<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 March 31, 2000
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 737,523,395 shares as of April 30, 2000.
<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
March 31, 2000 and December 31, 1999 3
Consolidated Statements of Income
For the Three Months Ended March 31, 2000 and 1999 4
Consolidated Statement of Changes In
Shareholders' Equity For the Three
Months Ended March 31, 2000 5
Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 2000 and 1999 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
Item 3. Quantitative and Qualitative Disclosures about Market
Risk. (See "Trading Activities") 12
PART 2. OTHER INFORMATION
- --------------------------
Item 1. Legal Proceedings 21
Item 6. Exhibits and Reports on Form 8-K 22
SIGNATURE 23
<PAGE 3>
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
- -----------------------------
THE BANK OF NEW YORK COMPANY, INC.
Consolidated Balance Sheets
(Dollars in millions, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
---- ----
<S> <C> <C>
Assets
- ------
Cash and Due from Banks $ 3,873 $ 3,276
Interest-Bearing Deposits in Banks 6,225 6,850
Securities:
Held-to-Maturity (fair value of $850 in 2000
and $839 in 1999) 875 871
Available-for-Sale 6,080 6,028
------- -------
Total Securities 6,955 6,899
Trading Assets at Fair Value 8,789 8,715
Federal Funds Sold and Securities Purchased Under Resale
Agreements 2,629 5,383
Loans (less allowance for credit losses of $600 in 2000
and $595 in 1999) 40,057 36,952
Premises and Equipment 894 893
Due from Customers on Acceptances 969 739
Accrued Interest Receivable 356 319
Other Assets 5,294 4,730
------- -------
Total Assets $76,041 $74,756
======= =======
Liabilities and Shareholders' Equity
- ------------------------------------
Deposits
Noninterest-Bearing (principally domestic offices) $13,113 $12,162
Interest-Bearing
Domestic Offices 15,548 16,319
Foreign Offices 26,775 27,270
------- -------
Total Deposits 55,436 55,751
Federal Funds Purchased and Securities
Sold Under Repurchase Agreements 1,440 1,318
Other Borrowed Funds 4,710 3,825
Acceptances Outstanding 970 740
Accrued Taxes and Other Expenses 2,696 2,644
Accrued Interest Payable 137 131
Other Liabilities 1,099 893
Long-Term Debt 2,829 2,811
------- -------
Total Liabilities 69,317 68,113
------- -------
Company-Obligated Mandatory Redeemable Preferred
Trust Securities of Subsidiary Trust Holding Solely
Junior Subordinated Debentures 1,500 1,500
------- -------
Shareholders' Equity
Class A Preferred Stock - par value $2.00 per share,
authorized 5,000,000 shares, outstanding 16,787 shares
in 2000 and 16,787 shares in 1999 1 1
Common Stock-par value $7.50 per share,
authorized 1,600,000,000 shares, issued
980,496,116 shares in 2000 and
977,961,165 shares in 1999 7,354 7,335
Additional Capital 355 315
Retained Earnings 2,841 2,620
Accumulated Other Comprehensive Income 31 30
------- -------
10,582 10,301
Less: Treasury Stock (241,961,139 shares in 2000
and 237,747,242 shares in 1999), at cost 5,348 5,148
Loan to ESOP (1,444,005 shares in 2000
and 1,444,005 in 1999), at cost 10 10
------- -------
Total Shareholders' Equity 5,224 5,143
------- -------
Total Liabilities and Shareholders' Equity $76,041 $74,756
======= =======
<FN>
- ----------------------------------------------------------------------------------------
Note: The balance sheet at December 31, 1999 has been derived from the audited financial
statements at that date.
See accompanying Notes to Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE 4>
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,
2000 1999
---- ----
<S> <C> <C>
Interest Income
- ---------------
Loans $ 716 $ 661
Securities
Taxable 80 64
Exempt from Federal Income Taxes 15 10
------ -----
95 74
Deposits in Banks 71 64
Federal Funds Sold and Securities Purchased
Under Resale Agreements 49 53
Trading Assets 102 5
------ -----
Total Interest Income 1,033 857
------ -----
Interest Expense
- ----------------
Deposits 472 317
Federal Funds Purchased and Securities Sold
Under Repurchase Agreements 36 31
Other Borrowed Funds 29 48
Long-Term Debt 49 34
------ -----
Total Interest Expense 586 430
------ -----
Net Interest Income 447 427
- -------------------
Provision for Credit Losses 20 15
------ -----
Net Interest Income After Provision for
Credit Losses 427 412
------ -----
Noninterest Income
- ------------------
Servicing Fees
Securities 372 291
Cash 66 69
------ -----
438 360
Private Client Services and
Asset Management Fees 70 58
Service Charges and Fees 90 85
Securities Gains 40 50
Other 99 72
------ -----
Total Noninterest Income 737 625
------ -----
Noninterest Expense
- -------------------
Salaries and Employee Benefits 359 312
Net Occupancy 45 41
Furniture and Equipment 26 23
Other 172 133
------ -----
Total Noninterest Expense 602 509
------ -----
Income Before Income Taxes 562 528
Income Taxes 196 184
Distribution on Preferred Trust Securities 28 28
------ -----
Net Income $ 338 $ 316
- ---------- ====== =====
Net Income Available to Common Shareholders $ 338 $ 316
- ------------------------------------------- ====== =====
Per Common Share Data:
- ----------------------
Basic Earnings $0.46 $0.41
Diluted Earnings 0.46 0.41
Cash Dividends Paid 0.16 0.14
Diluted Shares Outstanding 741 779
<FN>
- ----------------------------------------------------------------------------------
See accompanying Notes to Consolidated Financial Statements
</FN>
</TABLE>
<PAGE 5>
<TABLE>
<CAPTION>
THE BANK OF NEW YORK COMPANY, INC.
Consolidated Statement of Changes in Shareholders' Equity
For the three months ended March 31, 2000
(In millions)
(Unaudited)
<S> <C>
Preferred Stock
Balance, January 1 $ 1
-------
Balance, March 31 1
-------
Common Stock
Balance, January 1 7,335
Issuances in Connection with Employee Benefit Plans 19
-------
Balance, March 31 7,354
-------
Additional Capital
Balance, January 1 315
Issuances in Connection with Employee Benefit Plans 40
-------
Balance, March 31 355
-------
Retained Earnings
Balance, January 1 2,620
Net Income 338
Cash Dividends
Common Stock (117)
-------
Balance, March 31 2,841
-------
Accumulated Other Comprehensive Income
Securities Valuation Allowance
Balance, January 1 58
Change in Fair Value of Securities Available-for-Sale,
Net of $10 Million in Taxes 19
Reclassification Adjustment, Net of ($11) Million in Taxes (20)
-------
Balance, March 31 57
-------
Foreign Currency Items
Balance, January 1 (28)
Foreign Currency Translation Adjustment,
Net of $1 Million in Taxes 2
-------
Balance, March 31 (26)
-------
Less Treasury Stock
Balance, January 1 5,148
Issued (46)
Acquired 246
-------
Balance, March 31 5,348
-------
Less Loan to ESOP
Balance, January 1 10
-------
Balance, March 31 10
-------
Total Shareholders' Equity, March 31 $ 5,224
=======
<FN>
- ------------------------------------------------------------------------------------
Comprehensive Income for the three months ended March 31, 2000 and 1999 was $339
million and $258 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 three months
Ended March 31,
2000 1999
---- ----
<S> <C> <C>
Operating Activities
Net Income $ 338 $ 316
Adjustments to Determine Net Cash (Used) Provided by
Operating Activities:
Provision for Losses on Loans and Other Real Estate 21 15
Depreciation and Amortization 61 49
Deferred Income Taxes 122 122
Securities Gains (40) (50)
Change in Trading Activities (533) (6)
Change in Accruals and Other, Net (290) (154)
------ ------
Net Cash (Used) Provided by Operating Activities (321) 292
------ ------
Investing Activities
Change in Interest-Bearing Deposits in Banks 413 (369)
Purchases of Securities Held-to-Maturity (69) (89)
Maturities of Securities Held-to-Maturity 57 162
Purchases of Securities Available-for-Sale (820) (752)
Sales of Securities Available-for-Sale 521 403
Maturities of Securities Available-for-Sale 213 53
Net Principal Disbursed on Loans to Customers (3,299) (1,513)
Sales of Loans and Other Real Estate 117 27
Change in Federal Funds Sold and Securities
Purchased Under Resale Agreements 2,754 1,345
Purchases of Premises and Equipment (19) (34)
Acquisitions, Net of Cash Acquired (93) (27)
Proceeds from the Sale of Premises and Equipment - 20
Other, Net (91) 31
------ ------
Net Cash (Used) by Investing Activities (316) (743)
------ ------
Financing Activities
Change in Deposits (72) 406
Change in Federal Funds Purchased and Securities
Sold Under Repurchase Agreements 122 1,618
Change in Other Borrowed Funds 1,347 (905)
Proceeds from the Issuance of Preferred Trust Securities - 200
Proceeds from the Issuance of Long-Term Debt 15 100
Issuance of Common Stock 105 88
Treasury Stock Acquired (246) (382)
Cash Dividends Paid (117) (106)
------ ------
Net Cash Provided by Financing Activities 1,154 1,019
------ ------
Effect of Exchange Rate Changes on Cash 80 (21)
------ ------
Change in Cash and Due From Banks 597 547
Cash and Due from Banks at Beginning of Period 3,276 3,999
------ ------
Cash and Due from Banks at End of Period $3,873 $4,546
====== ======
- ----------------------------------------------------------------------------
Supplemental Disclosure of Cash Flow Information
Cash Paid During the Period for:
Interest $ 578 $ 458
Income Taxes 15 3
Noncash Investing Activity
(Primarily Foreclosure of Real Estate) - 1
<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. Acquisitions and Dispositions
-----------------------------
On January 4, 2000, the Company completed the acquisition of certain
assets of Institutional Securities Trading LLC (IST). IST is a commission
recapture and third-party services firm primarily serving Taft-Hartley
organizations and other plan sponsors. On April 19, 2000, the Company
announced that it has reached a definitive agreement to purchase certain
assets of Global Execution Network Associates, Inc. (GENA). GENA is a U.S.
based broker-dealer, specializing in quantitative and program equity trading
in 52 markets globally. GENA's clients are both U.S. and U.K. institutional
investors. The acquisition will significantly enhance the Company's non-dollar
trading capabilities for the Company's institutional clients worldwide and
furthers the Company's strategy to be a recognized leader in global
institutional agency brokerage.
In February 2000 the Company announced that it has signed a definitive
agreement to acquire the correspondent clearing business of SG Cowen
Securities Corporation. This transaction supports the Company's ongoing
strategy of growth in the correspondent clearing business. In April 2000, the
Company announced that it has signed a definitive agreement to acquire BHF
Securities Corporation, a leading provider of domestic and international
correspondent clearing services.
On March 27, 2000, the Company acquired the corporate trust business of
Harris Trust and Savings Bank located in Chicago, Illinois. The transaction
involves the transfer of approximately 1,700 trustee and agency appointments
for corporate and municipal issues of debt securities. Also during the
quarter, the Company announced that it had signed a definitive agreement to
acquire Sakura Trust Company's Corporate Trust business. The transaction is
expected to close during the second quarter.
On April 21, 2000, the Company completed the sale of its interest in
Banco Credibanco S.A. to Unibanco-Uniao de Bancos Brasileiros S.A
<PAGE 8>
3. Allowance for Credit Losses
---------------------------
Transactions in the allowance for credit losses are summarized as
follows:
Three months ended
March 31,
(In millions) 2000 1999
---- ----
Balance, Beginning of Period $595 $636
Charge-Offs (22) (22)
Recoveries 7 3
---- ----
Net Charge-Offs (15) (19)
Provision 20 15
---- ----
Balance, End of Period $600 $632
==== ====
4. Capital Transactions
--------------------
As of April 30, 2000, the Company has approximately 7 million common
shares remaining to repurchase under its share buyback programs.
5. New Accounting Pronouncements
-----------------------------
Effective January 1, 2001, 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 Financial Accounting
Standards Board ("FASB") continues to issue interpretative guidance related to
this standard. In addition, the FASB is considering an amendment to the
standard. As a result, the Company has not yet determined all of the effects
of this new accounting standard.
6. Earnings Per Share
------------------
The following table illustrates the computations of basic and diluted
earnings per share for the three months ended March 31, 2000 and 1999:
Three Months Ended
March 31,
(In millions, except per share amounts)
2000 1999
---- ----
Net Income $338 $316
Net Income Available to Common Shareholders $338 $316
Diluted Net Income $338 $316
==== ====
Basic Weighted Average Shares Outstanding 732 766
Employee Stock Options 9 13
---- ----
Diluted Weighted Average Shares Outstanding 741 779
==== ====
Basic Earnings Per Share: $0.46 $0.41
Diluted Earnings Per Share: 0.46 0.41
7. Commitments and Contingent Liabilities
--------------------------------------
In the ordinary course of business, there are various claims pending
against the Company and its subsidiaries. In the opinion of management,
liabilities arising from such claims, if any, would not have a material effect
upon the Company's consolidated financial statements.
<PAGE 9>
Item 2. Management's Discussion and Analysis of Financial Condition and
- ------------------------------------------------------------------------
Results of Operations
- ---------------------
The Company's actual results of future operations may differ from those
set forth in certain forward-looking statements contained herein. Refer to
further discussion under the heading "Forward Looking Statements".
The Company's reported first quarter diluted earnings per share were a
record 46 cents, up 12% from the 41 cents earned in the first quarter of 1999.
Net income for the first quarter was a record $338 million, up 7% from the
$316 million earned in the same period last year. The prior period included
the results of BNY Financial Corporation ("BNYFC") which was divested in the
third quarter of 1999.
The Company's continued gains in global market share, and the increased
pace of investment activities world wide resulted in all areas of securities
servicing exceeding expectations. The strategy of offering an industry leading
array of products across multiple markets, combined with favorable global
market activity fueled strong revenue growth in securities servicing and
fiduciary services, producing record results for the first quarter.
In securities servicing, fee revenues increased to $372 million or 28%
for the quarter, while foreign exchange and other trading increased to $76
million or 80%, with both benefiting from the surge in global trading volumes
and new business wins. Private client services and asset management fees grew
21%, led by new business growth and continued strong investment performance,
as well as the acquisition of Estabrook Capital Management, Inc. The Company's
continued focus on fee based businesses resulted in noninterest income growing
to 62% of total revenues in the first quarter, up from 59% in the first
quarter a year ago.
Return on average common equity for the first quarter of 2000 was a
record 27.07% compared with 25.98% and 24.48% in the fourth and first quarters
of 1999, respectively. Return on average assets for the first quarter of 2000
was 1.78% compared with 1.84% and 1.94% in the fourth and first quarters of
1999, respectively.
Fees from the Company's securities servicing businesses reached $372
million for the first quarter compared with $291 million in the prior year.
Significant new business and continued expansion in existing clients'
portfolios resulted in assets under custody reaching $6.7 trillion for the
quarter. Fee revenue was strong across all product lines with particular
strength in global custody, ADR's, and global execution and clearing services.
Private client services and asset management fees were $70 million for
the quarter, up a strong 21% over last year, driven by strong performance in
BNY Asset Management, combined with the positive impact of the Estabrook
acquisition.
For the first quarter of 2000, fees in global payment services were $66
million. Revenues from cash management were up 12% from last year's first
quarter, driven by significant new deposit and disbursement service business
with the Company's specialized industries customers. Revenues from funds
transfer grew by 10%, the result of additional electronic payment business
received from foreign banks and domestic clients in the on-line brokerage
industries. Fees in cash management and funds transfer were up only slightly
compared with last year's first quarter due to customers' expanded use of
compensating balances in lieu of fees in a rising rate environment. Trade
finance fees were down from a year ago primarily due to the sale of BNYFC and
reduced pricing in the Asian and Latin American markets evidencing greater
economic stability in those regions.
<PAGE 10>
Foreign exchange and other trading revenues for the quarter increased 36%
versus the fourth quarter and 80% versus the first quarter of last year to a
record $76 million driven by continued cross selling to the Company's global
custody clients and greater market volatility. Foreign exchange revenues from
the Company's European based securities servicing operations were particularly
strong, complemented by the recent Royal Bank of Scotland Trust Bank ("RBSTB")
acquisition.
Net interest income on a taxable equivalent basis for the first quarter
increased to $460 million from $453 million in the fourth quarter of 1999.
Tangible diluted earnings per share (earnings before the amortization of
goodwill and intangibles) were 48 cents per share in the first quarter of
2000, up from 43 cents per share in the first quarter of 1999. On the same
basis, tangible return on average common equity was 43.03% in the first
quarter of 2000 compared with 37.28% in 1999; and tangible return on average
assets was 1.93% in the first quarter of 2000 compared with 2.11% in 1999.
Amortization of intangibles for the first quarter of 2000 was $28 million
compared with $26 million in the first quarter of 1999.
CAPITAL
The Company's estimated Tier 1 capital and Total capital ratios were
7.39% and 11.50% at March 31, 2000 compared with 7.51% and 11.67% at December
31, 1999, and 7.84% and 11.86% at March 31, 1999. The leverage ratio was 6.66%
at March 31, 2000 compared with 7.20% at December 31, 1999 and 7.69% one year
ago. The Company's tangible common equity as a percent of total assets was
4.74% at March 31, 2000 compared with 4.79% at December 31, 1999 and 5.88% at
March 31, 1999. The decline in the capital ratios reflects growth in the
Company's securities servicing businesses and the acquisition of RBSTB, which
brought approximately $10 billion in highly liquid, short-term assets and
liabilities. In the first quarter of 2000, the Company repurchased
approximately 6 million shares under its common stock repurchase programs.
LIQUIDITY
The Company maintains its liquidity through the management of its assets
and liabilities, utilizing worldwide financial markets. The diversification of
liabilities reflects the flexibility of the Company's funding sources under
changing market conditions. Stable core deposits, including demand, retail
time, and trust deposits from processing businesses, are generated through the
Company's diversified network and managed with the use of trend studies and
deposit pricing. The use of derivative products such as interest rate swaps
and financial futures enhances liquidity through the issue of long-term
liabilities with limited exposure to interest rate risk. Liquidity also
results from the maintenance of a portfolio of assets, which can be easily
reduced, and the monitoring of unfunded loan commitments, thereby reducing
unanticipated funding requirements.
<PAGE 11>
NET INTEREST INCOME
<TABLE>
<CAPTION>
1st 4th 1st
Quarter Quarter Quarter
------- ------- -------
(In millions) 2000 1999 1999
---- ---- ----
<S> <C> <C> <C>
Net Interest Income $460 $453 $436
Net Interest Rate
Spread 1.96% 2.07% 2.29%
Net Yield on Interest
Earning Assets 2.89 3.02 3.18
</TABLE>
Net interest income on a taxable equivalent basis was $460 million in the
first quarter of 2000 compared with $453 million in the fourth quarter of 1999
and $436 million in the first quarter of 1999. The net interest rate spread
was 1.96% in the first quarter of 2000, compared with 2.07% in the fourth
quarter of 1999 and 2.29% one year ago. The net yield on interest-earning
assets was 2.89% compared with 3.02% in the fourth quarter of 1999 and 3.18%
in last year's first quarter.
The increase in net interest income and the decline in spread and yield
from the fourth quarter was primarily caused by growth in highly liquid but
lower yielding assets associated with the Company's securities servicing
business.
Interest income would have been increased by $3 million in both the first
quarters of 2000 and 1999 if loans on nonaccrual status at March 31, 2000 and
1999 had been performing for the entire quarter.
NONINTEREST INCOME
<TABLE>
<CAPTION>
1st 4th 1st
Quarter Quarter Quarter
------- ------- -------
(In millions) 2000 1999 1999
---- ---- ----
<S> <C> <C> <C>
Servicing Fees
Securities $372 $341 $291
Cash 66 65 69
---- ---- ----
438 406 360
Private Client Services and
Asset Management Fees 70 65 58
Service Charges and Fees 90 88 85
Foreign Exchange and
Other Trading Activities 76 56 42
Securities Gains 40 49 50
Other 23 22 30
---- ---- ----
Total Noninterest Income $737 $686 $625
==== ==== ====
</TABLE>
Securities servicing fees grew 28% reaching $372 million compared with
$291 million from a year ago reflecting strong internal growth and the
acquisition of RBSTB. Fees from private client services and asset management
were $70 million, up 21% from the first quarter of 1999. Securities gains were
$40 million, which compares to $49 million in the fourth quarter of 1999 and
$50 million a year ago.
<PAGE 12>
TRADING ACTIVITIES
The fair value and notional amounts of the Company's financial
instruments held for trading purposes at March 31, 2000 are as follows:
1st Quarter 2000
March 31, 2000 Average
---------------------------- -------------------
(In millions) Fair Value Fair Value
------------------ -------------------
Notional
Trading Account Amount Assets Liabilities Assets Liabilities
- --------------- -------- ------ ----------- ------ -----------
Interest Rate Contracts:
Futures and Forward
Contracts $33,219 $ 1 $ - $ 25 $ -
Swaps 99,649 1,263 1,001 1,318 959
Written Options 75,163 - 730 - 808
Purchased Options 39,666 69 - 71 -
Foreign Exchange Contracts:
Swaps 199 - - - -
Written Options 28,245 - 52 - 60
Purchased Options 31,343 103 - 112 -
Commitments to Purchase
and Sell Foreign Exchange 65,821 909 925 836 832
Securities 6,444 29 6,668 25
------ ------ ------ ------
Total Trading Account $8,789 $2,737 $9,030 $2,684
====== ====== ====== ======
The Company manages trading risk through a system of position limits,
a value at risk (VAR) methodology, based on a Monte Carlo simulation, 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. As the VAR
methodology does not evaluate risk attributable to extraordinary financial,
economic or other occurrences, the risk assessment process includes a
number of stress scenarios based upon the risk factors in the portfolio and
management's assessment of market conditions. Additional stress scenarios
based upon historic market events are also tested.
The following table indicates the calculated VAR amounts for the trading
portfolio for the periods indicated. During these periods, the daily trading
loss did not exceed the calculated VAR amounts on any given day.
<TABLE>
<CAPTION>
(In millions) 1st Quarter 2000 1st Quarter 1999
----------------------------------- -----------------------------------
Market Risk Average Minimum Maximum 03/31/00 Average Minimum Maximum 03/31/99
- ----------- ------- ------- ------- -------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest Rate $4.3 $2.7 $6.1 $5.2 $4.9 $2.1 $10.9 $4.7
Foreign Exchange 2.0 1.3 3.8 2.0 1.6 0.8 4.0 1.2
Overall Portfolio 6.3 4.4 8.8 7.2 6.5 3.7 12.1 5.9
</TABLE>
<PAGE 13>
NONINTEREST EXPENSE AND INCOME TAXES
Noninterest expense for the first quarter of 2000 was $602 million, up
from $571 million in the fourth quarter and $509 million in 1999. The increase
was principally due to acquisitions including RBSTB, which closed on October
31, 1999, as well as growth in the Company's securities servicing businesses,
including higher spending on technology projects.
The efficiency ratio for the first quarter of 2000 was 52.1% compared
with 52.3% in the fourth quarter of 1999 and 50.3% for the first quarter of
1999.
The effective tax rates for the first quarter of 2000 and 1999 were 34.8%
and 34.9%.
NONPERFORMING ASSETS
<TABLE>
<CAPTION>
Change
3/31/00 vs.
(Dollars in millions) 3/31/00 12/31/99 12/31/99
-------- -------- --------
<S> <C> <C> <C>
Loans:
Other Commercial 27 20 7
Foreign 63 63 -
Regional Commercial 29 30 (1)
Loans Available for Sale 32 33 (1)
----- ----- ---
Total Loans 151 146 5
Other Real Estate 8 12 (4)
----- ----- ---
Total $ 159 $ 158 $ 1
===== ===== ===
Nonperforming Assets Ratio 0.4% 0.4%
Allowance/Nonperforming Loans 398.2 407.7
Allowance/Nonperforming Assets 378.1 376.9
</TABLE>
Nonperforming assets totaled $159 million at March 31, 2000, compared
with $158 million at December 31, 1999, an increase of $1 million. At March
31, 2000, remaining credit exposures of loans available for sale totaled $389
million with outstandings of $275 million compared with $538 million and $318
million at December 31, 1999, respectively.
At March 31, 2000, impaired loans (nonaccrual loans over $1 million)
aggregated $96 million, of which $62 million exceeded their fair value by $30
million. Impaired loans at March 31, 1999, totaled $174 million, of which $145
million exceeded their fair value by $59 million. For the first quarters of
2000 and 1999, the average amounts of impaired loans were $96 million and $160
million. Interest income (cash received) on impaired loans was zero and $42
thousand for the first quarters of 2000 and 1999, respectively.
<PAGE 14>
CREDIT LOSS PROVISION AND NET CHARGE-OFFS
The provision for credit losses was $20 million in the first quarter of
2000 compared with $15 million in the first quarter of 1999.
<TABLE>
<CAPTION>
1st 4th 1st
Quarter Quarter Quarter
------- ------- -------
(In millions) 2000 1999 1999
---- ---- ----
<S> <C> <C> <C>
Provision $ 20 $ 15 $ 15
==== ==== ====
Net(Charge-offs)Recoveries:
Commercial Real Estate - 1 (2)
Other Commercial (13) (11) (7)
Consumer (1) (1) (1)
Foreign - (2) (9)
Other (1) (1) -
---- ---- ----
Total $(15) $(14) $(19)
==== ==== ====
Other Real Estate Expenses $ 1 $ - $ -
</TABLE>
The allowance for credit losses was $600 million, or 1.48% of loans at
March 31, 2000 compared with $595 million, or 1.58% of loans at December 31,
1999 and $632 million, or 1.59% of loans at March 31, 1999. The ratio of the
allowance to nonperforming assets was 378.1% at March 31, 2000 compared with
376.9% at December 31, 1999 and 284.3% at March 31, 1999.
Based on an evaluation of individual credits, historical credit losses,
and global economic factors, the Company has allocated its allowance for
credit losses as follows:
3/31/00 12/31/99 3/31/99
------- -------- -------
Real Estate 3% 4% 2%
Domestic Commercial and Industrial 79 78 82
Foreign 12 12 13
Unallocated 6 6 3
--- --- ---
100% 100% 100%
=== === ===
Such an allocation is inherently judgmental, and the entire allowance for
credit losses is available to absorb credit losses regardless of the nature of
the loss.
SEGMENT PROFITABILITY
Segment Data
The Company has an internal information system that produces performance
data for its four segments along product and service lines.
The Servicing and Fiduciary segment provides a broad array of fee based
services. This segment includes the Company's securities servicing, global
payment services, and private client services and asset management businesses.
Securities servicing includes global custody, securities clearance, mutual
funds, unit investment trust, securities lending, American Depositary
Receipts, corporate trust, stock transfer and execution services. Global
payment services products primarily relate to funds transfer, cash management
and trade finance. Private client services and asset management provide
traditional banking and trust services to affluent clients and asset
management to institutional and private clients.
<PAGE 15>
The Corporate Banking segment provides lending services, such as term
loans, lines of credit, asset based financings, and commercial mortgages, to
domestic and international commercial enterprises. Through BNY Capital
Markets, the Company provides syndicated loans, bond underwriting, private
placements of corporate debt and equity securities, and merger, acquisition,
and advisory services.
The Retail Banking segment includes consumer lending, residential
mortgage lending, and retail deposit services. The Company operates 352
branches in 22 counties in three states.
The Financial Markets segment includes trading of foreign exchange and
interest rate products, investing and leasing activities, and treasury
services to other segments.
The Company's segment data has been determined on an internal management
basis of accounting, other than the generally accepted accounting principles
used for consolidated financial reporting. These measurement principles ensure
that reported results of the segments track their economic performance.
Segment results are subject to restatement whenever improvements are made in
the measurement principles or organizational changes are made.
The measure of revenues and profit or loss by operating segment has been
adjusted to present segment data on a taxable equivalent basis. The provision
for credit losses allocated to each reportable segment is based on
management's judgment as to average credit losses that will be incurred in the
operations of the segment over a credit cycle of a period of years.
Management's judgment includes the following factors among others: historical
charge-off experience and the volume, composition and growth of the loan
portfolio. This method is different from that required under generally
accepted accounting principles as it anticipates future losses which are not
yet probable and therefore not recognizable under generally accepted
accounting principles. Assets and liabilities are match funded. Support and
other indirect expenses are allocated to segments based on general guidelines.
The segments contributed to the Company's profitability as follows:
<TABLE>
<CAPTION>
In Millions Servicing
and
For the Quarter Ended Fiduciary Corporate Retail Financial Reconciling Consolidated
March 31, 2000 Businesses Banking Banking Markets Items Total
- --------------------- ---------- --------- ------- --------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net Interest Income $ 164 $ 132 $ 128 $ 14 $ 9 $ 447
Provision for
Credit Losses - 28 1 - (9) 20
Noninterest Income 573 75 24 63 2 737
Noninterest Expense 385 53 73 18 73 602
------- ------- ------ ------- ------ -------
Income Before Taxes $ 352 $ 126 $ 78 $ 59 $ (53) $ 562
======= ======= ====== ======= ======= =======
Average Assets $16,033 $31,223 $4,537 $23,096 $1,649 $76,538
======= ======= ====== ======= ====== =======
</TABLE>
<TABLE>
<CAPTION>
In Millions Servicing
and
For the Quarter Ended Fiduciary Corporate Retail Financial Reconciling Consolidated
March 31, 1999 Businesses Banking Banking Markets Items Total
- --------------------- ---------- --------- ------- --------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net Interest Income $ 106 $ 169 $ 114 $ 29 $ 9 $ 427
Provision for
Credit Losses - 29 2 - (16) 15
Noninterest Income 447 86 21 49 22 625
Noninterest Expense 288 65 75 17 64 509
------ ------- ------ ------- ------- -------
Income Before Taxes $ 265 $ 161 $ 58 $ 61 $ (17) $ 528
====== ======= ====== ======= ======= =======
Average Assets $6,164 $32,556 $4,533 $21,188 $1,571 $66,012
====== ======= ====== ======= ====== =======
</TABLE>
<PAGE 16>
Segment Highlights
Servicing and Fiduciary Businesses
- ----------------------------------
Net interest income in the Servicing and Fiduciary segment was $164
million compared with $106 million in 1999. In the first quarter of 2000,
noninterest income was $573 million up from $447 million in 1999.
Fees from the Company's securities servicing businesses reached $372
million for the first quarter compared with $291 million in the prior year.
Significant new business and continued expansion in existing clients'
portfolios resulted in assets under custody reaching $6.7 trillion for the
quarter. Fee revenue was strong across all product lines with particular
strength in global custody, ADR's, and global execution and clearing services.
During the first quarter of 2000, the Company was appointed for 60% of all new
depository receipt programs.
Private client services and asset management fees were $70 million for
the quarter, up a strong 21% over last year, driven by strong performance in
BNY Asset Management, combined with the positive impact of the Estabrook
acquisition. Assets under management were $62.8 billion while assets under
administration were $32.4 billion at March 31, 2000.
For the first quarter of 2000, fees in global payment services were $66
million. Revenues from cash management were up 12% from last year's first
quarter, driven by significant new deposit and disbursement service business
with the Company's specialized industries customers. Revenues from funds
transfer grew by 10%, the result of additional electronic payment business
received from foreign banks and domestic clients in the on-line brokerage
industries. Fees in cash management and funds transfer were up only slightly
compared with last year's first quarter due to customers' expanded use of
compensating balances in lieu of fees in a rising rate environment. Trade
finance fees were down from a year ago primarily due to the sale of BNYFC and
reduced pricing in the Asian and Latin American markets evidencing greater
economic stability in those regions.
Net charge-offs in the Servicing and Fiduciary Businesses segment were
zero in the first quarters of 2000 and 1999. Noninterest expense for the first
quarter of 2000 was $385 million compared with $288 million in 1999. The rise
in noninterest expense is consistent with the increase in growth as well as
the added salary and other expenses from acquisitions.
Corporate Banking
- -----------------
The Corporate Banking segment's net interest income was $132 million in
the first quarter of 2000, down from last year's $169 million. The decline
reflects the sale of BNYFC.
The first quarter of 2000 provision for credit losses was $28 million
compared with $29 million last year. Net charge-offs in the Corporate Banking
segment were $14 million and $18 million in the first quarters of 2000 and
1999. Noninterest income was $75 million in the current year compared with $86
million last year. The decline is attributable to the sale of BNYFC partially
offset by a 13% increase in revenues associated with capital markets
activities and higher income from the Company's offshore banking subsidiaries.
Noninterest expense declined to $53 million from $65 million reflecting the
sale of BNYFC.
<PAGE 17>
Retail Banking
- --------------
In the Retail Banking segment, net interest income in the first quarter
of 2000 was $128 million as compared with $114 million in the first quarter of
1999. The increase reflects the higher value of demand deposits in an
increasing rate environment. Noninterest income increased in this same period
to $24 million from $21 million. Noninterest expense in the first quarter of
2000 was $73 million as compared with $75 million in the previous year's
period. Net charge-offs were $1 million in the first quarters of 2000 and
1999.
Financial Markets
- -----------------
In the Financial Markets segment, net interest income for the quarter was
$14 million compared with 1999's $29 million due to a decline in net interest
income from leasing activities reflecting higher interest rates. Noninterest
income was $63 million in the first quarter of 2000 up from $49 million in the
first quarter of 1999 reflecting growth in interest rate derivatives and
foreign exchange proprietary trading. Net charge-offs were zero in the first
quarters of 2000 and 1999.
Reconciling Items
- -----------------
Reconciling items for net interest income primarily relate to the
recording of interest income on a taxable equivalent basis, reallocation of
capital and the funding of goodwill. Reconciling items for noninterest expense
include $28 million and $26 million of amortization of intangibles in the
first quarters of 2000 and 1999, Year 2000 expenses, and corporate overhead.
The adjustment to the provision for credit losses reflects the difference
between the aggregate of the credit provision over a credit cycle for the
reportable segments and the Company's recorded provision. The reconciling
items for average assets consist of goodwill and other intangible assets.
YEAR 2000 READINESS DISCLOSURE
The Company's data processing systems transitioned to the start of the
Year 2000 without exhibiting any material problems. In addition to analysis,
remediation, and testing of the Company's systems, the Company's compliance
program focused on assessing the Year 2000 readiness of its global sub-
custodians, major service providers, correspondents, business partners, and
borrowers. The Company has not experienced any material problems due to the
Year 2000 performance of any significant third party. The Company's current
focus is to monitor continued performance, preparedness, and contingency
planning. While contingency planning has been defined as part of the Year 2000
compliance program, owing to the Company's continued exposure to potential Y2K
problems, all new measures have been incorporated into the Company's existing
Business Continuity Plans.
<PAGE 18>
INTRODUCTION OF THE EURO
In January 1999, eleven European countries adopted the euro as their
common legal currency. In the transition period from adoption through December
31, 2001, commerce may be conducted in either the euro or the former national
currencies.
The Company has adapted its information technology systems and business
practices to accommodate euro-denominated transactions. The introduction of
the euro currency may result in increased price transparency in the euro-area
countries as well as a loss of cross-currency trading in the former national
currencies, and may ultimately have profound political and financial
implications. Based on its knowledge at this time, the Company does not,
anticipate that the introduction of the euro will have a material effect on
the Company's financial condition or results of operations.
FORWARD LOOKING STATEMENTS
The information presented with respect to earnings growth, the Company's
plans and objectives in moving toward fee based business, legal proceedings,
and otherwise is forward looking information. Forward looking statements are
the Company's current estimates or expectations of future events or future
results. As such forward looking statements are subject to risks and
uncertainties that could cause actual results to differ materially from
projected results discussed in this Report. These include variations in
management projections or market forecasts and the actions that management
could take in response to these changes.
The Company or its executive officers and directors on behalf of the
Company, may from time to time make forward looking statements. When used in
this report, any press release or oral statements, the words "estimate",
"project", "anticipate", "expect", "intend", "believe", "plan", "goal", and
words of like import are intended to identify forward looking statements in
addition to statements specifically identified as forward looking statements.
These statements, projections or future plans, could be affected by a number
of factors that the Company is necessarily unable to predict with accuracy,
including future changes in interest rates, general credit quality, economic
activity, consumer behavior, government monetary policy, legislation and
regulation, competition, credit, market and operating risk, and loan demand.
In addition, the Company's future results of operations, discussions of future
plans and other forward looking statements contained in Management's
Discussion and Analysis and elsewhere in this Form 10-Q involve a number of
risks and uncertainties, including risks relating to the uncertainties created
by the enactment of the Gramm-Leach-Bliley Financial Modernization Act of
1999. As a result of variations in such factors, actual results may differ
materially from any forward looking statements.
Forward looking statements speak only as of the date they are made. The
Company will not update forward looking statements to reflect factual
assumptions, circumstances or events which have changed after a forward
looking statement was made.
<PAGE 19>
Government Monetary Policies
The Federal Reserve Board has the primary responsibility for monetary
policy; accordingly, its actions have an important influence on the demand for
credit and investments and the level of interest rates and thus on the
earnings of the Company.
Competition
The businesses in which the Company operates are very competitive.
Competition is provided by both unregulated and regulated financial services
organizations, whose products and services span the local, national, and
global markets in which the Company conducts operations.
Savings banks, savings and loan associations, and credit unions actively
compete for deposits, and money market funds and brokerage houses offer
deposit-like services. These institutions, as well as consumer and commercial
finance companies, national retail chains, factors, insurance companies and
pension trusts, are important competitors for various types of loans. Issuers
of commercial paper compete actively for funds and reduce demand for bank
loans. For personal and corporate trust services and investment counseling
services, insurance companies, investment counseling firms, and other business
firms and individuals offer active competition. A wide variety of domestic and
foreign companies compete for processing services.
<PAGE 20>
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, 2000 ended March 31, 1999
------------------------------ ------------------------------
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) $ 6,395 $ 71 4.47% $ 5,294 $ 64 4.90%
Federal Funds Sold and Securities
Purchased Under Resale Agreements 3,647 49 5.40 4,513 53 4.76
Loans
Domestic Offices 20,113 361 7.22 19,817 362 7.40
Foreign Offices 20,156 355 7.09 19,504 299 6.22
------- ----- ------- -----
Total Loans 40,269 716 7.15 39,321 661 6.82
------- ----- ------- -----
Securities
U.S. Government Obligations 2,774 42 6.08 2,592 37 5.72
U.S. Government Agency Obligations 826 14 6.62 857 13 6.33
Obligations of States and
Political Subdivisions 592 12 8.01 626 12 7.70
Other Securities, including
Trading Securities 9,614 142 5.93 2,335 26 4.45
------- ----- ------- -----
Total Securities 13,806 210 6.09 6,410 88 5.53
------- ----- ------- -----
Total Interest-Earning Assets 64,117 1,046 6.56% 55,538 866 6.32%
----- -----
Allowance for Credit Losses (609) (635)
Cash and Due from Banks 3,283 3,075
Other Assets 9,747 8,034
------- -------
TOTAL ASSETS $76,538 $66,012
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Interest-Bearing Deposits
Money Market Rate Accounts $ 5,522 65 4.75% $ 5,176 52 4.10%
Savings 7,647 47 2.46 7,793 42 2.20
Certificates of Deposit
$100,000 & Over 465 6 5.44 657 8 4.92
Other Time Deposits 2,204 26 4.73 2,255 25 4.41
Foreign Offices 27,691 328 4.75 18,596 190 4.13
------- ----- ------- -----
Total Interest-Bearing Deposits 43,529 472 4.36 34,477 317 3.72
Federal Funds Purchased and
Securities Sold Under Repurchase
Agreements 2,792 36 5.25 2,989 31 4.23
Other Borrowed Funds 1,996 29 5.80 3,627 48 5.32
Long-Term Debt 2,823 49 6.84 2,126 34 6.45
------- ----- ------- -----
Total Interest-Bearing Liabilities 51,140 586 4.60% 43,219 430 4.03%
----- -----
Noninterest-Bearing Deposits 11,291 10,424
Other Liabilities 7,587 5,682
Minority Interest-Preferred Securities 1,500 1,447
Preferred Stock 1 1
Common Shareholders' Equity 5,019 5,239
------- -------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $76,538 $66,012
======= =======
Net Interest Earnings
and Interest Rate Spread $ 460 1.96% $ 436 2.29%
===== ==== ===== ====
Net Yield on Interest-Earning Assets 2.89% 3.18%
==== ====
</TABLE>
<PAGE 21>
PART 2. OTHER INFORMATION
Item 1. Legal Proceedings
- --------------------------
The Company is cooperating with investigations being conducted by federal
and state law enforcement and bank regulatory authorities focusing on funds
transfer activities in certain accounts at BNY, principally involving wire
transfers from Russian and other sources in Eastern Europe, as well as certain
other matters involving BNY and its affiliates. The funds transfer
investigations center around accounts controlled by Peter Berlin, his wife,
Lucy Edwards (until discharged in September 1999, an officer of BNY), and
companies and persons associated with them. Berlin and Edwards have pleaded
guilty to various federal criminal charges.
On February 8, 2000, BNY entered into a written agreement with both the
Federal Reserve Bank of New York and the New York State Banking Department,
which imposed a number of reporting requirements and controls. Substantial
portions of these were in place on the date the agreement was signed.
Four purported shareholder derivative actions have been filed in
connection with these Russian related matters - - two in the United States
District Court for the Southern District of New York and two in the New York
Supreme Court, New York County - - against certain directors and officers of
the Company and BNY alleging that the defendants have breached their fiduciary
duties of due care and loyalty by aggressively pursuing business with Russian
banks and entities without implementing sufficient safeguards and failing to
supervise properly those responsible for that business. The actions seek, on
behalf of the Company and BNY, monetary damages from the defendants,
corrective action and attorneys' fees.
Additionally, on October 7, 1999, six alleged depositors of Joint Stock
Bank Inkombank ("Inkombank"), a Russian Bank, filed a purported class action
in the United States District Court for the Southern District of New York on
behalf of all depositors of Inkombank who lost their deposits when that bank
collapsed in 1998. The complaint, as subsequently amended, alleges that the
Company and BNY and their senior officers knew about, and aided and abetted
the looting of Inkombank by its principals. The amended complaint asserts
causes of action for conversion and aiding and abetting conversion under New
York law. In addition, the amended complaint states a claim under the
Racketeer Influenced and Corrupt Organizations Act ("RICO"). It seeks an
unspecified amount of damages believed to exceed $500 million, along with
punitive damages of $500 million, interest, costs, attorneys' fees, expert
fees, and other expenses. The amended compliant seeks a trebling of any RICO
damages. The Company and BNY moved to dismiss the amended complaint, and the
Court granted that motion with leave to replead. The Company and BNY believe
that the allegations of the amended complaint are without merit and intend to
defend the actions vigorously.
The Company does not expect that any of the foregoing civil actions will
have a material impact on the Company's consolidated financial statements.
In the ordinary course of business, there are various legal 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 on the Company's consolidated financial statements.
<PAGE 22>
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 and Distributions on
Preferred Trust Securities for the Three Months Ended March 31, 2000
and 1999.
Exhibit 27 - Statement Re: Financial Data Schedule containing selected
financial data at March 31, 2000.
(b) The Company filed the following reports on Form 8-K since
December 31, 1999:
On January 18, 2000, 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 fourth quarter of 1999 contained in the
Company's press release dated January 18, 2000.
On April 17, 2000, the Company filed a Form 8-K Current Report (Items 5
and 7), which report included unaudited interim financial information and
accompanying discussion for the first quarter of 2000 contained in the
Company's press release dated April 17, 2000.
<PAGE 23>
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 hereunto duly authorized.
THE BANK OF NEW YORK COMPANY, INC.
----------------------------------
(Registrant)
Date: May 9, 2000 By: \s\ Thomas J. Mastro
---------------------------------
Name: Thomas J. Mastro
Title: Comptroller
<PAGE 24>
EXHIBIT INDEX
--------------
Exhibit Description
- ------- -----------
12 Ratio of Earnings to Fixed Charges and Ratio of
Earnings to Combined Fixed Charges and Distributions
on Preferred Trust Securities for the Three Months Ended
March 31, 2000 and 1999.
27 Financial Data Schedule containing selected
financial data at March 31, 2000.
EXHIBIT 12
<TABLE>
THE BANK OF NEW YORK COMPANY, INC.
Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Combined Fixed Charges,
and Distributions on Preferred Trust Securities
(Dollars in millions)
<CAPTION>
Three Months Ended
March 31,
2000 1999
---- ----
<S> <C> <C>
EARNINGS
- --------
Income Before Income Taxes $ 562 $ 528
Fixed Charges, Excluding Interest on Deposits 123 122
------ ------
Income Before Income Taxes and Fixed Charges
Excluding Interest on Deposits 685 650
Interest on Deposits 472 317
------ ------
Income Before Income Taxes and Fixed Charges,
Including Interest on Deposits $1,157 $ 967
====== ======
FIXED CHARGES
- -------------
Interest Expense, Excluding Interest
on Deposits $ 114 $ 113
One-Third Net Rental Expense* 9 9
------ ------
Total Fixed Charges, Excluding Interest on
Deposits 123 122
Interest on Deposits 472 317
------ ------
Total Fixed Charges, Including Interest on
Deposits $ 595 $ 439
====== ======
DISTRIBUTION ON PREFERRED TRUST
SECURITIES, PRE-TAX BASIS $ 28 $ 28
- -------------------------------
====== ======
EARNINGS TO FIXED CHARGES RATIOS
- --------------------------------
Excluding Interest on Deposits 5.57x 5.33x
Including Interest on Deposits 1.94 2.20
EARNINGS TO COMBINED FIXED CHARGES AND
DISTRIBUTION ON PREFERRED TRUST SECURITIES
- -------------------------------------------
Excluding Interest on Deposits 4.54 4.33
Including Interest on Deposits 1.86 2.07
<FN>
*The proportion deemed representative of the interest factor.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from the Bank
of New York Company, Inc.'s Form 10-Q for the period ended March 31, 2000 and
is qualified entirely by reference to such Form 10-Q.
</LEGEND>
<CIK> 0000009626
<NAME> THE BANK OF NEW YORK COMPANY, INC.
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 3,873
<INT-BEARING-DEPOSITS> 6,225
<FED-FUNDS-SOLD> 2,629
<TRADING-ASSETS> 8,789
<INVESTMENTS-HELD-FOR-SALE> 6,080
<INVESTMENTS-CARRYING> 875
<INVESTMENTS-MARKET> 850
<LOANS> 40,657
<ALLOWANCE> 600
<TOTAL-ASSETS> 76,041
<DEPOSITS> 55,436
<SHORT-TERM> 6,150
<LIABILITIES-OTHER> 3,932
<LONG-TERM> 2,829
0
1
<COMMON> 7,354
<OTHER-SE> (2,131)
<TOTAL-LIABILITIES-AND-EQUITY> 76,041
<INTEREST-LOAN> 716
<INTEREST-INVEST> 95
<INTEREST-OTHER> 222
<INTEREST-TOTAL> 1,033
<INTEREST-DEPOSIT> 472
<INTEREST-EXPENSE> 586
<INTEREST-INCOME-NET> 447
<LOAN-LOSSES> 20
<SECURITIES-GAINS> 40
<EXPENSE-OTHER> 602
<INCOME-PRETAX> 562
<INCOME-PRE-EXTRAORDINARY> 338
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 338
<EPS-BASIC> 0.46
<EPS-DILUTED> 0.46
<YIELD-ACTUAL> 2.89
<LOANS-NON> 151
<LOANS-PAST> 18
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 595
<CHARGE-OFFS> 22
<RECOVERIES> 7
<ALLOWANCE-CLOSE> 600
<ALLOWANCE-DOMESTIC> 494
<ALLOWANCE-FOREIGN> 71
<ALLOWANCE-UNALLOCATED> 35
</TABLE>
