<PAGE>
<PAGE>
As Filed with The Securities and Exchange Commission on June 18, 1997.
Registration No. 333-22127
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
POST-EFFECTIVE AMENDMENT NO. 2
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------------
GREATER NEW YORK BANCORP INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 6036 13-3930370
(State or other jurisdiction of (Primary Standard Industrial (I.R.S Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
One Penn Plaza
New York, New York 10119
(212) 613-4000
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Robert P. Carlson
Senior Vice President, Counsel and Secretary
Greater New York Bancorp Inc.
One Penn Plaza
New York, New York 10119
(212) 613-4000
(Name and address, including zip code, and telephone number,
including area code, of agent for service)
---------------------------
Copies to:
Mark J. Menting
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
(212) 558-4000
---------------------------
Approximate date of commencement of proposed sale to the public: At the
effective time as described in the attached Joint Proxy Statement/Prospectus.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. |X|
---------------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=======================================================================================================================
Proposed
Maximum Proposed
Offering Maximum Amount of
Title of Each Class of Amount to be Price Per Aggregate Registration
Securities to be Registered Registered Unit Offering Price Fee
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $1.00 per share(1)
(including rights to purchase shares
of Junior Participating Preferred Stock,
par value $1.00 per share) 13,850,000 shs.(1) $14.00(3) $193,900,000(3) $58,757.58(5)
- -------------------------------------------------------------------------------------------------------------------------
Series A ESOP Convertible Preferred Stock, par value
$1.00 per share (including an indeterminate amount of
Common Stock, par value $1.00 per share, issuable upon
conversion thereof, and the attached rights to purchase
shares of Junior Participating Preferred Stock,
par value $1.00 per share) $1,536,391 shs.(2) $13.00(4) $ 19,973,083(4) $ 6,052.45(5)
=========================================================================================================================
</TABLE>
<PAGE>
<PAGE>
(footnotes from cover page)
(1) The number of shares of common stock of Greater New York Bancorp Inc.
("Bancorp Common Stock") to be issued in the share exchange described
herein (the "share exchange") cannot be precisely determined at the time
this Registration Statement becomes effective because shares of common
stock of The Greater New York Savings Bank ("Bank Common Stock") may be
issued thereafter and prior to the effective time of the share exchange
pursuant to the Bank's Employee Stock Ownership Plan, Long-Term Incentive
Program, 1996 Non-Employee Directors Stock Option Plan and 1996
Equity Incentive Plan. The Registration Statement covers a number of
shares of Bancorp Common Stock which is estimated to be at least as
large as the number of shares of Bank Common Stock which are expected to
be outstanding at the effective time of the share exchange. See the
undertaking in Item 22(4) in Part II of this Registration Statement.
(2) The number of shares of Series A ESOP Convertible Preferred Stock of
Bancorp ("Bancorp Series A Preferred Stock") to be issued in the share
exchange cannot be precisely determined at the time this Registration
Statement becomes effective because shares of Series A ESOP Convertible
Preferred Stock of the Bank (Bank Series A Preferred Stock") may be
retired thereafter and prior to the effective time of the share exchange
pursuant to the Bank's Employee Stock Ownership Plan. This Registration
Statement covers a number of shares of Bancorp Series A Preferred Stock
which is estimated to be at least as large as the number of shares of Bank
Series A Preferred Stock which are expected to be outstanding at the
effective time of the share exchange. See the undertaking in Item 22(4)
in Part II of this Registration Statement.
(3) Estimated pursuant to Rule 457(f)(1) of the Securities Act of 1933 (the
"Securities Act"), based upon the per share market value of the shares of
Bank Common Stock to be exchanged in the share exchange, which is deemed to
be the average of the reported high and low sales prices of a share of Bank
Common Stock on the National Association of Securities Dealers Automated
Quotation System on February 14, 1997.
(4) Estimated pursuant to Rule 457(f)(2) of the Securities Act, based upon the
book value of such shares of stock on February 19, 1997.
(5) Registration Fee previously paid.
<PAGE>
<PAGE>
Item 21. Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description of Document
- ------ -----------------------------------------------------------------------------------------------------------
<S> <C>
2 -- Agreement and Plan of Reorganization (attached to Proxy Statement/Prospectus as
Appendix A).
3.1 -- Amended and Restated Certificate of Incorporation of Greater New York Bancorp Inc. (attached to Proxy
Statement/Prospectus as Exhibit 1 to Appendix A).
3.2 -- By-Laws of Greater New York Bancorp Inc. (attached to Proxy Statement/Prospectus as Exhibit 2 to
Appendix A).
4.1 -- Instruments defining the rights of security holders. (Amended and Restated Certificate of Incorporation and
By-Laws, incorporated by reference to Exhibits 1 and 2, respectively, to Appendix A to the Proxy
Statement/Prospectus included in the Registration Statement.)
4.2 -- Bancorp Rights Agreement
5 -- Opinion of Sullivan & Cromwell as to validity of securities.
8 -- Opinion of Sullivan & Cromwell as to tax matters.
12 -- Computation of Consolidated Ratios of Earnings to Combined Fixed Charges and Preferred
Stock Dividend Requirements.
21 -- Subsidiaries of Greater New York Bancorp Inc.
23.1 -- Consent of Sullivan & Cromwell (included in Exhibits 5 and 8 hereto)
23.2 -- Consent of KPMG Peat Marwick LLP.
23.3 -- Consent of Persons About to Become Directors.
99.1 -- Form of Proxy Card.
99.2 -- Annual Report on Form F-2 of The Greater New York Savings Bank for the fiscal year ended December 31,
1996 with all exhibits thereto, as filed with the Federal Deposit Insurance Corporation.
99.3 -- Form F-3, filed with the Federal Deposit Insurance Corporation
on April 10, 1997.
99.4 -- Letter to Stockholders, dated April 10, 1997.
99.5 -- Quarterly Report on Form 10-Q of The Greater New York Savings Bank for the Quarter Ended March 31, 1997
with all exhibits thereto, as filed with the Federal Deposit Insurance Corporation.
99.6 -- Registration Statement on Form F-1 of The Greater New York Savings Bank, filed with the Federal Deposit
Insurance Corporation on May 5, 1987.
</TABLE>
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in The City of New York,
State of New York on this 18th day of June 1997.
Greater New York Bancorp Inc.
By: /s/ Gerard C. Keegan
------------------------------
Name: Gerard C. Keegan
Title: Director, Chief Executive Officer
and President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on June 18, 1997.
<TABLE>
<CAPTION>
Signature Title
--------- ------
<S> <C>
Principal Executive Officer and Sole Director:
/s/ Gerard C. Keegan Director, Chief Executive Officer and President
-------------------------------------
(Gerard C. Keegan)
Controller:
/s/ Philip T. Spies Senior Vice President and Controller
-------------------------------------
(Philip T. Spies)
</TABLE>
<PAGE>
<PAGE>
Exhibit Index
<TABLE>
<CAPTION>
Exhibit
Number Description of Document Location
------- ----------------------- --------
<S> <C> <C> <C>
2 -- Agreement and Plan of Reorganization. ................ Incorporated by reference to Appendix A to
the Proxy Statement/Prospectus included in
the Registration Statement.
3.1 -- Amended and Restated Certificate of Incorporation of
Greater New York Bancorp Inc. ........................ Incorporated by reference to Exhibit 1 to
Appendix A to the Proxy
Statement/Prospectus included in the
Registration Statement.
3.2 -- By-Laws of Greater New York Bancorp Inc. ............. Incorporated by reference to Exhibit 2 to
Appendix A to the Proxy
Statement/Prospectus included in the
Registration Statement.
4.1 -- Instruments defining the rights of security
holders .............................................. Amended and Restated Certificate of
Incorporation and By-Laws, incorporated by
reference to Exhibits 1 and 2,
respectively, to Appendix A to the Proxy
Statement/Prospectus included in the
Registration Statement.
4.2 -- Bancorp Rights Agreement.............................. Previously filed.
5 -- Opinion of Sullivan & Cromwell as to validity of
securities. .......................................... Previously filed.
8 -- Opinion of Sullivan & Cromwell as to tax matters. .... Previously filed.
12 -- Computation of Consolidated Ratios of Earnings to
Combined Fixed Charges and Preferred Stock Dividend
Requirements.......................................... Previously filed.
21 -- Subsidiaries of Greater New York Bancorp Inc. ........ Previously filed.
23.1 -- Consent of Sullivan & Cromwell (included in Exhibits 5
and 8). .............................................. Previously filed.
23.2 -- Consent of KPMG Peat Marwick LLP. .................... Previously filed.
23.3 -- Consent of Persons About to become Directors.......... Previously filed.
99.1 -- Form of Proxy Card ................................... Previously filed.
99.2 -- Annual Report on Form F-2 of The Greater New York
Savings Bank for the fiscal year ended December 31,
1996, as filed with the Federal Deposit Insurance
Corporation (including as exhibits thereto the Bank's
Restated Organization Certificate, Bank Bylaws, Rights
Agreement, material employment agreements, material
severance agreements, director, officer and employee
benefit plans, statement re: computation of earnings
per share for the years ended December 31, 1996, 1995
and 1994, financial data schedule and 1996 Annual
Report to Stockholders (pages 23-76 and 79)).......... Previously filed.
99.3 -- Form F-3, filed with the Federal Deposit Insurance
Corporation on April 10, 1997......................... Previously filed.
99.4 -- Letter to Stockholders, dated April 10, 1997. ........ Previously filed.
99.5 -- Quarterly Report on Form 10-Q of The Greater New York
Savings Bank for the Quarter Ended March 31, 1997
with all exhibits thereto, as filed with the Federal
Deposit Insurance Corporation.......................... Filed herewith.
99.6 -- Registration Statement on Form F-1 of The Greater
New York Savings Bank, filed with the Federal Deposit
Insurance Corporation on May 5, 1987 (including only
the cover page, page 10 and pages 70-75 of exhibit (a)
"Offering Circular dated April 10, 1987" thereto). ... Filed herewith.
</TABLE>
<PAGE>
<PAGE>
EXHIBIT 99.5
FEDERAL DEPOSIT INSURANCE CORPORATION
Washington, D.C. 20429
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED MARCH 31, 1997
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ______ TO _______
FDIC Insurance Certificate No. 16015-6
THE GREATER NEW YORK SAVINGS BANK
---------------------------------
(Exact name of bank as specified in its charter)
<TABLE>
<S> <C>
One Penn Plaza, New York, NY 10119 New York
- ---------------------------------- ---------------------------------------------
(Address of administrative office) (State or other jurisdiction of incorporation
or organization)
11-0754650 (212) 613-4000
- ------------------------------------ ---------------------------------------------
(I.R.S. Employer Identification No.) (Bank's telephone number, including area code)
</TABLE>
Indicate by check mark whether the Bank (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 Bank was required to
file such reports): Yes XX No ; and (2) has been subject to such filing
requirements for the past 90 days: Yes XX No .
-- -
Securities registered pursuant to Section 12(g) of the Securities Exchange Act
of 1934:
(Title of Each Class)
Common Stock, $1.00 par value per share
---------------------------------------
12% Noncumulative Perpetual Preferred Stock, Series B
(Liquidation Preference $25.00 per share; $1.00 par value per share)
--------------------------------------------------------------------
Junior Participating Preferred Stock Purchase Rights
----------------------------------------------------
Number of shares outstanding of the Bank's Common Stock as of April 30, 1997
was: 13,679,565
<PAGE>
<PAGE>
THE GREATER NEW YORK SAVINGS BANK AND SUBSIDIARIES
FORM 10-Q
MARCH 31, 1997
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Statements of Financial Condition as of March 31, 1997 and
December 31, 1996..................................................................... 1
Consolidated Statements of Income for the Quarter Ended March 31, 1997
and 1996.............................................................................. 2
Consolidated Statements of Changes in Stockholders' Equity for the Quarter
Ended March 31, 1997 and 1996......................................................... 3
Consolidated Statements of Cash Flows for the Quarter Ended March 31, 1997
and 1996.............................................................................. 4
Notes to Consolidated Financial Statements.............................................. 5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.............................................................. 10
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.................................................................. 27
ITEM 2. CHANGES IN SECURITIES.............................................................. 27
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS................................ 28
ITEM 6. EXHIBITS AND REPORTS ON FORM F-3 (EQUIVALENT TO FORM 8-K).................... ..... 28
SIGNATURES.................................................................................... 29
</TABLE>
<PAGE>
<PAGE>
THE GREATER NEW YORK SAVINGS BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
(UNAUDITED)
AT MAR. 31, AT DEC. 31,
($ in thousands, except par value) 1997 1996 CHANGE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Cash and due from banks $ 23,279 $ 22,396 $ 883
Federal funds sold 8,300 5,750 2,550
Securities available for sale, net, at estimated fair value 209,274 215,961 (6,687)
Securities held to maturity, net:
Mortgage-backed securities, net (estimated fair value
of $1,065,741 and $1,027,922, respectively) 1,082,140 1,042,843 39,297
Other bonds and notes, net (estimated fair value
of $129,052 and $131,117, respectively) 130,570 131,478 (908)
Federal Home Loan Bank of NY stock, at cost 23,600 23,600 -
Loans receivable, net:
Mortgage loans on real estate 816,341 835,600 (19,259)
Other loans 147,458 132,968 14,490
-----------------------------------------
Loans receivable 963,799 968,568 (4,769)
Allowance for loan losses (16,579) (17,228) 649
-----------------------------------------
Loans receivable, net 947,220 951,340 (4,120)
Accrued interest receivable 13,552 15,343 (1,791)
Premises and equipment, net 28,567 28,273 294
Deferred tax asset, net 43,213 45,365 (2,152)
Other assets 60,818 59,539 1,279
- -----------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 2,570,533 $ 2,541,888 $ 28,645
- -----------------------------------------------------------------------------------------------------------
LIABILITIES
Deposits $ 1,667,433 $ 1,666,674 $ 759
Borrowed funds, including securities sold under agreements
to repurchase of $439,500 and $409,500, respectively 670,108 640,384 29,724
Accrued expenses and other liabilities 20,178 25,182 (5,004)
- -----------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 2,357,719 2,332,240 25,479
- -----------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
Preferred stock, 8.25%, cumulative, ESOP convertible Series A
($1.00 par value, 1,800,000 shares authorized, 1,478,077
and 1,536,391 shares issued and outstanding, respectively) 1,478 1,537 (59)
Preferred stock, 12%, noncumulative, perpetual Series B
($1.00 par value, 2,000,000 shares authorized, issued
and outstanding) 2,000 2,000 -
Additional paid-in-capital preferred 62,411 63,111 (700)
ESOP debt guarantee (14,230) (14,230) -
Common stock ($1.00 par value, 45,000,000 shares
authorized, 13,677,565 and 13,534,448 shares
issued and outstanding, respectively) 13,678 13,534 144
Additional paid-in-capital common 104,526 102,883 1,643
Surplus fund 22,998 22,998 -
Undivided profits 20,368 17,845 2,523
Net unrealized loss on securities available for sale, net of
taxes (415) (30) (385)
- -----------------------------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY 212,814 209,648 3,166
- -----------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,570,533 $ 2,541,888 $ 28,645
- -----------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
1
<PAGE>
<PAGE>
THE GREATER NEW YORK SAVINGS BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE QUARTER ENDED
MARCH 31,
-------------------------
($ in thousands, except per share data) 1997 1996 CHANGE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INTEREST AND DIVIDEND INCOME
Mortgage loans on real estate $17,475 $20,150 $ (2,675)
Other loans 2,733 2,560 173
--------------------------------------
Total interest on loans 20,208 22,710 (2,502)
Securities available for sale 3,588 3,267 321
Securities held to maturity:
Mortgage-backed securities 17,714 15,999 1,715
Other bonds and notes 2,072 2,132 (60)
Other 483 604 (121)
- ---------------------------------------------------------------------------------------------------------
TOTAL INTEREST AND DIVIDEND INCOME 44,065 44,712 (647)
- ---------------------------------------------------------------------------------------------------------
INTEREST EXPENSE
Deposits 15,868 17,097 (1,229)
Securities sold under agreements to repurchase 5,760 5,569 191
Other borrowed funds 3,541 4,066 (525)
- ---------------------------------------------------------------------------------------------------------
TOTAL INTEREST EXPENSE 25,169 26,732 (1,563)
- ---------------------------------------------------------------------------------------------------------
NET INTEREST AND DIVIDEND INCOME 18,896 17,980 916
Provision for loan losses - 500 (500)
- ---------------------------------------------------------------------------------------------------------
NET INTEREST AND DIVIDEND INCOME AFTER PROVISION FOR LOAN LOSSES 18,896 17,480 1,416
- ---------------------------------------------------------------------------------------------------------
NONINTEREST INCOME
Income from mortgage activities 395 545 (150)
Customer service fees 962 856 106
Fees from sales of investment products 447 488 (41)
Other 237 104 133
- ---------------------------------------------------------------------------------------------------------
TOTAL NONINTEREST INCOME 2,041 1,993 48
- ---------------------------------------------------------------------------------------------------------
NONINTEREST EXPENSES
Compensation and benefits 5,728 6,009 (281)
Occupancy, net 1,969 1,972 (3)
Equipment and data processing services 1,532 1,481 51
Advertising and promotion 420 342 78
Federal deposit insurance premiums 180 126 54
Provision for real estate losses 500 - 500
Nonperforming loan and real estate activities 992 843 149
Other 2,103 2,046 57
- ---------------------------------------------------------------------------------------------------------
TOTAL NONINTEREST EXPENSES 13,424 12,819 605
- ---------------------------------------------------------------------------------------------------------
Income before taxes 7,513 6,654 859
Tax expense 2,810 2,442 368
- ---------------------------------------------------------------------------------------------------------
NET INCOME $ 4,703 $ 4,212 $ 491
- ---------------------------------------------------------------------------------------------------------
PRIMARY EARNINGS PER SHARE $ 0.21 $ 0.18 $ 0.03
FULLY DILUTED EARNINGS PER SHARE 0.20 0.17 0.03
DIVIDENDS DECLARED PER COMMON SHARE 0.05 - 0.05
- ---------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE>
<PAGE>
THE GREATER NEW YORK SAVINGS BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE QUARTER ENDED
MARCH 31,
------------------------------
($ in thousands) 1997 1996
---------------------------------------------------------------------------------------------------
<S> <C> <C>
PREFERRED STOCK - SERIES A
Balance at beginning of period $ 1,537 $ 1,595
Conversion of 58,314 shares to common stock (59) -
---------------------------------------------------------------------------------------------------
BALANCE AT END PERIOD 1,478 1,595
---------------------------------------------------------------------------------------------------
PREFERRED STOCK - SERIES B
---------------------------------------------------------------------------------------------------
Balance at beginning and end of period 2,000 2,000
---------------------------------------------------------------------------------------------------
ADDITIONAL PAID-IN-CAPITAL, PREFERRED
Balance at beginning of period 63,111 63,810
Conversion of 58,314 shares to common stock (700) -
---------------------------------------------------------------------------------------------------
Balance at end of period 62,411 63,810
---------------------------------------------------------------------------------------------------
ESOP DEBT GUARANTEE
---------------------------------------------------------------------------------------------------
Balance at beginning and end of period (14,230) (15,670)
---------------------------------------------------------------------------------------------------
COMMON STOCK
Balance at beginning of period 13,534 13,289
Issuance of 143,117 shares of common stock 144 -
---------------------------------------------------------------------------------------------------
Balance at end of period 13,678 13,289
---------------------------------------------------------------------------------------------------
ADDITIONAL PAID-IN CAPITAL, COMMON
Balance at beginning of period 102,883 100,648
Issuance of 143,117 shares of common stock, including tax benefit 1,643 -
---------------------------------------------------------------------------------------------------
Balance at end of period 104,526 100,648
---------------------------------------------------------------------------------------------------
SURPLUS FUND
---------------------------------------------------------------------------------------------------
Balance at beginning and end of period 22,998 22,998
---------------------------------------------------------------------------------------------------
UNDIVIDED PROFITS
Balance at beginning of period 17,845 7,231
Net income 4,703 4,212
Dividends declared on preferred stock (1,500) (1,500)
Dividends declared on common stock (680) -
---------------------------------------------------------------------------------------------------
Balance at end of period 20,368 9,943
---------------------------------------------------------------------------------------------------
NET UNREALIZED LOSS ON SECURITIES AVAILABLE FOR SALE, NET OF TAXES
Balance at beginning of period (30) 36
Change in net unrealized loss, net of taxes (385) (560)
---------------------------------------------------------------------------------------------------
Balance at end of period (415) (524)
---------------------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY AT END OF PERIOD $212,814 $198,089
---------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
<PAGE>
THE GREATER NEW YORK SAVINGS BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE QUARTER ENDED
MARCH 31,
--------------------------
($ IN THOUSANDS) 1997 1996
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 4,703 $ 4,212
Items to reconcile net income to net cash provided (used) by
operating activities:
Depreciation and amortization 559 580
Provision for loan and real estate losses 500 500
Deferred tax expense 2,672 2,305
Decrease in net deferred fees (141) (226)
Accretion of (discounts) and amortization of premiums, net (333) 447
Net (gain) loss on sales of assets and loans originated for sale (26) 10
(Originations) and sales of loans originated for sale, net (2,762) 851
Increase in accrued interest receivable and other assets (42) (1,848)
Decrease in accrued expenses and other liabilities (4,179) (11,524)
- ----------------------------------------------------------------------------------------------------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 951 (4,693)
- ----------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Principal repayments of securities for sale 5,944 6,887
Purchases of securities available for sale - (1,732)
Principal repayments of mortgage-backed securities 41,836 52,330
Purchases of mortgage-backed securities (81,856) (71,192)
Principal repayments of other bonds and notes 904 1,511
Principal repayments and sales of loans receivable 48,166 25,758
Originations and purchase of loans receivable (42,258) (16,244)
Sales of other real estate 2,348 3,656
Purchases of premises and equipment, net (853) (337)
Investment in joint ventures, net (62) (103)
- ----------------------------------------------------------------------------------------------------
NET CASH (USED) PROVIDED BY INVESTING ACTIVITIES (25,831) 534
- ----------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Increase in deposits 759 14,240
Proceeds from securities sold under agreements to repurchase,
maturing in 90 days or less, net 30,000 144,000
Proceeds from borrowed funds - 15,000
Repayment of borrowed funds (276) (170,264)
Dividends paid on preferred stock (2,325) (2,355)
Dividends paid on common stock (680) -
Proceeds from issuance of common stock 835 -
- ----------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 28,313 621
- ----------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 3,433 (3,538)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 28,146 26,502
- ----------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 31,579 $ 22,964
- ----------------------------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURES
Cash paid during the period for:
Interest $ 25,631 $ 29,708
Income taxes, net 192 178
Noncash investing activities:
Loans to finance sales of real estate 1,800 1,092
Loans transferred to (from) real estate acquired through foreclosure,
net 2,433 (1,204)
Noncash financing activities:
Conversion of preferred stock to common stock 759 -
- ----------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
<PAGE>
THE GREATER NEW YORK SAVINGS BANK AND SUBSIDIARIES (the BANK)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL
The consolidated financial statements in this report have not been
audited except for the information derived from the audited Consolidated
Statement of Financial Condition as of December 31, 1996. These
statements should be read in conjunction with the consolidated financial
statements and related notes thereto included in the Bank's Annual
Report to Stockholders and in the related Annual Report on Form F-2 for
the year ended December 31, 1996.
In the opinion of management, all material adjustments necessary for a
fair presentation of financial condition and results of operations for
the interim periods presented have been made. These adjustments are of a
normal recurring nature. In preparing the consolidated financial
statements, management is required to make estimates and assumptions
that affect the reported amounts of assets, liabilities, revenues and
expenses. Actual results could differ from those estimates. Material
estimates that are particularly susceptible to change in the near term
relate to the determination of the allowances for loan and real estate
losses and the valuation allowance for deferred tax assets. The results
of operations for the 1997 interim period are not necessarily indicative
of results that may be expected for the entire year or any other interim
period. Certain reclassifications have been made to prior period amounts
appearing on the consolidated statements of income and cash flows to
conform to the current period's presentation.
On March 31, 1997, the Bank adopted early, as provided, the Federal
Deposit Insurance Corporation's revised regulations (revised on February
4, 1997) detailing registration and reporting requirements for nonmember
insured banks with securities registered under section 12 of the
Securities Exchange Act of 1934. The revised regulations incorporate
through cross reference the corresponding regulations of the Securities
and Exchange Commission into the provisions of the FDIC's securities
regulations.
2. EARNINGS PER SHARE
Primary earnings per share is calculated by dividing net income less
preferred stock dividend requirements by the weighted-average number of
shares of common stock and dilutive common stock equivalents
outstanding. Common stock equivalents consist of options to purchase
common stock.
5
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Fully diluted earnings per share is calculated by dividing net income
less preferred stock dividend requirements and certain adjustments by
the weighted-average number of shares of common stock, dilutive common
stock equivalents and other potentially dilutive securities outstanding.
The adjustments to net income represent the elimination of ESOP
dividends and the addition of incremental expense, which would arise as
a result of a hypothetical conversion into common stock of the ESOP
preferred shares. Other potentially dilutive securities represent the
shares of common stock that would arise from such a conversion.
Preferred stock dividend requirements, adjusted net income applicable to
common stock and the average number of shares used for primary and fully
diluted earnings per share computations are summarized as follows:
<TABLE>
<CAPTION>
FOR THE QUARTER ENDED MARCH 31,
--------------------------------
($ IN THOUSANDS) 1997 1996
----------------------------------------------------------------------------------------------
<S> <C> <C>
PREFERRED DIVIDEND REQUIREMENTS $1,802 $1,806
ADJUSTED NET INCOME APPLICABLE TO (1):
PRIMARY EARNINGS PER SHARE $2,901 $2,406
FULLY DILUTED EARNINGS PER SHARE $3,004 $2,502
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 13,610,074 13,289,356
AVERAGE NUMBER OF COMMON AND DILUTIVE COMMON
EQUIVALENT SHARES OUTSTANDING FOR:
PRIMARY EARNINGS PER SHARE 13,884,527 13,497,537
FULLY DILUTED EARNINGS PER SHARE 15,361,009 15,114,283
----------------------------------------------------------------------------------------------
</TABLE>
(1) See Exhibit 11 for a computation of adjusted net income.
3. ACCOUNTING DEVELOPMENTS
In June 1996, the Financial Accounting Standards Board issued SFAS No.
125, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities," which, among other things, establishes
accounting and reporting standards on the captioned subject matter based
on a consistent application of a financial components approach that
focuses on control. Under this approach, subsequent to a transfer of
financial assets, a company must recognize the financial and servicing
assets it controls and liabilities it has incurred, derecognize
financial assets when control has been surrendered, and derecognize
liabilities when they have been extinguished. Criteria for
distinguishing transfers of financial assets that are sales from those
that are secured borrowings are provided in the statement. A transfer
not meeting the criteria for a sale must be accounted for as a secured
borrowing with a pledge of collateral.
6
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
SFAS No. 125 also amends SFAS No. 115, "Accounting for Certain
Investments in Debt and Equity Securities," to prohibit the
classification of a debt security as held to maturity if it can be
prepaid or otherwise settled in such a way whereby the holder of the
security would not recover substantially all of its recorded investment.
It further requires that loans and other assets that can be similarly
prepaid or settled, be subsequently measured like debt securities
classified as available for sale or trading under SFAS No. 115, as
amended. SFAS No. 125 also amends and extends to all servicing assets
and liabilities the accounting standards for mortgage servicing rights
now in SFAS No. 65, "Accounting for Certain Mortgage Banking
Activities," and supersedes SFAS No. 122, "Accounting for Mortgage
Servicing Rights."
SFAS No. 125 was amended by SFAS No. 127, "Deferral of the Effective
Date of Certain Provisions of SFAS No. 125." SFAS No. 127 postpones the
effective date of transactions occurring after December 31, 1996 by one
year for certain provisions of SFAS No. 125. Specifically, paragraph 15
of SFAS No. 125 (secured borrowings and collateral) is deferred for all
transfers of financial assets until after December 31, 1997. Likewise,
paragraphs 9-12 of SFAS No. 125 (accounting for transfers) are deferred
until after December 31, 1997, but only for repurchase agreements,
dollar-rolls, securities lending, and similar transactions. On January
1, 1997, the Bank adopted SFAS No. 125 and 127. The adoption of these
standards did not have any impact on the Bank's consolidated financial
statements.
In February 1997, SFAS No. 128, "Earnings per Share," was issued. This
statement establishes standards for computing and presenting earnings
per share (EPS) and applies to entities with publicly held common stock
or potential common stock. The statement simplifies the standards for
computing earnings per share previously found in APB Opinion No. 15,
"Earnings per Share," and makes them comparable to international EPS
standards. It replaces the presentation of primary EPS with a
presentation of basic EPS. It also requires dual presentation of basic
and diluted EPS on the face of the income statement for all entities
with complex capital structures and requires a reconciliation of the
numerator and denominator of the basic EPS computation to the numerator
and denominator of the diluted EPS computation.
Basic EPS excludes dilution and is computed by dividing income
applicable 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, or
resulted in the issuance of common stock that then shared in the
earnings of the entity. Diluted EPS is computed similarly to fully
7
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
diluted EPS pursuant to APB Opinion No. 15. This statement supersedes
APB Opinion No. 15 and AICPA Accounting Interpretations 1-102 of APB
Opinion No. 15. It also supersedes or amends other various accounting
pronouncements. The provisions in this statement are substantially the
same as those in International Accounting Standard 33, "Earnings per
Share," recently issued by the International Accounting Standards
Committee. SFAS No. 128 is effective for financial statements issued for
periods ending after December 15, 1997, including interim periods;
earlier application is not permitted. This statement also requires
restatement of all prior-period EPS data presented. The adoption of this
standard is not expected to have a material effect on the Bank's
computation of earnings per share.
In February 1997, SFAS No. 129, "Disclosure of Information about Capital
Structure," was issued and is effective for financial statements for
periods ending after December 15, 1997. The statement codifies the
disclosure requirements about capital structure contained in APB
Opinions No. 10, "Omnibus Opinion," and No. 15, "Earnings per Share,"
and SFAS No. 47, "Disclosures of Long-Term Obligations." Since the Bank
was previously subject to, and complied with, these disclosure
requirements as applicable, the adoption of this statement will have no
effect on the Bank's financial statement disclosures.
4. PROPOSED MERGER AGREEMENT
On March 29, 1997, the Bank entered into an Agreement and Plan of Merger
(the Merger Agreement) with Astoria Financial Corporation (Astoria
Financial), a Delaware corporation, and Astoria Federal Savings and Loan
Association, a federally chartered savings and loan association and a
wholly-owned subsidiary of Astoria Financial (the Association). The
Merger Agreement provides, among other things, that the Bank will be
merged with and into the Association, with the Association being the
surviving corporation (the Merger).
Pursuant to the Merger Agreement, each share of common stock of the Bank
issued and outstanding at the Effective Time (as defined in the Merger
Agreement) will be converted into the right to receive either 0.50
shares of Astoria Financial common stock or $19.00 in cash (with 75% of
the Bank's common shares being converted into Astoria Financial common
stock and 25% being exchanged for cash) subject to certain election and
allocation procedures as described in the Merger Agreement. In addition,
the outstanding shares of 12% Noncumulative Perpetual Preferred Stock,
Series B, of the Bank will be converted into a newly-created series of
preferred stock of Astoria Financial with substantially identical and no
less favorable terms.
8
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Consummation of the Merger is subject to the satisfaction of certain
conditions, including approval of the stockholders and the appropriate
regulatory agencies of both Astoria Financial and the Bank. The Merger
Agreement contains restrictions on the operations of the Bank pending
completion of the Merger.
The Bank has the right to terminate the Merger Agreement if the market
value of Astoria Financial (as defined in the Merger Agreement) falls
below $30.30 per share and such decline in value is 15% greater than the
percentage decline of a group of similar financial institutions, unless
Astoria Financial delivers to the Bank's stockholders Astoria Financial
shares having a minimum value established pursuant to a formula set
forth in the Merger Agreement.
In connection with the Merger Agreement, Astoria Financial and the Bank
also entered into a Stock Option Agreement dated March 29, 1997 (the
Option Agreement), pursuant to which the Bank granted Astoria Financial
an option to purchase up to 2,721,536 shares of the Bank's common stock,
upon the terms and conditions stated therein. The Merger Agreement also
includes a provision for a $5 million termination fee that is payable to
Astoria Financial by the Bank if the transaction is not completed under
certain circumstances. The maximum total profit Astoria Financial can
receive under the Option Agreement and the termination fee agreement is
$10 million.
5. LEGAL MATTERS
On April 3, 1997, a purported class action (the Action) commenced in the
Supreme Court of the State of New York (Kings County) against the Bank
and its directors and certain executive officers. The suit is entitled
Leonard Minzer and Harry Schipper v. Gerard C. Keegan, et al. The suit
alleges, among other things, that the directors and executive officers
have breached their fiduciary duties in entering into the Merger
Agreement and providing for the Stock Option Agreement and the
termination fee arrangement. The complaint seeks, among other things, a
preliminary and permanent injunction against the Merger and the related
transactions, an order to the directors and executive officers to
carry-out their fiduciary duties, and damages and costs. The Bank
believes that the allegations made in the Action are without merit.
6. FORMATION OF A HOLDING COMPANY
At the Bank's 1997 Annual Meeting of Stockholders, shareholders approved
the formation of a holding company. However, as a result of the proposed
merger agreement, the Bank has suspended its plan to form a holding
company.
9
<PAGE>
<PAGE>
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
Net income for The Greater New York Savings Bank and Subsidiaries (the Bank)
increased to $4.7 million in the first quarter of 1997, or $0.20 per fully
diluted common share, from net income of $4.2 million, or $0.17 per share, in
the first quarter of 1996. The improved results were due to a $0.9 million
increase in net interest and dividend income, partially offset by a $0.4 million
increase in the provision for income taxes. In April 1997, the Bank's Board of
Directors declared a quarterly cash dividend of $0.05 per common share, payable
June 2, 1997 to holders of record at the close of business on May 15, 1997.
As discussed in note 4 "Proposed Merger Agreement" in the notes to the
consolidated financial statements of this report, on March 31, 1997 the Bank
announced that it signed a definitive merger agreement with Astoria Financial
Corporation pursuant to which Astoria will acquire the Bank.
The Bank's annualized return on average equity increased to 8.92% in the first
quarter of 1997, from 8.56% in the first quarter of 1996. Annualized return on
average assets also improved, increasing from 0.65% in the 1996 first quarter,
to 0.74% in the first quarter of 1997.
The Bank's net interest margin improved to 3.11% in the first quarter of 1997,
from 2.97% in the first quarter of 1996. Net interest and dividend income, the
Bank's primary source of earnings, increased to $18.9 million in the 1997 first
quarter, from $18.0 million in the year-earlier quarter. Noninterest income
amounted to $2.0 million in the 1997 first quarter, unchanged from the
comparable period of 1996. Residential loan originations for the first quarter
of 1997 totaled $41 million, well ahead of last year's pace of $22 million for
the same period.
The combined provision for loan and real estate losses amounted to $0.5 million
in the first quarter of 1997, unchanged from the same quarter of 1996.
Nonperforming loan and real estate activities expense totaled $1.0 million in
the first quarter of 1997, an increase from $0.8 million in the 1996 first
quarter. Noninterest expenses remained relatively unchanged at $11.9 million in
the first quarter of this year, compared to $12.0 million in the first quarter
of 1996.
At March 31, 1997, nonperforming assets declined to $38.7 million, or to 1.51%
of total assets, from $45.6 million, or 1.79%, at December 31, 1996. At March
31, 1997, the combined allowance for loan and real estate losses amounted to
$20.5 million, unchanged
10
<PAGE>
<PAGE>
from year-end 1996. Net loan and real estate chargeoffs amounted to $0.5 million
in the first quarter of 1997, compared to $0.9 million in the same quarter of
1996. During the current quarter, the Bank recovered $1.3 million of chargeoffs
previously recorded on nonperforming assets. The combined allowance (excluding
reserves attributable to real estate held for development) represented 49% of
nonperforming assets at March 31, 1997, an increase from 42% at December 31,
1996.
The ratio of stockholders' equity to total assets improved to 8.28% at March 31,
1997, from 8.25% at December 31, 1996. Book value per common share also
increased to $11.48 at quarter end, from $11.31 at December 31, 1996. The Bank's
Tier 1 leverage capital ratio increased to 7.31% at March 31,1997, from 7.06% at
December 31, 1996. The Bank's total risk-based capital ratio also improved to
15.35% at March 31,1997, from 14.62% at year-end 1996.
Recently, the Bank received approval from the New York State Banking Department
and the Federal Deposit Insurance Corporation to open three new full-service
branches in Brooklyn, New York. These branches are expected to be opened within
a year. Also, as a result of the proposed merger agreement with Astoria, the
Bank has suspended its plan to form a holding company.
FINANCIAL CONDITION
COMPARISON OF MARCH 31, 1997 AND DECEMBER 31, 1996
Total assets at March 31, 1997 amounted to $2.57 billion, compared to $2.54
billion at December 31, 1996. The slight increase was primarily due to a higher
level of mortgage-backed securities held to maturity, partially offset by a
decline in securities available for sale and loans receivable.
The Bank's balance sheet was comprised of the following:
<TABLE>
<CAPTION>
AT MARCH 31, 1997 AT DECEMBER 31, 1996
------------------------- -------------------------
CARRYING % OF CARRYING % OF
($ IN THOUSANDS) VALUE TOTAL ASSETS VALUE TOTAL ASSETS
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CASH AND CASH EQUIVALENTS $ 31,579 1.2% $ 28,146 1.1%
SECURITIES AVAILABLE FOR SALE, NET 209,274 8.1 215,961 8.5
SECURITIES HELD TO MATURITY, NET 1,212,710 47.2 1,174,321 46.2
LOANS RECEIVABLE, NET 947,220 36.9 951,340 37.4
ALL OTHER ASSETS 169,750 6.6 172,120 6.8
DEPOSITS 1,667,433 64.9 1,666,674 65.6
BORROWED FUNDS 670,108 26.1 640,384 25.2
ALL OTHER LIABILITIES 20,178 0.7 25,182 1.0
STOCKHOLDERS' EQUITY 212,814 8.3 209,648 8.2
----------------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
<PAGE>
SECURITIES
Securities available for sale and held to maturity are summarized as follows:
<TABLE>
<CAPTION>
AT MARCH 31, 1997 AT DECEMBER 31, 1996
----------------------- -----------------------
CARRYING ESTIMATED CARRYING ESTIMATED
($ IN THOUSANDS) VALUE FAIR VALUE VALUE FAIR VALUE
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SECURITIES AVAILABLE FOR SALE:
MORTGAGE-BACKED - VARIABLE RATE $ 76,568 $ 76,568 $ 91,465 $ 91,465
MORTGAGE-BACKED - FIXED RATE 88,344 88,344 80,068 80,068
CORPORATE NOTES - VARIABLE RATE 44,362 44,362 44,428 44,428
- -------------------------------------------------------------------------------------------------------
209,274 209,274 215,961 215,961
- -------------------------------------------------------------------------------------------------------
SECURITIES HELD TO MATURITY:
MORTGAGE-BACKED - VARIABLE RATE 800,391 794,316 750,195 743,404
MORTGAGE-BACKED - FIXED RATE 281,749 271,424 292,648 284,518
STATES AND MUNICIPALS - FIXED RATE 57,020 55,865 57,278 57,139
CORPORATE NOTES - VARIABLE RATE 54,006 53,470 54,007 53,614
ASSET-BACKED NOTES - VARIABLE RATE 19,495 19,668 20,144 20,314
U.S. TREASURY - FIXED RATE 49 50 49 50
- -------------------------------------------------------------------------------------------------------
1,212,710 1,194,793 1,174,321 1,159,039
- -------------------------------------------------------------------------------------------------------
$1,421,984 $1,404,067 $1,390,282 $1,375,000
- -------------------------------------------------------------------------------------------------------
</TABLE>
Securities available for sale decreased by $6.7 million due to principal
repayments. The available-for-sale portfolio is carried at estimated fair value,
which was slightly below the portfolio's amortized cost of $210.0 million at
March 31, 1997.
Securities held to maturity increased by $38.4 million due to purchases of $81.9
million of adjustable-rate, mortgage-backed securities, partially offset by
principal repayments. Securities held to maturity are carried at amortized cost.
The credit quality and related carrying and estimated fair values of the
securities in the held-to-maturity and available-for-sale portfolios are
summarized in the aggregate as follows:
<TABLE>
<CAPTION>
AT MARCH 31, 1997 AT DECEMBER 31, 1996
----------------------------------- ---------------------------------
CARRYING % OF ESTIMATED CARRYING % OF ESTIMATED
($ IN THOUSANDS) VALUE TOTAL FAIR VALUE VALUE TOTAL FAIR VALUE
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
U.S. GOVERNMENT/AGENCIES $ 841,083 59.1% $ 835,998 $ 789,538 56.8% $ 784,148
STATES AND MUNICIPALS 56,825 4.0 55,666 57,084 4.1 56,939
AAA RATED SECURITIES 315,885 22.2 310,547 329,757 23.7 326,279
AA RATED SECURITIES 85,040 6.0 85,241 89,734 6.5 90,035
A RATED SECURITIES 91,092 6.4 86,525 92,099 6.6 87,487
BBB RATED SECURITIES 32,059 2.3 30,090 32,070 2.3 30,112
- --------------------------------------------------------------------------------------------------------
$1,421,984 100.0% $1,404,067 $1,390,282 100.0% $1,375,000
- --------------------------------------------------------------------------------------------------------
</TABLE>
LOANS RECEIVABLE
The loan portfolio, before the allowance for loan losses, decreased by $4.8
million, primarily due to normal amortization, prepayments and satisfactions
aggregating $48.5
12
<PAGE>
<PAGE>
million, sales of $6.2 million, transfers to real estate acquired through
foreclosure of $2.4 million and chargeoffs of $1.8 million. The sum of these
items was largely offset by originations of $53.0 million during the quarter.
The loan portfolio is summarized as follows:
<TABLE>
<CAPTION>
AT MARCH 31, 1997 AT DECEMBER 31, 1996
--------------------------------- -------------------------------
NO. OF % OF NO. OF % OF
($ IN THOUSANDS) LOANS AMOUNT TOTAL LOANS AMOUNT TOTAL
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
RESIDENTIAL 1-4 FAMILY:
CONVENTIONAL ADJUSTABLE RATE 1,414 $173,035 18% 1,412 $164,708 17%
CONVENTIONAL FIXED RATE 248 18,209 2 249 14,442 2
FHA AND VA 4,421 18,719 2 4,860 21,027 2
- --------------------------------------------------------------------------------------------------------
6,083 209,963 22 6,521 200,177 21
- --------------------------------------------------------------------------------------------------------
RESIDENTIAL MULTI-FAMILY:
CONVENTIONAL 164 201,496 21 163 216,348 22
FHA PROJECT 7 12,211 1 7 12,283 1
- --------------------------------------------------------------------------------------------------------
171 213,707 22 170 228,631 23
- --------------------------------------------------------------------------------------------------------
COMMERCIAL REAL ESTATE 247 393,942 41 254 409,218 42
COOPERATIVE 1,371 130,735 13 1,302 117,799 12
STUDENT 2,135 8,355 1 2,058 6,673 1
OTHER CONSUMER 1,907 8,399 1 1,994 8,604 1
UNEARNED DISCOUNT AND FEES - (1,302) - - (2,534) -
- --------------------------------------------------------------------------------------------------------
11,914 $963,799 100% 12,299 $968,568 100%
- --------------------------------------------------------------------------------------------------------
</TABLE>
Loans originated and purchased are summarized as follows:
<TABLE>
<CAPTION>
FOR THE QUARTER ENDED MARCH 31,
------------------------------
($ IN THOUSANDS) 1997 1996
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
FOR PORTFOLIO:
1-4 FAMILY ORIGINATED $17,237 $ 4,329
1-4 FAMILY PURCHASED - 70
MULTI-FAMILY ORIGINATED 5,200 2,300
COMMERCIAL REAL ESTATE ORIGINATED 1,800 -
COOPERATIVE ORIGINATED 17,539 5,196
STUDENT ORIGINATED - 3,056
OTHER CONSUMER ORIGINATED 2,282 2,385
FOR SALE:
1-4 FAMILY ORIGINATED 5,398 10,088
COOPERATIVE ORIGINATED 939 2,665
STUDENT ORIGINATED 2,560 -
- --------------------------------------------------------------------------------------------------------
$52,955 $30,089
- --------------------------------------------------------------------------------------------------------
</TABLE>
LOANS MODIFIED IN TROUBLED DEBT RESTRUCTURINGS AND IMPAIRED LOANS
At March 31, 1997, $155.0 million, or 27% of the Bank's performing commercial
real estate and multi-family loans were categorized as troubled debt
restructurings under the criteria of SFAS No. 15, "Accounting by Debtors and
Creditors for Troubled Debt Restructurings," compared to $155.5 million, or 26%,
at December 31, 1996.
13
<PAGE>
<PAGE>
Troubled debt restructurings (TDRs) are loans on which the Bank has granted
certain concessions in light of the borrowers' financial difficulties. These
concessions, which are individually negotiated, generally provide for interest
rates that are lower than the original contractual rate and may also relate to
maturity dates and payment terms. The objective of granting these concessions is
to maximize the recovery of the Bank's investment. Loans categorized as TDRs
have a higher degree of credit risk than the remainder of the performing loan
portfolio. The Bank has no commitments to lend additional funds to borrowers
with mortgages whose terms have been modified in a TDR.
Loans classified as TDRs are summarized as follows:
<TABLE>
<CAPTION>
AT MARCH 31, 1997 AT DECEMBER 31, 1996
-------------------------------------- --------------------------------------
CURRENT ORIGINAL CURRENT ORIGINAL
($ IN THOUSANDS) NO. AMOUNT RATE (1) RATE (1) NO. AMOUNT RATE (1) RATE (1)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MULTI-FAMILY 16 $ 37,215 8.15% 9.74% 17 $ 37,892 8.13% 9.73%
COMMERCIAL REAL ESTATE 46 117,804 7.30 9.17 45 117,646 7.50 9.17
- --------------------------------------------------------------------------------------------------------
TOTAL(2) 62 $155,019 7.50% 9.31% 62 $155,538 7.66% 9.31%
- --------------------------------------------------------------------------------------------------------
</TABLE>
(1) Represents weighted-average rate.
(2) Includes $92.1 million and $83.0 million of loans at March 31, 1997 and
December 31, 1996, respectively, that are considered impaired under the
criteria of SFAS No. 114.
A nonperforming loan that is restructured is normally accounted for as a cash
basis TDR. After it develops a satisfactory payment history, the loan is placed
on an accrual basis but remains classified as a TDR. At March 31, 1997 and
December 31, 1996, one loan in the amount of $9.0 million was classified as a
TDR and maintained on a cash basis of accounting. An accruing TDR that yields a
market rate of interest is considered for recategorization to a fully performing
status after it has performed for an appropriate period. Loans that are
recategorized are done so no earlier than the year following the restructuring
and are no longer classified as TDRs and, if applicable, impaired loans.
Under the criteria of SFAS No. 114, "Accounting by Creditors for Impairment of a
Loan," a loan is normally deemed impaired when it is probable the Bank will be
unable to collect both principal and interest due according to the contractual
terms. Loans that were restructured prior to January 1, 1995 and performing in
accordance with their restructured terms are not considered impaired loans under
SFAS No. 114. Loans restructured after December 31, 1994 are considered
impaired. A valuation allowance is established (with a corresponding charge to
the provision for loan losses) when the fair value of the property that
collateralizes the impaired loan is less than the recorded investment in the
loan. However, the Bank typically records a chargeoff for this difference which
results in little or no valuation allowance being maintained. The valuation
allowance, if any, is part of the overall allowance for loan losses. The Bank's
process of identifying impaired loans is conducted in conjunction with the
review of the adequacy of the allowance for loan losses. Impaired loans at a
minimum include all nonperforming loans and loans restructured after December
31, 1994.
14
<PAGE>
<PAGE>
The following tables summarize information related to impaired loans:
<TABLE>
<CAPTION>
($ IN THOUSANDS) AT MARCH 31, 1997 AT DECEMBER 31, 1996
---------------------------------------------------------------------------------------------------------
<S> <C> <C>
PRINCIPAL BALANCE OF IMPAIRED LOANS OUTSTANDING:
NONPERFORMING LOANS $ 26,545 $ 31,821
TROUBLED DEBT RESTRUCTURINGS (POST SFAS NO. 114) 92,112 82,964
OTHER PERFORMING LOANS 4,675 878
---------------------------------------------------------------------------------------------------------
$ 123,332 $ 115,663
---------------------------------------------------------------------------------------------------------
VALUATION ALLOWANCE FOR IMPAIRED LOANS - $ 1,650
BALANCE OF IMPAIRED LOANS WITH A VALUATION ALLOWANCE - 4,389
---------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
FOR THE QUARTER ENDED MARCH 31,
-------------------------------
($ IN THOUSANDS) 1997 1996
--------------------------------------------------------------------------------------------------------
<S> <C> <C>
AVERAGE BALANCE OF IMPAIRED LOANS $118,764 $125,831
CHARGEOFFS OF IMPAIRED LOANS 1,821 826
--------------------------------------------------------------------------------------------------------
</TABLE>
The increase in other performing impaired loans represents two commercial real
estate loans. These loans are in the process of being restructured and are
expected to eventually be classified as TDRs in the near term.
Foregone interest income on loans is summarized as follows:
<TABLE>
<CAPTION>
FOR THE QUARTER ENDED MARCH 31,
------------------------------
($ IN THOUSANDS) 1997 1996
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
INTEREST THAT WOULD HAVE BEEN ACCRUED AT ORIGINAL CONTRACT RATES:
NONPERFORMING LOANS $ 706 $1,296
TROUBLED DEBT RESTRUCTURINGS (PRE SFAS NO. 114) 1,711 3,026
TROUBLED DEBT RESTRUCTURINGS (POST SFAS NO. 114) 2,099 1,942
OTHER PERFORMING IMPAIRED LOANS 93 213
- --------------------------------------------------------------------------------------------------------
4,609 6,477
- --------------------------------------------------------------------------------------------------------
AMOUNT RECOGNIZED AS INTEREST INCOME:
NONPERFORMING LOANS 11 12
TROUBLED DEBT RESTRUCTURINGS (PRE SFAS NO. 114) 1,388 2,401
TROUBLED DEBT RESTRUCTURINGS (POST SFAS NO. 114) 1,530 1,461
OTHER PERFORMING IMPAIRED LOANS 69 213
- --------------------------------------------------------------------------------------------------------
2,998 4,087
- --------------------------------------------------------------------------------------------------------
FOREGONE INTEREST INCOME $1,611 $2,390
- --------------------------------------------------------------------------------------------------------
CASH BASIS INTEREST INCOME $ 101 $ 47
- --------------------------------------------------------------------------------------------------------
</TABLE>
Many of the restructuring agreements call for a portion of the foregone interest
income to be paid to the Bank at a later date. Since receipt of these payments
is not assured, income is not currently recognized. Many restructured loans also
provide for increases in the interest rate over the life of the loan, although
such increases are not assured.
NONPERFORMING ASSETS
Nonperforming assets, which consist of nonperforming loans and real estate
acquired through foreclosure, declined to $38.7 million, or 1.51% of total
assets, at March 31, 1997, from $45.6 million, or 1.79%, at December 31, 1996.
15
<PAGE>
<PAGE>
The change in nonperforming assets is summarized as follows:
<TABLE>
<CAPTION>
FOR THE QUARTER ENDED MARCH 31,
-------------------------------
($ IN THOUSANDS) 1997 1996
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
BEGINNING BALANCE $45,561 $55,769
NEW NONPERFORMING LOANS 1,108 8,546
OTHER ADDITIONS 29 -
LOANS SOLD, SATISFIED OR REINSTATED (2,191) (2,361)
CHARGEOFFS (1,789) (519)
SALES OF OTHER REAL ESTATE (3,995) (3,573)
- ------------------------------------------------------------------------------------------------------
ENDING BALANCE $38,723 $57,862
- ------------------------------------------------------------------------------------------------------
</TABLE>
The composition of nonperforming assets is summarized as follows:
<TABLE>
<CAPTION>
AT MARCH 31, 1997 AT DECEMBER 31, 1996
--------------------- --------------------
($ IN THOUSANDS) NO. AMOUNT NO. AMOUNT
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NONPERFORMING LOANS:
1-4 FAMILY, COOPERATIVE AND OTHER 21 $ 2,073 21 $ 2,082
MULTI-FAMILY 9 19,546 11 21,428
COMMERCIAL REAL ESTATE 5 4,926 5 8,311
- -------------------------------------------------------------------------------------------------------
35 26,545 37 31,821
- -------------------------------------------------------------------------------------------------------
OTHER REAL ESTATE:
1-4 FAMILY, COOPERATIVE AND OTHER 10 397 4 54
MULTI-FAMILY 1 3,512 1 3,512
COMMERCIAL REAL ESTATE 7 8,269 10 10,174
- -------------------------------------------------------------------------------------------------------
18 12,178 15 13,740
- -------------------------------------------------------------------------------------------------------
TOTAL NONPERFORMING ASSETS 53 $38,723 52 $45,561
- -------------------------------------------------------------------------------------------------------
NONPERFORMING ASSETS AS A PERCENTAGE OF TOTAL
ASSETS 1.51% 1.79%
- -------------------------------------------------------------------------------------------------------
</TABLE>
In addition to the above, loans delinquent for 90 days or more upon which the
Bank was still accruing interest amounted to $1.3 million at March 31, 1997,
compared to $2.1 million at December 31, 1996. These loans, which are government
guaranteed, were considered both well secured and in the process of collection.
Loans delinquent for 30 days or more but less than 90 days amounted to $42.6
million at March 31, 1997, compared to $30.6 million at December 31, 1996. A
large number of these past-due loans are TDRs. In April 1997, a TDR with a
principal balance of $9.5 million (that was included in the 30-89 day past-due
category at March 31) was transferred to a nonperforming status.
REAL ESTATE HELD FOR DEVELOPMENT AND ACQUIRED THROUGH FORECLOSURE
Real estate held for development and acquired through foreclosure is summarized
as follows:
<TABLE>
<CAPTION>
($ IN THOUSANDS) AT MARCH 31, 1997 AT DECEMBER 31, 1996
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
REAL ESTATE ACQUIRED THROUGH FORECLOSURE $12,178 $13,740
REAL ESTATE HELD FOR DEVELOPMENT 23,236 23,174
- ---------------------------------------------------------------------------------------------------------
35,414 36,914
- ---------------------------------------------------------------------------------------------------------
ALLOWANCE FOR REAL ESTATE LOSSES (3,923) (3,270)
- ---------------------------------------------------------------------------------------------------------
$31,491 $33,644
- ---------------------------------------------------------------------------------------------------------
</TABLE>
16
<PAGE>
<PAGE>
Real estate acquired through foreclosure declined by $1.6 million in the first
quarter of 1997 due to sales of $4.0 million, partially offset by transfers of
$2.4 million from nonperforming loans upon foreclosure. Real estate held for
development increased slightly due to the investment of $0.1 million in two
joint venture projects. Real estate held for development consists of equity
investments in five real estate joint venture projects. For additional
information on these projects, see the Bank's 1996 Annual Report to Stockholders
(page 32) and the Bank's 1996 Annual Report on Form F-2 (pages 12 and 13). Also,
see the section "Stockholders' Equity and Regulatory Capital" in this report for
a discussion regarding The Federal Deposit Insurance Corporation Improvement Act
of 1991, which restricts the ability of the Bank to continue its real estate
joint venture activities.
ALLOWANCES FOR LOAN AND REAL ESTATE LOSSES
The Bank monitors its loan and real estate portfolios to determine the level of
the related loss allowances based upon various factors. These factors are
discussed on page 33 of the Bank's 1996 Annual Report to Stockholders. At March
31, 1997 and December 31, 1996, the combined allowance for loan and real estate
losses amounted to $20.5 million. The combined allowance (exclusive of $1.4
million attributable to real estate held for development) represented 49% of
nonperforming assets at March 31, 1997, compared to 42% at December 31, 1996.
The allowances for loan and real estate losses substantially related to
commercial real estate and multi-family loans and properties.
During the quarter, a performing multi-family loan (which was acquired by the
Bank in 1995 at a significant discount) with a carrying value of $11.9 million
was satisfied for proceeds of $14.8 million. This loan represented the first
mortgage on one of the Bank's nonperforming assets (a second mortgage) that had
a carrying value of $1.7 million at year-end 1996. A portion of the excess
proceeds was used to satisfy the second mortgage and the remainder ($1.2
million), was reflected as a recovery of chargeoffs previously recorded on the
second mortgage. The tables on page 18 summarize the activity in the allowances
for loan and real estate losses.
17
<PAGE>
<PAGE>
The table below summarizes the activity in the allowance for loan losses:
<TABLE>
<CAPTION>
FOR THE QUARTER ENDED MARCH 31,
-------------------------------
($ IN THOUSANDS) 1997 1996
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
BALANCE AT BEGINNING OF PERIOD $17,228 $23,993
PROVISION CHARGED TO OPERATIONS - 500
CHARGEOFFS:
RESIDENTIAL 1-4 FAMILY (114) (89)
RESIDENTIAL MULTI-FAMILY - (336)
COMMERCIAL REAL ESTATE (1,709) (953)
-------------------------------
TOTAL CHARGEOFFS (1,823) (1,378)
RECOVERIES:
RESIDENTIAL 1-4 FAMILY - 2
RESIDENTIAL MULTI-FAMILY 1,174 163
COMMERCIAL REAL ESTATE - 170
-------------------------------
TOTAL RECOVERIES 1,174 335
- ---------------------------------------------------------------------------------------------------------
BALANCE AT END OF PERIOD $16,579 $23,450
- ---------------------------------------------------------------------------------------------------------
</TABLE>
The table below summarizes the activity in the allowance for real estate losses:
<TABLE>
<CAPTION>
FOR THE QUARTER ENDED MARCH 31,
-------------------------------
($ IN THOUSANDS) 1997 1996
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
BALANCE AT BEGINNING OF PERIOD $3,270 $3,276
PROVISION CHARGED TO OPERATIONS 500 -
CHARGEOFFS (RESIDENTIAL 1-4 FAMILY) - (1)
RECOVERIES:
RESIDENTIAL MULTI-FAMILY - 70
COMMERCIAL REAL ESTATE 153 55
-------------------------------
TOTAL RECOVERIES 153 125
- ---------------------------------------------------------------------------------------------------------
BALANCE AT END OF PERIOD $3,923 $3,400
- ---------------------------------------------------------------------------------------------------------
</TABLE>
DEFERRED TAX ASSET
At March 31, 1997, the Bank's net deferred tax asset, amounted to $43.2 million,
compared to $45.4 million at December 31, 1996. The asset represents the
unrealized benefit related to: net temporary differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases that will result in future tax deductions; unused operating
loss carryforwards; and tax credit carryforwards. The net temporary differences
substantially relate to credit losses and related expenses recognized in prior
years for financial statement purposes but not yet deducted for tax purposes.
The decline in the net asset during the quarter reflected the utilization of a
portion of these deductions, partially offset by a $0.6 million reduction in the
related valuation allowance for deferred tax assets. At March 31, 1997, the
Bank's remaining valuation allowance for deferred tax assets amounted to $8.6
million.
The determination of the need for a valuation allowance is based on whether the
Bank can conclude that the asset is more likely than not to be realized in the
future in accordance with the criteria of SFAS No. 109, "Accounting for Income
Taxes." This evaluation is predicated
18
<PAGE>
<PAGE>
on whether the Bank will have sufficient future taxable income to realize the
asset, and whether the net tax deductible items represented by the asset will
reverse in future periods in which the Bank generates such income. Consistent
with the significant reductions of nonperforming assets and related expenses
over the past several years, the Bank believes that the level and predictability
of its future taxable income has and will continue to increase. In addition, the
Bank believes the net deductible differences represented by the asset will
reverse during periods in which the Bank generates taxable income.
The valuation allowance at March 31, 1997 relates to that portion of the asset
that will result in tax deductions beyond the timeframe in which the Bank can
estimate, with a high degree of predictability, a similar amount of taxable
income. The Bank will continue to evaluate whether the maintenance or magnitude
of its remaining valuation allowance is appropriate in light of future facts and
circumstances. As a result, the allowance will be subject to ongoing adjustments
in connection with reassessments of future levels of taxable income.
DEPOSITS
Deposit liabilities amounted to $1.67 billion at March 31, 1997 and December 31,
1996. The mix of deposits also remained relatively unchanged from year-end 1996.
BORROWED FUNDS
Borrowed funds at March 31, 1997 increased to $670.1 million, from $640.4
million at December 31, 1996. The increase was due to an additional $30.0
million of short-term reverse repurchase agreements outstanding. These borrowed
funds were invested in mortgage-backed securities.
STOCKHOLDERS' EQUITY AND REGULATORY CAPITAL
Stockholders' equity increased by $3.2 million from December 31, 1996, to $212.8
million at March 31,1997. The increase was primarily due to net income of $4.7
million and the issuance of common stock of $1.0 million (in connection with the
exercise of stock options as well as the purchase of common stock by the Bank's
ESOP for participants' accounts in connection with the reinvestment of their
allocated preferred stock dividends). This was partially offset by preferred and
common dividends aggregating $2.2 million. The table on page 20 sets forth
information regarding stockholders' equity, regulatory capital and related
ratios.
19
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
($ IN THOUSANDS) AT MAR. 31, 1997 AT DEC. 31, 1996 CHANGE
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
STOCKHOLDERS' EQUITY:
PREFERRED EQUITY $ 51,659 $ 52,418 $ (759)
COMMON EQUITY 161,155 157,230 3,925
- --------------------------------------------------------------------------------------------------------
$ 212,814 $ 209,648 $ 3,166
- --------------------------------------------------------------------------------------------------------
TIER 1 CAPITAL:
COMMON STOCKHOLDERS' EQUITY $ 161,155 $ 157,230 $ 3,925
NET UNREALIZED LOSS ON SECURITIES AVAILABLE FOR
SALE, NET OF TAXES 415 30 385
EXCESS DEFERRED TAX ASSET (1) (24,361) (27,640) 3,279
QUALIFYING PREFERRED STOCK (SERIES B) 47,312 47,312 -
- --------------------------------------------------------------------------------------------------------
184,521 176,932 7,589
- --------------------------------------------------------------------------------------------------------
TIER 2 CAPITAL:
ALLOWABLE PORTION OF THE ALLOWANCE FOR LOAN LOSSES 16,579 17,027 (448)
NONQUALIFYING PREFERRED STOCK (SERIES A) 4,347 5,106 (759)
- --------------------------------------------------------------------------------------------------------
20,926 22,133 (1,207)
- --------------------------------------------------------------------------------------------------------
TOTAL RISK-BASED CAPITAL $ 205,447 $ 199,065 $ 6,382
- --------------------------------------------------------------------------------------------------------
RISK-ADJUSTED ASSETS $1,338,265 $1,361,941 $23,676
AVERAGE ASSETS FOR REGULATORY PURPOSES $2,524,294 $2,506,503 $17,791
TIER 1 RISK-BASED CAPITAL RATIO 13.79% 12.99% 0.80%
TOTAL RISK-BASED CAPITAL RATIO 15.35% 14.62% 0.73%
TIER 1 LEVERAGE CAPITAL RATIO 7.31% 7.06% 0.25%
STOCKHOLDERS' EQUITY TO TOTAL ASSETS RATIO 8.28% 8.25% 0.03%
- --------------------------------------------------------------------------------------------------------
</TABLE>
(1) Represents the portion of the Bank's net deferred tax asset which was not
includable in regulatory capital.
The Federal Deposit Insurance Corporation Improvement Act of 1991 restricts the
ability of state-chartered institutions to engage in activities not permissible
for national banks or their subsidiaries. With regard to this restriction, the
FDIC has approved a phase-out plan that permits the Bank to continue its real
estate joint venture activities through December 31, 2000, subject to certain
conditions. The conditions include a requirement that the Bank perform
supplemental quarterly capital adequacy calculations which deduct all such real
estate joint venture investments. The Bank has performed these supplemental
calculations and continues to be well capitalized under applicable FDIC
regulations.
Solely for purposes of these calculations, the Bank's Tier 1 leverage, Tier 1
risk-based and total risk-based capital ratios (as calculated by deducting the
net carrying value of joint venture investments, inclusive of commitments to
invest) would have been 6.49%, 12.34% and 13.91%, respectively, at March 31,
1997. If the Bank's capital (calculated as described above) falls below the
level required for well capitalized institutions pursuant to FDIC regulations,
the Bank must submit a plan to restore its capital to such a level. There can be
no assurance, absent an extension by the FDIC, that any of the Bank's joint
ventures can be completed or disposed of by December 31, 2000, without
significant loss to the Bank. For purposes of the FDIC's determination of
deposit insurance assessment rates and of prompt corrective action in accordance
with FDIC regulations, the Bank's capital ratios are computed after deducting
its joint venture investments, as calculated above.
20
<PAGE>
<PAGE>
RESULTS OF OPERATIONS
COMPARISON OF THE QUARTERS ENDED MARCH 31, 1997 AND 1996
Net income for the quarter ended March 31, 1997 increased to $4.7 million, or
$0.20 per fully diluted common share, from $4.2 million, or $0.17 per share, for
the same quarter of 1996. The improvement was due to a $0.9 million increase in
net interest and dividend income, partially offset by a $0.4 million increase in
the provision for income taxes.
NET INTEREST AND DIVIDEND INCOME
Net interest and dividend income is the Bank's primary source of earnings and is
influenced primarily by the amount, distribution and repricing characteristics
of the Bank's interest-earning assets and interest-bearing liabilities as well
as by the relative levels and movements of interest rates.
The table on page 22 sets forth information on average assets, liabilities and
stockholders' equity; yields earned on interest-earning assets; and rates paid
on interest-bearing liabilities for the periods indicated. The yields and rates
shown are based on a computation of annualized income/expense for each period
divided by average interest-earning assets/interest-bearing liabilities during
each period. Certain yields and rates shown are adjusted for related fee income
or expense. Average balances are derived from daily balances. Net interest
margin is computed by dividing annualized net interest and dividend income by
the average of total interest-earning assets during each period.
21
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
FOR THE QUARTER ENDED MARCH 31,
---------------------------------------------------------------
1997 1996
------------------------------ -----------------------------
AVERAGE INTEREST YIELD/ AVERAGE INTEREST YIELD/
($ IN THOUSANDS) BALANCE INC./EXP. RATE BALANCE INC./EXP. RATE
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
INTEREST-EARNING ASSETS:
MORTGAGE LOANS $ 834,655 $17,475 8.38% $ 963,543 $20,150 8.36%
OTHER LOANS 139,453 2,733 7.85 126,718 2,560 8.10
---------------------------------------------------------------
TOTAL LOANS (1) 974,108 20,208 8.30 1,090,261 22,710 8.33
SECURITIES AVAILABLE FOR SALE 211,946 3,588 6.78 198,488 3,267 6.59
MORTGAGE-BACKED SECURITIES 1,045,806 17,714 6.78 942,788 15,999 6.79
OTHER BONDS AND NOTES 130,896 2,072 6.37 137,747 2,132 6.21
OTHER INTEREST-EARNING ASSETS 31,018 483 6.32 39,053 604 6.22
- --------------------------------------------------------------------------------------------------------
TOTAL INTEREST-EARNING ASSETS 2,393,774 $44,065 7.37% 2,408,337 $44,712 7.43%
- --------------------------------------------------------------------------------------------------------
NONINTEREST-EARNING ASSETS 154,940 165,716
- --------------------------------------------------------------------------------------------------------
TOTAL ASSETS $2,548,714 $2,574,053
- --------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
INTEREST-BEARING LIABILITIES:
SAVINGS AND OTHER DEPOSITS $ 565,023 $ 3,515 2.52% $ 590,808 $ 3,709 2.52%
MONEY MARKET DEPOSITS 96,700 601 2.51 109,123 685 2.52
NEGOTIABLE ORDER OF WITHDRAWAL
DEPOSITS 55,532 171 1.25 60,742 190 1.25
ESCROW DEPOSITS 11,928 20 0.67 12,479 26 0.84
CERTIFICATES OF DEPOSIT 869,229 11,561 5.39 893,902 12,487 5.62
---------------------------------------------------------------
TOTAL DEPOSITS ACCOUNTS 1,598,412 15,868 4.02 1,667,054 17,097 4.12
---------------------------------------------------------------
REVERSE REPURCHASE AGREEMENTS 425,167 5,760 5.49 374,495 5,569 5.98
FHLB ADVANCES 155,000 2,279 5.96 178,956 2,635 5.92
OTHER BORROWED FUNDS 75,704 1,262 6.67 80,289 1,431 7.13
---------------------------------------------------------------
TOTAL BORROWED FUNDS 655,871 9,301 5.74 633,740 9,635 6.11
- --------------------------------------------------------------------------------------------------------
TOTAL INTEREST-BEARING LIABILITIES 2,254,283 $25,169 4.52% 2,300,794 $26,732 4.67%
- --------------------------------------------------------------------------------------------------------
NONINTEREST-BEARING LIABILITIES 83,446 76,452
STOCKHOLDERS' EQUITY 210,985 196,807
- --------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $2,548,714 $2,574,053
- --------------------------------------------------------------------------------------------------------
NET INTEREST AND DIVIDEND INCOME/SPREAD $18,896 2.85% $17,980 2.76%
- --------------------------------------------------------------------------------------------------------
NET INTEREST-EARNING ASSETS/MARGIN $ 139,491 3.11% $ 107,543 2.97%
- --------------------------------------------------------------------------------------------------------
RATIO OF TOTAL INTEREST-EARNING ASSETS
TO TOTAL INTEREST-BEARING LIABILITIES 1.06X 1.05X
- --------------------------------------------------------------------------------------------------------
</TABLE>
(1) Loan balances include average nonperforming loans of $29.7 million and $45.2
million for 1997 and 1996, respectively.
Net interest and dividend income increased to $18.9 million in the first quarter
of 1997, from $18.0 million in the 1996 first quarter. The increase reflected a
higher net interest margin resulting from increases in the Bank's net interest
rate spread and net interest-earning assets. These improvements were partially
offset by a decline in the Bank's average balance sheet.
Average net interest-earning assets increased by $31.9 million due to the
investment of funds generated from operations and sales of nonperforming assets.
The increase in the Bank's interest rate spread was a function of its cost of
funds declining at a faster pace than the yield on its interest-earning assets.
22
<PAGE>
<PAGE>
The yield on interest-earning assets declined by 6 basis points primarily due to
the impact of: the prepayment of higher-yielding, multi-family and commercial
real estate loans and the replacement thereof with investments in securities
with a lower rate relative to the loan portfolio; an increase in
adjustable-rate, 1-4 family and cooperative loan originations with low
introductory interest rates; and the sale of higher-yielding student loans.
These aforementioned factors were partially offset by a lower level of
nonperforming loans and upward rate resets on securities.
The decline in the average cost of funds of 15 basis points was primarily due to
lower rates paid for time deposits and for funds borrowed under reverse
repurchase agreements. The lower rates were partially offset by the effect of
the outflow of deposits and the replacement thereof with borrowed funds (which
normally are the most expensive source of funds for the Bank).
The following table presents the dollar amount of changes in interest and
dividend income and interest expense attributable to changes in volume and
changes in rate for the periods indicated. The changes in interest due to both
rate and volume have been allocated between such categories in proportion to the
absolute amounts of the change in each. Nonperforming loans have been included
in total loans for this analysis.
<TABLE>
<CAPTION>
INCREASE OR (DECREASE)
DUE TO CHANGE IN:
($ IN THOUSANDS) ---------------------
FOR THE QUARTER ENDED MARCH 31, 1997 VERSUS 1996 VOLUME RATE TOTAL
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INTEREST AND DIVIDEND INCOME:
MORTGAGE LOANS $ (2,723) $ 48 $(2,675)
OTHER LOANS 254 (81) 173
-----------------------------
TOTAL LOANS (2,469) (33) (2,502)
SECURITIES AVAILABLE FOR SALE 225 96 321
MORTGAGE-BACKED SECURITIES 1,739 (24) 1,715
OTHER BONDS AND NOTES (114) 54 (60)
OTHER INTEREST-EARNING ASSETS (131) 10 (121)
- --------------------------------------------------------------------------------------------------------
CHANGE IN INTEREST AND DIVIDEND INCOME (750) 103 (647)
- --------------------------------------------------------------------------------------------------------
INTEREST EXPENSE:
SAVINGS AND OTHER DEPOSITS (194) - (194)
MONEY MARKET DEPOSITS (81) (3) (84)
NEGOTIABLE ORDER OF WITHDRAWAL DEPOSITS (19) - (19)
ESCROW DEPOSITS (1) (5) (6)
CERTIFICATES OF DEPOSIT (420) (506) (926)
-----------------------------
TOTAL DEPOSIT ACCOUNTS (715) (514) (1,229)
-----------------------------
REVERSE REPURCHASE AGREEMENTS 673 (482) 191
FHLB ADVANCES (374) 18 (356)
OTHER BORROWED FUNDS (80) (89) (169)
-----------------------------
TOTAL BORROWED FUNDS 219 (553) (334)
- --------------------------------------------------------------------------------------------------------
CHANGE IN INTEREST EXPENSE (496) (1,067) (1,563)
- --------------------------------------------------------------------------------------------------------
CHANGE IN NET INTEREST AND DIVIDEND INCOME $ (254) $ 1,170 $ 916
- --------------------------------------------------------------------------------------------------------
</TABLE>
23
<PAGE>
<PAGE>
PROVISIONS FOR LOAN AND REAL ESTATE LOSSES
Provisions for loan and real estate losses are based on management's ongoing
assessment of the adequacy of the allowances for loan and real estate losses,
which considers the factors discussed in the section "Allowances for Loan and
Real Estate Losses" on page 33 of the Bank's 1996 Annual Report to Stockholders.
The combined provision amounted to $0.5 million in the first quarter of 1997,
unchanged from the same quarter of 1996.
NONINTEREST INCOME
Total noninterest income amounted to $2.0 million in the first quarter of 1997,
unchanged from the first quarter of 1996, as a decline in income from mortgage
activities was offset by an increase in customer service fees.
Income from mortgage activities declined to $0.4 million in the first quarter of
1997, from $0.5 million in the first quarter of last year. The decline was due
to a lower level of income from servicing loans owned by investors (due to the
sale of a substantial portion of this portfolio in 1996) and fixed-rate loans
originated for sale into the secondary market (due to an increase in demand for
adjustable-rate product in 1997).
Customer service fees increased to $1.0 million in the current quarter, from
$0.9 million in the 1996 first quarter, due to a higher volume of fee-based
transactions and commercial checking accounts.
NONINTEREST EXPENSES
Total noninterest expenses (excluding the provision for real estate losses)
amounted to $12.9 million in the first quarter of 1997, compared to $12.8
million in the same period last year. The largest components of the change from
last year were an increase in nonperforming loan and real estate activities
expense, offset by a decline in compensation and benefits expense.
Compensation and benefits expense declined to $5.7 million in the first quarter
of 1997, from $6.0 million in 1996. The decline was primarily due to reduced
staff and lower expenses associated with pension and medical benefits, partially
offset by normally salary increases.
Nonperforming loan and real estate activities expense amounted to $1.0 million
in the first quarter of 1997, compared to $0.8 million in the same period last
year. The expenses for the first quarter of 1997 included $0.4 million
attributable to two loan relationships. The Bank expects to recover a portion of
these expenses over time. These expenditures are comprised primarily of real
estate taxes, insurance, utilities, maintenance, professional fees and other
24
<PAGE>
<PAGE>
charges required to protect the Bank's interest in its foreclosed properties,
properties which collateralize nonperforming loans and its joint venture
investments. The remainder represents compensation expense attributable to
specific departments established within the Bank to resolve problem assets.
The Bank's operating efficiency ratio improved to 57.0% for the first quarter of
1997, from 60.0% in the same period of 1996. This ratio is defined as
noninterest expenses (exclusive of the provision for real estate losses and
nonperforming loan and real estate activities expense) as a percentage of net
interest and dividend income plus noninterest income (exclusive of any gains
(losses) on sales of securities).
TAX EXPENSE
Net tax expense amounted to $2.8 million in the first quarter of 1997, compared
to $2.4 million in the 1996 first quarter. The increase was due to higher
pre-tax earnings. The Bank's effective tax rate (inclusive of state and local
taxes) amounted 37.4% in the first quarter of 1997, compared to 36.7% in the
same quarter of 1996. Net tax expense included a reduction in the Bank's
valuation allowance for deferred tax assets of $0.6 million and $0.5 million for
the 1997 and 1996 periods, respectively.
INTEREST RATE SENSITIVITY
The Bank manages its interest rate risk through the use of "income simulation
analysis" and "gap analysis." Interest rate risk arises from mismatches in the
repricing of assets and liabilities within a given time period. For a further
discussion of interest rate risk and income simulation and gap analysis, see the
Bank's 1996 Annual Report to Stockholders, pages 42 through 44.
From time-to-time, the Bank uses interest rate cap and floor agreements as
hedges to reduce its exposure to unfavorable fluctuations in the repricing of
certain liabilities and assets (generally borrowed funds and securities). The
agreements limit the interest rate on such assets and liabilities to a
predetermined level, while still allowing the Bank to benefit if rates decline
in the case of liabilities, or if rates increase in the case of assets. The
agreements provide for the payment of a specified sum to the Bank when the
underlying rate index (generally one-month LIBOR) exceeds (in the case of caps)
or falls below (in the case of floors) the agreements' contractual rate. The
Bank pays a premium at the inception date of each of the agreements and no
future payments to the third parties are required. Premiums are recorded as
other assets and are amortized over the contractual terms of the agreements as a
component of interest expense or income, net of contractual payments received
from third parties.
25
<PAGE>
<PAGE>
As of March 31, 1997, $30.0 million and $60.0 million (notional principal) of
interest rate caps and floors, respectively, were outstanding. The agreements
have weighted-average cap and floor rates of 7.00% and 6.08%, respectively, and
expire at various times through February 2000. The amortization of premiums
paid, net of contractual amounts received, for cap and floor agreements reduced
net interest and dividend income by $0.3 million in the first quarter of 1996.
For the first quarter of 1997, the impact was minimal.
The Bank's one-year gap was a negative 4.1% at March 31, 1997, compared to a
negative 0.2% at December 31, 1996. The increase was primarily due to FHLB
advances and time deposits cycling into the one-year repricing category, as well
as a decline in loans within the one-year repricing category resulting from
repayments, satisfactions and modifications of existing loans. The Bank
currently believes that, in the normal course of events, its net interest and
dividend income would not be materially affected by changes in interest rates.
However, a rapidly rising interest rate environment, as well as other factors,
may have a significant negative impact (particularly as it relates to the Bank's
assumptions concerning the predicted behavior of depositors) on the Bank's level
of net interest and dividend income.
The following table is an analysis of the Bank's gap position at March 31, 1997:
<TABLE>
<CAPTION>
WITHIN OVER 1-3 OVER 3-5 OVER
($ IN THOUSANDS) ONE YEAR YEARS YEARS 5 YEARS TOTAL
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INTEREST-EARNING ASSETS:
MORTGAGE LOANS $ 239,876 $360,503 $124,320 $ 67,023 $ 791,722
OTHER LOANS 58,777 35,823 18,118 34,115 146,833
--------------------------------------------------------------
TOTAL LOANS 298,653 396,326 142,438 101,138 938,555
SECURITIES AVAILABLE FOR SALE 109,225 43,374 23,131 33,590 209,320
MORTGAGE-BACKED SECURITIES 813,243 65,725 39,515 155,002 1,073,485
OTHER BONDS AND NOTES 74,795 2,288 2,088 51,688 130,859
OTHER INTEREST-EARNING ASSETS 8,300 - - 23,600 31,900
----------------------------------------------------------------------------------------------------
TOTAL INTEREST-EARNING ASSETS $1,304,216 $507,713 $207,172 $365,018 $2,384,119
----------------------------------------------------------------------------------------------------
INTEREST-BEARING LIABILITIES:
SAVINGS AND OTHER DEPOSITS $ 251,676 $269,037 $ 45,604 $ - $ 566,317
MONEY MARKET DEPOSITS 95,858 - - - 95,858
NEGOTIABLE ORDER OF WITHDRAWAL
DEPOSITS - 18,607 37,214 - 55,821
ESCROW DEPOSITS - - - 14,544 14,544
CERTIFICATES OF DEPOSIT 584,111 194,799 90,658 - 869,568
--------------------------------------------------------------
TOTAL DEPOSIT ACCOUNTS 931,645 482,443 173,476 14,544 1,602,108
--------------------------------------------------------------
REVERSE REPURCHASE AGREEMENTS 439,500 - - - 439,500
FHLB ADVANCES 55,000 - 100,000 - 155,000
OTHER BORROWED FUNDS 2,708 6,343 6,473 60,084 75,608
--------------------------------------------------------------
TOTAL BORROWED FUNDS 497,208 6,343 106,473 60,084 670,108
--------------------------------------------------------------
TOTAL INTEREST-BEARING LIABILITIES $1,428,853 $488,786 $279,949 $ 74,628 $2,272,216
----------------------------------------------------------------------------------------------------
INTEREST RATE SENSITIVITY GAP (124,637) 18,927 (72,777) 290,390 111,903
----------------------------------------------------------------------------------------------------
INTEREST RATE OPTIONS - CAPS (1) 20,000 (20,000) - - -
----------------------------------------------------------------------------------------------------
ADJUSTED INTEREST-RATE SENSITIVITY
GAP $ (104,637) $ (1,073) $(72,777) $290,390 $ 111,903
----------------------------------------------------------------------------------------------------
CUMULATIVE RATIO OF GAP TO TOTAL
ASSETS -4.1% 4.4%
----------------------------------------------------------------------------------------------------
</TABLE>
(1) Excluding the effect of interest rate caps with a maturity of greater than
one year, the one-year gap would have been -4.8%
26
<PAGE>
<PAGE>
The following assumptions are utilized in the gap table:
(1) adjustable-rate loans and securities are included in the period in which
their interest rates are next scheduled to reset; (2) fixed-rate loans and
mortgage-backed securities and certain other fixed-rate securities are amortized
based on historical and estimated prepayment experience; (3) unamortized
premiums and discounts on securities and loans are excluded from the table; (4)
savings deposit accounts are amortized based on estimated decay factors and
other relevant internal analyses; (5) money market deposit accounts (Greaterfund
Savings) are assumed to reprice within one month and negotiable order of
withdrawal deposit accounts (Greaterfund Checking) are assumed to reprice
ratably over a two- to five-year period; (6) nonperforming assets are excluded
from the table and (7) most other categories reprice according to their actual
maturities or interest rate reset dates.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The information required is incorporated herein by reference to note 5 "Legal
Matters" in the notes to the consolidated financial statements of this report.
ITEM 2. CHANGES IN SECURITIES
(a) Not applicable
(b) Not applicable
(c) Securities of the Bank issued during the quarter ended March 31, 1997
that are exempt from registration pursuant to section 3(a)(5) of the
Securities Act of 1933 are summarized as follows:
<TABLE>
<CAPTION>
($ IN THOUSANDS)
---------------------------------------------------------------
DESCRIPTION DATE ISSUED SHARES CONSIDERATION
---------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCK (1) VARIOUS 60,485 $ 648
COMMON STOCK (2) FEB. 28, 1997 55,095 759
COMMON STOCK (3) JAN. 1, 1997 27,537 380
---------------------------------------------------------------
143,117 $1,787
---------------------------------------------------------------
</TABLE>
(1) Common stock issued to officers of the Bank on various dates upon the
exercise (at various grant prices) of common stock options granted under stock
option plans (as described on page 67 of the Bank's 1996 Annual Report to
Stockholders). The consideration includes a related tax benefit.
(2) Common stock issued to the Bank's ESOP (for participants who terminated
their employment with the Bank) upon the conversion of 58,314 shares of ESOP
Preferred Stock based on a conversion rate of .9448 of a common share for each
preferred share (as described on pages 66 and 67 of the Bank's 1996 Annual
Report to Stockholders).
(3) Common stock purchased by the Bank's ESOP in connection with the
reinvestment, for participants, of the semi-annual dividend (declared on
December 12, 1996 and paid January 1, 1997) on allocated ESOP Preferred Stock
(as described on pages 66 and 67 of the Bank's 1996 Annual Report to
Stockholders).
27
<PAGE>
<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The Annual Meeting of Stockholders was held on April 25, 1997.
(b) Each of the persons named in the Proxy Statement/Prospectus dated March
14, 1997 as a nominee for Director was elected for three-year terms
expiring in 2000 (see Item 4-C below). Additionally, the following
represent the names of the other Directors whose term of office as a
director were unexpired and continued after the meeting: Philip F.
Ruppel, George H. Sorter, Gwendolyn Calvert Baker, William F. de
Neergaard, James G. Peel, C. Stephen Connolly and William F. Ward.
(c) The following table summarizes the voting results on each of the matters
that were submitted to the Bank's common and ESOP Series A Preferred
stockholders (voting together as a single class):
<TABLE>
<CAPTION>
FOR AGAINST OR WITHHELD ABSTAINED BROKER NONVOTES
---------------------------- ----------- -------------------- -------------- -----------------
<S> <C> <C> <C> <C>
ELECTION OF DIRECTORS
GERARD C. KEEGAN 13,736,484 1,136,821 - -
NICHOLAS A. MARSHALL 13,792,474 1,080,831 - -
PETER C. HAEFFNER, JR. 13,796,659 1,076,646 - -
RESOLUTIONS
TO RATIFY THE APPOINTMENT
OF KPMG PEAT MARWICK LLP
AS INDEPENDENT AUDITOR FOR
1997. 14,541,927 189,332 142,046 -
TO APPROVE A PROPOSED
AGREEMENT AND PLAN OF
REORGANIZATION TO WHICH A NEWLY
FORMED DELAWARE CORPORATION,
GREATER NEW YORK BANCORP INC.
(BANCORP) WILL BECOME A HOLDING
COMPANY FOR THE BANK AND ALL
THE OUTSTANDING COMMON AND
PREFERRED STOCK OF THE BANK WILL
BE CONVERTED INTO ALL THE
OUTSTANDING COMMON AND
PREFERRED STOCK OF BANCORP. 10,650,251 1,099,761 172,216 2,951,077
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM F-3 (EQUIVALENT TO FORM 8-K)
(a) EXHIBIT INDEX
11 - Statement Re: Computation of Earnings Per Share
27 - Financial Data Schedule
(b) REPORTS ON FORM F-3 (EQUIVALENT TO FORM 8-K)
The Bank filed one report on Form F-3 during the quarter ended March
31, 1997. This report for the month of March 1997 filed the Agreement
and Plan of Merger dated as of March 29, 1997 by and among Astoria
Financial Corporation, Astoria
28
<PAGE>
<PAGE>
Federal Savings and Loan Association and the Bank, and various other
exhibits related to the Agreement and Plan of Merger.
SIGNATURES
Under the requirements of the Securities Exchange Act of 1934, the Bank has duly
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
THE GREATER NEW YORK SAVINGS BANK
May 9, 1997 \s\ Gerard C. Keegan
________________________________________
Gerard C. Keegan, Chairman of the Board,
President and Chief Executive Officer
May 9, 1997 \s\ Philip T. Spies
________________________________________
Philip T. Spies, Senior Vice President and Controller
29
<PAGE>
<PAGE>
Exhibit 11 of Form 10-Q
THE GREATER NEW YORK SAVINGS BANK AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
For the Quarter Ended March 31,
-------------------------------
1997 1996
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
PRIMARY:
Net income $ 4,702,933 $ 4,211,500
Less:
Dividends on Series A preferred stock, net of taxes (301,569) (305,524)
Dividends on Series B preferred stock (1,500,000) (1,500,000)
-----------------------------
(1,801,569) (1,805,524)
-----------------------------
Adjusted net income for primary earnings per share computation $ 2,901,364 $ 2,405,976
=============================
Weighted-average number of shares used to compute primary earnings per
share 13,884,527 13,497,537
=============================
PRIMARY EARNINGS PER SHARE $0.21 $0.18
=============================
FULLY DILUTED:
Net income $4,702,933 $ 4,211,500
Less: (1,500,000) (1,500,000)
Dividends on Series B preferred stock
Adjustment to expense due to proforma conversion of Series A
preferred stock to common stock, net of taxes (198,831) (209,941)
-----------------------------
Adjusted net income for fully diluted earnings per share computation $3,004,102 $ 2,501,559
=============================
Weighted-average number of shares used to compute fully diluted earnings 15,361,009 15,114,283
per share
=============================
FULLY DILUTED EARNINGS PER SHARE $0.20 $0.17
=============================
</TABLE>
30
<PAGE>
<PAGE>
Exhibit 27 of Form 10-Q
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AND
QUALIFIED IN ITS ENTIRETY BY THE GREATER NEW YORK SAVINGS BANK'S QUARTERLY
REPORT ON FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1997.
[RESTATED]
[MULTIPLIER] 1,000
<TABLE>
<S> <C>
[PERIOD-TYPE] 3-MOS
[FISCAL-YEAR-END] DEC-31-1997
[PERIOD-END] MAR-31-1997
[CASH] 23,279
[INT-BEARING-DEPOSITS] 0
[FED-FUNDS-SOLD] 8,300
[TRADING-ASSETS] 0
[INVESTMENTS-HELD-FOR-SALE] 209,274
[INVESTMENTS-CARRYING] 1,212,710
[INVESTMENTS-MARKET] 1,194,793
[LOANS] 963,799
[ALLOWANCE] 16,579
[TOTAL-ASSETS] 2,570,533
[DEPOSITS] 1,667,433
[SHORT-TERM] 497,208
[LIABILITIES-OTHER] 20,178
[LONG-TERM] 172,900
[COMMON] 118,204
[PREFERRED-MANDATORY] 0
[PREFERRED] 51,659
[OTHER-SE] 42,951
[TOTAL-LIABILITIES-AND-EQUITY] 2,570,533
[INTEREST-LOAN] 20,208
[INTEREST-INVEST] 23,374
[INTEREST-OTHER] 483
[INTEREST-TOTAL] 44,065
[INTEREST-DEPOSIT] 15,868
[INTEREST-EXPENSE] 25,169
[INTEREST-INCOME-NET] 18,896
[LOAN-LOSSES] 0
[SECURITIES-GAINS] 0
[EXPENSE-OTHER] 13,424
[INCOME-PRETAX] 7,513
[INCOME-PRE-EXTRAORDINARY] 4,703
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] 4,703
[EPS-PRIMARY] 0.21
[EPS-DILUTED] 0.20
[YIELD-ACTUAL] 7.37
[LOANS-NON] 26,545
[LOANS-PAST] 1,264
[LOANS-TROUBLED] 155,019
[LOANS-PROBLEM] 47,291
[ALLOWANCE-OPEN] 17,228
[CHARGE-OFFS] 1,823
[RECOVERIES] 1,174
[ALLOWANCE-CLOSE] 16,579
[ALLOWANCE-DOMESTIC] 16,579
[ALLOWANCE-FOREIGN] 0
[ALLOWANCE-UNALLOCATED] 0
</TABLE>
<PAGE>
<PAGE>
Exhibit 99.6
FEDERAL DEPOSIT INSURANCE CORPORATION
Washington, D.C. 20429
FORM F-1
FORM FOR REGISTRATION OF SECURITIES OF A BANK
UNDER SECTION 12(b) OR SECTION 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
FDIC Certificate No. 16015-6
THE GREATER NEW YORK SAVINGS BANK
---------------------------------
(Exact name of bank as specified in charter)
One Penn Plaza
New York, New York 10119
------------------------
(Address of administrative office)
11-0754650
----------
(I.R.S. Employer Identification No.)
(212) 613-4000
--------------
(Bank's telephone number, including area code)
Title of each class of securities being registered under section
12(b) of the Act:
Title of class: None.
Name of each exchange on which class is being
registered: None.
Title of each class of securities being registered under section
12(g) of the Act:
Title of class: Common Stock, par value $1.00 per share.
<PAGE>
<PAGE>
Explanatory Note: Answers to many of the items set forth below
are incorporated herein by reference to the Proxy Statement and Subscription
Offering Circular dated April 10, 1987 of The Greater New York Savings Bank (the
"Offering Circular"), attached as Exhibit A to this Registration Statement
pursuant to Item l9(b).
Item 1. Business.
(a) Year organized: The Greater New York Savings Bank ("The
Greater" or the "Bank") was organized in 1897 in mutual form under the name The
Greater New York Savings Bank. It is expected that the Bank will be converted to
stock form upon approval of the Bank's depositors at a special meeting to be
held on May 4, 1987 and the satisfaction of certain other conditions.
Accordingly, there are, at present, no holders of equity securities of the
Bank.(1)
(b) Business done: Reference is made to "The Greater New York
Savings Bank" at pages 7 through 10, and "Business of the Bank" at pages 24
through 41, respectively, of the Offering Circular.
Competitive conditions: Reference is made to "Business of the
Bank - Competition" at page 41 of the Offering Circular.
Number of offices: Reference is made to the map on page 6 of the
Offering Circular and "Business of the Bank - Properties" at pages 40 and 41 of
the Offering Circular.
Business of subsidiaries: Reference is made to "Business of the
Bank - Wholly-Owned Subsidiaries" at page 39 of the Offering Circular.
Number of employees: Reference is made to "Business of the Bank -
Personnel" at pages 39 and 40 of the Offering Circular.
Certain information required by Item 1 of the Form F-1 is not
contained in the Offering Circular and is provided below:
New Product Research
The Greater has conducted research activities relating to the
development of new services and the improvement of existing services. The Bank
does not deem the amounts spent in the last two fiscal years on such activities
to be material. Reference is made to "Business of the Bank - Investment
Activities" at pages 32 through 35, "Business of the Bank - Deposits and Other
Sources of Funds" at pages 35 through 38, and "The Greater New York Savings
Bank" at pages 7 through 10, respectively, of the Offering Circular.
- -------------------
(1) The Bank is converting from a New York mutual savings bank to a New York
stock savings bank pursuant to Part 86 of the General Regulations of the
Banking Board of the State of New York. This Registration Statement is being
prepared in anticipation of the sale of common stock in connection with such
conversion. Information not supplied herewith will be filed by amendment.
<PAGE>
<PAGE>
Certain Financial Data
<TABLE>
<CAPTION>
Ratio of: 1984 1985 1986
- --------- ---- ---- ----
<S> <C> <C> <C>
Net Income to Average Equity(2) ......... (56.81)% 91.24% 70.59%
Net Income to Average
Daily Deposits ......................... (0.90)% 0.89% 1.60%
Average Loans to Average
Daily Deposits ......................... 60.7% 40.9% 53.4%
</TABLE>
Item 2. Selected Financial Data; Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Reference is made to "Selected Financial and Operating Data" at
page 4, "Statements of Operations" at page 16, and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" at pages 17 through
23, respectively, of the Offering Circular.
Item 3. Properties
Reference is made to "Business of the Bank - Properties" at pages
40 and 41 of the Offering Circular.
Item 4. Parents and Subsidiaries.
Reference is made to "Business of the Bank - Wholly-Owned
Subsidiaries" at page 39 of the Offering Circular.
The Greater New York Mortgage Corporation ("GNYMC") is a
wholly-owned subsidiary incorporated under the laws of the State of New York.
The Greater New York Mortgage Corporation of Florida ("GNYMCF") is a
wholly-owned subsidiary incorporated under the laws of the State of Florida. The
stock of both GNYMC and GNYMCF is held by The Greater New York Financial
Corporation, a wholly-owned non-operating subsidiary incorporated under the laws
of the State of Delaware.
The Bank has no parent corporation.
Item 5. Security Ownership of Management.
None.(1)
- -------------------
(2) Net income and average equity are computed on the basis of generally
accepted accounting principles. Average equity represents average net worth.
(1) The Bank is converting from a New York mutual savings bank to a New York
stock savings bank pursuant to Part 86 of the General Regulations of the
Banking Board of the State of New York. This Registration Statement is being
prepared in anticipation of the sale of common stock in connection with such
conversion. Information not supplied herewith will be filed by amendment.
-2-
<PAGE>
<PAGE>
Item 6. Directors and Principal Officers.
Reference is made to "Management - Trustees and Executive
Officers" at pages 49 through 51 of the Offering Circular.
Significant Employees: The principal occupation and business
during the last five years, and age as of March 31, 1987, of each significant
employee not otherwise included in the Offering Circular is set forth below.
Louis H. Ferkin, age 61, has been President and Chief Executive
Officer of The Greater New York Mortgage Corporation of Florida since July 1985.
He previously served as Senior Vice President of General Development Corp., a
builder and land developer, from January 1978 to June 1985.
Ronald A. Pasquini, age 47, has been President of The Greater New
York Mortgage Corporation since March 1986. He previously served as a Vice
President of 1st Nationwide Savings, a thrift association, from 1982 to February
1986.
There are no family relationships or legal proceedings required
to be disclosed with respect to directors, principal officers or significant
employees of the Bank.
Item 7. Remuneration of Directors and Officers.
Reference is made to "Remuneration of Trustees and Executive
Officers" and "Employee Benefit Plans" under "Management" at pages 52 through 59
of the Offering Circular.
Item 8. Management Options to Purchase Securities.
Reference is made to "Management - Employee Benefit Plans -
Long-Term Incentive Program" at pages 57 through 59 of the Offering Circular.
Item 9. Interest of Management and Others in Certain Transactions.
Reference is made to "Management - Transactions with Certain
Related Persons" at page 59 of the Offering Circular.
In addition, for the years ended December 31, 1984 and 1985, the
Bank paid $93,450 and $50,100, respectively, to the law firm of Ahearn, Damanti
& Carlson pursuant to the terms of its retainer agreement. The law firm received
fees from third parties as a result of representing the Bank in loan closings,
foreclosure actions, loan satisfactions, extension agreements and other legal
matters during 1984 and 1985 in the amounts of $907,482 and $1,067,417,
respectively.
Item 10. Legal Proceedings.
Reference is made to "Business of the Bank - Legal Proceedings"
at page 40 of the Offering Circular.
-3-
<PAGE>
<PAGE>
Item 11. Number of Equity Security Holders.
None.(1)
Item 12. Nature of Trading Market.
Reference is made to "Market for Common Stock" at page 10 of the
Offering Circular.
Item 13. Recent Sales of Securities.
None.(1) Reference is made to the information contained on
page 1, and to "Use of Proceeds" at page 10, and "The Conversion" at pages 60
through 70, respectively, of the Offering Circular.
Item 14. Capital Stock Being Registered.
Reference is made to "Dividends" at page 10, "Description of
Capital Stock" at pages 70 and 71, and "Certain Anti-Takeover Provisions" at
pages 71 through 75 of the Offering Circular.
The shares being registered are not subject to any redemption
provisions or sinking fund provisions and are not liable to further calls or to
assessment by the Bank.
Under New York law, the Bank is not permitted to repurchase the
shares being registered.
Item 15. Long-Term Debt Being Registered.
Not applicable.
Item 16. Other Securities Being Registered.
Not applicable.
Item 17. Indemnification of Directors and Officers.
Reference is made to "Management - Remuneration of Trustees and
Executive Officers" at pages 52 and 53 of the Offering Circular for a
description of an irrevocable trust agreement entered into by the Bank to
provide for the indemnification of certain trustees and officers of the Bank,
and a description of the individual indemnification contracts entered between
the Bank and each trustee. In addition, Article VIII of the proposed By-Laws of
the Bank provides for indemnification of each director
- -------------------
(1) The Bank is converting from a New York mutual savings bank to a New York
stock savings bank pursuant to Part 86 of the General Regulations of the
Banking Board of the State of New York. This Registration Statement is being
prepared in anticipation of the sale of common stock in connection with such
conversion. Information not supplied herein will be filed by amendment.
-4-
<PAGE>
<PAGE>
or officer of the Bank to the full extent permitted by Article XV of the New
York Banking Law. Article XV of the New York Banking Law provides generally for
indemnification against reasonable expenses of defending or appealing actions,
or of paying judgments, fines, or settlements, incurred by any such person made
a party by reason of his or his legal predecessor's status as a director or
officer of the Bank.
Item 18. Applicability of State Laws.
Reference is made to "Regulation and Supervision" at pages 41
through 45 of the Offering Circular.
Item 19. Financial Statements and Exhibits.
(a) Financial statements: The consolidated statements of
financial condition of the Bank as of December 31, 1985 and 1986, the related
consolidated statements of operations, changes in net worth and changes in
financial position for each of the years in the three year period ended December
31, 1986 (together with the Notes to such financial statements), and the
opinions of independent certified public accountants, are included at pages F-2
through F-21 of the Offering Circular.
(b) Exhibits:
(A) Offering Circular dated April 10, 1987.*
(B) Opinion of Peat Marwick Main & Co., independent
certified public accountants.*
(C) (1) (a) Restated Organization Certificate.*
(b) Proposed By-Laws.*
(2) Plan of Conversion.*
(3) Form of certificate for shares of Common Stock.*
(4) (a) Retirement Plan of The Greater New York
Savings Bank in the Retirement System for
Savings Institutions.*
(b) Plan of Pensions and Retirement Benefits of
The Greater New York Savings Bank.*
(c) Incentive Savings Plan.*
(5) 1987 Long Term Incentive Program of The Greater
New York Savings Bank.*
(6) Not applicable.
- -------------------
* Filed herewith
-5-
<PAGE>
<PAGE>
(7) (a) Employment contracts of Messrs. Wille and
Spies and proposed form of management
employment contracts.*
(b) Indemnification Trust Agreement.*
(8) Not applicable.
(9) Not applicable.
- -------------------
* Filed herewith
-6-
<PAGE>
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Bank has duly caused this registration statement to be signed on its
behalf by the undersigned thereunto duly authorized.
THE GREATER NEW YORK SAVINGS BANK
By: /s/ Frank Wille
--------------------------------
Frank Wille
Chairman and Chief
Executive Officer
May 4, 1987
-7-
<PAGE>
<PAGE>
Proxy Statement and [LOGO]
Subscription Offering Circular
Exhibit (a)
to
Form F-1
The Greater New York Savings Bank
11,000,000 Shares of Common Stock
The Greater New York Savings Bank ("The Greater" or the "Bank") is offering
for sale in a subscription offering (the "Subscription Offering") 11,000,000
shares of common stock, par value $1.00 per share (the "Common Stock"), to be
issued in connection with the conversion of the Bank from a New York chartered
mutual savings bank to a New York chartered stock savings bank (the
"Conversion"). The Common Stock is being offered in the Subscription Offering to
depositors whose accounts with the Bank totaled $100 or more on September 30,
1986 (the "Eligible Account Holders").
Consummation of the Conversion is subject to the approval of the Bank's
plan of conversion (the "Plan of Conversion" or the "Plan") by 75% of the
votes cast by Eligible Account Holders present in person or by proxy at the
special meeting of depositors to be held on May 4, 1987. This Proxy Statement
and Subscription Offering Circular contains information relating to, and
constitutes a proxy statement for, the solicitation of proxies for such special
meeting. See "Proxy Statement Information."
All subscription rights in the Subscription Offering are non-transferable
and will expire if not exercised by 5:00 p.m., New York time, on May 9, 1987,
unless the Subscription Offering is extended by the Bank with the approval of
the Superintendent of Banks of the State of New York (the "Superintendent").
Shares offered in the Subscription Offering may be subscribed for by properly
completing an order form and returning it with full payment of the maximum
subscription price of $13.80 per share (the "Maximum Subscription Price") for
each of the subscribed shares. Payment may be made in cash, by check, bank draft
or money order, or by authorizing withdrawal from deposits maintained with the
Bank. Interest will be paid on subscriptions paid for in cash or by check, bank
draft or money order at the rate being paid by The Greater on passbook savings
accounts at the commencement of the Subscription Offering from the date payment
is received by the Bank until the Conversion is completed or terminated.
Payments authorized by withdrawal from accounts will continue to earn interest
at the contractual rates for such accounts until the Conversion is completed or
terminated.
No person or entity may subscribe for fewer than 25 shares in the
Subscription Offering. No person or entity, together with associates and persons
acting in concert, may subscribe for more than an aggregate of 3% of the total
number of shares being offered in the Subscription Offering. It is anticipated
that any shares not subscribed for in the Subscription Offering will be sold to
underwriters for reoffering in a public offering (the "Public Offering"). No
person or entity, together with associates and persons acting in concert, may
purchase in the Public Offering 5% or more of the Common Stock, including within
such limitation shares subscribed for in the Subscription Offering. The total
number of shares of Common Stock to be issued in the Conversion may be increased
or decreased significantly to reflect changes in the appraised value of the Bank
or market and financial conditions without resolicitation of, or granting any
rights of cancellation to, subscribers.
As a mutual institution, The Greater has never issued capital stock.
Consequently, there is no established market for the Common Stock and there can
be no assurance that an established market for the Common Stock will develop.
The Bank has applied to have its common stock quoted on the National Association
of Securities Dealers Automated Quotation System ("NASDAQ") under the symbol
"GRTR." See "Market for Common Stock."
THESE SHARES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE NEW YORK STATE
BANKING DEPARTMENT OR THE FEDERAL DEPOSIT INSURANCE CORPORATION, NOR
HAS SUCH DEPARTMENT OR CORPORATION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROXY STATEMENT AND SUBSCRIPTION OFFERING
CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Estimated Estimated
Maximum Maximum Maximum Net
Subscription Conversion Conversion
Price(l) Expenses(2) Proceeds
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share................... $13.80 $0.984 $12.816
Total(3) ................... $151,800,000 $10,822,000 $140,978,000
- --------------------------------------------------------------------------------
</TABLE>
(1) The Maximum Subscription Price is the amount to be paid for each share at
the time of subscription and was determined on the basis of an independent
appraisal of the estimated pro forma market value of the Common Stock at
February 2, 1987 and updated as of March 23, 1987. The actual purchase price
is expected to be within the range of S10.20 to S13.80 per share and will,
if there is a Public Offering, be the same as the public offering price. See
"The Conversion--Stock Pricing."
(2) Includes estimated expenses of the Conversion, including an estimated
underwriting discount to the underwriters in connection with the Public
Offering. See "Pro Forma Data."
(3) Does not include the exercise of an over-allotment option which is expected
to be granted to the underwriters in the Public Offering to purchase, on the
same terms as other shares purchased in the Public Offering, up to an
additional 15% of the shares of Common Stock offered in the Subscription
Offering or the possible increase or decrease in the number of shares
offered to reflect any changes in the appraised value of the Bank after the
date hereof. Unless otherwise required by the Superintendent, no
resolicitation of subscribers in the Subscription Offering will be made and
subscribers will not be permitted to modify or rescind their subscriptions
unless the total proceeds are outside the Estimated Price Range stated
herein, exclusive of any exercise of the over-allotment option. See "Pro
Forma Data" and "Public Offering" and "Number of Shares to be Sold" under
"The Conversion."
------------------
The date of this Proxy Statement and Subscription Offering Circular is
April 10, 1987.
<PAGE>
<PAGE>
OTHER INFORMATION
The Greater is subject to supervision, examination and regulation by the
New York State Banking Department (the "Banking Department") and the FDIC. The
Bank is further subject to regulation by the Board of Governors of the Federal
Reserve System with respect to reserves required to be maintained against
deposits and certain other matters. See "Regulation and Supervision."
The Greater's principal office is located at 451 Fifth Avenue, Brooklyn,
New York 11215, and its administrative headquarters are located at One Penn
Plaza, New York, New York 10119. The Bank's telephone number is (212) 613-4000.
USE OF PROCEEDS
The net proceeds from the sale of the Common Stock will become part of the
capital funds of the Bank to be used for general business purposes. These
purposes may include: (1) the continued funding of the Bank's commercial real
estate activities; (2) the acquisition of adjustable rate home mortgage loans
originated by GNYMC and GNYMCF; (3) investment in short and intermediate-term
interest-bearing obligations issued or guaranteed by the United States
government and similar investments offered by public or private corporations;
and (4) the purchase of variable rate mortgage-backed securities. While the
Bank has no specific plans or agreements to do so, the proceeds may also be used
for (1) the establishment of new branches in the New York City metropolitan
area; (2) the establishment or acquisition of other mortgage banking affiliates
in other states; (3) the acquisition of other financial institutions or
financial service companies in the Bank's market area or, to the extent legally
permissible, in other states along the Northeast Corridor; and (4) the
introduction of new financial products and services. The capital generated
will also permit the continued restructuring of the Bank's remaining long-term
fixed rate assets. It is currently anticipated that, on an interim basis, all
or part of the proceeds will be invested in variable rate or short-term
marketable securities. For an estimate of the net proceeds to the Bank from the
sale of the Common Stock, see "Pro Forma Data."
DIVIDENDS
The Bank has no initial plans for the payment of dividends on the Common
Stock. The Greater intends to pay dividends at such time as it determines that
such payments would be appropriate based on its earnings performance, financial
condition, tax position, expansion opportunities and other factors, including
the capital requirements imposed on the Bank by regulatory agencies.
Payment of dividends by The Greater on the Common Stock is subject to
various regulatory and tax restrictions. Pursuant to New York Banking Law (the
"Banking Law"), dividends may be declared and paid only out of net profits of
the Bank. The approval of the Superintendent is required if the total of all
dividends declared in any calendar year will exceed net profits for that year
plus the retained net profits of the preceding two years, less any required
transfer to surplus or a fund for the retirement of any preferred stock. In
addition, no dividends may be declared, credited or paid if the effect thereof
would be to cause the Bank's net worth to be reduced below the amount required
to maintain the liquidation account to be established in the Conversion or as
may be required by the Superintendent or the FDIC. See "Regulation and
Supervision" and "The Conversion--Effects of Conversion--Liquidation Rights."
MARKET FOR COMMON STOCK
As a mutual institution, The Greater has never issued capital stock.
Consequently, there is no established market for the Common Stock. The Bank has
applied to have its common stock quoted on NASDAQ concurrently with the
commencement of the Public Offering under the symbol "GRTR." The First Boston
Corporation, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Dean Witter
Reynolds Inc., the expected co-managers of the contemplated Public Offering,
have each advised the Bank that they intend to use their best efforts upon
completion of the Conversion to make a market in the Common Stock by maintaining
bid and asked quotations and by trading as a principal as long as the volume of
trading activity in the Common Stock and certain other market making
considerations justify doing so. The Bank also intends to encourage other market
makers to establish and maintain a market in the Common Stock. However, there
can be no assurance that an established and liquid market for the Common Stock
will develop or that, if developed, it will continue.
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CERTAIN RESTRICTIONS ON PURCHASE OR TRANSFER OF SHARES AFTER CONVERSION
Shares of the Common Stock purchased in connection with the Conversion by a
trustee, director or an executive officer of The Greater will be subject to a
restriction that, without the consent of the Superintendent, the shares not be
sold for a period of one year following the Conversion, except in the event of
the death or judicial declaration of incompetency of such trustee, director or
executive officer. Any shares of common stock issued during the one year period
as a stock dividend, stock split or otherwise with respect to such restricted
stock will be subject to the same restrictions.
Purchases of outstanding shares of common stock of The Greater by
directors, executive officers (or any person who was an executive officer,
director or trustee of the Bank after adoption of the Plan of Conversion) and
their associates during the three year period following the Conversion may be
made only through a broker or dealer registered with the Securities and Exchange
Commission, except with the prior written approval of the Superintendent.
Additionally, under New York law, The Greater will be prohibited from
repurchasing any shares of the Common Stock. The Bank has adopted certain
additional restrictions on the acquisition of shares of Common Stock of the
Bank. See "Certain Anti-Takeover Provisions."
DESCRIPTION OF CAPITAL STOCK
The Restated Organization Certificate of The Greater, which will be
effective upon the Conversion, authorizes the issuance of capital stock
consisting of up to 10 million shares of preferred stock, par value $1.00 per
share, in series and classes having such rights, preferences, privileges and
restrictions as the Board of Directors may determine, and up to 45 million
shares of common stock, par value $1.00 per share. Upon the Conversion, the
Board of Directors of The Greater will have the power to issue additional shares
of capital stock from time to time without obtaining the approval of the
stockholders of the Bank, but subject to the consent of the Superintendent. The
capital stock of the Bank will represent non-withdrawable capital and will not
be an account insured by the FDIC or by any other person or entity.
Provisions of the Plan of Conversion, the Restated Organization
Certificate, the By-Laws, and laws and regulations to which The Greater is
subject, will substantially restrict the acquisition of certain percentages of
the outstanding common stock of the Bank and the ability of the stockholders to
change the Board of Directors. See "The Conversion--Certain Restrictions on
Purchase or Transfer of Shares After Conversion" and "Certain Anti-Takeover
Provisions."
COMMON STOCK
Voting Rights. Each share of common stock will have the same relative
rights as, and will be identical in all respects to, each other share of common
stock. Upon the Conversion, and prior to the issuance of any voting preferred
stock, the holders of shares of common stock will possess all rights, including
exclusive voting rights, pertaining to the capital stock of the Bank. Each share
of common stock will entitle the holder thereof to one vote on all matters upon
which stockholders have the right to vote. The Restated Organization Certificate
and By-Laws contain certain limitations for certain periods on voting rights of
persons holding more than 10% of the outstanding common stock of the Bank, and
supermajority voting requirements in certain cases. Stockholders will not be
entitled to cumulate their votes for the election of directors. See "Certain
Anti-Takeover Provisions."
Dividends. The holders of the Bank's common stock will be entitled to
receive and to share equally in such dividends as may be declared by the Board
of Directors of the Bank out of funds legally available therefor. However, the
Bank has no initial plans to pay dividends on its common stock. See "Dividends"
for certain restrictions on the payment of dividends.
Liquidation. In the event of any liquidation, dissolution or winding up of
the Bank, the holders of shares of common stock will be entitled to receive,
after payment of all debts and liabilities of the Bank (including all deposits
and accrued interest thereon), after distribution of the balance in the special
liquidation account to Eligible Account Holders (see "The Conversion--Effects of
Conversion--Liquidation Rights"), and after the rights, if any, of preferred
stockholders, any remaining assets of the Bank available for distribution in
cash or in kind.
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Preemptive Rights; Redemption; Assessability. Holders of shares of common
stock of the Bank will not be entitled to preemptive rights with respect to any
shares of the Bank which may be issued. The common stock will not be
subject to redemption. Upon receipt by the Bank of the full specified
purchase price therefor, the common stock will be fully paid and nonassessable.
PREFERRED STOCK
None of the 10 million shares of authorized preferred stock will be issued
in the Conversion. After the Conversion, the Board of Directors will be
authorized, subject to the consent of the Superintendent, to approve the
issuance of preferred stock without further stockholder approval. The powers,
preferences and rights, and the qualifications, limitations and restrictions
thereof, on each series of preferred stock issued will be determined by the
Board of Directors, and approved as required by the Banking Law or otherwise, at
the time of issuance and may include, among other things, rights in liquidation,
rights to participating dividends, voting and convertibility to common stock.
See "Certain Anti-Takeover Provisions."
CERTAIN ANTI-TAKEOVER PROVISIONS
A number of provisions of the Bank's Restated Organization Certificate and
By-Laws pertain to matters of corporate governance and certain rights of
stockholders. Certain of those provisions relating to stock ownership and
transfers, the Board of Directors and business combinations may be deemed to
have an "anti-takeover" effect. These provisions affect stockholder rights and
should be given careful consideration. They may have the effect of delaying or
inhibiting a tender offer or takeover attempt which a stockholder might consider
in his or her best interest, including those attempts which might result in a
premium over the current market price for the shares held by stockholders. The
following summary description of certain of these provisions is necessarily
general and reference should be made in each case to the Restated Organization
Certificate and By-Laws of the Bank, which are incorporated herein by reference.
These documents may be obtained from the Bank upon written request.
CLASSIFIED BOARD OF DIRECTORS AND RELATED PROVISIONS
The Restated Organization Certificate and the By-Laws provide that the
Board of Directors is to be divided into three classes with respect to term of
office which shall be as nearly equal in number as possible. The initial terms
of the directors will be staggered so that directors of one class will be
elected at each annual meeting of stockholders. One class of directors will have
a term of office expiring at the first annual meeting of stockholders; a second
class will have a term of office expiring at the annual meeting to be held one
year thereafter; and a third class will have a term of office expiring at the
annual meeting to be held two years thereafter. The term of each director
elected at an annual meeting will be three years. Each director will serve until
his or her successor is elected and qualified. The By-Laws also provide that
vacancies on the Board of Directors not exceeding one-third of the entire Board,
including vacancies created by an increase in the number of directors, may be
filled for the unexpired term by resolution of a majority of the directors then
in office.
The Restated Organization Certificate and the By-Laws provide generally
that a director may be removed for cause at any time by the affirmative vote of
two-thirds of the entire Board, or for cause by the affirmative vote of the
holders of record of not less than 80% of the outstanding shares of capital
stock entitled to vote generally in the election of directors. This provision
may, under certain circumstances, impede the removal of a director of the Bank.
A classified Board of Directors could make it more difficult for
stockholders, including those holding a majority of the outstanding shares, to
force an immediate change in the composition of a majority of the Board of
Directors, even when the reason for a proposed removal is poor performance.
Since the terms of only one-third of the incumbent directors expire each year,
it would require at least two annual elections for the stockholders to change a
majority of the Board, whereas a majority of a non-classified board may be
changed in one year. In the absence of the provisions of the Restated
Organization Certificate and By-Laws classifying the Board, all of the directors
would be elected annually.
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Management of the Bank believes that the inclusion of the above provisions
in the Restated Organization Certificate and By-Laws will help to insure the
continuity and stability of the Bank's management and policies because, in the
ordinary course, a majority of the directors at any one time have had at least
one year's experience as directors of the Bank.
STOCKHOLDER VOTE REQUIRED TO APPROVE CERTAIN BUSINESS COMBINATIONS
ARTICLE VI of the Bank's Restated Organization Certificate requires the
affirmative vote of the holders of at least 80% of The Greater's outstanding
shares of capital stock entitled to vote generally in the election of directors
(the "Voting Stock"), together with the affirmative vote of the holders of at
least 50% of the Voting Stock held by stockholders other than any "interested
stockholder," to approve certain "business combinations," unless the transaction
is either approved by a majority of the "disinterested directors," or certain
minimum price criteria and procedural requirements are met. Under New York law,
absent this provision, business combinations, including mergers, consolidations
and sales of substantially all of the assets of the Bank must generally be
approved by the vote of the holders of two-thirds of the outstanding shares of
common stock of the Bank. The term "interested stockholder" is defined to
include any individual, corporation, partnership or other entity (other than the
Bank, any subsidiary of the Bank or any employee benefit plan of the Bank or a
subsidiary) which beneficially owns 10% or more of the Voting Stock. The term
"disinterested director" is defined to include any member of the Board of
Directors of the Bank who is not affiliated with an interested stockholder and
who was either a director of the Bank prior to the time the interested
stockholder became an interested stockholder, or was recommended for election by
a majority of the disinterested directors on the Board at the time such director
was nominated for election.
The provisions of Article VI apply to certain "business combinations" which
are generally defined to include the following transactions: (1) a merger or
consolidation of the Bank or any of its subsidiaries with an interested
stockholder or any "affiliate" or "associate" of an interested stockholder; (2)
any sale, lease, exchange, mortgage, pledge, transfer or other disposition to or
with any interested stockholder, or any "affiliate" or "associate" of an
interested stockholder, of any assets of the Bank or any of its subsidiaries, or
any issuance or transfer of any securities of the Bank or any of its
subsidiaries, having an aggregate fair market value equal to 20% or more of the
aggregate fair market value of the outstanding capital stock of the Bank; (3)
the adoption of any plan or proposal for the liquidation or dissolution of the
Bank proposed by or on behalf of any interested stockholder or any "affiliate"
or "associate" of an interested stockholder; or (4) any reclassification of
securities, recapitalization, merger with a subsidiary, or other transaction
which has the effect, directly or indirectly, of increasing the proportionate
share of any class of the outstanding stock (or securities convertible into
stock) of the Bank, or a subsidiary of the Bank, owned, directly or indirectly,
by an interested stockholder or any "affiliate" or "associate" of an interested
stockholder. The terms "affiliate" and "associate" have the respective meanings
ascribed to such terms under Rule 12b-2 of the General Rules and Regulations
under the Exchange Act, as in effect upon the effective date of the Conversion.
Article VI may be amended only by the affirmative vote of the holders of at
least 80% of the Voting Stock, together with the affirmative vote of the holders
of at least 50% of the Voting Stock not beneficially owned by any interested
stockholder. Article VI will expire three years following the effective date of
the Conversion unless it is retained by the affirmative vote of the holders of
at least a majority of outstanding shares of capital stock eligible to vote
thereon at a duly held meeting of stockholders within such three-year period.
Although designed to encourage potential acquirors to negotiate with the
Bank and to avoid tactics which may not treat all stockholders equally, Article
VI may discourage tender offers and other acquisitions of the Bank's stock. The
requirement that a business combination satisfy certain minimum price and
procedural requirements may also make the acquisition of all of the Bank's stock
too costly, and consequently may discourage acquisitions of large blocks of
stock and could tend to reduce the temporary fluctuations in the market price of
the Bank's stock which are caused by such accumulations. The provisions of
Article VI may also delay or prevent a change in the management of the Bank. The
Board of Trustees, however, has concluded that the potential benefits of Article
VI outweigh any possible disadvantages.
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The Board of Trustees of the Bank believes that the provisions of Article
VI are prudent and reduce the Bank's vulnerability to takeover attempts and
certain other transactions which have not been negotiated with and approved by
the Bank's Board of Directors. These provisions will also assist The Greater in
the orderly deployment of the proceeds received from the sale of the Common
Stock. The Board of Trustees believes these provisions are in the best interest
of the Bank and its stockholders. In the Board's judgment, it is in the best
position to determine the true value of the Bank and to negotiate more
effectively for what may be in the best interests of its stockholders.
Accordingly, the Board believes that it is in the best interests of the Bank and
its stockholders to encourage potential acquirors to negotiate directly with the
Board of Directors and that these provisions encourage such negotiations and
discourage hostile takeover attempts and abusive takeover tactics. It is also
the Board's view that these provisions do not discourage persons from proposing
a merger or other transaction at prices reflective of the true value of the Bank
and where the transaction is in the best interest of all stockholders.
PROVISIONS RELATING TO MEETINGS OF STOCKHOLDERS
The Greater's By-Laws provide that special meetings of stockholders may be
called by the Chairman, the President, the resolution of at least three-fourths
of the entire Board of Directors, or upon the written request of the holders of
record of three-fourths of the outstanding voting stock of the Bank. Although
the Board of Trustees believes that this provision will discourage stockholder
attempts to disrupt the business of the Bank between annual meetings of
stockholders, its effect may be to deter hostile takeovers by making it more
difficult for a person or entity to obtain immediate control of the Bank and
impose its will on other stockholders prior to the next annual meeting of
stockholders of the Bank.
The Greater's Restated Organization Certificate provides that there will be
no cumulative voting by stockholders for the election of the Bank's directors.
The absence of cumulative voting rights effectively means that the holders of a
majority of the shares of common stock voted at a meeting of stockholders may,
if they so choose, elect all directors of the Bank then being elected, thus
precluding minority stockholder representation on the Bank's Board of Directors.
LIMITATION ON ACQUISITIONS OF CONTROL
Section 3 of Article III of the Bank's Restated Organization Certificate
provides that for a period of three years (or such longer period, not to exceed
five years, as may be subsequently authorized by the Banking Department)
following the effective date of the Conversion, no person shall directly or
indirectly acquire the beneficial ownership of 10% or more of the common stock
of the Bank. In addition, any person who directly or indirectly acquires
beneficial ownership of more than 10% of the common stock of the Bank in
violation of the foregoing limitation shall not be entitled to vote any shares
in excess of such 10% limitation in connection with any matter submitted to
stockholders for a vote.
ADDITIONAL ANTI-TAKEOVER PROVISIONS
The Greater's Restated Organization Certificate and By-Laws contain a
number of additional provisions that may be deemed to have an anti-takeover
effect. For example, the Restated Organization Certificate authorizes the
issuance of up to 10 million shares of preferred stock, which conceivably could
represent an additional class of stock required to approve any proposed
acquisition. This preferred stock, none of which has been issued or will be
issued by the Bank in connection with the Conversion, together with authorized
but unissued shares of common stock (the Restated Organization Certificate
authorizes the issuance of up to 45 million shares of common stock), could also
represent additional capital required to be purchased by the acquiror.
The Bank's Restated Organization Certificate and By-Laws provide that the
number of directors of the Bank (exclusive of directors, if any, to be elected
by the holders of any shares of preferred stock subsequently issued by the Bank)
shall not be less than seven nor more than 30. The Bank's By-Laws further
provide that the number and classification of directors of the Bank may be
altered only by a vote of two-thirds of the entire Board or by the affirmative
vote of the holders of record of not less than
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80% of the outstanding shares of capital stock entitled to vote generally in the
election of directors. Additionally, the power to determine the number of
directors within these parameters and the power to fill vacancies not exceeding
one-third of the entire Board, whether occurring by reason of an increase in the
number of directors, by resignation or by other cause, is vested in the Bank's
Board of Directors. The overall effect of such provisions may be to prevent a
person or entity from immediately acquiring control of the Bank through an
increase in the number of the Bank's directors and election of his or its
nominees to fill the newly created vacancies.
The Bank's By-Laws provide that any stockholder desiring to make a
nomination for the election of directors at a meeting of stockholders must
submit written notice to the Secretary of the Bank not later than November 30,
1987, in the case of individuals to be nominated at the Bank's first annual
meeting of stockholders, and not less than 90 nor more than 120 days prior to
the anniversary date of the Bank's proxy statement released to stockholders in
connection with the previous year's annual meeting of stockholders for the
election of directors for all subsequent annual meetings. In addition, the
By-Laws provide that any stockholder desiring to make a proposal for new
business at a meeting of the stockholders must submit written notice to the Bank
not later than November 30, 1987 for the first annual meeting of stockholders,
and not less than 90 nor more than 120 days prior to the anniversary date of
such proxy statement for all subsequent annual meetings. The Board of Trustees
believes that it is in the best interests of the Bank and its stockholders to
provide sufficient time to enable management to disclose to stockholders
information about a dissident slate of nominations for directors. This advance
notice requirement may also give management time to solicit its own proxies in
an attempt to defeat any dissident slate of nominations should management
determine that doing so is in the best interest of stockholders generally.
Similarly, adequate advance notice of stockholder proposals will give management
time to study such proposals and to determine whether to recommend to the
stockholders that such proposals be adopted.
The Restated Organization Certificate sets forth criteria that the Board of
Directors is to consider when evaluating whether a potential acquisition of the
Bank is in the best interest of the Bank and its stockholders. The effect of
this provision may be to render more difficult the acquisition of control of the
Bank if the Board of Directors concludes that the transaction is not in the best
interests of the Bank, its depositors, stockholders, employees, customers,
suppliers or the community served by the Bank. The Board of Trustees believes
that such criteria are appropriate factors to be considered by the management of
the Bank and that formalizing the criteria by including them in the Restated
Organization Certificate is a desirable action. These provisions are not
intended to confer any rights on depositors, customers, suppliers or the Bank's
community, or on any stockholders beyond rights otherwise available.
Article VII of The Greater's Restated Organization Certificate provides
that certain provisions of the Restated Organization Certificate and the By-Laws
which contain supermajority voting requirements may not be repealed or amended
except upon an affirmative supermajority vote of either the Board or the holders
of all the outstanding shares of the capital stock of the Bank entitled to vote
generally in the election of directors that is not less than the supermajority
specified in such provision. Absent this provision, the Banking Law provides
that a bank's by-laws may be amended by the holders of a majority of a bank's
outstanding capital stock. By reducing the ability of a potential acquiror to
make changes in the Bank's By-Laws and to diminish the authority of the Board of
Directors, or by impeding such acquiror's ability to manage the Bank, this
provision could have the effect of discouraging a tender offer or other takeover
attempt where the ability to make fundamental changes through By-Law amendments
is an important element of the takeover strategy of the acquiror.
The Bank expects to enter into agreements with certain key officers that
would provide such officers with additional payments and benefits in the event
of the officer's termination of employment in connection with a change in
control of the Bank or due to a discharge other than for cause or a voluntary
resignation following a change of the officer's position or duties. The effect
of such agreements would be to increase the cost to the Bank of making a
management change involving officers under contract and may thereby render the
takeover of the Bank less attractive to a potential acquiror. See
"Management--Remuneration of Trustees and Executive Officers."
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In addition to discouraging a takeover attempt which a majority of the
stockholders of the Bank might determine to be in their best interests or in
which the stockholders of the Bank might receive a premium over the current
market prices for their shares, the effect of these provisions may be to render
the removal of management more difficult. It is thus possible that incumbent
officers and directors might be able to retain their positions (at least until
their terms of office expire) even though a majority of the Bank's stockholders
desire a change.
ADDITIONAL CHANGE IN CONTROL REGULATION
The Change in Bank Control Act of 1978 and the regulations adopted by the
FDIC pursuant to this Act generally require persons who at any time,
individually or jointly with others, intend to acquire control of a bank to give
60 days' prior written notice to the FDIC. "Control," for the purpose of these
regulations, exists in situations in which the acquiring person has voting
control of at least 25% of any of the bank's voting stock or the power to direct
the management or policies of the bank. Control is presumed to exist where the
acquiring party has voting control of at least 10% of the bank's voting stock if
(1) the bank is registered pursuant to Section 12 of the Exchange Act, or (2) if
the acquiring person would be the largest stockholder of the institution. The
Greater's Common Stock will be registered pursuant to Section 12 of the Exchange
Act, and the 10% threshold will therefore apply. The statute and underlying
regulations authorize the FDIC to disapprove a proposed transaction on certain
specified grounds. These provisions are designed primarily to protect the
interests of a bank's depositors and the FDIC insurance fund.
Prior approval of the Federal Reserve Board would be required for an
acquisition of control of The Greater by "any company" as defined in the Bank
Holding Company Act (the "BHC Act"). "Control," for purposes of the BHC Act,
means the power to vote 25% or more of any class of voting stock, the power to
elect a majority of the board of directors of a bank, the power to otherwise
control the election of a majority of the board of directors of a bank or the
power to exercise, directly or indirectly, a controlling influence over the
management or policies of a bank. As part of such acquisition, the company would
be required to register as a bank holding company and have its activities
limited to those activities which the Federal Reserve Board has determined to be
so closely related to banking as to be a proper incident thereof.
Under the Banking Law, the prior approval of the Banking Board is required
before any "company," as defined in the Banking Law, can acquire "control" of a
banking institution, which includes a stock savings bank. "Control," for
purposes of the Banking Law, is deemed to exist if any person owns, controls, or
holds with the power to vote 10% or more of the voting stock of a banking
institution. The term "company" is defined generally as any individual, group,
corporation, partnership, trust, association, or similar organization either
incorporated, residing or doing business in the State of New York, but does not
include certain governmental, non-profit, or investment banking organizations or
operations. Prior approval is also required before: (1) any action is taken that
causes any company to become a bank holding company; (2) any action is taken
that causes any banking institution to become or to be merged or consolidated
with a subsidiary of a bank holding company; (3) any bank holding company
acquires direct or indirect ownership or control of more than five percent of
the voting stock of a banking institution; or (4) any bank holding company or
subsidiary thereof acquires all or substantially all of the assets of a banking
institution. The term "bank holding company" is defined generally to include any
company or trust that directly or indirectly either controls the election of a
majority of the directors or owns, controls or holds the power to vote more than
10% of the stock of a bank holding company, each of two or more banking
institutions or a banking institution held by another banking institution. The
statute requires the Banking Board to approve or deny an application within 120
days of submission.
Any tender offer to acquire The Greater's common stock after the Conversion
would be subject to the limitations and disclosure requirements of the Exchange
Act. See "Registration Requirements."
For a description of other provisions that may be deemed anti-takeover in
nature, see "Description of Capital Stock."
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