<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
F O R M 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 18, 1996
BANKERS TRUST NEW YORK CORPORATION
(Exact name of registrant as specified in its charter)
NEW YORK
(State or other jurisdiction of incorporation)
1-5920 13-6180473
(Commission file number) (IRS employer 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
<PAGE>
Item 5. Other Events
The purpose of this Current Report on Form 8-K is to file a
Press Release to file certain financial information to be
incorporated into currently effective registration statements
filed by the Registrant with the Securities and Exchange
Commission under the Securities Act of 1933, as amended. Such
financial information contained in the Registrant's Press Release
dated January 18, 1996, 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, 1995 and December 31, 1994 and its unaudited
consolidated results of operations for each of the three-
month and twelve-month periods ended December 31, 1995 and
1994 and the three-month period ended September 30, 1995.
In the opinion of the Registrant's management, all material
adjustments necessary for a fair presentation of the
Corporation's consolidated financial position at December 31,
1995 and December 31, 1994 and its consolidated results of
operations for the three-month and twelve-month periods ended
December 31, 1995 and 1994 and the three-month period ended
September 30, 1995 have been made. All such adjustments were of
a normal recurring nature.
Item 7. Financial Statements and Exhibits
(c) Exhibits
(99.1) Earnings Press Release of the Registrant
dated January 18, 1996
<PAGE>
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.
BANKERS TRUST NEW YORK CORPORATION
By /s/ GEOFFREY M. FLETCHER
GEOFFREY M. FLETCHER
Senior Vice President and
Principal Accounting Officer
January 18, 1996
<PAGE>
BANKERS TRUST NEW YORK CORPORATION
FORM 8-K DATED JANUARY 18, 1995
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
(99.1) Earnings Press Release of the
Registrant dated January 18, 1996.
<PAGE>
<PAGE>
THURSDAY, JANUARY 18, 1996
BANKERS TRUST REPORTS FOURTH QUARTER NET INCOME OF $126 MILLION, UP 25%
FROM THE FOURTH QUARTER OF 1994; PRIMARY EARNINGS PER SHARE WERE $1.36, AN
INCREASE OF 14%
New York, January 18, 1996 -- Bankers Trust New York Corporation earned
$126 million for the quarter ended December 31, 1995, compared with $101
million in the fourth quarter of 1994, an increase of 25%. Primary
earnings per share were $1.36 for the fourth quarter of 1995, up 14% from
the prior year's fourth quarter. Return on average common equity for the
fourth quarter of 1995 was 11%. The Corporation earned $155 million, or
$1.72 primary earnings per share, for the quarter ended September 30, 1995.
In a joint statement, Bankers Trust Chairman Charles S. Sanford, Jr. and
President and CEO Frank N. Newman said: "This quarter marks the end of a
difficult year for Bankers Trust. It has also been a year in which much
has been accomplished. Problems have been dealt with and, for the most
part, resolved. New and constructive initiatives have been undertaken, and
the Firm is well positioned to continue its role as an innovative and
global leader in the world of finance."
Commenting on the financial results announced today, Mr. Sanford and Mr.
Newman said: "Both the finance and the merchant banking components of the
Firm's investment banking business demonstrated outstanding performance in
the fourth quarter and year as a whole. Trading has been profitable on a
reduced risk profile. We have also continued to invest in and develop our
other client-related businesses, including transaction processing,
investment management, private banking and risk management, as well as our
locally-based businesses outside of the United States."
The fourth quarter results were impacted by two opposite effects. Gains
from the sale of an additional block of the Corporation's investment in
Northwest Airlines Corporation contributed to earnings well beyond the
level that has been typical of prior merchant banking investments. At the
<PAGE>
same time, reserves and legal expenses related to leveraged derivative
transactions from 1994 and earlier exerted a noticeable drag on the
Corporation's performance. As the Corporation continues to resolve issues
related to the leveraged derivative business, results should become more
reflective of Bankers Trust's earning power.
Revenue
<TABLE>
<CAPTION>
Non-Trading Trading-
Related Related Total
Net Net Net
Interest Interest Interest
(in millions) Revenue Revenue Revenue
<S> <C> <C> <C>
Fourth Quarter 1995 $196 $13 $209
Third Quarter 1995 $184 $20 $204
Fourth Quarter 1994 $179 $50 $229
</TABLE>
Net interest revenue totaled $209 million, down $20 million, or 9%, from
the fourth quarter of 1994 and up $5 million, or 2% from the third quarter
of 1995. Non-trading related interest revenue was $196 million for the
fourth quarter of 1995, up $17 million from the fourth quarter of 1994, and
$12 million from the third quarter of 1995. The fourth quarter 1995
increase versus the third quarter 1995 was primarily due to cash basis
income, realization of deferred loan fees and lease income. The fourth
quarter of 1995 included $13 million of trading-related net interest
revenue, down $37 million from the fourth quarter of 1994 and $7 million
from the third quarter of 1995.
A significant portion of the Firm's trading and risk management activities
involve positions in interest rate instruments and related derivatives.
The revenue from these activities can periodically shift between trading
and net interest, depending on a variety of factors, including risk
management strategies. Therefore, the Corporation views trading revenue
and trading-related net interest revenue together, which are presented
below.
<PAGE>
<TABLE>
<CAPTION>
Trading-
Related
Net
Trading Interest
(in millions) Revenue Revenue Total
<S> <C> <C> <C>
Fourth Quarter 1995 $83 $13 $96
Third Quarter 1995 $257 $20 $277
Fourth Quarter 1994 $49 $50 $99
</TABLE>
Combined trading revenue and trading-related net interest revenue of $96
million in the current quarter was down $3 million versus the same period
in 1994. The fourth quarter of 1995 revenue declined $181 million in
comparison to the third quarter of 1995, principally due to lower revenue
in the Firm's client derivatives business including a $51 million charge
from settlements of old leveraged derivative transactions. Based on an
analysis of the potential outcome of outstanding issues relating to
leveraged derivative transactions, management believes that the expected
potential financial impact should be covered by existing reserves. Also
impacting fourth quarter results was lower revenue in foreign exchange
market trading. Trading results in the emerging markets of Asia and Latin
America were generally comparable to those of the third quarter of 1995,
and those of the prior year.
Fiduciary and funds management revenue totaled $186 million for the fourth
quarter, up $9 million, or 5%, from the same period last year. The
increase in revenue was primarily due to higher global private banking
commissions, offset in part by a decline in revenue from global fiduciary
services. The $186 million of revenue for the fourth quarter was up $12
million, or 7%, from the third quarter of 1995.
Fiduciary and funds management revenue totaled $697 million for the year
ended December 31, 1995, compared with $740 million for the comparable
period in 1994.
Fees and commissions of $204 million decreased by $12 million, or 6%, from
the fourth quarter of 1994. Corporate finance fees of $125 million
<PAGE>
decreased by $7 million, or 5%, from the same period last year. Lower
revenue from loan syndication and merger and acquisition activities were
partially offset by higher revenue from private placement and securities
underwriting fees. Compared with this year's third quarter, fees and
commissions were up $52 million, or 34%, as corporate finance fees
increased by $51 million, or 69%, as a result of higher revenue from
virtually all activities within this category.
Fees and commissions totaled $712 million for the year ended December 31,
1995 versus $756 million for 1994.
The Corporation's securities available for sale gains were $151 million, up
$130 million from the prior year's fourth quarter and $141 million from the
third quarter of 1995. These results were attributable to a $145 million
pre-tax gain on the sale of a substantial portion of the Corporation's
merchant banking investment in Northwest Airlines Corporation. Gains in
the third quarter related to Northwest Airlines Corporation were included
in other noninterest revenue.
Securities available for sale gains were $180 million for the year ended
December 31, 1995, compared with $72 million in 1994.
Other noninterest revenue totaled $115 million, down $46 million from the
prior year's quarter. Fewer net gains from equity investments were
realized, partially offset by higher insurance premium revenue from
operations in Chile. The $115 million of other noninterest revenue for the
fourth quarter of 1995 was down $47 million, or 29%, from the third quarter
of 1995, primarily as a result of the above mentioned third quarter gain
relating to Northwest Airlines Corporation.
For the year ended December 31, 1995, other noninterest revenue totaled
$493 million versus $440 million in 1994.
Expenses
Total noninterest expenses of $758 million increased by $49 million, or 7%,
from the fourth quarter of 1994. Incentive compensation and employee
benefits expense increased $22 million, or 13%. Salaries expense decreased
<PAGE>
$2 million, or 1%, mostly due to a 3% decrease in the average number of
employees. Management has, as previously announced, implemented expense
reduction programs over the course of 1995. These programs have achieved
reductions in operating expenses (principally noninterest expenses before
bonus, policyholder benefits and minority interest) of $200 million
compared to the annualized fourth quarter 1994 levels. These savings will
continue into 1996. However, their impact in 1996 will be offset by
decisions made as part of the Corporation's planning process to expand a
number of key businesses and to make selected investments in areas that
show profitable growth.
All other expenses totaled $367 million for the quarter, up $29 million, or
9%, from last year's fourth quarter. This increase was due to a rise in
net other real estate expenses as last year's fourth quarter included a
gain on the sale of a foreclosed property. Also contributing to this rise
were an increase in professional fees, which included exceptional legal
costs related to leveraged derivative transactions, and higher provisions
for policyholder benefits. Partial offsets came from a reduction in travel
and entertainment expenses.
For the year ended December 31, 1995, total noninterest expenses amounted
to $2.898 billion, compared with $2.751 billion for 1994.
Asset Quality
The provision for credit losses was $10 million for the current quarter,
compared with $8 million in the prior year's fourth quarter and $7 million
in the third quarter of 1995. Net charge-offs for the quarter were $50
million, compared with $85 million a year ago.
The current quarter included $30 million of leveraged derivative contract
receivables that were charged-off against the allowance for credit losses,
reflecting additional settlements reached.
In 1995, the provision for credit losses totaled $31 million versus $25
million for 1994.
<PAGE>
Cash basis loans decreased by $8 million, to $744 million, during the
fourth quarter. The allowance for credit losses was $992 million at
December 31, 1995, and $1.252 billion at December 31, 1994 representing
133% and 126% of cash basis loans, respectively.
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. 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.
Twelve Months Results
For the full year 1995, the Corporation earned $250 million, or $2.46
primary earnings per share, excluding an after-tax provision for severance-
related costs of $35 million taken in connection with the Corporation's
expense reduction programs. Net income for the year, including the effect
of this provision, was $215 million, or $2.03 primary earnings per share.
For the year ended December 31, 1994, the Corporation earned $615 million,
or $7.17 primary earnings per share.
During 1995 the Corporation established a reserve to cover adjustments
related to the Firm's funds management business. A detailed analytical
process resulted in the Corporation identifying a small number of accounts
in which a subset of trading in certain prior years was not conducted in
accordance with the Corporation's standards. As a result, management has
decided to make adjustments to those accounts that it believes may have
been affected. The Corporation estimates that the financial impact of
these adjustments will be less than $6 million before tax.
Capital
Total stockholders' equity at December 31, 1995 was $4.984 billion, an
increase of $280 million compared to December 31, 1994 and a decrease of
$77 million compared to September 30, 1995.
Retained earnings increased during the fourth quarter. Total stockholders'
equity however, was impacted by a decline in the securities valuation
<PAGE>
allowance. This decline primarily resulted from realized gains on the sale
of Northwest Airlines Corporation stock as previously mentioned. Although
stockholders' equity decreased, our risk-based capital and leverage ratios
remained strong.
The Corporation estimates that its ratios of Tier 1 Capital and Total
Capital to risk-adjusted assets were approximately 8.50% and 13.90%,
respectively, at December 31, 1995. The Leverage Ratio was 5.06% at that
same date.
Assets
At December 31, 1995, total assets were $104.0 billion compared to $97.0
billion and $103.9 billion at December 31, 1994 and September 30, 1995,
respectively.
For additional information, contact Douglas Kidd, (212) 454-3532 or Tom
Parisi, (212) 454-1686 (Media); Howard Schneider
(212) 250-3609 (Investors).
<PAGE>
BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES
FINANCIAL STATISTICS
($ in millions, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Third
Fourth Quarter Quarter Year
1995 1994 1995 1995 1994
<S> <C> <C> <C> <C> <C>
Net income $126 $101 $155 $215 $615
Per common share
Primary earnings $1.36 $1.19 $1.72 $2.03 $7.17
Fully diluted earnings $1.36 $1.18 $1.71 $2.02 $7.17
Cash dividends declared $1.00 $1.00 $1.00 $4.00 $3.70
Book value (1) $50.58 $53.67 $51.72
Shares Outstanding (in millions)
Average common and common
equivalent shares
outstanding-primary 81.322 80.126 81.039 80.923 81.825
Average common shares
outstanding assuming
full dilution 81.415 80.188 81.403 81.095 81.865
Common shares outstanding
at end of period 79.076 78.069 78.594 79.076 78.069
Profitability ratios
Return on average common
stockholders' equity 10.57% 8.64% 13.51% 3.98% 13.48%
Return on average
total assets .43% .38% .56% .20% .59%
Net interest revenue
(fully taxable basis) $215 $252 $215 $858 $1,255
Average rates (fully taxable basis)
Yield on interest-earning
assets 7.83% 7.05% 7.56% 7.51% 6.70%
Cost of interest-bearing
liabilities 7.01% 5.93% 6.91% 6.74% 5.23%
Interest rate spread .82% 1.12% .65% .77% 1.47%
Net interest margin .98% 1.29% 1.04% 1.04% 1.64%
Average balances
Loans $12,823 $12,548 $11,714 $11,752 $12,470
Total interest-earning
assets $87,389 $77,642 $82,288 $82,349 $76,300
Total assets $115,927 $106,009 $109,360 $109,919 $104,828
Total interest-bearing
liabilities $85,409 $75,521 $77,668 $79,121 $73,748
Common stockholders' equity $4,165 $4,364 $4,082 $4,124 $4,355
Total stockholders' equity $5,030 $4,759 $4,946 $4,850 $4,743
At end of period
Common stockholders' equity
to total assets 3.96% 4.44% 4.04%
Total stockholders' equity
to total assets 4.79% 4.85% 4.87%
Risk-based capital ratios (2)
Tier 1 Capital 8.50% 9.05% 8.09%
Total Capital 13.90% 14.77% 12.96%
Leverage Ratio 5.06% 5.26% 5.53%
Employees 14,069 14,529 13,808
<FN>
(1) This calculation includes the effect of common shares issuable under
deferred stock awards.
(2) Regulatory capital ratios at December 31, 1995 are preliminary.
</TABLE>
<PAGE>
BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES
FINANCIAL STATISTICS (CONT'D)
(in millions)
(unaudited)
<TABLE>
<CAPTION>
December 31, September 30,
1995 1994 1995
<S> <C> <C> <C>
Nonperforming assets
Cash basis loans
Secured by real estate $362 $356 $394
Real estate related 23 29 23
Highly leveraged 153 150 148
Other 206 459 187
Refinancing country - 2 -
Total cash basis loans $744 $996 $752
Renegotiated loans
Secured by real estate $ 88 $65 $ 89
Other nonrefinancing country 12 1 12
Total renegotiated loans $100 $66 $101
Other real estate $259 $301 $281
Other nonperforming assets $67 $63 $64
</TABLE>
<TABLE>
<CAPTION>
Fourth Quarter Year
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Allowance for credit losses
Balance, beginning of period $1,032 $1,329 $1,252 $1,324
Net charge-offs
Charge-offs 60 93 330 168
Recoveries 10 8 39 71
Total net charge-offs* 50 85 291 97
Provision for credit losses 10 8 31 25
Balance, end of period $ 992 $1,252 $ 992 $1,252
*Components:
Secured by real estate $11 $ - $ 23 $ 24
Real estate related - 1 2 23
Highly leveraged 2 3 30 (5)
Other 38 83 245 92
Refinancing country (1) (2) (9) (37)
Total $50 $85 $291 $ 97
</TABLE>
<PAGE>
BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(in millions, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Increase
THREE MONTHS ENDED DECEMBER 31, 1995 1994 (Decrease)
<S> <C> <C> <C>
NET INTEREST REVENUE
Interest revenue $1,718 $1,357 $361
Interest expense 1,509 1,128 381
Net interest revenue 209 229 (20)
Provision for credit losses 10 8 2
Net interest revenue after provision
for credit losses 199 221 (22)
NONINTEREST REVENUE
Trading 83 49 34
Fiduciary and funds management 186 177 9
Fees and commissions 204 216 (12)
Securities available for sale gains 151 21 130
Other 115 161 (46)
Total noninterest revenue 739 624 115
NONINTEREST EXPENSES
Salaries 206 208 (2)
Incentive compensation and employee benefits 185 163 22
Occupancy, net 32 31 1
Furniture and equipment 40 45 (5)
Other 295 262 33
Total noninterest expenses 758 709 49
Income before income taxes 180 136 44
Income taxes 54 35 19
NET INCOME $ 126 $ 101 $ 25
NET INCOME APPLICABLE TO COMMON STOCK $ 111 $ 95 $ 16
EARNINGS PER COMMON SHARE:
PRIMARY $1.36 $1.19 $.17
FULLY DILUTED $1.36 $1.18 $.18
Cash dividends declared per common share $1.00 $1.00 $-
</TABLE>
<PAGE>
BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(in millions, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Fourth Third
Quarter Quarter Increase
1995 1995 (Decrease)
<S> <C> <C> <C>
NET INTEREST REVENUE
Interest revenue $1,718 $1,556 $162
Interest expense 1,509 1,352 157
Net interest revenue 209 204 5
Provision for credit losses 10 7 3
Net interest revenue after provision
for credit losses 199 197 2
NONINTEREST REVENUE
Trading 83 257 (174)
Fiduciary and funds management 186 174 12
Fees and commissions 204 152 52
Securities available for sale gains 151 10 141
Other 115 162 (47)
Total noninterest revenue 739 755 (16)
NONINTEREST EXPENSES
Salaries 206 196 10
Incentive compensation and employee benefits 185 187 (2)
Occupancy, net 32 41 (9)
Furniture and equipment 40 40 -
Other 295 264 31
Total noninterest expenses 758 728 30
Income before income taxes 180 224 (44)
Income taxes 54 69 (15)
NET INCOME $ 126 $ 155 $(29)
NET INCOME APPLICABLE TO COMMON STOCK $ 111 $ 139 $(28)
EARNINGS PER COMMON SHARE:
PRIMARY $1.36 $1.72 $(.36)
FULLY DILUTED $1.36 $1.71 $(.35)
Cash dividends declared per common share $1.00 $1.00 $-
</TABLE>
<PAGE>
BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(in millions, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Increase
YEAR ENDED DECEMBER 31, 1995 1994 (Decrease)
<S> <C> <C> <C>
NET INTEREST REVENUE
Interest revenue $6,147 $5,030 $1,117
Interest expense 5,330 3,858 1,472
Net interest revenue 817 1,172 (355)
Provision for credit losses 31 25 6
Net interest revenue after provision
for credit losses 786 1,147 (361)
NONINTEREST REVENUE
Trading 341 465 (124)
Fiduciary and funds management 697 740 (43)
Fees and commissions 712 756 (44)
Securities available for sale gains 180 72 108
Other 493 440 53
Total noninterest revenue 2,423 2,473 (50)
NONINTEREST EXPENSES
Salaries 804 774 30
Incentive compensation and employee benefits 640 724 (84)
Occupancy, net 152 146 6
Furniture and equipment 162 163 (1)
Provision for severance-related costs 50 - 50
Other 1,090 944 146
Total noninterest expenses 2,898 2,751 147
Income before income taxes 311 869 (558)
Income taxes 96 254 (158)
NET INCOME $ 215 $ 615 $ (400)
NET INCOME APPLICABLE TO COMMON STOCK $ 164 $ 587 $ (423)
EARNINGS PER COMMON SHARE:
PRIMARY $2.03 $7.17 $(5.14)
FULLY DILUTED $2.02 $7.17 $(5.15)
Cash dividends declared per common share $4.00 $3.70 $.30
</TABLE>
<PAGE>
BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
($ in millions, except par value)
(unaudited)
<TABLE>
<CAPTION>
December 31, December 31,
1995 1994
<S> <C> <C>
ASSETS
Cash and due from banks $ 2,337 $ 1,985
Interest-bearing deposits with banks 2,023 3,390
Federal funds sold 854 2,544
Securities purchased under resale agreements 17,958 9,943
Securities borrowed 6,199 6,197
Trading assets 47,893 47,514
Securities available for sale 6,283 7,475
Loans 12,633 12,501
Allowance for credit losses (992) (1,252)
Premises and equipment, net 896 915
Due from customers on acceptances 500 378
Accounts receivable and accrued interest 4,220 2,356
Other assets 3,198 3,070
Total $104,002 $97,016
LIABILITIES
Deposits
Noninterest-bearing
In domestic offices $ 2,687 $ 3,285
In foreign offices 605 541
Interest-bearing
In domestic offices 5,402 5,769
In foreign offices 17,014 15,344
Total deposits 25,708 24,939
Trading liabilities 26,091 20,949
Securities sold under repurchase agreements 15,247 15,617
Other short-term borrowings 15,761 18,222
Acceptances outstanding 500 378
Accounts payable and accrued expenses 3,931 3,174
Other liabilities 2,236 2,328
Long-term debt 9,294 6,455
Total liabilities 98,768 92,062
PREFERRED STOCK OF SUBSIDIARY 250 250
STOCKHOLDERS' EQUITY
Preferred stock 865 395
Common stock, $1 par value
Authorized, 300,000,000 shares
Issued, 83,678,973 shares 84 84
Capital surplus 1,302 1,317
Retained earnings 3,316 3,494
Common stock in treasury, at cost: 1995,
4,602,855 shares; 1994, 5,609,707 shares (336) (416)
Other (247) (170)
Total stockholders' equity 4,984 4,704
Total $104,002 $97,016
</TABLE>
<PAGE>
BANKERS TRUST NEW YORK CORPORATION
280 PARK AVENUE
NEW YORK, NEW YORK 10017
Geoffrey M. Fletcher
Senior Vice President and
Principal Accounting Officer
January 18, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sirs:
Accompanying this letter is Bankers Trust New York Corporation's
report on Form 8-K dated January 18, 1996 (the "Form 8-K"). The Form 8-K
is being filed electronically through the EDGAR System.
If there are any questions or comments in connection with the enclosed
filing, please contact the undersigned at 212-250-7098.
Very truly yours,
BANKERS TRUST NEW YORK CORPORATION
By: GEOFFREY M. FLETCHER
Geoffrey M. Fletcher
Senior Vice President and
Principal Accounting Officer
