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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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) January 19, 1995
BANKERS TRUST NEW YORK CORPORATION
(Exact Name of Registrant as Specified in Charter)
New York 1-5920 13-6180473
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
280 Park Avenue, New York, New York 10017
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (212) 250-2500
N/A
(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events
The purpose of this Current Report on Form 8-K is to file
certain financial information to be incorporated into currently effective
registration statements filed by Bankers Trust New York Corporation (the
"Corporation") with the Securities and Exchange Commission under the
Securities Act of 1933, as amended. Such information contained in the
Corporation's Press Release dated January 19, 1995, attached hereto as
Exhibit 99.1, is described below and is incorporated herein by reference.
1. Review of certain financial information.
2. The unaudited consolidated financial position of Bankers Trust
New York Corporation and its subsidiaries at December 31, 1994
and 1993 and its unaudited consolidated results of operations
for each of the three-month periods and the years then ended.
In the opinion of the Corporation's management, the information
described above reflected all material adjustments necessary for a fair
presentation of the Corporation's consolidated financial position at
December 31, 1994 and 1993 and its consolidated results of operations for
each of the three-month periods and the years then ended. All such
adjustments were of a normal recurring nature.
Detailed information, including notes to financial statements,
will be provided in the Corporation's Annual Report on Form 10-K for the
year ended December 31, 1994.
This Current Report on Form 8-K also reports that on
December 21, 1994, the Corporation and its subsidiaries, Bankers Trust Company
and BT Securities Corporation, executed a Memorandum of Understanding with the
New York State Banking Department, the terms of which are substantially the
same as those of the Written Agreement between the Corporation, such
subsidiaries and the Federal Reserve Bank of New York, which was filed by the
Corporation with its Current Report on Form 8-K dated December 4, 1994.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits
(c) Exhibits.
99.1 Press release of the Corporation, dated January 19, 1995.
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SIGNATURES
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.
Date: January 23, 1995
BANKERS TRUST NEW YORK CORPORATION
By: /s/ James T. Byrne, Jr.
Name: James T. Byrne, Jr.
Title: Secretary
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INDEX TO EXHIBITS
99.1 Press release of the Corporation, dated January 19, 1995.
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EX. 99.1
BANKERS TRUST NEW YORK CORPORATION
NEWS RELEASE
Fax Release: THURSDAY, JANUARY 10, 1995
BANKERS TRUST REPORTS FOURTH QUARTER NET INCOME OF $101 MILLION OR $1.19
PRIMARY EARNINGS PER SHARE
New York, January 19, 1995 -- Bankers Trust New York Corporation earned
$101 million for the quarter ended December 31, 1994, or $1.19 primary
earnings per share. The earnings compare with $169 million, or $1.98
primary earnings per share, for the third quarter of 1994 and $279 million,
or $3.26 primary earnings per share, in the fourth quarter of 1993, which
included a record $449 million of trading revenue.
For the full year 1994, the Corporation's net income was $615 million, or
$7.17 primary earnings per share. For the year ended December 31, 1993 the
Corporation earned $1.070 billion before cumulative effects of accounting
changes, or $12.40 primary earnings per share.
"The year's results were affected by persistently difficult market
conditions, which had a negative effect on trading revenue, while revenue
increased from the firm's client-related businesses that provide financing,
advisory and transaction processing services," said Bankers Trust Chairman
Charles S. Sanford, Jr.
Revenue
Net interest revenue totaled $229 million, down $144 million, or 39%, from
the fourth quarter of 1993. Excluding the past-due interest received from
Argentina during the fourth quarter of
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1993, net interest revenue decreased by $115 million, or 33%. Of this
decline, $137 million was from trading-related net interest revenue,
as shown below.
The Corporation views trading revenue and trading-related net interest
revenue in combination, as quantified below (in millions):
<TABLE>
<CAPTION>
Trading-
Related Net
Trading Interest
Revenue Revenue Total
<S> <C> <C> <C>
Fourth Quarter 1994 $49 $50 $99
Fourth Quarter 1993 $449 $187 $636
</TABLE>
This combined total for the fourth quarter of 1994 was $99 million, a
$291 million decrease from the third quarter of 1994 and a decline of
$537 million from the record results achieved in the fourth quarter of
1993. Many of the Firm's proprietary trading businesses, principally fixed
income instruments, recorded lower revenue during the period, as market
conditions remained generally unsettled. In addition, trading results
declined significantly in the emerging markets of Asia and Latin America.
During the current quarter the volume of traditional risk management
products slowed.
Fiduciary and funds management revenue totaled $177 million for the fourth
quarter, down $8 million, or 4%, from the same period last year. Lower
revenue from performance-based funds management fees were offset in part by
continued growth in global private banking assets under management.
Fees and commissions of $216 million increased by $24 million, or 13%, from
the fourth quarter of 1993. Corporate finance fees of $132 million
increased by $24 million to their highest level in
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five years, due to higher revenue from loan syndication fees, offset in
part by lower fees from securities underwriting and leasing syndication fees.
The Corporation's securities available for sale gains were $21 million,
compared with investment securities losses of $2 million in the prior
year's fourth quarter.
Other noninterest revenue totaled $161 million, up $116 million from the
prior year's quarter. This increase was due to an increase in net revenue
from equity investment transactions, higher insurance premium revenue and
gains from the revaluation of non-trading foreign currency investments,
versus a loss in the prior year.
Expenses
Total noninterest expenses of $709 million decreased by $107 million, or
13%, from the fourth quarter of 1993. Incentive compensation and employee
benefits expense decreased $99 million, or 38%, due primarily to lower
bonus expense reflecting the reduced earnings. Salaries expense increased
$29 million, or 16%, from the fourth quarter of 1993. The average number
of employees increased by 6% versus the same period, to 14,432.
All other expenses totaled $338 million for the quarter, down $37 million,
or 10%, from last year's fourth quarter. This decline was due to a
decrease in other real estate expense, primarily resulting from a gain on
the sale of a foreclosed property, as well as a lower level of
contributions expense. This was offset in part by an increase in the
provision for policyholder benefits.
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Asset Quality
During the fourth quarter of 1994, $423 million of leveraged derivative
contracts were reclassified as receivables in the loan account and placed
on a cash basis. Of this amount, $72 million was subsequently charged-off
to the allowance for credit losses. Approximately one half of the
remainder related to transactions with Proctor and Gamble. With these
transfers and charge-offs, the Corporation has taken action on those
leveraged derivative transactions that likely will not perform according to
the contract and has charged-off the balances deemed to be uncollectible.
The provision for credit losses for the quarter was $8 million, compared
with $23 million in the prior year's fourth quarter. Net charge-offs for
the quarter were $85 million, compared with $184 million a year ago.
Nonrefinancing country net charge-offs for the fourth quarter of 1994
totaled $87 million. As mentioned above, this amount included charge-offs
of $72 million related to leveraged derivative transactions.
Cash basis loans increased by $303 million, or 44%, to $996 million during
the fourth quarter. This increase was primarily attributable to the above-
mentioned reclassifications of various leveraged derivative transactions.
The allowance for credit losses at December 31, 1994, was $1.252 billion,
representing 126% of cash basis loans.
The allowance for credit losses is available for credit losses arising from
the Corporation's portfolio, which is comprised of loans, credit-related
commitments, derivatives and other financial instruments. Credit losses
include credit charge-offs and losses on sales and swaps of refinancing
country loans held in the portfolio.
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In the opinion of management, the allowance, when taken as a whole, is
adequate to absorb reasonably estimated credit losses inherent in the
Corporation's portfolio, as defined above.
Effects of Accounting Changes
During the fourth quarter of 1994, the Corporation adopted FASB
Interpretation No. 41, "Offsettings of Amounts Related to Certain
Repurchase and Reverse Repurchase Agreements." The Interpretation allows
the netting, under certain circumstances, of certain repurchase and reverse
repurchase agreements. It was the Corporation's former policy to record
such transactions on a gross basis on the balance sheet. As the result of
this adoption, at December 31, 1994, the Corporation's consolidated total
assets and total liabilities each decreased by $500 million. On January 1,
1994, the Corporation adopted FASB Interpretation No. 39, "Offsetting of
Amounts Related to Certain Contracts." The Interpretation requires that
unrealized gains and losses on swaps, forwards, options and similar
contracts be recognized as assets and liabilities, except where such gains
and losses arise from contracts covered by qualifying master netting
agreements. It was the Corporation's former policy to record such
unrealized gains and losses on a net basis on the balance sheet. As the
result of this adoption, at December 31, 1994, the Corporation's
consolidated total assets and total liabilities each increased by
$12 billion. In the first quarter of 1993, the Corporation adopted
accounting standards for postretirement benefits other than pensions
(SFAS 106) and postemployment benefits (SFAS 112).
Capital
The Corporation estimates that its ratios of Tier 1 Capital and Total
Capital to risk-adjusted assets were approximately 9.00% and 14.70%,
respectively, at December 31, 1994. The Leverage Ratio was 5.25% at that
same date.
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For additional information, contact Douglas Kidd, (212) 454-3532 or Tom
Parisi, (212) 454-1686 (Media); Mary Flournoy (212) 454-3201 (Investors).
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BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES
FINANCIAL STATISTICS
($ in millions, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Third
Fourth Quarter Quarter Year
<S> <C> <C> <C> <C> <C>
1994 1993 1994 1994 1993
Income before cumulative effects of accounting changes $101 $279 $169 $615 $1,070
Cumulative effects of accounting changes - - - - (75)
Net income $101 $279 $169 $615 $995
Primary earnings per common share:
Income before cumulative effects of accounting changes $1.19 $3.26 $1.98 $7.17 $12.40
Cumulative effects of accounting changes - - - - (.89)
Net income $1.19 $3.26 $1.98 $7.17 $11.51
Fully diluted earnings per common share:
Income before cumulative effects of accounting changes $1.18 $3.25 $1.98 $7.17 $12.29
Cumulative effects of accounting changes - - - - (.88)
Net income $1.18 $3.25 $1.98 $7.17 $11.41
Cash dividends declared $1.00 $.90 $.90 $3.70 $3.24
Book value per common share (1) $53.67 $51.90 $54.08
Profitability ratios
Return on average common stockholders' equity 8.64% 25.91% 14.64% 13.48% N/M
-Excluding cumulative effects of accounting changes N/A N/A N/A N/A 26.33%
Return on average total assets .38% 1.27% .66% .59% N/M
-Excluding cumulative effects of accounting changes N/A N/A N/A N/A 1.25%
Net interest revenue (fully taxable basis) $252 $398 $282 $1,255 $1,396
Average rates (fully taxable basis)
Yield on interest-earning assets 7.05% 6.21% 6.70% 6.70% 5.88%
Cost of interest-bearing liabilities 5.93% 4.52% 5.31% 5.23% 4.48%
Interest rate spread 1.12% 1.69% 1.39% 1.47% 1.40%
Net interest margin 1.29% 2.07% 1.54% 1.64% 1.82%
Average balances
Loans $12,548 $14,211 $11,755 $12,470 $15,310
Total interest-earning assets $77,642 $76,388 $72,493 $76,300 $76,798
Total assets $106,009 $87,165 $102,356 $104,828 $85,623
Total interest-bearing liabilities $75,521 $69,976 $70,402 $73,748 $69,676
Common stockholders' equity $4,364 $4,180 $4,364 $4,355 $3,901
Total stockholders' equity $4,759 $4,430 $4,812 $4,743 $4,203
At end of period
Common stockholders' equity to total assets 4.44% 4.65% 4.03%
Total stockholders' equity to total assets 4.85% 4.92% 4.40%
Risk-based capital ratios
Tier 1 Capital (2) 9.00% 8.50% 8.22%
Total Capital (2) 14.70% 14.46% 13.48%
Leverage Ratio (2) 5.25% 6.28% 5.54%
Employees 14,529 13,571 14,221
</TABLE>
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BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES
FINANCIAL STATISTICS (CONT'D)
(in millions)
(unaudited)
<TABLE>
<CAPTION>
December 31, September 30,
1994 1993 1994
<S> <C> <C> <C>
Nonperforming assets
Cash basis loans
Secured by real estate $356 $455 $365
Real estate related 29 58 27
Highly leveraged 150 193 188
Other 459 150 111
Refinancing country 2 118 2
Total cash basis loans $996 $974 $693
Renegotiated loans
Secured by real estate $65 $14 $13
Other 1 7 1
Total renegotiated loans $66 $21 $14
Other real estate $301 $287 $330
Other nonperforming assets $63 $101 $67
</TABLE>
<TABLE>
<CAPTION>
Fourth Quarter Year
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Allowance for credit losses
Balance, beginning of period $1,329 $1,485 $1,324 $1,620
Net charge-offs
Charge-offs 93 200 168 460
Recoveries 8 16 71 71
Total net charge-offs* 85 184 97 389
Provision for credit losses 8 23 25 93
Balance, end of period $1,252 $1,324 $1,252 $1,324
*Components:
Secured by real estate $ - $ 40 $24 $116
Real estate related 1 1 23 3
Highly leveraged 3 (1) (5) 15
Other 83 146 92 265
Refinancing country (2) (2) (37) (10)
Total $85 $184 $97 $389
<FN>
N/A Not applicable.
N/M Not meaningful.
(1) This calculation includes the effect of common shares issuable under
deferred stock awards.
(2) Risk-based capital ratios at December 31, 1994 are preliminary. At
both December 31, 1994 and September 30, 1994, all three regulatory
capital ratios excluded any benefit from the adoption of SFAS 115.
</TABLE>
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BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(in millions, except per share data)
(unaudited)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Increase
THREE MONTHS ENDED DECEMBER 31, 1994 1993 (Decrease)
NET INTEREST REVENUE
Interest revenue $1,357 $1,171 $ 186
Interest expense 1,128 798 330
Net interest revenue 229 373 (144)
Provision for credit losses 8 23 (15)
Net interest revenue after provision for credit losses 221 350 (129)
NONINTEREST REVENUE
Trading 49 449 (400)
Fiduciary and funds management 177 185 (8)
Fees and commissions 216 192 24
Securities available for sale losses 21 - 21
Investment securities gains - (2) 2
Other 161 45 116
Total noninterest revenue 624 869 (245)
NONINTEREST EXPENSES
Salaries 208 179 29
Incentive compensation and employee benefits 163 262 (99)
Occupancy, net 31 41 (10)
Furniture and equipment 45 39 6
Other 262 295 (33)
Total noninterest expenses 709 816 (107)
Income before income taxes 136 403 (267)
Income taxes 35 124 (89)
NET INCOME $ 101 $ 279 $ (178)
NET INCOME APPLICABLE TO COMMON STOCK $ 95 $ 273 $ (178)
EARNINGS PER COMMON SHARE:
PRIMARY $1.19 $3.26 $(2.07)
FULLY DILUTED $1.18 $3.25 $(2.07)
Cash dividends declared per common share $1.00 $.90 $.10
</TABLE>
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BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(in millions, except per share data)
(unaudited)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Increase
YEAR ENDED DECEMBER 31, 1994 1993 (Decrease)
NET INTEREST REVENUE
Interest revenue $5,030 $4,436 $ 594
Interest expense 3,858 3,122 736
Net interest revenue 1,172 1,314 (142)
Provision for credit losses 25 93 (68)
Net interest revenue after provision for credit losses 1,147 1,221 (74)
NONINTEREST REVENUE
Trading 465 1,631 (1,166)
Fiduciary and funds management 740 703 37
Fees and commissions 756 710 46
Securities available for sale gains 72 - 72
Investment securities gains - 13 (13)
Other 440 307 133
Total noninterest revenue 2,473 3,364 (891)
NONINTEREST EXPENSES
Salaries 774 687 87
Incentive compensation and employee benefits 724 1,172 (448)
Occupancy, net 146 155 (9)
Furniture and equipment 163 144 19
Other 944 877 67
Total noninterest expenses 2,751 3,035 (284)
Income before income taxes and cumulative effects of accounting changes 869 1,550 (681)
Income taxes 254 480 (226)
INCOME BEFORE CUMULATIVE EFFECTS OF ACCOUNTING CHANGES 615 1,070 (455)
Cumulative effects of accounting changes - (75) 75
NET INCOME $615 $ 995 $ (380)
NET INCOME APPLICABLE TO COMMON STOCK $587 $ 972 $ (385)
PRIMARY EARNINGS PER COMMON SHARE:
Income before cumulative effects of accounting changes $7.17 $12.40 $(5.23)
Cumulative effects of accounting changes - (.89) .89
Net income $7.17 $11.51 $(4.34)
FULLY DILUTED EARNINGS PER COMMON SHARE:
Income before cumulative effects of accounting changes $7.17 $12.29 $(5.12)
Cumulative effects of accounting changes - (.88) .88
Net income $7.17 $11.41 $(4.24)
Cash dividends declared per common share $3.70 $3.24 $.46
</TABLE>
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BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
($ in millions, except par value)
(unaudited)
<TABLE>
<CAPTION>
December 31, December 31,
1994 1993
<S> <C> <C>
ASSETS
Cash and due from banks $1,985 $1,750
Interest-bearing deposits with banks 3,390 1,638
Federal funds sold 2,544 361
Securities purchased under resale agreements 9,943 9,567
Securities borrowed 6,197 2,937
Trading assets 47,422 48,276
Securities available for sale 7,475 7,073
Loans 12,593 15,200
Allowance for credit losses (1,252) (1,324)
Premises and equipment, net 915 719
Due from customers on acceptances 378 455
Accounts receivable and accrued interest 2,356 2,561
Other assets 3,070 2,869
Total $ 97,016 $ 92,082
LIABILITIES
Deposits
Noninterest-bearing
In domestic offices $ 3,285 $ 3,185
In foreign offices 541 707
Interest-bearing
In domestic offices 6,603 7,120
In foreign offices 14,510 11,764
Total deposits 24,939 22,776
Trading liabilities 20,949 9,349
Securities sold under repurchase agreements 15,617 23,834
Other short-term borrowings 18,222 18,992
Acceptances outstanding 378 455
Accounts payable and accrued expenses 3,174 3,771
Other liabilities 2,328 2,524
Long-term debt 6,455 5,597
Total liabilities 92,062 87,298
PREFERRED STOCK OF SUBSIDIARY 250 250
STOCKHOLDERS' EQUITY
Preferred stock 395 250
Common stock, $1 par value
Authorized, 300,000,000 shares
Issued, 83,678,973 shares 84 84
Capital surplus 1,317 1,321
Retained earnings 3,494 3,226
Common stock in treasury, at cost: 1994, 5,609,707 shares;
1993, 3,076,439 shares (416) (233)
Other (170) (114)
Total stockholders' equity 4,704 4,534
Total $ 97,016 $ 92,082
</TABLE>
