The Bank of New York Company, Inc. Reports Third Quarter EPS of 51 Cents, up 11% vs. Year-Ago; Strong Securities Servicing Revenue and Net Interest Income Growth.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 third quarter net income of $389 million 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 51 cents, compared with net income of $354 million and diluted earnings per share of 46 cents in the third quarter of 2004, and net income of $398 million and diluted earnings per share of 52 cents in the second quarter of 2005. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. net income was $1,166 million, or $1.51 of diluted earnings per share, compared to $1,089 million, or $1.40 of diluted earnings per share in 2004. Third Quarter 2005 Highlights --Positive 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 the year-ago quarter. --Securities servicing fees up 18% versus the year-ago quarter. --Net interest income up 15% over the year-ago quarter. --Foreign exchange and other trading revenues up 39% from the third quarter of 2004. --Agreed to acquire Alcentra Group Ltd., an international asset management group (announced October October: see month. 18, 2005). --New marketing alliances with leading clients in key growth markets. 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, "We are pleased with our performance this quarter and particularly the achievement of positive operating leverage. This is about making our own growth - expanding client relationships and winning new ones. Our credit performance remains strong, and our cost re-engineering re-engineering - The examination and modification of a system to reconstitute it in a new form and the subsequent implementation of the new form. http://erg.abdn.ac.uk/users/brant/sre. efforts continue to be effective. "We believe the true earnings power of our franchise is becoming steadily more apparent and we are committed to delivering more to the bottom line by increasing the operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: of our businesses. We remain focused on achieving annual positive operating leverage, as our efforts to manage the cost base lower through various programs continue to bear fruit. And we are laying the foundation for 2006 through acquisitions like Alcentra and by pursuing new business opportunities in faster-growing markets around the world. The Nordea Nordea is a financial services group operating in Northern Europe, based in Stockholm. It is the result of the successive mergers and acquisitions of the Swedish, Finnish, Danish and Norwegian banks of Nordbanken, Merita Bank, Unibank and Kreditkassen (Christiania Bank) that took alliance, under which we will jointly market and deliver 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. services in the Nordic and Baltic Sea Baltic Sea, arm of the Atlantic Ocean, c.163,000 sq mi (422,170 sq km), including the Kattegat strait, its northwestern extension. The Øresund, Store Bælt, and Lille Bælt connect the Baltic Sea with the Kattegat and Skagerrak straits, which lead to the regions, is a timely example of how we are working to penetrate high-growth markets throughout Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and Asia in the most effective and economical manner. We will seize seizev. To exhibit symptoms of seizure activity, usually with convulsions. this and other opportunities to create our own growth and pursue our goals for superior performance."
SECURITIES SERVICING FEES
Percent
Inc/(Dec) Year-to-date
------------------------
3Q05 3Q05 Percent
(In millions) 3Q05 2Q05 3Q04 vs. vs. Inc/
2Q05 3Q04 2005 2004 (Dec)
----------------------------------------------------------------------
Execution and Clearing
Services $314 $294 $262 7% 20% $ 901 $ 844 7%
Investor Services 265 265 228 - 16 793 683 16
Issuer Services 170 159 141 7 21 468 433 8
Broker-Dealer Services 57 58 53 (2) 8 171 156 10
--------------- --------------
Securities Servicing
Fees $806 $776 $684 4 18 $2,333 $2,116 10
=============== ==============
Securities servicing fee growth over the year-ago period reflects solid growth across all business segments. On a sequential-quarter basis, fees were up 4%, reflecting strong growth in issuer services as well as the early success of the Lynch Lynch may be:
LJR Legislative, Judicial and Rules (committee) LJR Layer Jump Recording ") acquisition within execution and clearing. Execution and clearing fees were up considerably from 2004, reflecting good organic growth at Pershing and in the execution businesses, as well as the additional revenues from the LJR acquisition. Excluding the impact of the LJR acquisition, execution and clearing revenues were still up on a quarterly basis and demonstrated strong growth year-over-year. The organic growth over the prior quarter was principally driven by the significant increase in revenues from transition management. Pershing's revenues were essentially flat sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen . 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 for introducing broker-dealers. Investor services fees rose significantly from the year-ago quarter due to strong performance across all business lines, which include global fund services, global custody, 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. , 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. . Global fund services was favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impacted by new business and higher international transaction volumes, while securities lending 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 One after the other in some consecutive order such as by name or number. performance was flat as a seasonal slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in securities lending was offset by solid results across most businesses. Issuer services fees increased substantially versus the year-ago quarter due to an increase in trading volumes Trading volume The number of shares transacted every day. As there is a seller for every buyer, one can think of the trading volume as half of the number of shares transacted. That is, if A sells 100 shares to B, the volume is 100 shares. and 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 same trends drove improved sequential performance in depositary receipts. In corporate trust, international issuance was seasonally slower, which was offset by strength in structured, municipal, and corporate products. 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 fees improved versus the year-ago period as a result of increased 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 activity and higher 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 was 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. lower, as higher fees from collateral management were offset by lower volumes in government securities clearance.
NONINTEREST INCOME
Percent
Inc/(Dec) Year-to-date
------------------------
3Q05 3Q05 Percent
(In millions) 3Q05 2Q05 3Q04 vs. vs. Inc/
2Q05 3Q04 2005 2004 (Dec)
----------------------------------------------------------------------
Servicing Fees
Securities $ 806 $ 776 $ 684 4% 18% $2,333 $2,116 10%
Global Payment
Services 75 76 85 (1) (12) 226 247 (9)
--------------------- --------------
881 852 769 3 15 2,559 2,363 8
Private Client
Services and
Asset Management
Fees 120 122 113 (2) 6 363 333 9
Service Charges
and Fees 93 103 98 (10) (5) 288 286 1
Foreign Exchange
and Other Trading
Activities 93 103 67 (10) 39 292 273 7
Securities Gains 15 23 14 (35) 7 50 59 (15)
Other * 46 53 38 (13) 21 130 160 (19)
--------------------- --------------
Total Noninterest
Income $1,248 $1,256 $1,099 (1) 14 $3,682 $3,474 6
===================== ==============
* See Note (3).
The increase in noninterest income versus the third quarter and year-to-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 decline in noninterest income primarily reflects declines in foreign exchange and other trading, service charges and fees, and securities gains. Global payment services fees were lower than the third quarter and year-to-date periods of 2004 and on a sequential-quarter basis. The decline reflects 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 6% over the third quarter of 2004 and 3% sequentially. Private client services and asset management fees for the third quarter were up from the third quarter of 2004 reflecting higher fees at Ivy Asset Management. The sequential quarter decrease reflects higher asset management fees which were more than offset by seasonally lower private client fees. 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 $107 billion, up from $97 billion a year ago and $105 billion at June June: see month. 30, 2005. Service charges and fees were down from the third quarter of 2004 and from the second quarter of 2005. For the nine months of 2005, service charges and fees increased slightly from 2004. The sequential quarter decrease reflects lower capital markets fees due to seasonally lower market activity. Foreign exchange and other trading revenues were up significantly from the third quarter of 2004 and down on a sequential-quarter basis. The positive variance The discrepancy between what a party to a lawsuit alleges will be proved in pleadings and what the party actually proves at trial. In Zoning law, an official permit to use property in a manner that departs from the way in which other property in the same locality year-over-year results from significantly higher client activity in foreign exchange as well as more favorable markets 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. . Sequential quarter results were impacted by a decline in fixed income trading, lower retail flows at Pershing, and a seasonal slowdown in foreign exchange activity. Securities gains in the third quarter were up from the third quarter of 2004 and down from the second quarter of 2005. The sequential quarter decrease reflects lower gains in the Company's sponsor fund portfolio. Securities gains declined in the first nine months of 2005 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. Other noninterest income increased versus the third quarter of 2004 and decreased from the second quarter of 2005. The third quarter of 2005 included gains 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. ("CRA See Community Reinvestment Act. ") investments of $12 million ($5 million after related tax considerations) 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 of $6 million ($4 million 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. ). On a year-to-date basis, other noninterest income also included a $17 million gain on the second quarter 2005 sale of the Company's interest in Financial Models Company, Inc. For the nine months ended September September: see month. 30, 2005, other noninterest income was down from the nine months ended September 30, 2004, primarily reflecting a 2004 pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta 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)
-----------
3Q05 3Q05
(Dollars in millions) 3Q05 2Q05 3Q04 vs. vs.
2Q05 3Q04
----------------------------------------------------------------------
Net Interest Income $492 $470 $428 5% 15%
Tax Equivalent Adjustment * 8 7 8
------------------
Net Interest Income on a
Tax Equivalent Basis $500 $477 $436 5 15
==================
Net Interest Rate Spread 1.84% 1.84% 1.88%
Net Yield on Interest Earning Assets 2.42 2.34 2.18
Year-to-date Percent
Inc/(Dec)
---------------------------------------
(Dollars in millions) 2004 2004
2005 Reported Core** Reported Core**
----------------------------------------------------------------------
Net Interest Income $1,417 $1,118 $1,263 27% 12%
Tax Equivalent Adjustment * 21 20 20
-------------------------
Net Interest Income on a Tax
Equivalent Basis $1,438 $1,138 $1,283 26 12
=========================
Net Interest Rate Spread 1.87% 1.62% 1.86%
Net Yield on Interest
Earning Assets 2.37 1.88 2.11
* See Note (2).
** Excludes SFAS 13 adjustment. See Note (1).
The increases in net interest income over 2004 reflect the higher value of interest-free interest-free adj → libre de interés interest-free adj → sans intérêt interest-free interest adj, adv → deposits as short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. rates increased, as well as growth in 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 . The third quarter of 2005 also includes $4 million ($3 million after-tax) related to the recognition of interest on nonaccrual loans that were sold. In addition, the increase from the prior quarter also reflects asset-sensitive interest rate positioning, driven in part by the continued expansion of deposit spreads and increased liquidity generated by servicing activities.
NONINTEREST EXPENSE AND INCOME TAXES
Percent
Inc/(Dec)
-------------
3Q05 3Q05
(In millions) 3Q05 2Q05 3Q04 vs. vs.
2Q05 3Q04
----------------------------------------------------------------------
Salaries & Employee Benefits $ 644 $ 640 $ 564 1% 14%
Net Occupancy 79 82 77 (4) 3
Furniture and Equipment 52 51 51 2 2
Clearing 49 42 39 17 26
Sub-custodian Expenses 25 24 21 4 19
Software 54 55 52 (2) 4
Communications 24 22 22 9 9
Amortization of Intangibles 10 10 9 - 11
Other 198 197 164 1 21
-----------------------
Total Noninterest Expense $1,135 $1,123 $ 999 1 14
=======================
Year-to-date Percent
---------------- Inc/(Dec)
(In millions) 2005 2004
----------------------------------------------------------------------
Salaries &
Employee Benefits $1,902 $1,708 11%
Net Occupancy 239 230 4
Furniture and Equipment 155 153 1
Clearing 137 131 5
Sub-custodian Expenses 72 65 11
Software 162 151 7
Communications 69 69 -
Amortization of Intangibles 28 26 8
Other 571 492 16
----------------
Total Noninterest Expense $3,335 $3,025 10
================
Noninterest expense was up compared with the third quarter of 2004 and the second 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 and consulting costs. Other expenses in the third quarter 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) of expenses associated with an anticipated 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. The sequential increase reflects higher salaries & employee benefits and clearing expenses tied to the LJR acquisition. Relative to the year-ago quarter, salaries & employee benefits expense increased reflecting higher pension and stock option expense as well as higher staffing levels associated with growth in investor services and expansion of certain staff functions. Salaries & employee benefits expense for the third quarter increased slightly on a sequential quarter basis, reflecting the LJR acquisition. For the first nine months of 2005, salaries & employee benefit expense also was higher, 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 down sequentially as a result of a write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. in the second quarter. On a year-to-date basis, occupancy expenses were up from 2004 primarily reflecting business continuity initiatives and 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 both year-over-year and sequentially reflects the LJR acquisition. Communication expense was up sequentially reflecting the start-up Start-up The earliest stage of a new business venture. of the Company's new out-of-region data center. The effective tax rate for the third quarter of 2005 was 34.7%, compared to 32.8% in the third quarter of 2004 and 33.4% in the second quarter of 2005. The effective tax rate for the nine months period ended September 30, 2005 was 33.7%, compared with 29.5% for the nine months period ended September 30, 2004. The increase in the year-to-date period reflects the benefit associated with the 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 leasing adjustment related to the Company's leasing portfolio in the first quarter of 2004. The sequential quarter increase principally reflects the nondeductibility of the amount associated with the anticipated settlement referenced above and the tax impact on the sale of the CRA investments. 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) 3Q05 2Q05 3Q04 2005 2004
--------------------------------------
Provision $ 10 $ 5 $ - $ 5 $ 22
======================================
Net Charge-offs:
Commercial $ (2) $ (2) $ (4) $ (7) $(21)
Foreign (2) (4) (9) (6) (26)
Regional Commercial (3) 2 (1) (3) (1)
Consumer (6) (7) (5) (18) (22)
--------------------------------------
Total $(13) $(11) $(19) $(34) $(70)
======================================
LOANS
September June September
(Dollars in millions) 30, 2005 30, 2005 30, 2004
-----------------------------
Margin Loans $ 6,320 $ 6,055 $ 5,911
Non-Margin Loans 35,823 34,626 31,208
-----------------------------
Total Loans $42,143 $40,681 $37,119
=============================
Allowance for Loan Losses $ 561 $ 562 $ 598
Allowance for Lending-Related Commitments 146 148 158
-----------------------------
Total Allowance for Credit Losses $ 707 $ 710 $ 756
=============================
Allowance for Loan Losses As a Percent
of Total Loans 1.33% 1.38% 1.61%
Allowance for Loan Losses As a Percent
of Non-Margin Loans 1.57 1.62 1.92
Total Allowance for Credit Losses As a
Percent of Total Loans 1.68 1.75 2.04
Total Allowance for Credit Losses As a
Percent of Non-Margin Loans 1.97 2.05 2.42
NONPERFORMING ASSETS
Change
9/30/05
September June vs. Percent
(Dollars in millions) 30, 2005 30, 2005 6/30/05 Inc/(Dec)
----------------------------------------
Loans:
Commercial $ 35 $ 78 $(43) (55)%
Foreign 15 15 - -
Other 57 47 10 21
------------------------------
Total Nonperforming Loans 107 140 (33) (24)
Other Real Estate - - - -
------------------------------
Total Nonperforming Assets $107 $140 $(33) (24)
==============================
Nonperforming Assets Ratio 0.3% 0.4%
Allowance for Loan Losses
/Nonperforming Loans 524.9 400.5
Allowance for Loan Losses
/Nonperforming Assets 524.9 400.5
Total Allowance for Credit
Losses/Nonperforming Loans 661.2 506.1
Total Allowance for Credit
Losses/Nonperforming Assets 661.2 506.1
The sequential quarter decrease in nonperforming loans primarily reflects the Company's partial sale of exposure to a cable operator that is 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 In July July: see month. 2005, the Company signed a definitive agreement to acquire the bond administration business of Marshall Marshall. 1 City (1990 pop. 12,711), seat of Saline co., N central Mo.; inc. 1839. In a large farm area, it is a processing center for grain, eggs, meat, and dairy products. Marshall is the seat of Missouri Valley College. & Ilsley The Ilsley was a schooner commanded by Captain Ephraim Sturdivant during the War of 1812. It was of 143 tons, six guns, and 75 men. Trust Company N.A., and M&I Marshall & Ilsley Bank (together, "M&I"), where they act as bond trustee A user or group of users that has been given access rights to files on a network server. See also TRUSTe. , paying/fiscal agent, master trustee, transfer agent and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. registrar See domain name registrar. . The transaction involves the acquisition of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 560 bond trusteeships and agency appointments, representing $4.8 billion of principal debt outstanding for an estimated 225 clients. In August 2005, the Company and Nordea, the leading financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. provider in the Nordic region, have entered into a strategic agreement to provide global custody and selected related services to Nordea's institutional clients in the Nordic and Baltic Sea regions. The scope of the agreement involves approximately EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 240 billion of assets which represent about half of Nordea's EUR 500 billion assets under custody. In August 2005, the Company announced a strategic arrangement with IL&FS Trust Company Limited ("ITCL ITCL International Textile Care Label "), a leading provider of trust and fiduciary fiduciary (fĭd  `shēĕ'rē), in law, a person who is obliged to discharge faithfully a responsibility of trust toward another. services in 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. . The arrangement between the
two organizations will provide Indian issuers with access to the
Company's global network, a comprehensive array of services to the
international capital markets, and leading-edge technology capabilities.
Under the arrangement, ITCL will perform corporate trust services in
India, and the Company will provide offshore services.In October 2005, the Company announced a marketing alliance with National Australia Bank The National Australia Bank or NAB (ASX: NAB, LSE: NAB, NYSE: NAB, TYO: 8637 ) is part of the NAB Group. It is the largest bank in Australia by assets, and 28th largest in the world. ("National"). The arrangement will enable the Company to offer commission recapture recapture n. in income tax, the requirement that the taxpayer pay the amount of tax savings from past years due to accelerated depreciation or deferred capital gains upon sale of property. (See: income tax) RECAPTURE, war. services to National's custody clients in 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 New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. . The alliance continues the strategic international build-out Build-out is an urban planner’s estimate of the amount and location of potential development for an area. Build-out is one step of the land use planning process. Evaluation of potential development impacts begins with a build-out analysis. of the Company's transition management and commission recapture capabilities, which has included the opening of its Sydney Sydney, city, Australia Sydney, city (1991 pop. 3,097,956), capital of New South Wales, SE Australia, surrounding Port Jackson inlet on the Pacific Ocean. Sydney is Australia's largest city, chief port, and main cultural and industrial center. office and acquisition of LJR. On October 18, 2005, the Company announced a definitive agreement to acquire Alcentra Group Limited, an international asset management group focused on funds that invest in sub-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. The transaction is expected to close by year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. , subject to 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. approval and other customary conditions of closing. Construction of the new data center in the mid-south Mid-South may refer to:
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, senior executive vice president and chief financial officer, will review the quarterly results in a live conference call and audio webcast today at 8:00 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 (800) 945-7247 within the United States or (203) 369-3951 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)
September June September
30, 2005 30, 2005 30, 2004
--------- --------- --------
Quarter
-------
Revenue (tax equivalent basis) $ 2,126 $ 2,077 $ 1,747
Net Income 389 398 354
Basic EPS 0.51 0.52 0.46
Diluted EPS 0.51 0.52 0.46
Cash Dividends Per Share 0.21 0.20 0.20
Return on Average Common
Shareholders' Equity 16.15% 17.12% 15.90%
Return on Average Assets 1.53 1.59 1.45
Efficiency Ratio 65.5 65.7 65.2
Year-to-date
------------
Revenue (tax equivalent basis) $ 6,103 $ 3,995 $ 5,197
Net Income 1,166 777 1,089
Basic EPS 1.52 1.01 1.41
Diluted EPS 1.51 1.00 1.40
Cash Dividends Per Share 0.61 0.40 0.59
Return on Average Common Shareholders'
Equity 16.59% 16.82% 16.73%
Return on Average Assets 1.56 1.57 1.47
Efficiency Ratio 65.8 65.9 66.0
Assets $101,766 $103,063 $93,175
Loans 42,143 40,681 37,119
Securities 26,230 25,779 23,246
Deposits - Domestic 34,807 37,921 34,786
- Foreign 26,270 26,076 23,654
Long-Term Debt 7,529 7,586 6,137
Common Shareholders' Equity 9,608 9,471 9,054
Common Shareholders' Equity Per Share $ 12.48 $ 12.29 $ 11.66
Market Value Per Share of Common Stock 29.41 28.78 29.17
Allowance for Loan Losses as
a Percent of Total Loans 1.33% 1.38% 1.61%
Allowance for Loan Losses as
a Percent of Non-Margin Loans 1.57 1.62 1.92
Total Allowance for Credit Losses as
a Percent of Total Loans 1.68 1.75 2.04
Total Allowance for Credit Losses as
a Percent of Non-Margin Loans 1.97 2.05 2.42
Tier 1 Capital Ratio 7.93 8.07 8.09
Total Capital Ratio 12.20 12.49 12.09
Leverage Ratio 6.59 6.55 6.38
Tangible Common Equity Ratio 5.32 5.26 5.49
Employees 23,081 22,993 23,034
THE BANK OF NEW YORK COMPANY, INC.
Financial Highlights
(Dollars in millions, except per share amounts)
(Estimated)
September June September
30, 2005 30, 2005 30, 2004
--------- --------- ---------
Assets Under Custody (In trillions)
-----------------------------------
Assets Under Custody $ 10.3 $ 10.3 $ 8.9
Equity Securities 31% 35% 33%
Fixed Income Securities 69 65 67
Cross-Border Assets 3.1 2.9 2.5
Assets Under Management (In billions)
-------------------------------------
Total Assets Under Management $ 107 $ 105 $ 97
Equity Securities 34% 34% 35%
Fixed Income Securities 21 21 21
Alternative Investments 14 14 15
Liquid Assets 31 31 29
Notes:
(1) Other First Quarter Developments in 2004 is summarized in the
following table:
After-
(In millions) Income Statement Pre-Tax Tax
Item Caption Income Tax Income
----------------------------------------------------------------------
Net Interest Income(a)
SFAS 13 cumulative lease Net Interest
adjustment - leasing portfolio Income $(145) $113 $(32)
Noninterest Income(b)
Gain on sale of Wing Hang Other Income 48 (21) 27
Gain on sponsor fund
investments Securities Gains 19 (7) 12
---------------------
Subtotal - Noninterest Income 67 (28) 39
Noninterest Expense(c)
Severance tied to relocations Salaries &
Employee
Benefits (10) 4 (6)
Lease terminations Net Occupancy (8) 3 (5)
---------------------
Subtotal - Noninterest Expense (18) 7 (11)
---------------------
Total $ (96) $ 92 $ (4)
=====================
(a) An after-tax charge of $32 million resulting from a cumulative adjustment to the leasing portfolio, which was triggered under Statement of Financial Accounting Standards No. 13 "Accounting for Leases" ("SFAS 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. (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, which was recorded in other income, and $19 million ($12 million after-tax) of higher than anticipated securities gains in the first quarter resulting 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. (c) The Company also took several actions associated with its 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. 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. (2) A number of amounts related to net interest income are presented on a "taxable 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 June 30, 2005 Form 10-Q Form 10-Q See 10-Q. . 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 Second 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.
THE BANK OF NEW YORK COMPANY, INC.
Consolidated Statements of Income
(Dollars in millions, except per share amounts)
(Unaudited)
For the three For the nine
months ended months ended
September 30, September 30,
2005 2004 2005 2004
------ ------ ------ ------
Interest Income
---------------
Loans $ 392 $ 290 $1,082 $ 680
Margin loans 71 40 188 108
Securities
Taxable 253 181 694 543
Exempt from Federal
Income Taxes 10 10 30 30
------ ------ ------ ------
263 191 724 573
Deposits in Banks 68 77 206 224
Federal Funds Sold and
Securities Purchased
Under Resale Agreements 38 20 102 53
Trading Assets 38 11 98 34
------ ------ ------ ------
Total Interest Income 870 629 2,400 1,672
------ ------ ------ ------
Interest Expense
----------------
Deposits 248 139 652 384
Federal Funds Purchased
and Securities Sold
Under Repurchase Agreements 9 4 23 10
Other Borrowed Funds 13 9 33 27
Customer Payables 35 14 88 38
Long-Term Debt 73 35 187 95
------ ------ ------ ------
Total Interest Expense 378 201 983 554
------ ------ ------ ------
Net Interest Income 492 428 1,417 1,118
-------------------
Provision for Credit Losses 10 - 5 22
------ ------ ------ ------
Net Interest Income After
Provision for Credit Losses 482 428 1,412 1,096
------ ------ ------ ------
Noninterest Income
------------------
Servicing Fees
Securities 806 684 2,333 2,116
Global Payment Services 75 85 226 247
------ ------ ------ ------
881 769 2,559 2,363
Private Client Services
and Asset Management Fees 120 113 363 333
Service Charges and Fees 93 98 288 286
Foreign Exchange and
Other Trading Activities 93 67 292 273
Securities Gains 15 14 50 59
Other 46 38 130 160
------ ------ ------ ------
Total Noninterest
Income 1,248 1,099 3,682 3,474
------ ------ ------ ------
Noninterest Expense
-------------------
Salaries and Employee
Benefits 644 564 1,902 1,708
Net Occupancy 79 77 239 230
Furniture and Equipment 52 51 155 153
Clearing 49 39 137 131
Sub-custodian Expenses 25 21 72 65
Software 54 52 162 151
Communications 24 22 69 69
Amortization of Intangibles 10 9 28 26
Other 198 164 571 492
------ ------ ------ ------
Total Noninterest Expense 1,135 999 3,335 3,025
------ ------ ------ ------
Income Before Income Taxes 595 528 1,759 1,545
Income Taxes 206 174 593 456
------ ------ ------ ------
Net Income $ 389 $ 354 $1,166 $1,089
---------- ====== ====== ====== ======
Per Common Share Data:
----------------------
Basic Earnings $ 0.51 $ 0.46 $ 1.52 $ 1.41
Diluted Earnings 0.51 0.46 1.51 1.40
Cash Dividends Paid 0.21 0.20 0.61 0.59
Diluted Shares Outstanding 769 778 773 778
THE BANK OF NEW YORK COMPANY, INC.
Consolidated Balance Sheets
(Dollars in millions, except per share amounts)
(Unaudited)
Sept. 30, 2005 Dec. 31, 2004
-------------- -------------
Assets
------
Cash and Due from Banks $ 3,493 $ 3,886
Interest-Bearing Deposits in Banks 7,058 8,192
Securities
Held-to-Maturity 2,071 1,886
Available-for-Sale 24,159 21,916
-------------- -------------
Total Securities 26,230 23,802
Trading Assets at Fair Value 6,292 4,627
Federal Funds Sold and Securities
Purchased Under Resale Agreements 3,572 5,708
Loans (less allowance for loan
losses of $561 in 2005 and $591
in 2004) 41,582 35,190
Premises and Equipment 1,040 1,097
Due from Customers on Acceptances 175 137
Accrued Interest Receivable 357 285
Goodwill 3,613 3,477
Intangible Assets 813 793
Other Assets 7,541 7,335
-------------- -------------
Total Assets $ 101,766 $ 94,529
============== =============
Liabilities and Shareholders'
Equity
-----------------------------
Deposits
Noninterest-Bearing (principally
domestic offices) $ 16,289 $ 17,442
Interest-Bearing
Domestic Offices 18,966 18,692
Foreign Offices 25,822 22,587
-------------- -------------
Total Deposits 61,077 58,721
Federal Funds Purchased and
Securities Sold Under Repurchase
Agreements 3,349 1,205
Trading Liabilities 3,000 2,873
Payables to Customers and
Broker-Dealers 8,103 8,664
Other Borrowed Funds 1,270 533
Acceptances Outstanding 176 139
Accrued Taxes and Other Expenses 4,552 4,452
Accrued Interest Payable 132 113
Other Liabilities (including
allowance for lending-related
commitments of $146 in 2005
and $145 in 2004) 2,970 2,418
Long-Term Debt 7,529 6,121
-------------- -------------
Total Liabilities 92,158 85,239
-------------- -------------
Shareholders' Equity
Common Stock-par value $7.50 per
share, authorized 2,400,000,000
shares, issued 1,048,772,989
shares in 2005 and 1,044,841,603
shares in 2004 7,866 7,836
Additional Capital 1,865 1,790
Retained Earnings 6,843 6,162
Accumulated Other Comprehensive
Income (104) (6)
-------------- -------------
16,470 15,782
Less: Treasury Stock (278,556,517
shares in 2005 and
266,720,629 shares in 2004),
at cost 6,852 6,492
Loan to ESOP (305,261 shares
in 2005), at cost 10 -
-------------- -------------
Total Shareholders' Equity 9,608 9,290
-------------- -------------
Total Liabilities and
Shareholders' Equity $ 101,766 $ 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 September 30, 2005
----------------------------
Average Average
Balance Interest Rate
--------- -------- -------
ASSETS
------
Interest-Bearing
Deposits in Banks
(primarily foreign) $ 8,629 $ 68 3.13%
Federal Funds Sold and Securities
Purchased Under Resale Agreements 4,465 38 3.37
Margin Loans 6,392 71 4.40
Loans
Domestic Offices 22,955 271 4.69
Foreign Offices 10,561 121 4.53
--------- --------
Non-Margin Loans 33,516 392 4.64
--------- --------
Securities
U.S. Government Obligations 228 2 3.55
U.S. Government Agency Obligations 3,956 41 4.19
Obligations of States and
Political Subdivisions 231 4 6.59
Other Securities 21,227 224 4.23
Trading Securities 3,361 38 4.49
--------- --------
Total Securities 29,003 309 4.27
--------- --------
Total Interest-Earning Assets 82,005 878 4.25%
--------
Allowance for Credit Losses (562)
Cash and Due from Banks 2,974
Other Assets 16,493
---------
TOTAL ASSETS $ 100,910
=========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Interest-Bearing Deposits
Money Market Rate Accounts $ 6,827 $ 30 1.74%
Savings 8,637 27 1.23
Certificates of Deposit
$100,000 & Over 3,137 28 3.56
Other Time Deposits 1,529 11 2.84
Foreign Offices 25,887 152 2.33
--------- --------
Total Interest-Bearing Deposits 46,017 248 2.14
Federal Funds Purchased and
Securities Sold Under Repurchase
Agreements 1,245 9 2.96
Other Borrowed Funds 1,716 13 3.10
Payables to Customers and Broker-Dealers 5,714 35 2.41
Long-Term Debt 7,568 73 3.81
--------- --------
Total Interest-Bearing Liabilities 62,260 378 2.41%
--------
Noninterest-Bearing Deposits 15,815
Other Liabilities 13,271
Common Shareholders' Equity 9,564
---------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 100,910
=========
Net Interest Earnings
and Interest Rate Spread $ 500 1.84%
======== =======
Net Yield on Interest-Earning Assets 2.42%
=======
For the three months
ended September 30, 2004
----------------------------
Average Average
Balance Interest Rate
--------- -------- -------
ASSETS
------
Interest-Bearing
Deposits in Banks
(primarily foreign) $ 11,416 $ 77 2.69%
Federal Funds Sold and Securities
Purchased Under Resale Agreements 6,443 20 1.22
Margin Loans 6,315 40 2.50
Loans
Domestic Offices 21,333 218 4.06
Foreign Offices 9,939 72 2.89
--------- --------
Non-Margin Loans 31,272 290 3.69
--------- --------
Securities
U.S. Government Obligations 450 3 2.64
U.S. Government Agency Obligations 3,560 30 3.37
Obligations of States and
Political Subdivisions 227 4 8.29
Other Securities 18,137 162 3.57
Trading Securities 1,587 11 2.81
--------- --------
Total Securities 23,961 210 3.52
--------- --------
Total Interest-Earning Assets 79,407 637 3.19%
--------- --------
Allowance for Credit Losses (592)
Cash and Due from Banks 3,027
Other Assets 15,513
---------
TOTAL ASSETS $ 97,355
=========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Interest-Bearing Deposits
Money Market Rate Accounts $ 6,474 $ 13 0.83%
Savings 9,296 16 0.70
Certificates of Deposit
$100,000 & Over 3,640 14 1.56
Other Time Deposits 934 4 1.61
Foreign Offices 25,227 92 1.44
--------- --------
Total Interest-Bearing Deposits 45,571 139 1.22
Federal Funds Purchased and
Securities Sold Under Repurchase
Agreements 1,572 4 1.12
Other Borrowed Funds 2,416 9 1.51
Payables to Customers and Broker-Dealers 5,785 14 0.95
Long-Term Debt 6,083 35 2.26
--------- --------
Total Interest-Bearing Liabilities 61,427 201 1.31%
--------- --------
Noninterest-Bearing Deposits 14,576
Other Liabilities 12,489
Common Shareholders' Equity 8,863
---------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 97,355
=========
Net Interest Earnings
and Interest Rate Spread $ 436 1.88%
======== =======
Net Yield on Interest-Earning Assets 2.18%
=======
THE BANK OF NEW YORK COMPANY, INC.
Average Balances and Rates on a Taxable Equivalent Basis
(Preliminary)
(Dollars in millions)
For the nine months
ended September 30, 2005
----------------------------
Average Average
Balance Interest Rate
--------- -------- -------
ASSETS
------
Interest-Bearing
Deposits in Banks
(primarily foreign) $ 9,207 $ 206 2.99%
Federal Funds Sold and Securities
Purchased Under Resale Agreements 4,813 102 2.82
Margin Loans 6,380 188 3.94
Loans
Domestic Offices 22,606 760 4.50
Foreign Offices 10,336 322 4.17
--------- --------
Non-Margin Loans 32,942 1,082 4.39
--------- --------
Securities
U.S. Government Obligations 289 7 3.23
U.S. Government Agency Obligations 3,690 110 3.97
Obligations of States and
Political Subdivisions 214 11 7.03
Other Securities 20,449 617 4.02
Trading Securities 3,084 98 4.30
--------- --------
Total Securities 27,726 843 4.06
--------- --------
Total Interest-Earning Assets 81,068 2,421 3.99%
--------
Allowance for Credit Losses (578)
Cash and Due from Banks 3,342
Other Assets 16,379
---------
TOTAL ASSETS $ 100,211
=========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Interest-Bearing Deposits
Money Market Rate Accounts $ 6,939 $ 77 1.49%
Savings 8,824 72 1.09
Certificates of Deposit
$100,000 & Over 3,028 70 3.09
Other Time Deposits 1,101 20 2.37
Foreign Offices 25,896 413 2.13
--------- --------
Total Interest-Bearing Deposits 45,788 652 1.90
Federal Funds Purchased and
Securities Sold Under Repurchase
Agreements 1,262 23 2.44
Other Borrowed Funds 1,831 33 2.43
Payables to Customers and Broker-Dealers 6,025 88 1.95
Long-Term Debt 7,223 187 3.21
--------- --------
Total Interest-Bearing Liabilities 62,129 983 2.12%
--------
Noninterest-Bearing Deposits 15,533
Other Liabilities 13,152
Common Shareholders' Equity 9,397
---------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 100,211
=========
Net Interest Earnings
and Interest Rate Spread $ 1,438 1.87%
======== ========
Net Yield on Interest-Earning Assets 2.37%
========
For the nine months
ended September 30, 2004
----------------------------
Average Average
Balance Interest Rate
--------- -------- -------
ASSETS
------
Interest-Bearing
Deposits in Banks
(primarily foreign) $ 11,960 $ 224 2.50%
Federal Funds Sold and Securities
Purchased Under Resale Agreements 6,964 53 1.02
Margin Loans 6,330 108 2.29
Loans
Domestic Offices 21,547 483 2.99
Foreign Offices 9,364 197 2.81
--------- --------
Non-Margin Loans 30,911 680 2.94
--------- --------
Securities
U.S. Government Obligations 456 8 2.47
U.S. Government Agency Obligations 3,955 98 3.29
Obligations of States and
Political Subdivisions 236 13 7.23
Other Securities 18,136 474 3.48
Trading Securities 2,139 34 2.17
--------- --------
Total Securities 24,922 627 3.36
--------- --------
Total Interest-Earning Assets 81,087 1,692 2.79%
--------- --------
Allowance for Credit Losses (633)
Cash and Due from Banks 2,947
Other Assets 15,728
---------
TOTAL ASSETS $ 99,129
=========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Interest-Bearing Deposits
Money Market Rate Accounts $ 6,648 $ 36 0.73%
Savings 9,267 47 0.68
Certificates of Deposit
$100,000 & Over 3,847 39 1.33
Other Time Deposits 967 11 1.55
Foreign Offices 25,874 251 1.30
--------- --------
Total Interest-Bearing Deposits 46,603 384 1.10
Federal Funds Purchased and
Securities Sold Under Repurchase
Agreements 1,599 10 0.82
Other Borrowed Funds 2,400 27 1.50
Payables to Customers and Broker-Dealers 6,521 38 0.78
Long-Term Debt 6,143 95 2.04
--------- --------
Total Interest-Bearing Liabilities 63,266 554 1.17%
--------- --------
Noninterest-Bearing Deposits 14,465
Other Liabilities 12,701
Common Shareholders' Equity 8,697
---------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 99,129
=========
Net Interest Earnings
and Interest Rate Spread $ 1,138 1.62%
======== =======
Net Yield on Interest-Earning Assets 1.88%
=======
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