<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 26, 1999
----------------
ROSLYN BANCORP, INC.
--------------------
(Exact name of registrant as specified in its charter)
Delaware 0-28886 11-3333218
-------- ------- ----------
(State or other Jurisdiction of (Commission (IRS Employer
incorporation or organization) File Number) Identification No.)
1400 Old Northern Boulevard, Roslyn, New York 11576
- --------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (516) 621-6000
--------------
Not Applicable
--------------
(Former name or former address, if changed since last report.)
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ITEM 5. OTHER EVENTS.
------------
On January 26, 1999, Roslyn Bancorp, Inc. (the "Company"), issued a press
release which reported earnings for the fiscal year and quarter ended December
31, 1998.
A press release announcing the Company's year and fourth quarter earnings
is attached as Exhibit 99.1.
ITEM 7. FINANCIAL STATEMENTS AND OTHER EXHIBITS.
---------------------------------------
Exhibit 99.1 Press Release dated January 26, 1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ROSLYN BANCORP, INC.
Dated: February 8, 1999 By: /s/ Joseph L. Mancino
----------------------------------
Joseph L. Mancino
Chairman of the Board and Chief
Executive Officer
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EXHIBIT 99.1 PRESS RELEASE
<PAGE> 2
ROSLYN BANCORP, INC.
1400 OLD NORTHERN BOULEVARD, ROSLYN, NY 11576-2154 TEL: (516) 621-6000
FOR IMMEDIATE RELEASE
Contact: Tormey Santolli
Investor Relations
Extension 1228
ROSLYN BANCORP, INC. REPORTS RECORD QUARTERLY AND ANNUAL EARNINGS
QUARTERLY EARNINGS OF $13.4 MILLION UP 42.6% FROM $9.4 MILLION
EARNINGS PER SHARE OF $0.35 UP 45.8 % FROM $0.24
TWELVE MONTH EARNINGS OF $52.4 MILLION UP 56.9% FROM $33.4 MILLION
EARNINGS PER SHARE OF $1.36 UP 63.9% FROM $0.83
FOURTH CONSECUTIVE RECORD QUARTER OF LOAN ORIGINATIONS - $364.9 MILLION
A 160.6% INCREASE FROM PRIOR YEAR'S QUARTER
ROSLYN, NEW YORK, JANUARY 26, 1999 - Roslyn Bancorp, Inc. (NASDAQ:RSLN), the
holding company for The Roslyn Savings Bank, today reported record earnings of
$13.4 million, or $0.35 per share, for the quarter ended December 31, 1998,
representing increases of 42.6% and 45.8%, respectively, from the $9.4 million
in net income, or $0.24 per share, reported for the comparable prior year
period. Core earnings per share for the quarter ended December 31, 1998
increased 25.9% to $0.34 per share, compared to $0.27 for the 1997 comparable
period. Basic and diluted per share amounts are the same for all periods
presented.
Net income for the twelve months ended December 31, 1998 was a record $52.4
million, or $1.36 per share, as compared with $33.4 million, or $0.83 per share,
for the corresponding period in 1997.
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The Company's reported earnings for the quarter and year ended December 31,
1997, include charges of $2.3 million and $2.7 million, respectively, after-tax,
for settlement of asserted claims including professional fees related thereto.
Additionally, net income for the year ended December 31, 1997 includes a $7.4
million after-tax non-recurring charge relating to the funding of The Roslyn
Savings Foundation (a charitable foundation formed by the Company for the
benefit of the communities it serves). Excluding such charges, the Company's
reported earnings for the quarter and year ended December 31, 1997, were $11.7
million and $43.4 million, respectively, or $0.29 and $1.08 per share. This
represents an earnings per share increase for 1998 of 20.7%, and 25.9%,
respectively, from the 1997 period.
The Company's return on average equity and assets for the December 31, 1998
quarter was 9.13% and 1.44%, compared to 6.13% and 1.07% for the 1997 period.
Based on cash earnings, the return on average equity and assets was 10.43% and
1.64% for the quarter ended December 31, 1998. For the corresponding periods,
the Company's cash efficiency ratio was 34.42% and 43.13%. Loan originations
increased 160.6% to $364.9 million for the fourth quarter 1998, compared to
$140.0 million in the 1997 fourth quarter.
Commenting on the Company's record results, Joseph L. Mancino, Chairman,
President and Chief Executive Officer stated, "Roslyn's record earnings, both
for the quarter and the year, are indicative of the success in meeting our
financial and strategic objectives. We have continued our earnings momentum,
evidenced by double digit growth in both earnings per share and return on equity
for both the quarter and year ended December 31, 1998. Equally important, we
have accomplished increases in core earnings per share the past two quarters
without the financial benefit of a stock repurchase program."
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QUARTERLY CASH EARNINGS - $15.4 MILLION
Cash earnings represent the amount by which tangible equity changes each period
due to operating results. Cash earnings include reported earnings plus the
non-cash charges for goodwill amortization and amortization relating to certain
employee stock benefit plans. The Company's performance on a cash earnings basis
is an important analytical measure for investors or potential investors, since
tangible equity generation can be utilized to repurchase stock, pay dividends
and support greater asset and franchise growth.
For the quarter ended December 31, 1998, the Company earned $15.4 million, or
$0.41 per share, in cash earnings, increasing tangible equity by an additional
$2.0 million, or 14.3%, as compared to reported earnings of $13.4 million.
Compared to the fourth quarter in 1997, cash earnings increased $3.8 million, or
32.6%, and cash earnings per share have increased $0.12, or 41.4%.
RECORD LOAN ORIGINATIONS
Roslyn experienced its fourth consecutive quarter of record loan originations.
For the quarter ended December 31, 1998, the Company's loan originations reached
$364.9 million, a 160.6% increase over the prior year's corresponding quarter.
During the past twelve months, the Company has more than doubled its 1997 record
level of annual loan originations. Mr. Mancino stated, "We have made substantial
progress in enhancing our asset generation capabilities through Roslyn National
Mortgage Corporation. This has been accomplished while continuing record levels
in core earnings growth."
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SIXTH CONSECUTIVE QUARTERLY DIVIDEND INCREASE
Consistent with Roslyn's commitment to providing shareholder value, and its
capacity for exceptional earnings, the Board of Directors increased the
quarterly dividend for the sixth consecutive quarter. The Board of Directors, at
their November 20, 1998 meeting, declared a quarterly dividend of $0.11 per
share, which was paid on December 14, 1998 to shareholders of record on December
2, 1998.
BRANCH OPENINGS
On November 30, 1998, Roslyn opened full-service offices in Oceanside and
Smithtown, New York. Currently, deposits aggregated in excess of $37 million in
these offices and have surpassed expectations. "The success of our de novo
strategy has been substantiated by the outstanding performance of our new
branches. This strategy will continue to be an integral part of the Company's
growth initiatives," stated Mr. Mancino.
Additionally, Roslyn National Mortgage Corporation has expanded its loan
origination network by opening four additional mortgage origination offices in
Virginia, New Jersey, Maryland and New York. The mortgage company intends to
continue increasing its loan production capabilities and market share by
expanding its geographic reach through both internal growth and possible
acquisitions.
PROPOSED ACQUISITION OF T R FINANCIAL CORP.
On May 26, 1998, the Board of Directors of Roslyn Bancorp, Inc. and T R
Financial Corp., the holding company for Roosevelt Savings Bank announced the
signing of a definitive agreement to merge the holding companies in an
exchange-of-stock transaction. During the quarter ended December 31, 1998 the
companies received all required regulatory approvals and mailed proxy materials
to shareholders to consider the proposed merger.
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On December 22, 1998, each of the companies shareholders voted overwhelmingly
endorsing the transaction.
On January 24, 1999, the Board of Directors of Roslyn Bancorp, Inc. announced
the Companies will go forward with the proposed merger, and T R Financial's
stockholders will receive 2.05 shares of Roslyn common stock for each share of
T R Financial common stock held. The closing is expected to take place in
February 1999, subject to the satisfaction of customary closing conditions.
"We are excited about this combination of two strong community-minded financial
institutions," stated Mr. Mancino. "This merger will provide Roslyn with the
market share necessary to significantly capitalize on cross-selling our array of
products and quality services to our customers. We will have $7.7 billion in
assets, more than $4.1 billion in deposits, and 25 full-service banking
locations. This significantly strengthens and expands the Roslyn franchise.
Roslyn now becomes one of the top 10 banks in deposit market share in Brooklyn,
Queens, Nassau and Suffolk counties, whose combined populations exceed that of
39 individual states across the nation. In addition, Roslyn is now fifth in
deposit market share in Nassau County which is part of the third highest
statistical area in terms of median household income in the nation."
REVIEW OF RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED DECEMBER 31, 1998
SIGNIFICANT IMPROVEMENT IN NET INTEREST INCOME
Net interest income for the quarter ended December 31, 1998 increased $1.6
million, or 6.5% to $26.2 million from the corresponding prior year quarter. The
increase in net interest income was attributable
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to the increase in average interest-earning assets resulting from growth in the
balances of mortgage loans and debt and equity securities, partially offset by a
decrease in mortgage-backed securities.
Further contributing to net interest income growth, was an improvement in the
Company's net interest rate spread to 2.05%, reflecting a 16 basis point
increase from the prior year quarter. On a linked quarter basis, the net
interest rate spread increased 31 basis points from 1.74% recorded in the third
quarter of 1998. The net interest margin remained relatively unchanged at 2.87%
for the 1998 quarter as compared to 2.85% for the prior year quarter.
POSITIVE TREND IN NON-INTEREST INCOME
Non-interest income, excluding securities gains, totaled $3.0 million for the
quarter ended December 31, 1998, a 91.7% increase over the $1.6 million reported
for the prior year's corresponding quarter. The increase was primarily the
result of a $1.1 million increase in income from mortgage banking operations in
connection with management's decision to increase sales of newly originated
loans into the secondary market, and to a lesser extent, an increase in retail
service fees directly related to the Company's enhanced checking account
products.
Due to the current low rate environment, the Company expects to continue to sell
the majority of its residential originations into the secondary market in an
effort to manage its interest rate risk and increase its income from mortgage
banking operations.
CONTINUED CONTROL OF NON-INTEREST EXPENSE
General and administrative expenses, increased $2.5 million, or 26.5%, to $11.9
million for the quarter ended December 31, 1998. The increase primarily reflects
additional commission and other
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compensation costs associated with the increased volume of loan originations,
and to a lesser extent, an increase in office occupancy expense. The efficiency
ratio for the quarter ended December 31, 1998, was 40.58%, as compared with
50.88% for the comparable 1997 quarter.
REVIEW OF RESULTS OF OPERATIONS FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1998
RECORD EARNINGS
The Company earned a record $52.4 million for the twelve months ended December
31, 1998, an increase of $19.0 million, or 56.9%, from the $33.4 million
reported for the prior year's corresponding twelve month period. The record
earnings for the twelve months ended December 31, 1998 resulted in a return on
average equity and assets of 8.75% and 1.40%, compared to 6.57% and 1.29%, for
the twelve months ended December 31, 1997. Excluding the aforementioned charges
for settlement of asserted claims and funding the Foundation, reported net
income for the year ended December 31, 1997 would have been $43.4 million.
IMPROVED NET INTEREST INCOME
Net interest income increased $3.0 million, or 3.1%, to $101.6 million for the
twelve months ended December 31, 1998 over the comparable period last year. The
increase in net interest income was attributable to the growth in average
interest-earning assets to $3.65 billion for the twelve months ended December
31, 1998 from $3.08 billion for the 1997 period, partially offset by a
corresponding decrease in the average yield to 7.09% from 7.31%. The growth in
interest-earning assets was funded by increases in deposits and borrowings,
along with re-invested cash flows.
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RECORD LEVEL OF NON-INTEREST INCOME
Non-interest income increased $10.1 million, or 108.9%, to $19.3 million for the
twelve months ended December 31, 1998, as compared with $9.2 million for the
comparable period last year. The increase was primarily the result of a $4.6
million increase in income from mortgage banking operations, and a $4.4 million
increase in gains on the sale of securities, and to a lesser extent, by a $1.0
million increase in real estate operations.
NON-INTEREST EXPENSE
General and administrative expenses increased $4.4 million, or 11.0%, to $44.3
million for the twelve months ended December 31, 1998. The increase in 1998,
primarily reflects a full year of costs associated with the Company's
stock-related benefit plans established in the third quarter of 1997, and
additional commission and other compensation costs associated with the increased
volume of loan originations, and to a lesser extent an increase in office
occupancy expense.
The overall decrease in the Company's non-interest expense for the twelve months
ended December 31, 1998, as compared with the 1997 period, relates to one-time
charges incurred in the prior year's corresponding period of $12.7 million
associated with the funding of The Roslyn Savings Foundation and $4.6 million
related to the settlement of asserted claims and professional fees related
thereto.
The Company's efficiency ratio improved to 39.15% for the twelve months ended
December 31, 1998, as compared with 42.33% for the comparable 1997 period. For
the twelve months ended December 31, 1998, Roslyn's efficiency ratio, on a cash
earnings basis, improved to 31.53%, as compared with 36.98% for the
corresponding 1997 period. The 1997 ratios include the effect of the
aforementioned settlement of asserted claims and professional fees related
thereto.
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BALANCE SHEET SUMMARY
Total assets at December 31, 1998 increased to $3.74 billion, or 3.7%, from
$3.60 billion at December 31, 1997, due primarily to an increase in the mortgage
loan portfolio, funded substantially through deposit growth and a redirection of
cash flows from securities. Loans, net, increased $303.4 million, or 30.5%, to
$1.30 billion as compared with $993.6 at prior year end.
The allowance for possible loan losses totaled $24.8 million at December 31,
1998, and represented 2.04% of loans. The provision for possible loan losses
increased to $750,000 for the twelve months ended December 31, 1998, as compared
with $600,000 for the prior corresponding period. Management assesses the level
and adequacy of the allowance for possible loan losses based on the evaluation
of known and inherent risks in the loan portfolio and upon continuing analysis
of the factors underlying the quality of the loan portfolio.
Total deposits increased $128.6 million, or 6.6%, to $2.07 billion at December
31, 1998, as compared to $1.94 billion at December 31, 1997. This increase was
primarily the result of continued growth in Roslyn's newest core deposit
products, Quantam Savings, Free Checking and Charter Money Market. Borrowed
funds decreased $7.0 million to $959.5 million at December 31, 1998 as compared
with $966.5 million for the prior year end.
Stockholders' equity decreased $29.4 million to $598.9 million at December 31,
1998 from $628.3 million at December 31, 1997. This decrease is principally do
to the repurchase of 2,242,500 shares of the Company's common stock and
dividends paid of $15.7 million during the twelve months ended December 31, 1998
and a decrease of $18.5 million in net unrealized gains on securities
available-for-sale, net of taxes, to $14.4 million. Offsetting these decreases
are the twelve months earnings of $52.4
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million, and the amortization of unallocated and unearned shares of common stock
held by the Company's stock-related benefit plans. At December 31, 1998, the
book value per share amounted to $14.47.
Roslyn Bancorp, Inc. is the holding company for The Roslyn Savings Bank, which
operates ten full service banking locations in Nassau and Suffolk counties on
Long Island and fourteen mortgage origination offices of Roslyn National
Mortgage Corporation (a wholly-owned subsidiary of The Roslyn Savings Bank)
operating in New York, New Jersey, Connecticut, Delaware, Pennsylvania,
Virginia, and Maryland.
Statements contained in this news release which are not historical facts are
forward-looking statements, as that term is defined in the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements are subject to
risks and uncertainties which could cause actual results to differ materially
from those currently anticipated due to a number of factors, which include, but
are not limited to, factors discussed in documents filed by the Company with the
Securities and Exchange Commission from time to time.
Roslyn Bancorp, Inc.'s press releases are available by fax at no charge through
Business Wire's News-On-Demand service. For an index of Roslyn Bancorp, Inc.'s
press releases or to obtain a specific release, call (888) 329-4697 or visit us
on the worldwide web at: http://www.roslynsavings.com.
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<TABLE>
<CAPTION>
ROSLYN BANCORP, INC.
(NASDAQ:RSLN)
(IN THOUSANDS, EXCEPT RATIOS AND SHARE AMOUNTS)
DECEMBER 31, DECEMBER 31,
SELECTED FINANCIAL CONDITION DATA 1998 1997
- ---------------------------------
-------------------- -------------------
<S> <C> <C>
Money market investments.............................................. $ 38,000 $ -
Securities available-for-sale......................................... 2,235,283 2,350,826
Securities held-to-maturity........................................... 68,786 202,123
Loans, net of unearned income (1)..................................... 1,297,032 993,603
Allowance for possible loan losses.................................... 24,779 24,029
Total loans, net (1).................................................. 1,272,253 969,574
Intangible assets..................................................... 2,449 2,906
Total assets.......................................................... 3,735,032 3,601,079
Deposits.............................................................. 2,070,831 1,942,245
Borrowed funds........................................................ 959,469 966,451
Total stockholders' equity............................................ 598,898 628,335
Book value per share.................................................. 14.47 14.40
SELECTED FINANCIAL DATA
- -----------------------
CAPITAL (2):
- --------------
Risk based capital
Tier 1............................................................. 23.18 % 26.34 %
Total.............................................................. 24.43 % 27.60 %
Common shares outstanding at the end of the period................... 41,399,959 43,642,459
ASSET QUALITY RATIOS AND DATA:
------------------------------
Non-performing assets as a percent of total assets................... 0.18 % 0.18 %
Non-performing loans as a percent of loans........................... 0.50 % 0.66 %
Allowance for possible loan losses as a percent of loans............. 2.04 % 2.46 %
Allowance for possible loan losses as
a percent of total non-performing loans............................ 405.42 370.82 %
Total non-performing loans........................................... $ 6,112 $ 6,480
Real estate owned, net............................................... 532 157
(1) Includes loans held-for-sale.
(2) The ratios represent the capital ratios of The Roslyn Savings Bank and Subsidiaries.
</TABLE>
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<TABLE>
<CAPTION>
ROSLYN BANCORP, INC.
(NASDAQ:RSLN)
(IN THOUSANDS, EXCEPT RATIOS AND SHARE AMOUNTS)
FOR THE THREE MONTHS FOR THE YEAR ENDED
ENDED DECEMBER 31, DECEMBER 31,
---------------------------- ---------------------------
SELECTED OPERATING DATA 1998 1997 1998 1997
- ----------------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Interest income.................................................. $ 64,587 $ 62,378 $ 258,917 $ 224,964
Interest expense................................................. 38,398 37,795 157,335 126,414
------------ ------------ ------------ ------------
Net interest income before provision for possible loan losses.... 26,189 24,583 101,582 98,550
Provision for possible loan losses............................... - 150 750 600
------------ ------------ ------------ ------------
Net interest income after provision for possible loan losses..... 26,189 24,433 100,832 97,950
------------ ------------ ------------ ------------
Non-interest income:
- --------------------
Fees and service charges......................................... 786 469 2,799 2,286
Mortgage banking operations...................................... 2,121 998 8,126 3,508
Net gains on securities.......................................... 1,231 1,491 7,175 2,757
Real estate operations, net...................................... 103 (118) 869 (172)
Other non-interest income........................................ 23 233 353 869
------------ ------------ ------------ ------------
Total non-interest income.................................... 4,264 3,073 19,322 9,248
------------ ------------ ------------ ------------
Non-interest expense:
- ---------------------
General and administrative expenses.............................. 11,862 9,378 44,250 39,875
Amortization of excess of cost over fair value of net
assets acquired................................................ 118 117 471 469
Charitable contribution to The Roslyn Savings Foundation......... - - - 12,711
Settlement of asserted claims.................................... - 4,000 - 4,680
------------ ------------ ------------ ------------
Total non-interest expense................................... 11,980 13,495 44,721 57,735
------------ ------------ ------------ ------------
Income before provision for income taxes......................... 18,473 14,011 75,433 49,463
Provision for income taxes....................................... 5,032 4,586 23,029 16,073
------------ ------------ ------------ ------------
Net income....................................................... $ 13,441 $ 9,425 $ 52,404 $ 33,390
============ ============ ============ ============
Basic and diluted earnings per share............................. 0.35 0.24 1.36 0.83
Basic and diluted earnings per share excluding charitable
contribution to The Roslyn Savings Foundation.................. - - - 1.01
Basic and diluted earnings per share (core basis) (1)............ 0.34 0.27 1.25 1.04
(1) Represents reported earnings per share adjusted for net gains on sales of securities
and other 1997 one-time items, net of tax.
</TABLE>
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<TABLE>
<CAPTION>
ROSLYN BANCORP, INC.
(NASDAQ:RSLN)
(IN THOUSANDS, EXCEPT RATIOS AND SHARE AMOUNTS)
FOR THE THREE MONTHS FOR THE YEAR ENDED
ENDED DECEMBER 31, DECEMBER 31,
------------------------------- ---------------------------
PERFORMANCE RATIOS: 1998 1997 (1) 1998 1997 (1)
- ------------------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Return on average assets............................. 1.44 % 1.07 % 1.40 % 1.29 %
Return on average stockholders' equity............... 9.13 % 6.13 % 8.75 % 6.57 %(2)
Net interest rate spread ............................ 2.05 % 1.89 % 1.91 % 2.20 %
Net interest margin ................................. 2.87 % 2.85 % 2.78 % 3.20 %
Operating expenses to average assets................. 1.27 % 1.52 % 1.18 % 1.41 %
Net interest income to operating expenses............ 220.78 % 183.76 % 229.56 % 221.19 %
Efficiency Ratio .................................... 40.58 % 50.88 % 39.15 % 42.33 %
(1) The ratios shown for the quarter and year ended December 31, 1997, include, on an after-tax basis, $2.3 million and $2.7
million, respectively, of charges for settlement of asserted claims including professional fees related thereto
and exclude the $7.4 million after-tax effect of the shares contributed to The Roslyn Savings Foundation.
(2) The ratio shown assumes that the conversion was completed on January 1, 1997. The actual return on average stockholders'
equity based on the January 10, 1997 conversion rate was 6.70%.
</TABLE>
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<TABLE>
<CAPTION>
ROSLYN BANCORP, INC.
(NASDAQ:RSLN)
(IN THOUSANDS, EXCEPT RATIOS AND SHARE AMOUNTS)
THREE MONTHS ENDED FOR THE YEAR ENDED
DECEMBER 31, DECEMBER 31,
----------------------------- ------------------------------
ACTUAL CONTRIBUTIONS TO
STOCKHOLDERS' EQUITY AND 1998 1997 (1) 1998 1997 (1)
RESULTANT CASH EARNINGS DATA:
---------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Return on average assets............................. 1.64 % 1.32 % 1.65 % 1.65 %
Return on average stockholders' equity............... 10.43 % 7.53 % 10.26 % 8.42 %(2)
Operating expenses to average assets................. 1.07 % 1.29 % 0.95 % 1.23 %
Net interest income to operating expenses............ 260.28 % 216.76 % 285.04 % 253.17 %
Efficiency ratio..................................... 34.42 % 43.13 % 31.53 % 36.98 %
Basic and diluted earnings per share................. $ 0.41 $ 0.29 $ 1.60 $ 1.30
(1) The ratios shown for the quarter and year ended December 31, 1997, include, on an after-tax basis, $2.3 million and $2.7
million, respectively, of charges for settlement of asserted claims including professional fees related thereto
and exclude the $7.4 million after-tax effect of the shares contributed to The Roslyn Savings Foundation.
(2) The ratio shown assumes that the conversion was completed on January 1, 1997. The return on average stockholders'
equity based on the January 10, 1997 conversion date was 8.59%.
</TABLE>