<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) July 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 July 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 June 30,
1996, March 31, 1996, December 31, 1995 and June 30, 1995 and
its unaudited consolidated results of operations for each of
the three-month and six-month periods ended June 30, 1996
and 1995 and the three-month period ended March 31, 1996.
In the opinion of the Registrant's management, all material
adjustments necessary for a fair presentation of the
Corporation's consolidated financial position at June 30, 1996
and June 30, 1995 and its consolidated results of operations for
the three-month and six-month periods ended June 30, 1995 and
1995 and the three-month period ended March 31, 1996 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 June 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
July 18, 1996
<PAGE>
BANKERS TRUST NEW YORK CORPORATION
FORM 8-K DATED JULY 18, 1995
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
(99.1) Earnings Press Release of the
Registrant dated July 18, 1996.
<PAGE>
<PAGE>
THURSDAY, JULY 18, 1996
BANKERS TRUST SECOND QUARTER EARNINGS RISE TO $151 MILLION, OR $1.67
EARNINGS PER SHARE
New York, July 18, 1996 -- Bankers Trust New York Corporation earned $151
million, or $1.67 primary earnings per share, in the second quarter of
1996. The current quarter's earnings increased 9% from the first quarter
1996 results of $138 million, or $1.52 primary earnings per share, and 66%
from the second quarter 1995 results of $91 million, or $.98 primary
earnings per share. Return on average common equity for the second quarter
of 1996 was 13%.
"Bankers Trust made excellent progress in the second quarter towards key
strategic objectives," said Frank N. Newman, chairman and chief executive
officer. "We put major derivatives disputes and inquiries behind us. We
announced a strategic merger with Wolfensohn & Co. that will add
significantly to our client-focused investment banking capabilities. And
earnings grew strongly."
"In particular, earnings performance was again led by our Investment
Banking business, complemented by strong results in Latin America,
Australia/New Zealand and Client Processing Services - all of which were up
from the first quarter. We are pleased by the improvement in Investment
Management, including private banking. Although earnings in Risk
Management Services were down due to losses in commodity derivatives when
copper prices fell sharply during June, client-related risk management
revenues continued at the same pace as last quarter. For the Firm as a
whole, client-based revenues are far and away the principal driver of
Bankers Trust's second quarter results."
<PAGE>
ORGANIZATIONAL HIGHLIGHTS
The following table analyzes net income (loss) by Organizational Units*:
<TABLE>
<CAPTION>
Second First Second
Quarter Quarter Quarter
($ in millions) 1995 1996 1996
<S> <C> <C> <C>
Investment Banking $ 74 $ 77 $109
Risk Management Services (9) 1 (22)
Trading & Sales 8 24 17
Investment Management 2 1 4
Client Processing Services 27 21 26
Australia/New Zealand 25 24 31
Asia 8 6 7
Latin America (4) 19 36
Corporate/Other (40) (35) (57)
Net Income $ 91 $138 $151
</TABLE>
The Investment Banking business produced net income of $109 million in the
second quarter of 1996, compared with $77 million in the first quarter of
1996 and $74 million in the second quarter of the previous year. The
current quarter's increase was attributable primarily to strong revenues
from loan syndications and bond and equity underwriting. The remainder of
the increase was in the Private Equity Investment unit, where one
transaction increased total pre-tax revenues to $30 million above the
quarterly average of the past two years.
Risk Management Services produced a net loss of $22 million in the second
quarter of 1996, down from both the first quarter of 1996 and the second
quarter of 1995. The change from the first quarter was due to losses
incurred in the commodity derivatives books when copper prices dropped
sharply.
*Organizational Unit business results are determined based on the
Corporation's internal management accounting process, which allocates revenue
and expenses among the Organizational Units. Because the Corporation's
business is complex in nature and its operations are integrated, it is
impractical to segregate respective contributions of the Organizational Units
with precision. As a result, estimates and subjective judgments have been
made to apportion revenue and expense items. The internal management
accounting process, unlike financial accounting in accordance with
generally accepted accounting principles, is based on the way the
management views Bankers Trust's business and is not necessarily
comparable with similar information disclosed by other financial
institutions. In order to provide comparability from one period to
the next, the Corporation will restate this analysis to conform with material
changes in the allocation process and/or significant changes in
organizational structure.
Net income from the Trading & Sales business, at $17 million, was down $7
million from the first quarter of 1996, but up $9 million from the second
quarter of 1995.
The Corporation's Investment Management business, which for reporting
purposes does not include investment management activities in Australia/NZ,
reported net income of $4 million for the current quarter. The improved
results from the first quarter of 1996 and second quarter of 1995 were due
primarily to increased revenue from private banking activities. At June
30, 1996, assets under management in this organizational unit were
approximately $191 billion, compared to $185 billion and $172 billion at
March 31, 1996 and June 30, 1995, respectively.
<PAGE>
Client Processing Services recorded $26 million of net income in the second
quarter of 1996, up $5 million from the previous quarter and down slightly
from the second quarter of 1995, which had been boosted by a $6 million
after-tax gain from the sale of the unit-investment-trust product line.
The improved performance in the current quarter was primarily due to a
newly acquired book of mortgage-backed securities servicing and from
custody fee growth.
Net income of the Australia/NZ business was $31 million in the second
quarter of 1996, up $7 million and $6 million respectively from the first
quarter of 1996 and the second quarter of 1995. The current quarter's
improvement was due to strong performances in corporate finance and
trading. At June 30, 1996, assets under management in Australia/NZ's
investment management business were approximately $24 billion, compared to
$23 billion and $20 billion at March 31, 1996 and June 30, 1995,
respectively.
Asia net income was $7 million in the second quarter of 1996, up slightly
from the first quarter of 1996 and down slightly from the second quarter of
1995.
Latin America net income was $36 million in the second quarter of 1996, up
$17 million from the first quarter of 1996, and up $40 million from the
second quarter of 1995. Included in the second quarter's results was $31
million in pre-tax revenue from the sale of Compensa, the smaller of the
Corporation's two Chilean insurance subsidiaries. Consorcio, the other
subsidiary, is the largest life insurance company in Chile.
Corporate/Other net loss increased by $22 million principally due to $28
million pre-tax of unusual legal and professional fees related to the
completion of the Independent Counsel's report and the settlement of old
leveraged derivative disputes.
QUARTERLY FINANCIAL COMPARISONS
Second Quarter 1996 versus First Quarter 1996
Net income of $151 million for the second quarter of 1996 was up 9% from
the $138 million earned in the first quarter of 1996.
Second quarter 1996 combined trading revenue and trading-related net
interest revenue decreased $67 million from the first quarter of 1996.
Page 7 below shows combined trading results by organizational units.
Corporate finance fees increased $50 million, or 58%, due to strong results
from loan syndication and securities underwriting activities.
Net revenue from equity investment transactions increased $51 million,
primarily in the Private Equity Investment unit of Investment Banking.
Other noninterest revenue increased $27 million during the current quarter,
due to the $31 million gain on the sale of Compensa, as previously
discussed.
Included within agency and other professional service fees for the current
quarter were $28 million pre-tax of unusual legal and professional fees
related to the completion of the Independent Counsel's report and the
settlement of old leveraged derivative disputes.
Provision for policyholder benefits increased $6 million during the second
quarter due to increased activity in the Corporation's Chilean insurance
subsidiary.
CREDIT QUALITY
Credit quality improved further in the quarter, and there was no provision
for credit losses. Cash basis loans declined markedly from $715 million in
the first quarter of 1996 to $573 million in the second quarter of 1996.
The decline in cash basis loans during the current quarter is attributable
to paydowns on various commercial, industrial, and real estate loans as
well as collections in connection with the settlement of old leveraged
<PAGE>
derivative transactions. The ratio of the allowance for credit losses to
total cash basis loans rose to 170% at June 30, 1996 from 138% at March 31,
1996.
CAPITAL
Total stockholders' equity at June 30, 1996 was $5.167 billion, up $112
million and $183 million respectively from March 31, 1996 and December 31,
1995. The Corporation estimates that its ratios of Tier 1 Capital and
Total Capital to risk-adjusted assets were approximately 8.3% and 13.5%,
respectively, at June 30, 1996.
The remainder of this release contains the following tables:
Page
1. BTNY Consolidated Quarterly Statement of Income 5
2. BTNY Consolidated Year-To-Date Statement of Income 6
3. Combined Trading Revenue and Trading-Related Net
Interest Revenue 7
4. Net Interest Revenue 7
5. Consolidated Balance Sheet 8
6. Stock and Capital Data 9
7. Nonperforming Assets and Allowance for Credit Losses 10
For additional information, contact Douglas Kidd, 212 250-7225 or Tom
Parisi, 212 250-7235 (Media); Howard Schneider 212 250-7908 (Investors).
Bankers Trust news releases, including quarterly results, are available on
the Internet (http://www.bankerstrust.com).
<PAGE>
BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES
CONSOLIDATED QUARTERLY STATEMENT OF INCOME
(in millions, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Second First Second
Quarter Quarter Quarter
1995 1996 1996
<S> <C> <C> <C>
NET INTEREST REVENUE
Interest revenue $1,520 $1,590 $1,664
Interest expense 1,298 1,377 1,421
Net interest revenue 222 213 243
Provision for credit losses - 5 -
Net interest revenue after provision
for credit losses 222 208 243
NONINTEREST REVENUE
Trading 79 247 146
Fiduciary & funds management 166 183 198
Corporate finance fees 127 86 136
Other fees & commissions 84 87 82
Net revenue from equity
investment transactions 13 21 72
Securities available for sale gains 17 15 25
Insurance premiums 63 62 63
Other 38 49 76
Total noninterest revenue 587 750 798
NONINTEREST EXPENSES
Salaries 194 201 202
Incentive compensation &
employee benefits 135 227 235
Agency & other professional service fees 68 60 98
Communication & data services 48 46 47
Occupancy, net 38 37 36
Furniture & equipment 40 41 41
Travel & entertainment 24 18 24
Provision for policyholder benefits 71 72 78
Other 60 59 64
Total noninterest expenses 678 761 825
Income before income taxes 131 197 216
Income taxes 40 59 65
NET INCOME $ 91 $ 138 $ 151
NET INCOME APPLICABLE TO COMMON STOCK $ 79 $ 123 $ 137
Cash dividends declared per common share $1.00 $1.00 $1.00
EARNINGS PER COMMON SHARE:
PRIMARY $.98 $1.52 $1.67
FULLY DILUTED $.98 $1.51 $1.66
<FN>
Certain prior period amounts have been reclassified to conform to the
current presentation.
</TABLE>
<PAGE>
BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES
CONSOLIDATED YEAR-TO-DATE STATEMENT OF INCOME
(in millions, except per share data)
(unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30, 1995 1996
<S> <C> <C>
NET INTEREST REVENUE
Interest revenue $2,873 $3,254
Interest expense 2,469 2,798
Net interest revenue 404 456
Provision for credit losses 14 5
Net interest revenue after provision
for credit losses 390 451
NONINTEREST REVENUE
Trading 1 393
Fiduciary & funds management 337 381
Corporate finance fees 199 222
Other fees & commissions 157 169
Net revenue from equity investment transactions 39 93
Securities available for sale gains 19 40
Insurance premiums 112 125
Other 65 125
Total noninterest revenue 929 1,548
NONINTEREST EXPENSES
Salaries 402 403
Incentive compensation and employee benefits 268 462
Agency & other professional service fees 144 158
Communication & data services 95 93
Occupancy, net 79 73
Furniture & equipment 82 82
Travel & entertainment 47 42
Provision for policyholder benefits 127 150
Other 118 123
Provision for severance-related costs 50 -
Total noninterest expenses 1,412 1,586
Income (loss) before income taxes (93) 413
Income taxes (benefit) (27) 124
NET INCOME (LOSS) $ (66) $ 289
NET INCOME (LOSS) APPLICABLE TO COMMON STOCK $ (86) $260
Cash dividends declared per common share $2.00 $2.00
EARNINGS (LOSS) PER COMMON SHARE:
PRIMARY $(1.10) $3.19
FULLY DILUTED $(1.10) $3.17
<FN>
Certain prior period amounts have been reclassified to conform to the
current presentation.
</TABLE>
<PAGE>
COMBINED TRADING REVENUE AND TRADING-RELATED NET INTEREST REVENUE
The Corporation views trading revenue and trading-related net interest
revenue together, as presented in the table below.
<TABLE>
<CAPTION>
Second First Second
Quarter Quarter Quarter
($ in millions) 1995 1996 1996
<S> <C> <C> <C>
Trading Revenue $ 79 $247 $146
Trading-Related Net Interest
Revenue (Estimate) 57 30 64
Total Trading Revenue &
Trading-Related NIR $136 $277 $210
By Organizational Unit ($ in millions)
Investment Banking $ 16 $ 49 $ 21
Risk Management Services 48 73 43
Trading & Sales 48 81 72
Investment Management 4 1 2
Client Processing Services 2 2 2
Australia/New Zealand 36 27 34
Asia 16 12 9
Latin America - 37 28
Corporate/Other (34) (5) (1)
Total Trading Revenue &
Trading-Related NIR $136 $277 $210
<FN>
Note: The Corporation accounts for revenues from a wide range of business
activities as "trading". Investment Banking produces trading revenues in
secondary market activities with clients, primarily in sectors where the
Firm also serves as underwriter. A small portion of trading revenues arise
from private equity investments that are accounted for on a mark-to-market
basis. Risk Management Services generates trading revenues primarily from
new derivative transactions with clients and in managing the risks the
Corporation assumes on such transactions. Trading & Sales produces trading
revenues through proprietary position-taking, including arbitrage, as well
as market making and other client activities. Geographically-Based
Businesses produce trading revenues from all the above business activities.
Corporate/Other includes various transactions which, for management
accounting purposes, are not recorded in Organizational Units.
</TABLE>
<PAGE>
NET INTEREST REVENUE
<TABLE>
<CAPTION>
Second First Second
Quarter Quarter Quarter
($ in millions) 1995 1996 1996
<S> <C> <C> <C>
Nontrading-related net interest revenue $165 $183 $179
Trading-related net interest revenue 57 30 64
Net interest revenue $222 $213 $243
Average rates (fully taxable basis)
Yield on interest-earning assets 7.53% 7.49% 7.37%
Cost of interest-bearing liabilities 6.70% 6.68% 6.59%
Interest rate spread .83% .81% .78%
Net interest margin 1.14% 1.02% 1.09%
Average balances (billions)
Loans $10.8 $12.4 $13.1
Total interest-earning assets $81.4 $85.6 $91.0
Total assets $109.8 $113.7 $117.8
Total interest bearing liabilities $77.7 $82.9 $86.7
</TABLE>
<PAGE>
BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
($ in millions)
(unaudited)
<TABLE>
<CAPTION>
June 30 December 31 March 31 June 30
1995 1995 1996 1996
<S> <C> <C> <C>> <C>
ASSETS
Cash and due from banks $ 1,739 $ 2,337 $ 1,181 $ 1,663
Interest-bearing deposits
in banks 1,357 2,023 1,377 2,065
Federal funds sold 238 854 1,038 365
Sec. purch. under
resale agreement 14,075 13,206 15,670 25,420
Securities borrowed 10,483 10,951 15,390 13,373
Trading assets:
Government securities 21,026 20,704 18,345 14,565
Corporate debt securities 4,767 5,648 5,670 7,637
Equity securities 3,830 5,098 6,024 6,869
Swaps, options &
other derivatives 15,560 10,555 10,330 9,486
Other trading assets 5,382 5,888 5,136 5,218
Total trading assets 50,565 47,893 45,505 43,775
Securities available for sale 6,479 6,283 6,880 6,851
Loans 11,537 12,633 13,088 14,249
Allowance for credit losses (1,243) (992) (987) (972)
Accounts receivable &
accrued interest 2,697 4,220 4,072 2,841
Other assets 5,010 4,594 4,930 4,971
Total $102,937 $104,002 $108,144 $114,601
LIABILITIES
Noninterest-bearing deposits
Domestic offices $ 2,465 $ 2,687 $ 1,997 $ 3,327
Foreign offices 527 605 545 488
Interest-bearing deposits
Domestic offices 5,170 5,402 5,824 6,091
Foreign offices 14,443 17,014 14,190 15,387
Total deposits 22,605 25,708 22,556 25,293
Trading liabilities:
Securities sold, not yet purchased
Government securities 10,408 11,092 11,897 10,918
Equity securities 2,523 3,262 3,918 4,655
Other trading liabilities 365 473 331 377
Swaps, options &
other derivatives 15,108 11,264 10,903 10,333
Total trading liabilities 28,404 26,091 27,049 26,283
Sec. sold under
repurch. agreements 18,933 15,247 23,209 24,050
Other short-term borrowings 14,010 15,761 12,493 15,211
Accounts payable and
accrued expenses 3,615 3,931 4,665 4,531
Other liabilities 2,717 2,736 2,742 2,563
Long-term debt 7,514 9,294 10,125 11,253
Total liabilities 97,798 98,768 102,839 109,184
PREFERRED STOCK OF SUBSIDIARY 250 250 250 250
STOCKHOLDERS' EQUITY
Preferred stock 863 865 866 866
Common stock 84 84 84 84
Capital surplus 1,300 1,302 1,304 1,308
Retained earnings 3,240 3,316 3,351 3,393
Common stock in treasury,
at cost (391) (336) (311) (273)
Other stockholders' equity (207) (247) (239) (211)
Total stockholders' equity 4,889 4,984 5,055 5,167
Total $102,937 $104,002 $108,144 $114,601
<FN>
Certain prior period amounts have been reclassified to conform to the
current presentation.
</TABLE>
<PAGE>
STOCK AND CAPITAL DATA
<TABLE>
<CAPTION>
Second First Second
Quarter Quarter Quarter
1995 1996 1996
<S> <C> <C> <C>
FOR THE QUARTER
Return on Average Common
Stockholders' Equity 7.8% 11.9% 12.9%
Return on Average Total Assets .33% .49% .52%
PER COMMON SHARE
Earnings:
Primary $.98 $1.52 $1.67
Fully Diluted $.98 $1.51 $1.66
Cash Dividends Declared $1.00 $1.00 $1.00
Market Price, End of Period $62.00 $70.875 $73.875
Book Value, End of Period (1) $49.80 $51.06 $51.86
COMMON SHARES (shares in thousands except par value)
Common stock $1 par value:
Authorized, at period end 300,000 300,000 300,000
Issued, at period end 83,679 83,679 83,679
Common stock in treasury,
at period end 5,328 4,278 3,758
Average Common and Common Equivalent
Shares Outstanding
Primary 80,564 80,896 81,900
Fully Diluted 80,796 81,560 82,351
CAPITAL RATIOS, END OF PERIOD
Common Stockholders' Equity
to Total Assets 3.9% 3.9% 3.8%
Total Stockholders' Equity
to Total Assets 4.8% 4.7% 4.5%
Bankers Trust New York Corporation:
Risk-Based Capital Ratios (2)
Tier 1 Capital 8.6% 8.2% 8.3%
Total Capital 13.9% 13.4% 13.5%
Leverage Ratio (2) 5.5% 5.3% 5.5%
Bankers Trust Company:
Risk-Based Capital Ratios (2)
Tier 1 Capital 9.3% 9.4% 9.3%
Total Capital 11.9% 12.6% 12.4%
Leverage Ratio (2) 5.3% 5.5% 5.5%
<FN>
(1) This calculation includes the effect of the vested portion of common
shares issuable under deferred stock awards.
(2) Regulatory capital ratios at June 30, 1996 are preliminary.
</TABLE>
<PAGE>
NONPERFORMING ASSETS AND ALLOWANCE FOR CREDIT LOSSES
<TABLE>
<CAPTION>
June 30 March 31 June 30
1995 1996 1996
<S> <C> <C> <C>
Nonperforming assets (in millions)
Cash basis loans
Secured by real estate $412 $351 $308
Real estate related 25 31 31
Highly leveraged 110 132 128
Other 378 201 106
Total cash basis loans $925 $715 $573
Renegotiated loans
Secured by real estate $ 89 $89 $89
Other nonrefinancing country 12 - -
Total renegotiated loans $101 $89 $89
Other real estate $263 $257 $219
Other nonperforming assets $64 $67 $68
</TABLE>
<TABLE>
<CAPTION>
June 30 March 31 June 30
1995 1996 1996
<S> <C> <C> <C>
Allowance for credit losses (in millions)
Balance, beginning of period $1,245 $992 $987
Net charge-offs
Charge-offs 13 28 21
Recoveries 11 18 6
Total net charge-offs* 2 10 15
Provision for credit losses - 5 -
Balance, end of period $1,243 $987 $972
*Components:
Secured by real estate $(3) $ 1 $ -
Real estate related - 4 -
Highly leveraged 2 20 3
Other 4 (12) 13
Refinancing country (1) (3) (1)
Total $ 2 $ 10 $ 15
</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
July 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 July 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
