-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Lf5+bTKctfiskWWYK1N2HIZwSoDZ3yRIfthUQwpc3ePM2uFbQ647lfMX4wHabblK RTVZYPPzPehLgD3DrPBBvQ== 0000009749-96-000127.txt : 19960719 0000009749-96-000127.hdr.sgml : 19960719 ACCESSION NUMBER: 0000009749-96-000127 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951019 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960718 SROS: AMEX SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BANKERS TRUST NEW YORK CORP CENTRAL INDEX KEY: 0000009749 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 136180473 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05920 FILM NUMBER: 96596394 BUSINESS ADDRESS: STREET 1: 280 PARK AVE CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2122502500 MAIL ADDRESS: STREET 1: 280 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10017 FORMER COMPANY: FORMER CONFORMED NAME: BT NEW YORK CORP DATE OF NAME CHANGE: 19671107 8-K 1 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 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 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 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. EX-99.1 2 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 $.98 primary earnings per share. Return on average common equity for the second quarter of 1996 was 13%. "Bankers Trust made excellent progress in the second quarter towards key strategic objectives," said Frank N. Newman, chairman and chief executive officer. "We put major derivatives disputes and inquiries behind us. We announced a strategic merger with Wolfensohn & Co. that will add significantly to our client-focused investment banking capabilities. And earnings grew strongly." "In particular, earnings performance was again led by our Investment Banking business, complemented by strong results in Latin America, Australia/New Zealand and Client Processing Services - all of which were up from the first quarter. We are pleased by the improvement in Investment Management, including private banking. Although earnings in Risk Management Services were down due to losses in commodity derivatives when copper prices fell sharply during June, client-related risk management revenues continued at the same pace as last quarter. For the Firm as a whole, client-based revenues are far and away the principal driver of Bankers Trust's second quarter results." ORGANIZATIONAL HIGHLIGHTS The following table analyzes net income (loss) by Organizational Units*:
Second First Second Quarter Quarter Quarter ($ in millions) 1995 1996 1996 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
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. 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 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). BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES CONSOLIDATED QUARTERLY STATEMENT OF INCOME (in millions, except per share data) (unaudited)
Second First Second Quarter Quarter Quarter 1995 1996 1996 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 Certain prior period amounts have been reclassified to conform to the current presentation.
BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES CONSOLIDATED YEAR-TO-DATE STATEMENT OF INCOME (in millions, except per share data) (unaudited)
SIX MONTHS ENDED JUNE 30, 1995 1996 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) $3.17 Certain prior period amounts have been reclassified to conform to the current presentation.
COMBINED TRADING REVENUE AND TRADING-RELATED NET INTEREST REVENUE The Corporation views trading revenue and trading-related net interest revenue together, as presented in the table below.
Second First Second Quarter Quarter Quarter ($ in millions) 1995 1996 1996 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 $210 Note: The Corporation accounts for revenues from a wide range of business activities as "trading". Investment Banking produces trading revenues in secondary market activities with clients, primarily in sectors where the Firm also serves as underwriter. A small portion of trading revenues arise from private equity investments that are accounted for on a mark-to-market basis. Risk Management Services generates trading revenues primarily from new derivative transactions with clients and in managing the risks the Corporation assumes on such transactions. Trading & Sales produces trading revenues through proprietary position-taking, including arbitrage, as well as market making and other client activities. Geographically-Based Businesses produce trading revenues from all the above business activities. Corporate/Other includes various transactions which, for management accounting purposes, are not recorded in Organizational Units.
NET INTEREST REVENUE
Second First Second Quarter Quarter Quarter ($ in millions) 1995 1996 1996 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 $86.7
BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET ($ in millions) (unaudited)
June 30 December 31 March 31 June 30 1995 1995 1996 1996 > 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 Certain prior period amounts have been reclassified to conform to the current presentation.
STOCK AND CAPITAL DATA
Second First Second Quarter Quarter Quarter 1995 1996 1996 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% (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.
NONPERFORMING ASSETS AND ALLOWANCE FOR CREDIT LOSSES
June 30 March 31 June 30 1995 1996 1996 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
June 30 March 31 June 30 1995 1996 1996 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
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 -----END PRIVACY-ENHANCED MESSAGE-----