-----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, N/aXJfqljU+TW7kDuBFa22PWzV3A92rUzZBDnVJEcmzJ/ymr1pMexpMmwZLtlYih levIgsFfSZWjjozq7Je4VA== 0000009749-97-000006.txt : 19970124 0000009749-97-000006.hdr.sgml : 19970124 ACCESSION NUMBER: 0000009749-97-000006 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970123 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970123 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: 97509715 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) January 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 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 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 December 31, 1996, and September 30, 1996 and the audited consolidated financial position at December 31, 1995 and its unaudited consolidated results of operations for the three- month and twelve-month periods ended December 31, 1996 and the three-month periods ended September 30, 1996, and December 31, 1995 and the audited consolidated results of operations for the twelve-month period ended December 31, 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, 1996, September 30, 1996, and December 31, 1995 and its consolidated results of operations for the three-month and twelve- month periods ended December 31, 1996 and 1995 and the three- month period ended September 30, 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 January 23, 1997 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 23, 1997 BANKERS TRUST NEW YORK CORPORATION FORM 8-K DATED JANUARY 23, 1997 EXHIBIT INDEX Exhibit Number Description of Exhibit (99.1) Earnings Press Release of the Registrant dated January 23, 1997. EX-99.1 2 THURSDAY, JANUARY 23, 1997 BANKERS TRUST EARNS $6.78 PER SHARE IN 1996, UP $4.75 FROM 1995 FOURTH QUARTER EARNINGS PER SHARE OF $1.59 INCREASE 17% New York, January 23, 1997 -- Bankers Trust New York Corporation (BT) today reported that earnings per share for the full year 1996 were $6.78, up $4.75 from the $2.03 earned during 1995. Net income for 1996 was $612 million, up $397 million from the $215 million of earnings in 1995. BT's earnings per share in the fourth quarter of 1996 were $1.59, 17% above the $1.36 per share earned in the same period last year. Net income in the fourth quarter of 1996 was $147 million, compared with $126 million in the 1995 fourth quarter and $176 million in the third quarter of 1996. "For Bankers Trust, 1996 was a year of great progress, marked by a significant recovery in earnings and an expansion of business with clients across the range of our global activities," said Frank Newman, chairman and chief executive officer. "Thanks to the efforts of our exceptionally capable people, we regained the initiative in our businesses, with client-related income contributing approximately 70% of total revenues. "Among last year's achievements was the addition of Wolfensohn & Co., which strengthened our ability to offer clients the highest quality strategic advice. Throughout the Firm, management benefited from clarified lines of responsibility and increased accountability. With these accomplishments, Bankers Trust enters the new year with strong momentum and innovative spirit to deal with the challenges and opportunities of 1997. "Chief among those challenges is to accelerate the improvement in our profitability. We are planning to improve the earning power of businesses that have not yet reaped the benefits of their strong market positions. Our strategy also seeks to increase the growth rate of our best performing businesses." For the full year, total revenues of $4.165 billion were up $925 million, or 29%, from 1995. This increase was broadly based by type and reflected growth in nearly all of the Firm's businesses. Revenues reached their second highest annual level in the Corporation's history, trailing only the 1993 record. Total noninterest expenses for 1996 increased $390 million, or 13%, from 1995. This increase was primarily due to higher incentive compensation and employee benefits related to the improved financial performance. Credit quality continued to improve during the year. At December 31, 1996, total cash basis loans amounted to $452 million, down from $488 million at September 30, 1996 and $744 million at December 31, 1995. ORGANIZATIONAL HIGHLIGHTS*
Total Non- Pretax Net Fourth Quarter 1996 Total Net interest Income/ Income/ (in millions) Revenue Expenses (Loss) (Loss) Investment Banking $ 226 $140 $ 86 $ 60 Risk Management Services 115 102 13 9 Trading & Sales 133 84 49 35 Investment Management 81 75 6 4 Client Processing Services 211 180 31 22 Australia/New Zealand 131 83 48 34 Asia 35 29 6 5 Latin America 101 92 9 7 Corporate/Other 69 108 (39) (29) Total $1,102 $893 $209 $147
Total Non- Pretax Net Third Quarter 1996 Total Net interest Income/ Income/ (in millions) Revenue Expenses (Loss) (Loss) Investment Banking $ 231 $122 $109 $ 77 Risk Management Services 84 80 4 3 Trading & Sales 107 65 42 29 Investment Management 76 70 6 4 Client Processing Services 200 165 35 25 Australia/New Zealand 138 77 61 43 Asia 30 24 6 5 Latin America 123 94 29 20 Corporate/Other 70 112 (42) (30) Total $1,059 $809 $250 $176
Total Non- Pretax Net Fourth Quarter 1995 Total Net interest Income/ Income/ (in millions) Revenue Expenses (Loss) (Loss) Investment Banking $333 $106 $227 $158 Risk Management Services 34 95 (61) (44) Trading & Sales 99 64 35 25 Investment Management 65 72 (7) (5) Client Processing Services 187 157 30 21 Australia/New Zealand 110 65 45 33 Asia 17 29 (12) (10) Latin America 99 116 (17) (11) Corporate/Other (6) 54 (60) (41) Total $938 $758 $180 $126
*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. 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 attribution to a particular Organizational Unit would be distortive. 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. The Investment Banking business contributed net income of $60 million in the fourth quarter, down from $158 million a year ago and $77 million from the third quarter of 1996. Net income in last year's fourth quarter reflected a $101 million after-tax gain from the sale of a block of the Corporation's investment in Northwest Airlines Corporation. Compared with the 1996 third quarter, lower Private Equity Investment revenues were partly offset by an increase in Corporate Finance revenues. In addition, salaries and incentive compensation increased. Risk Management Services recorded net income of $9 million in the fourth quarter of 1996, up $53 million from the fourth quarter of 1995 and $6 million from the third quarter of 1996. Risk management revenues of $115 million were up $81 million from the fourth quarter of 1995 and $31 million from the previous quarter. Net income from the Trading & Sales business, at $35 million, was up $10 million from the fourth quarter of 1995 and $6 million from the third quarter of 1996. The current quarter's improvement was largely due to foreign exchange trading. 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, up $9 million from the 1995 comparable period and unchanged from the third quarter of 1996. At December 31, 1996, assets under management in this organizational unit were approximately $201 billion, compared to $193 billion and $175 billion at September 30, 1996 and December 31, 1995, respectively. Client Processing Services contributed $22 million of net income in the fourth quarter of 1996, up $1 million from the 1995 fourth quarter and down $3 million from the preceding quarter of this year. Net income of the Australia/NZ business was $34 million in the fourth quarter of 1996, up $1 million and down $9 million from the fourth quarter of 1995 and the third quarter of 1996, respectively. At December 31, 1996, assets under management in Australia/NZ's investment management business were approximately $26 billion, compared to $25 billion and $22 billion at September 30, 1996 and December 31, 1995, respectively. The decline in revenue from the third quarter of 1996 was primarily due to lower trading revenue within the Financial Markets Group. Asia net income was $5 million in the fourth quarter of 1996, up $15 million from the fourth quarter of 1995 and unchanged from the third quarter of 1996. The increase from the fourth quarter of 1995 was primarily due to improved corporate finance and trading results. Latin America net income was $7 million in the fourth quarter of 1996, up $18 million from the fourth quarter of 1995, and down $13 million from the third quarter of 1996. The current quarter's decline was primarily due to lower securities available for sale gains as well as lower corporate finance revenue. Corporate/Other net loss was $29 million in the fourth quarter of 1996, compared with a net loss of $41 million in the fourth quarter of 1995 and a $30 million net loss in the third quarter of 1996. As noted below, results in the current quarter included reserves related to prior period items in the transaction processing business while the fourth quarter of 1995 included charges related to the settlement of leveraged derivative transactions and related legal costs. QUARTERLY FINANCIAL COMPARISONS Fourth Quarter 1996 versus Third Quarter 1996 Net income of $147 million for the fourth quarter of 1996 was down 16% from the $176 million earned in the third quarter of 1996. Fourth quarter 1996 combined trading revenue and trading-related net interest revenue increased $16 million from the third quarter of 1996. Page 10 shows combined trading results by organizational units. Corporate finance fees rose $47 million in the current quarter primarily due to higher private placement fees, loan syndication fees, and securities underwriting fees. Other noninterest revenue totaled $25 million in the current quarter, compared to $54 million in the third quarter of 1996. This change was due to the third quarter of 1996 gain on the sale of Golden American Life Insurance Company, an indirect wholly- owned subsidiary of the Corporation acquired in satisfaction of debt in 1992. Incentive compensation and employee benefits expense rose $33 million from the third quarter of 1996. This was primarily due to an increase in cash incentive compensation awards for the full year in response to increasingly competitive market conditions. In addition, expenses related to a stock-based incentive program increased due to increases in the Corporation's share price. Other noninterest expenses rose by $25 million from the third quarter of 1996. A significant portion of this increase related to reserves for potential charges established after a review of accounting operations since 1989 in the Corporation's transaction processing business. None of the items identified in the review was attributable to 1996 operations, and none was material to the results of any prior period. Fourth Quarter 1996 Versus Fourth Quarter 1995 Net income of $147 million for the fourth quarter of 1996 was up 17% from the $126 million earned in the fourth quarter of 1995. Fourth quarter 1996 combined trading revenue and trading-related net interest revenue increased $210 million. The fourth quarter of 1995 included a $51 million charge from settlements of old leveraged derivative transactions. Page 10 shows combined trading results by organizational units. Corporate finance fees increased 33% from the $125 million earned in the fourth quarter of 1995 primarily due to higher revenue from private placement and merger and acquisition activities. Securities available for sale gains were $24 million in the fourth quarter of 1996 versus $151 million in the comparable 1995 period. Last year's fourth quarter included a $145 million pre- tax gain on the sale of a substantial portion of the Corporation's investment in Northwest Airlines Corporation. Total noninterest expenses of $893 million increased by $135 million, or 18%, from the fourth quarter of 1995. Incentive compensation and employee benefits expense increased $76 million due to improved financial performance. Salaries expense increased $29 million, or 14%, principally due to an 8% increase in the average number of employees. Also included in the current quarter's noninterest expenses were the reserves related to the transaction processing business as previously mentioned. Agency & other professional service fees decreased $21 million, or 20%, from the fourth quarter of 1995. The prior year period included legal costs related to leveraged derivative transactions. CREDIT QUALITY Credit quality improved further during the year. Cash basis loans declined from $744 million at December 31, 1995 to $488 million at September 30, 1996 and $452 million at December 31, 1996. This decline was attributable to paydowns on various commercial, industrial, and real estate loans. There was no provision for credit losses as compared with a $10 million provision in the prior year's fourth quarter. CAPITAL Total stockholders' equity at December 31, 1996 was $5.234 billion, down $90 million and up $250 million respectively from September 30, 1996 and December 31, 1995. During the quarter, the Corporation repurchased approximately 4 million shares of its common stock in connection with its previously announced repurchase programs. The Corporation estimates that its ratios of Tier 1 Capital and Total Capital to risk-adjusted assets were approximately 8.5% and 13.4%, respectively, at December 31, 1996. During the quarter, a total of $750 million of trust-preferred securities were issued. 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 Douglas Kidd, 212 250-7225 (Media). Bankers Trust news releases, including quarterly results, are available on the Internet (http://www.bankerstrust.com/earnings). BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES CONSOLIDATED QUARTERLY STATEMENT OF INCOME (in millions, except per share data) (unaudited)
Fourth Third Fourth Quarter Quarter Quarter 1995 1996 1996 NET INTEREST REVENUE Interest revenue $1,457 $1,669 $1,721 Interest expense 1,248 1,421 1,459 Net interest revenue 209 248 262 Provision for credit losses 10 - - Net interest revenue after provision for credit losses 199 248 262 NONINTEREST REVENUE Trading* 83 219 234 Fiduciary & funds management 186 196 206 Corporate finance fees 125 119 166 Other fees & commissions 79 86 88 Net revenue from equity investment transactions 22 74 44 Securities available for sale gains 151 11 24 Insurance premiums 58 52 53 Other 35 54 25 Total noninterest revenue 739 811 840 NONINTEREST EXPENSES Salaries 206 229 235 Incentive compensation & employee benefits 185 228 261 Agency & other professional service fees 104 70 83 Communication & data services 44 52 48 Occupancy, net 32 38 39 Furniture & equipment 40 42 47 Travel & entertainment 21 24 31 Provision for policyholder benefits 69 66 64 Other 57 60 85 Total noninterest expenses 758 809 893 Income before income taxes 180 250 209 Income taxes 54 74 62 NET INCOME $ 126 $ 176 $ 147 NET INCOME APPLICABLE TO COMMON STOCK $ 111 $ 168 $ 133 Cash dividends declared per common share $1.00 $1.00 $1.00 EARNINGS PER COMMON SHARE: PRIMARY $1.36 $1.99 $1.59 FULLY DILUTED $1.36 $1.98 $1.58 *The Corporation accounts for revenues from a wide range of business activities as "trading". See table on page 10. 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)
YEAR ENDED DECEMBER 31, 1995 1996* NET INTEREST REVENUE Interest revenue $5,886 $6,439 Interest expense 5,069 5,473 Net interest revenue 817 966 Provision for credit losses 31 5 Net interest revenue after provision for credit losses 786 961 NONINTEREST REVENUE Trading** 341 846 Fiduciary & funds management 697 783 Corporate finance fees 398 507 Other fees & commissions 314 343 Net revenue from equity investment transactions 146 211 Securities available for sale gains 180 75 Insurance premiums 234 230 Other 113 204 Total noninterest revenue 2,423 3,199 NONINTEREST EXPENSES Salaries 804 867 Incentive compensation & employee benefits 640 951 Agency & other professional service fees 318 311 Communication & data services 184 193 Occupancy, net 152 150 Furniture & equipment 162 171 Travel & entertainment 88 97 Provision for policyholder benefits 271 280 Other 229 268 Provision for severance-related costs 50 - Total noninterest expenses 2,898 3,288 Income before income taxes 311 872 Income taxes 96 260 NET INCOME $ 215 $ 612 NET INCOME APPLICABLE TO COMMON STOCK $ 164 $ 561 Cash dividends declared per common share $4.00 $4.00 EARNINGS PER COMMON SHARE: PRIMARY $2.03 $6.78 FULLY DILUTED $2.02 $6.74 * Unaudited ** The Corporation accounts for revenues from a wide range of business activities as "trading". See quarterly information on page 10. Certain prior period amounts have been reclassified to conform to the current presentation.
COMBINED TRADING REVENUE AND TRADING-RELATED NET INTEREST REVENUE The Corporation views trading revenue and trading-related net interest revenue (NIR) together, as presented in the table below.
Fourth Third Fourth Quarter Quarter Quarter ($ in millions) 1995 1996 1996 Trading Revenue $83 $219 $234 Trading-Related Net Interest Revenue (Estimate) 13 71 72 Total Trading Revenue & Trading-Related NIR $96 $290 $306 By Organizational Unit ($ in millions) Investment Banking $ 10 $ 31 $ 12 Risk Management Services 12 75 111 Trading & Sales 89 93 114 Investment Management - 5 7 Client Processing Services 2 1 1 Australia/New Zealand 29 59 35 Asia 3 12 15 Latin America 10 21 24 Corporate/Other (59) (7) (13) Total Trading Revenue & Trading-Related NIR $ 96 $290 $306 Note: The Corporation accounts for revenues from a wide range of business activities as "trading". Investment Banking produces trading revenues in secondary market activities with clients, primarily in sectors where the Firm also serves as underwriter. A small portion of trading revenues arise from private equity investments that are accounted for on a mark-to-market basis. Risk Management Services generates trading revenues primarily from new derivative transactions with clients and in managing the risks the Corporation assumes on such transactions. Trading & Sales produces trading revenues through proprietary position- taking, including arbitrage, as well as market making and other client activities. Geographically-Based Businesses produce trading revenues from all the above business activities. Corporate/Other includes various transactions which, for management accounting purposes, are not recorded in Organizational Units.
NET INTEREST REVENUE
Fourth Third Fourth Quarter Quarter Quarter ($ in millions) 1995 1996 1996 Nontrading-related net interest revenue $196 $177 $190 Trading-related net interest revenue (Estimate) 13 71 72 Net interest revenue $209 $248 $262 Average rates (fully taxable basis) Yield on interest-earning assets 6.72% 6.78% 7.01% Cost of interest-bearing liabilities 5.87% 6.21% 6.23% Interest rate spread .85% .57% .78% Net interest margin .99% 1.02% 1.08% Average balances (billions) Loans $12.8 $13.8 $15.2 Total interest-earning assets $86.3 $98.2 $97.8 Total assets $114.9 $123.4 $124.3 Total interest-bearing liabilities $84.3 $91.0 $93.2
BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (in millions)
December 31 September 30 December 31 1995 1996* 1996* ASSETS Cash and due from banks $ 2,337 $ 825 $ 1,543 Interest-bearing deposits in banks 2,023 4,100 2,210 Federal funds sold 854 856 1,599 Sec. purch. under resale agreements 13,206 22,073 17,986 Securities borrowed 10,951 14,926 16,676 Trading assets: Government securities 20,704 16,075 16,745 Corporate debt securities 5,648 8,678 8,005 Equity securities 5,098 5,585 6,048 Swaps, options & other derivatives 10,555 10,363 11,410 Other trading assets 5,888 7,056 6,711 Total trading assets 47,893 47,757 48,919 Securities available for sale 6,283 7,461 7,920 Loans 12,633 15,264 - Allowance for credit losses (992) (967) - Loans, net of allowance for credit losses of $773 at December 31, 1996 - - 15,053 Accounts receivable & accrued interest 4,220 3,417 3,003 Other assets 4,594 5,135 5,326 Total $104,002 $120,847 $120,235 LIABILITIES Noninterest-bearing deposits Domestic offices $ 2,687 $ 2,552 $ 2,600 Foreign offices 605 647 1,013 Interest-bearing deposits Domestic offices 5,402 7,401 9,928 Foreign offices 17,014 18,072 16,774 Total deposits 25,708 28,672 30,315 Trading liabilities: Securities sold, not yet purchased Government securities 11,092 11,020 7,652 Equity securities 3,262 3,729 4,151 Other trading liabilities 473 389 325 Swaps, options & other derivatives 11,264 10,266 11,585 Total trading liabilities 26,091 25,404 23,713 Sec. sold under repurch. agreements 15,247 23,989 23,000 Other short-term borrowings 15,761 18,799 19,395 Accounts payable and accrued expenses 3,931 5,252 3,656 Other liabilities, including allowance for credit losses of $200 at December 31, 1996 2,736 2,650 2,833 Long-term debt not included in risk-based capital 6,934 8,070 8,533 Long-term debt included in risk-based capital 2,360 2,437 2,576 Mandatorily redeemable capital securities of subsidiary trusts holding solely junior subordinated deferrable interest debentures included in risk-based capital - - 730 Total liabilities 98,768 115,273 114,751 PREFERRED STOCK OF SUBSIDIARY 250 250 250 STOCKHOLDERS' EQUITY Preferred stock 865 816 810 Common stock 84 84 84 Capital surplus 1,302 1,319 1,339 Retained earnings 3,316 3,450 3,462 Common stock in treasury, at cost (336) (173) (372) Other stockholders' equity (247) (172) (89) Total stockholders' equity 4,984 5,324 5,234 Total $104,002 $120,847 $120,235 * Unaudited Certain prior period amounts have been reclassified to conform to the current presentation.
STOCK AND CAPITAL DATA
Fourth Third Fourth Quarter Quarter Quarter 1995 1996 1996 FOR THE QUARTER Return on Average Common Stockholders' Equity 10.6% 15.0% 11.7% Return on Average Total Assets .44% .57% .47% PER COMMON SHARE Earnings: Primary $1.36 $1.99 $1.59 Fully Diluted $1.36 $1.98 $1.58 Cash Dividends Declared $1.00 $1.00 $1.00 Market Price, End of Period $66.50 $78.625 $86.25 Book Value, End of Period (1) $50.58 $53.11 $53.27 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 4,603 2,193 4,435 Average Common and Common Equivalent Shares Outstanding Primary 81,322 84,442 83,812 Fully Diluted 81,415 84,885 84,225 CAPITAL RATIOS, END OF PERIOD Common Stockholders' Equity to Total Assets 4.0% 3.7% 3.7% Total Stockholders' Equity to Total Assets 4.8% 4.4% 4.4% Bankers Trust New York Corporation: Risk-Based Capital Ratios (2) Tier 1 Capital 8.5% 8.0% 8.5% Total Capital 13.9% 12.7% 13.4% Leverage Ratio (2) 5.1% 5.3% 5.5% Bankers Trust Company: Risk-Based Capital Ratios (2) Tier 1 Capital 9.5% 9.1% 9.6% Total Capital 12.8% 12.2% 12.7% Leverage Ratio (2) 5.1% 5.5% 5.6% (1) This calculation includes the effect of the vested portion of common shares issuable under deferred stock awards. (2) Regulatory capital ratios at December 31, 1996 are preliminary.
NONPERFORMING ASSETS AND ALLOWANCE FOR CREDIT LOSSES
December 31 September 30 December 31 1995 1996 1996 Nonperforming assets (in millions) Cash basis loans Secured by real estate $362 $291 $272 Real estate related 23 26 25 Highly leveraged 153 99 117 Other 206 72 38 Total cash basis loans $744 $488 $452 Renegotiated loans Secured by real estate $ 88 $ 89 $ 37 Other 12 - - Total renegotiated loans $100 $ 89 $ 37 Other real estate $259 $220 $213 Other nonperforming assets $ 67 $ 13 $ 10 Total allowance for credit losses (in millions) Balance, beginning of period $1,032 $972 $967 Net charge-offs (recoveries) Charge-offs 60 19 21 Recoveries 10 14 27 Total net charge-offs (recoveries)* 50 5 (6) Provision for credit losses 10 - - Balance, end of period (a) $ 992 $967 $973 (a) Allocation**: Loans $773 Other liabilities 200 Balance, end of period $973 *Components of Net Charge-offs (Recoveries): Secured by real estate $11 $(1) $ 14 Real estate related - (1) - Highly leveraged 2 (5) (7) Other 38 14 (13) Refinancing country (1) (2) - Total $50 $ 5 $ (6) ** Beginning December 31, 1996, in accordance with the American Institute of Certified Public Accountants Banks and Savings Institutions Audit Guide, the Corporation has allocated its total allowance for credit losses as follows: $773 million as a reduction of loans, and $200 million as other liabilities related to all 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. Prior period amounts have not been restated.
BANKERS TRUST NEW YORK CORPORATION 130 LIBERTY STREET NEW YORK, NEW YORK 10006 Geoffrey M. Fletcher Senior Vice President and Principal Accounting Officer January 23, 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 January 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- 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-----