FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 30, 1994 Commission file number 2-99779
National Consumer Cooperative Bank
(Exact name of registrant as specified in its charter)
United States of America 52-1157795
(12 U.S.C. Section 3001 et seq.) (I.R.S. Employer
(State or other jurisdiction of Identification No.)
incorporation or organization)
1401 Eye St., NW, Suite 700, Washington, D.C. 20005
(Address of principal executive offices)
Registrant's telephone number, including area code (202)336-7700
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 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.
Outstanding at September 30, 1994
---------------------------------
Class C 205,739
(Common stock, $100.00 par value)
Class B 595,462
(Common stock, $100.00 par value)
Class D 3
(Common stock, $100.00 par value)
National Consumer Cooperative Bank
(doing business as National Cooperative Bank)
and Subsidiaries
INDEX
PART I FINANCIAL INFORMATION Page No.
Item 1 Consolidated balance sheets-
September 30, 1994 and December 31, 1993 ........... 3
Consolidated statements of income -
for the three and nine months ended September 30, 1994
and 1993............................................ 4
Consolidated statements of cash
flows - for the nine months ended September 30,
1994 and 1993....................................... 5-6
Condensed notes to the consolidated financial
statements - September 30, 1994.................... 7-9
Item 2 Management's discussion and analysis of
financial condition and results of operations -
for the three and nine months ended September 30,
1994 and 1993....................................... 10-18
PART II OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K ..................... 19
NATIONAL COOPERATIVE BANK
CONSOLIDATED BALANCE SHEETS
September 30, 1994 and December 31, 1993
Assets 1994 1993
------------ -----------
Cash and cash equivalents $ 15,185,929 $ 22,938,795
Restricted cash 8,348,703 8,361,519
Investment securities
Available-for sale 27,110,293 26,406,171
Held-to-maturity 2,419,005 3,380,698
Loans and lease financing 418,815,699 417,438,593
Loans held for sale 29,772,217 40,274,829
Less: Allowance for loan losses (13,281,380) (12,309,359)
------------ ------------
435,306,536 445,404,063
Excess servicing fees receivable 15,933,724 18,124,471
Premises and equipment,net 2,121,937 2,028,044
Other assets 9,629,516 9,123,215
----------- ------------
Total assets $516,055,643 $535,766,976
============ ============
Liabilities and Members' Equity
Liabilities
Deposits $ 58,157,496 $ 66,931,434
Patronage dividends payable in cash 3,005,904 3,147,860
Other liabilities 12,606,767 8,722,495
Borrowings
Short-term 39,033,147 31,541,577
Long-term 105,263,640 130,354,889
Other 1,513,391 2,040,406
----------- -----------
145,810,178 163,936,872
Subordinated Class A notes 182,939,554 182,989,162
----------- ------------
Total borrowings 328,749,732 346,926,034
----------- ------------
Total liabilities 402,519,899 425,727,823
----------- ------------
Members' Equity
Common stock
Class B 59,546,218 59,671,095
Class C 20,573,933 20,573,753
Class D 300 300
Retained earnings
Allocated 16,434,740 12,844,968
Unallocated 18,010,891 16,949,037
Unrealized loss on investment
securities available for sale (1,030,338)
------------- -----------
Total members' equity 113,535,744 110,039,153
------------- -----------
Total liabilities and members' equity $516,055,643 $535,766,976
============= ============
<TABLE>
NATIONAL COOPERATIVE BANK
CONSOLIDATED STATEMENTS OF INCOME
Nine Months Ended September 30,Three Months Ended September 30,
1994 1993 1994 1993
---------- ---------- ------------ -----------
<S> <C> <C> <C> <C>
Interest income
Loans and lease financing $28,043,817 $27,548,186 $ 9,844,917 $ 9,347,860
Investment securities 2,026,151 2,045,921 726,705 718,817
----------- ---------- ----------- -----------
Total interest income 30,069,968 29,594,107 10,571,622 10,066,677
----------- ---------- ----------- -----------
Interest expense
Deposits 1,460,594 1,479,741 555,550 504,807
Short-term borrowings 1,424,661 1,158,469 560,720 621,826
Long-term debt,other
borrowings and subordinated
Class A notes 11,703,220 13,055,083 3,937,623 4,028,011
---------- ---------- --------- ---------
Total interest expense 14,588,475 15,693,293 5,053,893 5,154,644
---------- ---------- --------- ---------
Net interest income 15,481,493 13,900,814 5,517,729 4,912,033
Provision for loan losses 820,800 1,078,549 280,600 464,021
---------- ---------- --------- ---------
Net interest income after
provision for loan
losses 14,660,693 12,822,265 5,237,129 4,448,012
---------- ---------- --------- ---------
Non-interest income
Gain on sale of loans 3,421,954 6,173,502 222,957 3,769,418
Loan and deposit servicing
fees 1,125,283 973,631 371,604 359,292
Other 2,381,759 2,170,687 920,827 697,772
--------- --------- --------- ----------
Total non-interest income 6,928,996 9,317,820 1,515,388 4,826,482
Non-interest expenses
Compensation and employee
benefits 7,004,789 5,802,644 2,436,479 2,064,319
Contractual services 2,347,425 2,876,200 805,013 1,428,889
Occupancy and equipment 2,078,618 1,987,175 708,664 696,576
Contribution to NCB
Development Corporation 1,715,378 812,605
Other 1,691,784 1,405,108 621,453 459,004
--------- --------- --------- ---------
Total non-interest
expenses 13,122,616 13,789,505 4,571,609 5,461,393
---------- ---------- --------- ---------
Income before income taxes 8,467,073 8,350,580 2,180,908 3,813,101
Provisions for income taxes 844,677 912,174 163,358 499,654
----------- ----------- ----------- -----------
Net income $ 7,622,396 $ 7,438,406 $ 2,017,550 $ 3,313,447
=========== =========== =========== ===========
Distribution of net income
Patronage dividends $ 6,679,786 $ 7,374,930 $ 1,349,306 $ 2,974,128
Retained earnings 942,610 63,476 668,244 339,319
----------- ----------- ----------- -----------
$ 7,622,396 $ 7,438,406 $ 2,017,550 $ 3,313,447
=========== =========== =========== ===========
</TABLE>
<TABLE>
NATIONAL COOPERATIVE BANK
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1994 and 1993
1994 1993
------------ ------------
<S> <C> <C>
Cash flows from operating activities
Interest received $ 33,570,323 $ 29,293,129
Commitment charges and other fees received 6,946,103 4,427,346
Proceeds from sales of loans held for sale 111,722,791 188,458,734
Loans originated for sale (103,299,742) (148,618,123)
Loss on hedges of loans held for sale 272,172 159,284
(Increase) decrease in investment securities,
net (67,090) 1,979,602
Interest paid (14,696,541) (11,728,087)
Transfer from(to) restricted cash 12,816 (1,844,978)
Cash paid to suppliers and employees (14,422,771) (19,816,291)
------------ ------------
Net cash provided by operating activities 20,038,061 42,310,616
------------ ------------
Cash flows from investing activities
Proceeds from sales of investments
available for sale 14,100,000
Purchase of investments available for sale (18,440,825)
Proceeds from maturities of investments
available for sale 3,529,304
Proceeds from sales of portfolio loans 4,515,296 23,114,212 Net decrease in loans and lease financing
Capital expenditures (504,374) (162,087)
----------- -----------
Net cash provided by investing activities 2,348,438 8,346,831
----------- -----------
Cash flows from financing activities
Net (decrease) increase in deposits (8,769,953) 5,011,185
Net increase (decrease)in short-term borrowings 7,491,570 (26,007,602)
Repayment on long-term debt (25,000,000) (17,000,000)
Repayment on other borrowings (527,015) (493 675)
Redemption of common stock (186,107) (85,512) Repayment on subordinated Class A notes
Patronage dividends paid (3,147,860) (2,970,925)
------------ ------------
Net cash used in financing activities (30,139,365) (41,861,151)
------------ ------------
(Decrease) increase in cash and cash equivalents (7,752,866) (8,796,296)
Cash and cash equivalents, beginning of year 22,938,795 23,888,148
------------ ------------
Cash and cash equivalents, end of period $ 15,185,929 $ 32,684,444
============ =============
</TABLE>
NATIONAL COOPERATIVE BANK
Reconciliation of Net Income to Net Cash
Provided by Operating Activities
For the Nine Months Ended September 30, 1994 and 1993
1994 1993
----------- -----------
Net income $ 7,622,396 $ 7,438,406
Adjustments to reconcile net income to net
cash provided by operating activities
Decrease (increase) in restricted
cash account 12,816 (1,844,978)
(Increase) decrease in accrued
interest receivable (170,015) 555,224
Net investment security account activity (67,090) 1,979,602
Decrease in loans held for sale 8,423,049 39,840,611
Increase in other assets,net of
real estate owned (358,107) (5,771,118)
(Decrease) increase in accounts payable
and other accrued expenses (616,331) 642,393
Decrease in accrued interest payable 4,500,602 4,076,344
Provision for loan losses 820,800 1,078,549
Depreciation and amortization, net 2,144,539 2,739,085
Gain on sale of assets, net (1,821,940) (7,974,794)
Increase on hedges of loans
held for sale 272,172 159,284
Other, net (724,830) (607,992)
------------ ------------
Net cash provided by operating activities $20,038,061 $42,310,616
============ ============
NATIONAL COOPERATIVE BANK
Condensed Notes to the Consolidated
Financial Statements
September 30, 1994
(Unaudited)
The accompanying financial statements have been prepared
without audit and reflect all adjustments (consisting only of normal recurring
adjustments ) which were, in the opinion of NCB, necessary to a fair
statement of the results of the interim period presented. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have
been condensed or omitted. Accordingly, these condensed financial statements
should be read in conjunction with the financial statements and the notes
thereto included in NCB's most current annual report.
1. Cash, Cash Equivalents and Investment Securities
As of September 30, 1994, NCB's portfolio of investment securities, cash
and cash equivalents had an average adjusted maturity of 1,339 days with
interest rates in those portfolios varying from 4.4% to 9.6%.
<TABLE>
Cash and Cash Investments Investments
Equivalents Available for Sale held to maturity
-------------- ------------------ ------------------
<S> <C> <C> <C>
Cash $ 5,560,929
Corporate bonds $12,424,540
Federal funds 6,100,000
Eurodollar certificates and
repurchase agreements 3,525,000 2,419,005
US Treasury and agency
obligations 14,685,753
------------ ------------ -----------
$ 15,185,929 $ 27,110,293 $ 2,419,005
============ ============ ===========
</TABLE>
At September 30, 1994, the investments in the available for sale
portfolio were recorded at aggregate market value. Restricted cash of
$8,348,703 is held by a trustee for the benefit of certificate holders
in the event of loss on certain loans and will become available to NCB as the
principal balance of the respective loan decreases. The loans sold have
orginal maturities of ten to fifteen years.
2. Loans, Lease Financing and Non-performing Assets
Loans and leases outstanding by category at September 30, 1994 were:
Commercial loans $219,308,033
Lease financing 8,776,312
Real estate loans:
Residential 209,209,279
Construction 863,499
Commercial 10,430,793
-----------
$448,587,916
============
At September 30, 1994 and December 31, 1993 real estate loans
held for sale were $29.8 million and $40.3 million, respectively. The
loans portfolio includes loans which were not currently accruing any
interest. The total outstanding principal of these loans at September
30, 1994 and the effect on income for the nine months ended September 30,
1994 are shown below:
Principal outstanding $1,487,973
==========
Gross amount of income which
would have been recorded
under original terms $ 103,903
Less interest received 15,803
----------
Interest not recorded $ 88,100
==========
The loan portfolio includes loans that are
renegotiated with a reduced interest rate or with an extension of payment
of interest and principal. The total outstanding principal of these
loans at September 30, 1994 and the effect on income for the nine months
ended September 30, 1994 are shown below:
Principal outstanding $2,193,729
==========
Gross amount of income which
would have been recorded
under original terms $ 217,162
Less interest received 103,264
----------
Interest not recorded $ 113,898
==========
3. Allowance for Loan Losses
The following is a transaction summary of the allowance for loan losses
during the nine months ended September 30, 1994:
Balance at December 31, 1993 $12,309,359
Provision for loan losses 820,800
Charge-offs ( 4,941)
Recoveries of loans previously
charged off 156,162
-----------
Balance at September 30, 1994 $13,281,380
===========
The allowance for loan losses as a percentage of loans outstanding at
September 30, 1994 was 3.0%.
NATIONAL COOPERATIVE BANK
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
SUMMARY
NCB's net income for the nine months ended September 30, 1994 was $7.6
million. This was a 2.7% or $.2 million increase over the nine months ended
September 30, 1993. The increase was due primarily to increases in net interest
income during the nine months period. For the three month period, net income
declined to $2.0 million from $3.3 million due primarily to a decline in non-
interest income.
Total assets decreased by $19.7 million or 3.7% to $516.1
million at September 30, 1994 from $535.8 million at December 31, 1993 due to
decreases in the real estate loans held for sale and decreases in cash and cash
equivalents during the nine months period in 1994. Loans and leases outstanding
at September 30, 1994 decreased 2.0% to $448.6 million from $457.7 million at
December 31, 1993.
NET INTEREST INCOME
Net interest income for the nine months period increased $1.6
million to $15.5 million from the same period the prior year. As
shown on Table 1, the net yield on interest-earning assets
increased to 4.18% from 3.67% as higher-yielding warehoused real
estate loans held in the portfolio were funded by interest-
bearing liabilities that were sensitive to short term interest
rate movements. As shown on Table 2, rates caused a positive
variance of $1.3 million. In comparison to prior year-end and
the prior quarter, average commercial balances have increased due
to strengthening originations in the cooperative loan market.
Interest income increased slightly to $30.1 million for the
nine months ended September 30, 1994 from $29.6 million for the
same period in the prior year. In general, average rates on
interest-earning assets increased to 8.12% in the 1994 period
from 7.82% in the 1993 period due to increasing rates on new real
estate originations and the repricing of variable rate commercial
and real estate loans. Increasing average rates accounted for a
$1.0 million positive variance. Average rates on the commercial
loan portfolio increased 17 basis points as interest sensitive
assets in the commercial portfolio reacted to increases in the
prime and other short term rates. Real estate rates increased by
24 basis points as real estate loan originations were made at
higher interest rates.
Interest expense decreased $1.1 million to $14.6 million for the
nine months ended September 30, 1994 due to the maturity of $10
million in intermediate term debt in the third quarter of 1993
and the repricing of a $36.9 million tranche of the Class A notes
during October 1993 at the prevailing 3 year US Treasury rate.
Average rates on interest-bearing liabilities decreased to 4.98%
from 5.14%.
<TABLE>
Table 1
Rate Related Assets and Liabilities
( in thousands )
Nine months ended September 30,
--------------------------------
1994 1993
------------------------------ -----------------------------
ASSETS Average Income/ Yields/ Average Income/ Yields/
Balance Expense Rates Balance Expense Rates
------- ------- ------ ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets
Real estate loans $217,079 $14,664 9.01% $234,628 $15,424 8.77%
Commercial loans & leases 224,718 13,380 7.94% 208,066 12,124 7.77%
------- ------ ------- ------
Total loans & leases 441,797 28,044 8.46% 442,694 27,548 8.30%
Trading, investment
securities and cash
equivalents 52,160 2,026 5.18% 62,086 2,046 4.39%
------- ------ ------- ------
Total interest-earning
assets 493,957 30,070 8.12% 504,780 29,594 7.82%
------ ------ ------- ------
Allowance for loan loss (12,897) (10,955)
Non-interest earning assets
Cash 6,204 3,816
Other assets 29,506 30,828
Total non-interest ------ ------
earning assets 35,710 34,614
------ ------
Total assets $516,770 $528,469
======== ========
LIABILITIES AND MEMBERS' EQUITY
Interest-bearing liabilities
Subordinated Class A
notes $182,970 6,579 4.79% $183,097 7,161 5.21%
Notes payable 151,663 6,549 5.76% 170,928 7,052 5.50%
Deposits 55,700 1,460 3.50% 53,466 1,480 3.69%<PAGE>
------- ----- ------- -----
Total interest-bearing
liabilities 390,333 14,588 4.98% 407,491 15,693 5.14%<PAGE>
------- ------ ------- ------
Other liabilities 14,492 14,594
Members' equity 111,945 106,384
Total liabilities & -------- --------
members' equity $516,770 $528,469
======== ========
Net interest revenue $15,482 $13,901
Net interest spread 3.13% 2.68%<PAGE>
Net yield on interest-earning assets 4.18% 3.67%
</TABLE>
<TABLE>
Table 1A
Rate Related Assets and Liabilities
( in thousands )
Three months ended September 30,
------------------------------------------------------------------
1994 1993
----------------------------- ------------------------------
ASSETS Average Income/ Yields/ Average Income/ Yields/
Balance Expense Rates Balance Expense Rates
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets
Real estate loans $215,625 $ 5,060 9.12% $222,792 $ 5,147 9.24%
Commercial loans & leases 227,090 4,784 8.43% 217,405 4,201 7.73%
------- ----- ------- -----
442,715 9,844 8.90% 440,197 9,348 8.49%
Trading, investment
securities and cash
equivalents 49,761 727 5.84% 69,379 719 4.15%
------- ----- ------- -----
Total interest-earning
assets 492,476 10,571 8.59% 509,576 10,067 7.90%<PAGE>
------- ------ ------- ------
Allowance for loan loss (13,133) (11,370)
Non-interest earning assets
Cash 7,432 3,689
Other assets 27,800 35,465
Total non-interest ------- ------
earning assets 35,232 39,154
-------- --------
Total assets $514,575 $537,360
======== ========
LIABILITIES AND MEMBERS' EQUITY
Interest-bearing liabilities
Subordinated Class A
notes $182,964 2,192 4.79% $182,968 2,164 4.73%
Notes payable 141,857 2,306 6.31% 176,299 2,486 5.64%
Deposits 54,608 556 3.77% 55,350 505 3.65%
------- ----- ------- -----
Total interest-bearing
liabilities 379,429 5,054 5.21% 414,617 5,155 4.97%
------- ----- ------- -----
Other liabilities 22,051 14,924
Members' equity 113,096 107,819
Total liabilities & ------- -------
members' equity $514,575 $537,360
======== ========
Net interest revenue $ 5,517 $ 4,913
Net interest spread 3.38% 2.93%<PAGE>
Net yield on interest-earning assets 4.48% 3.86%
</TABLE>
<TABLE>
Table 2
Changes in Net Interest Income
( in thousands )
For the nine months ended September 30, 1994 compared to September 30,1993
---------------------------------------------------------------------------
Increase ( decrease ) due to changes in:
-----------------------------------------
Average Average
Volume Yield Net
------- ------- ----
<S> <C> <C> <C>
Interest Income
Cash equivalents and investment securities $ (355) $ 335 $ ( 20)
Commercial loans and leases 987 269 1,256
Real estate loans (1,177) 416 (761)
------- ----- ------
Total interest income ( 545) 1,070 475
------- ----- ------
Interest expense
Deposits 60 ( 80) ( 20)
Notes payable ( 903) 400 ( 503)
Subordinated Class A notes ( 5) (578) ( 583)
------- ----- -------
Total interest expense ( 848) (258) (1,106)
------- ------- -------
Net interest income $ 303 $1,278 $ 1,581
======== ======== ========
</TABLE>
<TABLE>
Table 2A
Changes in Net Interest Income
( in thousands )
For the three months ended September 30, 1994 compared to September 30,1993
---------------------------------------------------------------------------
Increase ( decrease ) due to changes in:
------------------------------------------
Average Average
Volume Yield Net
------- ------- ----
<S> <C> <C> <C>
Interest Income
Cash equivalents and investment securities $( 237) $ 245 $ 8
Commercial loans and leases 193 391 584
Real estate loans ( 167) 80 (87)
------ --- ----
Total interest income ( 211) 716 505
------ --- ----
Interest expense
Deposits 34 17 51
Notes payable ( 468) 288 (180)
Subordinated Class A notes (1) 28 27
------ ---- ----
Total interest expense ( 435) 333 (102)
------ ---- -----
Net interest income $ 224 $ 383 $ 607
======= ===== ======
</TABLE>
NON-INTEREST INCOME
Non-interest income decreased 25.8% to $6.9 million for the
nine months ended September 30,1994 from $9.3 million for the
nine months ended September 30, 1993. Gains from the sales of
loans, net of hedging gains and losses, decreased to $3.4 million
from $6.2 million in 1993 on loan sales of $116.2 million and
$214.1 million, respectively. Servicing fee income and excess
servicing income increased to $2.5 million for the nine months
ended September 30, 1994 from $1.6 million for the nine months
ended September 30, 1993.
For the three month period ended September 30, non-interest
income declined by $3.3 million from $4.8 million at September
30, 1994 to $1.5 million for the same period in the prior year.
The majority of the decline was related to the timing of $78.3
million real estate loan sales during the third quarter of 1993.
NON-INTEREST EXPENSES
Non-interest expenses for the nine months ended September 30,
1994, decreased 5.1% to $13.1 million from $13.8 million for the
nine months ended September 30, 1993. Non-interest expenses as
a percentage of average assets increased to 3.4% at September 30,
1994 from 2.9% at September 30, 1993 due to an increase in salary
and benefit expenses during the first quarter of 1994.
Salaries and benefits expenses increased due to the accrual of
employee and senior management incentive bonuses.
For the three month period ended September 30, non-interest
expenses declined by $.9 million to $4.6 million at September 30,
1994 from $5.5 million at September 30, 1993. The decrease is
attributable to the lack of a contribution to NCBDC during this
period.
PROVISION FOR INCOME TAXES
The provision for income taxes is driven by taxes due on non-
member income earned by NCB and by state and local income taxes
owed by NCB's subsidiaries. The federal income tax provision for
the nine months ended September 30 decreased by $68 thousand from
the prior year due to decreases in non-member income generated by
NCB Mortgage Corporation and NCB Savings Bank.
LOANS AND LEASE PORTFOLIO
Consolidated Loans and Leases Outstanding (millions)
%
9/30/94 12/31/93 Change
Commercial $219.3 $223.7 -2.0
Real estate 220.5 227.2 -3.0
Leases 8.8 6.8 29.4
------ ------
Total: $448.6 $457.7 -2.0%
====== ======
Total loans and leases outstanding at September 30, 1994, were
$448.6 million, down 2.0% from $457.7 million at December 31,
1993. Real estate loans decreased by $6.7 million or 3.0% from
year-end due to loan sales during the three quarters of 1994.
Commercial loans and leases increased slightly due to
originations on commercial accounts.
CASH, CASH EQUIVALENTS AND INVESTMENT SECURITIES
Cash, cash equivalents and investment securities decreased
13.1% to $53.1 million at September 30, 1994 from $61.1 million
at year-end 1993. NCB used $20.0 million of funds generated from
operating activities to repay a $25 million intermediate term
debt obligation during the second quarter of 1994 and to pay
patronage dividends to NCB members. As a percentage of earning
assets, cash, cash equivalents, and investment securities,
increased slightly to 11.9% from 11.2% at December 31, 1993.
ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses at September 30, 1994 increased
8.1% to $13.3 million from $12.3 million at December 31, 1993.
The allowance was impacted primarily by the $0.8 million loan
loss provision taken during the first nine months of the year.
The provision for loan losses decreased to $.8 million for the
nine months ended September 30, 1994 from $1.1 million for the
nine months ended September 30, 1993. NCB's provision for loan
losses as a percentage of average loans and leases outstanding
has decreased from .3% at September 30, 1993 to .2% at September
30, 1994.
The allowance as a percentage of loans outstanding increased
from 2.69% at September 30, 1993 and December 31, 1993,
respectively to 3.0% at September 30, 1994. This is due to the
recordation of additional provisions for loan loss during 1994 in
conjunction with declining loan portfolio balances.
As shown in Table 3, total nonperforming assets ( renegotiated
and non-accruing loans, REO, and in- substance foreclosures )
increased slightly to $3.8 million at September 30, 1994 from
$3.3 million at December 31, 1993. The increase was due to an
additional commercial loan credit that was placed on non-accrual
status and an increase in non-accrual single family real estate
loans. Nonperforming assets as a percentage of loans and leases
outstanding plus REO and in-substance foreclosures increased
slightly to .9% at September 30, 1994 from .7% at December 31,
1993. The allowance for loan loss as a percentage of
nonperforming loans has decreased to 363% at September 30, 1994
from 384% from December 31, 1993.
<TABLE>
Table 3
Nonperforming assets
( in thousands )
Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
1994 1994 1994 1993 1993
--------- -------- --------- -------- ---------
<S> <C> <C> <C> <C> <C>
Nonaccrual loans
Commercial $ 324 $ 341 $ 20 $ 10 $ 17
Real estate-construction 0 0 0 0 0
Real estate- commercial 0 0 0 0 0
Real estate-residential 1,164 839 855 876 1,592
----- ----- ---- ---- -----
Total non-accrual loans 1,488 1,180 875 886 1,609
Restructured loans 2,168 2,194 2,273 2,283 2,309
----- ----- ----- ----- -----
Total nonperforming
loans 3,656 3,374 3,148 3,169 3,918
Real estate acquired
through foreclosure and
insubstance foreclosure 170 170 171 172 217
------ ------ ------ ------ ------
Total nonperforming
assets $3,826 $3,544 $3,319 $3,341 $4,315
====== ====== ====== ====== ======
Nonperforming assets/Loans
plus REO and insubstance
foreclosure .9% .8% .8% .7% 1.1%
Allowance/nonperforming
loans 363% 385% 416% 384% 298%
</TABLE>
INTEREST-BEARING LIABILITIES
Interest-Bearing Liabilities
( millions)
09/30/94 12/31/93 % Change
-------- -------- --------
Class A notes $182.94 $182.99 -0.1%
Short-term 39.03 31.54 23.7
Deposits 58.16 66.93 -13.1
Non-current term debt 75.26 75.35 -0.1
Current term debt 30.00 55.00 -45.5
Other borrowings 1.51 2.04 -25.9
-------- -------
Totals $386.90 $413.85 -6.5%
======= =======
Interest-bearing liabilities decreased by $27.0 million to
$386.9 million at September 30, 1994. As noted earlier, NCB
retired $25 million of intermediate term debt in April 1994. NCB
increased usage of its short term lines of credit to support
existing asset balances. Unused capacity under the line of
credit ( $141 million ) is sufficient to meet anticipated
commitments. The decrease in deposits is due to large demand
deposits that occurred at year-end 1993 that were subsequently
liquidated in the first quarter of 1994.
Part II
Item 6 Exhibits and Reports on Form 8-K
(a) The following exhibits are filed as part of this report:
Exhibit No. Exhibit description
10.8 First Amendment to Deferred
Compensation Agreement with
Jeremiah J. Foley
27 Financial Data Schedule
Signatures
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
NATIONAL CONSUMER COOPERATIVE BANK
Date: November 14, 1994
By: /s/ Richard L. Reed
(Richard L. Reed,
Chief Financial Officer)
/s/ Marietta J. Orcino
(Marietta J.Orcino,Controller/
Principal Accounting Officer)
INDEX TO EXHIBITS
Exhibit No. Description Page
10.8 First Amendment to Deferred
Compensation
Agreement with Jeremiah J. Foley 23
27 Financial Data Schedule 25
Exhhibit 10.8
FIRST AMENDMENT TO
DEFERRED COMPENSATION AGREEMENT
This First Amendment to Deferred Compensation Agreement (the
"Amendment") confirms an agreement entered into on the 24th day
of June, 1994, by and between the National Consumer Cooperative
Bank, a corporation chartered by Act of Congress of the United
States (the "Bank"), and Jeremiah J. Foley ("Mr. Foley"), for the
purpose of amending that certain Deferred Compensation Agreement
entered into by the Bank and Mr. Foley as of April 20, 1992.
The Bank and Mr. Foley hereby agree that the Deferred
Compensation Agreement (the "Agreement"), a copy of which is
attached as Exhibit A hereto, is hereby amended as provided in
this Amendment and that, except as amended hereby, the Agreement
remains in full force and effect as originally written.
1. Paragraph 7 of the Agreement is amended by deleting it and
substituting the following:
"The amount credited to Mr. Foley's Deferred
Compensation Account shall become payable in
the manner hereinafter provided upon the
termination of his relationship with the Bank
because of death or retirement or because of
disability; provided, however, that, with
respect to deferred compensation credited to
the Deferred Compensation Account after June
24, 1994, and Quarterly Credits thereon, such
amounts credited to Mr. Foley's Compensation
Account shall become payable, in the amount
hereinafter provided, upon Mr. Foley's 62nd
birthday."
2. Paragraph 8 of the Agreement is amended by deleting the
first sentence and substituting the following:
"The amount becoming payable shall be paid in
a lump sum or in twenty substantially equal
quarterly installments beginning on the first
day of the calendar quarter following the
previous quarter in which the event of
maturity, as provided in paragraph 7, occurs;
provided, however, that election of lump sum
or installments shall be made no later than
six months before the occurrence of such
event of maturity."
In Witness Whereof, the Bank has caused this Agreement to be
duly executed and Mr. Foley has duly executed this Agreement as
of this 24th day of June, 1994.
NATIONAL CONSUMER
COOPERATIVE BANK
BY:
_________________________
Charles E. Snyder
BY:
_________________________
Jeremiah J. Foley
Exhibit 27
Financial Data Schedule
Appendix C to Item 601(c) of Regulation S-K
Bank Holding Companies and Savings and Loan Holding Companies
Article 9 of Regulation S-X
Item Number Item Description Amount
9-03(1) Cash and due from banks 8,035,929
9-03(2) Interest bearing deposits 0
9-03(3) Federal funds sold-purchased
securities for resale 4,900,000
9-03(4) Trading account assets 0
9-03(6) Investment and mortgage backed
securities held for sale 27,110,293
9-03(6) Investment and mortgage backed
securities held to maturity-
carrying value 2,419,005
9-03(6) Investment and mortgage backed
securities held to maturity-
market value 2,419,005
9-03(7) Loans 448,587,916
9-03(7)(2) Allowance for losses 13,281,380
9-03(11) Total assets 516,055,643
9-03(12) Deposits 58,157,496
9-03(13) Short term borrowings 39,033,147
9-03(15) Other liabilities 1,513,391
9-03(16) Long-term debt 105,263,640
9-03(19) Preferred stock-mandatory
redemption 0
9-03(20) Preferred stock- no mandatory
redemption 0
9-03(21) Common stocks 80,120,451
9-03(22) Other stockholders' equity 33,415,293
9-03(23) Total liabilities and
stockholders equity 516,055,643
9-04(1) Interest and fees on loans 28,043,807
9-04(2) Interest and dividends on
investments 2,026,151
9-04(4) Other interest income 0
9-04(5) Total interest income 30,069,968
9-04(6) Interest on deposits 1,460,594
9-04(9) Total interest expense 14,588,475
9-04(10) Net interest income 15,481,493
9-04(11) Provision for loan losses 820,800
9-04(13)(h) Investment securities
gains/losses 29,614
9-04(14) Other expenses 1,691,784
9-04(15) Income/loss before income tax 8,467,073
9-04(17) Income/loss before extraordinary
items 8,467,073
9-04(18) Extraordinary items, less tax 0
9-04(19) Cumulative changes in accounting
principles 0
9-04(20) Net income or loss 7,622,396
I.B.5 Net yield on interest earning
assets- actual 4.19%
III.C.1(a) Loans on non accrual 1,487,943
III.C.1(b) Accruing loans past due 90 days
or more 0
III.C.1(c) Troubled debt restructuring 2,193,729
III.C.2 Potential problem loans 171,000
IV.A.1 Allowance for loan loss-beginning
of period 12,309,359
IV.A.2 Total chargeoffs 4,941
IV.A.3 Total recoveries 156,162
IV.A.4 Allowance for loan loss- end of
period 13,281,380
IV.B.1 Loan loss allowance allocated to
domestic loans 0
IV.B.2 Loan loss allowance allocated to
foreign loans 0
IV.B.3 Loan loss allowance-unallocated 13,281,380
