<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, 1998
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)
One 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 373,647,468 shares as of July 31, 1998.
<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, 1998 and December 31, 1997 3
Consolidated Statements of Income
For the Three Months and Six Months
Ended June 30, 1998 and 1997 4
Consolidated Statement of Changes In
Shareholders' Equity For the Six
Months Ended June 30, 1998 5
Consolidated Statements of Cash Flows
For the Six Months Ended June 30,
1998 and 1997 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 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
- ------------------------------------------------------------------------------
<TABLE>
THE BANK OF NEW YORK COMPANY, INC.
Consolidated Balance Sheets
(Dollars in millions, except per share amounts)
<CAPTION>
June 30, December 31,
1998 1997
---- ----
(Unaudited) (Note)
<S> <C> <C>
Assets
- ------
Cash and Due from Banks $ 7,329 $ 5,769
Interest-Bearing Deposits in Banks 1,900 2,126
Securities:
Held-to-Maturity (fair value of $1,001 in
1998 and $1,106 in 1997) 1,030 1,127
Available-for-Sale 5,787 5,501
------- -------
Total Securities 6,817 6,628
Trading Assets at Fair Value 1,422 2,616
Federal Funds Sold and Securities Purchased
Under Resale Agreements 1,167 2,820
Loans (less allowance for loan losses
of $646 in 1998 and $641 in 1997) 38,403 34,486
Premises and Equipment 843 835
Due From Customers on Acceptances 974 1,187
Accrued Interest Receivable 364 356
Other Assets 3,784 3,138
------- -------
Total Assets $63,003 $59,961
======= =======
Liabilities and Shareholders' Equity
- ------------------------------------
Deposits
Noninterest-Bearing (principally
domestic offices) $11,814 $12,561
Interest-Bearing
Domestic Offices 15,707 15,607
Foreign Offices 15,887 13,189
------- -------
Total Deposits 43,408 41,357
Federal Funds Purchased and Securities
Sold Under Repurchase Agreements 1,996 2,329
Other Borrowed Funds 5,626 4,673
Acceptances Outstanding 983 1,196
Accrued Taxes and Other Expenses 2,087 1,910
Accrued Interest Payable 152 182
Other Liabilities 480 503
Long-Term Debt 2,003 1,809
------- -------
Total Liabilities 56,735 53,959
------- -------
Guaranteed Preferred Beneficial Interests in
the Company's Junior Subordinated Deferrable
Interest Debentures 1,300 1,000
------- -------
Class A Preferred Stock - par value $2.00
per share, authorized 5,000,000 shares,
outstanding 22,800 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
472,128,198 shares in 1998 and
460,212,619 shares in 1997 3,541 3,452
Additional Capital 594 465
Retained Earnings 3,912 3,528
Accumulated Other Comprehensive Income 354 285
------- -------
8,402 7,731
Less: Treasury Stock - 96,731,240 shares in
1998 and 85,320,504 shares in 1997, at cost 3,419 2,714
Loan to ESOP - 1,056,829 shares, at cost 15 15
------- -------
Total Shareholders' Equity 4,968 5,002
------- -------
Total Liabilities and Shareholders' Equity $63,003 $59,961
======= =======
- ------------------------------------------------------------------------------
<FN>
Note: The balance sheet at December 31, 1997 has been derived from the
audited financial statements at that date.
See accompanying Notes to Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE> 4
<TABLE>
- --------------------------------------------------------------------------------
THE BANK OF NEW YORK COMPANY, INC.
Consolidated Statements of Income
(In millions, except per share amounts)
(Unaudited)
<CAPTION>
For the three months ended For the six months ended
June 30, June 30,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest Income
- ---------------
Loans $ 695 $ 765 $ 1,364 $ 1,511
Securities
Taxable 77 58 156 119
Exempt from Federal
Income Taxes 11 8 20 18
----- ----- ----- -----
88 66 176 137
Deposits in Banks 40 39 83 73
Federal Funds Sold and Securities
Purchased Under Resale
Agreements 42 35 72 68
Trading Assets 5 7 9 10
----- ----- ----- -----
Total Interest Income 870 912 1,704 1,799
----- ----- ----- -----
Interest Expense
- ----------------
Deposits 343 328 667 629
Federal Funds Purchased and
Securities Sold Under Repurchase
Agreements 31 30 65 58
Other Borrowed Funds 54 42 103 81
Long-Term Debt 34 31 66 63
----- ----- ----- -----
Total Interest Expense 462 431 901 831
----- ----- ----- -----
Net Interest Income 408 481 803 968
- -------------------
Provision for Loan Losses 5 60 10 120
----- ----- ----- -----
Net Interest Income After
Provision for Loan Losses 403 421 793 848
----- ----- ----- -----
Noninterest Income
- ------------------
Processing Fees
Securities 239 190 469 375
Cash 64 59 127 114
----- ----- ----- -----
303 249 596 489
Trust and Investment Fees 51 44 101 87
Service Charges and Fees 85 94 166 187
Securities Gains 46 33 74 40
Other 76 69 176 141
----- ----- ----- -----
Total Noninterest Income 561 489 1,113 944
----- ----- ----- -----
Noninterest Expense
- -------------------
Salaries and Employee Benefits 287 263 570 521
Net Occupancy 43 42 84 84
Furniture and Equipment 21 24 41 48
Other 121 136 244 256
----- ----- ----- -----
Total Noninterest Expense 472 465 939 909
----- ----- ----- -----
Income Before Income Taxes 492 445 967 883
Income Taxes 172 162 344 323
Distribution on Trust Preferred
Securities 25 14 45 26
----- ----- ----- -----
Net Income $ 295 $ 269 $ 578 $ 534
- ---------- ===== ===== ===== =====
Net Income Available to
- -----------------------
Common Shareholders $ 295 $ 266 $ 578 $ 529
------------------- ===== ===== ===== =====
Per Common Share Data:
- ----------------------
Basic Earnings $0.79 $0.70 $1.56 $1.38
Diluted Earnings 0.75 0.66 1.48 1.29
Cash Dividends Paid 0.26 0.24 0.52 0.48
Diluted Shares Outstanding 392 405 391 409
- --------------------------------------------------------------------------------
<FN>
See accompanying Notes to Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE> 5
<TABLE>
- -------------------------------------------------------------------------------
THE BANK OF NEW YORK COMPANY, INC.
Consolidated Statement of Changes in Shareholders' Equity
For the six months ended June 30, 1998
(In millions)
(Unaudited)
<CAPTION>
<S> <C>
Preferred Stock
Balance, January 1 $ 1
-------
1
Balance, June 30 -------
Common Stock
Balance, January 1 3,452
Exercise of Warrants 69
Other Issuances 20
-------
Balance, June 30 3,541
-------
Additional Capital
Balance, January 1 465
Exercise of Warrants 75
Other 54
-------
Balance, June 30 594
-------
Retained Earnings
Balance, January 1 3,528
Net Income 578
Cash Dividends
Common Stock (194)
-------
Balance, June 30 3,912
-------
Accumulated Other Comprehensive Income
Securities Valuation Allowance
Balance, January 1 320
Change in Fair Value of Securities
Available-for-Sale, Net of $73 Million
in Taxes 121
Reclassification Adjustment,
Net of $27 Million in Taxes (50)
-------
Balance, June 30 391
-------
Foreign Currency Items
Balance, January 1 (35)
Foreign Currency Translation Adjustment,
Net of $1.4 Million in Tax Benefits (2)
-------
Balance, June 30 (37)
-------
Less: Treasury Stock
Balance, Janaury 1 2,714 (43)
Issued (54)
Acquired 759
-------
Balance, June 30 3,419
-------
Less Loan to ESOP
Balance, January 1 15
-------
Balance, June 30 15
-------
Total Shareholders' Equity, June 30 $ 4,968
=======
- -------------------------------------------------------------------------------
<FN>
Comprehensive Income for the three months ended June 30, 1998 and 1997 was
$316 million and $363 million.
Comprehensive Income for the six months ended June 30, 1998 and 1997 was
$647 million and $600 million.
See accompanying Notes to Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE> 6
<TABLE>
- -------------------------------------------------------------------------------
THE BANK OF NEW YORK COMPANY, INC.
Consolidated Statements of Cash Flows
(In millions)
(Unaudited)
<CAPTION>
For the six months ended
June 30,
1998 1997
---- ----
<S> <C> <C>
Operating Activities
Net Income $ 578 $ 534
Adjustments to Determine Net Cash Provided (Used)
by Operating Activities
Provision for Losses on Loans and Other Real Estate 11 121
Depreciation and Amortization 90 102
Deferred Income Taxes 102 108
Securities Gains (74) (40)
Change in Trading Activities 702 (254)
Change in Accruals and Other, Net (1,085) (104)
------- -------
Net Cash Provided by Operating Activities 324 467
------- -------
Investing Activities
Change in Interest-Bearing Deposits in Banks 200 (893)
Purchases of Securities Held-to-Maturity (259) (131)
Maturities of Securities Held-to-Maturity 375 202
Purchases of Securities Available-for-Sale (1,477) (383)
Sales of Securities Available-for-Sale 745 198
Maturities of Securities Available-for-Sale 517 281
Net Principal Disbursed on Loans to Customers (3,190) (3,433)
Sales of Loans and Other Real Estate 159 1,060
Change in Federal Funds Sold and Securities
Purchased Under Resale Agreements 1,653 (88)
Purchases of Premises and Equipment (38) (17)
Proceeds from the Sale of Premises and Equipment 41 -
Acquisitions, Net of Cash Acquired (419) (133)
Other, Net (51) (36)
------- -------
Net Cash Used by Investing Activities (1,744) (3,373)
------- -------
Financing Activities
Change in Deposits 2,092 4,559
Change in Federal Funds Purchased and Securities
Sold Under Repurchase Agreements (333) (164)
Change in Other Borrowed Funds 1,441 673
Proceeds from the Issuance of Trust
Preferred Securities 300 400
Proceeds from the Issuance of Long-Term Debt 210 -
Repayments of Long-Term Debt (16) (16)
Issuance of Common Stock 251 173
Treasury Stock Acquired (759) (773)
Cash Dividends Paid (194) (191)
------- -------
Net Cash Provided by Financing Activities 2,992 4,661
------- -------
Effect of Exchange Rate Changes on Cash (12) (5)
------- -------
Change in Cash and Due From Banks 1,560 1,750
Cash and Due from Banks at Beginning of Period 5,769 6,032
------- -------
Cash and Due from Banks at End of Period $ 7,329 $ 7,782
======= =======
- -----------------------------------------------------------------------------
Supplemental Disclosure of Cash Flow Information
Cash Paid During the Period for:
Interest $ 492 $ 865
Income Taxes 194 209
Noncash Investing Activity (Primarily Foreclosure
of Real Estate) 4 7
- -----------------------------------------------------------------------------
<FN>
See accompanying Notes to Consolidated Financial Statements.
</FN>
</TABLE>
<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 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.
2. Allowance for Loan Losses
-------------------------
Transactions in the allowance for loan losses are summarized as
follows:
Six months ended
June 30,
(In millions) 1998 1997
----- -----
Balance, Beginning of Period $ 641 $ 901
Charge-offs (19) (220)
Recoveries 10 31
----- -----
Net Charge-Offs (9) (189)
Acquisition 4 -
Provision 10 120
----- -----
Balance, End of Period $ 646 $ 832
===== =====
3. Capital Transactions
--------------------
As of July 31, 1998, the Company has approximately 1.6 million
shares remaining to repurchase under its share buyback program.
During the second quarter of 1998, warrant holders converted 1.3
million warrants into 5.0 million common shares, providing the Company
with $77 million in capital. In July 1998, warrant holders converted
an additional 0.3 million warrants into 1.3 million common shares,
providing the Company with $20 million in capital.
<PAGE> 8
4. New Accounting Pronouncements
-----------------------------
On January 1, 1998, a new accounting pronouncement related to
comprehensive income was adopted. This pronouncement requires
unrealized gains or losses on available-for-sale securities and
foreign currency translation adjustments, which were reported
separately in shareholders' equity, are now included in other
comprehensive income. Prior periods have been restated for these
changes.
Effective January 1, 2000, a new accounting standard will require
the Company to record all derivatives on the balance sheet at fair
value and apply new accounting practices for hedging activities. The
Company has not yet determined the impact of the new accounting
standard on the Company's financial position and results of
operations.
5. Earnings Per Share
------------------
The following table illustrates the computations of basic and
diluted EPS for the three and six months ended June 30, 1998 and 1997:
(In millions, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
1998 1997 1998 1997
---- ---- ---- ----
Net Income $295 $269 $578 $534
Preferred Stock Dividends - (3) - (5)
---- ---- ---- ----
Net Income Available to
Common Shareholders $295 $266 $578 $529
==== ==== ==== ====
Basic Weighted Average
Shares Outstanding 374 381 372 384
Shares Issued on Conversion:
Warrants 11 17 13 18
Employee Stock Options 7 7 6 7
---- ---- ---- ----
Diluted Weighted Average
Shares Outstanding 392 405 391 409
==== ==== ==== ====
Basic Earnings Per Share $ 0.79 $ 0.70 $ 1.56 $ 1.38
Diluted Earnings Per Share $ 0.75 $ 0.66 $ 1.48 $ 1.29
<PAGE> 9
6. 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.
Management's Discussion and Analysis of Financial Condition
- -----------------------------------------------------------
and Results of Operations
- -------------------------
The Company's actual results may differ from those set forth in
certain forward-looking statements contained herein. Reference is made
to the Company's Annual Report on Form 10-K for a discussion of
factors which may affect the Company's future results.
The Company's reported second quarter diluted earnings per share
were 75 cents, up 14% from the 66 cents earned in the second quarter
of 1997. Second quarter net income was $295 million, up 10% from $269
million earned in the same period last year. Diluted earnings per
share were $1.48 for the first half of 1998, up 15% from the $1.29
earned last year. Net income for the first six months was a record
$578 million, an increase of 8% over last year's $534 million.
Second quarter results were driven by broad based growth from fee
income activities. All fee generating businesses did well with the
strongest performances by securities servicing, up 25%, funds
transfer, up 19%, and trust and investment, up 16%.
Securities servicing revenue growth was spread across all product
lines, led by ADRs and global custody. ADRs benefited from 27% growth
in trading activity in the first six months of 1998, with The Bank of
New York named as agent on 83% of new programs that came to market
during that period. Global custody's record performance was fueled by
new business wins combined with continued growth in cross-border
investment and increased trading activity. Overall, fee based revenues
and noninterest income contributed 58% of total revenues in the second
quarter, up sharply from 50% in the prior year period.
All of the above contributed to a return on average common equity
for the second quarter of 1998 of 24.03% compared with 24.99% in the
first quarter of 1998 and 21.84% in the second quarter of 1997. Return
on average assets for the second quarter of 1998 was 1.90% compared
with 1.93% in the first quarter of 1998 and 1.83% in the second
quarter of 1997. For the first six months of 1998, return on average
common equity totaled 24.49% compared with 21.36% in 1997. Return on
average assets was 1.91% for the first six months of 1998 compared
with 1.84% in 1997.
Tangible diluted earnings per share (earnings before the
amortization of goodwill and intangibles) were 80 cents per share in
<PAGE> 10
the second quarter of 1998, up 13% from 71 cents per share in the
second quarter of 1997. On the same basis, tangible return on average
common equity was 37.15% in the second quarter of 1998 compared with
31.75% in the second quarter of 1997; and tangible return on average
assets was 2.07% in the second quarter of 1998 compared with 2.01% in
the second quarter of 1997. Tangible diluted earnings per share were
$1.57 per share for the first six months of 1998, compared with $1.39
per share in 1997. Tangible return on average common equity was 37.42%
in the first six months of 1998 compared with 30.65% in 1997; and
tangible return on average assets was 2.09% in the first six months
1998 compared with 2.03% last year.
Revenues from the Company's securities servicing businesses
reached $239 million for the second quarter and $469 million for the
first six months of 1998, growing by 25% compared with the
corresponding periods of the previous year. Strong internal growth of
16% was spread over all of the Company's businesses with ADRs, global
custody, domestic custody, and stock transfer performing particularly
well.
In cash processing, funds transfer fees were particularly strong,
growing by 19%, with cash management fees ahead by 14%. Trade finance
revenues were essentially flat during the quarter due to reduced trade
flows in Southeast Asia. On a combined basis, fees from cash
processing were ahead 8% in the second quarter, reaching $64 million.
New business and generally strong markets resulted in trust and
investment fees of $51 million for the quarter, an increase of 16%
over last year. Foreign exchange and other trading revenues increased
69% from a year ago to $42 million for the quarter, but were slightly
below the $47 million for the first quarter.
Net interest income on a taxable equivalent basis for the second
quarter rose to $424 million from $404 million in the first quarter of
1998. This was due to commercial loan growth and a more favorable mix
of assets. Financial discipline remained a hallmark for the Company as
the efficiency ratio was 50.3% in spite of the sale of the credit card
operation and the impact of Year 2000 expenses.
Average diluted shares outstanding were 392 million for the
quarter, up from the 390 million in the first quarter of 1998 due to
the conversion of warrants, and down significantly from the 405
million in the prior year period, a result of the Company's stock
buyback program.
CAPITAL
- -------
The Company's Board of Directors declared a common stock dividend
of 28 cents per share to be paid in the third quarter, an 8% increase
over the 26 cents paid for the first and second quarters of this year.
This increase will result in an annual cash dividend rate of $1.12 per
share, the highest in the Company's history. The new dividend is
payable on August 6, 1998 to holders of record as of the close of
business on July 24, 1998.
<PAGE> 11
The Company's Board also declared a 2-for-1 common stock split,
which will be paid after the cash dividend. On August 13, 1998,
holders of record as of the close of business on July 24, 1998 will
receive one additional share for every share held. Adjusted for the
split, diluted earnings per share were 38 cents for the second quarter
and 74 cents for the first six months of 1998 compared with 33 cents
for the second quarter and 65 cents for the first six months of 1997.
The Company's estimated Tier 1 capital and Total capital ratios
remained strong at 7.27% and 11.28% at June 30, 1998 compared with
7.25% and 11.43% at March 31, 1998, and 7.83% and 12.00% at June 30,
1997. Tangible common equity as a percent of total assets was 5.55% at
June 30, 1998 compared with 5.68% at March 31, 1998 and 5.92% one year
ago. The leverage ratio was 7.17% at June 30, 1998 compared with 7.33%
at March 31, 1998 and 8.04% one year ago.
NET INTEREST INCOME
- -------------------
2nd 1st 2nd Year-to-date
Quarter Quarter Quarter ------------
(Dollars in millions) 1998 1998 1997 1998 1997
---- ---- ---- ---- ----
Net Interest Income $424 $404 $489 $828 $985
Net Interest Rate
Spread 2.27% 2.24% 3.12% 2.25% 3.21%
Net Yield on Interest-
Earning Assets 3.28 3.33 4.08 3.30 4.16
Net interest income on a taxable equivalent basis was $424
million in the second quarter of 1998 compared with $404 million in
the first quarter of 1998 and $489 million in the second quarter of
1997. The net interest rate spread was 2.27% in the second quarter of
1998, compared with 2.24% in the first quarter of 1998 and 3.12% one
year ago. The net yield on interest-earning assets was 3.28% compared
with 3.33% in the first quarter of 1998 and 4.08% in last year's
second quarter.
For the first six months of 1998, net interest income on a
taxable equivalent basis, amounted to $828 million compared with $985
million in the first half of 1997. The year-to-date net interest rate
spread was 2.25% in 1998 compared with 3.21% in 1997, while the net
yield on interest-earning assets was 3.30% in 1998 and 4.16% in 1997.
The increase in net interest income and the net interest rate
spread from the first quarter reflects growth in the balance sheet,
improvements in the mix of assets due to corporate loan growth and
lower cost of funds. The decline from the second quarter of 1997 was
primarily the result of the sale of the credit card business. The
decline in the net yield on interest-earning assets from the first
quarter of this year is due to the lower value of free funds in a
declining rate environment. The decrease in the yield as compared to
the second quarter last year is the result of the sale of the credit
card business as well as the stock buyback program.
<PAGE> 12
Interest lost on loans on nonaccrual status at June 30, 1998 and
1997 reduced net interest income by $3 million and $2 million for the
three months ended June 30, 1998 and 1997, and by $6 million for the
six months ended June 30, 1998 and 1997.
NONINTEREST INCOME
- ------------------
2nd Quarter Year-to-date
----------- -------------
(In millions) 1998 1997 1998 1997
---- ---- ------ ----
Processing Fees
Securities $239 $190 $ 469 $375
Cash 64 59 127 114
---- ---- ------ ----
303 249 596 489
Trust and Investment Fees 51 44 101 87
Service Charges and Fees 85 94 166 187
Foreign Exchange and
Other Trading Activities 42 25 88 52
Securities Gains 46 33 74 40
Other 34 44 88 89
---- ---- ------ ----
Total Noninterest Income $561 $489 $1,113 $944
==== ==== ====== ====
Securities servicing fees increased 25% to $239 million compared
with $190 million in the second quarter of 1997. Strong internal
growth across all areas reached 16%, with remaining growth coming from
acquisitions made during 1997. In the first half of 1998, securities
servicing fees were $469 million compared with $375 million in 1997.
Second quarter service charges and fees of $85 million were up from
$81 million in the first quarter due to increased syndication fees.
However, service charges and fees were down from $94 million in the
second quarter of 1997 reflecting 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 $42 million in the second quarter of 1998 compared
with $47 million in the first quarter of 1998 and $25 million in the
second quarter of 1997. The Company reported $46 million of securities
gains in the second quarter of 1998 compared with $33 million in the
second quarter of 1997.
<PAGE> 13
TRADING ACTIVITIES
- ------------------
The fair value and notional amounts of the Company's financial
instruments held for trading purposes at June 30, 1998 are as follows:
2nd Quarter 1998
June 30, 1998 Average
---------------------------- ------------------
(In millions) Fair Value Fair Value
Notional ------------------ ------------------
Trading Account Amount Assets Liabilities Assets Liabilities
- --------------- -------- ------ ----------- ------ -----------
Interest Rate Contracts:
Futures and Forward
Contracts $10,732 $ 8 $ - $ 6 $ -
Swaps 29,166 130 132 128 125
Written Options 53,473 - 154 - 138
Purchased Options 25,966 57 - 56 -
Foreign Exchange Contracts:
Swaps 43 - - - -
Written Options 49,129 - 501 - 492
Purchased Options 52,043 497 - 436 -
Commitments to Purchase
and Sell Foreign Exchange 54,330 418 416 443 439
Securities 312 108 298 98
------ ------ ------ ------
Total Trading Account $1,422 $1,311 $1,367 $1,292
====== ====== ====== ======
Typically, the Company does not take directional risk, but on
occasion residual risk is created in the process of acting as a market
maker for the Company's customers. This residual risk is managed by
the Company's traders and is limited in total exposure as described
below.
The Company manages trading risk through a system of position
limits, a value at risk (VAR) methodology, stop loss advisory
triggers, and other market sensitivity measures. Risk is monitored and
reported to senior management by an independent unit on a daily basis.
The VAR methodology captures, based on certain assumptions, the
potential overnight pre-tax dollar loss from adverse changes in fair
values of all trading positions. The calculation assumes a one day
holding period for most instruments, utilizes a 99% confidence level,
and incorporates the non-linear characteristics of options. This
methodology does not, however, attempt to evaluate risk created from
extraordinary financial, economic or other occurrences, and any risk
evaluation system has judgement aspects.
The following table indicates the calculated VAR amounts for the
trading portfolio for the periods indicated.
(In millions) 2nd Quarter 1998 Year-to-date
------------------------ ----------------------- As of
Market Risk Average Minimum Maximum Average Minimum Maximum 6/30/98
- ----------- ------- ------- ------- ------- ------- ------- -------
Interest Rate $4.5 $2.1 $7.0 $4.8 $2.1 $7.0 $3.9
Foreign Exchange 2.1 0.8 3.5 2.2 0.8 4.0 1.4
Overall Portfolio 6.6 4.0 9.0 7.0 4.0 9.7 5.3
<PAGE> 14
NONINTEREST EXPENSE AND INCOME TAXES
- ------------------------------------
Total noninterest expense for the quarter was $472 million, up 2%
from $465 million in the same period last year. Year-to-date
noninterest expense was $939 million compared with $909 million in
1997. Noninterest expense for the second quarter included $8 million,
approximately $0.01 per share, related to making computer systems Year
2000 compliant. For the first six months of 1998, Year 2000 expenses
were $16 million or approximately $0.02 per share.
The efficiency ratio for the second quarter of 1998 was 50.3%
compared with 50.1% in the first quarter of 1998 and 49.1% for the
second quarter of 1997. For the first half of 1998, the efficiency
ratio was 50.2% compared with 48.1% last year. 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 an increase in Year 2000
systems expenses.
The effective tax rate for the second quarter and first six
months of 1998 was 35.0% and 35.6% compared with 36.5% and 36.6% last
year.
NONPERFORMING ASSETS
- --------------------
Change
6/30/98 vs.
(Dollars in millions) 6/30/98 3/31/98 3/31/98
------- ------- -----------
Loans:
Commercial Real Estate $ 35 $ 37 $(2)
Other Commercial 61 58 3
Foreign 37 38 (1)
Community Banking 49 53 (4)
---- ---- ---
Total Loans 182 186 (4)
Other Real Estate 17 15 2
---- ---- ---
Total $199 $201 $(2)
==== ==== ===
Nonperforming Assets Ratio 0.5% 0.5%
Allowance/Nonperforming Loans 356.1 347.4
Allowance/Nonperforming Assets 324.9 321.2
Nonperforming assets totaled $199 million at June 30, 1998,
compared with $201 million at March 31, 1998, a decrease of $2
million. This was the twenty-eighth consecutive quarter of
nonperforming asset decreases.
At June 30, 1998, impaired loans (nonaccrual loans over $1
million) aggregated $141 million, of which $105 million exceeded their
fair value by $38 million. Impaired loans at June 30, 1997, totaled
$148 million, of which $106 million exceeded their fair value by $18
<PAGE> 15
million. For the second quarters of 1998 and 1997, the average amount
of impaired loans was $146 million and $149 million and interest
income (cash received) on them was $436 thousand and $361 thousand.
LOAN LOSS PROVISION AND NET CHARGE-OFFS
- ---------------------------------------
2nd 1st 2nd Year-to-date
Quarter Quarter Quarter ------------
In millions) 1998 1998 1997 1998 1997
------- ------- ------- ---- ----
Provision $ 5 $ 5 $ 60 $ 10 $120
==== ==== ==== ==== ====
Net(Charge-offs)
Recoveries:
Commercial Real Estate 1 1 - 2 1
Other Commercial (3) (3) (6) (6) (9)
Other Consumer (1) (1) (1) (2) (3)
Foreign - (1) - (1) 4
Other (1) (1) (2) (2) (1)
Credit Card - - (88) - (181)
---- ---- --- ---- -----
Total $ (4) $ (5) $(97) (9) $(189)
==== ==== ==== ==== =====
Other Real Estate Expense $ - $ 1 $ 1 $ 1 $ 1
The allowance for loan losses was $646 million, or 1.65% of loans
at June 30, 1998 compared with $645 million, or 1.74% of loans at
March 31, 1998 and $832 million, or 2.13% of loans at June 30, 1997.
The ratio of the allowance to nonperforming assets was 324.9% at June
30, 1998 compared with 321.2% at March 31, 1998 and 342.1% at June 30,
1997.
SECTOR PROFITABILITY
- --------------------
The Company has an internal information system used for
management purposes that produces sector performance data for Trust,
Securities Servicing and Cash Processing; Corporate Banking; Retail
Banking; and Other Sectors. A set of measurement principles has been
developed to help insure that reported results of the sectors track
their economic performance. Sector results are subject to restatement
whenever improvements are made in the measurement principles or
organizational changes are made. Prior year results have been restated
to reflect the transfer of leasing operations from the Other Sector to
the Corporate Banking Sector. Changes were also made in the allocation
of equity to sectors.
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.
<PAGE> 16
The Trust, Securities Servicing, and Cash Processing Sector
provides a broad array of fee based services. Trust includes personal
trust and investment management. Securities Servicing includes
services to both institutional issuers and investors. Cash Processing
products relate primarily to funds transfer, deposit services and
trade finance. The Retail Banking Sector includes consumer lending,
residential mortgage lending, and retail deposit services. The Retail
Banking Sector ceased credit card lending during 1997. The Corporate
Banking Sector is divided into specialty industries banking, U.S.
commercial banking, regional commercial banking, international
banking, leasing, and asset based lending. The Other Sector includes
trading and investing activities, treasury services to other sectors,
general administration, and the difference between the recorded
provision for loan losses and that allocated to the other sectors.
Based on this system, the sectors contributed to the Company's
profitability for the second quarter and first six months of 1998 and
1997 as follows:
Trust,
Securities
Servicing
and Cash Corporate Retail
(In millions) Processing Banking Banking Other Total
---------- ---------- ---------- --------- ----------
2nd Quarter 1998 1997 1998 1997 1998 1997 1998 1997 1998 1997
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Net Interest Income
a on a Taxable
Equivalent Basis $ 97 $ 79 $192 $173 $132 $235 $ 3 $ 2 $424 $489
Provision for
Loan Losses - - 2 6 2 91 1 (37) 5 60
Noninterest Income 373 315 94 71 21 44 73 59 561 489
Noninterest Expense 262 220 72 59 85 135 53 50 472 464
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Income Before Taxes $208 $174 $212 $179 $ 66 $ 53 $ 22 $ 48 $508 $454
==== ==== ==== ==== ==== ==== ==== ==== ==== ====
Trust,
Securities
Servicing
and Cash Corporate Retail
(In millions) Processing Banking Banking Other Total
---------- ---------- ---------- --------- -----------
Year-to-date 1998 1997 1998 1997 1998 1997 1998 1997 1998 1997
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Net Interest Income
on a Taxable
Equivalent Basis $178 $149 $385 $356 $259 $476 $ 6 $ 4 $ 828 $ 985
Provision for
Loan Losses - - 6 7 3 183 1 (70) 10 120
Noninterest Income 747 619 169 133 40 91 157 101 1,113 944
Noninterest Expense 517 433 143 113 171 272 108 92 939 910
---- ---- ---- ---- ---- ---- ---- ---- ----- -----
Income Before Taxes $408 $335 $405 $369 $125 $112 $ 54 $ 83 $ 992 $ 899
==== ==== ==== ==== ==== ==== ==== ==== ===== =====
Trust, Securities Servicing, and Cash Processing
- ------------------------------------------------
In the Trust, Securities Servicing, and Cash Processing Sector,
Securities Servicing fees increased 25% to $239 million compared with
$190 million in the second quarter of 1997. In the first half of 1998,
securities servicing fees were $469 million compared with $375 million
in 1997. Strong internal growth of 16% was spread over all the
<PAGE> 17
Company's businesses with ADRs, global custody, domestic custody, and
stock transfer performing particularly well. Fee revenues from issuer
services, investment company services, and broker/dealer services were
$91 million, $73 million, and $75 million in the second quarter of
1998 compared with $74 million, $62 million, and $54 million in 1997.
Fees from cash processing increased 8% over the second quarter of last
year to $64 million. Funds transfer fees were particularly strong
growing by 19%, with cash management fees ahead by 14%.
Notwithstanding uncertain economic conditions and the resultant
reduced trade flows in Southeast Asia, revenues in our trade finance
business were essentially flat. Fees from trust and investment grew
16% in the second quarter of 1998 reflecting new business and
generally strong markets. The rise in noninterest expense is primarily
related to this growth.
Retail Banking
- --------------
The decrease in net interest income, provision for loan losses,
noninterest income, and noninterest expense in the Retail Banking
Sector principally reflects the sale of the Company's credit card
business in 1997. Net interest income in the Retail Banking Sector's
branch network benefited from more favorable interest rate spreads in
the second quarter of 1998 compared to the second quarter last year.
Operating expenses and net interest income relating to branch banking
decreased in part due to the sale of eleven retail branches in
November 1997.
Corporate Banking
- -----------------
Net interest income increased in the Corporate Banking Sector due
to strong loan growth and acquisitions related to the asset based
lending business. In the second quarter of 1998, average loans
outstanding in the Corporate Banking Sector increased 15% from the
second quarter of last year. The increase in noninterest income
reflects higher asset based lending revenue and syndication fees,
offset by lower income from the Company's offshore banking
subsidiaries. The increase in noninterest expense is partially due to
acquisitions related to the asset based lending business.
Other
- -----
The Other Sector reflects the difference between the total
provision for loan losses and that charged off by the sectors. The
Company reported $46 million of securities gains in the second quarter
of 1998 compared with $33 million in the second quarter of 1997.
Noninterest income for the first six months of 1998 also includes a
pre-tax gain of $29 million on the sale of the Company's property at
48 Wall Street. Noninterest income for the first six months of last
year includes a $27 million pre-tax gain on the sale of a portion of
the Company's interest in Wing Hang Bank, Ltd.
<PAGE> 18
<TABLE>
THE BANK OF NEW YORK COMPANY, INC.
Average Balances and Rates on a Taxable Equivalent Basis
(Dollars in millions)
<CAPTION>
For the three months For the three months
ended June 30, 1998 ended June 30, 1997
------------------------ ------------------------
Average Average Average Average
Balance Interest Rate Balance Interest Rate
------- -------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
- ------
Interest-Bearing
Deposits in Banks
(primarily foreign) $ 3,150 $ 40 5.12% $ 2,942 $ 39 5.31%
Federal Funds Sold and
Securities Purchased
Under Resale Agreements 3,165 42 5.33 2,531 35 5.50
Loans
Domestic Offices 19,753 384 7.80 22,469 523 9.34
Foreign Offices 18,219 312 6.86 14,792 243 6.58
------- ----- ------- -----
Total Loans 37,972 696 7.35 37,261 766 8.25
------- ----- ------- -----
Securities
U.S. Government
Obligations 3,307 48 5.81 2,683 39 5.86
U.S. Government Agency
Obligations 557 9 6.50 386 6 6.46
Obligations of States and
Political Subdivisions 656 14 8.23 632 14 8.69
Other Securities,
including Trading
Securities 3,085 37 4.86 1,712 21 4.90
------- ----- ------- -----
Total Securities 7,605 108 5.68 5,413 80 5.93
------- ----- ------- -----
Total Interest-Earning
Assets 51,892 886 6.85% 48,147 920 7.67%
----- -----
Allowance for Loan Losses (644) (837)
Cash and Due from Banks 3,529 3,756
Other Assets 7,457 7,853
------- -------
TOTAL ASSETS $62,234 $58,919
======= =======
LIABILITIES AND
- ---------------
SHAREHOLDERS' EQUITY
- -------------------
Interest-Bearing Deposits
Money Market Rate
Accounts $ 4,991 59 4.77% $ 4,259 49 4.59%
Savings 7,751 48 2.50 8,022 51 2.53
Certificates of Deposit
$100,000 & Over 734 10 5.48 715 10 5.46
Other Time Deposits 2,293 28 4.86 2,569 31 5.02
Foreign Offices 15,864 198 4.98 15,200 187 4.93
------- ----- ------- -----
Total Interest-Bearing
Deposits 31,633 343 4.34 30,765 328 4.28
Federal Funds Purchased
and Securities Sold
Under Repurchase
Agreements 2,760 31 4.56 2,226 30 5.33
Other Borrowed Funds 4,053 54 5.36 3,195 42 5.25
Long-Term Debt 1,964 34 6.83 1,808 31 6.94
------- ----- ------- -----
Total Interest-Bearing
Liabilities 40,410 462 4.58% 37,994 431 4.55%
----- -----
Noninterest-Bearing
Deposits 10,227 9,183
Other Liabilities 5,379 6,028
Minority Interest-
Preferred Securities 1,300 714
Preferred Stock 1 112
Common Shareholders'
Equity 4,917 4,888
------- -------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $62,234 $58,919
======= =======
Net Interest Earnings
and Interest Rate Spread $ 424 2.27% $ 489 3.12%
===== ==== ===== ====
Net Yield on Interest-
Earning Assets 3.28% 4.08%
==== ====
</TABLE>
<PAGE> 19
<TABLE>
THE BANK OF NEW YORK COMPANY, INC.
Average Balances and Rates on a Taxable Equivalent Basis
(Dollars in millions)
<CAPTION>
For the six months For the six months
ended June 30, 1998 ended June 30, 1997
------------------------ ------------------------
Average Average Average Average
Balance Interest Rate Balance Interest Rate
------- -------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
- ------
Interest-Bearing
Deposits in Banks
(primarily foreign) $ 3,002 $ 83 5.56% $ 2,692 $ 73 5.46%
Federal Funds Sold and
Securities Purchased
Under Resale Agreements 2,743 72 5.29 2,541 68 5.41
Loans
Domestic Offices 19,389 755 7.86 22,610 1,048 9.32
Foreign Offices 17,923 611 6.87 14,545 466 6.46
------- ------ ------- ------
Total Loans 37,312 1,366 7.38 37,155 1,514 8.22
------- ------ ------- ------
Securities
U.S. Government
Obligations 3,365 97 5.78 2,718 78 5.82
U.S. Government Agency
Obligations 584 19 6.47 405 13 6.40
Obligations of States and
Political Subdivisions 660 27 8.23 637 28 8.67
Other Securities,
including Trading
Securities 2,907 65 4.53 1,617 42 5.21
------- ------ ------- ------
Total Securities 7,516 208 5.58 5,377 161 6.03
------- ------ ------- ------
Total Interest-Earning
Assets 50,573 1,729 6.89% 47,765 1,816 7.67%
------ ------
Allowance for Loan Losses (644) (854)
Cash and Due from Banks 3,535 3,901
Other Assets 7,462 7,576
------- -------
TOTAL ASSETS $60,926 $58,388
======= =======
LIABILITIES AND
- ---------------
SHAREHOLDERS' EQUITY
- --------------------
Interest-Bearing Deposits
Money Market Rate
Accounts $ 4,857 114 4.73% $ 4,074 89 4.42%
Savings 7,712 97 2.54 8,071 102 2.55
Certificates of Deposit
$100,000 & Over 701 19 5.50 706 19 5.38
Other Time Deposits 2,301 55 4.86 2,531 61 4.88
Foreign Offices 15,112 382 5.10 14,904 358 4.83
------- ------ ------- ------
Total Interest-Bearing
Deposits 30,683 667 4.39 30,286 629 4.19
Federal Funds Purchased
and Securities Sold
Under Repurchase
Agreements 2,856 65 4.60 2,246 58 5.22
Other Borrowed Funds 3,717 103 5.56 3,223 81 5.08
Long-Term Debt 1,902 66 6.88 1,812 63 6.89
------- ------ ------- ------
Total Interest-Bearing
Liabilities 39,158 901 4.64% 37,567 831 4.46%
------ ------
Noninterest-Bearing
Deposits 10,124 9,226
Other Liabilities 5,718 5,836
Minority Interest-
Preferred Securities 1,164 657
Preferred Stock 1 112
Common Shareholders'
Equity 4,761 4,990
------- -------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $60,926 $58,388
======= =======
Net Interest Earnings
and Interest Rate Spread $ 828 2.25% $ 985 3.21%
====== ===== ====== =====
Net Yield on Interest-
Earning Assets 3.30% 4.16%
==== ====
</TABLE>
<PAGE> 20
PART 2. OTHER INFORMATION
Item 4. Submissions of Matters to Vote of Security Holders
- -----------------------------------------------------------
The Company held its annual meeting on May 12, 1998 at The Bank
of New York at 48 Wall Street in New York, New York. The following
matters were submitted to a vote of the shareholders:
-- election of fifteen director nominees to new one-year terms
was approved with no nominee receiving less than 319.1 million votes;
-- amendment to Article FOURTH of the Company's Certificate of
Incorporation to increase the number of authorized shares of Common
Stock from 800,000,000 shares to 1,600,000,000 shares was approved by
a vote of 306.9 million affirmative to 13.0 million negative;
-- appointment of Ernst & Young LLP as the Company's independent
public accountants for 1998 was ratified by a vote of 320.1 million
affirmative to 0.5 million negative;
-- proposal to approve the Company's 1999 Long-Term Incentive
Plan was approved by a vote of 180.9 million affirmative to 93.4
million negative;
-- proposal that cumulative voting rights be accorded to
shareholders was defeated by a vote of 62.6 million affirmative to
212.4 million negative; and
-- proposal that the Company affirm its political non-
partisanship was defeated by a vote of 10.9 million affirmative to
256.2 million negative.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) The exhibits filed as part of this report are as follows:
Exhibit 12 - Statement Re: Ratio of Earnings to Fixed Charges
and Ratio of Earnings to Combined Fixed Charges, Distribution on
Trust Preferred Securities, and Preferred Stock Dividends for the
Three and Six Months Ended June 30, 1998 and 1997.
Exhibit 27 - Statement Re: Financial Data Schedule containing
selected financial data at June 30, 1998 and for the Six Months
Ended June 30, 1998.
(b) The Company filed the following reports on Form 8-K since
March 31, 1998:
On April 20, 1998, the Company filed a Form 8-K Current Report
(Items 5 and 7), report included unaudited interim financial
information and accompanying discussion for the first quarter of
<PAGE> 21
1998 contained in the Company's press release dated April 20,
1998.
On April 22, 1998, the Company filed a Form 8-K Current Report
(Items 5 and 7), report included the press release announcing the
Company's proposed merger plan with Mellon Bank Corporation and
accompanying presentation materials.
On April 23, 1998, the Company filed a Form 8-K Current Report
(Items 5 and 7), report included the press release confirming the
Company's desire to complete its proposed merger to Mellon Bank
Corporation.
On May 20, 1998, the Company filed a Form 8-K Current Report
(Items 5 and 7), report included the press release regarding the
Company's withdrawal of its merger proposal to Mellon Bank
Corporation.
On July 20, 1998, 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 1998 contained in the Company's press release dated
July 20, 1998.
<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 12, 1998 By: \s\ Robert E. Keilman
-----------------------
Name: Robert E. Keilman
Title: Comptroller
<PAGE> 23
EXHIBIT INDEX
-------------
Exhibit Description
- ------- -----------
12 Ratio of Earnings to Fixed Charges and Ratio of
Earnings to Combined Fixed Charges, Distribution
on Trust Preferred Securities, and Preferred
Stock Dividends for the Three and Six Months Ended
June 30, 1998 and 1997.
27 Financial Data Schedule containing selected
financial data at June 30, 1998 and for the
Six Months Ended June 30, 1998.
<TABLE>
EXHIBIT 12
THE BANK OF NEW YORK COMPANY, INC.
Ratios of Earnings to Fixed Charges and Ratios
of Earnings to Combined Fixed Charges,
Distribution on Trust Preferred Securities
and Preferred Stock Dividends
(Dollars in millions)
<CAPTION>
Three Six
Months Ended Months Ended
June 30, June 30,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
EARNINGS
- --------
Income Before Income Taxes $492 $445 $ 967 $ 883
Fixed Charges, Excluding Interest
on Deposits 128 111 250 218
---- ---- ------ ------
Income Before Income Taxes and Fixed
Charges, Excluding Interest on Deposits 620 556 1,217 1,101
Interest on Deposits 343 328 667 629
---- ---- ------ ------
Income Before Income Taxes and Fixed
Charges, Including Interest on Deposits $963 $884 $1,884 $1,730
==== ==== ====== ======
FIXED CHARGES
- -------------
Interest Expense, Excluding Interest
on Deposits $119 $103 $ 234 $ 202
One-Third Net Rental Expense* 9 8 16 16
---- ---- ------ ------
Total Fixed Charges, Excluding Interest
on Deposits 128 111 250 218
Interest on Deposits 343 328 667 629
---- ---- ------ ------
Total Fixed Charges, Including Interest
on Deposits $471 $439 $ 917 $ 847
==== ==== ====== ======
DISTRIBUTION ON TRUST PREFERRED SECURITIES,
- -------------------------------------------
PRE-TAX BASIS
- ------------- $ 25 $ 14 $ 45 $ 26
==== ==== ====== ======
PREFERRED STOCK DIVIDENDS, PRE-TAX BASIS $ - $ 4 $ - $ 8
- ---------------------------------------- ==== ==== ====== ======
EARNINGS TO FIXED CHARGES RATIOS
- --------------------------------
Excluding Interest on Deposits 4.84x 5.01x 4.87x 5.05x
Including Interest on Deposits 2.04 2.01 2.05 2.04
EARNINGS TO COMBINED FIXED CHARGES
& PREFERRED STOCK DIVIDENDS RATIOS
- ----------------------------------
Excluding Interest on Deposits 4.05 4.31 4.13 4.37
Including Interest on Deposits 1.94 1.93 1.96 1.96
* The proportion deemed representative of the interest factor.
</TABLE>
<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, 1998.
</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-31-1997
<PERIOD-END> Jun-30-1998
<CASH> 7,329
<INT-BEARING-DEPOSITS> 1,900
<FED-FUNDS-SOLD> 1,167
<TRADING-ASSETS> 1,422
<INVESTMENTS-HELD-FOR-SALE> 5,787
<INVESTMENTS-CARRYING> 1,030
<INVESTMENTS-MARKET> 1,001
<LOANS> 39,049
<ALLOWANCE> 646
<TOTAL-ASSETS> 63,003
<DEPOSITS> 43,408
<SHORT-TERM> 7,622
<LIABILITIES-OTHER> 2,719
<LONG-TERM> 2,003
0
1
<COMMON> 3,541
<OTHER-SE> 1,426
<TOTAL-LIABILITIES-AND-EQUITY> 63,003
<INTEREST-LOAN> 695
<INTEREST-INVEST> 88
<INTEREST-OTHER> 87
<INTEREST-TOTAL> 870
<INTEREST-DEPOSIT> 343
<INTEREST-EXPENSE> 462
<INTEREST-INCOME-NET> 408
<LOAN-LOSSES> 5
<SECURITIES-GAINS> 46
<EXPENSE-OTHER> 472
<INCOME-PRETAX> 492
<INCOME-PRE-EXTRAORDINARY> 295
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 295
<EPS-PRIMARY> $0.79
<EPS-DILUTED> $0.75
<YIELD-ACTUAL> 3.28
<LOANS-NON> 182
<LOANS-PAST> 89
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 641
<CHARGE-OFFS> 19
<RECOVERIES> 10
<ALLOWANCE-CLOSE> 646
<ALLOWANCE-DOMESTIC> 490
<ALLOWANCE-FOREIGN> 47
<ALLOWANCE-UNALLOCATED> 109
</TABLE>
