<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) October 23, 1997
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.)
130 LIBERTY STREET, NEW YORK, NEW YORK 10006
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (212) 250-2500
<PAGE>
Item 5. Other Events
A) On October 23, 1997, Bankers Trust New York Corporation (the
"Registrant") released financial information with respect to the
quarter ended September 30, 1997. This Current Report on Form 8-
K files the Press Release which contains 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 October 23, 1997, 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
September 30, 1997, June 30, 1997 and September 30, 1996 and the
audited consolidated financial position at December 31, 1996 and
its unaudited consolidated results of operations for each of the
three-month and nine-month periods ended September 30, 1997, and
September 30, 1996, and the three-month period ended June 30,
1997.
In the opinion of the Registrant's management, all material
adjustments necessary for a fair presentation of the
Corporation's consolidated financial position at September 30,
1997, June 30, 1997 and September 30, 1996 and its consolidated
results of operations for the three-month and nine-month periods
ended September 30, 1997 and September 30, 1996 and the three-
month period ended June 30, 1997 have been made. All such
adjustments were of a normal recurring nature. The results of
operations for the three-month and nine-month periods ended
September 30, 1997 and for the three-month period ended June 30,
1997 are not necessarily indicative of the results of operations
for the full year or any other interim period.
B) On September 1, 1997, Alex. Brown Incorporated was merged
into a wholly-owned subsidiary of Bankers Trust New York
Corporation. The merger was treated as a tax free exchange and
qualified for the pooling of interests method of accounting.
Accounting Series Release 135, as interpreted by Staff
Accounting Bulletin 65, requires that no affiliate of either
combining company may reduce its risk relating to its common
shareholder position during a period ending when financial
results including at least 30 days of post-merger combined
operations have been published. This Form 8-K includes 30 days
of combined operating results to satisfy this requirement.
<PAGE>
In the opinion of the Registrant's management, the unaudited
results for the one month ended September 30, 1997 include all
ordinary and recurring adjustments necessary to present fairly
the results of operations for the one month ended September 30,
1997. The operating results have been prepared and published
only for purposes of complying with pooling accounting
requirements and are not necessarily indicative of the results
that may be expected for any future periods.
BANKERS TRUST NEW YORK CORPORATION
MONTH ENDED SEPTEMBER 30, 1997 (unaudited)
(Dollars in millions)
Total Revenues* $634
Net Income $ 89
* Net interest revenue after provision for credit losses plus
noninterest revenue.
Item 7. Financial Statements and Exhibits
(c) Exhibits
(99.1) Earnings Press Release of the Registrant
dated October 23, 1997.
<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/ RONALD HASSEN
RONALD HASSEN
Senior Vice President
(Principal Accounting Officer)
October 24, 1997
<PAGE>
BANKERS TRUST NEW YORK CORPORATION
FORM 8-K DATED OCTOBER 23, 1997
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
(99.1) Earnings Press Release of the
Registrant dated October 23, 1997.
THURSDAY, OCTOBER 23, 1997
BANKERS TRUST EARNS $2.16 PER SHARE IN THE THIRD QUARTER OF 1997,
UP 20% FROM THE $1.80 PER SHARE FOR THE THIRD QUARTER OF 1996, BOTH
ON A FULLY DILUTED BASIS
New York, October 23, 1997 -- Bankers Trust New York Corporation
(BT) today reported that fully diluted earnings per share for the
third quarter were $2.16, up 20% from the $1.80 earned in the
third quarter of 1996. Net income for the third quarter of 1997
was $246 million, compared with $202 million in the third quarter
of 1996. Return on common equity in the quarter reached 17.4%,
compared with 15.3% in the third quarter of 1996. The merger of
Alex. Brown and Bankers Trust New York Corporation was completed
on September 1, 1997. The merger was accounted for as a pooling
of interests and all periods presented have been restated as if
Alex. Brown and the Corporation had always been combined.
"Our merger with Alex. Brown is off to an outstanding start,"
said Frank Newman, chairman of the board of directors and chief
executive officer of Bankers Trust. "With the formation of BT
Alex. Brown, we became the pre-eminent provider of financing to
fast-growing companies and restructuring industries around the
world. Bankers Trust alone is now ranked in the top five
providers in all four financing categories critical to this non-
investment grade market -- high yield bonds, equities, leveraged
lending, and mergers-and-acquisition advisory."
Mr. Newman added: "Our strong investment banking revenues in the
third quarter began to reflect our new ability to meet the full
range of clients' needs. These early successes underscore our
tremendous potential to deliver value to clients and
shareholders."
The current quarter included an after-tax gain of $51 million on
the sale of 280 Park Avenue, a midtown Manhattan office building.
The building is the former headquarters of the Corporation, which
is now located at One Bankers Trust Plaza, in lower Manhattan.
The current quarter also included an after-tax gain of $20
million resulting from the completion of the final stage in the
sale of 50% of the Corporation's stake in a Chilean insurance
company. Included in noninterest expenses were restructuring
charges of $57 million ($40 million after-tax) associated with
the merger, such as severance, lease terminations and direct
costs of completing the merger, and other integration costs of
$42 million ($29 million after-tax).
For the current quarter, total revenues of $1.770 billion were up
$511 million from third quarter 1996 revenues of $1.259 billion.
Revenues increased in most of the Firm's business units. Total
noninterest expenses of $1.419 billion for the third quarter of
1997 increased $455 million from the third quarter of 1996.
At September 30, 1997, total cash basis loans amounted to $298
million, down from $305 million at June 30, 1997 and $488 million
at September 30, 1996. During the quarter, the Corporation
incurred net charge-offs of $11 million and recorded a $10
million provision for credit losses. As a result, the total
allowance for credit losses at September 30, 1997 was $972
million, down from $973 million at June 30, 1997.
2
ORGANIZATIONAL HIGHLIGHTS*
Total Non- Pretax Net
Third Quarter 1997 Total Interest Income/ Income/
(in millions) Revenue Expenses (Loss) (Loss)
Investment Banking $ 625 $335 $290 $204
Risk Management Services 117 101 16 11
Trading & Sales 128 86 42 30
Private Client Services Group 174 145 29 20
Global Institutional Services 241 211 30 21
Australia/New Zealand 136 113 23 17
Asia 8 34 (26) (19)
Latin America 203 144 59 42
Corporate/Other 138 250 (112) (80)
Total $1,770 $1,419 $351 $246
Total Non- Pretax Net
Second Quarter 1997 Total Interest Income/ Income/
(in millions) Revenue Expenses (Loss) (Loss)
Investment Banking $ 492 $ 294 $198 $136
Risk Management Services 107 98 9 6
Trading & Sales 169 86 83 57
Private Client Services Group 155 128 27 19
Global Institutional Services 225 201 24 16
Australia/New Zealand 143 107 36 25
Asia 11 31 (20) (14)
Latin America 172 116 56 39
Corporate/Other 60 164 (104) (71)
Total $1,534 $1,225 $309 $213
Total Non- Pretax Net
Third Quarter 1996 Total Interest Income/ Income/
(in millions) Revenue Expenses (Loss) (Loss)
Investment Banking $ 344 $195 $149 $102
Risk Management Services 75 66 9 6
Trading & Sales 105 64 41 28
Private Client Services Group 142 123 19 13
Global Institutional Services 211 183 28 19
Australia/New Zealand 144 86 58 40
Asia 30 24 6 4
Latin America 123 95 28 19
Corporate/Other 85 128 (43) (29)
Total $1,259 $964 $295 $202
* 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 diverse 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 judgments have been made to
apportion revenue and expense items. In addition, certain
revenue and expenses have been segregated and reported in
Corporate/Other because, in the opinion of management, they could
not be reasonably allocated or because their contributions to a
particular organizational unit would be distortive. In order to
provide comparability from one period to the next,
the Corporation will generally restate this analysis to conform
with material changes in the allocation process and/or significant
changes in organizational structure.
3
Changes in Organizational Structure
Results of Alex. Brown are included primarily in Investment
Banking and Private Client Services Group. The Private Client
Services Group also includes the results of the Corporation's
historical private banking and active domestic equity management
businesses. The quantitative and indexed investment management
business, previously included in Investment Management, is now
included in Global Institutional Services. All active
international and global investment activities are included in
Australia/New Zealand. The results by organizational units have
been restated to conform to the new presentation.
Organizational Unit Results
The Investment Banking business contributed net income of $204
million in the third quarter of 1997, up $102 million from a year
ago and up $68 million from the previous quarter. The increase
from the prior year period and previous quarter reflected higher
revenues from corporate finance activities in addition to higher
revenues from private equity investments. In addition, real
estate investment banking activities contributed strong corporate
finance revenues as compared to the prior year period.
Risk Management Services recorded net income of $11 million in
the third quarter of 1997, up $5 million from both the third
quarter of 1996 and from the previous quarter. Compared to the
prior year period and previous quarter, revenues from new
derivatives transactions and Eastern Europe activities improved.
Trading & Sales contributed $30 million of net income in the
third quarter of 1997, up $2 million from the 1996 third quarter
and down $27 million from the previous quarter. The current
quarter reflected lower revenue from arbitrage activities as
compared to the previous quarter.
The Corporation's Private Client Services Group business reported
net income of $20 million for the current quarter, up $7 million
from the 1996 comparable period and up $1 million from the prior
quarter. All major business lines in Private Client Services
Group improved as compared to the prior year period.
Global Institutional Services contributed $21 million of net
income in the third quarter of 1997, up $2 million from the 1996
third quarter and up $5 million from the previous quarter.
Revenues of $241 million were up $30 million from the third
quarter of 1996 and $16 million from the previous quarter
primarily due to the acquisition of NationsBank's institutional
trust business. The current quarter also reflected improved
results from investment management and securities lending
activities as compared to the third quarter of 1996.
Net income of the Australia/NZ business was $17 million in the
third quarter of 1997, down $23 million from the third quarter of
1996 and down $8 million from the previous quarter. The decline
in net income from the prior quarter
4
and prior year period was mainly attributable to lower trading
revenue partly offset by improved revenues from fiduciary and
funds management. In addition, personnel-related costs increased
as a result of higher staff levels. At September 30, 1997,
assets under management in Australia/NZ's investment management
business were approximately $45 billion, compared to $41 billion
and $34 billion at June 30, 1997 and September 30, 1996
respectively.
Asia net loss was $19 million in the third quarter of 1997,
compared to net income of $4 million in the third quarter of 1996
and a net loss of $14 million in the second quarter of 1997. As
a result of continuing economic instability and heightened credit
concerns in Southeast Asia, the Corporation has recognized a
decline in value for certain investments in the region and has
taken other credit-related charges.
Latin America net income was $42 million in the third quarter of
1997, up $23 million from the third quarter of 1996 and up $3
million from the second quarter of 1997. The current quarter
included the remaining gain resulting from the completion of the
final stage in the sale of 50% of the Corporation's stake in a
Chilean insurance company as previously mentioned. The prior
quarter included a gain on the first stage of the sale.
Corporate/Other net loss was $80 million in the third quarter of
1997, compared with a net loss of $29 million in the third
quarter of 1996 and a net loss of $71 million in the second
quarter of 1997. During the current quarter, the Corporation
recognized $57 million in pre-tax restructuring charges and $42
million in other integration costs, offset partly by the pre-tax
gain of $73 million on the sale of 280 Park Avenue. The prior
year period included an after-tax gain of $18 million on the sale
of its subsidiary, Golden American Life Insurance Company. The
first nine months of 1997 included the effects of increased
incentive compensation and employee benefits and consulting
expenses associated with several strategic and infrastructure
improvement projects.
QUARTERLY FINANCIAL COMPARISONS
Third Quarter 1997 Versus Third Quarter 1996
Net income of $246 million for the third quarter of 1997 was up
22% from the $202 million earned in the third quarter of 1996.
Third quarter 1997 combined trading revenue and trading-related
net interest revenue of $492 million increased $163 million.
Page 10 shows combined trading results by organizational unit.
Fiduciary and funds management revenue was $277 million in the
third quarter of 1997, up $61 million from the prior year period.
Funds management, client processing services and global private
banking commissions contributed to this increase.
5
Corporate finance fees of $305 million increased 58% from the
$193 million earned in the third quarter of 1996, primarily due
to higher fees for arranging and underwriting bond and equity
financings, higher loan syndication fees and increased merger and
acquisition fees.
Other noninterest revenue totaled $171 million in the current
quarter, compared to $56 million in the third quarter of 1996.
The current quarter included the gain on the sale of 280 Park
Avenue and the remaining gain on the sale of 50% of the
Corporation's stake in a Chilean insurance company, as previously
discussed. The prior year quarter included a gain on the sale of
Golden American Life Insurance Company, an indirect wholly-owned
subsidiary acquired in satisfaction of debt in 1992.
Total noninterest expenses of $1.419 billion increased by $455
million, or 47%, from the third quarter of 1996. Included in
noninterest expenses are restructuring charges and other
integration costs as previously discussed. Salaries and
commissions expense increased $38 million, or 13%, principally
due to a 5% increase in the average number of employees, annual
pay increases and higher broker commission revenue. Incentive
compensation and employee benefits, the largest component of
noninterest expenses, increased $270 million due to higher
profitability and the increase in the average number of
employees.
Third Quarter 1997 versus Second Quarter 1997
Net income of $246 million for the third quarter of 1997 was up
15% from the $213 million earned in the second quarter of 1997.
Third quarter 1997 combined trading revenue and trading-related
net interest revenue of $492 million increased $29 million from
the second quarter of 1997.
Corporate finance fees of $305 million increased $36 million from
the prior quarter, primarily due to increases in revenues from
underwriting-related activities.
Other noninterest revenue totaled $171 million in the current
quarter, compared to $60 million in the prior quarter. As
previously mentioned, the current quarter included the gain on
the sale of 280 Park Avenue, and the remaining gain on the sale
of 50% of the Corporation's stake in a Chilean insurance company.
Total noninterest expenses of $1.419 billion increased by $194
million, or 16%, from the second quarter of 1997. Salaries and
commissions expense increased $29 million, or 10%, principally
due to an increase in the average number of employees, annual pay
increases and higher broker commission revenue. Incentive
compensation and employee benefits, the largest component of
noninterest expenses, increased $101 million due to higher
profitability and the increase in the average number of
employees. Also included in noninterest expenses are
restructuring charges and other integration costs as previously
mentioned.
6
CAPITAL
In March 1997, the Corporation became the first banking
institution to adopt the new Market Risk Amendment to the risk-
based capital guidelines issued by the Federal Reserve and the
Bank for International Settlements (BIS). The amendment changes
the calculation of the risk-weighted assets for trading accounts
by incorporating the use of internal models to measure market
risks. In addition, the amendment requires that the capital and
risk-adjusted assets of the Corporation's Section 20 subsidiary,
BT Alex. Brown Incorporated, no longer be excluded when
calculating the risk-based capital ratios at the holding company
level. All banking institutions with significant trading
activity must adopt this Amendment by January 1, 1998. During
1997, early adoption is permissible with prior approval from the
institution's primary federal regulator.
As calculated under these new rules, the Corporation estimates
that its ratios of Tier 1 Capital and Total Capital to risk-
weighted assets were approximately 8.3% and 13.4%, respectively,
as of September 30, 1997.
The remainder of this release contains the following tables:
Page
1. BTNY Consolidated Quarterly Statement of Income 8
2. BTNY Consolidated Year-To-Date Statement of Income 9
3. Combined Trading Revenue and Trading-Related Net
Interest Revenue 10
4. Net Interest Revenue 10
5. BTNY Consolidated Balance Sheet 11
6. Stock and Capital Data 12
7. Nonperforming Assets and Allowance for Credit Losses 13
For additional information, contact William McBride, 212-250-7961.
Bankers Trust news releases, including quarterly results, are
available on the Internet (http://www.bankerstrust.com/earnings).
7
BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES
CONSOLIDATED QUARTERLY STATEMENT OF INCOME
(in millions, except per share data)
(unaudited)
Third Second Third
Quarter Quarter Quarter
1996 1997 1997
NET INTEREST REVENUE
Interest revenue $1,704 $1,731 $1,789
Interest expense 1,434 1,391 1,474
Net interest revenue 270 340 315
Provision for credit losses - - 10
Net interest revenue after provision
for credit losses 270 340 305
NONINTEREST REVENUE
Trading* 252 315 387
Fiduciary & funds management 216 261 277
Corporate finance fees 193 269 305
Other fees & commissions 130 148 158
Net revenue from equity investment
transactions 79 9 73
Securities available for sale gains 11 68 18
Insurance premiums 52 64 76
Other 56 60 171
Total noninterest revenue 989 1,194 1,465
Total revenue 1,259 1,534 1,770
NONINTEREST EXPENSES
Salaries and commissions 295 304 333
Incentive compensation &
employee benefits 273 442 543
Agency & other professional service fees 73 102 105
Communication & data services 63 57 58
Occupancy, net 43 44 45
Furniture & equipment 46 55 55
Travel & entertainment 27 36 36
Provision for policyholder benefits 66 73 90
Other 78 112 97
Restructuring charges - - 57
Total noninterest expenses 964 1,225 1,419
Income before income taxes 295 309 351
Income taxes 93 96 105
NET INCOME $ 202 $ 213 $ 246
NET INCOME APPLICABLE TO COMMON STOCK** $ 194 $ 201 $ 235
Cash dividends declared per common share $1.00 $1.00 $1.00
EARNINGS PER COMMON SHARE:
PRIMARY $1.85 $1.94 $2.25
FULLY DILUTED $1.80 $1.88 $2.16
* The Corporation accounts for revenues from a wide range of
business activities as "trading". See table on page 10.
** Amounts shown are used to calculate primary earnings per
common share.
Certain prior period amounts have been reclassified to conform
to the current presentation.
8
BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES
CONSOLIDATED YEAR-TO-DATE STATEMENT OF INCOME
(in millions, except per share data)
(unaudited)
NINE MONTHS ENDED SEPTEMBER 30, 1996 1997
NET INTEREST REVENUE
Interest revenue $4,822 $5,200
Interest expense 4,052 4,214
Net interest revenue 770 986
Provision for credit losses 5 10
Net interest revenue after provision
for credit losses 765 976
NONINTEREST REVENUE
Trading* 746 1,013
Fiduciary & funds management 633 769
Corporate finance fees 651 789
Other fees & commissions 407 445
Net revenue from equity investment
transactions 182 129
Securities available for sale gains 51 100
Insurance premiums 177 203
Other 202 277
Total noninterest revenue 3,049 3,725
Total revenue 3,814 4,701
NONINTEREST EXPENSES
Salaries and commissions 841 941
Incentive compensation & employee benefits 898 1,362
Agency & other professional service fees 236 296
Communication & data services 177 173
Occupancy, net 128 132
Furniture & equipment 135 163
Travel & entertainment 77 101
Provision for policyholder benefits 216 231
Other 247 292
Restructuring charges - 57
Total noninterest expenses 2,955 3,748
Income before income taxes 859 953
Income taxes 277 294
NET INCOME $ 582 $ 659
NET INCOME APPLICABLE TO COMMON STOCK** $ 545 $ 622
Cash dividends declared per common share $3.00 $3.00
EARNINGS PER COMMON SHARE:
PRIMARY $5.30 $6.00
FULLY DILUTED $5.13 $5.80
* The Corporation accounts for revenues from a wide range of
business activities as "trading". See quarterly information on page 10.
** Amounts shown are used to calculate primary earnings per
common share.
Certain prior period amounts have been reclassified to conform
to the current presentation.
9
COMBINED TRADING REVENUE AND TRADING-RELATED NET INTEREST REVENUE
The Corporation views trading revenue and trading-related net
interest revenue (NIR) together, as presented in the table below.
Third Second Third
Quarter Quarter Quarter
(in millions) 1996 1997 1997
Trading Revenue $252 $315 $387
Trading-Related Net Interest
Revenue (Estimate) 77 148 105
Total Trading Revenue &
Trading-Related NIR $329 $463 $492
By Organizational Unit (in millions)
Investment Banking $ 71 $100 $137
Risk Management Services 78 118 112
Trading & Sales 94 97 103
Private Client Services Group - 4 6
Global Institutional Services 1 1 1
Australia/New Zealand 58 54 30
Asia 13 44 54
Latin America 22 48 25
Corporate/Other (8) (3) 24
Total Trading Revenue &
Trading-Related NIR $329 $463 $492
Note: The Corporation accounts for revenues from a wide range of
business activities as "trading". Investment Banking produces
trading revenues in secondary market activities with clients,
primarily in sectors where the Firm also serves as underwriter.
A small portion of trading revenues arise from private equity
investments that are accounted for on a mark-to-market basis.
Risk Management Services generates trading revenues primarily
from new derivative transactions with clients and in managing the
risks the Corporation assumes on such transactions. Trading &
Sales produces trading revenues through proprietary position-
taking, including arbitrage, as well as market making and other
client activities. Australia/New Zealand, Asia and Latin America
produce trading revenues from all the above business activities.
Corporate/Other includes various transactions which, for
management accounting purposes, are not recorded in
Organizational Units.
NET INTEREST REVENUE
Third Second Third
Quarter Quarter Quarter
($ in millions) 1996 1997 1997
Nontrading-related net interest
revenue(Estimate) $193 $192 $210
Trading-related net interest
revenue (Estimate) 77 148 105
Net interest revenue $270 $340 $315
Average rates (fully taxable basis)
Yield on interest-earning assets 6.77% 6.82% 6.74%
Cost of interest-bearing liabilities 6.20% 5.65% 5.72%
Interest rate spread .57% 1.17% 1.02%
Net interest margin 1.09% 1.36% 1.21%
Average balances (billions)
Loans $13.9 $18.3 $19.0
Total interest-earning assets $100.4 $102.2 $105.6
Total assets $125.9 $132.4 $140.0
Total interest-bearing liabilities $92.0 $98.7 $102.2
10
BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in millions)
September 30 December 31 June 30 September 30
1996* 1996 1997* 1997*
ASSETS
Cash and due from banks $ 866 $ 1,568 $ 1,756 $ 1,625
Interest-bearing deposits
in banks 4,101 2,210 2,334 2,522
Federal funds sold 856 1,684 1,305 2,241
Sec. purch. under
resale agreements 22,110 18,002 25,758 24,902
Securities borrowed 15,386 17,005 13,285 16,138
Trading assets:
Government securities 16,155 16,849 12,338 11,650
Corporate debt securities 8,718 8,033 9,644 9,362
Equity securities 5,622 6,089 8,066 8,010
Swaps, options &
other derivatives 10,363 11,410 10,824 13,720
Other trading assets 7,106 6,748 8,329 9,833
Total trading assets 47,964 49,129 49,201 52,575
Securities available
for sale 7,461 7,920 7,478 7,577
Loans 15,318 - - -
Allowance for credit losses (967) - - -
Loans, net of allowance
for credit losses of
$773, $767 and $759 at
December 31, 1996,
June 30, 1997
and September 30, 1997,
respectively - 15,107 19,000 20,544
Customer receivables 1,552 1,529 1,630 1,711
Accounts receivable &
accrued interest 3,472 3,077 3,448 3,977
Other assets 5,362 5,547 6,368 6,275
Total $123,481 $122,778 $131,563 $140,087
LIABILITIES
Noninterest-bearing deposits
Domestic offices $ 2,552 $ 2,600 $ 3,046 $ 2,134
Foreign offices 647 1,013 1,439 1,294
Interest-bearing deposits
Domestic offices 7,401 9,928 15,618 20,490
Foreign offices 18,072 16,774 18,327 22,161
Total deposits 28,672 30,315 38,430 46,079
Trading liabilities:
Securities sold,
not yet purchased
Government securities 11,061 7,668 4,958 6,724
Equity securities 3,752 4,174 5,002 5,445
Other trading liabilities 394 334 401 407
Swaps, options &
other derivatives 10,266 11,585 11,064 13,517
Total trading liabilities 25,473 23,761 21,425 26,093
Securities loaned and
securities sold under
repurchase agreements 24,576 23,454 22,973 20,158
Other short-term borrowings 19,024 19,409 19,527 19,329
Accounts payable and
accrued expenses 6,199 4,837 6,170 6,255
Other liabilities,
including allowance
for credit losses of $200
at December 31, 1996,
$206 at June 30,
1997 and $213 at
September 30, 1997 2,650 2,836 4,195 3,998
Long-term debt not included
in risk-based capital 8,270 8,732 8,468 7,655
Long-term debt included in
risk-based capital 2,437 2,576 2,939 2,918
Mandatorily redeemable
capital securities of
subsidiary trusts
holding solely junior
subordinated
deferrable interest
debentures included in
risk-based capital - 730 1,470 1,471
Total liabilities 117,301 116,650 125,597 133,956
PREFERRED STOCK OF
SUBSIDIARY 250 250 - -
STOCKHOLDERS' EQUITY
Preferred stock 816 810 703 703
Common stock 104 104 105 105
Capital surplus 1,412 1,437 1,491 1,541
Retained earnings 3,943 3,988 4,168 4,176
Common stock in treasury,
at cost (173) (372) (513) (545)
Other stockholders' equity (172) (89) 12 151
Total stockholders' equity 5,930 5,878 5,966 6,131
Total $123,481 $122,778 $131,563 $140,087
* Unaudited
Certain prior period amounts have been reclassified to conform to
the current presentation.
11
STOCK AND CAPITAL DATA
Third Second Third
Quarter Quarter Quarter
1996 1997 1997
FOR THE QUARTER
Return on Average Common
Stockholders' Equity 15.3% 15.6% 17.4%
Return on Average Total Assets .64% .65% .70%
PER COMMON SHARE
Earnings:
Primary $1.85 $1.94 $2.25
Fully Diluted $1.80 $1.88 $2.16
Cash Dividends Declared $1.00 $1.00 $1.00
Market Price, End of Period $78.625 $87.125 $122.375
Book Value, End of Period $48.84 $50.81 $51.65
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 103,509 104,790 105,362
Common stock in treasury,
at period end 2,193 6,012 5,757
Average Common and Common Equivalent
Shares Outstanding
Primary 104,787 102,957 104,358
Fully Diluted 108,380 106,890 108,914
CAPITAL RATIOS, END OF PERIOD
Common Stockholders' Equity
to Total Assets 4.1% 4.0% 3.9%
Total Stockholders' Equity
to Total Assets 4.8% 4.5% 4.4%
Bankers Trust New York Corporation:
Risk-Based Capital Ratios (1)
Tier 1 Capital 8.6% 9.2% 8.3%
Total Capital 12.8% 14.8% 13.4%
Leverage Ratio (1) 5.7% 5.0% 4.9%
Bankers Trust Company:
Risk-Based Capital Ratios (1)
Tier 1 Capital 9.1% 9.0% 8.7%
Total Capital 12.2% 12.4% 12.1%
Leverage Ratio (1) 5.5% 5.3% 5.3%
(1) Regulatory capital ratios at September 30, 1997 are
preliminary. Regulatory capital ratios at September 30, 1997
and June 30, 1997 reflect the adoption of the
Market Risk Amendment to the risk-based capital guidelines.
This Amendment changes the calculation of risk-weighted assets for trading
accounts. In addition, it requires that the capital and risk-adjusted
assets of the Corporation's Section 20 subsidiary, BT Alex. Brown
Incorporated, be included when calculating the risk-based capital
ratios for Bankers Trust New York Corporation.
As a result of this adoption, the Corporation's leverage
ratios also reflect the capital and average assets of BT Alex. Brown
Incorporated. Previously, such assets and capital were excluded.
Regulatory capital ratios at September 30, 1996
have not been restated for the adoption of this Amendment.
12
NONPERFORMING ASSETS AND ALLOWANCE FOR CREDIT LOSSES
September 30 June 30 September 30
1996 1997 1997
Nonperforming assets (in millions)
Cash basis loans
Secured by real estate $291 $156 $140
Real estate related 26 25 25
Highly leveraged 99 76 56
Other 72 48 77
Total cash basis loans $488 $305 $298
Renegotiated loans
Secured by real estate $89 $37 $37
Total renegotiated loans $89 $37 $37
Other real estate $220 $196 $190
Other nonperforming assets $13 $8 $5
Total allowance for credit losses (in millions)
Balance, beginning of period $972 $958 $973
Net charge-offs (recoveries)
Charge-offs 19 3 30
Recoveries 14 1 19
Total net charge-offs (recoveries)* 5 2 11
Provision for credit losses - - 10
Allowance related to acquisition
of an affiliate - 17 -
Balance, end of period (a) $967 $973 $972
(a) Allocation**:
Loans $767 $759
Other liabilities 206 213
Balance, end of period $973 $972
* Components of Net Charge-offs (Recoveries):
Secured by real estate $(1) $ 2 $(1)
Real estate related (1) - -
Highly leveraged (5) - 7
Other 14 1 5
Refinancing country (2) (1) -
Total $ 5 $ 2 $11
** Beginning December 31, 1996, in accordance with the American
Institute of Certified Public Accountant's Banks and Savings Institutions
Audit and Accounting Guide, the Corporation has
allocated its total allowance for credit losses as a reduction
of loans and as other liabilities related to other credit-related items.
The Corporation continues to believe that the total allowance for
credit losses is available for credit losses in its
entire portfolio, which is comprised of loans, credit-related
commitments, derivatives and other financial instruments.
Due to a multitude of complex and changing factors that are
collectively weighed in determining the adequacy of the
allowance for credit losses, management expects that the allocation
of the total allowance for credit losses may be
adjusted as risk factors change. Amounts as of September 30,
1996 have not been restated.
13
BANKERS TRUST NEW YORK CORPORATION
130 LIBERTY STREET
NEW YORK, NEW YORK 10006
Ronald Hassen
Senior Vice President
(Principal Accounting Officer)
October 24, 1997
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 October 23, 1997 (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-
4881.
Very truly yours,
BANKERS TRUST NEW YORK CORPORATION
By: RONALD HASSEN
RONALD HASSEN
Senior Vice President
(Principal Accounting Officer)
