SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act
of 1934
For the period ended: March 31, 1995
NORTH FORK BANCORPORATION, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 36-315460
(State or other Jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9025 ROUTE 25, MATTITUCK, NEW YORK 11952
(Address of principal executive offices) (Zip Code)
(516) 298-5000
(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.
CLASSES OF COMMON STOCK NUMBER OF SHARES OUTSTANDING 5/10/95
$2.50 Par Value 24,224,367
<PAGE>
INDEX
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
North Fork Bancorporation, Inc. and Subsidiaries
(1.) Consolidated Balance Sheets.
(2.) Consolidated Statements of Income.
(3.) Consolidated Statements of Cash Flows.
(4.) Consolidated Statements of Changes in Stockholders' Equity.
(5.) Notes to Consolidated Financial Statements.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not Applicable.
ITEM 2. CHANGES IN SECURITIES
Not Applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable.
<PAGE>
PART II. OTHER INFORMATION (continued)
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
The following exhibits are submitted herewith:
(a) Exhibit # Description
(10.1) Letter Agreement, dated March 31, 1994, between
North Fork Bank and Mindy Butler, regarding
Ms. Butler's employment.
(10.2) Form of Change-in-Control Agreement, as entered
into between North Fork Bancorporation, Inc. and
each of John Adam Kanas, John Bohlsen and
Daniel M. Healy, each dated December 20, 1994.
(11) Statement Re: Computation of per share earnings.
(27) Financial Data Schedule
(b) Current Report on Form 8-K dated January 20, 1995
(Reporting operating results for the quarter and year
ending December 31, 1994.)
Current Report on Form 8-K dated April 20, 1995
(Reporting the Registrant's intention to repurchase
up to 5% of its common shares outstanding.)
<PAGE>
<TABLE>
<CAPTION>
Consolidated Balance Sheets March 31, December 31, March 31,
1995 1994 1995
(in thousands, except share amounts) (unaudited) (unaudited)
Assets
<S> <C> <C> <C>
Cash & Due from Banks $92,820 $67,168 $74,897
Interest Earning Deposits 1,454 748 292
Federal Funds Sold & Securities
Purchased under Agreements to Resell 8,000 - 53,800
Securities:
Held-to-Maturity 588,540 631,492 616,670
Available-for-Sale 141,952 141,805 398,103
Total Securities 730,492 773,297 1,014,773
Loans 1,860,026 1,831,466 1,776,040
Less: Unearned Income & Fees 17,586 17,429 19,449
Allowance for Loan Losses 50,638 50,069 55,870
Net Loans 1,791,802 1,763,968 1,700,720
Premises & Equipment, Net 39,242 39,168 40,320
Accrued Income Receivable 18,978 19,315 19,229
Other Real Estate 5,081 4,861 10,412
Other Assets 29,645 27,043 20,988
Excess of Cost over Fair Value
of Net Assets Acquired 21,840 22,208 23,310
Total Assets $2,739,354 $2,717,776 $2,958,741
Liabilities and Stockholders' Equity
Demand Deposits $369,941 $331,245 $275,984
Savings, N.O.W. & Money
Market Deposits 1,155,360 1,325,628 1,399,723
Certificates of Deposits in
Amounts of $100,000 & Over 126,968 71,978 58,778
Other Time Deposits 720,753 614,036 618,059
Total Deposits 2,373,022 2,342,887 2,352,544
Federal Funds Purchased
& Securities Sold Under
Agreements to Repurchase 31,795 20,000 319,769
Other Borrowings 10,000 50,000 10,360
Senior Notes Payable 25,000 25,000 20,000
Accrued Interest & Other Expenses 19,895 19,770 14,316
Other Liabilities 6,955 5,196 5,040
Total Liabilities $2,466,667 $2,462,853 $2,722,029
Stockholders' Equity
Preferred Stock, par value $1.00;
authorized 10,000,000
shares, unissued - - -
Common stock, par value $2.50;
authorized 50,000,000 shares;
issued & outstanding 24,225,809,
23,049,187, 22,477,042
shares at the periods
ending, respectively 60,565 57,623 56,193
Additional Paid in Capital 98,406 94,526 91,609
Retained Earnings 114,585 106,186 91,875
Less: Unrealized Loss on
Securities Available-for-Sale,
net of taxes (498) (2,871) (2,229)
Deferred Compensatio (289) (514) (714)
Treasury Stock at cost;
5,925, 1,945, 1,740 shares
at the periods ending, respectively (82) (27) (22)
Total Stockholders' Equity 272,687 254,923 236,712
Total Liabilities and
Stockholders' Equity $2,739,354 $2,717,776 $2,958,741
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended
<S> <C> <C>
Consolidated Statements of Income March 31, 1995 March 31, 1994
(in thousands, except
per share amounts) (unaudited) (unaudited)
Interest Income
Loans (including fee income) $40,456 $35,379
Interest Earning Deposits 34 2
Federal Funds Sold & Securities Purchased
Under Agreements to Resell 157 289
Mortgage-Backed Securities 9,097 9,880
U.S. Treasury & Government Agency Securities 1,251 2,105
State & Municipal Obligations 689 444
Other Securities 321 192
Total Interest Income 52,005 48,291
Interest Expense
Savings, N.O.W. & Money Market Deposits 7,454 7,721
Certificates of Deposit, $100,000 and Over 1,503 572
Other Time Deposits 8,105 5,763
Short-Term Borrowings 369 2,411
Long-Term Borrowings 722 779
Total Interest Expense 18,153 17,246
Net Interest Income 33,852 31,045
Provision for Loan Losses 2,000 1,700
Net Interest Income after
Provision for Loan Losses 31,852 29,345
Non-Interest Income
Fees & Service Charges on Deposit Accounts 2,616 2,703
Trust & Investment Management Fees 435 435
Mortgage Banking Operations 629 693
Net Securities Gains/(Losses) 98 (77)
Other Operating Income 1,375 1,138
Total Non-Interest Income 5,153 4,892
Salaries & Employee Benefits 8,156 8,649
Occupancy 1,671 1,734
Equipment 1,180 1,343
FDIC Insurance Premiums 1,311 1,421
Other Real Estate 247 2,046
Amortization of Excess of Cost Over
Fair Value of Net Assets Acquired 368 368
Other Operating Expenses 4,304 4,223
Total Non-Interest Expense 17,237 19,784
Income Before Income Taxes 19,768 14,453
Provision for Income Taxes 8,268 5,682
Net Income $11,500 $8,771
Per Share:
Net Income $0.48 $0.37
Cash Dividends $0.125 $0.075
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statement of Cash Flows (Unaudited)
Three Months Ended March 31, (in thousands)
<S> <C> <C>
1995 1994
Cash Flows from Operating Activities:
Net Income $11,500 $8,771
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Provision for Loan Losses 2,000 1,700
Provision for Losses on Real Estate Acquired in
Settlement of Loans 47 1,107
Depreciation and Amortization 1,137 1,246
Amortization of Excess of Cost Over Fair Value of
Net Assets Acquired 368 368
Accretion of Discounts and Net Deferred Loan Fees (752) (650)
Amortization of Premiums 981 3,056
Net Securities (Gains)/Losses (98) 77
Other, Net (1,975) (187)
Net Cash Provided by Operating Activities 13,208 15,488
Cash Flows from Investing Activities:
Maturities, Calls and Principal Repayments on
Securities Held-to-Maturity 42,336 49,720
Purchases of Securities Held-to-Maturity (100)(151,963)
Proceeds from Sales of Securities
Available-for-Sale 783 47,013
Maturities, Calls and Principal Repayments on
Securities Available-for-Sale 10,244 67,849
Purchases of Securities Available-for-Sale (7,027) (55,955)
Loans Originated and Principal Repayments
on Loans and Other Real Estate Owned, Net (32,079) (35,983)
Proceeds from Sales of Real Estate Acquired
in Settlements of Loans 1,426 2,095
Proceeds from the Sale of Loans 1,221 16,950
Purchases of Premises and Equipment, Net (1,156) (752)
Net Cash Provided by/(Used in)
Investing Activities 15,648 (61,026)
Cash Flows from Financing Activities:
Net Increase/(Decrease) in Deposits 30,135 (2,448)
Net (Decrease)/Increase in Short-Term
and Other Borrowings (28,205) 59,301
Purchase of Treasury Shares (2) -
Common Stock Issued for Cash 5,951 208
Dividends Paid to Shareholders (2,377) (811)
Net Cash Provided by Financing Activities 5,502 56,250
Net Increase in Cash and Cash Equivalents 34,358 10,712
Metro Activity for the Three
Months Ended December 31, 1993 - 356
Cash and Cash Equivalents at Beginning
of the Quarter 67,916 117,921
Cash and Cash Equivalents at End
of the Quarter $102,274 $128,989
<PAGE>
Consolidated Statement of Cash Flows
(Unaudited), Continued
Three Months Ended March 31, 1995 1994
Supplemental Disclosures of
Cash Flow Information: (in thousands)
Cash Paid During the Period for:
Interest Expense $14,562 $17,170
Income Taxes $6,440 $3,845
Supplemental Schedule of Noncash
Investing and Financing Activities:
Securities Transferred to
Available-for-Sale Upon Adoption of SFAS 115 - $275,200
Real Estate Acquired in Settlement of Loans $1,841 $411
Loans to Facilitate the Sale
of Other Real Estate $1,096 $1,764
During the period the Registrant
purchased various investment securities
which settled in the subsequent month - $15,051
During the period the Registrant
sold various investment securities
which settled in the subsequent month - $18,413
</TABLE>
<PAGE>
Consolidated Statements of Changes in Stockholders' Equity (Unaudited)
(dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
Additional Unrealized
Common Paid in Retained Securities Deferred Treasury
Stock Capital Earnings Gains/(Losses) Comp. Stock Total
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1993 56,114 91,473 79,623 - (899) (1) 226,310
Unrealized Gain on Securities
Available-for-Sale,
net of taxes at January 1, 1994 2,241 2,241
Net Income 8,771 8,771
Cash Dividends
(The Registrant $0.075 per share) (1,059) (1,059)
Cash Dividends
( Metro Pre-Merger $0.45 per share) (1) (2,297) (2,297)
Sale of Common Stock (13,639 shares) 72 130 202
Exercise of Warrants (3,000 shares) 7 7 14
Deferred Compensation Activity:
Amortization of Restricted Stock Awards 53 53
Forfeiture of Restricted Stock Awards
(1,667 shares) (1) 21 (21) (1)
Amortization of Other Deferred Compensation Plans 111 111
Metro Net Income for the Three Months Ended
December 31, 1994 (1) 6,837 6,837
Adjustment to Unrealized Gain/(Loss) on Securities
Available-for-Sale, net of taxes (4,470) (4,470)
Balance, March 31, 1994 56,193 91,609 91,875 (2,229) (714) (22) 236,712
Balance, December 31, 1994 $57,623 $94,526 $106,186 ($2,871) ($514) ($27) $254,923
Net Income 11,500 11,500
Cash Dividends ($0.125 per share) (3,101) (3,101)
Sale of Common Stock (595,815 shares) 1,490 1,625 3,115
Exercise of Warrants (580,807 shares) 1,452 2,243 3,695
Deferred Compensation Activity:
Restricted Stock Awards (4,500 shares) (1) (61) 62
Amortization of Restricted Stock Awards 50 50
Forfeiture of Restricted Stock
Awards (8,334 shares) 13 30 (115) (72)
Amortization of Other Deferred Compensation Plans 206 206
Purchase of Treasury Stock (146 shares) (2) (2)
Adjustment to Unrealized Gain/(Loss) on Securities
Available-for-Sale, net of taxes 2,373 2,373
Balance, March 31, 1995 $60,565 $98,406 $114,585 ($498) ($289) ($82) $272,687
(1) See "Note 2 - Business Combinations" of the Registrant's 1994 Annual Report
on Form 10-K for further discussion of this transaction.
</TABLE>
<PAGE>
North Fork Bancorporation, Inc.
and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
March 31, 1995 and 1994
General
The consolidated financial statements of North Fork Bancorporation, Inc.
(the "Registrant"), a bank holding company, and its subsidiaries, have
been prepared in conformity with generally accepted accounting principles
and prevailing practices within the financial services industry.
On November 30, 1994, Metro Bancshares Inc. ("Metro"), the Parent Company
of Bayside Federal Savings Bank ("Bayside") was merged with and into the
Registrant. The merger was accounted for as a pooling-of-interests and,
as a result, the Registrant's consolidated financial statements have
been retroactively restated for all reporting periods to include the
consolidated accounts of Metro.
The Registrant's previously reported components of consolidated
income and the amounts reflected in the accompanying consolidated
statement of income for the three months ended March 31, 1994, are as follows:
(in thousands)
<TABLE>
<S> <C>
Net Interest Income
As Previously Reported $20,065
Metro 10,980
Combined $31,045
Net Income
As Previously Reported $5,512
Metro 3,259
Combined $8,771
</TABLE>
Metro's reporting period had been as of and for the year ended
September 30, whereas the Registrant utilizes a calendar year basis.
Metro's results for 1994 have been conformed to the calendar year
reporting of the Registrant. See "Note 2 - Business Combinations"
of the Registrant's 1994 Annual Report on Form 10-K for further discussion
of this transaction.
In the opinion of management, all significant intercompany accounts
and transactions have been eliminated in consolidation. In addition,
all adjustments necessary for a fair presentation of the consolidated
financial position, results of operations and cash flows of the
Registrant for the interim periods have been made. All such adjustments
,except as noted above, are of a normal and recurring nature.
These statements should be read in conjunction with the Registrant's
summary of significant accounting policies which are incorporated herin by
reference in its 1994 Annual Report on Form 10-K.
Results of operations for the quarter ended March 31, 1995 are not
necessarily indicative of the results of operations which may be
expected for the full year 1995 or any other interim periods.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
RECENT ACCOUNTING DEVELOPMENTS:
Accounting by Creditors for Impairment of a Loan:
Statement of Financial Accounting Standards No. 114, ("SFAS 114"),
as amended by Statement of Financial Accounting Standards
No. 118, "Accounting by Creditors for Impairment of a Loan-Income
Recognition and Disclosures" ("SFAS 118")
The Registrant adopted SFAS 114, as amended by SFAS 118 (collectively
referred to as "the Statement"), effective January 1, 1995.
The Statement requires that the measurement of impaired loans be
based on the present value of expected future cash flows discounted
at the loan's effective interest rate or, as a practical expedient,
at the loan's observable market price or the fair value of the collateral
if the loan is collateral dependent.
Additionally, the Statement amends the accounting for loans previously
classified as in-substance foreclosure. Under previous guidance, when a
loan met the criteria of an in-substance foreclosure, the creditor was
required to account for the loan and any future transactions as if they
had received the collateral in full satisfaction of the debt. However,
the Statement requires that a creditor shall measure impairment based on
the fair value of the collateral when a creditor determines that foreclosure
is probable. In these situations, the creditor is required to continue to
carry the asset as a loan rather than relcassify it to Other Real Estate.
As a result, $8.2 million and $11.8 million of loan previously reported as
In-substance forclosures at December 31, 1994 and March 31, 1994, respectively,
have been reclassified from Other Real Estate to loans in the accompanying
Balance Sheets. All financial schedules and ratios contained within this
document affected by this reclassification have been restated for
comparability purposes.
The Registrant's interest income recognition policy and methodology
used to assess the adequacy of its allowance for loan losses had
previously complied with the methods prescribed by the Statement.
Accordingly, adoption of this Statement had no material adverse
effect on the Registrant's financial condition at March 31, 1995
or on its financial results for the quarter ended March 31, 1995.
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Earnings Summary
North Fork Bancorporation, Inc. (the "Registrant") recognized net
income of $11.5 million, or $.48 per share, for the first quarter
ended March 31, 1995, as compared with net income of $8.8 million,
or $.37 per share for the comparable prior year period. Per share
results are based on weighted average shares outstanding of 24,152,031
and 23,824,688 for the quarters ended March 31, 1995 and 1994, respectively.
The increase in the Registrant's 1995 first quarter earnings,
when compared with the comparable prior year period, is attributable
to a $2.8 million increase in net interest income, a $.3 million
increase in non-interest income, and a $2.5 million decrease in
non-interest expense. This activity was partially offset by a
$.3 million increase in the provision for loan losses and a $2.6
million increase in the provision for income taxes.
Return on average total assets and return on average stockholders'
equity for the first quarter of 1995 improved to 1.70% and 17.76%,
respectively, when compared to 1.20% and 15.11%, respectively, for
the comparable prior year period.
Net Interest Income
Net interest income, which represents the difference between interest
earned on interest earning assets and interest incurred on interest
bearing liabilities, is the Registrant's primary source of earnings.
Net interest income is affected by the level and composition of
interest earning assets and interest incurred on interest bearing
liabilities, as well as changes in market interest rates.
<PAGE>
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Net Interest Income (continued)
Net interest income, on a fully taxable equivalent basis, increased
$2.9 million, or 9.3%, to $34.4 million for the 1995 first quarter,
as compared to $31.5 million for the comparable prior year period.
The components of this increase include a $3.8 million increase in
interest income, on a fully taxable equivalent basis, partially offset
by a $.9 million increase in interest expense.
Interest income, on a fully taxable equivalent basis, aggregated
$52.5 million for the 1995 first quarter, a $3.8 million increase
from the $48.7 million earned in the 1994 comparable period. The
yield on interest earning assets, on a fully taxable equivalent basis,
increased to 8.19% for the 1995 first quarter as compared to 7.05% in
the 1994 comparable period. This increase is attributable to (a) multiple
increases in the prime rate of interest throughout 1994 and 1995, (b) the
impact of higher market interest rates on the Registrant's securities
and adjustable rate residential portfolio, and (c) a shift in the composition
of interest earning assets to higher yielding loans from the securities
portfolio. These factors were partially offset by a $200 million decline
in the level of interest earning assets to $2.6 billion during the first
quarter of 1995 as compared to $2.8 billion for the comparable prior year
period.
The decline in the level of interest earning assets is a result of the
Registrant's formal strategy to reduce its reliance on short-term
borrowings, principally repurchase agreements and short-term Federal
Home Loan Bank advances, through the liquidation of certain securities
classified as Available-for-Sale combined with maturities of certain
securities. This strategy, which was implemented during the latter half
of 1994, was in response to increases on short-term interest rates and
a flattening of the yield curve.
Interest expense increased to $18.2 million for the 1995 first quarter,
reflecting a 3.49% cost of funds, as compared to $17.2 million, or an
effective cost of funds of 2.91%, for the comparable prior year period.
The increase in interest expense period-over-period is attributable to
the impact of higher market interest rates on the Registrant's cost of
funds, partially offset by a decline in the level of interest bearing
liabilities.
Interest incurred on short-term borrowings declined $2.0 million to
$.4 million in the first quarter of 1995 as compared to $2.4 million
for the comparable prior year period. Average short-term borrowings
declined $252.2 million to $27.1 million for the first quarter of 1995
as compared to $279.3 million for the comparable prior year period.
This decline resulted from management's strategy to reduce its reliance
on short-term borrowings and its level of holdings in its securities
portfolios as previously discussed.
Interest incurred on total savings and time deposit accounts increased
$3.0 million to $17.1 million in the first quarter of 1995 as compared to
$14.1 million for the comparable prior year period. This increase is
attributable to the effects of higher market interest rates on the
Registrant's cost of funds, and a shift in deposit composition from
Savings, N.O.W. and Money Market accounts to higher yielding Time
deposit accounts. Average Savings, N.O.W. and Money Market deposits
declined $136 million to $1.25 billion for the 1995 first quarter
as compared to $1.38 billion for the comparable prior year period.
Simultaneously, average Time deposits increased
$85.8 million to $800.5 million
for the 1995 first quarter as compared to $714.7 million for the
comparable prior year period. This increase in deposit funding
costs was partially offset by a $50 million decline in the level
of average total savings and time deposits to $2.05 billion during
the 1995 first quarter as compared to $2.10 billion during the comparable
prior year period.
Conversely, average Demand deposits increased $63.5 million or 22.9%
to $341.3 million for the 1995 first quarter as compared to $277.8
million for the comparable prior year period. Demand deposits
comprised 15.6% of total deposits at March 31, 1995 as compared
to 11.7% at March 31, 1994. The continued growth in Demand deposit
balances is attributable to the process of converting the former
Bayside branches into full-service commercial branches and the
Registrant's continued efforts to expand its small and medium size commercial
base.
The following table sets forth a summary analysis of the relative impact
on net interest income of changes in the average volume of interest earning
assets and interest bearing liabilities and changes in average rates on
such assets and liabilities. Due to the numerous simultaneous volume and
rate changes during the period analyzed, it is not possible to precisely
allocate changes between volumes and rates. For presentation purposes,
changes which are not solely due to volume changes or rate changes have
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Net Interest Income (continued)
been allocated to these categories based on the respective percentage
changes in average volume and average rates as they compare to each other.
In addition, average interest earning assets include non-accrual loans.
<TABLE>
<CAPTION>
For the Three Months Ended March 31, 1995 vs. March 31, 1994
(in thousands ) Change in
Average Average Net Interest
Volume Rate Income
<S> <C> <C> <C>
INTEREST INCOME FROM EARNING ASSETS:
Interest Earning Deposits $21 $11 $32
Taxable Securities (3,512) 2,818 (694)
Non-Taxable Municipals 198 162 360
Mortgage-Backed Securities (9,048) 8,265 (783)
Taxable Loans, including non-accrual loans 1,782 3,347 5,129
Non-Taxable Loans (67) (21) (88)
Federal Funds Sold and Securities
Purchased Under Agreements to Resell (1,155) 1,023 (132)
Total Interest Earning Assets (11,781) 15,605 3,824
INTEREST EXPENSE ON LIABILITIES:
Total Savings and Time Deposits (1,905) 4,911 3,006
Short-Term Borrowings (8,137) 6,095 (2,042)
Long-Term Borrowings 556 (613) (57)
Total Interest Expense (9,486) 10,393 907
Net Change in Interest Income $(2,295) $5,212 $2,917
The above table has been prepared on a Taxable Equivalent Basis
</TABLE>
<PAGE>
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Net Interest Income (continued)
The following tables present an analysis of net interest income by each
major category of interest earning assets and interest bearing liabilities
for the three month periods ended March 31, 1995 and 1994, respectively:
<TABLE>
<CAPTION>
ANALYSIS OF NET INTEREST INCOME
Three Months Ended
March 31, 1995 March 31, 1994
Average Average Average Average
Balance Interest Rate Balance Interest Rate
<S> <C> <C> <C> <C> <C> <C>
(dollars in thousands )
INTEREST EARNING ASSETS
Interest Earning Deposits $1,552 $34 8.96% $291 $2 2.79%
Taxable Securities 112,238 1,644 5.94% 200,545 2,338 4.73%
Non-Taxable Municipals 60,850 1,041 6.94% 48,302 681 5.72%
Mortgage-Backed Securities 578,850 9,097 6.37% 754,541 9,880 5.31%
Taxable Loans, net of unearned income & fees 1,827,424 40,278 8.94% 1,741,860 35,149 8.18%
Non-Taxable Loans 8,498 280 13.36% 10,494 368 14.22%
Federal Funds Sold and Securities
Purchased Under Agreements to Resell 10,700 157 5.94% 44,239 289 2.65%
Total Interest Earning Assets 2,600,112 52,531 8.19% 2,800,272 48,707 7.05%
Allowance for Loan Losses (51,009) (57,317)
Cash and Due from Banks 81,324 82,485
Other Non-Interest Earning Assets 106,693 131,305
Total Assets $2,737,120 $2,956,745
INTEREST BEARING LIABILITIES:
Savings, N.O.W & Money Market Deposits 1,244,665 7,454 2.43% 1,380,508 7,721 2.27%
Time Deposits 800,509 9,608 4.87% 714,702 6,335 3.59%
Total Savings and Time Deposits 2,045,174 17,062 3.38% 2,095,210 14,056 2.72%
Short-Term Borrowings 27,091 369 5.52% 279,332 2,411 3.50%
Long-Term Borrowings 35,000 722 8.37% 30,000 779 10.53%
Total Interest Bearing Liabilities 2,107,265 18,153 3.49% 2,404,542 17,246 2.91%
Rate Spread 4.70% 4.15%
Non-Interest Bearing Deposits 341,332 277,753
Other Non-Interest Bearing Liabilities 25,897 39,000
Total Liabilities 2,474,494 2,721,295
Stockholders' Equity 262,625 235,450
Total Liabilities and Stockholders' Equity $2,737,119 $2,956,745
Net Interest Income and Net Interest Margin 34,378 5.36% 31,461 4.56%
Less: Tax Equivalent Basis Adjustment (526) (416)
Net Interest Income $33,852 $31,045
The above table has been prepared on a Taxable Equivalent Basis
</TABLE>
<PAGE>
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Non-Interest Income
Non-interest income, exclusive of net securities gains/(losses), was $5.1
million for the 1995 first quarter, as compared to $5.0 million for the
comparable prior year period. Net securities gains were $98 thousand during
the current period, as compared with net securities losses of $77 thousand
for the comparable prior year period.
Non-Interest Expense
Non-interest expense declined $2.6 million, or 12.9%, to $17.2 million
during the 1995 first quarter when compared to $19.8 million during the
comparable prior year period. The decline is primarily the result of a
$1.8 million decrease in other real estate expenses, and a $.8 million
reduction in general and administrative expenses, resulting from the
post-merger integration of operations and the achievement of other
efficiencies associated with the combination of certain product lines.
The Registrant's core efficiency ratio, which represents the ratio of
non-interest expense, net of other real estate expenses and other
non-recurring charges, to net interest income, on a tax equivalent
basis, and non-interest income net of securities gains and losses,
improved to 43.09% for the 1995 first quarter as compared with 48.69%
for the comparable prior year period. This achievement occurred as
core operating expense levels declined while net interest income and
non-interest income improved.
Income Taxes
The Registrant provides for income taxes under the asset and liability
method. Under this method, the Registrant is required to establish
deferred tax assets and liabilities for the temporary differences
between the financial reporting basis and the tax basis of the
Registrant's assets and liabilities at the enacted tax rates expected
to be in effect when such amounts are realized or settled. A valuation
allowance is to be established to reduce the deferred tax asset if it is
"more likely than not" that some or all of the deferred tax asset will
not be realized.
The Registrant's effective tax rate was 41.8% for the first quarter
of 1995, as compared to 39.3% for the comparable prior year period.
The increase in the effective tax rate is primarily attributable to
the Registrant recognizing a decrease in its deferred tax valuation
allowance during 1994.
Asset Quality
The Registrant's loan portfolio is principally located in the metropolitan
New York area. The risk inherent in this portfolio is dependent not only
upon regional and general economic stability which affects property values,
but also the financial well-being and creditworthiness of the borrowers.
The portfolio is concentrated in real estate related loans, comprising 83.1%
of the portfolio at March 31, 1995.
The following table delineates the composition of the Registrant's loan
portfolio for the periods indicated (in thousands):
<TABLE>
<CAPTION>
March 31, 1995 December 31, 1994 March 31, 1994
<S> <C> <C> <C>
Mortgage Loans-Residential $588,717 $598,711 $629,182
Mortgage Loans-Multi-family 559,695 524,167 429,822
Mortgage Loans-Commercial 347,110 340,157 341,182
Commercial & Industrial 236,076 241,544 251,364
Consumer Loans 78,378 72,098 60,864
Land Loan 37,250 39,312 40,835
Mortgage Loans-Construction 12,800 15,477 22,791
TOTAL $1,860,026 $1,831,466 $1,776,040
</TABLE>
<PAGE>
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Asset Quality (continued)
Non-performing assets, which include loans ninety days past due and still
accruing, non-accrual loans and other real estate, remained unchanged at
$46.9 million at March 31, 1995 when compared to December 31, 1994 levels
and declined $13.7 million when compared to $60.6 at March 31, 1994.
Non-performing assets represent 1.71% of total assets at March 31, 1995
and compare favorably to 1.73% at December 31, 1994 and 2.05% at
March 31, 1994.
The components of non-performing assets are delineated in the table below
(in thousands):
<TABLE>
<CAPTION>
March 31, 1995 December 31, 1994 March 31, 1994
<S> <C> <S> <C> <C> <C>
Loans 90 days Past Due & Still Accruing $2,362 $1,597 $3,766
Non-Accrual Loans 39,475 40,516 46,412
Non-Performing Loans 41,837 42,113 50,178
Other Real Estate Owned 5,081 4,861 10,412
Non-Performing Assets 46,918 46,974 60,590
Restructured, Accruing Loans $38,980 $37,044 $42,919
</TABLE>
The adoption of SFAS 114 did not effect the level of non-performing
assets as loans previously classified as in-substance foreclosures,
and contained within the other real estate caption, are now classified
within the non-accrual loans caption. For a further discussion, refer
to the Recent Accounting Developments section of this report.
The provision for loan losses increased to $2.0 million for the 1995
first quarter, from $1.7 million in the comparable prior year period.
Net charge-offs aggregated $1.4 million, or .32% of average loans,
net of unearned income, on an annualized basis, for the 1995 first
quarter, as compared with $2.8 million, or .63% of average loans,
net of unearned income, on an annualized basis, for the 1994 first
quarter. The allowance for loan losses at March 31, 1995 was $50.6
million, or 121.0% of non-performing loans, and 2.75% of loans, net of
unearned income. The allowance for loan losses at December 31, 1994
was $50.1 million, or 118.9% of non-performing loans,
and 2.76% of loans, net of unearned income. The allowance for loan
losses at March 31, 1994 was $55.9 million, or 111.3% of non-performing
loans and 3.18% of loans, net of unearned income.
Management determines what it deems to be the appropriate level of the
Registrant's allowance for loan losses on an ongoing basis by reviewing
individual loans within, as well as the composition of and trends in the
loan portfolio. Management considers, among other things, concentrations
within segments of the loan portfolio, delinquency trends, as well as
recent charge-off experience and third party evidentiary matter (such as
appraisals) when assessing the degree of credit risk in the portfolio. Various
appraisals and estimates of current value influence the estimation of the
required allowance at any point in time.
While management uses available information to provide for possible loan
losses, future additions to the allowance may be necessary based on future
changes in economic conditions. In addition, various regulatory agencies,
as an integral part of their examination process, periodically review the
Registrant's bank subsidiary's allowance for loan losses. Such agencies
may require the Registrant to recognize additions to the allowance based
on their judgement of information available to them at the time of their
examinations which may not be available now. Based on the current economic
conditions,management considers the allowance at March 31, 1995 adequate to
cover the possible risk of loss in the loan portfolio.
<PAGE>
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Securities
A) Held-to-Maturity Securities
Held-to-Maturity Securities are debt securities that the Registrant
has the positive intent and ability to hold to maturity and are stated
at amortized cost. At March 31, 1995, Securities Held-to-Maturity
consisted of the following (in thousands):
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains (Losses) Value
<S> <C> <C> <C> <C>
U.S. Government Agencies Obligations $54,566 - ($2,748) $51,818
State and Municipal Obligations 60,587 267 (1,360) 59,494
Mortgage-Backed Securities 473,387 223 (18,302) 455,308
TOTAL $588,540 $490 ($22,410) $566,620
</TABLE>
B) Available-for-Sale Securities
Available-for-Sale Securities are debt and equity securities not
classified as either securities held to maturity or trading securities
and are stated at fair value. At March 31, 1995, Securities
Available-for-Sale consisted of the following (in thousands):
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains (Losses) Value
<S> <C> <C> <C> <C>
U.S. Treasury $20,007 $3 ($65) $19,945
Mortgage-Backed Securities 98,104 170 (2,059) 96,215
Equity Securities 24,709 1,083 - 25,792
TOTAL $142,820 $1,256 ($2,124) $141,952
</TABLE>
The amortized cost of Mortgage-backed securities ("MBS") included in
both the available-for-sale and held-to-maturity categories was $571.5
million at March 31, 1995, with an aggregate fair value of $551.5
million, or a net pre-tax unrealized loss of $20.0 million. This
compares to securities with an amortized cost of $586.6 million and
an aggregate fair value of $549.6 million or a net pre-tax unrealized
loss of $37.0 million, at December 31, 1994. The increase in fair value
reflects the favorable impact of lower market interest rates during the
first quarter of 1995. The Registrant's mortgage-backed securities
are principally fixed rate and the value of these instruments moves in
an inverse relationship to interest rates.
Mortgage-backed securities classified as held-to-maturity included
$90.7 million in collateralized mortgage obligations at March 31, 1995.
Mortgage-backed securities classified as available-for-sale included
$1.1 million in collateralized mortgage obligations at March 31, 1995.
The prepayment of mortgage-backed securities, including collateralized
mortgage obligations, is actively monitored through the Registrant's
portfolio management function. The Registrant typically invests in MBS's
with stable cash flows and relatively short duration, thereby limiting
the impact of interest rate fluctuations on the portfolio. Management
regularly performs simulation testing to assess the impact that interest
and market rate changes would have on its MBS's portfolio.
At March 31, 1995, securities carried at $214.9 million were pledged
for various purposes as required by law and to secure securities sold
under agreements to repurchase and other borrowings.
<PAGE>
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Capital
The Federal Reserve Board has formal capital guidelines which bank
holding companies are required to meet. The risk based capital
guidelines are designed to make regulatory capital requirements
more sensitive to differences in risk profiles among banks and
bank holding companies to account for off-balance sheet exposure
and to minimize disincentives for holding liquid assets. Under
these guidelines, assets and off-balance sheet items are assigned
to broad risk categories, each with appropriate weights. The resulting capital
ratios represent capital as a percentage of total risk weighted assets and off
balance sheet items. The guidelines currently require all bank holding
companies to maintain a minimum ratio of total risk based capital to total
risk weighted assets of 8.00%, including a minimum ratio of Tier 1 capital
to risk weighted assets of 4.00%.
The following table sets forth the Registrant's regulatory capital
as of March 31, 1995 under the rules applicable at such date. At
such date the Registrant was in compliance with all applicable
regulatory requirements.
(dollars in thousands)
<TABLE>
Amount Ratio
<S> <C> <C>
Tier 1 Capital $251,283 15.84%
Regulatory Requirement 63,456 4.00%
Excess 187,827 11.84%
Total Risk Adjusted Capital 271,494 17.11%
Regulatory Requirement 126,912 8.00%
Excess $144,582 9.11%
Risk Weighted Assets $1,586,400
</TABLE>
The Registrant's leverage ratio at March 31, 1995 was 9.25%.
The Tier I, total risk based and leverage capital ratios of the
Registrant's bank subsidiary, were 16.17%, 17.45%, and 9.41%,
respectively, at March 31, 1995.
The Federal Deposit Insurance Corporation Act ("FDICIA") became effective
December 19, 1991. FDICIA substantially revised the depository institution
regulatory and funding provisions of the Federal Deposit Insurance Act and
makes revisions to several other banking statutes. Among other things,
FDICIA requires the federal banking regulators to take prompt corrective
action on depository institutions that do not meet minimum capital
requirements. FDICIA establishes five categories: "well capitalized",
"adequately capitalized", "undercapitalized", "significantly undercapitalized"
and "critically undercapitalized". Under the regulations, a "well capitalized"
institution has a minimum total risk based capital to total risk weighted
assets of at least 10%, a minimum Tier I capital to total risk weighted
assets of 6%, a minimum leverage ratio of at least 5% and is not subject
to any written order, agreement or directive. The Registrant and its bank
subsidiary are considered well capitalized.
On March 28, 1995, the Registrant's Board of Directors declared a
quarterly cash dividend of 12.5 cents per share, a 25% increase over
the 10.0 cents declared in the previous quarter. The dividend is
payable May 15, 1995 to shareholders of record at the close of
business April 25, 1995.
<PAGE>
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Liquidity
The objective of the Registrant's liquidity management is to ensure
the availability of sufficient resources to meet all financial commitments
and to capitalize on opportunities for business expansion. Liquidity
management addresses the Registrant's ability to meet deposit withdrawals
either on demand or contractual maturity, to repay other borrowings as
they mature and to make new loans and investments as opportunities arise.
The Registrant's sources of liquidity include dividends from its
subsidiaries, borrowings, and funds available through the capital
markets. Dividends from the Registrant's bank subsidiary are limited
by New York State Banking Department regulations to the current year's
earnings plus the prior two years' retained net profits. According to
the parameters of this regulation, the Bank had $67.2 million of retained
earnings available for dividends to the Registrant as of March 31, 1995.
The Bank has numerous sources of liquidity including loan and security
principal repayments and maturities, lines of credit with other financial
institutions, the ability to borrow under repurchase agreements utilizing
its unpledged securities portfolio, the sale of securities from its
available for sale portfolio, the securitization of loans within the
portfolio, whole loan sales and growth in its core deposit base.
In addition, the Bank has the ability, as a member of the Federal Home
Loan Bank ("FHLB") system, to borrow approximately $320 million on a
secured basis, utilizing mortgage related loans and securities as
collateral, for a term ranging from one day to ten years at both
fixed and variable rates. As of March 31, 1995, the Bank had $10
million in such advances, with an original maturity of greater than one year.
The Registrant's liquidity position is monitored on a daily basis to
ensure the maintenance of an optimum level and the most cost efficient
use of available funds. Management believes that the Registrant has
sufficient liquidity to meet its operating requirements.
Other Matters
Great Neck Bancorp Acquisition
In January 1995, the Registrant announced that it had entered into an
agreement to acquire Great Neck Bancorp. ("Great Neck") for cash
consideration of approximately $6.5 million. Great Neck is the parent
company of Bank of Great Neck, a Long Island based commercial bank.
The total assets to be acquired approximate $110 million exclusive of
certain designated assets aggregating approximately $15 million which
will be retained by the selling shareholders. The transaction, which
will be accounted for as a purchase, is subject to regulatory approval
and is expected to close in the second quarter of 1995.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Date: May 12 , 1995 /s/ Daniel M. Healy
Daniel M. Healy
Executive Vice President &
Chief Financial Officer
EXHIBIT 10.1
[NORTH FORK BANK LETTERHEAD]
March 31, 1994
Ms. Mindy Butler
32 Cottontail Road
Melville, New York 11747
Dear Ms. Butler:
As a result of our many conversations over the past few months, I am pleased to
outline the offer made to you orally last week on behalf of North Fork Bank.
We propose to hire you for the position of Executive Vice President, Chief
Lending Officer of North Fork Bank at an annual salary of $225,000.00. You will
become a participant in the senior management bonus pool for which you will be
paid not less than $50,000.00 for the first year ending December 31, 1994. In
addition to the cash consideration, you will be granted 20,000 options to
purchase North Fork Bancorporation stock at the average of the bid and ask price
on the day you begin your employment. These options have a ten year duration
and are exercisable by you at any time during the period. Additionally, you
will be
provided with a grant of 5,000 restricted shares of North Fork Bancorporation
stock. They shall vest to you one-third in the third, one-third in the fourth
and one-third in the fifth year of your employment with the company. The voting
rights and dividends on these common shares will be transferred to you
immediately upon your employment. As we discussed, you will also be provided
with an automobile of your choice to be selected from a list of automobile
dealers to be given to you upon acceptance of this agreement.
If your employment is involuntarily terminated (other than for cause) or if a
change in the effective control of North Fork Bank occurs at any time during the
first year of your employment, you will receive severance equal to the balance
of the first year's salary plus two additional years salary. If that same
situation should occur at any time during the second through the fifth years of
your employment, you will receive severance equal to the balance of the current
year's salary and one additional year.
For your convenience, I have enclosed a packet of documentation explaining the
rest of our benefit programs. Should you have any questions, please feel free
to call Karen Seelig, Senior Vice President, Human Resources at our Mattituck
location.
Very truly yours,
/s/ John Adam Kanas
John Adam Kanas
JAK:km
Enclosure
EXHIBIT 10.2
CHANGE-IN-CONTROL AGREEMENT
CHANGE-IN-CONTROL AGREEMENT (the "Agreement"), dated as of December 20,
1994, between North Fork Bancorporation, Inc., a Delaware corporation with its
principal place of business at 9025 Main Road, Mattituck, New York 11952 (the
"Company"), and [NAME] , an executive of the Company (the
"Executive").
WHEREAS, the Executive is presently serving as [EXECUTIVE OFFICER
POSITION OR POSITIONS] of the Company and is providing valuable services to
the Company and its subsidiaries; and
WHEREAS, the Executive has requested certain assurances in the event of
a change in control of the Company during the term of his employment by the
Company; and
WHEREAS, the Company wishes to create an environment which will
encourage the Executive to render best efforts on the Company's behalf in the
event such a change in control occurs or is proposed; and
WHEREAS, the Board of Directors of the Company (the "Board") has
approved and authorized the negotiation, delivery and execution of this
Agreement on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, the Company and the Executive
hereby agree as follows:
1. Term of Agreement. This Agreement shall commence on the date
hereof and shall continue in effect until the earlier of:
(i) the normal expiration date, which shall be the third
anniversary of the date of this Agreement; provided, however, that
commencing on the first anniversary of the date of this Agreement, and
annually on such month and day in each succeeding year thereafter (the
"Renewal Date"), the normal expiration date for purposes of this
subsection (i) shall automatically be modified and extended to become
the third anniversary of such Renewal Date, unless at least sixty (60)
days prior to any such Renewal Date the Board, upon the affirmative vote
of a majority of its members, shall have voted not to renew this
Agreement, in which event the normal expiration date for purposes of
this subsection (i) shall not be further extended but shall remain the
normal expiration date in effect at the time of such non-renewal; or
(ii) the date of discontinuation of the employment of the
Executive with the Company and its subsidiaries, including by virtue of
the death, disability, retirement at normal retirement age, voluntary
resignation, or termination for any cause or no cause of the Executive;
provided, however, that if a Change in Control of the Company shall occur
prior to the normal expiration date under (i) above or the date of
discontinuation of employment under (ii) above, the provisions of Section 2
shall apply and this Agreement shall not expire until completion of the
Exercise Period as defined in Section 2 and the performance by the Company of
the last obligation required to be performed by it under Section 2.
2. Severance Compensation.
(a) If a Change in Control (as defined in subsection (c) below) shall
occur during the term of this Agreement and, at any time during the period
beginning on the date of the Change in Control and ending on the date which is
two (2) years after the date of Change in Control (the "Exercise Period"), the
employment of the Executive with the Company and its subsidiaries is
terminated, either because the Executive voluntarily elects to terminate such
employment or because the Executive is involuntarily terminated by the Company
or its subsidiaries, then the Executive shall be entitled to receive from the
Company, and the Company shall deliver to the Executive, within thirty (30)
days after the effective date of such voluntary or involuntary termination of
employment, a lump sum cash payment (the "Severance Payment") in an amount
equal to:
(i) 299% of the "base amount" of the Executive's compensation at
the time of such Change in Control (as defined in and determined under
Section 280G of the Internal Revenue Code of 1986 (the "Code"), as the
same may be amended from time to time), minus
(ii) the present value of all other payments and benefits
received or receivable by the Executive from the Company or its
subsidiaries, under any other contract or plan, that are contingent upon
such Change in Control within the meaning of and as calculated pursuant
to Section 280G of the Code, exclusive of (y) any payments received or
receivable by the Executive under the Company's Performance Plan (or any
successor thereof), and (z) the value, determined in accordance with
Section 280G, of any acceleration, incident to or in connection with
such Change in Control, of the exercisability of any options or rights
to acquire stock of the Company or any securities related to or
derivative of the stock of the Company or the market price or other
value thereof, or of the vesting of any restricted shares of stock of
the Company.
Notwithstanding the foregoing or any other provision of this Agreement, the
Executive shall not be entitled to receive any Severance Payment or any other
benefits under this Agreement following a Change in Control if the Company
shall terminate the Executive for Cause as defined in (and limited by) by
Section 3 of this Agreement.
(b) For purposes of Section 2(a) above, the Executive shall be deemed
to have been involuntarily terminated by the Company or its subsidiaries other
than for Cause immediately following a Change in Control, if a Change in
Control occurs and, prior to such Change in Control, the Executive's
employment with the Company or its subsidiaries has been terminated at the
direction or upon the recommendation or urging of any entity unaffiliated with
the Company that is a party to any transaction relating to or constituting
such Change in Control or any person, including an executive officer or
director, in a position of authority with respect to any such entity. In such
event, this Agreement shall be deemed not to have expired for purposes of
Section 1 upon the termination of the Executive's employment before the Change
in Control.
(c) For purposes of this Section 2, a "Change in Control" of the
Company shall be deemed to have occurred as of the first date that any of the
following events occurs:
(i) There shall be consummated (A) a consolidation, merger or
stock-for-stock exchange involving either the Company or the securities
of the Company, in which the persons holding all voting securities of
the Company immediately prior to such consummation own, as a group,
immediately after such consummation, voting securities of the Company
(or, if the Company does not survive such transaction, voting securities
of the corporation surviving such transaction which issued securities to
such group in such transaction) having less than fifty percent (50%) of
the total voting power in an election of directors of the Company (or
such other surviving corporation), excluding securities received by any
members of such group which represent disproportionate percentage
increases in their shareholdings vis-a-vis the other members of such
group, or (B) a sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially
all of the assets of the Company and its subsidiaries, on a consolidated
basis, to a party which is not controlled by or under common control
with the Company;
(ii) Any individual, corporation (other than the Company),
partnership, trust, association, pool, syndicate or any other entity or
any group of persons acting in concert becomes the beneficial owner as
that concept is defined in Rule 13d-3 promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as the
result of any one or more securities transactions (including gifts and
stock repurchases, but excluding transactions described in subsection
(i) above), of securities of the Company possessing twenty-five percent
(25%) or more of the voting power for the election of directors of the
Company; or
(iii) "Approved Directors" shall constitute less than a majority
of the entire Board of Directors of the Company, with "Approved
Directors" defined to mean the members of the Board of Directors of the
Company as of the date of this Agreement and any subsequently elected
members of such Board who shall be nominated or approved by a majority
of the Approved Directors on the Board prior to such election.
(d) The Executive shall not be required, as a condition to receiving
the Severance Payment provided for under Section 2(a) hereof, to forfeit any
right to receive amounts or distributions under, or to forfeit any
participation in, any plan or program of the Company in effect at the time of
such termination of employment (including broad-based severance plans of the
Company), or to mitigate the amount of any such Severance Payment by seeking
other employment or gainful pursuit following the termination of his
employment with the Company. The Company shall not be permitted to offset
against the amount of any such Severance Payment, except as specifically
permitted in the calculation thereof under Section 2(a)(ii) or as further
provided in Section 2(h) hereof, the amount of (w) any compensation or income
earned by the Executive as the result of his subsequent employment by any
other employer or subsequent self-employment, (x) the amount of any retirement
insurance or similar benefits subsequently received by the Executive, (y) the
amount of any payments previously or subsequently made by the Company or its
subsidiaries to the Executive or persons or entities affiliated with the
Executive for services rendered or goods provided, or (z) any amounts owed or
payable or claimed to be owed or payable by the Executive to the Company or
any affiliate of the Company.
(e) Regardless of any Severance Payment made to the Executive under
Section 2(a) of this Agreement following the termination of the Executive's
employment, in the event the Company shall have committed any breach of any
other agreement or contract with the Executive, the Company also shall pay to
the Executive any and all damages resulting from such breach, including
liquidated damages, if so provided under the relevant agreement or contract.
(f) Regardless of any Severance Payment made to the Executive under
Section 2(a) of this Agreement following the termination of the Executive's
employment, the Company also shall pay to the Executive following such
termination of employment any amounts or benefits then payable or
distributable to the Executive under any employee stock plan or agreement, any
supplemental executive retirement plan or agreement, and any other employee
benefit plan or agreement.
(g) The status of the Executive or any individual related to the
Executive as a participant in any individual or group health or insurance plan
or program of the Company or its subsidiaries in which the Executive was
participating as of the date of termination of employment of the Executive
shall not be affected by any Severance Payment made to the Executive under
Section 2(a) of this Agreement.
(h) If the Executive becomes entitled to receive payment of any amount
under Section 2(a) of this Agreement that, in and of itself or in conjunction
with any other amounts paid or payable to the Executive (whether by the
Company or otherwise) following or in connection with such Change in Control,
would, if paid, be considered an "excess parachute payment" as defined in
Section 280G of the Code, then such payment hereunder will be reduced in
amount to the extent, but only to the extent, necessary to ensure that such
payment, when paid, will no longer be considered such an "excess parachute
payment," excluding, however, for purposes of all calculations under this
Section 2(h), those payments and values excluded under Sections 2(a)(ii)(y)
and (z), above.
3. Termination For Cause. Following a Change in Control, the Company
may terminate the Executive's employment under this Agreement for "Cause" upon
ten (10) days' written notice, and in such event, the Executive will not be
entitled to receipt of any Severance Payment or any other benefits
specifically provided under this Agreement. During such ten days written
notice period, the Executive may not voluntarily terminate his employment.
Termination for "Cause" for purposes of this Section 3 shall mean termination
of the employment of the Executive by a two-thirds (2/3) vote of the entire
Board of Directors of the Company or the entire board of directors of the
particular subsidiary of the Company employing the Executive, expressly for
one or more of the following causes, as evidenced in a certified resolution of
such Board:
(i) willful misconduct by the Executive that is materially
injurious to the financial condition of the Company or the particular
subsidiary; or
(ii) conviction of the Executive with no further possibility of
appeal of a felony under applicable state or federal banking or
financial institution laws, or the agreement of the Executive to plead
guilty to any such felony; or
(iii) failure by the Executive adequately to perform the duties of
the Executive, as communicated to the Executive with specificity by a
senior corporate authority (which, in the case of the Chief Executive
Officer, shall be the Board of Directors), after express notice of such
failure to perform and a 30-day opportunity to cure such failure.
4. Benefits Following Change in Control. Following a Change in
Control of the Company, pending termination of the Executive's employment or
expiration of the Exercise Period:
(i) The Executive shall be entitled to receive from the Company
or its subsidiaries such personal or group health and insurance benefits
as the Executive may have been receiving as of the date of the Change in
Control;
(ii) The Executive shall be entitled to participate in and/or
receive allocations under any and all employee benefit plans or programs
or employee stock purchase plans or programs as are being maintained by
the Company or its subsidiaries as of the date of the Change in Control
and which cover or permit participation by key employees such as the
Executive; and
(iii) The Executive shall be entitled to continue to receive such
other benefits, goods or services as are being received by the Executive
as of the date of the Change in Control, including any additional
insurance coverage then being received and any access to Company-owned
or -leased vehicles and Company-funded club memberships as is then being
provided.
5. Non-competition. If the Executive receives a Severance Payment
under Section 2(a), the Executive shall not, during the one (1) year period
following receipt of such Severance Payment, without the express prior
approval of the Board, become an officer, employee, agent, partner or director
of, or serve as a consultant for, any other business in substantial
competition with the Company or any of its subsidiaries in any one or more
geographical areas (no such individual area being larger than a county) in
which the Company or such subsidiary is then conducting material business. It
is the intention of the parties to restrict the activities of the Executive
under this Section 5 only to the extent necessary for the protection of the
legitimate business interests of the Company.
6. Indemnification. The Company shall indemnify the Executive from
and against all legal fees and expenses necessarily and reasonably incurred by
the Executive in connection with any action, suit or proceeding brought by the
Executive or the Company for the enforcement, performance or construction of
this Agreement, unless the Executive shall have been wholly unsuccessful, on
the merits or otherwise, in such action, suit or proceeding. Upon obtaining
appropriate assurances of repayment, where appropriate, the Company may
advance such fees and expenses to the Executive to the extent permitted by
applicable law.
7. Withholding. Any amount to be distributed to or on behalf of the
Executive as a Severance Payment under this Agreement will be reduced by the
amount, if any, required to be withheld by the Company or its subsidiaries
pursuant to any governmental law or regulation with respect to taxes or
similar provisions.
8. Amendment; Waiver; Termination. No amendment, modification or
waiver of any provision of this Agreement shall be effective unless in a
writing signed by the party against whom such provision as amended or modified
or such waiver is sought to be enforced. Failure to insist upon strict
compliance with any of the terms or conditions of the Agreement shall not be
deemed a waiver of such term or condition. This Agreement shall terminate as
provided in Section 1 hereof or upon earlier agreement of the parties;
provided, however, that Sections 5 and 6 of this Agreement shall survive such
termination for one (1) and five (5) years, respectively.
9. Successors; Binding Agreement. This Agreement shall be binding
upon and inure to the benefit of the Company and its successors and assigns.
The Company will require any successor (whether direct or indirect, by
acquisition, merger, consolidation, corporate reorganization or otherwise) to
all or substantially all the assets or the business of the Company to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession had taken place. In the event the Executive shall die after
becoming entitled to receive, but prior to receiving, any Severance Payment or
any other amounts or benefits receivable hereunder, payment thereof shall be
made by the Company to the beneficiary designated by the Executive to receive
such amounts hereunder or, if none such, to the beneficiary designated by the
Executive for purposes of the group life insurance plan of the Company in
which the Executive shall have participated at the time of termination of
employment or, if none such, to the estate of the Executive.
10. State Law. This Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of New York.
11. Severability. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect to
the maximum extent permitted by law.
12. Counterparts. This Agreement may be executed in one or more
counterparts.
13. Notices. Any communication to a party required or permitted under
this Agreement, including any notice, direction, designation, consent,
instruction, objection or waiver, shall be in writing and deemed to have been
given at such time as it is delivered personally, or five (5) days after
mailing if mailed, postage prepaid, by registered or certified mail, return
receipt requested, addressed to such party at the address listed below or at
such other address as one such party may by written notice specify to the
other party:
If to the Company:
North Fork Bancorporation, Inc.
9025 Route 25
Mattituck, New York 11952
Attn: Corporate Secretary
If to the Executive:
[NAME]
[ADDRESS]
IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the date and year first above written.
"EXECUTIVE"
[NAME]
NORTH FORK BANCORPORATION, INC.
By:
[NAME]
[TITLE]
Exibit 11
COMPUTATION OF NET INCOME PER COMMON EQUIVALENT SHARE
March 31, 1995
(Unaudited)
<TABLE>
THREE MONTHS ENDED
March 31, 1995 March 31, 1994
<S> <C> <C>
Net Income $11,499,834 $8,771,087
Common Equivalent Shares:
Weighted Average Common Shares Outstanding 23,754,513 22,455,369
Weighted Average Common Equivalent Shares (a) 397,518 1,369,319
Weighted Average Common and Common
Equivalent Shares 24,152,031 23,824,688
Net Income per Common Equivalent Share 0.48 0.37
(a) Consists of warrants and options
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> QTR-1
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 92820
<INT-BEARING-DEPOSITS> 1454
<FED-FUNDS-SOLD> 8000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 141952
<INVESTMENTS-CARRYING> 588540
<INVESTMENTS-MARKET> 566620
<LOANS> 1860026
<ALLOWANCE> 50638
<TOTAL-ASSETS> 2739354
<DEPOSITS> 2373022
<SHORT-TERM> 31795
<LIABILITIES-OTHER> 6955
<LONG-TERM> 35000
<COMMON> 60565
0
0
<OTHER-SE> 212122
<TOTAL-LIABILITIES-AND-EQUITY> 2739354
<INTEREST-LOAN> 40456
<INTEREST-INVEST> 11358
<INTEREST-OTHER> 191
<INTEREST-TOTAL> 52005
<INTEREST-DEPOSIT> 17062
<INTEREST-EXPENSE> 18153
<INTEREST-INCOME-NET> 33852
<LOAN-LOSSES> 2000
<SECURITIES-GAINS> 98
<EXPENSE-OTHER> 17237
<INCOME-PRETAX> 19768
<INCOME-PRE-EXTRAORDINARY> 19768
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11500
<EPS-PRIMARY> .48
<EPS-DILUTED> .48
<YIELD-ACTUAL> 5.36
<LOANS-NON> 39475
<LOANS-PAST> 2362
<LOANS-TROUBLED> 38980
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 50069
<CHARGE-OFFS> 2112
<RECOVERIES> 681
<ALLOWANCE-CLOSE> 50638
<ALLOWANCE-DOMESTIC> 50638
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
