-----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, S95sLLGbukRB9pZ/6VWZNFX5pfDq/llYm67+iX78ksC3mCZMcNxSadX3M7teYzcA 8XeR01VYzQRsqNZ9ba++DQ== 0000009749-97-000095.txt : 19970721 0000009749-97-000095.hdr.sgml : 19970721 ACCESSION NUMBER: 0000009749-97-000095 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970717 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970718 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/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-05920 FILM NUMBER: 97642544 BUSINESS ADDRESS: STREET 1: 130 LIBERTY STREET CITY: NEW YORK STATE: NY ZIP: 10006 BUSINESS PHONE: 2122502500 MAIL ADDRESS: STREET 1: 130 LIBERTY STREET CITY: NEW YORK STATE: NY ZIP: 10006 FORMER COMPANY: FORMER CONFORMED NAME: BT NEW YORK CORP DATE OF NAME CHANGE: 19671107 8-K/A 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 F O R M 8-K/A (Amendment No. 1) 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 17, 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 By this Amendment No. 1, the Registrant is correcting the amount on page 9 for "Agency & other professional service fees" for the six months ended June 30, 1997. The amount should have been reported as 186 instead of 86. Item 5. Other Events The purpose of this Current Report on Form 8-K/A 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 17, 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 June 30, 1997, March 31, 1997 and June 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 six-month periods ended June 30, 1997, and June 30, 1996, and the three-month period ended March 31, 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 June 30, 1997, and June 30, 1996 and its consolidated results of operations for the three-month and six-month periods ended June 30, 1997 and June 30, 1996 and the three-month period ended March 31, 1997 have been made. All such adjustments were of a normal recurring nature. The results of operations for the three-month and six- month periods ended June 30, 1997 are not necessarily indicative of the results of operations for the full year or any other interim period. Item 7. Financial Statements and Exhibits (c) Exhibits (99.1) Earnings Press Release of the Registrant dated July 17, 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/ RICHARD H. DANIEL Richard H. Daniel Vice Chairman and Controller (Principal Financial Officer) July 17, 1997 BANKERS TRUST NEW YORK CORPORATION FORM 8-K/A DATED JULY 17, 1997 EXHIBIT INDEX Exhibit Number Description of Exhibit (99.1) Earnings Press Release of the Registrant dated July 17, 1997. EX-99.1 2 THURSDAY, JULY 17, 1997 BANKERS TRUST EARNS $2.07 PER SHARE IN THE SECOND QUARTER OF 1997, UP 24% FROM THE 1996 SECOND QUARTER EARNINGS PER SHARE OF $1.67 New York, July 17, 1997 -- Bankers Trust New York Corporation (BT) today reported that earnings per share for the second quarter were $2.07, up 24% from the $1.67 earned in the second quarter of 1996. Net income for the second quarter of 1997 was $181 million compared with $151 million in the second quarter of 1996. Driven by a 23% revenue growth, return on common equity in the quarter reached 15.2%, compared with 12.9% in the second quarter of 1996. "Broad-based revenue gains in Bankers Trust's global businesses continued to drive an improvement in profitability in the second quarter," said Frank Newman, chairman and chief executive officer. "Compared to last year, revenue growth was especially strong in our trading and sales, investment banking and risk management services business units. "On August 13, Bankers Trust and Alex. Brown shareholders will vote on an historic merger of two great institutions that share a strong commitment to clients and a long tradition of excellence," Mr. Newman added. "We approach this merger with solid business momentum and growing evidence of the exciting opportunities that lie ahead for our combined firm. Together, we will bring our clients a comprehensive array of sophisticated financing and advisory capabilities." For the current quarter, total revenues of $1.285 billion were up $244 million, or 23%, from second quarter 1996 revenues of $1.041 billion. Revenues increased in most of the Firm's business units. Trading revenue and trading-related net interest revenue increased $220 million, due to a rebound in the risk management services business and strong performances in nearly all other businesses. In addition, corporate finance fees increased $38 million, primarily due to increases in private placement, merger and acquisition and loan syndication activities. Total noninterest expenses for the second quarter of 1997 increased $203 million, or 25%, from the second quarter of 1996. Personnel-related expenses contributed $172 million to the increase. Salaries rose by $30 million due to growth in the number of employees and to annual pay increases. Incentive compensation and employee benefits were $377 million, up $142 million, primarily as a result of higher levels of revenues and profits. The Corporation's already strong credit quality continued to improve during the quarter. At June 30, 1997, total cash basis loans amounted to $305 million, down from $332 million at March 31, 1997 and $573 million at June 30, 1996. 2 ORGANIZATIONAL HIGHLIGHTS* Total Non- Pretax Net Second Quarter 1997 Total Interest Income/ Income/ (in millions) Revenue Expenses (Loss) (Loss) Investment Banking $ 353 $193 $160 $113 Risk Management Services 107 97 10 7 Trading & Sales 168 84 84 59 Investment Management 87 75 12 8 Client Processing Services 208 182 26 18 Australia/New Zealand 132 99 33 23 Asia 11 31 (20) (14) Latin America 172 117 55 39 Corporate/Other 47 150 (103) (72) Total $1,285 $1,028 $257 $181 Total Non- Pretax Net First Quarter 1997 Total Interest Income/ Income/ (in millions) Revenue Expenses (Loss) (Loss) Investment Banking $ 303 $165 $138 $ 96 Risk Management Services 105 89 16 11 Trading & Sales 134 73 61 43 Investment Management 85 72 13 9 Client Processing Services 196 178 18 13 Australia/New Zealand 129 81 48 34 Asia 40 29 11 8 Latin America 143 110 33 23 Corporate/Other 41 138 (97) (68) Total $1,176 $935 $241 $169 Total Non- Pretax Net Second Quarter 1996 Total Interest Income/ Income/ (in millions) Revenue Expenses (Loss) (Loss) Investment Banking $ 281 $132 $149 $104 Risk Management Services 38 64 (26) (18) Trading & Sales 84 59 25 17 Investment Management 75 70 5 4 Client Processing Services 197 169 28 20 Australia/New Zealand 114 67 47 33 Asia 36 26 10 7 Latin America 166 118 48 33 Corporate/Other 50 120 (70) (49) Total $1,041 $825 $216 $151 * 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 restate this analysis to conform with material changes in the allocation process and/or significant changes in organizational structure. 3 Organizational Unit Results The Investment Banking business contributed net income of $113 million in the second quarter, up from $104 million a year ago and $96 million in the previous quarter. The increase from the prior year period and previous quarter reflected higher corporate finance income offset partly by higher personnel-related costs. Revenue from private equity investments declined from the high level of the second quarter of 1996 but increased slightly from the previous quarter. Risk Management Services recorded net income of $7 million in the second quarter of 1997, up $25 million from the second quarter of 1996 and down $4 million from the previous quarter. The prior year quarter reflected losses incurred in the commodity derivatives books when copper prices dropped sharply. Beginning in 1997, the responsibility for managing the metals and mining commodities book was transferred to Australia/NZ. The decrease in net income from the first quarter of 1997 was primarily due to higher personnel-related costs. Net income from the Trading & Sales business, at $59 million, was up $42 million from the second quarter of 1996 and $16 million from the first quarter of 1997. The current quarter's improvement was largely due to strong arbitrage activities as compared to the prior year period and previous quarter. The Corporation's Investment Management business, which for reporting purposes does not include funds management activities in Australia/NZ, reported net income of $8 million for the current quarter, up $4 million from the 1996 comparable period due to improved performance fees. At June 30, 1997, assets under management in this organizational unit were approximately $242 billion, compared to $206 billion and $191 billion at March 31, 1997 and June 30, 1996, respectively. Client Processing Services contributed $18 million of net income in the second quarter of 1997, down $2 million from the 1996 second quarter and up $5 million from the previous quarter. Revenues of $208 million were up $11 million from the second quarter of 1996 and $12 million from the previous quarter. The decline in net income from a year ago reflected higher personnel- related costs and technology costs. Net income of the Australia/NZ business was $23 million in the second quarter of 1997, down $10 million from the second quarter of 1996 and down $11 million from the previous quarter. The decrease from the prior year period and previous quarter was primarily due to higher personnel-related costs as a result of increased staff levels offset in part by improved revenues from trading activities and fiduciary and funds management. At June 30, 1997, assets under management in Australia/NZ's investment management business were approximately $28 billion, compared to $27 billion and $24 billion at March 31, 1997 and June 30, 1996 respectively. 4 Asia net loss was $14 million in the second quarter of 1997 compared to net income of $7 million in the second quarter of 1996 and net income of $8 million in the previous quarter. Thailand is currently experiencing a significant reduction in its economic growth and the Thai stock market has experienced a steep decline. As a result, the Corporation recognized a decline in value of its unconsolidated investment in a Thai finance company. Offsetting this decline, the Corporation recognized trading gains from favorable Thai baht currency positions. The combined effect of these factors in Thailand resulted in a pre-tax net loss of $22 million. Latin America net income was $39 million in the second quarter of 1997, up $6 million from the second quarter of 1996 and up $16 million from the first quarter of 1997. A pre-tax gain of $22 million ($15 million after-tax) was recorded during the current quarter resulting from the completion of the first stage on the sale of 50% of the Corporation's stake in Consorcio, the largest life insurance and annuity firm in Chile. The prior year's quarter included $31 million in pre-tax revenue on the sale of Compensa which was the smaller of the Corporation's Chilean insurance subsidiaries. Corporate/Other net loss was $72 million in the second quarter of 1997, compared with a net loss of $49 million in the second quarter of 1996 and a net loss of $68 million in the first quarter of 1997. The first half of 1997 included the effects of increased incentive compensation and employee benefits and consulting expenses associated with several strategic and infrastructure improvement projects. The prior year period included higher levels of legal and professional fees. QUARTERLY FINANCIAL COMPARISONS Second Quarter 1997 Versus Second Quarter 1996 Net income of $181 million for the second quarter of 1997 was up 20% from the $151 million earned in the second quarter of 1996. Second quarter 1997 combined trading revenue and trading-related net interest revenue increased $220 million. Page 10 shows combined trading results by organizational unit. Fiduciary and funds management revenue was $234 million in the second quarter of 1997 up $36 million from the prior year period. Client processing services, funds management and global private banking commissions contributed to this increase. Corporate finance fees increased 28% from the $136 million earned in the second quarter of 1996 primarily due to higher private placement fees, merger and acquisition fees and loan syndication fees. The Corporation's private equity investment activities largely contributed to the changes in securities available for sale gains (up $43 million) and net revenue from equity investment transactions (down $69 million). Total noninterest expenses of $1.028 billion increased by $203 million, or 25%, from the second quarter of 1996. Salaries expense increased $30 million, or 15%, principally due to a 7% increase in the average number of employees 5 and to annual pay increases. Incentive compensation and employee benefits, the largest component of noninterest expenses, increased $142 million due to higher profitability and the increase in the average number of employees. Second Quarter 1997 versus First Quarter 1997 Net income of $181 million for the second quarter of 1997 was up 7% from the $169 million earned in the first quarter of 1997. Second quarter 1997 combined trading revenue and trading-related net interest revenue increased $17 million from the first quarter of 1997. Fiduciary funds management revenue was $234 million in the current quarter, up $26 million from the previous quarter primarily due to increased client processing services and funds management revenue. Corporate finance fees increased $34 million in the current quarter primarily due to higher loan syndication fees and securities underwriting fees. The Corporation's private equity investment activities largely contributed to the changes in securities available for sale gains (up $54 million) and net revenue from equity investment transactions (down $41 million). Incentive compensation and employee benefits expense rose $55 million from the first quarter of 1997. This was primarily due to higher incentive accruals. 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 BT Securities Corporation 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 8.1% and 14.3%, respectively, as of June 30, 1997. CREDIT QUALITY Credit quality improved further during the quarter and there was no provision for credit losses. Cash basis loans declined from $573 million at June 30, 1996 to $332 million at March 31, 1997 and $305 million at June 30, 1997. 6 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) Second First Second Quarter Quarter Quarter 1996 1997 1997 NET INTEREST REVENUE Interest revenue $1,459 $1,645 $1,694 Interest expense 1,216 1,337 1,379 Net interest revenue 243 308 315 Provision for credit losses - - - Net interest revenue after provision for credit losses 243 308 315 NONINTEREST REVENUE Trading* 146 279 282 Fiduciary & funds management 198 208 234 Corporate finance fees 136 140 174 Other fees & commissions 82 79 91 Net revenue from equity investment transactions 72 44 3 Securities available for sale gains 25 14 68 Insurance premiums 63 63 64 Other 76 41 54 Total noninterest revenue 798 868 970 Total revenue 1,041 1,176 1,285 NONINTEREST EXPENSES Salaries 202 237 232 Incentive compensation & employee benefits 235 322 377 Agency & other professional service fees 98 87 99 Communication & data services 47 45 45 Occupancy, net 36 37 38 Furniture & equipment 41 50 49 Travel & entertainment 24 25 31 Provision for policyholder benefits 78 68 72 Other 64 64 85 Total noninterest expenses 825 935 1,028 Income before income taxes 216 241 257 Income taxes 65 72 76 NET INCOME $ 151 $ 169 $ 181 NET INCOME APPLICABLE TO COMMON STOCK $ 137 $ 156 $ 169 Cash dividends declared per common share $1.00 $1.00 $1.00 EARNINGS PER COMMON SHARE: PRIMARY $1.67 $1.89 $2.07 FULLY DILUTED $1.66 $1.89 $2.05 *The Corporation accounts for revenues from a wide range of business activities as "trading". See table on page 10. 8 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, 1996 1997 NET INTEREST REVENUE Interest revenue $3,049 $3,339 Interest expense 2,593 2,716 Net interest revenue 456 623 Provision for credit losses 5 - Net interest revenue after provision for credit losses 451 623 NONINTEREST REVENUE Trading* 393 561 Fiduciary & funds management 381 442 Corporate finance fees 222 314 Other fees & commissions 169 170 Net revenue from equity investment transactions 93 47 Securities available for sale gains 40 82 Insurance premiums 125 127 Other 125 95 Total noninterest revenue 1,548 1,838 Total revenue 1,999 2,461 NONINTEREST EXPENSES Salaries 403 469 Incentive compensation & employee benefits 462 699 Agency & other professional service fees 158 186 Communication & data services 93 90 Occupancy, net 73 75 Furniture & equipment 82 99 Travel & entertainment 42 56 Provision for policyholder benefits 150 140 Other 123 149 Total noninterest expenses 1,586 1,963 Income before income taxes 413 498 Income taxes 124 148 NET INCOME $ 289 $ 350 NET INCOME APPLICABLE TO COMMON STOCK $ 260 $ 325 Cash dividends declared per common share $2.00 $2.00 EARNINGS PER COMMON SHARE: PRIMARY $3.19 $3.95 FULLY DILUTED $3.17 $3.93 * The Corporation accounts for revenues from a wide range of business activities as "trading". See quarterly information on page 10. 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. Second First Second Quarter Quarter Quarter (in millions) 1996 1997 1997 Trading Revenue $146 $279 $282 Trading-Related Net Interest Revenue (Estimate) 64 134 148 Total Trading Revenue & Trading-Related NIR $210 $413 $430 By Organizational Unit (in millions) Investment Banking $ 28 $ 63 $ 68 Risk Management Services 40 111 117 Trading & Sales 68 114 97 Investment Management 2 4 4 Client Processing Services 2 1 1 Australia/New Zealand 34 47 56 Asia 10 27 42 Latin America 28 49 48 Corporate/Other (2) (3) (3) Total Trading Revenue & Trading-Related NIR $210 $413 $430 Note: The Corporation accounts for revenues from a wide range of business activities as "trading". Investment Banking produces trading revenues in secondary market activities with clients, primarily in sectors where the Firm also serves as underwriter. A small portion of trading revenues arise from private equity investments that are accounted for on a mark-to-market basis. Risk Management Services generates trading revenues primarily from new derivative transactions with clients and in managing the risks the Corporation assumes on such transactions. Trading & Sales produces trading revenues through proprietary position- taking, including arbitrage, as well as market making and other client activities. Australia/New Zealand, Asia and Latin America produce trading revenues from all the above business activities. Corporate/Other includes various transactions which, for management accounting purposes, are not recorded in Organizational Units. NET INTEREST REVENUE Second First Second Quarter Quarter Quarter ($ in millions) 1996 1997 1997 Nontrading-related net interest revenue(Estimate) $179 $174 $167 Trading-related net interest revenue (Estimate) 64 134 148 Net interest revenue $243 $308 $315 Average rates (fully taxable basis) Yield on interest-earning assets 6.47% 7.00% 6.82% Cost of interest-bearing liabilities 5.64% 5.93% 5.65% Interest rate spread .83% 1.07% 1.17% Net interest margin 1.09% 1.33% 1.29% Average balances (billions) Loans $13.1 $15.6 $18.2 Total interest-earning assets $91.0 $95.7 $100.0 Total assets $117.8 $123.6 $129.9 Total interest-bearing liabilities $86.7 $91.4 $97.9 10 BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (in millions) June 30 December 31 March 31 June 30 1996* 1996 1997* 1997* ASSETS Cash and due from banks $ 1,663 $ 1,543 $ 1,607 $ 1,730 Interest-bearing deposits in banks 2,065 2,210 2,581 2,334 Federal funds sold 365 1,599 1,195 1,305 Sec. purch. under resale agreements 25,420 17,986 22,273 25,754 Securities borrowed 13,373 16,676 13,963 12,794 Trading assets: Government securities 14,565 16,745 11,686 12,270 Corporate debt securities 7,637 8,005 8,460 9,642 Equity securities 6,869 6,048 7,021 8,018 Swaps, options & other derivatives 9,486 11,410 11,222 10,824 Other trading assets 5,218 6,711 9,072 8,328 Total trading assets 43,775 48,919 47,461 49,082 Securities available for sale 6,851 7,920 7,986 7,478 Loans 14,249 - - - Allowance for credit losses (972) - - - Loans, net of allowance for credit losses of $773, $758 and $767 at December 31, 1996, March 31, 1997 and June 30, 1997, respectively - 15,053 17,221 18,939 Accounts receivable & accrued interest 2,841 3,003 3,227 3,431 Other assets 4,971 5,326 5,464 6,101 Total $114,601 $120,235 $122,978 $128,948 LIABILITIES Noninterest-bearing deposits Domestic offices $ 3,327 $ 2,600 $ 2,803 $ 3,046 Foreign offices 488 1,013 1,052 1,439 Interest-bearing deposits Domestic offices 6,091 9,928 12,365 15,618 Foreign offices 15,387 16,774 19,369 18,327 Total deposits 25,293 30,315 35,589 38,430 Trading liabilities: Securities sold, not yet purchased Government securities 10,918 7,652 3,943 4,949 Equity securities 4,655 4,151 4,935 4,973 Other trading liabilities 377 325 431 401 Swaps, options & other derivatives 10,333 11,585 11,177 11,064 Total trading liabilities 26,283 23,713 20,486 21,387 Sec. sold under repurch. agreements 24,050 23,000 21,995 22,550 Other short-term borrowings 15,755 19,395 20,224 19,398 Accounts payable and accrued expenses 4,531 3,656 3,836 5,776 Other liabilities, including allowance for credit losses of $200 at December 31, 1996 and March 31, 1997 and $206 at June 30, 1997 2,563 2,833 3,179 3,504 Long-term debt not included in risk-based capital 8,225 8,533 7,955 8,268 Long-term debt included in risk-based capital 2,484 2,576 3,164 2,939 Mandatorily redeemable capital securities of subsidiary trusts holding solely junior subordinated deferrable interest debentures included in risk-based capital - 730 1,469 1,470 Total liabilities 109,184 114,751 117,897 123,722 PREFERRED STOCK OF SUBSIDIARY 250 250 - - STOCKHOLDERS' EQUITY Preferred stock 866 810 704 703 Common stock 84 84 84 84 Capital surplus 1,308 1,339 1,349 1,352 Retained earnings 3,393 3,462 3,512 3,588 Common stock in treasury, at cost (273) (372) (527) (513) Other stockholders' equity (211) (89) (41) 12 Total stockholders' equity 5,167 5,234 5,081 5,226 Total $114,601 $120,235 $122,978 $128,948 * Unaudited Certain prior period amounts have been reclassified to conform to the current presentation. 11 STOCK AND CAPITAL DATA Second First Second Quarter Quarter Quarter 1996 1997 1997 FOR THE QUARTER Return on Average Common Stockholders' Equity 12.9% 14.3% 15.2% Return on Average Total Assets .52% .55% .56% PER COMMON SHARE Earnings: Primary $1.67 $1.89 $2.07 Fully Diluted $1.66 $1.89 $2.05 Cash Dividends Declared $1.00 $1.00 $1.00 Market Price, End of Period $73.875 $82.00 $87.125 Book Value, End of Period $51.86 $53.42 $54.84 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 3,758 5,965 6,012 Average Common and Common Equivalent Shares Outstanding Primary 81,900 82,784 81,585 Fully Diluted 82,351 82,898 82,403 CAPITAL RATIOS, END OF PERIOD Common Stockholders' Equity to Total Assets 3.8% 3.6% 3.5% Total Stockholders' Equity to Total Assets 4.5% 4.1% 4.1% Bankers Trust New York Corporation: Risk-Based Capital Ratios (1) Tier 1 Capital 8.3% 8.2% 8.1% Total Capital 13.5% 14.8% 14.3% Leverage Ratio (1) 5.5% 4.5% 4.4% Bankers Trust Company: Risk-Based Capital Ratios (1) Tier 1 Capital 9.3% 8.6% 8.8% Total Capital 12.4% 12.1% 12.2% Leverage Ratio (1) 5.5% 5.4% 5.3% (1) Regulatory capital ratios at June 30, 1997 are preliminary. Regulatory capital ratios at June 30, 1997 and March 31, 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 BT Securities Corporation 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 Securities Corporation. Previously, such assets and capital were excluded. Regulatory capital ratios at June 30, 1996 have not been restated for the adoption of this amendment. 12 NONPERFORMING ASSETS AND ALLOWANCE FOR CREDIT LOSSES June 30 March 31 June 30 1996 1997 1997 Nonperforming assets (in millions) Cash basis loans Secured by real estate $308 $185 $156 Real estate related 31 25 25 Highly leveraged 128 88 76 Other 106 34 48 Total cash basis loans $573 $332 $305 Renegotiated loans Secured by real estate $89 $37 $37 Total renegotiated loans $89 $37 $37 Other real estate $219 $188 $196 Other nonperforming assets $68 $8 $8 Total allowance for credit losses (in millions) Balance, beginning of period $987 $973 $958 Net charge-offs (recoveries) Charge-offs 21 33 3 Recoveries 6 18 1 Total net charge-offs (recoveries)* 15 15 2 Provision for credit losses - - - Allowance related to acquisition of an affiliate - - 17 Balance, end of period (a) $972 $958 $973 (a) Allocation**: Loans $758 $767 Other liabilities 200 206 Balance, end of period $958 $973 * Components of Net Charge-offs (Recoveries): Secured by real estate $ - $(1) $2 Real estate related - - - Highly leveraged 3 16 - Other 13 - 1 Refinancing country (1) - (1) Total $15 $15 $2 ** 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 June 30, 1996 have not been restated. 13 BANKERS TRUST NEW YORK CORPORATION 130 LIBERTY STREET NEW YORK, NEW YORK 10006 Richard H. Daniel Vice Chairman and Controller (Principal Financial Officer) July 18, 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/A (Amendment No. 1) dated July 17, 1997 (the "Form 8-K/A"). The Form 8-K/A 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- 7575. Very truly yours, BANKERS TRUST NEW YORK CORPORATION By: RICHARD H. DANIEL Richard H. Daniel Vice Chairman and Controller (Principal Financial Officer) -----END PRIVACY-ENHANCED MESSAGE-----