<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997 0-28886
Commission File Number
ROSLYN BANCORP, INC.
------------------------------------------------------------
(Exact name of registrant as specified in its charter.)
Delaware 11-3333218
-------------------------------- -------------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1400 Old Northern Boulevard, Roslyn, New York 11576
------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(516) 621-6000
------------------------------------------------------------
(Registrant's telephone number, including area code)
None
------------------------------------------------------------
Securities registered pursuant to Section 12(b) of the Act
Common Stock, $.01 par value
------------------------------------------------------------
Securities registered pursuant to Section 12(g) of the Act
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [_]
Indicate the number of shares outstanding of each of the Issuer's classes of
common stock, as of the latest practicable date.
The Registrant had 43,642,459 shares of Common Stock outstanding as of
April 30, 1997.
<PAGE>
Form 10-Q
ROSLYN BANCORP, INC.
INDEX
<TABLE>
<CAPTION>
Page
Number
------
PART I - FINANCIAL INFORMATION
- ------------------------------
<S> <C>
ITEM 1. Financial Statements - Unaudited
Consolidated Statements of Financial Condition at
March 31, 1997 and December 31, 1996 2
Consolidated Statements of Income for the three months
ended March 31, 1997 and 1996 3
Consolidated Statement of Changes in Stockholders' Equity
for the three months ended March 31, 1997 4
Consolidated Statements of Cash Flows for the three
months ended March 31, 1997 and 1996 5
Notes to Unaudited Consolidated Financial Statements 6-10
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11-16
PART II - OTHER INFORMATION
- ---------------------------
ITEM 1. Legal Proceedings 17
ITEM 2. Changes in Securities 17
ITEM 3. Defaults Upon Senior Securities 17
ITEM 4. Submission of Matters to a Vote of Security Holders 17
ITEM 5. Other Information 17
ITEM 6. Exhibits and Reports on Form 8-K 18
Signature Page 19
</TABLE>
1
<PAGE>
ROSLYN BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
(In thousands, except share and per share amounts)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
---------------- ---------------
<S> <C> <C>
ASSETS
Cash and cash equivalents:
Cash and cash items.............................................................. $ 2,088 $ 2,284
Due from banks................................................................... 25,568 9,786
Money market investments......................................................... 39,000 1,114,240
---------------- ---------------
66,656 1,126,310
Debt and equity securities, net:
Held-to-maturity (estimated fair value of $2,053 and $2,067,
respectively)................................................................... 1,930 1,930
Available-for-sale............................................................... 494,359 486,896
Mortgage-backed and mortgage related securities, net:
Held-to-maturity (estimated fair value of $256,763 and $276,046,
respectively)................................................................... 259,906 276,632
Available-for-sale............................................................... 1,330,435 1,159,411
---------------- ---------------
2,086,630 1,924,869
Loans held for sale, net.......................................................... 9,264 14,134
Loans receivable held for investment, net:
Real estate loans, net........................................................... 642,553 510,969
Consumer and student............................................................. 1,290 1,241
---------------- ---------------
643,843 512,210
Less allowance for possible loan losses.......................................... (23,445) (23,320)
---------------- ---------------
620,398 488,890
Banking house and equipment, net.................................................. 17,136 17,235
Accrued interest receivable....................................................... 19,710 18,665
Mortgage servicing rights, net.................................................... 8,796 8,695
Excess of cost over fair value of net assets acquired............................. 3,258 3,375
Real estate owned, net............................................................ 867 1,698
Deferred tax asset, net........................................................... 10,991 5,022
Other assets...................................................................... 5,721 9,060
---------------- ---------------
Total assets.................................................................. $ 2,849,427 $ 3,617,953
================ ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Savings accounts................................................................. $ 410,036 $ 646,650
Certificates of deposit.......................................................... 1,155,237 1,128,053
Money market accounts............................................................ 56,246 75,157
Demand deposit accounts.......................................................... 102,273 105,675
---------------- ---------------
Total deposits................................................................ 1,723,792 1,955,535
Borrowed funds.................................................................... 445,139 1,829
Accrued dividends and interest on deposits........................................ 6,757 6,636
Mortgagors' escrow and security deposits.......................................... 23,246 17,725
Accrued taxes payable............................................................. 8,962 12,185
Non-depository stock subscriptions................................................ - 1,356,911
Accrued expenses and other liabilities............................................ 26,858 17,783
---------------- ---------------
Total liabilities............................................................. 2,234,754 3,368,604
---------------- ---------------
Stockholders' equity:
Preferred stock, $. 01 par value, 10,000,000 shares authorized;
none issued .................................................................... - -
Common stock, $ .01 par value, 100,000,000 shares
authorized; 43,642,459 shares issued and outstanding at
March 31, 1997.................................................................. 436 -
Additional paid-in-capital....................................................... 422,952 -
Retained earnings - substantially restricted..................................... 237,618 235,154
Unallocated common stock held by ESOP............................................ (53,357) -
Net unrealized gain on securities available-for-sale, net of tax................. 7,024 14,195
---------------- ---------------
Total stockholders' equity.................................................... 614,673 249,349
---------------- ---------------
Total liabilities and stockholders' equity.................................... $ 2,849,427 $ 3,617,953
================ ===============
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
2
<PAGE>
ROSLYN BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
For the
three months ended
March 31,
-----------------------------
1997 1996
----------- -----------
<S> <C> <C>
Interest income:
Federal funds sold and short-term deposits........................................... $ 2,918 $ 312
Debt and equity securities........................................................... 8,264 6,799
Mortgage-backed and mortgage related securities...................................... 27,127 13,514
Real estate loans.................................................................... 11,668 9,015
Consumer and student loans........................................................... 73 167
----------- -----------
Total interest income........................................................... 50,050 29,807
Interest expense: ----------- -----------
Deposits............................................................................. 21,690 15,429
Borrowed funds....................................................................... 3,725 323
----------- -----------
Total interest expense.......................................................... 25,415 15,752
----------- -----------
Net interest income before provision for possible loan
losses................................................................................ 24,635 14,055
Provision for possible loan losses...................................................... 150 100
----------- -----------
Net interest income after provision for possible loan losses............................ 24,485 13,955
Non-interest income: ----------- -----------
Loan servicing and fee income........................................................ 1,726 1,181
Net gains on sales of loans.......................................................... 673 710
Net gains on securities.............................................................. 349 35
Net gains (losses) on real estate operations......................................... 56 (75)
Other non-interest income............................................................ 42 240
----------- -----------
Total non-interest income....................................................... 2,846 2,091
Non-interest expense: ----------- -----------
General and administrative expenses:
Compensation and employee benefits................................................. 6,809 4,989
Occupancy and equipment............................................................ 829 864
Deposit insurance premiums......................................................... 158 1
Advertising and promotion.......................................................... 599 477
Other non-interest expenses........................................................ 3,113 1,906
----------- -----------
Total general and administrative expenses....................................... 11,508 8,237
Amortization of excess of cost over fair value of net
assets acquired.................................................................... 117 117
Charitable contribution.............................................................. 12,711 -
----------- -----------
Total non-interest expense...................................................... 24,336 8,354
----------- -----------
Income before income taxes.............................................................. 2,995 7,692
Provision for income taxes.............................................................. 531 2,247
----------- -----------
Net income.............................................................................. $ 2,464 $ 5,445
=========== ===========
Net income per common share............................................................. $ 0.06 $ -
=========== ===========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
3
<PAGE>
ROSLYN BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(Unaudited)
(In thousands, except share and per share amounts)
<TABLE>
<CAPTION>
For the
three months ended
March 31, 1997
--------------
<S> <C>
Common Stock (Par Value)
- ------------------------
Issuance of 42,371,359 shares of $.01 par value common stock in initial public offering..........................$ 423
Issuance of 1,271,100 shares of $.01 par value common stock to The Roslyn Savings Foundation..................... 13
---------
Balance at end of period......................................................................................... 436
---------
Additional Paid-in-Capital
- --------------------------
Issuance of 42,371,359 shares of common stock in initial public offering at $10.00 per share, net of conversion
related expenses................................................................................................. 410,227
Issuance of 1,271,100 shares of common stock at $10.00 per share to The Roslyn Savings Foundation................ 12,699
Excess of ESOP compensation cost measured using fair value of stock over its related cost........................ 26
---------
Balance at end of period......................................................................................... 422,952
---------
Retained Earnings-Substantially Restricted
- ------------------------------------------
Balance at beginning of period................................................................................... 235,154
Net income....................................................................................................... 2,464
---------
Balance at end of period......................................................................................... 237,618
---------
Unallocated Common Stock Held by ESOP
- -------------------------------------
Open market purchases of Roslyn Bancorp, Inc. common stock by ESOP trustee....................................... (54,805)
Allocation from shares purchased with 1996 contribution.......................................................... 1,000
Allocation from shares purchased with loan from Roslyn Bancorp, Inc.............................................. 448
---------
Balance at end of period......................................................................................... (53,357)
---------
Unrealized Gain (Loss) on Securities Available-For-Sale, Net of Tax
- -------------------------------------------------------------------
Balance at beginning of period................................................................................... 14,195
Change in unrealized gain (loss) on securities available-for-sale, net of tax.................................... (7,171)
---------
Balance at end of period......................................................................................... 7,024
---------
Total stockholders' equity.......................................................................................$ 614,673
=========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
4
<PAGE>
ROSLYN BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
For the
three months ended
March 31,
-----------------------------------
1997 1996
----------------- ----------------
<S> <C> <C>
Cash flows from operating activities:
Net income................................................................. $ 2,464 $ 5,445
Adjustments to reconcile net income to net cash
provided by operating activities:
Charitable contribution of Roslyn Bancorp, Inc.
common stock to The Roslyn Savings Foundation........................... 12,711 -
Provision for possible loan losses....................................... 150 100
Provision for possible losses on real estate owned....................... - 50
Originated mortgage servicing rights, net of amortization................ (101) (166)
Amortization of excess of cost over fair value of
net assets acquired..................................................... 117 117
Depreciation and amortization............................................ 380 304
Accretion of discounts, net of amortization of premiums.................. (480) (374)
Amortization of premium on callable preferred stock...................... 83 175
Allocation of ESOP stock................................................. 474 -
Proceeds from sales of loans held for sale,
net of originations and purchases....................................... 5,569 (5,043)
Gains on sales of loans.................................................. (673) (710)
Net gains on securities.................................................. (349) (35)
Net gains on sales of real estate owned.................................. (134) (9)
(Increase) decrease in deferred income taxes............................. (621) 236
Changes in assets and liabilities:
Increase in accrued interest receivable................................ (1,045) (1,236)
Decrease (increase) in other assets.................................... 3,327 (1,622)
Increase in accrued dividends and interest on deposits................. 121 931
(Decrease) increase in accrued taxes payable........................... (3,223) 1,524
Increase in accrued expense and other liabilities...................... 9,075 10,442
Net increase in unearned income........................................ 1,072 4
------------- -------------
Net cash provided by operating activities............................. 28,917 10,133
------------- -------------
Cash flows from investing activities:
Proceeds from sales and repayments of mortgage-backed
and mortgage related securities held-to-maturity.......................... 16,866 19,459
Proceeds from sales and repayments of debt, equity,
mortgage-backed and mortgage related securities
available for sale........................................................ 90,695 88,592
Purchases of debt, equity, mortgage-backed and
mortgage related securities available-for-sale............................ (281,094) (216,373)
Loan originations and purchases, net of principal repayments............... (132,756) (16,645)
Purchases of banking house and equipment, net.............................. (281) (293)
Proceeds from sales of real estate owned................................... 977 733
------------- -------------
Net cash used in investing activities..................................... (305,593) (124,527)
------------- -------------
Cash flows from financing activities:
Decrease in demand deposit, money market,
and savings accounts...................................................... (258,927) (8,238)
Increase in certificates of deposit........................................ 27,184 68,246
Increase in borrowed funds................................................. 443,310 68,241
Increase in mortgagors' escrow and security deposits....................... 5,521 6,616
Net proceeds of common stock issuance...................................... 410,650 -
Loan to ESOP for open market purchase of common stock...................... (53,805) -
Decrease in non-depository stock subscriptions............................. (1,356,911) -
------------- -------------
Net cash (used) provided by financing activities.......................... (782,978) 134,865
------------- -------------
Net (decrease) increase in cash and cash equivalents........................ (1,059,654) 20,471
Cash and cash equivalents at beginning of period............................ 1,126,310 21,271
------------- ------------
Cash and cash equivalents at end of period.................................. $ 66,656 $ 41,742
============= =============
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest on deposits and borrowed funds................................... $ 25,294 $ 14,821
============= =============
Income taxes.............................................................. $ 3,880 $ 597
============= =============
Non-cash investing activities:
Additions to real estate owned, net....................................... $ 12 $ 81
============= =============
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
5
<PAGE>
ROSLYN BANCORP, INC. AND SUBSIDIARY
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements include the
accounts of Roslyn Bancorp, Inc. (the "Company"), its direct wholly-owned
subsidiary The Roslyn Savings Bank (the "Bank"), and the subsidiaries of the
Bank.
The unaudited consolidated financial statements included herein reflect all
normal recurring adjustments which are, in the opinion of management, necessary
for a fair presentation of the results for the interim periods presented. The
results of operations for the three months ended March 31, 1997 are not
necessarily indicative of the results of operations that may be expected for the
entire fiscal year. Certain information and note disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to the rules and
regulations of the Securities and Exchange Commission. The unaudited
consolidated financial statements should be read in conjunction with the audited
consolidated financial statements and notes thereto included in the Company's
1996 Annual Report on Form 10-K.
2. EARNINGS PER SHARE
Earnings per common share is calculated by dividing net income by the weighted
average number of shares of common stock outstanding. For the three months ended
March 31, 1997, the weighted average number of shares of common stock
outstanding was 40,708,683. For the three months ended March 31, 1997, such
shares have been reduced, in accordance with the provisions of AICPA Statement
of Position 93-6, "Employers' Accountings for Employee Stock Option Plans", by
the weighted average number of unallocated shares of common stock held by the
Bank's Employee Stock Ownership Plan.
3. CONVERSION TO STOCK FORM OF OWNERSHIP
On May 29, 1996, the Board of Trustees of the Bank adopted a Plan of Conversion,
which was subsequently amended on July 30, 1996 and September 30, 1996, to
convert the Bank from a New York State chartered mutual savings bank to a New
York State chartered stock savings bank with the concurrent formation of a
holding company, Roslyn Bancorp, Inc. (the "Conversion").
The Conversion was completed on January 10, 1997, with the issuance by the
Company of 42,371,359 shares of its common stock, at a price of $10.00 per
share, in an initial public offering to the Bank's eligible depositors. The
Company received gross proceeds from the Conversion of $423.7 million, before
the reduction from gross proceeds of $13.1 million for estimated Conversion
related expenses. On the date of the Conversion, $145.3 million of deposits and
$278.4 million of non-depository stock subscriptions funds were transferred to
stockholder's equity, and $1.08 billion of non-depository stock subscriptions
funds were subsequently returned to subscribers.
Concurrent with the close of the stock offering, an additional 1,271,100 shares
of authorized but unissued shares of common stock were donated by the Company to
The Roslyn Savings Foundation (the "Foundation"), a private foundation dedicated
to charitable purposes within the Bank's local community.
6
<PAGE>
The Company recognized a one-time charge of $12.7 million, the full amount of
the contribution made to the Foundation, in the first quarter of 1997. The
contribution to the Foundation will be fully tax deductible, subject to an
annual limitation based upon the Company's annual taxable income.
4. EMPLOYEE STOCK OWNERSHIP PLAN
In connection with the Conversion, the Bank established an Employee Stock
Ownership Plan (the "ESOP"). The ESOP is a tax qualified retirement plan
designed to invest primarily in the Company's common stock. All full-time
employees of the Bank who have completed one year of service with the Bank will
be able to participate in the ESOP. Subsequent to the Conversion, the ESOP
purchased, primarily through a $53.8 million loan from the Company and an
initial $1.0 million contribution from the Bank, 8% or 3,491,397 shares of
common stock on the open market. The loan to the ESOP will be primarily repaid
with contributions from the Bank to the ESOP over a period not to exceed 30
years. The Company recognizes compensation expense attributable to its ESOP,
other than the initial $1.0 million contribution which was charged to
compensation expense in 1996, over the year based upon the estimated number of
ESOP shares to be allocated each December 31st. The amount of compensation
expense recorded is equal to the estimate of shares to be allocated by the ESOP
multiplied by the average fair value of the underlying shares during the period.
For the three months ended March 31, 1997, compensation expense attributable to
the ESOP was $474,000.
5. RECENT ACCOUNTING PRONOUNCEMENTS
In October 1995, the Financial Accounting Standards Board (the "FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for
Stock-Based Compensation." The statement applies to all transactions in which an
entity acquires goods or services by issuing equity instruments or by incurring
liabilities where the payment amounts are based upon the entity's common stock
price, except for employee stock ownership plans. The statement covers
transactions with employees and non-employees and is applicable to both public
and non-public entities. SFAS No. 123 established a new method of accounting for
stock-based compensation arrangements with employees. The new method is a fair
value based method rather than the intrinsic value based method that is
contained in Accounting Principles Board Opinion (APB) No. 25, "Accounting for
Stock Issued to Employees." SFAS No. 123 does not require an entity to adopt the
fair value based method for financial statement preparation purposes. An entity
may choose to continue using the APB No. 25 method or adopt the SFAS No. 123
method. The FASB considers the fair value method of SFAS No. 123 to be the
preferable method as compared to the APB No. 25 method. Additionally, once the
SFAS No. 123 method is adopted, the entity can not revert to the APB No. 25
method, and must apply it to all of its compensation plans and transactions. For
entities not adopting the SFAS No. 123 method, the entity must display in the
footnotes to the financial statements the proforma net income and earnings per
share information as if the SFAS No. 123 method had been adopted. The accounting
requirements of SFAS No. 123 are effective for transactions entered into in
fiscal years beginning after December 31, 1995. The Company did not have any
stock-based compensation arrangements with its employees as of March 31, 1997.
In June 1996, the FASB issued SFAS No.125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities." SFAS No. 125
is effective for transfers and servicing of financial assets and extinguishments
of liabilities occurring after December 31, 1996 and is to be applied
prospectively. This statement provides accounting and reporting standards for
transfers and servicing of financial assets and extinguishments of liabilities
based on consistent application of a financial-components approach that focuses
on control. It distinguishes transfers of financial assets that are sales from
transfers that are secured borrowings. This statement supersedes SFAS No. 76,
"Extinguishment of Debt," and SFAS No. 77,
7
<PAGE>
"Reporting by Transferors for Transfers of Receivables with Recourse," and SFAS
No. 122, and amends SFAS No. 115 and SFAS No. 65.
In December 1996, the FASB issued SFAS No. 127, "Deferral of the Effective Date
of Certain Provisions of FASB Statement No. 125". The FASB was made aware that
the volume and variety of certain transactions and the related changes to
information systems and accounting processes that are necessary to comply with
the requirements of SFAS No. 125 would make it extremely difficult, if not
impossible, for some affected enterprises to apply the transfer and collateral
provisions of SFAS No. 125 to those transactions as soon as January 1, 1997. As
a result, SFAS No. 127 defers for one year the effective date, (a) of paragraph
15 of SFAS No. 125 and (b) for repurchase agreement, dollar-roll, securities
lending and similar transactions, of paragraphs 9-12 and 237(b) of SFAS No. 125.
Adoption of SFAS No. 125, as amended by SFAS No. 127, effective January 1, 1997,
did not have a material effect on the Company's financial statements. The
remaining provisions of SFAS No. 125 will continue to be applied prospectively
and are not expected to have a material effect on the Company's financial
statements.
In February 1997, the FASB issued SFAS No. 128, "Earnings per Share". The
statement is effective for periods ending after December 15, 1997, and will
require restatement of all prior-period earnings per share ("EPS") data
presented. The statement establishes standards for computing and presenting EPS.
It replaces the presentation of primary EPS with basic EPS, and requires dual
presentation of basic and diluted EPS on the face of the income statement. Basic
EPS is computed by dividing income available to common stockholders by the
weighted-average number of common shares outstanding for the period. Diluted EPS
reflects the potential dilution that could occur if securities or other
contracts to issue common stock were exercised or converted into common stock.
Adoption of this statement is not expected to have a material effect on the
Company's consolidated financial statements.
In February 1997, the FASB issued SFAS No. 129, "Disclosure of Information about
Capital Structure." SFAS No. 129 establishes standards for disclosing
information about an entity's capital structure. It applies to all entities.
SFAS No. 129 continues the previous requirements to disclose certain information
about an entity's capital structure found in APB No. 10, "Omnibus Opinion --
1966", and No. 15, "Earnings per Share", and SFAS Statement No. 47, "Disclosure
of Long-Term Obligations", for entities that were subject to the requirements of
those standards. SFAS No. 129 eliminates the exemption of non-public entities
from certain disclosure requirements of APB No. 15 as provided by SFAS Statement
No. 21, "Suspension of the Reporting of Earnings per Share and Segment
Information by Non-Public Enterprises." It supersedes specific disclosure
requirements of APB No. 10 and 15 and SFAS No. 47 and consolidates them in SFAS
No. 129 for ease of retrieval and for greater visibility to nonpublic entities.
SFAS No. 129 is effective for financial statements for periods ending after
December 15, 1997. It contains no change in disclosure requirements for entities
that were previously subject to the requirements of APB No. 10 and 15 and
Statement No. 47. Accordingly, when adopted, SFAS No. 129 is not expected to
have a material effect on the Company's financial statements.
6. DEBT AND EQUITY AND MORTGAGE-BACKED AND MORTGAGE RELATED SECURITIES
The following table sets forth certain information regarding amortized cost and
estimated fair values of debt and equity and mortgage-backed and mortgage
related securities of the Company at March 31, 1997 and December 31, 1996,
respectively.
8
<PAGE>
<TABLE>
<CAPTION>
March 31, 1997 December 31, 1996
------------------------- -------------------------
(In thousands)
(Unaudited)
Estimated Estimated
Amortized fair Amortized fair
cost value cost value
---- ----- ---- -----
<S> <C> <C> <C> <C>
Available-for-sale:
Debt securities:
United States Government - direct
and guaranteed....................................... $ 145,306 $ 147,330 $ 175,440 $ 179,259
United States Government agencies 167,700 165,998 124,709 124,377
Other................................................. 13,198 13,319 14,207 14,398
Total debt securities ----------- ----------- ----------- -----------
available-for-sale.............................. 326,204 326,647 314,356 318,034
----------- ----------- ----------- -----------
Equity securities:
Common.......................................... 12,270 21,013 12,110 19,116
Preferred....................................... 140,138 146,203 143,174 149,248
Other........................................... 488 496 488 498
Total equity securities ----------- ----------- ----------- -----------
available-for-sale............................. 152,896 167,712 155,772 168,862
----------- ----------- ----------- -----------
Mortgaged-backed and mortgage related
securities:
GNMA pass-through securities, net............... 17,774 19,313 18,737 20,504
FNMA pass-through securities, net............... 6,146 5,927 6,443 6,263
FHLMC pass-through securities, net.............. 223,556 220,532 220,800 220,264
GNMA adjustable rate mortgage pass-
through securities, net....................... 311,444 314,607 268,801 272,432
Whole loan private collateralized
mortgage obligations, net..................... 330,911 328,858 276,500 278,033
Agency collateralized mortgage
obligations, net.............................. 443,600 441,198 360,115 361,915
----------- ----------- ----------- -----------
Total mortgage-backed and mortgage
related securities available-for-sale, net. 1,333,431 1,330,435 1,151,396 1,159,411
----------- ----------- ----------- -----------
Total securities available-for-sale........... $ 1,812,531 $ 1,824,794 $ 1,621,524 $ 1,646,307
=========== =========== =========== ===========
Held-to-maturity, net:
Debt securities:
State, county and municipal..................... $ 1,930 $ 2,053 $ 1,930 $ 2,067
Mortgaged-backed and mortgage related
securities:
Whole loan private collateralized mortgage
obligations, net............................ 259,906 256,763 276,632 276,046
----------- ----------- ----------- -----------
Total securities held-to-maturity, net........ $ 261,836 $ 258,816 $ 278,562 $ 278,113
=========== =========== =========== ===========
</TABLE>
9
<PAGE>
7. LOANS RECEIVABLE, NET
Loans receivable, net at March 31, 1997 and December 31, 1996 consist of
the following:
<TABLE>
<CAPTION>
March 31, 1997 December 31, 1996
-------------- -----------------
(In thousands)
(Unaudited)
<S> <C> <C>
Real estate loans:
One-to four-family............................... $ 358,248 $ 263,337
Multi-family..................................... 41,741 46,576
Commercial real estate........................... 202,423 168,797
Construction and development..................... 40,501 37,459
Home equity and second mortgage.................. 9,662 9,506
Consumer............................................. 1,290 1,241
Student.............................................. 2,286 1,576
----------- -----------
Gross loans.......................... 656,151 528,492
Less :
Unamortized discounts, net....................... 1,245 701
Deferred loan fees............................... 1,172 881
Deferred mortgage interest....................... 627 566
Allowance for possible loan losses............... 23,445 23,320
----------- -----------
Total loans, net..................... 629,662 503,024
Less :
Loans held for sale, net:
One- to four-family, net................... 6,978 12,558
Student.................................... 2,286 1,576
----------- -----------
Loans receivable held for
investment, net.................... $ 620,398 $ 488,890
=========== ===========
</TABLE>
10
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
Roslyn Bancorp, Inc. is a savings and loan holding company regulated by the
Office of Thrift Supervision. The primary operating subsidiary of Roslyn
Bancorp, Inc. is The Roslyn Savings Bank (the "Bank"), a New York State
chartered stock savings bank. While the following discussion of financial
condition and results of operations includes the collective results of Roslyn
Bancorp, Inc. and the Bank (collectively the "Company"), this discussion
reflects principally the Bank's activities as the Company currently does not
engage in any significant business activities other than the management of the
Bank and the investment of net proceeds from the Bank's mutual to stock
conversion which occurred on January 10, 1997.
Financial Condition
Total assets at March 31, 1997 were $2.85 billion, a decrease of $768.5
million, or 21.2 %, from $3.62 billion at December 31, 1996. The decrease was
primarily attributable to the January 10, 1997 consummation of the Bank's
conversion from a New York State chartered mutual savings bank to a New York
State chartered stock savings bank and the return of stock subscription proceeds
for unsatisfied subscriptions of Roslyn Bancorp, Inc. common stock. As a result,
$145.3 million of deposits and $278.4 million of non-depository stock
subscriptions funds were transferred to stockholders' equity of the Company, and
$1.08 billion of non-depository stock subscriptions funds, which were held in
short-term money market investments, were returned to subscribers. The effect of
such resulted in a $1.08 billion decrease in short-term money market investments
from $1.11 billion at December 31, 1996 to $39.0 million at March 31, 1997.
Excluding the effect of the $1.08 billion of non-depository stock
subscriptions funds returned to subscribers, total assets increased by $310.1
million due to a $178.5 million increase in securities available-for-sale and a
$131.6 million increase in real estate loans held for investment, net. Asset
growth was primarily funded through borrowings and cash flows from the core
operating activities of the Bank. Mortgage-backed and mortgage related
securities available-for-sale increased by $171.0 million, or 14.8%, from $1.16
billion at December 31, 1996 to $1.33 billion at March 31, 1997. Debt and
equity securities available-for-sale at March 31, 1997 totaled $494.4 million,
an increase of $7.5 million, or 1.5%, compared to $486.9 million at December 31,
1996. Securities held-to-maturity, net decreased $16.8 million, or 6.0%, to
$261.8 million at March 31, 1997 from $278.6 million at December 31, 1996.
These changes in the securities portfolios reflect the effects of securities
purchases, securities repayments and maturities, and in the case of the
available-for-sale securities portfolio, the effects of securities sales and
changes in the estimated fair values of the securities. At March 31, 1997, the
available-for-sale portfolio had net unrealized gains of $12.3 million as
compared to $24.8 million at December 31, 1996.
Real estate loans held for investment, net at March 31, 1997 were $642.6
million, an increase of $131.6 million, or 25.8%, from $511.0 million at
December 31, 1996 primarily due to the origination of $86.2 million in
commercial real estate and one- to four-family loans and the purchase of $89.8
million of one- to four-family real estate loans.
Deferred tax asset, net at March 31, 1997 was $11.0 million, an increase of
$6.0 million, or 118.9%, from $5.0 million at December 31, 1996. The increase
was primarily attributable to the decrease in net unrealized gains on the
securities available-for-sale portfolio.
11
<PAGE>
Total liabilities at March 31, 1997 were $2.23 billion, a decrease of $1.14
billion, or 33.66% from $3.37 billion at December 31, 1996. Total deposits
decreased by $231.7 million, or 11.9%, from $1.96 billion at December 31, 1996
to $1.72 billion at March 31, 1997. The decrease in total liabilities and total
deposits is primarily attributable to the consummation of the Conversion of the
Bank from a New York State chartered mutual savings bank to a New York State
chartered stock savings bank. The overall decrease in total liabilities was
partially offset by a $443.3 million increase in borrowed funds primarily due to
management's decision to utilize borrowings, primarily in the form of reverse
repurchase agreements, to fund a significant portion of its asset growth and, to
a lesser extent, fund deposit outflows.
Total stockholders' equity increased $365.3 million to $614.7 million at
March 31, 1997 from $249.3 million at December 31, 1996. The increase is
primarily due to $410.7 million of net proceeds of the initial public offering
that was completed on January 10, 1997 which was offset by the reduction in
paid-in-capital reflecting unallocated shares of common stock held by the Bank's
ESOP of $53.4 million. Additionally, concurrent with the close of the stock
offering, the Company donated 1,271,100 shares of common stock to the Foundation
which increased stockholders' equity by $12.7 million. In addition to the net
proceeds from the initial public offering and the effect of the charitable
contribution, the increase in stockholder's equity was also due to net income
for the three months ended March 31, 1997 totaling $2.5 million offset by a
decrease in net unrealized gains on securities available-for-sale, net of taxes
of $7.2 million. The decrease in net unrealized gains on securities available-
for-sale from December 31, 1996 to March 31, 1997 resulted primarily from
increases in market interest rates during the three months ended March 31, 1997,
which lowered the estimated fair value of fixed rate debt and mortgage-backed
and mortgage related securities.
12
<PAGE>
Comparison of Operating Results for the Three Months Ended March 31, 1997 and
1996
General
Net income for the three month period ended March 31, 1997 totaled $2.5
million, or $.06 per share, as compared to net income of $5.4 million for the
same period last year. Due to the Bank's conversion and acquisition by the
Company on January 10, 1997, the Company had no significant assets or operations
prior to such date. Per share data for the quarter ended March 31, 1996 is not
applicable. Accordingly, the data presented for the period ended March 31, 1996
reflects the operations of the Bank only and the data presented for the period
ended March 31, 1997 reflects the operations of the Company and the Bank and
subsidiaries. The period ended March 31, 1997 is the Company's first earnings
report as a public company and includes a one-time charge relating to the
funding of the Foundation. The Foundation was established and funded with a
contribution by the Company of 1,271,100 shares of its common stock as part of
the January 10, 1997 conversion of the Bank to a New York State chartered stock
savings bank. Such contribution resulted in a $7.4 million charge to earnings on
a after tax basis. The Company's net income excluding the effect of funding the
Foundation was $9.8 million for the quarter ended March 31, 1997. This
represents a $4.4 million increase in net income from the quarter ended March
31, 1996.
Interest Income
Interest income amounted to $50.1 million for the three months ended March
31, 1997, representing an increase of $20.2 million, or 67.9%, from the same
period in 1996. The increase was primarily a result of a $1.18 billion increase
in average interest-earning assets. The growth in interest-earning assets was
primarily the result of utilizing the net conversion proceeds and the increased
borrowed fund position to fund the growth in both the securities and real estate
loan portfolios. Additionally contributing to the increase in interest-earning
assets was the holding of a significant portion of non-depository stock
subscriptions funds in short-term money market investments prior to the
consummation of the Conversion on January 10, 1997. Although average interest-
earning assets increased, the average yield on interest-earning assets decreased
by 29 basis points. The decrease is due in part to the short-term liquidity
position maintained prior to the Conversion on January 10, 1997. Short-term
liquidity was required to be maintained due to the pending offering of Roslyn
Bancorp, Inc. common stock and the anticipated return of approximately $1.08
billion in non-depository stock subscriptions funds. Interest income on
mortgage-backed and mortgage related securities increased $13.6 million, from
$13.5 million for the three months ended March 31, 1996 to $27.1 million for the
same period in 1997 due to an increase of $739.7 million, or 93.9%, in the
average balance of these securities and an increase in the average yield on
these securities of 24 basis points from 6.86% for the three months ended March
31, 1996 to 7.10% for the three months ended March 31, 1997. These yield
increases were due to the increased interest rate environment for new purchases
and the upward repricing of securities purchased in prior periods.
Interest income on real estate loans increased $2.7 million, or 29.4%, to
$11.7 million for the three months ended March 31, 1997, from $9.0 million for
the same period in 1996. The increase was a result of the growth in the average
balance of loans outstanding primarily due to increased originations of one-to
four-family and commercial real estate loans and the purchase of $89.8 million
of one- to four-family real estate loans. Further contributing to the increase
in interest income for the quarter ended March 31, 1997 compared to the same
period in 1996 was a 8.5% decrease in non-performing loans, from $8.7 million at
December 31, 1996 to $8.0 million at March 31, 1997. The increase was partially
offset by a 72 basis point decrease in the average yield on real estate loans
from 9.52% for the three months ended March 31, 1996, to 8.80% for the same
period in 1997 principally due to the origination and purchase of lower yielding
mortgage loans.
Interest Expense
Interest expense for the three months ended March 31, 1997, was $25.4
million, compared to $15.8 million for the three months ended March 31, 1996, an
increase of $9.6 million or 61.3%. The increase in
13
<PAGE>
interest expense is related to a $811.8 million, or 59.5%, increase the average
balance of interest-bearing liabilities from $1.36 billion in 1996 to $2.18
billion in 1997. This increase reflects a $381.3 million increase in the
average balance of interest-bearing deposits for the quarter ended March 31,
1997, as compared to the prior year quarter, a 13 basis point increase in the
average rate paid on total deposits over the same quarter due to a substantial
increase in the average balance of certificates of deposit and a one time $1.3
million expense relating to interest paid on stock subscription escrow funds
received in connection with the offering of Roslyn Bancorp, Inc. common stock.
The average balance of certificates of deposit increased due to management's
strategy of funding asset growth by offering competitive rates, and through the
acquisition of $100.0 million of brokered deposits during the third and fourth
quarters of 1996. The effect of the higher average balance primarily resulted in
an increase of $4.7 million in interest expense on certificates of deposit for
the quarter ended March 31, 1997 as compared to the same quarter in 1996.
Interest expense on borrowed funds increased $3.4 million, from $323,000 at
March 31, 1996 to $3.7 million at March 31, 1997, primarily due to an increase
of $249.1 million in the average balance of borrowed funds, from $20.1 million
for the three months ended March 31, 1996 to $269.2 million for the three months
ended March 31, 1997, offset by a 90 basis point decrease in the cost of
borrowed funds from 6.43% for the 1996 period to 5.53% for the 1997 period.
Borrowed funds, principally reverse repurchase agreements, have been reinvested
by the Bank in investment securities and real estate loans leveraging the Bank's
capital position and improving the return on equity.
Provision for Possible Loan Losses
The provision for possible loan losses totaled $150,000 for the three
months ended March 31, 1997 as compared to $100,000 for the three months ended
March 31, 1996. The provision for possible loan losses for the three months
ended March 31, 1997 reflects management's qualitative assessment of the loan
portfolio, net charge-offs and collection of delinquent loans. The increased
provision also reflects management's assessment of its continuation of the
origination of commercial real estate and construction and development loans.
Such loans generally bear a greater degree of risk as compared to one-to four-
family loans. At March 31, 1997 and December 31, 1996, the allowance for
possible loan losses amounted to $23.4 million and $23.3 million, respectively
and the ratio of such allowance to non-performing loans was 293.02% at March 31,
1997 as compared to 266.82% at December 31, 1996. Management of the Bank
assesses the adequacy of the allowance for possible loan losses based on
evaluating known and inherent risks in the loan portfolio and upon management's
continuing analysis of the factors underlying the quality of the loan portfolio.
While management believes that, based on information currently available, the
Bank's allowance for possible loan losses is sufficient to cover losses inherent
in its loan portfolio at this time, no assurance can be given that the Bank's
level of allowance for possible loan losses will be sufficient to cover future
possible loan losses incurred by the Bank or that future adjustments to the
allowance for possible loan losses will not be necessary if economic and other
conditions differ substantially from the economic and other conditions used by
management to determine the current level of the allowance for possible loan
losses. Management may in the future increase its level of allowance for
possible loan losses as a percentage of total loans and non-performing loans in
the event it increases the level of commercial real estate, multi-family,
commercial, construction and development or consumer lending as a percentage of
its total loan portfolio. In addition, various regulatory agencies, as an
integral part of their examination process, periodically review the Bank's
allowance for possible loan losses. Such agencies may require the Bank to
provide additions to the allowance based upon judgments different from
management.
Non-Interest Income
Non-interest income, exclusive of net securities gains, increased $441,000,
or 21.4%, to $2.5 million for the quarter ended March 31, 1997 as compared to
$2.1 million for the same period in the prior year. The increase reflects in
part, a $545,000 increase in loan servicing and fee income and a $131,000
increase in net gains on real estate operations. The increase in loan servicing
and fee income is primarily attributable to $467,000 in fee income
14
<PAGE>
earned on temporary bank balances relating to the post conversion return of
$1.08 billion of non-depository stock subscriptions. The increase in net gains
on real estate operations is primarily due to the sale of one real estate owned
property during the first quarter of 1997 which resulted in a gain of $124,000.
These increases were partially offset by a $198,000 decrease in other non-
interest income primarily due to real estate tax certiorari refunds received
during the first quarter of 1996.
Non-Interest Expense
Non-interest expense totaled $24.3 million for the quarter ended March 31,
1997, as compared to $8.4 million for the quarter ended March 31, 1996, an
increase of $15.9 million, or 191.3%. The increase in non-interest expense is
primarily attributable to the one-time charge of $12.7 million relating to the
funding of the Foundation by the Company. Excluding the effect of funding the
Foundation, non-interest expense increased $3.2 million, or 39.2%, to $11.6
million for the quarter ended March 31, 1997 as compared to $8.4 million for the
same period in 1996. The $3.2 million increase in non-interest expense was
primarily attributable to increases in compensation and employee benefits,
including the ESOP, and additional personnel and other costs associated with the
late 1996 establishment of two Long Island branch offices, and two mortgage
origination offices located in East Hartford and Fairfield, Connecticut. Also
contributing to the increase in non-interest expense were additional costs in
connection with professional fees and deposit insurance premiums.
Income Taxes
Total income tax expense decreased $1.7 million, or 76.4%, from $2.2
million recorded during the quarter ended March 31, 1996 to $531,000 during the
quarter ended March 31, 1997. The decrease is primarily attributable to the
decrease in income before income taxes, due in part to the one-time charitable
donation made by the Company to the Foundation in the first quarter of 1997.
The Foundation submitted a request to the Internal Revenue Service to be
recognized as a tax-exempt organization and will likely be classified as a
private foundation. The contribution of common stock to the Foundation by the
Company will be tax deductible, subject to an annual limitation based on 10% of
the Company's annual taxable income. The Company, however, will be able to carry
forward any unused portion of the deduction for a five year period following the
contribution. The Company recognized a $12.7 million expense for the full amount
of the contribution to the Foundation, offset in part by the $5.3 million
corresponding tax benefit, during the first quarter of 1997. This was a major
factor in the decline in the effective tax rate from 29.2% during the first
quarter of 1996 to 17.7% during the first quarter of 1997.
Liquidity and Capital Resources
The Company's primary sources of funds are deposits, proceeds from the
principal and interest payments on loans, mortgage-backed and mortgage related
and debt and equity securities, and to a lesser extent, proceeds from the sale
of fixed-rate mortgage loans to the secondary market. While maturities and
scheduled amortization of loans and securities are predictable sources of funds,
deposit outflows, mortgage prepayments and mortgage loan sales are greatly
influenced by general interest rates, economic conditions and competition.
The primary investing activities of the Bank are the origination of both
one-to four-family and commercial real estate loans and the purchase of
mortgage-backed and mortgage related and debt and equity securities. During the
three months ended March 31, 1997 and March 31, 1996, the Bank originated and
purchased mortgage loans in the amount of $201.0 million and $118.5 million,
respectively. Purchases of mortgage-backed and mortgage related and debt and
equity securities totaled $281.1 million and $216.4 million during the three
months ended March 31, 1997 and 1996, respectively. These activities were funded
primarily by principal repayments on loans and mortgage-backed and mortgage
related securities and by the Bank's increased borrowed funds position during
15
<PAGE>
the quarter ended March 31, 1997. Loan sales provided additional liquidity to
the Bank, totaling $49.3 million and $57.9 million for the three months ended
March 31, 1997 and 1996, respectively.
The Company closely monitors its liquidity position on a daily basis.
Excess, short-term liquidity is invested in overnight federal funds sold. In
the event that the Company should require funds beyond its ability to generate
them internally, additional sources of funds are available through the use of
reverse-repurchase agreements. At March 31, 1997, the Company had $444.1
million in reverse-repurchase agreements outstanding whereas at December 31,
1996 there were no reverse repurchase agreements outstanding. The aforementioned
is primarily attributable to management's decision to utilize borrowings,
primarily in the form of reverse repurchase agreements, to fund a significant
portion of its asset growth.
Loan commitments totaled $202.9 million at March 31, 1997, comprised of
$60.9 million in one-to four-family loan commitments, $34.9 million in
commercial real estate loan commitments, $88.0 million in construction and
development loan commitments, $14.5 million in multi-family loan commitments and
$4.6 million in home equity loan commitments. Management of the Bank
anticipates that it will have sufficient funds available to meet its current
loan commitments. Certificates of deposits that are scheduled to mature in one
year or less from March 31, 1997 totaled $776.6 million. Based upon prior
experience and the Bank's current pricing strategy, management believes that a
significant portion of such deposits will remain with the Bank.
The Bank's most liquid assets are cash and cash equivalents, short-term
securities, securities available-for-sale and securities held to maturity due
within one year. The levels of these assets are dependent on the Company's
operating, financing, lending, and investment activities during any given
period. At March 31, 1997 the Company had $66.7 million in cash and cash
equivalents and no short-term repurchase agreements outstanding whereas at
December 31, 1996 the Bank had $624.6 million in cash and cash equivalents and
$501.7 million in short-term repurchase agreements outstanding. The decrease in
cash and cash equivalents and short-term repurchase agreements was primarily due
to the Company's temporarily high liquidity position at December 31, 1996 due to
the receipt of stock subscriptions held in escrow relating to the Conversion.
Regulatory Capital Position
The Bank is subject to minimum regulatory requirements imposed by the
Federal Deposit Insurance Corporation ("FDIC") which vary according to the
institution's capital level and the composition of its assets. An insured
institution is required to maintain core capital of not less than 3% of total
assets plus an additional 100 to 200 basis points ("leverage capital ratio").
An insured institution must also maintain a ratio of total capital to risk-based
assets of 8%. Although the minimum leverage capital ratio is 3%, the Federal
Deposit Insurance Corporation Improvement Act ("FDICIA") stipulates that an
institution with less than 4% leverage capital ratio is deemed to be an
"undercapitalized" institution and results in the imposition of regulatory
restrictions. The Bank's capital ratios qualify it to be deemed "well
capitalized" under FDICIA.
In accordance with the requirements of FDIC and the New York State Banking
Department ("Banking Department"), the Bank must meet certain measures of
capital adequacy with respect to leverage and risk-based capital. As of March
31, 1997 and December 31, 1996, the Bank exceeded those requirements. The
Bank's leverage capital ratios were 14.52% and 8.70% at March 31, 1997 and
December 31, 1996, respectively. The Bank's Tier-1 risk-based capital ratios
were 34.45% and 18.50% at March 31, 1997 and December 31, 1996, respectively.
The Bank's total risk-based capital ratios were 35.71% and 19.75% at March 31,
1997 and December 31, 1996, respectively.
16
<PAGE>
PART II - OTHER INFORMATION
---------------------------
Item 1. Legal Proceedings
- ---------------------------
Not applicable
Item 2. Changes in securities
- -------------------------------
Not applicable
Item 3. Defaults Upon Senior Securities
- -----------------------------------------
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
- -------------------------------------------------------------
Not applicable
Item 5. Other Information
- ---------------------------
Not applicable
Item 6. Exhibits and Reports on Form 8-K
- ------------------------------------------
(a) Exhibits
--------
11.0 Statement re: Computation of Per Share Earnings
27.0 Financial Data Schedule*
(b) Reports on Form 8-K
-------------------
Not applicable
* Submitted only with filing in electronic format.
17
<PAGE>
Exhibit Index
-------------
Page
----
11.0 Statement re: Computation of Per Share Earnings 20
27.0 Financial Data Schedule (submitted only with -
filing in electronic format)
18
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ROSLYN BANCORP, INC.
(Registrant)
Date: May 15, 1997 By: /s/ Joseph L. Mancino
------------------------------------------
Joseph L. Mancino
Chairman of the Board, President and
Chief Executive Officer
Date: May 15, 1997 By: /s/ Michael P. Puorro
------------------------------------------
Michael P. Puorro
Treasurer and Chief Financial Officer
19
<PAGE>
Exhibit 11
Roslyn Bancorp, Inc.
Statement re: Computation of Per Share Earnings
(In thousands, except share and per share amounts)
<TABLE>
<CAPTION>
Three
Months
Ended
March 31,
1997
------------
<S> <C>
Net income $ 2,464
-----------
Weighted average common shares
outstanding 40,708,683
Common stock equivalents due to
dilutive effect of stock options -
-----------
Total weighted average common shares
and equivalents outstanding 40,708,683
===========
Primary earnings per common and common
share equivalents $ 0.06
===========
Total weighted average common shares
and equivalents outstanding 40,708,683
Additional dilutive shares using ending
period market value versus
average market value for the period
when utilizing the treasury
stock method regarding stock options -
-----------
Total shares for fully dilutive
earnings per share 40,708,683
===========
Fully dilutive earnings per
common and common share equivalents $ 0.06
===========
</TABLE>
20
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1
<CASH> 27,656
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 39,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 1,824,794
<INVESTMENTS-CARRYING> 261,836
<INVESTMENTS-MARKET> 258,816
<LOANS> 653,107
<ALLOWANCE> 23,445
<TOTAL-ASSETS> 2,849,427
<DEPOSITS> 1,723,792
<SHORT-TERM> 445,139
<LIABILITIES-OTHER> 65,823
<LONG-TERM> 0
0
0
<COMMON> 436
<OTHER-SE> 614,237
<TOTAL-LIABILITIES-AND-EQUITY> 2,849,427
<INTEREST-LOAN> 11,741
<INTEREST-INVEST> 35,391
<INTEREST-OTHER> 2,918
<INTEREST-TOTAL> 50,050
<INTEREST-DEPOSIT> 21,690
<INTEREST-EXPENSE> 25,415
<INTEREST-INCOME-NET> 24,635
<LOAN-LOSSES> 150
<SECURITIES-GAINS> 349
<EXPENSE-OTHER> 24,336
<INCOME-PRETAX> 2,995
<INCOME-PRE-EXTRAORDINARY> 2,464
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,464
<EPS-PRIMARY> .06
<EPS-DILUTED> 0
<YIELD-ACTUAL> 7.23
<LOANS-NON> 8,001
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 3,789
<ALLOWANCE-OPEN> 23,320
<CHARGE-OFFS> 24
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 23,445
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 23,445
</TABLE>
