The Bank of New York Company, Inc. Reports 18% Increase in Fourth Quarter Earnings Per Share; Positive Core Operating Leverage and Strong Growth in Securities Servicing Revenue and Net Interest Income.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- The Bank of New York The Bank of New York, abbrieviated to BNY, was a global financial services company that existed until its merger with the Mellon Financial Corporation on July 2, 2007.[1] The bank now continues under the new name of The Bank of New York Mellon Corporation. Company, Inc. (NYSE NYSE See: New York Stock Exchange : BK) reported today fourth quarter net income of $405 million compared with $351 million in the year-ago quarter and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of 53 cents, up 18% over the 45 cents earned in the fourth quarter of 2004. Third quarter 2005 earnings were $389 million and 51 cents. Full-year 2005 net income was $1,571 million compared to $1,440 million in 2004 while diluted earnings per share was up 10% to $2.03 from $1.85 in 2004. Reported EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. reflects a reduction of 3 cents for the fourth quarter 2004 and full-year 2004 due to items detailed in Note 1. Performance Highlights --Positive core operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. over year-ago and sequential One after the other in some consecutive order such as by name or number. quarters. See Note 4. --Securities servicing fees up 10% versus the year-ago quarter and on a full-year basis. The growth was led by strong performance in investor, issuer and broker-dealer Broker-Dealer A person or firm in the business of buying and selling securities operating as both a broker and dealer depending on the transaction. Notes: Technically, a broker is only an agent who executes orders on behalf of clients, whereas a dealer acts as a principal services. --Strong net interest income, driven by the Company's sound interest rate positioning and strong liquidity generated by its core servicing businesses. --Foreign exchange and other trading revenues up 10% from the year-ago quarter. --Private client services and asset management revenues were up 10% from the year-ago quarter. Chairman and Chief Executive Officer Thomas (language) Thomas - A language compatible with the language Dylan(TM). Thomas is NOT Dylan(TM). The first public release of a translator to Scheme by Matt Birkholz, Jim Miller, and Ron Weiss, written at Digital Equipment Corporation's Cambridge Research Laboratory runs A. Renyi stated, "Our fourth quarter and full-year results reflect the accelerating earnings power of our franchise. We are achieving double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. revenue growth in many of our key business lines and are positioned to generate positive operating leverage on a consistent basis - a primary goal for us. "We have good momentum entering 2006 and continue to position our Company for long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth and success. During 2005 we formed strategic alliances to penetrate faster-growing markets in France, Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). , the Nordic and Baltic region For other uses, see Baltic (disambiguation). The Baltic region is an ambiguous term that refers to slightly different combinations of countries in the general area surrounding the Baltic Sea. , Japan, Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. , and India India, officially Republic of India, republic (2005 est pop. 1,080,264,000), 1,261,810 sq mi (3,268,090 sq km), S Asia. The second most populous country in the world, it is also sometimes called Bharat, its ancient name. India's land frontier (c. . We also continued to expand our market presence in high-growth areas such as hedge fund hedge fund, in finance, a highly speculative, largely unregulated investment device. Originating in the 1950s, the funds "hedge" by offsetting "short" positions (borrowing a security and then selling it at a higher price before repaying the lender) against "long" servicing and collateral collateral (kəlăt`ərəl), something of value given or pledged as security for payment of a loan. Collateral consists usually of financial instruments, such as stocks, bonds, and negotiable paper, rather than physical goods, although management, while extending our capabilities in the rapidly growing area of alternative investments. Through these initiatives, our strengthened marketing programs, and the gains we are making in service quality and client-focused technology, we will create new growth opportunities in the year ahead."
SECURITIES SERVICING FEES
Percent Inc/(Dec) Year-to-date Percent
------------------------------
4Q05 vs. 4Q05 vs. Inc/
(In millions) 4Q05 3Q05 4Q04 3Q05 4Q04 2005 2004 (Dec)
----------------------------------------------------------------------
Execution and
Clearing
Services $321 $314 $301 2% 7% $1,222 $1,145 7%
Investor Services 265 265 240 - 10 1,060 924 15
Issuer Services 171 170 150 1 14 639 583 10
Broker-Dealer
Services 58 57 50 2 16 227 205 11
-------------- --------------
Securities
Servicing Fees $815 $806 $741 1 10 $3,148 $2,857 10
============== ==============
Double-digit securities servicing fee growth over the fourth quarter and full-year 2004 periods reflects solid growth across all businesses. On a sequential-quarter basis, fees were marginally mar·gin·al adj. 1. Of, relating to, located at, or constituting a margin, a border, or an edge: the marginal strip of beach; a marginal issue that had no bearing on the election results. 2. higher, reflecting modest growth in execution & clearing, issuer services, and broker-dealer services. Execution and clearing fees increased from both the fourth quarter and full-year 2004, reflecting organic growth at Pershing and in the execution businesses as well as the additional revenues from the LJR LJR Lead Joint Runner LJR Legislative, Judicial and Rules (committee) LJR Layer Jump Recording acquisition. Pershing's revenues were up on a sequential basis, while the execution business also improved reflecting higher activity levels and continued strength in transition management. The execution and clearing businesses include institutional agency brokerage BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. , electronic trading  This article or section is in need of attention from an expert on the subject.Please help recruit one or [ improve this article] yourself. See the talk page for details. , transition management services, independent research and, through Pershing, correspondent A bank, Securities firm, or other financial institution that regularly renders services for another in an area or market to which the other party lacks direct access. A bank that functions as an agent for another bank and carries a deposit balance for a bank in another city. clearing services such as clearing, execution, financing, and custody The care, possession, and control of a thing or person. The retention, inspection, guarding, maintenance, or security of a thing within the immediate care and control of the person to whom it is committed. The detention of a person by lawful authority or process. for introducing broker-dealers. Investor services fees rose significantly from the year-ago quarter due to strong performance in key business lines. Global and domestic fund services and custody were favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impacted by new customer wins and strong organic growth, while securities lending Securities Lending When a brokerage lends securities owned by its clients to short sellers. Notes: This allows brokers to create additional revenue (commissions) on the short sale transaction. improved year-over-year due to higher loan volumes driven by new business wins as well as a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. spread environment. Sequential performance reflects solid results across most businesses offset by the impact of business lost through client consolidation. Investor services includes global fund services, global custody, securities lending, global liquidity services and outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. . Issuer services fees increased versus the year-ago periods due to higher levels of trading activity and greater corporate actions in depositary receipts depositary receipt A negotiable certificate that represents a company's publicly traded debt or equity. Depositary receipts are created when a company's shares or bonds are delivered to a depositary's custodian bank, which instructs the depositary to issue , as well as continued strength in international issuance and structured products in corporate trust. The sequential quarter increase from the strong third quarter reflects higher depositary receipt revenue resulting from a greater number of corporate actions and strong investment flows into the international markets, which drove increased depositary receipt issuance. In corporate trust, growth was led by fees from international issuance. Broker-dealer services fees improved versus the year-ago periods as a result of increased collateral management activity and greater volumes in government securities clearance CLEARANCE, com. law. The name of a certificate given by the collector of a port, in which is stated the master or commander (naming him) of a ship or vessel named and described, bound for a port, named, and having on board goods described, has entered and cleared his ship or vessel . Sequential performance improved due to higher fees in collateral management.
NONINTEREST INCOME
Percent Inc/(Dec) Year-to-date Percent
-------------------------------
(In 4Q05 vs. 4Q05 vs. Inc/
millions) 4Q05 3Q05 4Q04 3Q05 4Q04 2005 2004 (Dec)
----------------------------------------------------------------------
Servicing
Fees
Securities $815 $806 $741 1% 10% $3,148 $2,857 10%
Global
Payment
Services 68 75 72 (9) (6) 294 319 (8)
-------------------- -------------
883 881 813 - 9 3,442 3,176 8
Private
Client
Services
and Asset
Management
Fees 127 120 115 6 10 490 448 9
Service
Charges and
Fees 94 93 98 1 (4) 382 384 (1)
Foreign
Exchange
and Other
Trading
Activities 99 93 90 6 10 391 364 7
Securites
Gains 18 15 18 20 - 68 78 (13)
Other* 53 46 42 15 26 183 200 (9)
-------------------- -------------
Total
Noninterest
Income $1,274 $1,248 $1,176 2 8 $4,956 $4,650 7
==================== =============
* See Note (3).
The increase in noninterest income versus the fourth quarter and year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. periods of 2004 reflects broadly stronger performance in securities servicing, foreign exchange and other trading, and private client services and asset management. The sequential increase in noninterest income primarily reflects increases in foreign exchange and other trading, private client services and asset management, and other income. Global payment services fees decreased from the fourth quarter and full-year of 2004 and on a sequential-quarter basis. The declines reflect customers choosing to pay with higher compensating balances Compensating balance An excess balance that is left in a bank to provide indirect compensation for loans extended or services provided. compensating balance , which benefits net interest income. On an invoiced services basis, total revenue was up 3% over the fourth quarter of 2004 and 5% for the full year. Private client services and asset management fees for the fourth quarter were up from the fourth quarter of 2004 reflecting higher fees at the Company's asset management subsidiaries including Gannett, Welsh Welsh most commonly refers to:
Places and Kotler, Estabrook, and Ivy Asset Management. The sequential quarter increase reflects growth in private banking fees and in revenue at Ivy Asset Management. Total assets under management Assets Under Management (AUM) is a term used by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. were $105 billion, up from $102 billion a year ago and marginally lower from $106 billion at September September: see month. 30, 2005. Service charges and fees were down from the fourth quarter of 2004 and were up slightly from the third quarter of 2005. Full year service charges and fees decreased slightly from 2004 due to lower retail transaction fees. The sequential quarter increase reflects higher loan syndication Loan Syndication The process of involving numerous different lenders in providing various portions of a loan. Notes: Mainly used in extremely large loan situations, syndication allows any one lender to provide a large loan while maintaining a more prudent and manageable fees. Foreign exchange and other trading revenues were up significantly from the fourth quarter of 2004 and on a sequential-quarter basis. The positive variances result from higher client activity in foreign exchange as well as improved results in interest rate derivatives An interest rate derivative is a derivative where the underlying asset is the right to pay or receive a (usually notional) amount of money at a given interest rate. The interest rate derivatives market is the largest derivatives market in the world. . The increase in the year 2005 compared with 2004 was due to higher customer-driven foreign exchange and increased interest rate derivative trading, partially offset by weaker trading results at Pershing. Securities gains in the fourth quarter were flat from the fourth quarter of 2004 and were up compared with the third quarter of 2005. The sequential quarter increase reflects higher gains in the Company's sponsor fund portfolio. For the year ended December December: see month. 31, 2005, securities gains declined versus a year ago, reflecting $19 million of realized gains Realized Gain A gain resulting from selling an asset at a price higher than the original purchase price. Notes: There may be tax consequences for a realized profit. on four sponsor fund investments recorded in the first quarter of 2004. See Note 1. Other noninterest income increased versus the fourth quarter of 2004 and the third quarter of 2005. The fourth quarter of 2005 included the sale of a building for a $10 million pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta gain and four New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. seats for a $6 million pre-tax gain. On a year-to-date basis, other noninterest income included a $17 million gain on the second quarter 2005 sale of the Company's interest in Financial Models Company, Inc., a $12 million gain on the sale of certain Community Reinvestment Act Community Reinvestment Act (CRA) Enacted by Congress in 1977, the CRA encourages banks to help meet the credit needs of their communities for housing and other purposes, particularly in neighborhoods with low or moderate incomes, while maintaining safe and sound operations. investments in the third quarter, a $12 million gain on the sale of eight New York Stock Exchange seats in the third and fourth quarters and the above gain on the sale of a building. For the year ended December 31, 2005, other noninterest income was down from the year ended December 31, 2004, primarily reflecting a 2004 pre-tax gain of $48 million on the sale of a portion of the Company's investment in Wing Hang Bank Limited. See Note 1.
NET INTEREST INCOME
Percent
Inc/
(Dec)
--------------------
4Q05 4Q05
4Q05 vs. vs.
(Dollars in millions) 4Q05 3Q05 4Q04 4Q04 vs. 4Q04 4Q04
Reported Core** 3Q05 Reported Core**
----------------------------------------------------------------------
Net Interest
Income $492 $492 $527 $448 -% (7)% 10%
Tax
Equivalent
Adjustment* 7 8 9 9
-------------------------
Net Interest
Income on a Tax
Equivalent Basis $499 $500 $536 $457 - (7) 9
=========================
Net Interest
Rate
Spread 1.71% 1.84% 2.26% 1.87%
Net Yield on
Interest
Earning
Assets 2.35 2.42 2.64 2.25
Percent
Inc/
Year-to-date (Dec)
--------------------- ---------------
2004 2004
(Dollars in millions) 2005 Reported Core** Reported Core**
----------------------------------------------------------------------
Net Interest
Income $1,909 $1,645 $1,711 16% 12%
Tax
Equivalent
Adjustment* 29 30 30
---------------------
Net Interest
Income on a Tax Equivalent
Basis $1,938 $1,675 $1,741 16 11
=====================
Net Interest
Rate
Spread 1.83% 1.78% 1.86%
Net Yield on
Interest
Earning
Assets 2.36 2.07 2.15
* See Note (2).
* * Excludes SFAS 13 adjustment. See Note (1).
Net interest income on a reported basis decreased on a year-over-year quarterly basis reflecting the leasing adjustment recorded in the fourth quarter of 2004. See Note 1. On a core basis, net interest income increased over the fourth quarter and year 2004 reflecting strong liquidity generated by the Company's securities servicing businesses and sound interest rate positioning. Net interest income was flat on a sequential quarter basis, reflecting higher earning assets Earning Assets Any income-earning asset owned by a company. Notes: These assets are generally interest-bearing accounts, bonds, and securities available for sale. See also: Asset, Asset Valuation, Earnings, Net Interest Margin offset by the aggregate $14 million impact of a cumulative adjustment in the Company's reserve position with the Federal Reserve and the interest impact of depositing funds with the IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. related to the anticipated LILO settlement. The fourth quarter 2005 compared to the third quarter had lower interest income related to nonperforming assets Nonperforming asset An asset that is not effectively producing income, such as an overdue loan. nonperforming asset An asset that produces no income. .
NONINTEREST EXPENSE AND INCOME TAXES
Percent Inc/(Dec) Year-to-date Percent
------------------------------
4Q05 vs. 4Q05 vs. Inc/
(In millions) 4Q05 3Q05 4Q04 3Q05 4Q04 2005 2004 (Dec)
----------------------------------------------------------------------
Salaries and
Employee
Benefits $647 $644 $617 -% 5% $2,549 $2,324 10%
Net Occupancy 84 79 75 6 12 323 305 6
Furniture and
Equipment 53 52 51 2 4 208 204 2
Clearing 50 49 45 2 11 187 176 6
Sub-custodian
Expenses 24 25 22 (4) 9 96 87 10
Software 53 54 43 (2) 23 215 193 11
Communications 26 24 23 8 13 95 93 2
Amortization
of
Intangibles 12 10 9 20 33 40 34 18
Other 199 198 212 1 (6) 770 706 9
--------------------- -------------
Total
Noninterest
Expense $1,148 $1,135 $1,097 1 5 $4,483 $4,122 9
===================== =============
Noninterest expense was up compared with the fourth quarter of 2004 and the third quarter of 2005. The increase versus the year-ago quarter reflects increased staffing and clearing costs associated with new business and acquisitions, as well as higher pension and option expenses, expanded occupancy costs Occupancy costs are the whole life costs of buildings and their associated land from occupancy until disposal. These costs may be incurred on a regular or irregular basis. Occupancy costs are those costs related to occupying a space including; rent, real estate taxes, personal associated with business continuity, and higher legal costs. Other expenses in the 2004 fourth quarter included the $30 million reserve associated with the RW Leasing matter. Relative to the year-ago quarter, salaries rose 2% as tight headcount head count or head·count n. 1. The act of counting people in a particular group. 2. The number of people counted in this way. Noun 1. control and reengineering Using information technology to improve performance and cut costs. Its main premise, as popularized by the book "Reengineering the Corporation" by Michael Hammer and James Champy, is to examine the goals of an organization and to redesign work and business processes from the ground up and relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. projects offset the impact of business wins, acquisitions and additional legal and compliance personnel. Benefit expense increased due to higher stock options, pension, medical, and incentive payments. Salaries and employee benefits expense for the fourth quarter increased slightly on a sequential quarter basis, reflecting higher incentive compensation as well as increased medical costs. For the full-year 2005, salaries and employee benefit expense also was higher compared to the full-year 2004, reflecting many of these same factors affecting the year-over-year quarterly comparison. Occupancy Gaining or having physical possession of real property subject to, or in the absence of, legal right or title. In a fire insurance policy, for example, the term occupancy expenses were up sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen reflecting the costs associated with the Company's new out-of-region data center in the mid-south Mid-South may refer to:
Manchester (măn`chəstər, –chĕs'tər), city and metropolitan district (1991 pop. 397,400), NW England, on the Irwell, Medlock, Irk, and Tib rivers. , England England, the largest and most populous portion of the United Kingdom of Great Britain and Northern Ireland (1991 pop. 46,382,050), 50,334 sq mi (130,365 sq km). It is bounded by Wales and the Irish Sea on the west and Scotland on the north. . On an annual basis, occupancy expenses were up from 2004, primarily reflecting the same factors affecting the sequential quarter comparison as well as higher energy costs. Occupancy expense in 2004 included lease termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. expenses of $8 million recorded in the first quarter of 2004. The increase in clearing expenses in the year-over-year periods reflects higher expenses associated with acquisitions within the execution business. On a sequential-quarter basis, other expenses in the fourth quarter of 2005 increased due to higher costs for legal, seasonal travel, and employment agencies tied to hiring. On a year-to-date basis, other expenses included $14 million (both pre- pre- word element [L.], before (in time or space). pre- pref. 1. Earlier; before; prior to: prenatal. 2. and after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. ) of expenses set aside for the settlement of the previously disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). Russian Russian associated in some way with Russia. Russian blue a breed of cats with short, dense, silver-tipped blue-colored coat and vivid green eyes. funds transfer matter in the third quarter of 2005, while the second quarter included $10 million ($7 million after-tax) for the potential settlement of certain regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. matters. In the fourth quarter of 2004, other expenses included $30 million ($22 million after-tax) of expenses accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. for the settlement of the RW Leasing matter. The effective tax rate for the fourth quarter of 2005 was 33.3%, compared to 42.8% in the fourth quarter of 2004 and 34.7% in the third quarter of 2005. The effective tax rate for the year ended December 31, 2005, was 33.6%, compared with 33.3% for the year ended December 31, 2004. The decrease from the fourth quarter of 2004 primarily reflects the expensing in 2004 of the potential LILO settlement. The sequential quarter decrease principally reflects the impact on the third quarter of 2005 of the non-deductibility of the amount associated with the settlement referenced above and the tax impact on the sale of the CRA See Community Reinvestment Act. investments. The increase in the year 2005 compared with 2004 is due to higher state and local income taxes. The effective tax rates in all periods reflect a reclassification Reclassification The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event. related to Section 42 tax credits. See Note 3.
CREDIT LOSS PROVISION AND NET CHARGE-OFFS
Year-to-date
-------------
(In millions) 4Q05 3Q05 4Q04 2005 2004
--------------------------------
Provision $10 $10 $(7) $15 $15
--------------------------------
Net Charge-offs:
Commercial $(139) $ (2) $ (1) $(143) $(22)
Foreign (1) (2) 2 (7) (24)
Regional Commercial (3) (3) (8) (9) (9)
Consumer (8) (6) (5) (27) (28)
--------------------------------
Total $(151) $(13) $(12) $(186) $(83)
================================
During the fourth quarter of 2005 the Company charged-off $139 million of leases with two bankrupt BANKRUPT. A person who has done, or suffered some act to be done, which is by law declared an act of bankruptcy; in such case he may be declared a bankrupt. 2. It is proper to notice that there is much difference between a bankrupt and an insolvent. airline customers.
LOANS
(Dollars in millions) Dec. 31, Sept. 30, Dec. 31,
2005 2005 2004
--------- ---------- --------
Margin Loans $ 6,089 $ 6,320 $ 6,059
Non-Margin Loans 34,637 35,823 29,722
--------- ---------- --------
Total Loans $ 40,726 $ 42,143 $35,781
========= ========== ========
Allowance for Loan Losses $ 411 $ 561 $ 591
Allowance for Lending-Related
Commitments 154 146 145
--------- ---------- --------
Total Allowance for Credit Losses $ 565 $ 707 $ 736
========= ========== ========
Allowance for Loan Losses
As a Percent of Total Loans 1.01 % 1.33 % 1.65 %
Allowance for Loan Losses
As a Percent of Non-Margin Loans 1.19 1.57 1.99
Total Allowance for Credit Losses
As a Percent of Total Loans 1.39 1.68 2.06
Total Allowance for Credit Losses
As a Percent of Non-Margin Loans 1.63 1.97 2.48
NONPERFORMING ASSETS
Change
12/31/2005
vs. Percent
(Dollars in millions) 12/31/2005 9/30/2005 9/30/2005 Inc/(Dec)
------------------------------------------
Loans:
Commercial $ 17 $ 35 $ (18) (51)%
Foreign 14 15 (1) (7)
Other 35 57 (22) (39)
---------------------------------
Total Nonperforming Loans 66 107 (41) (38)
Other Assets Owned 13 - 13 -
---------------------------------
Total Nonperforming Assets $ 79 $ 107 $ (28) (26)
=================================
Nonperforming Assets Ratio 0.2 % 0.3 %
Allowance for Loan Losses
/Nonperforming Loans 629.7 % 524.9 %
Allowance for Loan Losses
/Nonperforming Assets 524.0 524.9
Total Allowance for Credit
Losses
/Nonperforming Loans 865.4 661.2
Total Allowance for Credit
Losses
/Nonperforming Assets 720.2 661.2
The sequential quarter decrease in nonperforming loans primarily reflects completion of the sale of the Company's exposure to a cable operator that was categorized cat·e·go·rize tr.v. cat·e·go·rized, cat·e·go·riz·ing, cat·e·go·riz·es To put into a category or categories; classify. cat as nonperforming. OTHER DEVELOPMENTS On January January: see month. 3, 2006, the Company acquired Alcentra Group Limited, an international asset management group focused on funds that invest in non-investment grade debt. Alcentra's management team will retain a 20 percent interest. Alcentra has operations in London London, city, Canada London, city (1991 pop. 303,165), SE Ont., Canada, on the Thames River. The site was chosen in 1792 by Governor Simcoe to be the capital of Upper Canada, but York was made capital instead. London was settled in 1826. and Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. and currently manages 15 different investment funds Noun 1. investment funds - money that is invested with an expectation of profit investment assets - anything of material value or usefulness that is owned by a person or company with over $6.2 billion of assets. On January 17, 2006, the Company announced a definitive agreement to acquire Urdang Capital Management, Inc., a real estate investment management firm that manages more than $2.7 billion in direct investments and portfolios of REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). securities. The transaction is expected to close by the end of the first quarter, pending regulatory approval and other customary conditions of closing. If these acquisitions had closed prior to December 31, 2005, the tangible Possessing a physical form that can be touched or felt. Tangible refers to that which can be seen, weighed, measured, or apprehended by the senses. A tangible object is something that is real and substantial. An automobile is an example of tangible Personal Property. common equity ratio would have been reduced by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 33 basis points from 5.57% to 5.24%. In the fourth quarter of 2005, the Company's new data center in the mid-south region of the U.S. became operational. The new data center will improve the geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. and resilience resilience (r  ·zilˑ·yens),n of the Company's operations and will support the processing needs of the Company's institutional and retail customers. CONFERENCE CALL INFORMATION Thomas A. Renyi, chairman and chief executive officer, and Bruce Bruce, Scottish royal family descended from an 11th-century Norman duke, Robert de Brus. He aided William I in his conquest of England (1066) and was given lands in England. W. Van Saun, vice chairman and chief financial officer, will review the quarterly results in a live conference call and audio webcast today at 10:30 a.m. ET. The presentation will be accessible from the Company's website at --www.bankofny.com/earnings and --By telephone at (888)677-2456 within the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. or (517)623-4161 internationally. --Passcode is "The Bank of New York." --Replay of the call will be available through the Company's website and also by telephone at (866)515-1614 within the United States or (203)369-2024 internationally. The Bank of New York Company, Inc. (NYSE: BK) is a global leader in providing a comprehensive array of services that enable institutions and individuals to move and manage their financial assets Financial assets Claims on real assets. in more than 100 markets worldwide. The Company has a long tradition of collaborating with clients to deliver innovative solutions through its core competencies A core competency is something that a firm can do well and that meets the following three conditions specified by Hamel and Prahalad (1990):
THE BANK OF NEW YORK COMPANY, INC.
Financial Highlights
(Dollars in millions, except per share amounts)
(Unaudited)
December 31, September 30, December 31,
2005 2005 2004
------------ ------------- ------------
Quarter
------------------------------
Revenue (tax equivalent basis) $ 2,237 $ 2,126 $ 1,967
Net Income 405 389 351
Basic EPS 0.53 0.51 0.45
Diluted EPS 0.53 0.51 0.45
Cash Dividends Per Share 0.21 0.21 0.20
Return on Average Common
Shareholders' Equity 16.57% 16.15% 15.34%
Return on Average Assets 1.53 1.53 1.40
Efficiency Ratio 65.4 65.5 64.8
Year-to-date
------------------------------
Revenue (tax equivalent basis) $ 8,341 $ 6,103 $ 7,133
Net Income 1,571 1,166 1,440
Basic EPS 2.05 1.52 1.87
Diluted EPS 2.03 1.51 1.85
Cash Dividends Per Share 0.82 0.61 0.79
Return on Average Common
Shareholders' Equity 16.59% 16.59% 16.37%
Return on Average Assets 1.55 1.56 1.45
Efficiency Ratio 65.7 65.8 66.0
Assets $ 102,074 $ 101,766 $ 94,529
Loans 40,726 42,143 35,781
Securities 27,326 26,230 23,802
Deposits - Domestic 37,374 34,807 35,558
- Foreign 27,050 26,270 23,163
Long-Term Debt 7,819 7,529 6,121
Common Shareholders' Equity 9,864 9,608 9,290
Common Shareholders'
Equity Per Share $ 12.79 $ 12.48 $ 11.94
Market Value Per Share
of Common Stock 31.85 29.41 33.42
Allowance for Loan Losses as
a Percent of Total Loans 1.01% 1.33% 1.65%
Allowance for Loan Losses as
a Percent of Non-Margin Loans 1.19 1.57 1.99
Total Allowance for Credit
Losses as a Percent of Total
Loans 1.39 1.68 2.06
Total Allowance for Credit
Losses as a Percent of
Non-Margin Loans 1.63 1.97 2.48
Tier 1 Capital Ratio 8.35 7.93 8.31
Total Capital Ratio 12.44 12.20 12.21
Leverage Ratio 6.59 6.59 6.41
Tangible Common Equity Ratio 5.57 5.32 5.56
Employees 23,451 23,081 23,363
THE BANK OF NEW YORK COMPANY, INC.
Financial Highlights
(Dollars in millions, except per share amounts)
(Estimated)
December 31, September 30, December 31,
2005 2005 2004
------------ ------------- ------------
Assets Under Custody (In
trillions)
-------------------------------
Assets Under Custody $ 10.9 $ 10.3 $ 9.7
Equity Securities 32% 31% 35%
Fixed Income Securities 68 69 65
Cross-Border Assets Under
Custody $ 3.4 $ 3.1 $ 2.7
Assets Under Management (In
billions)
-------------------------------
Total Assets Under Management 105 106 102
Equity Securities 35% 34% 36%
Fixed Income Securities 20 21 21
Alternative Investments 14 14 15
Liquid Assets 31 31 28
Notes:
(1) In 2004, the Company recorded several gains and charges that in
the aggregate reduced reported earnings by 3 cents per share. These
items were recorded in the first and fourth quarters of 2004 and are
summarized in the table below.
After-
(In millions) Applicable Income Pre-Tax Tax
Item Quarter Statement Income Tax Income
------------------------- --------- ------------- ------ ----- -------
Net Interest Income(a)
SFAS 13 cumulative
lease adjustment - First Net Interest
(leasing portfolio) Income ($145) $113 ($32)
lease adjustment -
(cross-border rail Fourth Net Interest
equipment leases) Income 89 (37) 52
lease adjustment - Fourth Net Interest
(aircraft leases) Income (10) 4 (6)
------ ----- -------
Subtotal - Net Interest
Income (66) 80 14
Aircraft leases/other Fourth Provision for
Credit Losses 7 (3) 4
------ ----- -------
Subtotal - Net Interest
Income After Provision
for Credit Losses (59) 77 18
------ ----- -------
Noninterest Income(b)
Gain on sale of Wing Hang First Other Income 48 (21) 27
Gain on sponsor fund First Securities
investments Gains 19 (7) 12
Aircraft leases Fourth Other Income 3 (1) 2
------ ----- -------
Subtotal - Noninterest
Income 70 (29) 41
------ ----- -------
Noninterest Expense(c)
Severance tied to First Salaries and
relocations Employee
Benefits (10) 4 (6)
Lease terminations First Net Occupancy (8) 3 (5)
Charge for the RW Matter Fourth Other Expense (30) 8 (22)
------ ----- -------
Subtotal - Noninterest
Expense (48) 15 (33)
------ ----- -------
Federal tax reserve
adjustment related to
LILO exposure Fourth Income Tax - (50) (50)
------ ----- -------
Total ($37) $13 ($24)
====== ===== =======
(a) An after-tax charge of $32 million resulting from a cumulative adjustment to the leasing portfolio was triggered under Statement of Financial Accounting Standards No. 13 "Accounting for Leases" ("SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 13") by the combination of a reduction in state and local taxes and a restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). of the lease portfolio completed in the first quarter. The SFAS 13 adjustment impacts the timing of lease income reported by the Company, and resulted in a reduction in net interest income of $145 million, offset by tax benefits of $113 million. An after-tax benefit of $52 million resulted from a SFAS 13 cumulative adjustment to the leasing portfolio for customers exercising their early buy-out buy·out also buy-out n. 1. The purchase of the entire holdings or interests of an owner or investor. 2. The purchase of a company or business: ("EBO EBO Effects Based Operations EBO Emerging Business Opportunities EBO Experimental Biology Online EBO European Board of Ophthalmology EBO Early Buyout Option (leasing) EBO Easy Bake Oven (toy) ") options. The Company's leasing portfolio contains a number of large cross-border leveraged leases where the lessee One who rents real property or Personal Property from another. A lessee of land is a tenant. Cross-references Landlord and Tenant. lessee n. the person renting property under a written lease from the owner (lessor). has an early buy-out option to purchase the leased assets, generally railcars and related assets. Given a confluence confluence /con·flu·ence/ (kon´floo-ins) 1. a running together; a meeting of streams.con´fluent 2. in embryology, the flowing of cells, a component process of gastrulation. of economic factors, the value of the leased equipment currently exceeds the exercise price of the early buy-out option. The Company offered financial incentives to these lessees to accelerate the exercise of their early buy-out options. As a result, several lessees agreed to this proposal, triggering the after-tax $52 million gain. The gain results from the recognition of lease income over a shorter time frame, since the term of the lease has been shortened short·en v. short·ened, short·en·ing, short·ens v.tr. 1. To make short or shorter. 2. to the early buy-out date. Net investment in aircraft leases was impacted by a $6 million after-tax adjustment related to aircraft leased to two airlines. The Company recorded a $7 million reduction in the provision for credit losses which largely reflects release of reserves on the aircraft leases. (b) A $27 million after-tax gain on the sale of a portion of the Company's interest in Wing Hang Bank Limited ("Wing Hang"), a Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. based bank, was recorded in other income, and $19 million ($12 million after-tax) of higher than anticipated securities gains in the first quarter resulted from realized gains on sponsor fund investments in Kinkos, Inc., Bristol Bristol, cities, United States Bristol. 1 Industrial city (1990 pop. 60,640), Hartford co., central Conn., on the Pequabuck River; settled 1727, inc. 1785. Its clock-making industry dates from 1790. West Holdings, Inc., Willis Wil·lis , Thomas 1621-1675. English anatomist and physician known for his studies of the nervous system and the brain. He discovered the circle of Willis at the base of the brain. Group Holdings, Ltd., and True Temper Sports, Inc. The Company also had an after-tax gain of $2 million on the sale of a leased aircraft. (c) The Company also took several actions associated with its long-term cost reduction initiatives. These actions included an after-tax severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when charge of $6 million related to staff reductions tied to job relocations and a $5 million after-tax charge for terminating high cost leases associated with the staff redeployments. The Company recorded an after-tax expense of $22 million in connection with the settlement of the RW Professional Leasing Services Corp. matter ("RW Matter"). This expense is only partially tax deductible That which may be taken away or subtracted. In taxation, an item that may be subtracted from gross income or adjusted gross income in determining taxable income (e.g., interest expenses, charitable contributions, certain taxes). . The Company had several appellate Relating to appeals; reviews by superior courts of decisions of inferior courts or administrative agencies and other proceedings. conferences with the IRS related to the Company's cross-border leveraged lease transactions in December of 2004 and January 2005. Based on a revision (programming) revision - A release of a piece of software which is not a major release or a bugfix, but only introduces small changes or new features. to the probabilities and costs assigned as·sign tr.v. as·signed, as·sign·ing, as·signs 1. To set apart for a particular purpose; designate: assigned a day for the inspection. 2. to litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. and settlement outcomes, the Company recorded a $50 million expense associated with increasing the tax reserve on these transactions. (2) A number of amounts related to net interest income are presented on a "tax equivalent basis". The Company believes that this presentation provides comparability of net interest income arising from both taxable and tax-exempt tax-ex·empt adj. 1. Not subject to taxation, as the capital or income of a philanthropic organization. 2. Producing interest that is exempt from income tax: tax-exempt bonds. n. sources and is consistent with industry standards. (3) The Company participates in unconsolidated investments that own real estate qualifying for low income housing tax credits based on Section 42 of the Internal Revenue Code The Internal Revenue Code is the body of law that codifies all federal tax laws, including income, estate, gift, excise, alcohol, tobacco, and employment taxes. These laws constitute title 26 of the U.S. Code (26 U.S.C.A. § 1 et seq. . The Company's share of operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. generated by these investments is recorded as other income. The Company has historically netted the tax credits generated by these investments against the related operating losses. The Company has reviewed this accounting method and has decided to record these tax credits as a reduction of income tax expense. Prior period results for other income and income tax expense have been reclassified and did not have an impact on net income. See pages 43 to 45 of the Company's September 30, 2005 Form 10-Q Form 10-Q See 10-Q. . (4) Operating leverage is measured by comparing the rate of increase in revenue to the rate of increase in expenses. The chart below shows the computation Computation is a general term for any type of information processing that can be represented mathematically. This includes phenomena ranging from simple calculations to human thinking. of operating leverage. The core numbers reflect adjustment for the items detailed in Note 1.
Operating Leverage
(Dollars in
millions) 4Q 2005 4Q 2004 % Change % Change
------------------ -------------------
Reported Adj Core Reported Adj Core Reported Core
-------- --- ---- -------- --- ---- -------- ----
Noninterest
Income $1,274 $ - $1,274 $1,176 $(3) $1,173 8.3 % 8.6%
Net Interest
Income 492 - 492 527 (79) 448 (6.6) 9.8
Total
Revenue 1,766 - 1,766 1,703 (82) 1,621 3.7 8.9
Total
Expense 1,148 - 1,148 1,097 (30) 1,067 4.6 7.6
Operating
Leverage (0.9)% 1.3%
======== =======
(Dollars in
millions) 4Q 2005 3Q 2005 % Change % Change
------------------ -------------------
Reported Adj Core Reported Adj Core Reported Core
-------- --- ---- -------- --- ---- -------- ----
Noninterest
Income $1,274 $ - $1,274 $1,248 $ - $1,248 2.1% 2.1%
Net Interest
Income 492 - 492 492 - 492 - -
Total
Revenue 1,766 - 1,766 1,740 - 1,740 1.5 1.5
Total
Expense 1,148 - 1,148 1,135 - 1,135 1.1 1.1
Operating
Leverage 0.4% 0.4%
======== ======
(Dollars in
millions) 2005 2004 % Change % Change
------------------ -------------------
Reported Adj Core Reported Adj Core Reported Core
-------- --- ---- -------- --- ---- -------- ----
Noninterest
Income $4,956 $ - $4,956 $4,650 $(70) $4,580 6.6% 8.2 %
Net Interest
Income 1,909 - 1,909 1,645 66 1,711 16.0 11.6
Total
Revenue 6,865 - 6,865 6,295 (4) 6,291 9.1 9.1
Total
Expense 4,483 - 4,483 4,122 (48) 4,074 8.8 10.0
Operating
Leverage 0.3% (0.9)%
========= =======
FORWARD LOOKING STATEMENTS All statements in this press release other than statements of historical fact are forward looking statements including, among other things, projections with respect to revenue and earnings and the Company's plans and objectives and as such are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward looking statements. These include lower than expected performance or higher than expected costs in connection with acquisitions and integration of acquired businesses, the level of capital market and trading activity, changes in customer credit quality, market performance, the effects of capital reallocation Noun 1. reallocation - a share that has been allocated again allocation, allotment - a share set aside for a specific purpose 2. reallocation , portfolio performance, changes in regulatory expectations and standards, ultimate differences from management projections or market forecasts, the actions that management could take in response to these changes and other factors described under the heading "Forward Looking Statements and Factors That Could Affect Future Results" in the Company's 2004 Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and Third Quarter 2005 Form 10-Q which have been filed with the SEC and are available at the SEC's website (www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. ). Forward looking statements speak only as of the date they are made. The Company will not update forward looking statements to reflect factual assumptions, circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or or events that have changed after a forward looking statement was made. (Financial highlights and detailed financial statements are attached.)
THE BANK OF NEW YORK COMPANY, INC.
Consolidated Statements of Income
(Dollars in millions, except per share amounts)
(Unaudited)
For the three
months ended
December 31, Percent
2005 2004 Inc/(Dec)
------ ------ ----------
Interest Income
---------------
Loans $ 423 $ 401 5%
Margin loans 79 48 65
Securities
Taxable 282 197 43
Exempt from Federal Income Taxes 10 11 (9)
------ ------
292 208 40
Deposits in Banks 68 81 (16)
Federal Funds Sold and Securities
Purchased Under Resale Agreements 40 27 48
Trading Assets 54 17 218
------ ------
Total Interest Income 956 782 22
------ ------
Interest Expense
----------------
Deposits 303 164 85
Federal Funds Purchased and
Securities Sold Under Repurchase
Agreements 12 6 100
Other Borrowed Funds 25 25 -
Customer Payables 40 19 111
Long-Term Debt 84 41 105
------ ------
Total Interest Expense 464 255 82
------ ------
Net Interest Income 492 527 (7)
-------------------
Provision for Credit Losses 10 (7) (243)
------ ------
Net Interest Income After
Provision for Credit Losses 482 534 (10)
------ ------
Noninterest Income
------------------
Servicing Fees
Securities 815 741 10
Global Payment Services 68 72 (6)
------ ------
883 813 9
Private Client Services and
Asset Management Fees 127 115 10
Service Charges and Fees 94 98 (4)
Foreign Exchange and Other
Trading Activities 99 90 10
Securities Gains 18 18 -
Other 53 42 26
------ ------
Total Noninterest Income 1,274 1,176 8
------ ------
Noninterest Expense
-------------------
Salaries and Employee Benefits 647 617 5
Net Occupancy 84 75 12
Furniture and Equipment 53 51 4
Clearing 50 45 11
Sub-custodian Expenses 24 22 9
Software 53 43 23
Communications 26 23 13
Amortization of Intangibles 12 9 33
Other 199 212 (6)
------ ------
Total Noninterest Expense 1,148 1,097 5
------ ------
Income Before Income Taxes 608 613 (1)
Income Taxes 203 262 (23)
------ ------
Net Income $ 405 $ 351 15
---------- ====== ======
Per Common Share Data:
---------------------
Basic Earnings $ 0.53 $ 0.45 18
Diluted Earnings 0.53 0.45 18
Cash Dividends Paid 0.21 0.20 5
Diluted Shares Outstanding 771 780 (1)
For the year
ended
December 31, Percent
2005 2004 Inc/(Dec)
------ ------ ----------
Interest Income
---------------
Loans $1,505 $1,080 39%
Margin loans 267 156 71
Securities
Taxable 976 741 32
Exempt from Federal Income Taxes 40 40 -
------ ------
1,016 781 30
Deposits in Banks 274 305 (10)
Federal Funds Sold and Securities
Purchased Under Resale Agreements 142 80 78
Trading Assets 152 51 198
------ ------
Total Interest Income 3,356 2,453 37
------ ------
Interest Expense
----------------
Deposits 955 548 74
Federal Funds Purchased and
Securities Sold Under Repurchase
Agreements 35 15 133
Other Borrowed Funds 58 52 12
Customer Payables 128 57 125
Long-Term Debt 271 136 99
------ ------
Total Interest Expense 1,447 808 79
------ ------
Net Interest Income 1,909 1,645 16
-------------------
Provision for Credit Losses 15 15 -
------ ------
Net Interest Income After
Provision for Credit Losses 1,894 1,630 16
------ ------
Noninterest Income
------------------
Servicing Fees
Securities 3,148 2,857 10
Global Payment Services 294 319 (8)
------ ------
3,442 3,176 8
Private Client Services and
Asset Management Fees 490 448 9
Service Charges and Fees 382 384 (1)
Foreign Exchange and Other
Trading Activities 391 364 7
Securities Gains 68 78 (13)
Other 183 200 (9)
------ ------
Total Noninterest Income 4,956 4,650 7
------ ------
Noninterest Expense
-------------------
Salaries and Employee Benefits 2,549 2,324 10
Net Occupancy 323 305 6
Furniture and Equipment 208 204 2
Clearing 187 176 6
Sub-custodian Expenses 96 87 10
Software 215 193 11
Communications 95 93 2
Amortization of Intangibles 40 34 18
Other 770 706 9
------ ------
Total Noninterest Expense 4,483 4,122 9
------ ------
Income Before Income Taxes 2,367 2,158 10
Income Taxes 796 718 11
------ ------
Net Income $1,571 $1,440 9
---------- ====== ======
Per Common Share Data:
---------------------
Basic Earnings $ 2.05 $ 1.87 10
Diluted Earnings 2.03 1.85 10
Cash Dividends Paid 0.82 0.79 4
Diluted Shares Outstanding 773 778 (1)
THE BANK OF NEW YORK COMPANY, INC.
Consolidated Balance Sheets
(Dollars in millions, except per share amounts)
(Unaudited)
Dec. 31, 2005 Dec. 31, 2004
--------------- ---------------
Assets
------
Cash and Due from Banks $ 3,515 $ 3,886
Interest-Bearing Deposits in Banks 8,644 8,192
Securities
Held-to-Maturity 1,977 1,886
Available-for-Sale 25,349 21,916
------------ ---------
Total Securities 27,326 23,802
Trading Assets at Fair Value 5,930 4,627
Federal Funds Sold and Securities
Purchased Under Resale Agreements 2,425 5,708
Loans (less allowance for loan losses
of $411 in 2005 and $591 in 2004) 40,315 35,190
Premises and Equipment 1,060 1,097
Due from Customers on Acceptances 233 137
Accrued Interest Receivable 391 285
Goodwill 3,619 3,477
Intangible Assets 811 793
Other Assets 7,805 7,335
------------ ---------
Total Assets $ 102,074 $ 94,529
============ =========
Liabilities and Shareholders' Equity
------------------------------------
Deposits
Noninterest-Bearing (principally
domestic offices) $ 18,236 $ 17,442
Interest-Bearing
Domestic Offices 19,522 18,692
Foreign Offices 26,666 22,587
------------ ---------
Total Deposits 64,424 58,721
Federal Funds Purchased and Securities
Sold Under Repurchase Agreements 834 1,205
Trading Liabilities 2,401 2,873
Payables to Customers and
Broker-Dealers 8,623 8,664
Other Borrowed Funds 860 533
Acceptances Outstanding 235 139
Accrued Taxes and Other Expenses 4,135 4,452
Accrued Interest Payable 170 113
Other Liabilities (including allowance
for lending-related commitments of
$154 in 2005 and $145 in 2004) 2,709 2,418
Long-Term Debt 7,819 6,121
------------ ---------
Total Liabilities 92,210 85,239
------------ ---------
Shareholders' Equity
Common Stock-par value $7.50 per
share, authorized 2,400,000,000
shares, issued 1,049,865,076
shares in 2005 and 1,044,841,603
shares in 2004 7,874 7,836
Additional Capital 1,909 1,790
Retained Earnings 7,089 6,162
Accumulated Other Comprehensive
Income (146) (6)
------------ ---------
16,726 15,782
Less: Treasury Stock (278,532,777
shares in 2005 and 266,720,629
shares in 2004), at cost 6,855 6,492
Loan to ESOP (203,507 shares
in 2005), at cost 7 -
------------ ---------
Total Shareholders' Equity 9,864 9,290
------------ ---------
Total Liabilities and
Shareholders' Equity $ 102,074 $ 94,529
============ =========
----------------------------------------------------------------------
Note: The balance sheet at December 31, 2004 has been derived from the
audited financial statements at that date.
THE BANK OF NEW YORK COMPANY, INC.
Average Balances and Rates on a Taxable Equivalent Basis
(Preliminary)
(Dollars in millions)
For the three months
ended December 31, 2005
-----------------------------
Average Average
Balance Interest Rate
--------- -------- ---------
ASSETS
------
Interest-Bearing
Deposits in Banks
(primarily foreign) $ 8,369 $ 68 3.20%
Federal Funds Sold and
Securities Purchased
Under Resale Agreements 4,305 40 3.72
Margin Loans 6,470 79 4.87
Loans
Domestic Offices 23,396 291 4.94
Foreign Offices 10,885 132 4.81
--------- --------
Non-Margin Loans 34,281 423 4.90
--------- --------
Securities
U.S. Government Obligations 226 2 4.17
U.S. Government Agency Obligations 3,992 43 4.27
Obligations of States and
Political Subdivisions 219 4 6.71
Other Securities 22,428 249 4.46
Trading Securities 4,929 55 4.40
--------- --------
Total Securities 31,794 353 4.44
--------- --------
Total Interest-Earning
Assets 85,219 963 4.50%
--------
Allowance for Credit
Losses (562)
Cash and Due from Banks 3,401
Other Assets 17,009
---------
TOTAL ASSETS $ 105,067
=========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Interest-Bearing Deposits
Money Market Rate
Accounts $ 6,260 $ 32 2.03%
Savings 8,310 29 1.39
Certificates of Deposit $100,000 & Over 3,579 38 4.16
Other Time Deposits 2,199 16 2.86
Foreign Offices 28,536 188 2.62
--------- --------
Total Interest-Bearing Deposits 48,884 303 2.46
Federal Funds Purchased and
Securities Sold Under
Repurchase Agreements 1,348 12 3.55
Other Borrowed Funds 1,966 25 4.95
Payables to Customers and Broker-Dealers 5,979 40 2.65
Long-Term Debt 7,577 84 4.36
--------- --------
Total Interest-Bearing Liabilities 65,754 464 2.79%
--------
Noninterest-Bearing Deposits 15,986
Other Liabilities 13,628
Common Shareholders' Equity 9,699
---------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 105,067
=========
Net Interest Earnings
and Interest Rate Spread $ 499 1.71%
======== ========
Net Yield on Interest-Earning Assets 2.35%
========
For the three months
ended December 31, 2004
-----------------------------
Average Average
Balance Interest Rate
--------- -------- ---------
ASSETS
------
Interest-Bearing
Deposits in Banks
(primarily foreign) $ 10,825 $ 81 2.99%
Federal Funds Sold and
Securities Purchased
Under Resale Agreements 5,364 27 2.03
Margin Loans 6,378 48 2.98
Loans
Domestic Offices 22,766 316 5.52
Foreign Offices 10,234 86 3.33
--------- --------
Non-Margin Loans 33,000 402 4.84
--------- --------
Securities
U.S. Government Obligations 291 2 3.08
U.S. Government Agency Obligations 3,550 31 3.47
Obligations of States and
Political Subdivisions 209 4 8.01
Other Securities 19,308 178 3.69
Trading Securities 1,962 18 3.56
--------- --------
Total Securities 25,320 233 3.68
--------- --------
Total Interest-Earning Assets 80,887 791 3.89%
--------- --------
Allowance for Credit Losses (595)
Cash and Due from Banks 3,759
Other Assets 15,916
---------
TOTAL ASSETS $ 99,967
=========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Interest-Bearing Deposits
Money Market Rate Accounts $ 6,648 $ 17 1.04%
Savings 9,095 18 0.80
Certificates of Deposit $100,000 & Over 3,285 17 2.02
Other Time Deposits 919 4 1.62
Foreign Offices 25,410 108 1.70
--------- --------
Total Interest-Bearing Deposits 45,357 164 1.44
Federal Funds Purchased and
Securities Sold Under
Repurchase Agreements 1,407 6 1.58
Other Borrowed Funds 3,494 25 2.81
Payables to Customers
and Broker-Dealers 5,886 19 1.26
Long-Term Debt 6,176 41 2.64
--------- --------
Total Interest-Bearing Liabilities 62,320 255 1.63%
--------- --------
Noninterest-Bearing Deposits 15,659
Other Liabilities 12,892
Common Shareholders' Equity 9,096
---------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 99,967
=========
Net Interest Earnings
and Interest Rate Spread $ 536 2.26%
======== ========
Net Yield on Interest-Earning Assets 2.64%
========
THE BANK OF NEW YORK COMPANY, INC.
Average Balances and Rates on a Taxable Equivalent Basis
(Preliminary)
(Dollars in millions)
For the year ended
December 31, 2005
----------------------------
Average Average
Balance Interest Rate
-------- -------- ---------
ASSETS
------------
Interest-Bearing
Deposits in Banks (primarily foreign) $ 8,996 $ 274 3.04%
Federal Funds Sold and Securities
Purchased Under Resale Agreements 4,685 142 3.03
Margin Loans 6,403 267 4.17
Loans
Domestic Offices 22,805 1,051 4.61
Foreign Offices 10,474 454 4.33
-------- --------
Non-Margin Loans 33,279 1,505 4.52
-------- --------
Securities
U.S. Government Obligations 273 9 3.43
U.S. Government Agency Obligations 3,766 153 4.05
Obligations of States and
Political Subdivisions 215 15 6.95
Other Securities 20,948 867 4.14
Trading Securities 3,549 153 4.34
-------- --------
Total Securities 28,751 1,197 4.16
-------- --------
Total Interest-Earning
Assets 82,114 3,385 4.12%
--------
Allowance for Credit Losses (574)
Cash and Due from Banks 3,357
Other Assets 16,538
--------
TOTAL ASSETS $101,435
========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Interest-Bearing Deposits
Money Market Rate Accounts $ 6,767 $ 109 1.62%
Savings 8,695 101 1.16
Certificates of Deposit $100,000 & Over 3,167 108 3.40
Other Time Deposits 1,378 35 2.57
Foreign Offices 26,561 602 2.26
-------- --------
Total Interest-Bearing Deposits 46,568 955 2.05
Federal Funds Purchased and
Securities Sold Under
Repurchase Agreements 1,284 35 2.73
Other Borrowed Funds 1,865 58 3.10
Payables to Customers and
Broker-Dealers 6,014 128 2.12
Long-Term Debt 7,312 271 3.67
-------- --------
Total Interest-Bearing Liabilities 63,043 1,447 2.29%
--------
Noninterest-Bearing Deposits 15,647
Other Liabilities 13,272
Common Shareholders' Equity 9,473
--------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $101,435
========
Net Interest Earnings
and Interest Rate Spread $ 1,938 1.83%
======== ========
Net Yield on Interest-Earning Assets 2.36%
========
For the year ended
December 31, 2004
----------------------------
Average Average
Balance Interest Rate
-------- -------- ---------
ASSETS
------
Interest-Bearing
Deposits in Banks (primarily foreign) $11,675 $ 305 2.62%
Federal Funds Sold and Securities
Purchased Under Resale Agreements 6,562 80 1.22
Margin Loans 6,342 156 2.46
Loans
Domestic Offices 21,853 799 3.65
Foreign Offices 9,583 283 2.95
-------- --------
Non-Margin Loans 31,436 1,082 3.44
-------- --------
Securities
U.S. Government Obligations 415 11 2.58
U.S. Government Agency Obligations 3,853 128 3.33
Obligations of States and
Political Subdivisions 229 17 7.41
Other Securities 18,455 652 3.53
Trading Securities 2,094 52 2.50
-------- --------
Total Securities 25,046 860 3.43
-------- --------
Total Interest-Earning Assets 81,061 2,483 3.06%
-------- --------
Allowance for Credit Losses (623)
Cash and Due from Banks 3,151
Other Assets 15,751
--------
TOTAL ASSETS $ 99,340
========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Interest-Bearing Deposits
Money Market Rate Accounts $ 6,648 $ 54 0.81%
Savings 9,224 65 0.71
Certificates of Deposit $100,000 & Over 3,706 55 1.49
Other Time Deposits 955 15 1.57
Foreign Offices 25,757 359 1.39
-------- --------
Total Interest-Bearing Deposits 46,290 548 1.18
Federal Funds Purchased and Securities
Sold Under Repurchase Agreements 1,551 15 0.99
Other Borrowed Funds 2,675 52 1.93
Payables to Customers and Broker-Dealers 6,361 57 0.89
Long-Term Debt 6,152 136 2.19
-------- --------
Total Interest-Bearing Liabilities 63,029 808 1.28%
-------- --------
Noninterest-Bearing Deposits 14,766
Other Liabilities 12,748
Common Shareholders' Equity 8,797
--------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 99,340
========
Net Interest Earnings
and Interest Rate Spread $ 1,675 1.78%
======== ========
Net Yield on Interest-Earning Assets 2.07%
========
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