency ratio was 50.2% in spite of the
sale of the credit card operation and the impact of Year 2000 expenses.
All of the above contributed to a record return on average common
equity for the first quarter of 1998 of 24.99% compared with 23.73% in the
fourth quarter of 1997 and 20.90% in the first quarter of 1997. Return
on average assets for the first quarter of 1998 was 1.93% compared with
1.95% in the fourth quarter of 1997 and 1.86% in the first quarter of
1997.
Revenues from the Company's securities servicing businesses reached
$230 million for the first quarter, growing by 25%. Strong internal
growth of 16% was spread over all of the Company's businesses with ADR's,
stock transfer, corporate trust, unit investment trust and custody
performing particularly well.
Overall, fees from cash processing were up 14% over last year's first
quarter to $63 million. Funds transfer fees were particularly strong
growing by 27%, with cash management fees ahead by 18%. Not withstanding
uncertain economic conditions and the resultant reduced trade flows in
Southeast Asia, revenues in our trade finance business grew modestly.
New business and generally strong markets resulted in trust and
investment fees growing 15% over last year, reaching $50 million.
Expansion of our global client base and high volumes of securities
transactions worldwide contributed to foreign exchange and other trading
revenues increasing 70% from a year ago to $46 million.
Net interest income, on a taxable equivalent basis, totaled $404
million in the first quarter of 1998 compared with $496 million in the
first quarter of last year. The decline is primarily attributable to the
sale of the credit card operations and the stock buyback program,
partially offset by growth in corporate lending and acquisitions related
<PAGE> 3
to the Company's asset based lending business.
Tangible diluted earnings per share (earnings before the amortization
of goodwill and intangibles) were $0.77 per share in the first quarter of
1998, up 13% from $0.68 per share in the first quarter of 1997. On the
same basis, tangible return on average common equity was 37.72% in the
first quarter of 1998 compared with 29.61% in the first quarter of 1997;
and tangible return on average assets was 2.10% in the first quarter of
1998 compared with 2.04% in the first quarter of 1997.
Average diluted shares outstanding were 390 million for the quarter,
down from the 397 million in the fourth quarter of 1997 and down
significantly from the 412 million in the prior year period, as a result
of the Company's stock buyback programs. The Company has 6 million shares
remaining to repurchase under its 15 million 1998 share buyback program.
The Company's estimated Tier 1 capital and Total capital ratios
remained strong at 7.29% and 11.50% at March 31, 1998 compared with 7.92%
and 11.97% at December 31, 1997, and 7.92% and 12.28% at March 31, 1997.
Tangible common equity as a percent of total assets was 5.69% at March 31,
1998 compared with 6.47% at December 31, 1997 and 6.39% one year ago. The
leverage ratio was 7.33% at March 31, 1998 compared with 7.59% at December
31, 1997 and 7.83% one year ago.
<PAGE> 4
NET INTEREST INCOME
- -------------------
1st 4th 1st
Quarter Quarter Quarter
------- ------- -------
(In millions) 1998 1997 1997
---------------------------
Net Interest Income $404 $409 $496
Net Interest Rate
Spread 2.24% 2.19% 3.30%
Net Yield on Interest-
Earning Assets 3.33 3.26 4.24
Net interest income on a taxable equivalent basis was $404 million
in the first quarter of 1998 compared with $409 million in the fourth
quarter of 1997 and $496 million in the first quarter of 1997. The net
interest rate spread was 2.24% in the first quarter of 1998, compared with
2.19% in the fourth quarter of 1997 and 3.30% one year ago. The net yield
on interest-earning assets was 3.33% compared with 3.26% in the fourth
quarter of 1997 and 4.24% in last year's first quarter. The increase in
the spread and yield compared to the fourth quarter reflects improvements
in the mix of assets due to corporate loan growth and the U.K. asset based
lending acquisitions. The decline from the first quarter of 1997 was the
result of the sale of the credit card business.
<PAGE> 5
NONINTEREST INCOME
- ------------------
1st 4th 1st
Quarter Quarter Quarter
------- ------- -------
(In millions) 1998 1997 1997
--------------------------
Processing Fees
Securities $230 $213 $185
Cash 63 61 55
---- ---- ----
293 274 240
Trust and Investment Fees 50 47 43
Service Charges and Fees 81 74 94
Foreign Exchange and
Other Trading Activities 46 39 27
Securities Gains 28 45 7
Sale of Credit Card Portfolio - 177 -
Other 55 33 44
---- ---- ----
Total Noninterest Income $553 $689 $455
==== ==== ====
Securities servicing fees increased 25% to $230 million compared with
$185 million in the first quarter of 1997. Strong internal growth across
all areas reached 16% with acquisitions made during 1997 contributing to
the remainder. Service charges and fees of $81 million were down from $94
million in the first quarter of 1997 primarily as a result of the loss of
fee income associated with the sale of the credit card business, partially
offset by growth in factoring commissions related to U.K. asset based
lending acquisitions. Revenues from foreign exchange and other trading
activities were $46 million in the first quarter of 1998 compared with $39
million in the fourth quarter of 1997 and $27 million in the first quarter
of 1997. The Company reported $28 million of securities gains in the
first quarter of 1998 compared with $45 million in the fourth quarter of
1997 and $7 million in the first quarter of 1997. Included in other
noninterest income in the first quarter of 1998 was a $29 million pre-tax
<PAGE> 6
gain on the sale of the Company's property at 48 Wall Street, and in the
first quarter of 1997, 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 $467 million, up 5%
from $446 million in the same period last year. Noninterest expense for
the first quarter included $8 million, approximately 1 cent per share,
related to making computer systems Year 2000 compliant.
The efficiency ratio for the first quarter of 1998 was 50.2%
compared with 54.7% in the fourth quarter and 47.3% for the first quarter
of 1997. The upward move from a year ago in the efficiency ratio is
primarily attributable to the sale of the Company's credit card operations
and Year 2000 systems expenses.
The effective tax rate for the first quarter of 1998 was 36.1%
compared with 36.7% last year.
NONPERFORMING ASSETS
- --------------------
Change
1Q 1998 vs
(Dollars in millions) 3/31/98 12/31/97 4Q 1997
------------------------------------
Loans:
Commercial Real Estate $ 37 $ 35 $ 2
Other Commercial 58 65 (7)
Foreign 38 34 4
Community Banking 53 59 (6)
---- ----
Total Loans 186 193 (7)
Other Real Estate 15 15 -
---- ----
Total $201 $208 (7)
==== ====
Nonperforming Assets Ratio 0.5% 0.6%
Allowance/Nonperforming Loans 347.4 331.4
Allowance/Nonperforming Assets 321.2 307.2
<PAGE> 7
Nonperforming assets totaled $201 million at March 31, 1998, compared
with $208 million at December 31, 1997, a decrease of $7 million. This
was the twenty-seventh consecutive quarter of nonperforming asset
decreases.
LOAN LOSS PROVISION AND NET CHARGE-OFFS
- ---------------------------------------
1st 4th 1st
Quarter Quarter Quarter
------- ------- -------
(In millions) 1998 1997 1997
---------------------------
Provision $ 5 $100 $ 60
---- ---- ----
Net (Charge-offs) Recoveries:
Commercial Real Estate 1 1 1
Other Commercial (3) (39) (3)
Other Consumer (1) (2) (2)
Foreign (1) (1) 4
Other (1) (3) 1
Credit Card - - (93)
---- ---- ----
Total $ (5) $(44) $(92)
==== ==== ====
Other Real Estate Expense $ 1 $ 12 $ -
The allowance for loan losses was $645 million, or 1.74% of loans at
March 31, 1998 compared with $641 million, or 1.82% of loans at December
31, 1997 and $869 million, or 2.36% of loans at March 31, 1997. The ratio
of the allowance to nonperforming assets was 321.2% at March 31, 1998
compared with 307.2% at December 31, 1997 and 350.2% at March 31, 1997.
***************************
(Financial highlights and detailed financial statements are attached.
E.P.S. has been calculated based on a new accounting pronouncement. "Basic"
and "diluted" E.P.S. have replaced "primary" and "fully diluted" E.P.S. In
addition, a new accounting pronouncement related to comprehensive income
has been adopted. This has changed how certain components of shareholders'
equity are presented. Prior periods have been restated for these changes.)
<PAGE> 8
THE BANK OF NEW YORK COMPANY, INC.
Financial Highlights
(Unaudited)
(Dollars in millions, except per share amounts)
1998 1997 Change
---- ---- ------
For the Three Months Ended March 31:
- ---------------------------------------
Net Income $ 284 $ 265 7.2%
Per Common Share:
Basic $ 0.77 $ 0.68 13.2
Diluted 0.73 0.64 14.1
Cash Dividends Paid 0.26 0.24 8.3
Return on Average Common Shareholders'
Equity 24.99% 20.90%
Return on Average Assets 1.93 1.86
As of March 31:
- ------------------
Assets $59,410 $58,384 1.8%
Loans 37,034 36,771 0.7
Securities 6,848 4,991 37.2
Deposits - Domestic 25,290 26,210 -3.5
- Foreign 15,299 15,052 1.6
Long-Term Debt 1,959 1,817 7.8
Minority Interest - Preferred Securities 1,300 600 116.7
Preferred Shareholders' Equity 1 112 -99.1
Common Shareholders' Equity 4,804 4,908 -2.1
Common Shareholders' Equity Per Share 12.93 12.79 1.1
Market Value Per Share of Common Stock 62.81 36.75 70.9
Allowance for Loan Losses as a Percent
of Loans 1.74% 2.36%
Tier 1 Capital Ratio 7.29 7.92
Total Capital Ratio 11.50 12.28
Leverage Ratio 7.33 7.83
Tangible Common Equity Ratio 5.69 6.39
<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,
1998 1997
---- ----
Interest Income
- ---------------
Loans $ 670 $ 746
Securities
Taxable 79 61
Exempt from Federal Income Taxes 9 9
----- -----
88 70
Deposits in Banks 42 34
Federal Funds Sold and Securities
Purchased Under Resale Agreements 30 33
Trading Assets 4 4
----- -----
Total Interest Income 834 887
----- -----
Interest Expense
- ----------------
Deposits 325 301
Federal Funds Purchased and
Securities Sold Under Repurchase
Agreements 34 28
Other Borrowed Funds 48 39
Long-Term Debt 32 31
----- -----
Total Interest Expense 439 399
----- -----
Net Interest Income 395 488
- -------------------
Provision for Loan Losses 5 60
----- -----
Net Interest Income After
Provision for Loan Losses 390 428
----- -----
Noninterest Income
- ------------------
Processing Fees
Securities 230 185
Cash 63 55
----- -----
293 240
Trust and Investment Fees 50 43
Service Charges and Fees 81 94
Securities Gains 28 7
Other 101 71
----- -----
Total Noninterest Income 553 455
----- -----
Noninterest Expense
- -------------------
Salaries and Employee Benefits 283 257
Net Occupancy 41 41
Furniture and Equipment 20 24
Other 123 124
----- -----
Total Noninterest Expense 467 446
----- -----
Income Before Income Taxes 476 437
Income Taxes 172 160
Distribution on Preferred Securities 20 12
----- -----
Net Income $ 284 $ 265
- ---------- ===== =====
Net Income Available to
Common Shareholders $ 284 $ 263
- ----------------------- ===== =====
Per Common Share Data:
- ----------------------
Basic $0.77 $0.68
Diluted 0.73 0.64
Cash Dividends Paid 0.26 0.24
Diluted Shares Outstanding 390 412
<PAGE> 10
THE BANK OF NEW YORK COMPANY, INC.
Consolidated Balance Sheets
(Unaudited)
(Dollars in millions, except per share amounts)
March 31, December 31,
1998 1997
---- ----
Assets
- ------
Cash and Due from Banks $ 6,442 $ 5,769
Interest-Bearing Deposits in Banks 1,615 2,126
Securities:
Held-to-Maturity 1,609 1,127
Available-for-Sale 5,239 5,501
------- -------
Total Securities 6,848 6,628
Trading Assets at Fair Value 2,236 2,616
Federal Funds Sold and Securities Purchased
Under Resale Agreements 507 2,820
Loans (less allowance for loan losses
of $645 in 1997 and $641 in 1997) 36,389 34,486
Premises and Equipment 838 835
Due from Customers on Acceptances 993 1,187
Accrued Interest Receivable 351 356
Other Assets 3,191 3,138
------- -------
Total Assets $59,410 $59,961
======= =======
Liabilities and Shareholders' Equity
- ------------------------------------
Deposits
Noninterest-Bearing (principally
domestic offices) $10,770 $12,561
Interest-Bearing
Domestic Offices 15,228 15,607
Foreign Offices 14,591 13,189
------- -------
Total Deposits 40,589 41,357
Federal Funds Purchased and Securities
Sold Under Repurchase Agreements 1,896 2,329
Other Borrowed Funds 5,078 4,673
Acceptances Outstanding 998 1,196
Accrued Taxes and Other Expenses 2,048 1,910
Accrued Interest Payable 170 182
Other Liabilities 567 503
Long-Term Debt 1,959 1,809
------- -------
Total Liabilities 53,305 53,959
------- -------
Minority Interest - Preferred Securities 1,300 1,000
------- -------
Shareholders' Equity
Class A Preferred Stock - par value $2.00
per share, authorized 5,000,000 shares,
outstanding 23,615 shares in 1998 and
23,844 shares in 1997 1 1
Common Stock-par value $7.50 per share,
authorized 800,000,000 shares, issued
466,799,382 shares in 1998 and
460,212,619 shares in 1997 3,501 3,452
Additional Capital 533 465
Retained Earnings 3,716 3,527
Accumulated Other Comprehensive Incom 325 286
------- -------
8,076 7,731
Less: Treasury Stock (94,183,191 shares in
1997 and 85,320,504 shares in 1997), at cost 3,256 2,714
Loan to ESOP (1,056,829 shares in 1998
and 1997), at cost 15 15
------- -------
Total Shareholders' Equity 4,805 5,002
------- -------
Total Liabilities and Shareholders' Equity 59,410 $59,961
======= =======
<PAGE> 11
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 March 31, 1998 ended March 31, 1997
------------------------ ------------------------
Average Average Average Average
Balance Interest Rate Balance Interest Rate
------- -------- ------- ------- -------- -------
ASSETS
- ------
Interest-Bearing
Deposits in Banks
(primarily foreign) $ 2,852 $ 42 6.05% $ 2,439 $ 34 5.64%
Federal Funds Sold and
Securities Purchased
Under Resale Agreements 2,318 30 5.25 2,550 33 5.32
Loans
Domestic Offices 19,022 371 7.91 22,752 524 9.30
Foreign Offices 17,623 300 6.89 14,296 223 6.33
------- ------ ------- ------
Total Loans 36,645 671 7.42 37,048 747 8.15
------- ------ ------- ------
Securities
U.S. Government
Obligations 3,424 48 5.76 2,754 39 5.79
U.S. Government Agency
Obligations 611 10 6.43 424 7 6.35
Obligations of States and
Political Subdivisions 663 14 8.23 643 14 8.64
Other Securities,
including Trading
Securities 2,727 28 4.15 1,522 21 5.56
------- ------ ------- ------
Total Securities 7,425 100 5.44 5,343 81 6.11
------- ------ ------- ------
Total Interest-Earning
Assets 49,240 843 6.94% 47,380 895 7.66%
------ ------
Allowance for Loan Losses (644) (870)
Cash and Due from Banks 3,541 4,047
Other Assets 7,467 7,294
------- -------
TOTAL ASSETS $59,604 $57,851
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Interest-Bearing Deposits
Money Market Rate
Accounts $ 4,721 54 4.68% $ 3,886 41 4.23%
Savings 7,672 49 2.57 8,120 51 2.56
Certificates of Deposit
$100,000 & Over 668 9 5.51 697 9 5.29
Other Time Deposits 2,309 28 4.86 2,495 30 4.74
Foreign Offices 14,352 185 5.23 14,602 170 4.73
------- ------ ------- ------
Total Interest-Bearing
Deposits 29,722 325 4.43 29,800 301 4.09
Federal Funds Purchased
and Securities Sold
Under Repurchase
Agreements 2,954 34 4.63 2,266 28 5.10
Other Borrowed Funds 3,376 48 5.81 3,252 39 4.91
Long-Term Debt 1,840 32 6.93 1,817 31 6.84
------- ------ ------- ------
Total Interest-Bearing
Liabilities 37,892 439 4.70% 37,135 399 4.36%
------ ------
Noninterest-Bearing
Deposits 10,020 9,269
Other Liabilities 6,062 5,641
Minority Interest-
Preferred Securities 1,027 600
Preferred Stock 1 112
Common Shareholders'
Equity 4,602 5,094
------- -------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $59,604 $57,851
======= =======
Net Interest Earnings
and Interest Rate Spread $ 404 2.24% $ 496 3.30%
====== ==== ====== ====
Net Yield on Interest-
Earning Assets 3.33% 4.24%
==== ====
