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: June 30, 1997
NORTH FORK BANCORPORATION, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 36-3154608
(State or other Jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
275 BROAD HOLLOW ROAD, MELVILLE, NEW YORK 11747
(Address of principal executive offices) (Zip Code)
(516) 844-1004
(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 08/07/97
$2.50 Par Value 65,954,012
<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
(11) Statement Re: Computation of per share earnings
(27) Financial Data Schedule
(b) Current Report on Form 8-K dated June 24, 1997
(reporting that the Registrant's Board of Directors
approved a 20% increase in its quarterly dividend)
Current Report on Form 8-K dated July 25, 1997
(reporting that the Registrant entered into a definitive
agreement to acquire Branford Savings Bank).
<PAGE>
<TABLE>
<S> <C> <C> <C>
Consolidated Balance Sheets
(in thousands, except per share amounts) June 30, December 31, June 30,
1997 1996 1996
(unaudited) (unaudited)
Assets
Cash & Due from Banks $130,674 $150,365 $188,426
Interest Earning Deposits 2,004 2,298 2,012
Federal Funds Sold 3,000 115,000 3,100
Securities:
Available-for-Sale 1,666,704 857,391 1,485,323
Held-to-Maturity 1,214,831 1,300,115 1,054,030
Total Securities 2,881,535 2,157,506 2,539,353
Loans 3,451,607 3,194,086 2,886,337
Less: Unearned Income & Fees 17,543 22,561 22,892
Allowance for Loan Losses 55,837 53,894 55,988
Net Loans 3,378,227 3,117,631 2,807,457
Intangible Assets 78,502 82,073 85,879
Premises & Equipment 64,629 65,530 68,516
Accrued Income Receivable 45,691 37,392 40,159
Other Real Estate 2,709 1,898 8,839
Other Assets 26,783 20,834 46,474
Total Assets $6,613,754 $5,750,527 $5,790,215
Liabilities and Stockholders' Equity
Demand Deposits $793,747 $734,907 $696,913
Savings, N.O.W. &
Money Market Deposits 1,927,394 1,974,570 2,023,845
Other Time Deposits 1,351,087 1,416,220 1,514,464
Certificates of Deposit,
$100,000 & Over 345,303 343,813 250,052
Total Deposits 4,417,531 4,469,510 4,485,274
Federal Funds Purchased &
Securities Sold Under
Agreements to Repurchase 1,465,549 621,789 783,739
Other Borrowings 35,000 35,000 35,000
Due to Brokers - - 12,035
Accrued Expenses & Other Liabilities 91,442 67,060 50,948
Total Liabilities $6,009,522 $5,193,359 $5,366,996
Company-Obligated Mandatorily
Redeemable Capital Securities of
Subsidiary Trust $99,643 $99,637 -
Stockholders' Equity
Preferred Stock, par value $1.00;
authorized 10,000,000 shares,
unissued - - -
Common stock, par value $2.50;
authorized 200,000,000 shares;
issued & outstanding 65,995,459,
65,199,008 and 65,128,902 shares at
the periods ending, respectively 164,989 81,499 81,411
Additional Paid in Capital 108,755 180,809 178,650
Retained Earnings 243,992 206,895 200,381
Deferred Compensation (13,351) (5,193) (2,289)
Treasury Stock at cost; 56,004,
306,578 and 1,848,874 shares
at the periods ending, respectively (838) (3,846) (22,604)
Unrealized Gains/(Losses) on
Securities Available-for-Sale, net
of taxes 1,042 (2,633) (12,330)
Total Stockholders' Equity 504,589 457,531 423,219
Total Liabilities and
Stockholders' Equity $6,613,754 $5,750,527 $5,790,215
</TABLE>
<PAGE>
<TABLE>
Consolidated Statements of Income (Unaudited)
(in thousands, except per share amounts)
<S> <C> <C> <C> <C>
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1997 1996 1997 1996
Interest Income
Loans $74,184 $59,742 $144,385 $113,762
Mortgage-Backed Securities 41,064 34,387 74,191 67,408
U.S. Treasury & Government
Agency Securities 3,828 3,952 7,183 6,339
State & Municipal Obligations 1,359 1,255 2,744 2,002
Other Securities 2,655 1,049 4,259 2,400
Federal Funds Sold 122 693 295 2,244
Interest Earning Deposits 33 99 69 138
Total Interest Income 123,245 101,177 233,126 194,293
Interest Expense
Savings, NOW &
Money Market Deposits 10,677 11,877 21,259 22,671
Other Time Deposits 17,559 20,120 35,430 37,470
Certificates of Deposit,
$100,000 & Over 4,900 3,566 9,467 6,982
Federal Funds Purchased &
Securities Sold Under
Agreements to Repurchase 19,161 6,786 29,230 16,261
Other Borrowings 728 724 1,450 1,450
Total Interest Expense 53,025 43,073 96,836 84,834
Net Interest Income 70,220 58,104 136,290 109,459
Provision for Loan Losses 1,500 1,700 3,000 3,400
Net Interest Income after
Provision for Loan Losses 68,720 56,404 133,290 106,059
Non-Interest Income
Fees & Service Charges on
Deposit Accounts 4,699 4,485 9,090 7,691
Broker Commissions & Trust Fees 1,925 1,654 3,872 2,864
Mortgage Banking Operations 459 505 870 1,170
Other Operating Income 1,634 1,443 2,689 2,579
Net Securities Gains 2,074 109 2,235 1,506
Total Non-Interest Income 10,791 8,196 18,756 15,810
Non-Interest Expense
Compensation & Employee Benefits 14,264 14,042 28,521 26,632
Occupancy 3,164 3,130 6,350 5,660
Equipment 1,920 1,775 3,781 3,316
Amortization of Intangible Assets 1,824 1,939 3,665 2,457
Other Real Estate 72 (73) 118 709
Other Operating Expense 9,474 7,978 18,310 14,601
Total Non-Interest Expense 30,718 28,791 60,745 53,375
Income Before Income Taxes 48,793 35,809 91,301 68,494
Provision for Income Taxes 19,122 13,974 35,915 27,936
Net Income $29,671 $21,835 $55,386 $40,558
Per Share: (1)
Net Income $0.45 $0.34 $0.84 $0.62
Cash Dividends $0.15 $0.10 $0.275 $0.20
</TABLE>
(1) Per share data has been retroactively restated for the
issuance of a 2 for 1 stock split on May 15, 1997.
<PAGE>
<TABLE>
Consolidated Statements of Cash Flows (Unaudited)
For the Period Ended June 30, 1997 1996
(in thousands)
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income $55,386 $40,558
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Provision for Loan Losses 3,000 3,400
Depreciation and Amortization 4,244 3,822
Amortization of Premiums 3,827 7,032
Amortization of Intangible Assets 3,665 2,457
Accretion of Discounts and
Net Deferred Loan Fees (2,544) (3,420)
Net Securities Gains (2,235) (1,506)
Other, Net 2,583 (6,278)
Net Cash Provided by Operating Activities 67,926 46,065
Cash Flows from Investing Activities:
Maturities, Redemptions, Calls and
Principal Repayments on
Securities Held-to-Maturity 86,589 96,595
Purchases of Securities Held-to-Maturity (2,629) (229,676)
Proceeds from Sales of Securities
Available-for-Sale 79,944 174,182
Maturities and Principal Repayments on
Securities Available-for-Sale 80,677 271,603
Purchases of Securities Available-for-Sale (960,495) (639,577)
Loans Originated and Principal Repayments
on Loans and Other Real Estate, Net (274,837) (129,466)
Purchases of Loans - (164,509)
Proceeds from the Sale of Loans and
Other Real Estate Acquired in
Settlements of Loans 12,424 13,958
Purchases of Premises and Equipment, Net (2,725) (4,629)
Purchase Acquisitions, Net of Cash Paid - 595,650
Net Cash Used in Investing Activities (981,052) (15,869)
Cash Flows from Financing Activities:
Net Decrease in Customer
Deposit Liabilities (51,979) (188,558)
Net Increase in Borrowings 843,760 173,080
Purchase of Treasury Shares - (22,566)
Common Stock Sold for Cash 5,762 2,895
Dividends Paid to Shareholders (16,402) (11,065)
Net Cash Provided by/(Used in)
Financing Activities 781,141 (46,214)
Net Decrease in Cash and Cash Equivalents (131,985) (16,018)
North Side Activity for the
Three Months Ended December 31, 1995 - 60,747
Cash and Cash Equivalents at
Beginning of the Period 267,663 148,809
Cash and Cash Equivalents at
End of the Period $135,678 $193,538
</TABLE>
<PAGE>
<TABLE>
Consolidated Statements of Cash Flows, Continued (Unaudited)
For the Period Ended June 30, 1997 1996
(in thousands)
<S> <C> <C>
Supplemental Disclosures of
Cash Flow Information:
Cash Paid During the Period for:
Interest Expense $93,460 $88,414
Income Taxes $16,342 $15,983
Supplemental Schedule of Noncash Investing
and Financing Activities:
Real Estate Acquired in Settlement of Loans $829 $3,295
During the Period the Registrant
Purchased Various Securities which
Settled in the Subsequent Month $ - $12,035
</TABLE>
During March 1996, the Company acquired the domestic commercial
banking business of Extebank and assumed $572 million in deposit
liabilities from First Nationwide Bank. In connection with these
acquisitions, the following assets were acquired and liabilities assumed:
<TABLE>
<S> <C>
Fair Value of Assets Acquired $920,630
Intangible Assets 60,489
Cash Paid for the Common Stock (47,000)
Liabilities Assumed $934,119
</TABLE>
<PAGE>
<TABLE>
Consolidated Statements of Changes in Stockholders' Equity
(Dollars in thousands, except per share amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
Additional Unrealized
Common Paid in Retained Deferred Treasury Securities
Stock Capital Earnings Comp. Stock Gains/(Losses) Total
Balance, December 31, 1995 $80,862 $175,617 $167,379 ($1,585) ($653) $4,509 $426,129
Net Income - - 40,558 - - - 40,558
Cash Dividends
(The Registrant $.20
per share) - - (9,778) - - - (9,778)
Cash Dividends-North Side Pre-Merger - - (3,612) - - - (3,612)
Issuance of Common Stock
(439,066 shares) 549 2,601 - - - - 3,150
Deferred Compensation Activity:
Restricted Stock Activity,
net (69,300 shares) - 432 - (803) 615 - 244
Amortization of Other
Deferred Compensation Plans - - - 99 - - 99
Purchase of Treasury Stock
(1,845,800 shares) - - - - (22,566) - (22,566)
North Side Net Income for
the Three Months Ended
December 31, 1995 - - 5,834 - - - 5,834
Adjustment to Unrealized
Gains/(Losses) on Securities
Available-for-Sale,
Net of taxes - - - - - (16,839) (16,839)
Balance, June 30, 1996 $81,411 $178,650 $200,381 ($2,289) ($22,604) ($12,330) $423,219
Balance, December 31, 1996 $81,499 $180,809 $206,895 ($5,193) ($3,846) ($2,633) $457,531
Net Income - - 55,386 - - - 55,386
Cash Dividends ($.275 per share) - - (18,182) - - - (18,182)
Issuance of Common Stock for
the Two-for-One Stock Split
(32,976,384 shares) 82,441 (82,441)
Issuance of Common Stock
(796,451 shares) 1,049 4,713 - - - - 5,762
Restricted Stock Activity,
net (250,574 shares) - 5,674 - (8,158) 3,008 - 524
Amortization of Permanent
Unrealized Loss upon Transfer
of Securities from
Available-for-Sale to
Held-to-Maturity, Net of taxes - - (107) - - (438) (545)
Adjustment to Unrealized
Gains/(Losses) on Securities
Available-for-Sale,
Net of taxes - - - - - 4,113 4,113
Balance, June 30, 1997 $164,989 $108,755 $243,992 ($13,351) ($838) $1,042 $504,589
</TABLE>
<PAGE>
North Fork Bancorporation, Inc.
and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
June 30, 1997 and 1996
Basis of Presentation
The accounting and reporting policies of North Fork
Bancorporation, Inc. (the "Registrant"), and its Bank (the
"Bank") and non-bank subsidiaries, are in conformity with
generally accepted accounting principles and prevailing
practices within the financial services industry. The
preparation of financial statements in conformity with generally
accepted accounting principles requires that management make
estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of income and expenses during the reporting
period. Such estimates are subject to change in the future as
additional information becomes available or previously existing
circumstances are modified. Actual results could differ from
those estimates.
These statements should be read in conjunction with the
Registrant's summary of significant accounting policies which
are incorporated herein by reference in its 1996 Annual Report
on Form 10-K.
Results of operations for the three and six months ended June
30, 1997 are not necessarily indicative of the results of
operations which may be expected for the full year 1997 or any
other interim periods.
Business Combinations
Completed Acquisitions
On December 31, 1996, North Side Savings Bank ("North Side")
was merged with and into the Registrant in a transaction
accounted for under the pooling-of-interests method of
accounting. Accordingly, the financial results for all prior
periods presented include the accounts of North Side.
The Registrant's previously reported components of consolidated
income and the amounts reflected in the accompanying
consolidated statements of income for the three and six months
ended June 30, 1996, are as follows (in thousands):
<TABLE>
<S> <C> <C>
Three Months Six Months
Ended Ended
June 30, June 30,
Net Interest Income 1996 1996
As Previously Reported $45,330 $84,067
North Side 12,774 25,392
Combined $58,104 $109,459
Net Income
As Previously Reported $17,136 $31,562
North Side 4,699 8,996
Combined $21,835 $40,558
</TABLE>
North Side's reporting period had been as of and for the year
ended September 30, whereas the Registrant utilizes a calendar
year basis. North Side's results for 1996 have been conformed
to the calendar year reporting period of the Registrant. See
"Note 2(a) - Business Combinations" of the Registrant's 1996
Annual Report on Form 10-K for further discussion of this
transaction.
In March 1996, the Bank completed its purchase of the domestic
commercial banking business of Extebank ("Extebank") and ten
Long Island branch locations of First Nationwide Bank ("First
Nationwide"). These transactions were accounted for under the
purchase method of accounting and, accordingly, the Registrant's
consolidated results of operations only reflect activity
subsequent to the acquisition dates. See "Note 2(b) - Business
Combinations" of the Registrant's 1996 Annual Report on Form
10-K for further discussion of these transactions.
<PAGE>
Pending Transaction
On July 25, 1997, the Registrant entered into an agreement and
plan of merger with Branford Savings Bank ("Branford"), whereby
it would acquire Branford in a stock-for-stock exchange valued
at approximately $38 million. Under the terms of the agreement,
each share of Branford common stock will be exchanged for $5.25
of the Registrant's common stock, with a minimum of .1957 shares
and a maximum of .2648 shares issued. The agreement permits the
Registrant to increase the exchange ratio if the average price
of its common stock during the pricing period falls below
$19.83. The agreement also provides that Branford may terminate
the merger if the Registrant elects not to increase the exchange
ratio. The Registrant also received an option to acquire up to
19.9% of Branford voting common stock at $4.75 per share should
certain events occur.
The transaction is expected to be treated as a tax-free
reorganization and accounted for as a purchase for financial
reporting purposes. It is anticipated that the transaction will
close by December 31, 1997, following receipt of required
regulatory approvals, approval by Branford's shareholders, and
certain other customary closing conditions.
Branford had total assets of $187 million, deposits of $163
million and stockholders' equity of $17 million at June 30,
1997. It operates five banking offices in the Connecticut county
of New Haven.
Common Stock Split
On February 25, 1997, the Board of Directors approved a
two-for-one common stock split, subject to shareholder approval
of an increase in the Registrant's authorized common stock. At
the Annual Meeting of Stockholders held on April 22, 1997,
shareholders overwhelmingly approved the amendment of the
Registrant's Certificate of Incorporation to increase the number
of authorized shares of common stock from fifty million to two
hundred million. The new shares were issued on May 15, 1997 to
shareholders of record on April 25, 1997. The par value of the
Registrant's common stock remained unchanged at $2.50. As a
result, $82.4 million was transferred from Additional Paid in
Capital to Common Stock to reflect this issuance. All per
share, weighted average shares outstanding and option data
presented in the consolidated financial statements have been
retroactively adjusted to reflect the effects of the split.
RECENT ACCOUNTING DEVELOPMENTS
Earnings Per Share
In February 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standard No. 128 ("SFAS
128") "Earnings Per Share". SFAS 128 simplifies the standards
for computing and presenting earnings per share (EPS) previously
found in APB Opinion No. 15, Earnings Per Share, and makes them
comparable to international EPS standards. It replaces the
presentation of primary EPS with a presentation of basic EPS.
It also requires dual presentation of basic and diluted EPS on
the face of the income statement for all entities with complex
capital structures and requires a reconciliation of the
numerator and denominator of the basic EPS computation to the
numerator and denominator of the diluted EPS computation.
Basic EPS excludes dilution and is computed by dividing income
available to common stockholders by the weighted-average number
of common shares outstanding for the period. Diluted EPS
reflects the potential dilution that could occur if securities
or other contracts to issue common stock were exercised or
converted into common stock or resulted in the issuance of
common stock that then shared in the earnings of the entity.
Diluted EPS is computed similarly to fully diluted EPS pursuant
to Opinion 15.
SFAS 128 is effective for financial statements issued for
periods ending after December 15, 1997. Management is currently
assessing the financial implications of implementing SFAS 128
and believes the adoption will not have a material adverse
effect on reported earnings per shaare.
<PAGE>
<TABLE>
Management's Discussion & Analysis
Overview
<S> <C> <C> <C> <C>
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
(in thousands, except
ratios & per share amounts) 1997 1996 1997 1996
Earnings:
Net Income $29,671 $21,835 $55,386 $40,558
Per Share:
Net Income $0.45 $0.34 $0.84 $0.62
Cash Dividends $0.15 $0.10 $0.275 $0.20
Book Value $7.65 $6.69 $7.65 $6.69
Average Equivalent Shares 66,323 65,114 66,056 65,349
Selected Ratios:
Return on Average
Total Assets 1.82% 1.56% 1.80% 1.52%
Return on Average
Stockholders' Equity 24.83% 20.75% 23.56% 18.99%
Core Efficiency Ratio 37.92% 43.00% 38.83% 42.06%
Net Interest Margin 4.67% 4.50% 4.80% 4.41%
</TABLE>
The Registrant recognized net income of $55.4 million, or $.84
per share, for the first six months of 1997, as compared with
net income of $40.6 million, or $.62 per share earned in 1996.
Return on average total assets and return on average
stockholders' equity was 1.80% and 23.56%, respectively, for
the six months ended June 30, 1997 as compared to 1.52% and
18.99%, respectively, for the comparable prior year period.
Net income for the second quarter ended June 30, 1997 was $29.7
million, or $.45 per share, as compared with net income of $21.8
million, or $.34 per share in 1996. Return on average total
assets and return on average stockholders' equity was 1.82%
and 24.83%, respectively, for the quarter ended June 30, 1997 as
compared to 1.56% and 20.75%, respectively, for the comparable
prior year period.
The 1997 second quarter results, when compared with the
comparable prior year period, reflect a $12.1 million increase
in net interest income, a $.6 million increase in non-interest
income, exclusive of net securities gains, a $2.0 million
increase in net securities gains and a $.2 million decrease in
the provision for loan losses. This activity was partially
offset by a $2.0 million increase in non-interest expense and a
$5.1 million increase in the provision for income taxes.
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 assets, liabilities and equity, as well
as changes in market interest rates.
Net interest income increased $12.1 million, or 20.9%, to $70.2
million for the 1997 second quarter, as compared to $58.1
million for the comparable prior year period. This growth was
achieved through a significant increase in the level of average
interest earning assets and a modest improvement in the net
interest margin. The net interest margin on a taxable
equivalent basis grew to 4.67% during the most recent quarter
when compared to 4.50% during the 1996 comparable period.
Factors contributing to the widening in the net interest margin
included: (a) a change in the composition of average interest
earning assets; (b) higher levels of non-interest bearing
customer deposit liabilities; (c) the issuance of $100 million
in capital securities, and (d) increased levels of capital. The
positive impact of these factors was offset by an increase in
the level wholesale liabilities.
Interest income increased 21.8% to $123.2 million for the 1997
second quarter when compared to $101.2 million for the
comparable prior year period. This increase is attributable to
a $915.5 million or 17.3% increase in average interest earning
assets to $6.2 billion for the 1997 second quarter, as compared
to $5.3 billion during the comparable 1996 period, and a change
in the composition of average interest earning assets as
evidenced by the increase in yield on such assets to 8.10% as
compared to 7.78%.
During 1997, management entered into a capital management
strategy, whereby it leveraged its excess capital to generate
additional net interest income. As a result of the increase in
the level of interest earning assets, which were
<PAGE>
funded with wholesale liabilities, principally repurchase agreements of
varied maturities, additional net interest income was generated.
Average loans increased $677.2 million or 25.2% to $3.4 billion
for the 1997 second quarter, representing 54% of average
interest earning assets, when compared to $2.7 billion, or 51%
of average interest earning assets, for the comparable prior
year period. This level of growth was achieved through
continued strong demand in virtually all loan categories (See
"Loan Portfolio" section of this report for a detailed breakdown
of the loan portfolio). The corresponding yield on average
loans declined modestly to 8.87% during the most recent quarter
when compared to 8.97% for the 1996 comparable period. Average
loans, net of unearned income represented 74.9% of average
deposits for the quarter ended June 30, 1997.
Average Securities increased $287.5 million or 11.4% to $2.8
billion for the 1997 second quarter when compared to $2.5
billion for the comparable prior year period ( See "Securities
Portfolio" section of this report for a detailed breakdown of
the securities portfolio). The overall yield on the securities
portfolio improved to 7.20% during the most recent quarter as
compared to 6.58% during 1996, reflecting an increase in market
interest rates.
Interest expense increased to $53.0 million in the second
quarter of 1997, reflecting a 4.23% cost of funds, as compared
with $43.1 million, and a 3.91% cost of funds in 1996. The
increase in interest expense resulted from the $594.3 million
increase in the level of average interest bearing liabilities,
primarily, securities sold under agreements to repurchase, which
was partially offset by a decline in the level of average
interest bearing customer deposit liabilities.
Average total savings and time deposits declined $200 million
or 5.12% to $3.7 billion during 1997, when compared to $3.9
billion during 1996. The overall cost of funds on average
savings and time deposits declined to 3.59% during the most
recent quarter from 3.66% during the comparable 1996 period.
Both interest bearing deposit levels and the corresponding cost
of funds declined principally as a result of management
implementing its pricing strategy on customer deposit
liabilities assumed in its merger and acquisition transactions.
Average demand deposits increased $107.8 million or 15.8% to
$790.7 million during the second quarter of 1997 as compared to
$682.9 million for 1996. The growth in the level of demand
deposits has resulted from management's emphasis on converting
its acquired savings bank branches into full service commercial
bank branches. At June 30, 1997, demand deposits represented
18.0% of total deposits as compared to 15.5% at June 30, 1996.
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 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>
<S> <C> <C> <C> <C> <C>
Three Months Ended Six Months Ended
1997 vs. 1996 1997 vs. 1996
Change in Change in
Average Average Net Interest Average Average Net Interest
(in thousands ) Volume Rate Income Volume Rate Income
Interest Income from
Earning Assets:
Interest Earning Deposits ($54) ($12) ($66) ($58) ($11) ($69)
Securities 5,002 4,175 9,177 5,371 6,576 11,947
Loans, net of unearned
income & fees 15,128 (663) 14,465 31,781 (1,009) 30,772
Federal Funds Sold (615) 44 (571) (2,026) 77 (1,949)
Total Interest Income 19,461 3,544 23,005 35,068 5,633 40,701
Interest Expense on Liabilities:
Savings, N.O.W &
Money Market Deposits (718) (482) (1,200) (170) (1,242) (1,412)
Time Deposits (828) (399) (1,227) 2,195 (1,750) 445
Federal Funds Purchased
and Securities Sold Under
Agreements to
Repurchase 11,779 596 12,375 12,076 893 12,969
Other Borrowings - 4 4 - - -
Total Interest Expense 10,233 (281) 9,952 14,101 (2,099) 12,002
Net Change in
Net Interest Income $9,228 $3,825 $13,053 $20,967 $7,732 $28,699
</TABLE>
The above table is presented on a tax equivalent basis.
<PAGE>
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 and six months ended June 30,
1997 and 1996, respectively:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
For the Three Months Ended June 30, 1997 1996
Average Average Average Average
(dollars in thousands ) Balance Interest Rate Balance Interest Rate
Interest Earning Assets:
Interest Earning Deposits $2,563 $33 5.16% $6,668 $99 5.97%
Securities 2,817,216 50,592 7.20% 2,529,674 41,415 6.58%
Loans, net of unearned
income & fees 3,364,272 74,368 8.87% 2,687,104 59,903 8.97%
Federal Funds Sold 8,855 122 5.53% 53,943 693 5.17%
Total Interest Earning Assets 6,192,906 125,115 8.10% 5,277,389 102,110 7.78%
Allowance for Loan Losses (55,827) (58,427)
Cash and Due from Banks 117,103 149,111
Other Non-Interest
Earning Assets (1) 275,183 244,765
Total Assets $6,529,365 $5,612,838
Interest Bearing Liabilities:
Savings, N.O.W &
Money Market Deposits $1,953,332 $10,677 2.19% $2,085,840 $11,877 2.29%
Time Deposits 1,750,512 22,459 5.15% 1,818,024 23,686 5.24%
Total Savings and Time Deposits 3,703,844 33,136 3.59% 3,903,864 35,563 3.66%
Federal Funds Purchased &
Securities Sold Under
Agreements to Repurchase 1,289,431 19,161 5.96% 495,097 6,786 5.51%
Other Borrowings 35,000 728 8.34% 35,000 724 8.32%
Total Interest
Bearing Liabilities 5,028,275 53,025 4.23% 4,433,961 43,073 3.91%
Rate Spread 3.87% 3.87%
Non-Interest Bearing Deposits 790,705 682,900
Other Non-Interest
Bearing Liabilities 131,357 72,669
Total Liabilities 5,950,337 5,189,530
Company-Obligated Mandatorily
Redeemable Capital Securities
of Subsidiary Trust 99,642 -
Stockholders' Equity 479,386 423,308
Total Liabilities and
Stockholders' Equity $6,529,365 $5,612,838
Net Interest Income and
Net Interest Margin 72,090 4.67% 59,037 4.50%
Less: Tax Equivalent Basis Adjustment (1,870) (933)
Net Interest Income $70,220 $58,104
</TABLE>
(1) Unrealized gains/(losses) on available-for-sale securities
are recorded in other non-interest earning assets.
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
For the Six Months Ended June 30, 1997 1996
Average Average Average Average
(dollars in thousands ) Balance Interest Rate Balance Interest Rate
Interest Earning Assets:
Interest Earning Deposits $2,624 $69 5.30% $4,765 $138 5.82%
Securities 2,565,528 91,338 7.18% 2,404,499 79,391 6.64%
Loans, net of unearned
income & fees 3,288,412 144,752 8.88% 2,560,771 113,980 8.95%
Federal Funds Sold 10,894 295 5.46% 85,712 2,244 5.26%
Total Interest Earning Assets 5,867,458 236,454 8.13% 5,055,747 195,753 7.79%
Allowance for Loan Losses (55,186) (58,473)
Cash and Due from Banks 126,978 128,755
Other Non-Interest Earning Assets (1) 271,927 229,517
Total Assets $6,211,177 $5,355,546
Interest Bearing Liabilities:
Savings, N.O.W &
Money Market Deposits $1,951,783 $21,259 2.20% $1,965,973 $22,671 2.32%
Time Deposits 1,764,184 44,897 5.13% 1,676,541 44,452 5.33%
Total Savings and Time Deposits 3,715,967 66,156 3.59% 3,642,514 67,123 3.71%
Federal Funds Purchased &
Securities Sold Under
Agreements to Repurchase 994,705 29,230 5.93% 580,902 16,261 5.63%
Other Borrowings 35,000 1,450 8.35% 35,000 1,450 8.33%
Total Interest Bearing Liabilities 4,745,672 96,836 4.11% 4,258,416 84,834 4.01%
Rate Spread 4.01% 3.78%
Non-Interest Bearing Deposits 773,522 591,445
Other Non-Interest Bearing Liabilities 118,307 76,268
Total Liabilities 5,637,501 4,926,129
Company-Obligated Mandatorily
Redeemable Capital Securities
of Subsidiary Trust 99,641 -
Stockholders' Equity 474,035 429,417
Total Liabilities and
Stockholders' Equity $6,211,177 $5,355,546
Net Interest Income and
Net Interest Margin 139,618 4.80% 110,919 4.41%
Less: Tax Equivalent Basis Adjustment (3,328) (1,460)
Net Interest Income $136,290 $109,459
</TABLE>
(1) Unrealized gains/(losses) on available-for-sale securities
are recorded in other non-interest earning assets.
Non-Interest Income
Non-interest income, exclusive of net securities gains, was $
8.7 million in the 1997 second quarter, as compared with $8.1
million in the comparable prior year period. Net securities
gains of $2.1 million recognized during the most recent quarter
were achieved principally through the sale of certain equity
investments.
The modest increase in non interest income during the most
recent quarter resulted from a $.2 million increase in fees and
service charges on deposit accounts to $4.7 million, a $.3
million increase in brokers commissions and trust fees to $1.9
million and, a $.2 million increase in other operating income to
$1.6 million.
Non-Interest Expense
Non-interest expense increased $1.9 million, during the 1997
second quarter to $30.7 million as compared with $28.8 million
during the comparable prior year period. The increase in
non-interest expense during the 1997 second quarter principally
reflects the carrying costs of $2.2 million associated with the
issuance of $100 million in 8.70% capital securities on December
31, 1996.
<PAGE>
The Registrant's core efficiency ratio, which represents the
ratio of non-interest expense, net of other real estate costs
and other non-recurring charges, to net interest income on a
taxable equivalent basis and net-interest income net of
securities gains, was 37.92% and 38.83% for the three and six
months ended June 30, 1997, respectively, as compared to 43.0%
and 42.06%, respectively, for the comparable prior year periods.
The reduction in the core efficiency ratio resulted from
management's success in enhancing net interest income and
achieving the operating efficiencies associated with its 1996
mergers and acquisitions. Management continually monitors its
operating costs to ensure a high degree of customer service in
the most efficient manner possible.
Income Taxes
The Registrant's effective tax rate was 39.2% for the 1997
second quarter, as compared to 39.0% for the comparable prior
year period. The Registrant's effective tax rate was 39.3% for
the six months ended, June 30, 1997, as compared to 40.8% for
the comparable prior year period.
Loan Portfolio
The following table represents the components of the loan
portfolio for the periods indicated (dollars in thousands):
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
June 30, % of December 31, % of June 30, % of
1997 Total 1996 Total 1996 Total
Mortgage Loans-Multi-family $1,097,261 32% $956,718 30% 773,313 27%
Mortgage Loans-Residential 987,417 28% 985,983 31% 965,227 33%
Mortgage Loans-Commercial 649,999 19% 635,042 20% 569,688 20%
Commercial & Industrial 402,384 12% 347,437 11% 352,114 12%
Consumer Loans and Leases 268,020 8% 219,127 7% 171,207 6%
Construction and Land Loans 46,526 1% 49,779 1% 54,788 2%
$3,451,607 100% $3,194,086 100% $2,886,337 100%
</TABLE>
The loan portfolio is concentrated primarily in loans secured
by real estate in the New York metropolitan 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.
Total loans increased $257.5 million from $3.2 billion at
December 31, 1996 to $3.5 billion at June 30, 1997, representing
an annualized increase of 16.1%, due to continued strong demand
in virtually all loan categories.
Asset Quality
The components of non-performing assets and restructured,
accruing loans are delineated below (in thousands):
<TABLE>
<S> <C> <C> <C>
June 30, December 31, June 30,
1997 1996 1996
Loans Ninety Days Past Due
and Still Accruing $3,408 $2,596 $2,398
Non-Accrual Loans 18,811 17,745 27,997
Non-Performing Loans 22,219 20,341 30,395
Other Real Estate 2,709 1,898 8,839
Non-Performing Assets $24,928 $22,239 $39,234
Restructured, Accruing Loans $12,251 $13,734 $23,692
</TABLE>
At June 30, 1997, non-performing assets, which include loans
past due ninety days and still accruing interest, non-accrual
loans and other real estate, increased modestly to $24.9 million
when compared to $22.2 million at December 31, 1996.
Non-performing assets declined $14.3 million at June 30, 1997
when compared to $39.2 at June 30, 1996. Non-performing loans
at June 30, 1997 consisted of $6.9 million in commercial loans,
$6.7 million in commercial mortgages, $5.6 million in
residential mortgages, $2.0 million in construction and land
loans, $.5 million in consumer loans and leases, and $.6
million in multi-family mortgages.
Loans are classified as restructured when management has
granted, for economic or legal reasons related to the borrower's
financial difficulties, concessions to the customer that it
would not otherwise consider. Generally, this occurs when the
cash flow of the borrower is insufficient to service the loan
under its original terms. Loans restructured are reported as
such in the year of restructuring. In subsequent reporting
periods, if the loan was restructured to yield a market
<PAGE>
rate of interest, is performing in accordance with the restructure terms
and management expects such performance to continue, the loan is
then removed from its restructured status. Restructured,
accruing loans declined modestly to $12.3 million at June 30,
1997, as compared with $13.7 million at December 31, 1996, and
declined $11.4 million from $23.7 million at June 30, 1996. The
decline in the level of restructured accruing loans was achieved
through principal repayments, maturities and renewals at market
terms, and the satisfaction of the performance requirements on
certain of these loans during the past year. At June 30, 1997,
the portfolio of restructured, accruing loans is comprised
primarily of loans which have demonstrated performance in
accordance with the terms of their restructure agreements,
however, did not yield a market rate of interest at the time of
restructuring.
The following table represents a summary of the changes in the
allowance for loan losses (in thousands):
<TABLE>
<S> <C> <C>
For the Six Months Ended June 30, 1997 1996
Balance at Beginning of Year $53,894 $56,627
Provision for Loan Losses 3,000 3,400
Recoveries Credited to the Allowance 1,051 1,522
57,945 61,549
Losses Charged to the Allowance (2,108) (8,843)
Additional Allowance Acquired in
Purchase Acquisitions - 3,092
North Side Net Activity for the
Three Months Ended December 31,1995 - 190
Balance at End of Period $55,837 $55,988
Net Charge-Offs to Average Loans,
Net of Unearned Income & Fees 0.06% 0.57%
Allowance of Loan Losses to Period End Loans,
net of unearned income & fees 1.63% 1.96%
Ratio of Allowance for Loan Losses to
Non-performing Loans Inclusive of
90 day Delinquencies 251% 184%
</TABLE>
Management determines what it deems to be the appropriate level
of the allowance for loan losses on an ongoing basis by
reviewing individual loans, as well as the composition of and
trends in the loan portfolio. Management considers, among other
items, 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.
There has been significant growth in the loan portfolio over
the past two years from both originations and acquisitions.
Loan growth through originations has principally been in
multi-family lending, commercial mortgages, and consumer loans.
Multi-family mortgage loans generally are for $1 - $3 million
and are secured by properties located in metropolitan New York
area, where demand for such housing is strong. Commercial
mortgage loans generally are originated in amounts up to $5
million and are secured by a wide variety of collateral types
ranging from owner occupied to investment properties with strong
cash flows. To mitigate credit risk, management utilizes
prudent underwriting standards, including loan-to-value ratios
of generally 70% or less, and monitors operating results and collateral
value carefully.
The growth in consumer loans has resulted from management's
decision to expand its indirect dealer network. Through this
network the Registrant increased consumer loan originations,
principally new car loans. The credit risk in auto lending is
dependent upon the creditworthiness of the borrower and the
value of the collateral. The average loan originated is
generally between $15 - $20 thousand for periods ranging from 24
- - - 48 months. The Bank accepts substantially only "A" rated
paper, which are borrowers without past credit history problems.
The provision for loan losses declined to $1.5 million during
the current quarter, as compared to $1.7 million in the 1996
comparable period. While management uses available information
in estimating possible loan losses, future additions to the
allowance may be necessary based on future changes in economic
conditions. Based on current economic conditions, management
considers the allowance for loan losses at June 30, 1997
adequate to cover the possible credit losses inherent in the
loan portfolio.
<PAGE>
Securities Portfolio
The composition of and the amortized cost and estimated fair
values of held-to-maturity and available-for-sale securities
portfolios were as follows (in thousands):
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
June 30, 1997 December 31, 1996 June 30, 1996
Held-to-Maturity Amortized Fair Amortized Fair Amortized Fair
Cost Value Cost Value Cost Value
Mortgage-Backed Securities $1,086,986 $1,081,609 $1,162,814 $1,156,310 $911,060 $882,258
State & Municipal Obligations 113,993 114,096 121,945 121,664 $120,280 $118,006
U.S. Government
Agencies' Obligations 2,499 2,433 2,601 2,601 $2,702 $2,702
Other Securities 11,353 11,403 12,755 12,897 $19,988 $19,760
$1,214,831 $1,209,541 $1,300,115 $1,293,472 $1,054,030 $1,022,726
June 30, 1997 December 31, 1996 June 30, 1996
Available-for-Sale Amortized Fair Amortized Fair Amortized Fair
Cost Value Cost Value Cost Value
Mortgage-Backed Securities $1,297,046 $1,300,006 $648,302 $646,825 $1,228,426 $1,209,781
State & Municipal Obligations - - - - $27,768 $27,875
U.S. Government
Agencies' Obligations 136,552 136,975 94,262 93,251 $53,658 $52,761
U.S. Treasury Securities 78,810 76,448 78,760 76,990 $137,289 $134,155
Other Securities 151,697 153,275 39,728 40,325 $59,954 $60,751
$1,664,105 $1,666,704 $861,052 $857,391 $1,507,095 $1,485,323
</TABLE>
Management's strategy for the securities portfolio is to
maintain a short-weighted average life to minimize the exposure
to future rises in interest rates and to provide cash flows that
may be reinvested at current market interest rates. The
combined weighted average lives of the held-to-maturity and
available-for-sale securities portfolios at June 30, 1997 was
5.4 years.
During the second quarter of 1997, securities
available-for-sale increased $809.3 million to $1.7 billion when
compared to $.9 billion at December 31, 1996. This increase
resulted from management's decision to leverage its excess
capital principally through the purchase mortgage backed
securities funded primarily with repurchase agreements of varied
maturities.
The net unrealized gain on securities available-for-sale was $1
million at June 30, 1997 as compared to a net unrealized loss
of $3.7 million at December 31, 1996. This increase in value
resulted from a decline in market interest rates experienced
during the current quarter.
Mortgage-backed securities ("MBS") classified as
held-to-maturity included $656.1 million in collateralized
mortgage obligations ("CMO") at June 30, 1997. Mortgage-backed
securities classified as available-for-sale included $575.2
million in CMO's at June 30, 1997. These CMO securities,
collateralized by either U.S. Government Agency MBS's or whole
loans, are principally conservative current pay sequentials or
PAC structures with a current weighted average life of 3.2 years.
The prepayment of MBS's, including CMO's, is actively monitored
through the portfolio management function. Management 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 portfolio.
At June 30, 1997, other securities maintained in the
available-for-sale portfolio were comprised principally of
common stock, preferred stock, and capital securities of other
financial institutions.
At June 30, 1997, held-to-maturity securities carried at
$478.8 million and available-for-sale securities carried at
$1,346.8 million were pledged for various purposes as required
by law and to secure securities sold under agreements to
repurchase and other borrowings.
<PAGE>
Borrowings
Federal funds purchased and securities sold under
agreements to repurchase increased $843.8 million from $621.8
million at December 31, 1996 to $1.5 billion at June 30, 1997.
These increased borrowing arrangements were entered into to fund
the purchases of mortgage-backed securities placed in the
available-for-sale securities portfolio.
At June 30, 1997, federal funds purchased and securities
sold under agreements to repurchase were comprised of $503.2
million in short-term arrangements (arrangements with an
original maturity less than one year), at a 5.68% cost of funds
and $972.4 million intermediate term arrangements at 6.06% cost of
funds, for an overall cost of funds of 5.93%.
Asset/Liability Management
The Registrant's primary earnings source is the net interest
margin, which is affected by changes in the level of interest
rates, the relationship between rates, the impact of interest
rate fluctuations on asset prepayments, the level and
composition of deposits, and the credit quality of the
portfolio. Management's asset/liability objectives are to
maintain a strong, stable net interest margin, to utilize its
capital effectively without taking undue risks and to maintain
adequate liquidity.
The Registrant's risk assessment program includes a coordinated
approach to the management of liquidity, capital and interest
rate risk. This risk assessment process is governed by policies
and limits established by senior management which are reviewed
and approved by the Asset/Liability Committee of the Board of
Directors ("ALCO"). ALCO, comprised of members of senior
management and the Board, meets periodically to evaluate the
impact of changes in market interest rates on assets and
liabilities, net interest margin, capital and liquidity, and to
evaluate the Registrant's strategic plans.
The balance sheet structure is primarily short-term with most
assets and liabilities repricing or maturing in less than five
years. Management monitors the sensitivity of net interest
income by utilizing a dynamic simulation model complemented by
traditional gap analysis. This model measures net interest
income sensitivity and volatility to interest rate changes; it
involves a degree of estimation based on certain assumptions
that management believes to be reasonable. Factors considered
include actual maturities, estimated cash flows, repricing
characteristics, deposit growth/retention and, primarily, the
relative sensitivity of assets and liabilities to changes in
market interest rates. Utilizing this process, management can
project the impact of changes in interest rates on net interest
income. This relative sensitivity is important to consider
since the Bank's core deposit base is not subject to the same
degree of interest rate sensitivity as its assets. Core deposit
costs are internally controlled and generally exhibit less
sensitivity to changes in interest rates than the adjustable
rate assets whose yields are based on external indices and
change in concert with market interest rates.
Liquidity
The objective of 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 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 Bank are limited by New
York State Banking Department regulations to the current year's
earnings plus the prior two years' retained net profits.
Pursuant to this regulation, the Bank had $110.2 million of
retained earnings available dividends to the Registrant as of
June 30, 1997.
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.
The Bank has the ability, as a member of the Federal Home Loan
Bank ("FHLB") system, to borrow $615 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 June 30, 1997, the Bank had $300 million
in such borrowings outstanding.
The Registrant's and the Bank's liquidity positions are
monitored daily to ensure the maintenance of an optimum level
and efficient use of available funds. Management believes that
the Registrant and Bank have sufficient liquidity to meet their
operating requirements.
On June 24, 1997, the Board of Directors increased its
quarterly cash dividend by 20% from 12.5 cents per share to 15.0
cents per share. This dividend is payable August 15, 1997 to
shareholders of record at the close of business July 24, 1997.
<PAGE>
Capital
The Registrant and the Bank are subject to the risk based
capital guidelines administered by the banking regulatory
agencies. 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 banks and bank holding
companies to maintain a minimum ratio of total risk based
capital to total risk weighted assets of 8%, including a minimum
ratio of Tier 1 capital to total risk weighted assets of 4% and
a Tier 1 capital to average assets of 4%. Failure to meet
minimum capital requirements can initiate certain mandatory, and
possibly additional discretionary actions by regulators, that,
if undertaken, could have a direct material effect on the
Registrant's financial statements. As of June 30, 1997, the
most recent notification from the federal banking regulators
categorized the Registrant and the Bank as "well capitalized"
under the regulatory framework for prompt corrective action.
Under the capital adequacy guidelines, a well capitalized
institution must maintain a minimum total risk based capital to
total risk weighted assets ratio of at least 10%, a minimum Tier
1 capital to total risk weighted assets ratio of at least 6%, a
minimum leverage ratio of at least 5% and not be subject to any
written order, agreement or directive. There are no conditions
or events since such notification that management believes have
changed this classification.
The following table sets forth the Registrant's regulatory
capital at June 30, 1997 and June 30, 1996, under the rules
applicable at such date. At such date, management believes that
the Registrant meets all capital adequacy requirements to which
it is subject.
<TABLE>
<S> <C> <C> <C> <C>
June 30, 1997 June 30, 1996
(dollars in thousands ) Amount Ratio Amount Ratio
Tier 1 Capital $524,687 14.04% $349,669 12.45%
Regulatory Requirement 149,520 4.00% 112,330 4.00%
Excess $375,167 10.04% $237,339 8.45%
Total Risk Adjusted Capital $571,525 15.29% $385,030 13.71%
Regulatory Requirement 299,039 8.00% 224,660 8.00%
Excess $272,486 7.29% $160,370 5.71%
Risk Weighted Assets $3,737,991 $2,808,252
</TABLE>
The Registrant's leverage capital ratio at June 30, 1997 was
8.13%. The Tier 1, total risk based and leverage capital ratios
of the Bank were 11.30%, 12.56% and 6.43%, respectively, at June
30, 1997.
The Registrant's capital ratios were favorably impacted by the
issuance of $100 million of 8.70% Capital Securities on December
31, 1996, which under regulatory guidelines, qualify as Tier 1
capital.
<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: August 12, 1997 /s/ Daniel M. Healy
Daniel M. Healy
Executive Vice President &
Chief Financial Officer
<PAGE>
[EXHIBIT 11]
North Fork Bancorporation, Inc.
COMPUTATION OF NET INCOME PER COMMON EQUIVALENT SHARE
June 30, 1997
(Unaudited)
<TABLE>
<S> <C> <C> <C> <C>
Three Months Ended Six Months Ended
June 30, 1997 June 30, 1996 June 30, 1997 June 30, 1996
Net Income $29,670,459 $21,835,352 $55,385,748 $40,558,283
Common Equivalent Shares:
Weighted Average Common
Shares Outstanding 65,904,776 64,227,786 65,669,810 64,452,958
Weighted Average Common
Equivalent Shares 418,359 885,766 386,146 896,394
Weighted Average Common
and Common
Equivalent Shares 66,323,135 65,113,552 66,055,956 65,349,352
Net Income per Common
Equivalent Share $0.45 $0.34 $0.84 $0.62
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
NORTH FORK BANCORPORATION, INC. JUNE 30, 1997 FINANCIAL DATA SCHEDULE
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 130674
<INT-BEARING-DEPOSITS> 2004
<FED-FUNDS-SOLD> 3000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 1666704
<INVESTMENTS-CARRYING> 1214831
<INVESTMENTS-MARKET> 1209541
<LOANS> 3451607
<ALLOWANCE> 55837
<TOTAL-ASSETS> 6613754
<DEPOSITS> 4417531
<SHORT-TERM> 503199
<LIABILITIES-OTHER> 191085
<LONG-TERM> 997350
0
0
<COMMON> 164989
<OTHER-SE> 339600
<TOTAL-LIABILITIES-AND-EQUITY> 6613754
<INTEREST-LOAN> 74184
<INTEREST-INVEST> 48906
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