UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1999 Commission File No. 0-23271
RICHMOND COUNTY FINANCIAL CORP.
(Exact name of Registrant as specified in its charter)
Delaware 06-1498455
(State of Incorporation) (I.R.S. Employer Identification Number)
1214 Castleton Avenue
Staten Island, New York 10310
(Address of principal executive offices) (Zip Code)
718-448-2800
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the Issuer's classes of
common stock, as of the latest practicable date.
As of February 10, 2000, there were 28,965,239 shares of the common stock
outstanding.
<PAGE>2
FORM 10-Q
RICHMOND COUNTY FINANCIAL CORP.
INDEX
Page
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements (Unaudited)
Consolidated Statements of Financial Condition
at December 31, 1999 and June 30, 1999.................................. 3
Consolidated Statements of Operations
for the three and six months ended December 31, 1999 and 1998........... 4
Consolidated Statement of Changes in Stockholders' Equity
for the six months ended December 31, 1999 and 1998..................... 5
Consolidated Statements of Cash Flows
for the six months ended December 31, 1999 and 1998..................... 6
Notes to Unaudited Consolidated Financial Statements.................... 7
ITEM 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations........................ 9
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk..... 18
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings.............................................. 19
ITEM 2. Changes in Securities and Use of Proceeds....................... 19
ITEM 3. Defaults Upon Senior Securities................................. 19
ITEM 4. Submission of Matters to a Vote of Security Holders............. 19
ITEM 5. Other Information............................................... 19
ITEM 6. Exhibits and Reports on Form 8-K................................ 19
Exhibit Index........................................................... 20
Signature Page.......................................................... 21
================================================================================
Statements contained in this Form 10-Q which are not historical facts are
forward-looking statements, as that term is defined in the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements are subject to
risks and uncertainties which could cause actual results to differ materially
from those projected. Such risks and uncertainties include potential changes in
interest rates, competitive factors in the financial services industry, general
economic conditions, the effect of new legislation and other risks detailed in
documents filed by the Company with the Securities and Exchange Commission from
time to time.
================================================================================
<PAGE>3
RICHMOND COUNTY FINANCIAL CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In Thousands, Except Share and Per Share Amounts)
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1999 1999
---------- ----------
(Unaudited)
<S> <C> <C>
ASSETS
Cash and due from banks ...................................... $ 47,453 $ 55,773
Federal funds sold ........................................... 900 17,775
Securities available for sale:
Investment securities ................................... 267,682 297,611
Mortgage-backed and mortgage-related securities ......... 813,017 866,844
Mortgage loans:
1-4 family .............................................. 906,776 853,103
Multi-family ............................................ 452,542 290,066
Commercial real estate .................................. 108,135 107,280
Construction ............................................ 59,969 51,044
----------- -----------
Total mortgage loans ......................................... 1,527,422 1,301,493
Other loans .................................................. 23,494 26,374
Less: Unearned loan costs/(fees), net ................... 14 (455)
Allowance for loan losses ......................... (14,396) (13,885)
----------- -----------
Loans, net ................................................... 1,536,534 1,313,527
Federal Home Loan Bank stock ................................. 43,435 38,388
Banking premises and equipment, net .......................... 26,933 27,353
Accrued interest receivable .................................. 16,793 15,568
Other real estate owned ...................................... 617 997
Goodwill ..................................................... 41,904 43,382
Other assets ................................................. 95,667 82,877
----------- -----------
TOTAL ASSETS ..................................... $ 2,890,935 $ 2,760,095
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Demand deposits .............................................. $ 180,698 $ 169,007
Savings, N.O.W. and Money market accounts .................... 868,433 851,993
Certificates of deposit ...................................... 628,197 598,470
----------- -----------
Total deposits ..................................... 1,677,328 1,619,470
Borrowings ................................................... 861,532 757,832
Accrued expenses and other liabilities ....................... 10,302 12,582
----------- -----------
Total liabilities .................................. 2,549,162 2,389,884
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value, 5,000,000 shares authorized;
none issued ................................................ - -
Common stock, $.01 par value, 75,000,000 shares authorized;
32,737,134 shares issued; 30,409,339 and 31,662,839 shares
outstanding, at December 31, 1999 and June 30, 1999,
respectively ............................................... 327 327
Additional paid-in-capital ................................... 330,516 330,122
Retained earnings-substantially restricted ................... 134,239 122,784
Unallocated common stock held by
Employee Stock Ownership Plan ("ESOP") ..................... (31,114) (31,978)
Unearned compensation MRP Stock .............................. (15,181) (16,885)
Treasury stock, at cost, 2,327,795 and 1,074,295 shares
at December 31, 1999 and June 30, 1999, respectively ....... (41,468) (17,967)
Accumulated other comprehensive loss:
Unrealized loss on securities available for sale, net of tax (35,546) (16,192)
----------- -----------
Total stockholders' equity ......................... 341,773 370,211
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ....... $ 2,890,935 $ 2,760,095
=========== ===========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
<PAGE>4
RICHMOND COUNTY FINANCIAL CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Share and Per Share Amounts)
<TABLE>
<CAPTION>
FOR THE FOR THE
THREE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, DECEMBER 31,
-------------------- ------------------
(Unaudited) (Unaudited)
1999 1998 1999 1998
--------- --------- -------- --------
<S> <C> <C> <C> <C>
INTEREST INCOME:
Loans $28,030 $16,033 $54,093 $29,761
Debt and equity securities 6,357 4,206 12,581 8,535
Mortgage-backed and mortgage-related securities 14,025 8,825 28,271 18,079
Federal funds sold and interest-earning bank balances 65 78 247 429
--------- --------- -------- --------
Total interest income 48,477 29,142 95,192 56,804
--------- --------- -------- --------
INTEREST EXPENSE:
Deposits 13,414 7,902 25,927 15,872
Borrowed funds 10,801 5,729 21,415 10,358
--------- --------- -------- --------
Total interest expense 24,215 13,631 47,342 26,230
--------- --------- -------- --------
Net interest income 24,262 15,511 47,850 30,574
Provision for loan losses 300 600 600 1,350
--------- --------- -------- --------
Net interest income after provision for loan losses 23,962 14,911 47,250 29,224
--------- --------- -------- --------
NON-INTEREST INCOME:
Fee income 2,672 1,090 5,112 2,023
Net gain on sale of securities and loans 7 1,614 710 2,523
Other 780 8 1,554 10
--------- --------- --------- --------
Total non-interest income 3,459 2,712 7,376 4,556
--------- --------- --------- --------
NON-INTEREST EXPENSE:
Salaries and employee benefits 7,191 4,786 14,006 8,971
Occupancy costs 1,514 721 3,001 1,631
Computer service fees 1,395 834 2,789 1,640
Advertising 428 394 919 841
FDIC insurance premiums 123 38 238 77
Other 1,732 948 3,467 2,115
--------- --------- --------- --------
Total general and administrative 12,383 7,721 24,420 15,275
Amortization of goodwill and other intangibles 818 79 1,635 157
--------- --------- --------- --------
Total non-interest expense 13,201 7,800 26,055 15,432
--------- --------- --------- --------
Income before income taxes
14,220 9,823 28,571 18,348
Provision for income taxes 5,192 3,803 10,434 6,974
--------- --------- --------- --------
NET INCOME $ 9,028 $ 6,020 $18,137 $11,374
========= ========= ========= ========
EARNINGS PER SHARE:
Basic $ 0.33 $ 0.27 $ 0.65 $ 0.49
Diluted $ 0.33 $ 0.27 $ 0.65 $ 0.49
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
<PAGE>5
RICHMOND COUNTY FINANCIAL CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(In Thousands)
<TABLE>
<CAPTION>
Retained Accumulated Unallocated Unearned
Additional Earnings Other Common Common
Common Paid-in Substantially Comprehensive Stock Held Stock Held Treasury
Stock Capital Restricted Income/(Loss) by ESOP by MRP Stock Total
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at June 30, 1999 $ 327 $ 330,122 $ 122,784 $ (16,192) $ (31,978) $ (16,885) $(17,967) $ 370,211
Comprehensive income/(loss):
Net income - - 18,137 - - - - 18,137
Net unrealized loss on
certain securities, net
of tax - - - (19,354) - - - (19,354)
----------
Comprehensive loss (1,217)
----------
Adjustments - 624 - - - - - 624
Allocation of ESOP and MRP
stock - 49 - - 864 1,704 - 2,617
Common stock repurchased
(1,276,717 shares) - - - - - - (23,897) (23,897)
Treasury stock issued for
options exercised
(23,217 shares) - (279) - - - - 396 117
Cash dividends paid on
common stock - - (6,682) - - - - (6,682)
---------------------------------------------------------------------------------------------------
Balance at December 31,1999 $ 327 $ 330,516 $ 134,239 $ (35,546) $ (31,114) $ (15,181) $(41,468) $ 341,773
===================================================================================================
Balance at June 30, 1998 $ 264 $ 254,307 $ 103,760 $ 3,970 $ (33,706) $ - $ - $ 328,595
Comprehensive income/(loss):
Net income - - 11,374 - - - - 11,374
Net unrealized loss on
certain securities, net
of tax - - - (3,476) - - - (3,476)
----------
Comprehensive income 7,898
----------
Purchase of MRP stock - - - - - (16,118) - (16,118)
Allocation of ESOP and MRP
stock - (48) - - 864 537 - 1,353
Common stock repurchased
(931,000 shares) - - - - - - (15,709) (15,709)
Cash dividends paid on
common stock - - (3,056) - - - - (3,056)
---------------------------------------------------------------------------------------------------
Balance at December 31, 1998 $ 264 $ 254,259 $ 112,078 $ 494 $ (32,842) $ (15,581) $(15,709) $ 302,963
===================================================================================================
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
<PAGE>6
RICHMOND COUNTY FINANCIAL CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS ENDED
DECEMBER 31,
-------------------
(Unaudited)
1999 1998
--------- ---------
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES ..................................... $ 15,163 $ 11,524
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in loans receivable, net ........................................... (260,430) (241,615)
Loans purchased ............................................................. - (1,500)
Loans sold .................................................................. 37,313 15,300
Investment securities available for sale:
Sales and redemptions ..................................................... 54,783 54,270
Purchases ................................................................. (36,742) (28,865)
Mortgage-backed and mortgage-related securities available for sale:
Sales and redemptions ..................................................... 10,305 21,656
Principal collected ....................................................... 68,250 132,600
Purchases ................................................................. (39,585) (89,599)
Purchases of Federal Home Loan Bank of New York stock ....................... (5,047) (7,545)
Net addition to banking premises and equipment .............................. (678) (1,885)
Proceeds from sales of other real estate owned .............................. 377 134
-------- ---------
Net cash used in investing activities .................................. (171,454) (147,049)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits .................................................... 57,858 42,153
Decrease in securities sold under repurchase agreements ..................... (79,000) -
Increase in borrowings from the Federal Home Loan Bank ...................... 182,700 144,000
Cash dividends paid on common stock ......................................... (6,682) (3,056)
Net proceeds from issuance of common stock upon exercise
of stock options ......................................................... 117 -
Purchase of MRP stock ....................................................... - (16,118)
Purchase of treasury shares ................................................. (23,897) (15,709)
-------- ---------
Net cash provided by financing activities 131,096 151,270
-------- ---------
Net (decrease) increase in cash and cash equivalents ........................ (25,195) 15,745
Cash and cash equivalents at beginning of period 73,548 57,884
-------- ---------
Cash and cash equivalents at end of period .................................. $ 48,353 $ 73,629
======== =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest on deposits and borrowed funds ..................................... $ 46,984 $ 25,716
Income taxes ................................................................ 11,368 7,420
NON-CASH INVESTING ACTIVITIES:
Additions to other real estate owned, net.................................... $ - $ 90
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
<PAGE>7
RICHMOND COUNTY FINANCIAL CORP. AND SUBSIDIARY
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements include the
accounts of Richmond County Financial Corp. (the "Company"), its direct
wholly-owned subsidiary, Richmond County Savings Bank (the "Bank"), and the
subsidiaries of the Bank.
The unaudited consolidated financial statements included herein reflect all
normal recurring adjustments which are, in the opinion of management, necessary
for a fair presentation of the results for the interim periods presented. The
results of operations for the three and six-month periods ended December 31,
1999 are not necessarily indicative of the results of operations that may be
expected for the entire fiscal year. Certain information and note disclosures
normally included in the financial statements, prepared in accordance with
generally accepted accounting principles, have been condensed or omitted
pursuant to the rules and regulations of the Securities and Exchange Commission
(the "SEC"). The unaudited consolidated financial statements should be read in
conjunction with the audited consolidated financial statements and notes thereto
included in the Company's 1999 Annual Report and Form 10-K.
2. EARNINGS PER SHARE
Basic earnings per share ("EPS") is calculated by dividing net income by the
weighted average number of common shares outstanding. Diluted EPS is calculated
using the same method as basic EPS, but reflects potential dilution of common
stock equivalents. Shares of common stock held by the ESOP that have not been
allocated to participants' accounts or are not committed to be released for
allocation and non-vested 1998 Management Recognition Plan (the "MRP") shares
are not considered to be outstanding for the calculation of basic EPS, however,
a portion of such shares are considered in the calculation of diluted EPS as
common stock equivalents of basic EPS. Basic and diluted weighted-average common
shares outstanding were 27,541,491 and 27,705,293 shares, for the second quarter
of fiscal 2000, respectively. For the six months ended December 31, 1999, basic
and diluted weighted-average common shares were 27,810,711 and 28,060,626
shares, respectively.
3. CONVERSION TO STOCK FORM OF OWNERSHIP
On July 31, 1997, the Board of Trustees of the Bank unanimously adopted a Plan
of Conversion whereby the Bank would convert from a New York State chartered
mutual bank to a New York State chartered stock institution with the concurrent
formation of a holding company, Richmond County Financial Corp. (the
"Conversion").
The Conversion was completed on February 18, 1998, with the issuance by the
Company of 24,466,250 shares of common stock, at a price of $10.00 per share, in
an initial public offering. The Company received gross proceeds from the
Conversion of $244.7 million, before the reduction from gross proceeds of $9.8
million for estimated conversion related expenses. The Company used $117.4
million, or 50% of the net proceeds, to purchase all of the outstanding stock of
the Bank.
Concurrent with the completion of the Conversion, an additional 1,957,300 shares
of authorized
<PAGE>8
but unissued shares of common stock were contributed by the Company to the
Richmond County Savings Foundation (the "Foundation"), a private foundation
dedicated to charitable purposes within the Bank's communities that it serves.
The Company recorded a one-time charge of $19.6 million, the full amount of the
contribution made to the Foundation and a corresponding deferred tax benefit of
$8.4 million, in the third quarter ended March 31,1998. The contribution to the
Foundation will be fully tax deductible, subject to an annual limitation based
upon the Company's annual taxable income.
4. RECENT DEVELOPMENTS
On December 21, 1999, the Company announced that it has completed its previously
announced fourth stock repurchase plan. The Company repurchased 1,596,332 shares
of its common stock, par value $.01 per share, in open market transactions at an
aggregate cost of approximately $29.6 million.
The Company also announced that it has received approval from the Superintendent
of the New York State Banking Department to repurchase an additional 1,520,467
shares, or 5% of the Company's outstanding common stock prior to February 18,
2000, the second anniversary of Richmond County Savings Bank's conversion to
stock form.
5. SUBSEQUENT EVENTS
On January 19, 2000, the Board authorized the Company to commence its sixth
stock repurchase plan of 1,444,444 shares, or 5%, of the Company's outstanding
stock. The sixth stock repurchase plan will commence on February 18, 2000,
following completion of the fifth stock repurchase plan.
The repurchases will be made in unsolicited purchases pursuant to the federal
securities laws relating to activities by issuers having a distribution, subject
to the availability of stock, acceptable pricing of the stock and such timing
limitations as may be applicable.
On January 19, 2000, the Company announced that its Board of Directors declared
a quarterly cash dividend of thirteen cents ($0.13) per common share. The
dividend is payable on March 10, 2000 to shareholders of record on February 25,
2000.
<PAGE>9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
Richmond County Financial Corp. is a savings and loan holding company regulated
by the Office of Thrift Supervision. The primary operating subsidiary of
Richmond County Financial Corp. is Richmond County Savings Bank (the "Bank"), a
New York State chartered stock savings bank. While the following discussion of
financial condition and results of operations includes the collective results of
Richmond County Financial Corp. and the Bank (collectively the "Company"), this
discussion reflects the Bank's activities as the Company currently does not
engage in any significant business activities other than the management of the
Bank and the investment of net proceeds from the Bank's mutual to stock
conversion, which occurred on February 18, 1998 (the "Conversion").
BAYONNE BANCSHARES, INC.
At the close of business on March 22, 1999, the Company completed its
acquisition of Bayonne Bancshares, Inc. ("Bayonne"), the holding company of
First Savings Bank of New Jersey, SLA, a New Jersey State chartered savings and
loan association with four full service banking offices located in Bayonne, New
Jersey in a transaction which was accounted for as a purchase. The cost of the
acquisition was approximately $118.5 million for which the Company issued 1.05
shares of its common stock for each outstanding share of Bayonne common stock
for a total of 8,668,615 common shares, of which 3,938,731 shares were issued
from its treasury shares. Options to purchase 683,577 shares of Bayonne common
stock were also converted into options to purchase 717,755 shares of the
Company's common stock. The goodwill attributable to the transaction was $28.8
million, which is being amortized on a straight line basis over 15 years.
IRONBOUND BANKCORP, NJ.
At the close of business on March 5, 1999, the Company completed its acquisition
of Ironbound Bankcorp, NJ ("Ironbound"), the holding company of Ironbound Bank,
a New Jersey chartered commercial bank with three full service commercial
banking offices located in the New Jersey counties of Union and Essex, in a
transaction which was accounted for as a purchase. The cost of the acquisition
was approximately $27.7 million. The Company issued 1.463 shares of its common
stock for each outstanding share of Ironbound common stock for a total of
1,458,842 common shares. The goodwill attributable to the transaction was $15.3
million, which is being amortized on a straight line basis over 15 years.
FINANCIAL CONDITION
Total assets increased by $130.8 million, or 4.7%, to $2.9 billion at December
31, 1999. The increase in overall assets was primarily due to an increase in
loans of $223.0 million, or 17.0%, offset in part by a decrease in federal funds
sold of $16.9 million. The overall increase in the level of assets was primarily
the result of an increase in borrowed funds to fund growth in the mortgage loan
portfolio, as well as significant deposit inflows.
Mortgage-backed and mortgage-related securities decreased by $53.8 million, or
6.2%, from $866.8 million at June 30, 1999 to $813.0 million at December 31,
1999. Investment securities at December 31, 1999 totaled $267.7 million, a
decrease of $29.9 million, or 10.1%, compared to
<PAGE>10
$297.6 million at June 30, 1999.
The Bank continues to experience increased loan growth. For the six-month period
ended December 31, 1999, gross loans receivable increased by $223.5 million, or
16.8%, to $1.6 billion, compared to $1.3 billion at June 30, 1999. The
substantial increase in net loans was due primarily to originations of $342.3
million generated in the six-month period ended December 31, 1999, offset by the
sale of $37.3 million of one- to four-family fixed rate mortgage loans and
scheduled amortization and prepayments of $81.9. Loan originations for the
six-month period ended December 31, 1999 were primarily comprised of multifamily
and one- to four-family mortgage loans. Multifamily mortgage loan originations
for the six-month period ended December 31, 1999 totaled $167.4 million,
bringing the total multifamily loan portfolio to $452.5 million, or 29.2% of
gross loans at quarter end. Total one- to four-family loan production for the
six-month period ended December 31, 1999 was $134.6 million.
Total liabilities at December 31, 1999 were $2.5 billion, an increase of $159.3
million, or 6.7%, from $2.4 billion at June 30, 1999. Total deposits increased
by $57.9 million, or 3.6%, to $1.7 billion at December 31, 1999. The Bank's core
deposits increased by $28.1 million, or 2.8%, at December 31, 1999 to $1.0
billion. The increase in the Bank's core deposits was primarily attributable to
a $11.7 million increase in total demand deposits and a $16.4 million increase
in savings, N.O.W. and Money market accounts. The Bank also experienced an
increase of $29.7 million, or 5.0%, in certificates of deposit from $598.5
million at June 30, 1999 to $628.2 million at December 31, 1999.
Additionally, the Bank continues to place a level of emphasis on the utilization
of borrowed funds to fund asset growth. In this regard, at December 31, 1999 and
June 30, 1999, the Bank had total borrowings of $861.5 million and $757.8
million, respectively. The Bank may continue to increase such emphasis, which
may result in an increase in the Bank's overall cost of funds. The Bank's
current strategy is to invest such borrowed funds primarily in mortgage loans
and mortgage-backed and mortgage-related securities with similar estimated
maturities. This strategy is intended to incrementally increase net interest
income, although it may have the effect of incrementally decreasing net interest
rate spread.
Total stockholders' equity decreased by $28.4 million to $341.8 million at
December 31, 1999 from $370.2 million at June 30, 1999. The overall decrease was
primarily due to the repurchase of 1.3 million shares of the Company's common
stock, year to date cash dividends paid of $6.7 million and a $19.4 million
decrease in the fair value on securities available-for-sale, net of tax. These
decreases were offset by the earnings reported for the six-month period ended
December 31, 1999 of $18.1 million and the amortization of $2.6 million for the
unallocated and unearned shares of common stock held by the Company's
stock-related benefit plans.
NON-PERFORMING ASSETS
Non-performing loans totaled $6.4 million, or 0.4% of total loans at December
31, 1999, as compared to $5.9 million, or 0.5% of total loans, at June 30, 1999.
At December 31, 1999, the Bank's real estate owned consisted of foreclosed
assets totaling $617,000, which at such date was comprised of three one- to
four-family properties and two commercial properties.
At December 31, 1999, the Bank had $3.7 million of assets designated as
"Substandard," consisting of 22 loans, no assets classified as "Doubtful," and
11 consumer loans classified as "Loss,"
<PAGE>11
respectively. At December 31, 1999, the Bank had $2.7 million of assets
designated as "Special Mention," consisting of 42 loans due to past loan
delinquencies.
Non-accrual loans totaled $6.4 million as of December 31, 1999, which included
49 one- to four-family loans, with an aggregate balance of $3.9 million, and six
non-residential loans totaling $2.0 million, of which one loan is a $1.1 million
commercial mortgage on a mixed use property in Staten Island, New York. The loan
is secured by the property, which was last appraised in December 1996 for $1.4
million.
For the six-month period ended December 31, 1999, the Company's loan loss
provision was $600,000 as compared to $1.4 million for the prior year's period.
The Company's allowance for loan losses totaled $14.4 million at December 31,
1999 and $13.9 million at June 30, 1999, which represents a ratio of allowance
for loan losses to non-performing loans of 226.3% and 237.1%, respectively. The
Company continues to increase its overall loan loss reserves due to the increase
in lending of all loan products. Management believes the allowance for loan
losses at December 31, 1999 is adequate and sufficient reserves are presently
maintained to cover potential losses. For the quarter ended December 31, 1999,
the Company experienced net charge-offs of $99,000.
COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED DECEMBER 31, 1999
AND 1998
General. The Company reported net income for the second quarter ended December
31, 1999 of $9.0 million, or diluted earnings per share of $0.33, an increase of
$3.0 million as compared to the $6.0 million, or diluted earnings per share of
$0.27, reported for the second quarter ended December 31, 1998. Core earnings
for the second quarter ended December 31, 1999 increased 78.6% to a record $9.0
million, or core diluted earnings per share of $0.33, as compared to $5.1
million, or core diluted earnings per share of $0.22, reported for the
comparable quarter in 1998. Core earnings for the second quarter ended December
31, 1999 and 1998, excludes net gains on sales of securities and loans of $7,000
and a $1.6 million, respectively.
Interest Income. The Company reported total interest income of $48.5 million for
the second quarter ended December 31, 1999, representing an increase of $19.3
million, or 66.3%, as compared to the same period in 1998. The increase in
interest income was attributable primarily to the growth in average
interest-earning assets of $1.0 billion and a 13 basis point increase in the
average yield on interest-earning assets. The overall increase in the level of
interest-earning assets was primarily the result of an increase in borrowed
funds to fund growth in the mortgage loan and securities portfolios, assets
acquired from Bayonne and Ironbound, as well as deposit inflows.
Interest income on loans increased $12.0 million, or 74.8%, to $28.0 million for
the second quarter ended December 31, 1999, as compared to the $16.0 million
reported for the comparable period in 1998. This increase was the result of
growth in the average balance of loans outstanding of $645.6 million, due
primarily to increased originations of multifamily and one- to four-family real
estate loans and loans acquired through the recently completed acquisitions,
offset in part by a decrease in the average yield on the overall loan portfolio
to 7.57% for the second quarter ended December 31, 1999, as compared to 7.68%
for the same period in 1998.
Interest income on debt and equity securities increased $2.2 million, or 51.1%,
from $4.2 million for the second quarter ended December 31, 1998, to $6.4
million for the same period in 1999. This increase is mainly attributable to the
growth in the average balance of debt and equity
<PAGE>12
securities, primarily investments in financial bonds and FHLB stock, as well as
a 76 basis point increase in the average yield on the debt and equity portfolio.
Interest income on mortgage-backed and mortgage-related securities increased
$5.2 million, or 58.9%, from $8.8 million reported for the second quarter ended
December 31, 1998, to $14.0 million for the same period in 1999. This increase
was due primarily to an increase in the average balance of mortgage-backed and
mortgage-related securities of $307.4 million as a result of the investment of
borrowed funds and mortgage-backed and mortgage-related securities acquired
through the recently completed acquisitions. Additionally, interest income on
mortgage-backed and mortgage-related securities increased as a result of an
increase in the average yield on the mortgage-backed and mortgage-related
securities portfolio to 6.50% for the second quarter ended December 31, 1999, as
compared to 6.36% for the same period in 1998.
Interest Expense. Interest expense increased $10.6 million, or 77.6%, from $13.6
million for the second quarter ended December 31, 1998, to $24.2 million for the
second quarter ended December 31, 1999. The average cost of the Bank's
interest-bearing liabilities decreased from 4.23% for the second quarter ended
December 31, 1998, to 4.18% for the second quarter ended December 31, 1999.
Interest expense on deposits increased $5.5 million, or 69.8%, from $7.9 million
for the second quarter ended December 31, 1998, to $13.4 million for the second
quarter ended December 31, 1999. The increase reflects a $641.1 million increase
in the average balance of interest-bearing deposits, primarily attributable to a
$272.7 million increase in the average balance of certificates of deposit and a
$300.7 million increase in the average balance of savings deposit accounts. This
increase can be primarily attributable to the opening of two full-service
banking facilities and one public accommodation office on Staten Island, the
opening of an Ironbound Bank divisional full-service banking facility in Union,
New Jersey and deposits acquired through the recently completed acquisitions. In
addition, the Bank's strategy over the past several years has been to attract
more certificates of deposit through the offering of additional certificate of
deposit products and related marketing of commercial deposit accounts.
Interest expense on borrowed funds for the quarter ended December 31, 1999 was
$10.8 million, an increase of $5.1 million as compared to the $5.7 million
reported in the same period in 1998. The increase in interest expense on
borrowed funds was attributable to the growth in the average balance of borrowed
funds of $384.6 million, offset in part by a two basis point decrease in the
average cost on borrowed funds. The Bank continues to place a greater level of
emphasis on the utilization of borrowed funds to fund asset growth and to
leverage the Bank's capital position to improve returns on equity. As of
December 31, 1999, the Bank had $861.5 million of borrowings outstanding, an
increase of $103.7 million, or 13.7%, as compared to the $757.8 million of
borrowings outstanding as of June 30, 1999. The Bank may continue to increase
such emphasis on borrowed funds, which may result in an increase in the Bank's
overall cost of funds. The Bank's current strategy is to invest such borrowed
funds primarily in mortgage-backed and mortgage-related securities. This
strategy is intended to incrementally increase net interest income, although it
may have the effect of incrementally decreasing net interest rate spread.
Provision for Loan Losses. The Bank's provision for loan losses for the second
quarter ended December 31, 1999 was $300,000, as compared to the $600,000
reported for the same period in the prior year. The provision for the second
quarter ended December 31, 1999 was based on management's evaluation of its loan
portfolio and real estate market conditions. In particular, management
considered the continued growth in the portfolio, the introduction of new
lending products by the Bank and the seasoning of such new products, as well as
the level of its non-performing loans. Management believes, based upon
information currently available, that its
<PAGE>13
allowance for loan losses is adequate to cover future loan losses. To the extent
the Bank increases its investment in multifamily loans, commercial real estate,
commercial and other loans, which entail higher risk than one- to four-family
loans, the Bank may decide to increase its allowance for loan losses through
additional loan loss provisions, which may adversely affect net income. In
addition, if general economic conditions and real estate values within the
Bank's primary lending area decline, the level of non-performing loans may
increase, resulting in larger provisions for loan losses which, in turn, would
also adversely affect net income.
Non-Interest Income. Exclusive of net gains and losses from the sales of
securities and loans, total non-interest income for the second quarter ended
December 31, 1999 was $3.5 million, as compared to the $1.1 million reported for
the same period in 1998. The increased level of non-interest income is primarily
due to an overall increase in deposit fee income, fee income generated from the
Bayonne and Ironbound acquisitions, ATM fee income and advisory fee income from
our investment in Peter B. Cannell & Co. Inc. Additionally, the Bank purchased a
Bank Owned Life Insurance Policy ("BOLI"), which accounted for approximately
$744,000 of other income. Net gains reported for the second quarter ended
December 31, 1998, were primarily due to net gains of $1.6 million from the sale
of equity and investment securities.
Non-Interest Expense. Non-interest expense totaled $13.2 million for the second
quarter ended December 31, 1999, an increase of $5.4 million, or 69.2%, as
compared to the $7.8 million reported for the same period of the prior year. The
increased level of non-interest expense was mainly attributable to increased
compensation and employee benefit expenses, goodwill amortization and other
expenses associated with the Bayonne and Ironbound acquisitions. Additionally,
the Bank recognized increases in non-interest expenses as a result of the Bank's
opening of a public accommodation office and the opening of two new full service
branches in Staten Island and a full service branch in Union, New Jersey.
Income taxes. The Company's effective consolidated tax rate for the second
quarter ended December 31, 1999, was 36.5% as compared to 38.7% reported for the
comparable period in 1998. The reduction of the Company's effective tax rate is
primarily due to the Bank's utilization of various tax-planning strategies.
COMPARISON OF OPERATING RESULTS FOR THE SIX MONTHS ENDED DECEMBER 31, 1999
AND 1998
General. The Company reported net income for the six-month period ended December
31, 1999 of $18.1 million, or diluted earnings per share of $0.65, an increase
of $6.8 million as compared to the $11.4 million reported for the same period
last year. Core earnings for the six-month period ended December 31, 1999
increased 77.4% to a record $17.7 million, or core diluted earnings per share of
$0.63, as compared to $10.0 million, or core diluted earnings per share of $0.42
reported for the same period last year. Core earnings for the six-month period
ended December 31, 1999 and 1998, excludes net gains on sales of securities and
loans of $710,000 and $2.5 million, respectively.
Interest Income. The Company reported total interest income of $95.2 million for
the six-month period ended December 31, 1999, representing an increase of $38.4
million, or 67.6%, as compared to the same period in 1998. The increase in
interest income was attributable primarily to the growth in average
interest-earning assets of $1.1 billion and an eight basis point increase in the
average yield on interest-earning assets. The overall increase in the level of
interest-earning assets was primarily the result of an increase in borrowed
funds to fund growth in the mortgage loan and securities portfolios, assets
acquired from Bayonne and Ironbound, as well as deposit inflows.
<PAGE>14
Interest income on loans increased $24.3 million, or 81.8%, to $54.1 million for
the six-month period ended December 31, 1999, as compared to the $29.8 million
reported for the comparable period in 1998. This increase was the result of
growth in the average balance of loans outstanding of $649.6 million, due
primarily to increased originations of multifamily and one- to four-family real
estate loans and loans acquired through the recently completed acquisitions,
offset in part by a decrease in the average yield on the overall loan portfolio
to 7.60% for the six-month period ended December 31, 1999, as compared to 7.69%
for the same period in fiscal 1998.
Interest income on debt and equity securities increased $4.0 million, or 47.4%,
from $8.5 million for the six-month period ended December 31, 1998, to $12.6
million for the same period in 1999. This increase is mainly attributable to the
growth in the average balance of debt and equity securities, primarily
investments in financial bonds and FHLB stock, as well as a 51 basis point
increase in the average yield on the debt and equity portfolio.
Interest income on mortgage-backed and mortgage-related securities increased
$10.2 million, or 56.4%, from $18.1 million reported for the six-month period
ended December 31, 1998, to $28.3 million for the same period in 1999. This
increase was due primarily to an increase in the average balance of
mortgage-backed and mortgage-related securities of $314.3 million as a result of
the investment of borrowed funds and mortgage-backed and mortgage-related
securities acquired through the recently completed acquisitions. The yield on
the mortgage-backed and mortgage-related securities remained unchanged at 6.47%
for the six-month periods ended December 31, 1999 and 1998.
Interest Expense. Interest expense increased $21.1 million, or 80.5%, from $26.2
million for the six-month period ended December 31, 1998, to $47.3 million for
the six-month period ended December 31, 1999. The average cost of the Bank's
interest-bearing liabilities decreased from 4.25% for the six-month period ended
December 31, 1998, to 4.14% for the six-month period ended December 31, 1999.
Interest expense on deposits increased $10.1 million, or 63.4%, from $15.9
million for the six-month period ended December 31, 1998, to $25.9 million for
the six-month period ended December 31, 1999. The increase reflects a $626.0
million increase in the average balance of interest-bearing deposits, primarily
attributable to a $265.0 million increase in the average balance of certificates
of deposit and a $293.0 million increase in the average balance of savings
deposit accounts. This increase can be primarily attributable to the opening of
two full-service banking facilities and one public accommodation office on
Staten Island, the opening of an Ironbound Bank divisional full-service banking
facility in Union, New Jersey and deposits acquired through the recently
completed acquisitions. In addition, the Bank's strategy over the past several
years has been to attract more certificates of deposit through the offering of
additional certificate of deposit products and related marketing of commercial
deposit accounts.
Interest expense on borrowed funds for the six-month period ended December 31,
1999 was $21.4 million, an increase of $11.1 million as compared to the $10.4
million reported in the same period in 1998. The increase in interest expense on
borrowed funds was attributable to the growth in the average balance of borrowed
funds of $422.6 million, offset in part by a seven basis point decrease in the
average cost on borrowed funds. The Bank continues to place a greater level of
emphasis on the utilization of borrowed funds to fund asset growth and to
leverage the Bank's capital position to improve returns on equity. As of
December 31, 1999, the Bank had $861.5 million of borrowings outstanding, an
increase of $103.7 million, or 13.7%, as compared to the $757.8 million of
borrowings outstanding as of June 30, 1999. The Bank may continue to increase
such emphasis on borrowed funds, which may result in an increase in the
<PAGE>15
Bank's overall cost of funds. The Bank's current strategy is to invest such
borrowed funds primarily in mortgage-backed and mortgage-related securities.
This strategy is intended to incrementally increase net interest income,
although it may have the effect of incrementally decreasing net interest rate
spread.
Provision for Loan Losses. The Bank's provision for loan losses for the
six-month periods ended December 31, 1999 and 1998 was $600,000 and $1.4
million, respectively. The provision for the second quarter ended December 31,
1999 was based on management's evaluation of its loan portfolio and real estate
market conditions. In particular, management considered the continued growth in
the portfolio, the introduction of new lending products by the Bank and the
seasoning of such new products, as well as the level of its non-performing
loans. Management believes, based upon information currently available, that its
allowance for loan losses is adequate to cover future loan losses. To the extent
the Bank increases its investment in multifamily loans, commercial real estate,
commercial and other loans, which entail higher risk than one- to four-family
loans, the Bank may decide to increase its allowance for loan losses through
additional loan loss provisions, which may adversely affect net income. In
addition, if general economic conditions and real estate values within the
Bank's primary lending area decline, the level of non-performing loans may
increase, resulting in larger provisions for loan losses which, in turn, would
also adversely affect net income.
Non-Interest Income. Exclusive of net gains and losses from the sales of
securities and loans, total non-interest income for the six-month period ended
December 31, 1999 was $6.7 million, as compared to the $2.0 million reported for
the same period in 1998. The increased level of non-interest income is primarily
due to an overall increase in deposit fee income, fee income generated from the
Bayonne and Ironbound acquisitions, ATM fee income and advisory fee income from
our investment in Peter B. Cannell & Co. Inc. Additionally, the Bank purchased a
Bank Owned Life Insurance Policy ("BOLI"), which accounted for approximately
$1.5 million of other income. Net gains reported for the six-month periods ended
December 31, 1999 and 1998, were primarily due to net gains of $710,000 and $2.1
million from the sale of equity and investment securities, respectively.
Non-Interest Expense. Non-interest expense totaled $26.1 million for the
six-month period ended December 31, 1999, an increase of $10.6 million, or
68.8%, as compared to the $15.4 million reported for the same period of the
prior year. The increased level of non-interest expense was mainly attributable
to increased compensation and employee benefit expenses, goodwill amortization
and other expenses associated with the Bayonne and Ironbound acquisitions.
Additionally, the Bank recognized increases in non-interest expenses as a result
of the Bank's opening of a public accommodation office and the opening of two
new full service branches in Staten Island and a full service branch in Union,
New Jersey.
Income taxes. The Company's effective consolidated tax rate for the second
quarter ended December 31, 1999, was 36.5% as compared to 38.0% reported for the
comparable period in 1998. The reduction of the Company's effective tax rate is
primarily due to the Bank's utilization of various tax-planning strategies.
LIQUIDITY AND CAPITAL RESOURCES
The Bank's primary sources of funds are deposits, proceeds from the principal
and interest payments on loans, mortgage-backed and mortgage-related and
investment securities, and to a significantly lesser extent, proceeds from the
sale of fixed-rate mortgage loans to the secondary
<PAGE>16
market. While maturities and scheduled amortization of loans and securities are
predictable sources of funds, deposit outflows, mortgage prepayments and
mortgage loan sales are greatly influenced by general interest rates, economic
conditions and competition.
The primary investing activities of the Bank are the origination of residential
one- to four-family, multifamily and, to a lesser extent, commercial real
estate, construction and development and other loans and the purchase of
mortgage-backed and mortgage-related and investment securities. During the three
and six-month periods ended December 31, 1999 and 1998, the Bank's loan
originations totaled $196.2 million, $342.3 million, $118.9 million and $286.3
million, respectively. Purchases of mortgage-backed, mortgage-related and
investment securities totaled $10.8 million, $81.4 million, $55.6 million and
$126.0 million for the three and six-month periods ended December 31, 1999 and
1998, respectively. These activities were funded primarily by deposit growth and
principal repayments and prepayments on loans, mortgage-backed and
mortgage-related securities and investment securities, and advances from the
FHLB and the net proceeds received from the Conversion. As of December 31, 1999,
the Bank experienced a net increase in total deposits of $57.9 million to $1.7
billion, or 3.6%, as compared to the $1.6 billion at June 30, 1999. Deposit
flows are affected by the level of interest rates, the interest rates and
products offered by local competitors and other factors.
The Bank closely monitors its liquidity position on a daily basis. Excess
short-term liquidity is invested in overnight federal funds sold. In the event
the Bank should require funds beyond its ability to generate them internally,
additional sources of funds are available through repurchase agreements and
advances from the FHLB. The Bank has recently begun to place a greater level of
emphasis on the utilization of borrowed funds to fund asset growth. In this
regard, at December 31, 1999, the Bank had total borrowings of $861.5 million.
The Bank may continue to increase such emphasis, which may result in an increase
in the Bank's average cost of funds.
Loan commitments totaled $153.4 million at December 31, 1999, were comprised of
$55.5 million in one- to four-family loan commitments, $2.4 million in
commercial real estate loan commitments, $46.9 million in construction loan
commitments, $16.2 million in commercial loan commitments, $21.8 million in home
equity loan commitments, $6.2 million in multifamily loan commitments and $4.3
million in other loan commitments. In addition, management estimates that an
increased level of loan commitments may arise as a result of the Multifamily
Lending Division. Management of the Bank anticipates that it will have
sufficient funds available to meet its current loan commitments. Certificates of
deposit, which are scheduled to mature in less than one year from December 31,
1999, totaled $430.5 million. Based upon past experience and the Bank's current
pricing strategy, management believes that a significant portion of such
deposits will remain with the Bank.
At December 31, 1999, the Bank exceeded all of its regulatory capital
requirements with a leverage capital level of $261.7 million, or 9.0% of
adjusted assets, which is above the required level of $116.2 million, or 4.0% of
adjusted assets, and risk-based capital of $276.1 million, or 17.8% of adjusted
assets, which is above the required level of $123.9 million, or 8.0% of adjusted
assets.
The Company's most liquid assets are cash, due from banks and federal funds
sold. The levels of these assets are dependent on the Bank's operating,
financing, lending and investing activities during any given period. At December
31, 1999, cash, due from banks and federal funds sold totaled $48.4 million, or
1.7% of total assets.
<PAGE>17
THE YEAR 2000 ISSUE
To date, the Company has not experienced any data processing or computer
problems related to the Year 2000 issue. The Company has maintained formal
communications with all of its service providers, vendors, major fund providers,
major borrowers and companies with which it has material investments. At this
time, the Company is unaware of any material condition that would impact its
ability to deliver accurate data processing services, although such conditions
may arise during calendar year 2000. The Company's expenses, for the second
quarter were approximately $30,000 and total expenses relative to the Year 2000
issue were approximately $250,000.
FINANCIAL SERVICES LEGISLATION
Recent legislation designed to modernize the regulation of the financial
services industry expands the ability of bank holding companies to affiliate
with other types of financial services companies such as insurance companies and
investment banking companies. However, the legislation provides that companies
that acquire control of a single savings association after May 4, 1999 (or that
filed an application for that purpose after that date) are not entitled to the
unrestricted activities formerly allowed for a unitary savings and loan holding
company. Rather, these companies will have authority to engage in the activities
permitted "a financial holding company" under the new legislation, including
insurance and securities-related activities, and the activities currently
permitted for multiple savings and loan holding companies, but generally not in
commercial activities. The authority for unrestricted activities is
grandfathered for unitary savings and loan holding companies, such as the
Company, that existed prior to May 4, 1999. However, the authority for
unrestricted activities would not apply to any company that acquired the
Company.
PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT
In addition to historical information, this Form 10-Q includes certain
forward-looking statements based on current management expectations. The
Company's actual results could differ materially from those management
expectations. Factors that could cause future results to vary from current
management expectations include, but are not limited to, general economic
conditions, legislative and regulatory changes, monetary and fiscal policies of
the federal government, changes in tax policies, rates and regulations of
federal, state and local tax authorities, changes in interest rates, deposit
flows, the cost of funds, demand for loan products, demand for financial
services, competition, changes in the quality or composition of the Company's
loan and investment portfolios, changes in accounting principles, policies or
guidelines, and other economic, competitive, governmental and technological
factors affecting the Company's operations, markets, products, services and
prices.
<PAGE>18
ITEM 3. QUANTITATIVE AND QUALITIVE DISCLOSURES ABOUT MARKET RISK
ASSET AND LIABILITY MANAGEMENT AND THE MANAGEMENT OF INTEREST RATE RISK
Quantitative and qualitative disclosure about market risk is presented at June
30, 1999 in Item 7a. to the Company's Form 10-K, filed with the SEC on September
28, 1999. There have been no material changes in the Company's market risk at
December 31, 1999 as compared to June 30, 1999. The following is an update of
the discussion provided therein:
General. The Company's largest component of market risk continues to be interest
rate risk. Substantially all of this risk continues to reside at the Bank level.
The Bank still is not subject to foreign currency exchange or commodity price
risk. At December 31, 1999, neither the Company nor the Bank owned any trading
assets, nor did they participate in hedging programs, interest rate swaps or
other activities involving the use of off-balance sheet derivative financial
instruments.
Gap Analysis. At December 31, 1999, the Company's estimated one-year "gap"
position, the difference between the amount of interest-earning assets maturing
or repricing within one year and interest-bearing liabilities maturing or
repricing within one year, was a negative $331,253, representing a one-year
interest sensitivity gap as a percentage of total assets of (10.8%).
Accordingly, during a period of rising interest rates, the Company, having a
positive gap position, would be in a better position to invest in higher
yielding assets which, consequently, may result in the yield on its assets
increasing at a pace more closely matching the increase in the cost of its
interest-bearing liabilities than if it had a negative gap. During a period of
falling interest rates, an institution with a positive gap would tend to have
its assets repricing at a faster rate than one with a negative gap which,
consequently, may tend to restrain the growth of its net interest income or
result in a decrease in interest income.
Interest Rate Risk Compliance. The Company continues to monitor the impact of
interest rate volatility upon net interest income and net portfolio value in the
same manner as at June 30, 1999. There have been no changes in the Board of
Directors approved limits of acceptable variance in net interest income and net
portfolio value at December 31, 1999, compared to June 30, 1999, and the
projected changes continue to fall within the Board of Directors approved limits
at all levels of potential interest rate volatility.
<PAGE>19
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
- ---------------------------
The Company is not involved in any pending legal proceedings other than the
routine legal proceedings occurring in the ordinary cause of business. Such
routine legal proceeding in the aggregate, are believed by management to be
immaterial to the Company's financial condition or results of operations.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
- ---------------------------------------------------
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
- -----------------------------------------
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- -------------------------------------------------------------
Not applicable.
ITEM 5. OTHER INFORMATION
- ---------------------------
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ------------------------------------------
(a) EXHIBITS
--------
3.1 Certificate of Incorporation of Richmond County Financial Corp.*
3.2 Bylaws of Richmond County Financial Corp.*
11.0 Statement re: Computation of Per Share Earnings.
27.0 Financial Data Schedule (EDGAR version only).
* Incorporated by reference from the Form S-1 (Registration No.
333-37009), as amended, filed on October 2, 1997.
(b) REPORTS ON FORM 8-K
-------------------
Not applicable.
<PAGE>20
Exhibit Index
-------------
Exhibit No. Page
- ----------- ----
11.0 Statement re: Computation of Per Share Earnings................ 22
27.0 Financial Data Schedule
<PAGE>21
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RICHMOND COUNTY FINANCIAL CORP.
(Registrant)
Date: February 14, 2000 By: /s/ Michael F. Manzulli
----------------------------
Michael F. Manzulli
Chairman of the Board and
Chief Executive Officer
Date: February 14, 2000 By: /s/ Thomas R. Cangemi
----------------------------
Thomas R. Cangemi
Senior Vice President, Chief
Financial Officer and Treasurer
EXHIBIT 11
RICHMOND COUNTY FINANCIAL CORP.
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
(In Thousands, Except Share and Per Share Amounts)
<TABLE>
<CAPTION>
FOR THE FOR THE
THREE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, DECEMBER 31,
---------------------- ----------------------
1999 1998 1999 1998
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net Income $ 9,028 $ 6,020 $ 18,137 $ 11,374
========== ========== ========== ==========
Weighted average common shares outstanding 27,541,491 23,426,228 27,810,711 23,888,753
Common stock equivalents due to dilutive effect of
stock options - - - -
---------- ---------- ---------- ----------
Total weighted average common shares and 27,541,491 23,426,228 27,810,711 23,888,753
equivalents ========== ========== ========== ==========
Basic earnings per common and common share
equivalents $ 0.33 $ 0.27 $ 0.65 $ 0.49
========== ========== ========== ==========
Total weighted average common shares and 27,541,491 23,426,228 27,810,711 23,888,753
equivalents outstanding
Additional dilutive shares using ending period
market value versus average market value
for the period when utilizing the treasury
stock method regarding stock options 163,802 (306,219) 249,915 (268,252)
---------- ---------- ---------- ----------
Total shares for dilutive earnings per share 27,705,293 23,120,009 28,060,626 23,620,501
========== ========== ========== ==========
Diluted earnings per common share equivalents $ 0.33 $ 0.27 $ 0.65 $ 0.49
========== ========== ========== ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FORM
10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JUL-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 37,819
<INT-BEARING-DEPOSITS> 9,634
<FED-FUNDS-SOLD> 900
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 1,080,699
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 1,550,930
<ALLOWANCE> 14,396
<TOTAL-ASSETS> 2,890,935
<DEPOSITS> 1,677,328
<SHORT-TERM> 206,100
<LIABILITIES-OTHER> 10,302
<LONG-TERM> 655,432
0
0
<COMMON> 327
<OTHER-SE> 341,446
<TOTAL-LIABILITIES-AND-EQUITY> 2,890,935
<INTEREST-LOAN> 54,093
<INTEREST-INVEST> 40,852
<INTEREST-OTHER> 247
<INTEREST-TOTAL> 95,192
<INTEREST-DEPOSIT> 25,927
<INTEREST-EXPENSE> 47,342
<INTEREST-INCOME-NET> 47,850
<LOAN-LOSSES> 600
<SECURITIES-GAINS> 710
<EXPENSE-OTHER> 26,055
<INCOME-PRETAX> 28,571
<INCOME-PRE-EXTRAORDINARY> 28,571
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 18,137
<EPS-BASIC> .65
<EPS-DILUTED> .65
<YIELD-ACTUAL> 7.17
<LOANS-NON> 6,361
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 13,885
<CHARGE-OFFS> 145
<RECOVERIES> 56
<ALLOWANCE-CLOSE> 14,396
<ALLOWANCE-DOMESTIC> 8,481
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 5,915
</TABLE>
