<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 19, 1999
THE BANK OF NEW YORK COMPANY, INC.
----------------------------------
(exact name of registrant as specified in its charter)
NEW YORK
--------
(State or other jurisdiction of incorporation)
001-06152 13-2614959
--------- ----------
(Commission file number) (I.R.S. employer identification number)
One Wall Street, New York, NY 10286
----------------------------- -----
(Address of principal executive offices) (Zip code)
212-495-1784
------------
(Registrant's telephone number,
including area code)
<PAGE> 2
ITEM 5. Other Events
------------
First Quarter of 1999 Financial Results
---------------------------------------
On April 19, 1999, The Bank of New York Company, Inc. issued a press release
containing unaudited interim financial information and accompanying discussion
for the first quarter of 1999. 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 1999 contained in the press release dated
April 19, 1999, 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 19, 1999
THE BANK OF NEW YORK COMPANY, INC.
(Registrant)
By: /s/ Thomas J. Mastro
-------------------------
Name: Thomas J. Mastro
Title: Comptroller
<PAGE> 4
EXHIBIT INDEX
-------------
Exhibit No. Description
- ----------- -----------
99 Unaudited interim financial information and accompanying
discussion for the first quarter of 1999 contained in the
press release dated April 19, 1999, of The Bank of New York
Company, Inc.
<PAGE> 1
EXHIBIT 99
The Bank of New York Company, Inc. NEWS
- ------------------------------------------------------------------------------
One Wall Street, New York, NY 10286
-----------------------------------
Contact:
PUBLIC AND INVESTOR REALATIONS
IMMEDIATELY Frank H. Scarangella, SVP
- ----------- (212) 635-1590
Nicholas C. Silitch, SVP
(212) 635-1591
Gregory A. Burton, AVP
(212) 635-1578
THE BANK OF NEW YORK COMPANY, INC. REPORTS
Record First Quarter Diluted E.P.S. of 41 Cents, Up 14%
Securities Servicing Fee Revenue Up 27%
Return on Average Common Equity of 24.48%
Return on Average Assets of 1.94%
NEW YORK, N.Y., April 19, 1999 -- The Bank of New York Company, Inc. (NYSE:
BK) reports record first quarter diluted earnings per share of 41 cents, up
14% from the 36 cents earned in the first quarter of 1998. Net income for the
first quarter was a record $316 million, up 12% from the $284 million earned
in the same period last year.
"Substantial revenue growth in fee based businesses, continued emphasis
on expense control, and ongoing capital management produced superior earnings
performance", said Thomas A. Renyi, Chairman and CEO. Significant new business
and active markets worldwide drove securities servicing fees up 27%. Trust and
investment grew 16% benefiting from strong investment performance, new
business wins, and record U.S. equity markets. As a result, fee based revenue
and noninterest income contributed 59% of revenues, reflecting continued
concentration on fee based businesses.
In securities servicing, revenue growth was led by global custody, mutual
funds, securities lending, ADRs and execution services. Domestic and global
<PAGE> 2
custody continued to gain market share and momentum from new business wins as
assets under custody grew by 27% from a year ago reaching $5.2 trillion at
quarter end. Trust and investment's results were due to strong investment
performance which attracted new business. Continued focus on cost control was
evident, as noninterest expense for the quarter was flat compared with the
fourth quarter of 1998 and the efficiency ratio improved to 50.3%. As part of
its capital management program, the Company repurchased 9 million shares under
its 18 million share buyback authorization.
Return on average common equity for the first quarter of 1999 was 24.48%
exceeded only by the record 24.99% in the first quarter of 1998. Return on
average assets for the first quarter of 1999 was 1.94% compared with 1.93% in
the first quarter of 1998.
Net interest income on a taxable equivalent basis for the first quarter
decreased to $436 million from $451 million in the fourth quarter of 1998, as
effective balance sheet management reduced levels of liquid deposits and
investments associated with the securities servicing business.
Fees from the Company's securities servicing businesses reached $291
million for the first quarter, up 27% compared with the corresponding period
of the prior year. All areas contributed to strong internal growth of 16% with
international activities including global custody, securities lending, and
ADRs especially strong.
In cash processing, revenues from cash management were up 14% driven by
continued cross selling to the Company's securities servicing customers.
Trade finance revenues were up 13% from a year ago as recovery in world
markets continues. Fees from funds transfer grew by 6% from the previous
year, the result of continued market share gains as CHIPS payment systems
volumes were flat for the quarter. Overall, cash processing fees grew by 10%
from a year ago reaching $69 million.
Trust and investment fees were $58 million for the quarter, an increase
of 16% over last year driven by strong results from short term money
management and portfolio transition services. Foreign exchange and other
trading revenues were $42 million compared with $51 million in the fourth
<PAGE> 3
quarter of 1998 and $46 million last year. Declines were due to reduced
levels of customer trading.
Tangible diluted earnings per share (earnings before the amortization of
goodwill and intangibles) were 43 cents per share in 1999, up 13% from $0.38
cents per share in the first quarter of 1998. On the same basis, tangible
return on average common equity was 37.28% in 1999 compared with 37.72% in
1998; and tangible return on average assets was 2.11% in 1999 compared with
2.10% in 1998.
The Company's estimated Tier 1 capital and Total capital ratios remained
strong at 7.87% and 11.91% at March 31, 1999 compared with 7.89% and 11.90% at
December 31, 1998, and 7.25% and 11.43% at March 31, 1998. Tangible common
equity as a percent of total assets was 5.88% at March 31, 1999 compared with
6.25% at December 31, 1998 and 5.68% one year ago. The leverage ratio was
7.68% at March 31, 1999 compared with 7.46% at December 31, 1998 and 7.33% one
year ago.
NET INTEREST INCOME
<TABLE>
<CAPTION>
1st 4th 1st
Quarter Quarter Quarter
------- ------- -------
(In millions) 1999 1998 1998
---- ---- ----
<S> <C> <C> <C>
Net Interest Income $436 $451 $404
Net Interest Rate
Spread 2.29% 2.22% 2.24%
Net Yield on Interest-
Earning Assets 3.18 3.20 3.33
</TABLE>
Net interest income on a taxable equivalent basis was $436 million in the
first quarter of 1999 compared with $451 million in the fourth quarter of 1998
and $404 million in the first quarter of 1998. The net interest rate spread
was 2.29% in the first quarter of 1999, compared with 2.22% in the fourth
quarter of 1998 and 2.24% one year ago. The net yield on interest-earning
assets was 3.18% compared with 3.20% in the fourth quarter of 1998 and 3.33%
in last year's first quarter.
The decrease in net interest income and the improved net interest rate
spread from the fourth quarter were due to aggressive balance sheet
<PAGE> 4
management, which reduced highly liquid, lower yielding assets generated by
the Company's securities servicing businesses. The decline in the net interest
rate yield from the first and fourth quarters of 1998 was due to the Company's
share repurchase program.
NONINTEREST INCOME
<TABLE>
<CAPTION>
1st 4th 1st
Quarter Quarter Quarter
------- ------- -------
(In millions) 1999 1998 1998
---- ---- ----
<S> <C> <C> <C>
Processing Fees
Securities $291 $274 $230
Cash 69 63 63
---- ---- ----
360 337 293
Trust and Investment Fees 58 54 50
Service Charges and Fees 85 79 81
Foreign Exchange and
Other Trading Activities 42 51 46
Securities Gains 50 50 28
Other 30 26 55
---- ---- ----
Total Noninterest Income $625 $597 $553
==== ==== ====
</TABLE>
Total noninterest income reached $625 million, growing 5% from the fourth
quarter of 1998 and 13% from the first quarter of 1998. Securities servicing
fees increased 27% to $291 million compared with $230 million a year ago.
Strong internal growth across all areas reached 16%, with remaining growth
coming from acquisitions. First quarter service charges and fees of $85
million were up from $81 million in the first quarter of 1998. Revenues from
foreign exchange and other trading activities were $42 million in the first
quarter of 1999 compared with $46 million last year. The Company reported $50
million of securities gains in the first quarter, the same as in the fourth
quarter of 1998, and up from $28 million a year ago. Other income in the
first quarter of 1998 included $29 million from the sale of the Company's
property at 48 Wall Street.
NONINTEREST EXPENSE AND INCOME TAXES
Continued adherence to expense control resulted in total noninterest
expense for the quarter of $509 million, flat with $507 million in the fourth
<PAGE> 5
quarter of 1998. The increase of 9% from $467 million in the same period last
year was principally due to acquisitions. Noninterest expense for the first
quarter included $6 million related to making computer systems Year 2000
compliant compared with $8 million in last year's fourth and first quarters.
The efficiency ratio for the first quarter of 1999 was 50.3% compared
with 50.8% in the fourth quarter and 50.2% for the first quarter of 1998.
The effective tax rate for the first quarter of 1999 was 34.9% compared
with 36.1% last year.
NONPERFORMING ASSETS
<TABLE>
<CAPTION>
Change
3/31/99 vs.
(Dollars in millions) 3/31/99 12/31/98 12/31/98
-------- -------- --------
<S> <C> <C> <C>
Loans:
Commercial Real Estate $ 4 $ 26 $ (22)
Other Commercial 103 65 38
Foreign 66 53 13
Regional Commercial 35 35 -
----- ----- -----
Total Loans 208 179 29
Other Real Estate 14 14 -
----- ----- -----
Total $ 222 $ 193 $ 29
===== ===== =====
Nonperforming Assets Ratio 0.5% 0.5%
Allowance/Nonperforming Loans 303.6 355.5
Allowance/Nonperforming Assets 284.3 328.9
</TABLE>
Nonperforming assets totaled $222 million at March 31, 1999, compared
with $193 million at December 31, 1998, an increase of $29 million. Commercial
real estate nonperforming loans declined primarily due to the sale of a
property in New Jersey. A $44 million loan to a mortgage bank and $25 million
of Russian loans became nonperforming in the first quarter of 1999.
<PAGE> 6
CREDIT LOSS PROVISION AND NET CHARGE-OFFS
<TABLE>
<CAPTION>
1st 4th 1st
Quarter Quarter Quarter
------- ------- -------
(In millions) 1999 1998 1998
---- ---- ----
<S> <C> <C> <C>
Provision $ 15 $ 5 $ 5
==== ==== ====
Net(Charge-offs)Recoveries:
Commercial Real Estate (2) - 1
Other Commercial (7) (3) (3)
Consumer (1) (1) (1)
Foreign (9) (1) (1)
Other - (2) (1)
---- ---- ----
Total $(19) $ (7) $ (5)
==== ==== ====
Other Real Estate Expenses $ - $ - $ 1
</TABLE>
The allowance for credit losses was $632 million, or 1.59% of loans at
March 31, 1999 compared with $636 million, or 1.66% of loans at December 31,
1998 and $645 million, or 1.76% of loans at March 31, 1998. The ratio of the
allowance to nonperforming assets was 284.3% at March 31, 1999 compared with
328.9% at December 31, 1998 and 321.2% at March 31, 1998.
***************************
(Financial highlights and detailed financial statements are attached.
<PAGE> 7
THE BANK OF NEW YORK COMPANY, INC.
Financial Highlights
(Dollars in millions, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
1999 1998 Change
---- ---- ------
<S> <C> <C> <C>
For the Three Months Ended March 31:
- ---------------------------------------
Net Income $ 316 $ 284 11.5%
Per Common Share:
Basic $ 0.41 $ 0.38 7.9
Diluted 0.41 0.36 13.9
Cash Dividends Paid 0.14 0.13 7.7
Return on Average Common Shareholders'
Equity 24.48% 24.99%
Return on Average Assets 1.94 1.93
As of March 31:
- ---------------
Assets $64,913 $59,611 8.9%
Loans 39,746 36,743 8.2
Securities 5,960 6,859 -13.1
Deposits - Domestic 26,121 25,290 3.3
- Foreign 18,717 15,299 22.3
Long-Term Debt 2,189 1,959 11.7
Minority Interest - Preferred Securities 1,500 1,300 15.4
Preferred Shareholders' Equity 1 1 -
Common Shareholders' Equity 5,305 4,811 10.3
Common Shareholders' Equity Per Share 6.92 6.46 7.1
Market Value Per Share of Common Stock 35.94 31.41 14.4
Allowance for Credit Losses as a Percent
of Loans 1.59% 1.76%
Tier 1 Capital Ratio 7.87 7.25
Total Capital Ratio 11.91 11.43
Leverage Ratio 7.68 7.33
Tangible Common Equity Ratio 5.88 5.68
</TABLE>
<PAGE> 8
THE BANK OF NEW YORK COMPANY, INC.
Consolidated Statements of Income
(In millions, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
For the three
months ended
March 31,
1999 1998
---- ----
<S> <C> <C>
Interest Income
- ---------------
Loans $ 661 $ 670
Securities
Taxable 64 74
Exempt from Federal Income Taxes 10 14
----- -----
74 88
Deposits in Banks 64 42
Federal Funds Sold and Securities Purchased
Under Resale Agreements 53 30
Trading Assets 5 4
----- -----
Total Interest Income 857 834
----- -----
Interest Expense
- ----------------
Deposits 317 325
Federal Funds Purchased and Securities Sold
Under Repurchase Agreements 31 34
Other Borrowed Funds 48 48
Long-Term Debt 34 32
----- -----
Total Interest Expense 430 439
----- -----
Net Interest Income 427 395
- -------------------
Provision for Credit Losses 15 5
----- -----
Net Interest Income After Provision for
Credit Losses 412 390
----- -----
Noninterest Income
- ------------------
Processing Fees
Securities 291 230
Cash 69 63
----- -----
360 293
Trust and Investment Fees 58 50
Service Charges and Fees 85 81
Securities Gains 50 28
Other 72 101
----- -----
Total Noninterest Income 625 553
----- -----
Noninterest Expense
- -------------------
Salaries and Employee Benefits 312 283
Net Occupancy 41 41
Furniture and Equipment 23 20
Other 133 123
----- -----
Total Noninterest Expense 509 467
----- -----
Income Before Income Taxes 528 476
Income Taxes 184 172
Distribution on Trust Preferred Securities 28 20
----- -----
Net Income $ 316 $ 284
- ---------- ===== =====
Net Income Available to Common Shareholders $ 316 $ 284
- ------------------------------------------- ===== =====
Per Common Share Data:
- ----------------------
Basic Earnings $0.41 $0.38
Diluted Earnings 0.41 0.36
Cash Dividends Paid 0.14 0.13
Diluted Shares Outstanding 779 781
</TABLE>
<PAGE> 9
THE BANK OF NEW YORK COMPANY, INC.
Consolidated Balance Sheets
(Dollars in millions, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
---- ----
<S> <C> <C>
Assets
- ------
Cash and Due from Banks $ 4,546 $ 3,999
Interest-Bearing Deposits in Banks 4,785 4,504
Securities:
Held-to-Maturity 880 964
Available-for-Sale 5,080 5,451
------- -------
Total Securities 5,960 6,415
Trading Assets at Fair Value 1,661 1,637
Federal Funds Sold and Securities Purchased Under Resale
Agreements 1,935 3,281
Loans (less allowance for credit losses of $632 in 1999
and $636 in 1998) 39,114 37,750
Premises and Equipment 856 856
Due from Customers on Acceptances 1,213 946
Accrued Interest Receivable 331 355
Other Assets 4,512 3,760
------- -------
Total Assets $64,913 $63,503
======= =======
Liabilities and Shareholders' Equity
- ------------------------------------
Deposits
Noninterest-Bearing (principally domestic offices) $10,432 $11,480
Interest-Bearing
Domestic 15,800 16,091
Foreign Offices 18,606 17,061
------- -------
Total Deposits 44,838 44,632
Federal Funds Purchased and Securities
Sold Under Repurchase Agreements 3,189 1,571
Other Borrowed Funds 3,632 4,536
Acceptances Outstanding 1,213 951
Accrued Taxes and Other Expenses 2,190 2,183
Accrued Interest Payable 160 188
Other Liabilities 696 608
Long-Term Debt 2,189 2,086
------- -------
Total Liabilities 58,107 56,755
------- -------
Guaranteed Preferred Beneficial Interests in the
Company's Junior Subordinated Deferrable Interest
Debentures 1,500 1,300
------- -------
Shareholders' Equity
Class A Preferred Stock - par value $2.00
per share, authorized 5,000,000 shares,
outstanding 19,730 shares in 1999 and
22,820 shares in 1998 1 1
Common Stock-par value $7.50 per share,
authorized 1,600,000,000 shares, issued
973,922,006 shares in 1999 and
970,767,767 shares in 1998 7,304 7,281
Additional Capital 171 142
Retained Earnings 1,528 1,318
Accumulated Other Comprehensive Income 254 312
------- -------
9,258 9,054
Less: Treasury Stock (205,233,723 shares in 1999
and 197,648,459 shares in 1998), at cost 3,939 3,593
Loan to ESOP (1,801,003 shares in 1999
and 1998), at cost 13 13
------- -------
Total Shareholders' Equity 5,306 5,448
------- -------
Total Liabilities and Shareholders' Equity $64,913 $63,503
======= =======
</TABLE>
<PAGE> 10
THE BANK OF NEW YORK COMPANY, INC.
Average Balances and Rates on a Taxable Equivalent Basis
(Preliminary)
(Dollars in millions)
<TABLE>
<CAPTION>
For the three months For the three months
ended March 31, 1999 ended March 31, 1998
------------------------------ ------------------------------
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) $ 5,294 $ 64 4.90% $ 2,852 $ 42 6.05%
Federal Funds Sold and Securities
Purchased Under Resale Agreements 4,513 53 4.76 2,318 30 5.25
Loans
Domestic Offices 19,817 362 7.40 19,022 371 7.91
Foreign Offices 19,504 299 6.22 17,623 300 6.89
------- ----- ------- -----
Total Loans 39,321 661 6.82 36,645 671 7.42
------- ----- ------- -----
Securities
U.S. Government Obligations 2,592 37 5.72 3,424 48 5.76
U.S. Government Agency Obligations 857 13 6.33 611 10 6.43
Obligations of States and
Political Subdivisions 626 12 7.70 663 14 8.23
Other Securities, including
Trading Securities 2,335 26 4.45 2,727 28 4.15
------- ----- ------- -----
Total Securities 6,410 88 5.53 7,425 100 5.44
------- ----- ------- -----
Total Interest-Earning Assets 55,538 866 6.32% 49,240 843 6.94%
----- -----
Allowance for Credit Losses (635) (644)
Cash and Due from Banks 3,075 3,541
Other Assets 8,034 7,467
------- -------
TOTAL ASSETS $66,012 $59,604
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Interest-Bearing Deposits
Money Market Rate Accounts $ 5,176 52 4.10% $ 4,721 54 4.68%
Savings 7,793 42 2.20 7,672 49 2.57
Certificates of Deposit
$100,000 & Over 657 8 4.92 668 9 5.51
Other Time Deposits 2,255 25 4.41 2,309 28 4.86
Foreign Offices 18,596 190 4.13 14,352 185 5.23
------- ----- ------- -----
Total Interest-Bearing Deposits 34,477 317 3.72 29,722 325 4.43
Federal Funds Purchased and
Securities Sold Under Repurchase
Agreements 2,989 31 4.23 2,954 34 4.63
Other Borrowed Funds 3,627 48 5.32 3,376 48 5.81
Long-Term Debt 2,126 34 6.45 1,840 32 6.93
------- ----- ------- -----
Total Interest-Bearing Liabilities 43,219 430 4.03% 37,892 439 4.70%
----- -----
Noninterest-Bearing Deposits 10,424 10,020
Other Liabilities 5,682 6,062
Minority Interest-Preferred Securities 1,447 1,027
Preferred Stock 1 1
Common Shareholders' Equity 5,239 4,602
------- -------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $66,012 $59,604
======= =======
Net Interest Earnings
and Interest Rate Spread $ 436 2.29% $ 404 2.24%
===== ==== ===== ====
Net Yield on Interest-Earning Assets 3.18% 3.33%
==== ====
</TABLE>
