<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 17, 2000
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 2000 Financial Results
---------------------------------------
On April 17, 2000, The Bank of New York Company, Inc. issued a press release
containing unaudited interim financial information and accompanying discussion
for the first quarter of 2000. 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 2000 contained in the press release dated
April 17, 2000, 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 hereunto duly authorized.
Dated: April 17, 2000
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 2000 contained in the
press release dated April 17, 2000, 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 RELATIONS
IMMEDIATELY
- -----------
Media: Investors:
- ----- ---------
Frank H. Scarangella, SVP Richard P. Stanley, SVP
(212) 635-1590 (212) 635-1854
Cary J. Giacalone, VP Gregory A. Burton, AVP
(212) 635-1590 (212) 635-1578
THE BANK OF NEW YORK COMPANY, INC. REPORTS
Record First Quarter Diluted E.P.S. of 46 Cents, up 12%
Securities Servicing Fee Revenue Up 28%
Record Return on Average Common Equity of 27.07%
NEW YORK, N.Y., April 17, 2000 -- The Bank of New York Company, Inc. (NYSE:
BK) reports record first quarter diluted earnings per share of 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.
"Our 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," said
<PAGE> 2
Thomas A. Renyi, Chairman and CEO. 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
<PAGE> 3
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.
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.
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
<PAGE> 4
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.
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.
<PAGE> 5
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.
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.
<PAGE> 6
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.
<PAGE> 7
CREDIT LOSS PROVISION AND NET CHARGE-OFFS
<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.
***************************
(Financial highlights and detailed financial statements are attached.)
<PAGE> 8
THE BANK OF NEW YORK COMPANY, INC.
Financial Highlights
(Dollars in millions, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
2000 1999 Change
---- ---- ------
<S> <C> <C> <C>
For the Three Months Ended March 31:
- ------------------------------------
Net Income $ 338 $ 316 6.8%
Per Common Share:
Basic $ 0.46 $ 0.41 12.2
Diluted 0.46 0.41 12.2
Cash Dividends Paid 0.16 0.14 14.3
Return on Average Common Shareholders'
Equity 27.07% 24.48%
Return on Average Assets 1.78 1.94
As of March 31:
- ------------------
Assets $76,041 $64,917 17.1%
Loans 40,657 39,751 2.3
Securities 6,955 5,960 16.7
Deposits - Domestic 27,812 26,121 6.5
- Foreign 27,624 18,722 47.5
Long-Term Debt 2,829 2,189 29.2
Minority Interest - Preferred Securities 1,500 1,500 -
Preferred Shareholders' Equity 1 1 -
Common Shareholders' Equity 5,223 5,305 (1.5)
Common Shareholders' Equity Per Share 7.09 6.92 2.4
Market Value Per Share of Common Stock 41.56 35.94 15.6
Allowance for Credit Losses as a Percent
of Loans 1.48% 1.59%
Tier 1 Capital Ratio 7.39 7.84
Total Capital Ratio 11.50 11.86
Leverage Ratio 6.66 7.69
Tangible Common Equity Ratio 4.74 5.88
</TABLE>
<PAGE> 9
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 Trust Preferred 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
</TABLE>
<PAGE> 10
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 875 871
Available-for-Sale 6,080 6,028
------- -------
Total Securities 6,955 6,899
Trading Assets at Fair Value 8,770 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 5,313 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.
</FN>
</TABLE>
<PAGE> 11
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>
