UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: MAY 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to ___________
Commission File Number 0-17709
RCSB FINANCIAL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 16-1484699
(State or other jurisdiction of (I.R.S. employer identification number)
incorporation or organization)
235 EAST MAIN STREET, ROCHESTER, NEW YORK 14604
(Address of principal executive offices) (Zip Code)
(716) 423-7270
(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
---- ----
Number of shares of common stock outstanding on June 30, 1996: 11,773,986
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RCSB FINANCIAL, INC. AND SUBSIDIARIES
FORM 10-Q
For the Quarter Ended
May 31, 1996
INDEX
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Page
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PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
Consolidated Statements of Condition as of
May 31, 1996 and November 30, 1995 3
Consolidated Statements of Income for the three and six
months ended May 31, 1996 and 1995 4
Consolidated Statements of Changes in Shareholders' Equity
for the three and six months ended May 31, 1996 and 1995 5
Consolidated Statements of Cash Flows for the six months
ended May 31, 1996 and 1995 6
Notes to Consolidated Financial Statements 8
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS 11
PART II - OTHER INFORMATION
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 19
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K 20
SIGNATURES 21
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<TABLE>
<CAPTION>
RCSB FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION
(Unaudited)
(thousands)
MAY 31, November 30,
1996 1995
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ASSETS
Cash and due from banks $ 73,918 $ 78,877
Interest-bearing deposits in banks 12,646 15,913
Securities available for sale (cost $22,729 in 1996
and $85,335 in 1995) 20,100 84,128
Securities held to maturity (fair value $1,579,618
in 1996 and $1,398,727 in 1995) 1,618,016 1,398,067
Loans receivable:
Residential mortgage loans 828,713 910,891
Commercial mortgage loans 64,478 71,240
Automobile loans and leases 929,073 807,629
Other consumer and other loans 88,862 83,596
Residential mortgage loans held for sale 157,376 123,755
-------------- --------------
Total loans receivable 2,068,502 1,997,111
Allowance for loan losses (26,867) (26,091)
-------------- --------------
Net loans receivable 2,041,635 1,971,020
Premises and equipment 31,993 28,896
Federal Home Loan Bank stock 38,498 38,498
Loan servicing rights 126,875 106,517
Other real estate 5,267 3,965
Other assets 79,736 145,559
-------------- --------------
Total assets $ 4,048,684 $ 3,871,440
============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits $ 2,337,884 $ 2,222,970
Borrowings and repurchase agreements with
Federal Home Loan Bank 675,050 674,350
Other repurchase agreements and borrowings 446,342 295,090
Mortgagors' deposits under escrow agreements 97,303 77,053
Other liabilities 142,515 226,050
-------------- --------------
Total liabilities 3,699,094 3,495,513
-------------- --------------
Commitments and contingent liabilities (see note 3)
SHAREHOLDERS' EQUITY:
Preferred stock, at par value 2,989 2,989
Common stock, at par value 14,209 14,067
Paid-in capital in excess of par value 243,076 241,392
Surplus fund 51,070 51,070
Undivided profits 88,596 76,755
Loans to employee stock plan (3,611) (4,371)
Net unrealized holding loss on securities, net of taxes (4,892) (4,985)
Treasury stock, at cost (1,800 common shares in 1996
and 44 in 1995) (41,847) (990)
-------------- --------------
Total shareholders' equity 349,590 375,927
-------------- --------------
Total liabilities and shareholders' equity $ 4,048,684 $ 3,871,440
============== ==============
</TABLE>
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<TABLE>
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RCSB FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(thousands, except per share amounts)
Three Months Ended Six Months Ended
May 31, May 31,
1996 1995 1996 1995
------------ ------------ ------------ ------------
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Interest income:
Interest and fees on loans $ 44,348 $ 41,405 $ 87,948 $ 80,477
Interest on mortgage-backed and other
securities 30,098 24,149 57,525 47,173
Other interest income 67 268 263 568
------------ ------------ ------------ ------------
Total interest income 74,513 65,822 145,736 128,218
------------ ------------ ------------ ------------
Interest expense:
Interest on deposits 25,103 23,117 50,056 43,914
Interest on FHLB borrowings and
repurchase agreements 9,944 8,935 18,350 19,383
Interest on other repurchase agreements
and borrowings 6,457 3,874 12,598 4,724
------------ ------------ ------------ ------------
Total interest expense 41,504 35,926 81,004 68,021
------------ ------------ ------------ ------------
Net interest income 33,009 29,896 64,732 60,197
Provision for loan losses 3,478 1,679 6,220 3,025
------------ ------------ ------------ ------------
Net interest income after
provision for loan losses 29,531 28,217 58,512 57,172
------------ ------------ ------------ ------------
Noninterest income:
Mortgage banking 12,131 7,616 22,389 14,287
Retail banking 2,711 2,306 5,075 4,585
Automobile loan banking 1,116 723 1,585 1,133
Net securities sale gains 995 30 995 40
Other 29 11 66 38
------------ ------------ ------------ ------------
Total noninterest income 16,982 10,686 30,110 20,083
------------ ------------ ------------ ------------
Operating expenses:
Salaries and benefits 18,633 13,268 34,318 28,261
Occupancy 5,236 4,691 10,147 9,075
Deposit insurance 51 1,251 169 2,500
Other 8,003 6,932 14,498 13,335
------------ ------------ ------------ ------------
Total operating expenses 31,923 26,142 59,132 53,171
------------ ------------ ------------ ------------
Income before income taxes 14,590 12,761 29,490 24,084
Income tax provision 5,106 3,445 10,322 6,503
------------ ------------ ------------ ------------
Net income $ 9,484 $ 9,316 $ 19,168 $ 17,581
============ ============ ============ ============
Net income per common share (fully diluted) $ 0.54 $ 0.50 $ 1.07 $ 0.94
============ ============ ============ ============
Net income applicable to common shares $ 8,176 $ 8,008 $ 16,552 $ 14,965
============ ============ ============ ============
Net income per common share (primary) $ 0.63 $ 0.57 $ 1.24 $ 1.07
============ ============ ============ ============
</TABLE>
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<TABLE>
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RCSB FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES
IN SHAREHOLDERS' EQUITY
(Unaudited)
(thousands, except per share amounts)
Three Months Ended
May 31,
1996 1995
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Shareholders' equity at beginning of period $ 371,295 $ 350,798
Net income 9,484 9,316
Purchase of RCSB common stock (27,890) -
Common stock options exercised 990 279
Dividends declared on preferred stock (1,308) (1,308)
Dividends declared on common stock ($0.24 and
$0.10 per share in 1996 and 1995, respectively) (3,055) (1,399)
Loan repayments from employee stock plan 383 361
Change in net unrealized holding loss on securities,
net of taxes (309) 669
------------ ------------
Shareholders' equity at end of period $ 349,590 $ 358,716
============ ============
Six Months Ended
May 31,
1996 1995
------------ ------------
Shareholders' equity at beginning of period $ 375,927 $ 346,999
Net income 19,168 17,581
Purchase of RCSB common stock (40,857) -
Common stock options exercised 1,826 396
Dividends declared on preferred stock (2,616) (2,616)
Dividends declared on common stock ($0.36 and
$0.20 per share in 1996 and 1995, respectively) (4,711) (2,797)
Loan repayments from employee stock plan 760 716
Change in net unrealized holding loss on securities,
net of taxes 93 (1,563)
------------ ------------
Shareholders' equity at end of period $ 349,590 $ 358,716
============ ============
</TABLE>
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<TABLE>
<CAPTION>
RCSB FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(thousands)
Six Months Ended
May 31,
1996 1995
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OPERATING ACTIVITIES:
Net income $ 19,168 $ 17,581
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for loan losses 6,220 3,025
Depreciation 3,800 2,797
Amortization of loan servicing rights 8,021 5,833
Amortization of intangible assets, hedging gains
or losses, and securities premiums or discounts 908 91
Deferred income tax benefit (1,500) (4,100)
Provisions for foreclosed real estate and other
problem assets - (1,135)
(Gains) losses on the sale of loans, securities
and other real estate (870) 21
Increase in mortgage loans held for sale (33,621) (18,762)
Decrease in other assets 66,876 901
Decrease in accrued expenses (4,795) (7,072)
Decrease in loans to employee stock plan 760 716
-------------- --------------
Net cash provided (used) by operating activities 64,967 (104)
-------------- --------------
INVESTING ACTIVITIES:
Decrease in interest-bearing deposits in banks 3,267 8,359
Purchases of:
Securities held to maturity (358,346) (161,693)
Loans (92) (172,560)
Loan servicing rights, including those on originated loans (28,379) (10,393)
Premises and equipment (6,897) (2,094)
Proceeds from sales of:
Securities available for sale 60,517 39
Other real estate 3,019 4,262
Principal repayments on:
Securities available for sale 3,114 2,643
Securities held to maturity 139,490 35,597
Loan originations, net of repayments and other reductions (47,630) 39,859
Decrease in FHLB stock - 8,270
-------------- --------------
Net cash used by investing activities (231,937) (247,711)
-------------- --------------
</TABLE>
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<TABLE>
<CAPTION>
RCSB FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(thousands)
Six Months Ended
May 31,
1996 1995
-------------- --------------
(Continued)
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FINANCING ACTIVITIES:
Increase in deposits 114,914 49,667
Increase (decrease) in FHLB borrowings
and repurchase agreements 700 (171,059)
Increase in other repurchase agreements
and borrowings 151,252 334,586
Increase in mortgagors' escrow deposits 20,250 9,150
Increase (decrease) in other liabilities (80,234) 39,685
Net proceeds from exercise of stock options 1,826 396
Purchase of RCSB common stock (40,857) -
Dividends paid on preferred stock (2,616) (2,616)
Dividends paid on common stock (3,224) (2,797)
-------------- --------------
Net cash provided by financing activities 162,011 257,012
-------------- --------------
Increase (decrease) in cash and cash equivalents (4,959) 9,197
Cash and cash equivalents at beginning of period 78,877 63,702
-------------- --------------
Cash and cash equivalents at end of period $ 73,918 $ 72,899
============== ==============
Supplemental cash flow disclosures:
Cash paid during the period for:
Interest $ 81,787 $ 66,943
Income taxes 12,887 8,567
Additions to other real estate through foreclosure 4,446 3,544
</TABLE>
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RCSB FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONDENSED)
MAY 31, 1996
(unaudited)
1. BASIS OF PRESENTATION
The accompanying consolidated financial statements, which include the accounts
of RCSB Financial, Inc. and its subsidiaries (RCSB or the Company), have been
prepared in accordance with the instructions for Form 10-Q, and therefore do
not include all information and footnotes necessary for a complete
presentation of financial position, results of operations and cash flows in
accordance with generally accepted accounting principles. The financial
statements and the information under the heading "Management's Discussion and
Analysis of Financial Condition and Results of Operations" are prepared under
the presumption that the interim consolidated financial statements are read in
conjunction with the Company's Annual Report on Form 10-K for the year ended
November 30, 1995.
In the opinion of management, the unaudited, consolidated interim financial
statements of RCSB Financial, Inc. and subsidiaries reflect all adjustments
(consisting of normal recurring accruals) necessary for a fair presentation of
the statements. The results of operations for the interim periods are not
necessarily indicative of the results of operations which may be expected for
the entire year. For consistency among the periods presented, certain amounts
in the prior year's consolidated financial statements have been reclassified
to conform with the 1996 presentation.
2. ACCOUNTING CHANGE
RCSB adopted Financial Accounting Standards Board (FASB) Statement No. 114
entitled "Accounting by Creditors for Impairment of a Loan" and Statement No.
118, "Accounting by Creditors for Impairment of a Loan - Income Recognition
and Disclosures" on December 1, 1995. The statements require that certain
impaired loans be measured based on the present value of expected future cash
flows discounted at the loan's effective interest rate, or as a practical
expedient, based on the loan's observable market price or the fair value of
collateral if the loan is collateral dependent. For purposes of Statement
114, a loan is impaired when, based on current information and events, it is
probable that a creditor will be unable to collect all contractual interest
and principal payments according to the terms of the loan agreement.
Implementing the provisions of Statements 114 and 118 had no material impact
on the Company's consolidated financial statements on the date of adoption.
Most of RCSB's loan portfolios are excluded from the scope of Statements 114
and 118 because the pronouncements are generally not applicable to large
groups of smaller-balance homogeneous loans such as residential mortgage,
automobile and other consumer loans. The pronouncement does apply to RCSB's
commercial mortgage loan portfolio, from which impaired loans are identified
during reviews of loans that (a) are delinquent, (b) have been classified by
management or banking regulators or (c) are believed by management to involve
potential collectibility concerns. In most cases, the Company measures
impairment based on the fair value of loan collateral, minus estimated costs
to sell the property. If the measure of an impaired loan is less than the
recorded investment in the loan, a valuation allowance is established with a
corresponding charge to the provision for loan losses. Charge-offs are
recorded when definitive information indicates that collection of the
identified impaired amount is doubtful.
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At May 31, 1996, RCSB's recorded investment in loans considered impaired
totaled $3.8 million, and no allowance for loan losses was required for the
identified loans under the provisions of Statements 114 and 118. The average
recorded investment in impaired loans during 1996 totaled $5.0 million. Cash
receipts on impaired loans are either (a) added to the allowance for loan
losses if a previously recorded charge-off has not been recovered, or (b) used
to reduce the carrying value of the loan or recognized as interest income,
depending upon management's judgment regarding the likelihood of collecting
the recorded loan balance. Interest income recognized on impaired loans was
less than $0.1 million during the first six months of 1996, none of which was
recognized on a cash basis.
3. CONTINGENCIES
In February 1995, a trust company providing check processing and securities
custodial services to the Company's subsidiary, Rochester Community Savings
Bank (the Bank), and other financial institutions was seized by state banking
regulators due to the trust company's deteriorating financial condition.
Subsequently, a liquidation of the trust company was commenced and remains in
progress. In connection with services being provided to the Bank, certain
cash balances and collateral in the form of securities were maintained with
the trust company. In addition, the Bank holds long term investments in the
trust company's capital stock and debentures. Under conditions of the seizure
and liquidation, cash balances, securities held as collateral and payments on
these and other securities totaling approximately $11.5 million were
temporarily frozen by the regulators. During May 1996, the banking regulators
released to the Bank securities held as collateral and related payments on the
securities totaling $9.4 million, and in June 1996, the Bank received an
initial settlement of $1.0 million on its remaining assets.
It is not possible to estimate when liquidation of the trust company will be
concluded. The Bank's $2.4 million investment in trust company stock and
debentures was charged off as expense in 1995, and an allowance of $1.4
million remained at May 31, 1996 to absorb possible losses on its other assets
held by the trust company and legal expenses related to the liquidation.
Further adjustment of the allowance may be required based on subsequent
developments in the liquidation process.
Under pending federal legislation, the Bank may be required to participate in
a one-time recapitalization of the Federal Deposit Insurance Corporation's
(FDIC) Savings Association Insurance Fund (SAIF). Although most of the Bank's
deposits are insured by the FDIC's Bank Insurance Fund (BIF), approximately
$84 million of SAIF-insured deposits held by the Bank would be subject to the
one-time assessment, estimated to total $0.7 million. It is uncertain whether
this pending legislation will be enacted.
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4. COMMON STOCK PURCHASES AND PREFERRED STOCK REDEMPTION
In May 1996, RCSB completed a previously announced program to purchase 1.8
million shares of the Company's common stock, and the Board of Directors
authorized the purchase of an additional 1.7 million common shares at
opportune times through November 1996. Under the second program, 635,000
shares were purchased from market sources during June 1996.
RCSB's Board of Directors also approved the redemption of all issued and
outstanding shares of the Company's 7% Noncumulative Convertible Perpetual
Preferred Stock, Series B, effective July 15, 1996 at a price of $26.225 per
share plus accrued and unpaid dividends. Prior to the close of business on
July 15, 1996, holders of the Series B Preferred Stock have the option of
converting their shares into RCSB common stock at a ratio of 1.5625 shares of
common for each Series B share. Based on RCSB's common stock price at June
30, 1996, the Company anticipates that all preferred shareholders will convert
their shares into common.
To facilitate the redemption of Series B preferred shares, the declaration of
the third quarter common stock dividend was accelerated to May 1996, compared
to a June declaration date in the prior year. RCSB declared dividends of
$0.12 per common share in December 1995, March 1996 and May 1996, and declared
dividends of $0.4375 per Series B preferred share in February and May 1996.
5. NET INCOME PER SHARE
Primary net income per common share for the three and six months ended May 31,
1996 and 1995 was computed by dividing net income, reduced by preferred stock
dividends, by the weighted average number of common shares outstanding during
the periods. The weighted average number of common shares outstanding totaled
12,921,063 and 13,994,307 for the three months ended May 31, 1996 and 1995,
respectively, and 13,324,966 and 13,982,355 for the six months ended May 31,
1996 and 1995, respectively.
Fully diluted net income per common share for the three and six months ended
May 31, 1996 and 1995 was computed by dividing net income by the sum of the
weighted average number of common shares outstanding and the common shares
that would be issuable if all outstanding preferred shares were converted to
common. The weighted average number of common shares utilized in this
computation totaled 17,590,969 and 18,666,182 for the three months ended May
31, 1996 and 1995, respectively, and 17,994,894 and 18,654,230 for the six
months ended May 31, 1996 and 1995, respectively. There were no materially
dilutive common stock equivalents during either period.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS
RCSB Financial, Inc. and subsidiaries earned net income of $9.5 million or
$.54 per share (fully diluted) for the three months ended May 31, 1996,
compared to $9.3 million or $.50 per share in the second quarter of 1995. For
the first six months of 1996, RCSB's net income totaled $19.2 million or $1.07
per share compared to $17.6 million or $0.94 per share in 1995. While pretax
earnings in the second quarter and first six months of 1996 rose by 14.3% and
22.4%, respectively, a higher effective rate of income tax in the current year
lessened the increase in net income for the periods. The improvement in
pretax earnings was aided by higher levels of net interest income and growth
in mortgage banking revenues. Earnings per fully diluted share in the 1996
second quarter and six-month period increased by 8.0% and 13.8%, respectively,
reflecting higher net income and the effect of the Company's stock repurchase
program.
Second Quarter Review
RCSB's net interest income was $33.0 million in the second quarter of 1996, up
$3.1 million or 10.4% from 1995. Purchases of mortgage-backed securities
during 1996 and the latter half of 1995 and a 19% increase in average
automobile loan outstandings produced greater amounts of net interest income,
more than offsetting the effect of a narrower average interest rate spread in
RCSB's portfolios. Asset growth was funded by additional borrowings and higher
levels of customer deposits at the Bank. The Company also utilized borrowings
to purchase $41.8 million of RCSB common stock during 1996 and late 1995.
The reduction in RCSB's interest rate spread to 3.25% in 1996 from 3.34% in
1995 resulted from a greater decrease in the average yield on interest-earning
assets than in the average rate on interest-bearing liabilities. The spread
was affected by a narrowing of the average difference, during the past 18
months, between market interest rates on short-term instruments versus those
on longer-term instruments. Because RCSB's assets generally have longer terms
to maturity or repricing than its liabilities, the reduction experienced in
general marketplace spreads had a downward influence on the Company's interest
rate spread. Net interest margin, which is influenced by the interest rate
spread and changes in the relationship of interest-earning asset volumes to
interest-bearing liability volumes, decreased to 3.52% in 1996 from 3.66% in
1995. RCSB's spread and margin for the second quarter improved, however, from
levels experienced earlier in the year partially due to a recent widening in
general marketplace spreads.
The following table presents information for the second quarter of 1996 and
1995 regarding interest yields and rates, average earning asset and liability
volumes, and the allocation of interest variations between amounts caused by
volumes and amounts attributable to rates. No tax equivalent adjustments have
been made for minor amounts of tax-exempt income earned by RCSB.
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<TABLE>
<CAPTION>
AVERAGE BALANCES, YIELDS AND RATES AND CHANGES IN INTEREST INCOME AND EXPENSE
(dollars in thousands)
Three Months Ended
MAY 31, 1996 May 31, 1995
------------------------------ ------------------------------
Change
Average Yield/ Average Yield/ in Change due to
Balance Interest Rate Balance Interest Rate Interest Volume Rate
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INTEREST-EARNING
ASSETS:
Federal funds and
interest-bearing deposits $ 13,064 $ 67 2.05% $ 16,446 $ 268 6.52% $ (201) $ (46) $ (155)
Mortgage-backed and
other securities 1,723,727 30,098 6.98 1,375,153 24,149 7.02 5,949 6,087 (138)
Loans receivable, net 2,013,599 44,348 8.81 1,872,094 41,405 8.85 2,943 3,117 (174)
---------- --------- ---------- --------- ---------- -------- --------
Total interest-
earning assets $3,750,390 74,513 7.95 $3,263,693 65,822 8.07 8,691 9,158 (467)
========== --------- ========== --------- ---------- -------- --------
INTEREST-BEARING
LIABILITIES:
Transaction, money market
and savings deposits $1,057,130 6,195 2.33 $1,071,668 6,676 2.47 (481) (90) (391)
Term deposits 1,309,334 18,908 5.74 1,109,713 16,441 5.88 2,467 2,898 (431)
---------- --------- ---------- --------- ---------- -------- --------
Total deposits 2,366,464 25,103 4.22 2,181,381 23,117 4.20 1,986 2,808 (822)
FHLB borrowings
and repurchase agreements 692,364 9,944 5.71 586,374 8,935 6.05 1,009 1,547 (538)
Other repurchase agreements
and borrowings 456,417 6,457 5.63 243,924 3,874 6.30 2,583 3,054 (471)
---------- --------- ---------- --------- ---------- -------- --------
Total interest-
bearing liabilities $3,515,245 41,504 4.70% $3,011,679 35,926 4.73% 5,578 7,409 (1,831)
========== --------- ========== --------- ---------- -------- --------
Net interest income $ 33,009 $ 29,896 $ 3,113 $ 1,749 $ 1,364
========= ========= ========== ======== ========
Excess of interest-earning
assets over interest-bearing
liabilities $ 235,145 $ 252,014
RATIOS:
Interest rate spread 3.25% 3.34%
Net interest margin 3.52 3.66
</TABLE>
In the second quarter of 1996, RCSB provided $3.5 million for possible loan
losses compared to $1.7 million in 1995. The increased provisions in 1996 were
primarily due to growth in the automobile loan portfolio resulting from higher
volumes of loan originations in the quarter. The adequacy of the Company's
loan loss allowance is evaluated quarterly with consideration given to the
status of particular loans, the general risk characteristics of the loan
portfolio, historical charge-offs and recoveries, the regulatory environment,
current appraisals and economic and market conditions. As of May 31, 1996,
RCSB's allowance for loan losses totaled $26.9 million or 102.7% of
nonperforming loans, compared to $26.1 million or 106.6% of nonperforming
loans at November 30, 1995.
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Mortgage banking noninterest income totaled $12.1 million in the second
quarter of 1996, compared to $7.6 million in 1995. The increase resulted from
higher levels of loan originations and increased loan servicing income
generated by American Home Funding, Inc. (AHF), RCSB's mortgage banking
subsidiary. Residential mortgage loan originations at AHF were $421.6 million
during the second quarter, up 88.2% from $224.0 million in the prior year.
The growth in loan servicing income and a related increase in amortization
expense for loan servicing rights was driven by continuing purchases of such
rights and the retention of servicing rights on originated loans. AHF's
portfolio of loans serviced for others increased to $9.4 billion at May 31,
1996, compared to $6.1 billion at May 31, 1995. During 1996, AHF expanded its
loan origination capabilities by taking over six loan offices formerly
operated by another entity in the states of Alabama, Kansas, Missouri, North
Carolina and Texas and opening seven other loan offices in Connecticut,
Indiana, New Jersey, New York, North Carolina and Ohio. Current year activity
has expanded the scope of AHF's loan origination operations to encompass 52
offices in 15 states.
RCSB's retail banking units generated noninterest income of $2.7 million in
the second quarter, up from $2.3 million in 1995. Earnings in this category
are derived from fees and service charges collected for various
deposit-related activities and revenues from the Company's securities
brokerage and insurance sales subsidiaries. The increase was primarily in
fees earned by RCSB's securities brokerage subsidiary through sales of
variable annuity products.
Noninterest income from automobile loan banking was $1.1 million for the
second quarter of 1996, compared to $0.7 million in 1995. Automobile loan
banking income represents revenues generated from pools of sold auto loans
serviced by RCSB for others. Since no such loans have been sold since
mid-1992, there were only $5.7 million of loans being serviced for others at
May 31, 1996. The Company's automobile lending business in recent years has
been focused mainly on originating and servicing loans for RCSB's auto loan
portfolio, which totaled $929.1 million at the end of the second quarter.
Noninterest revenues from the sold loan pools included $0.9 million in the
second quarter of 1996 and $0.4 million in 1995 resulting from reductions in
certain allowances carried by RCSB to cover estimated losses under recourse
obligations. Allowances for credit losses on RCSB's portfolio of owned
automobile loans are established through charges to the provision for loan
losses.
Net gains from securities sales totaled $1.0 million in the 1996 second
quarter, while such gains in the 1995 quarter were less than $0.1 million. In
1996, RCSB sold $59.5 million of mortgage-backed securities from the
available-for-sale portfolio in response to interest rate-related market
opportunities.
Operating expenses in the 1996 second quarter were $31.9 million compared to
$26.1 million in the prior year. The increase was primarily attributable to
higher variable expenses associated with loan origination and servicing
volumes at AHF and American Credit Services Inc. (ACSI), the Company's
automobile lending subsidiary, and expenses resulting from recently opened
retail banking branches. These costs were partially offset by a substantial
reduction in FDIC deposit insurance premiums.
While still below a normal rate of income taxes for RCSB, the Company's
effective tax rate increased to 35% in the second quarter of 1996 from 27% in
1995. Reductions in RCSB's deferred tax valuation allowance during both years
accounted for the difference from normal rates.
-13-
<PAGE>
Six Month Review
For the first six months of 1996, RCSB's net interest income was $64.7
million, an increase of 7.5% from $60.2 million in the prior year. The
increase was largely due to the effects of investing, on average, $475.2
million more in mortgage-backed securities and loans during 1996. Asset growth
was funded by the reinvestment of earnings, additional customer deposits and
increased borrowings. RCSB's interest rate spread declined to 3.12% in 1996
from 3.39% in 1995, primarily due to a narrowing of general marketplace
spreads between short-term and intermediate-term interest rates. A shift of
$61.3 million in average deposits from transaction, money market and savings
accounts into higher rate term accounts contributed to the reduced interest
rate spread. Net interest margin was 3.51% in 1996 compared to 3.74% in 1995.
The following table presents information regarding interest yields and rates,
average earning asset and liability volumes, and the allocation of interest
variations between amounts caused by volumes and amounts attributable to rates
for the six months ended May 31, 1996 and 1995. No tax equivalent adjustments
have been made for minor amounts of tax-exempt income earned by RCSB.
-14-
<PAGE>
<TABLE>
<CAPTION>
AVERAGE BALANCES, YIELDS AND RATES AND CHANGES IN INTEREST INCOME AND EXPENSE
(dollars in thousands)
Six Months Ended
MAY 31, 1996 May 31, 1995
------------------------------ ------------------------------
Change
Average Yield/ Average Yield/ in Change due to
Balance Interest Rate Balance Interest Rate Interest Volume Rate
---------- --------- ------- ---------- --------- ------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INTEREST-EARNING
ASSETS:
Federal funds and
interest-bearing deposits $ 13,571 $ 263 3.88% $ 18,026 $ 568 6.30% $ (305) $ (119) $ (186)
Mortgage-backed and
other securities 1,686,146 57,525 6.82 1,346,305 47,173 7.01 10,352 11,624 (1,272)
Loans receivable, net 1,990,589 87,948 8.84 1,852,747 80,477 8.69 7,471 6,071 1,400
---------- --------- ---------- --------- ---------- -------- --------
Total interest-
earning assets $3,690,306 145,736 7.90 $3,217,078 128,218 7.97 17,518 17,576 (58)
========== --------- ========== --------- ---------- -------- --------
INTEREST-BEARING
LIABILITIES:
Transaction, money market
and savings deposits $1,035,454 12,163 2.35 $1,096,740 13,741 2.51 (1,578) (749) (829)
Term deposits 1,298,199 37,893 5.84 1,063,000 30,173 5.69 7,720 6,866 854
---------- --------- ---------- --------- ---------- -------- --------
Total deposits 2,333,653 50,056 4.29 2,159,740 43,914 4.08 6,142 6,117 25
FHLB borrowings
and repurchase agreements 627,520 18,350 5.85 665,844 19,383 5.84 (1,033) (1,124) 91
Other repurchase agreements
and borrowings 429,458 12,598 5.87 151,964 4,724 6.23 7,874 8,178 (304)
---------- --------- ---------- --------- ---------- -------- --------
Total interest-
bearing liabilities $3,390,631 81,004 4.78% $2,977,548 68,021 4.58% 12,983 13,171 (188)
========== --------- ========== --------- ---------- -------- --------
Net interest income $ 64,732 $ 60,197 $ 4,535 $ 4,405 $ 130
========= ========= ========== ======== ========
Excess of interest-earning
assets over interest-bearing
liabilities $ 299,675 $ 239,530
RATIOS:
Interest rate spread 3.12% 3.39%
Net interest margin 3.51 3.74
</TABLE>
RCSB's provision for loan losses totaled $6.2 million in the first six months
of 1996 compared to $3.0 million in 1995. A higher level of automobile loan
originations produced an increase in the Company's automobile loan portfolio
and a corresponding requirement for additional loan loss allowances.
Mortgage banking noninterest income grew by 56.7% to $22.4 million in 1996
from $14.3 million in the prior year. The increase was attributable to
greater loan origination fees and higher levels of loan servicing income, net
of additional amortization expense for loan servicing rights. Residential
mortgage originations at AHF totaled $748.8 million during the first six
months of 1996, up 89.3% from $395.6 million of originations in 1995.
-15-
<PAGE>
Retail banking noninterest income totaled $5.1 million in 1996, up from $4.6
million in 1995 primarily due to increased revenues from the Company's
securities brokerage subsidiary and slightly higher fees and service charges
from deposit related activities. Lower 1996 earnings from RCSB's insurance
sales subsidiary reflect reduced demand, in the current rate environment, for
fixed-rate annuity products.
Noninterest income from automobile loan banking was $1.6 million in 1996
compared to $1.1 million in 1995. The increase was the net result of a
reduced requirement for sold loan loss allowances, offset in part by a decline
in revenue from servicing loans for others. RCSB has continued to retain
recently originated auto loans in its portfolio, and loans serviced for others
total only $5.7 million.
Operating expenses incurred during the first six months of 1996 totaled $59.1
million compared to $53.2 million in the prior year. Higher variable expenses
at AHF and ACSI, resulting from an increase in loan origination volumes and
loans serviced, and the costs associated with several new retail banking
branches were partially offset by a reduction in FDIC deposit insurance
premiums.
The Company's effective tax rate was 35% in 1996 compared to 27% in 1995,
reflecting reductions in the deferred tax valuation allowance during both
years.
FINANCIAL CONDITION
At May 31, 1996, RCSB's total assets were $4.05 billion, compared to $3.87
billion at November 30, 1995. Loans at the end of the second quarter totaled
$2.04 billion, compared to $1.97 billion at November 30, 1995. Loan growth
during the first six months of 1996 occurred primarily in the automobile loan
portfolio which increased to $929.1 million at May 31, 1996, compared to
$807.6 million at the end of the 1995 fiscal year. Automobile loan
originations were $181.1 million in the 1996 second quarter and $322.3 million
in the first six months, up from $105.2 million and $167.8 million,
respectively, in the prior year periods.
Securities held to maturity increased to $1.62 billion at May 31, 1996,
compared to $1.40 billion at November 30, 1995 as the result of purchasing
$358.3 million of mortgage-backed securities during the year. Deposits
increased to $2.34 billion at May 31, 1996, up from $2.22 billion at November
30, 1995. Federal Home Loan Bank borrowings, repurchase agreements and other
borrowings totaled $1.12 billion at May 31, 1996, compared to $969.4 million
at November 30, 1995.
The Company's one-year interest rate sensitivity gap was liability sensitive
to the extent of 6.2% of total assets at May 31, 1996, compared to 3.9% at
November 30, 1995 and 6.1% at May 31, 1995. Shareholders' equity totaled
$349.6 million or $20.47 per common share on a fully diluted basis at May 31,
1996, compared to $375.9 million or $20.11 per common share at November 30,
1995. Equity per common share is computed as if all convertible preferred
shares were converted to common. The decline in shareholders' equity resulted
from ongoing purchases of RCSB common stock through the Company's stock
repurchase program.
In May 1996, RCSB completed a previously announced program to purchase 1.8
million shares of the Company's common stock, and the Board of Directors
authorized the purchase of an additional 1.7 million common shares at
opportune times through November 1996. Under the
-16-
<PAGE>
second program, 635,000 shares were purchased from market sources during June
1996. Equity was 8.63% of assets at the end of the second quarter of 1996,
compared to 9.71% at November 30, 1995.
RCSB's Board of Directors also approved the redemption of all issued and
outstanding shares of the Company's 7% Noncumulative Convertible Perpetual
Preferred Stock, Series B, effective July 15, 1996 at a price of $26.225 per
share plus accrued and unpaid dividends. Prior to the close of business on
July 15, 1996, holders of the Series B Preferred Stock have the option of
converting their shares into RCSB common stock at a ratio of 1.5625 shares of
common for each Series B share. Based on RCSB's common stock price at June
30, 1996, the Company anticipates that all preferred shareholders will convert
their shares into common.
To facilitate the redemption of Series B preferred shares, the declaration of
the third quarter common stock dividend was accelerated to May 1996, compared
to a June declaration date in the prior year. RCSB declared dividends of
$0.12 per common share in December 1995, March 1996 and May 1996, and declared
dividends of $0.4375 per Series B preferred share in February and May 1996.
In accordance with requirements of the FDIC and the New York State Banking
Department, the Company's subsidiary, Rochester Community Savings Bank, must
meet certain measures of capital adequacy with respect to leverage and
risk-based capital. At March 31, 1996, the most recent FDIC reporting date,
the Bank's capital ratios were in excess of required levels as shown in the
table below.
<TABLE>
<CAPTION>
CAPITAL ADEQUACY
March 31, 1996
Actual Required Excess
------- --------- -------
<S> <C> <C> <C>
Core (Tier 1) leverage capital 8.78% 4.00% 4.78%
Risk-Based capital:
Core (Tier 1) capital 12.96 4.00 8.96
Total capital 13.94 8.00 5.94
</TABLE>
Allowance for Loan Losses and Nonperforming Assets
The determination of the allowance for loan losses is based on ongoing
analyses of the loan portfolio and reflects an amount which, in management's
judgment, is adequate to provide for potential losses. While management used
all currently available information to determine the adequacy of the
allowance, future additions may be necessary based on changes in economic and
market conditions and specific borrower situations. In addition, various
regulatory agencies, as an integral part of the examination process,
periodically review the Company's allowance for losses on loans. Such
agencies may require the Company to recognize additions to the allowance based
on their judgments about information available at the time of their
examinations. RCSB's allowance for loan losses at May 31, 1996 equaled 102.7%
of nonperforming loans, which exceeded the average of approximately 62% for
all publicly-held thrifts as of March 31, 1996, the
-17-
<PAGE>
most recent date for which such information is available. Activity in RCSB's
loan loss allowance during the first six months of 1996 and 1995 is presented
below.
<TABLE>
<CAPTION>
ALLOWANCE FOR LOAN LOSSES
(thousands)
Six Months Ended
May 31,
----------------------------------
1996 1995
---------------- ----------------
<S> <C> <C>
Beginning balance $ 26,091 $ 26,225
Provision for loan losses 6,220 3,025
Loans charged off (8,090) (7,399)
Loan recoveries 2,646 1,829
---------------- ----------------
Ending balance $ 26,867 $ 23,680
================ ================
</TABLE>
The Company defines nonperforming assets to include nonaccrual loans, loans
past due 90 days and accruing, restructured loans and other real estate.
Total nonperforming assets at May 31, 1996 were $31.4 million compared to
$28.4 million at November 30, 1995, remaining at less than 1% of total assets
during the year to date. The increase in nonperforming assets in the first six
months of 1996 reflects the growth in RCSB's loan portfolio and a recent
slowing noted nationally in the repayment of consumer debt. The following
table summarizes nonperforming assets as of the end of the second quarter and
prior year.
<TABLE>
<CAPTION>
NONPERFORMING ASSETS
(dollars in thousands)
MAY 31, November 30,
1996 1995
-------------- --------------
<S> <C> <C>
Nonaccrual loans $ 22,372 $ 21,789
Loans past due 90 days and accruing 3,790 2,689
-------------- --------------
Total nonperforming loans 26,162 24,478
Other real estate, net of allowances 5,267 3,965
-------------- --------------
Total nonperforming assets $ 31,429 $ 28,443
============== ==============
Nonperforming loans as a percent of
total loans 1.26% 1.23%
Nonperforming assets as a percent of
total assets 0.78% 0.73%
</TABLE>
-18-
<PAGE>
RCSB FINANCIAL, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of Shareholders of RCSB Financial, Inc. was held on April
10, 1996. Of the 13,607,170 shares eligible to vote at the annual meeting,
11,073,057 shares were represented in person or by proxy for the election of
directors and appointment of independent auditors and 10,823,190 shares for
approval of the 1996 Non-Employee Director Stock Plan. The following is a
summary of matters voted upon at the meeting.
<TABLE>
<CAPTION>
Number of Votes
---------------------------------------------
Broker
For Withheld Non-Votes
---------- --------- -----------
<S> <C> <C> <C> <C>
Nominees for Director for Three-
Year Term Expiring in 1999:
Bruce B. Bates 10,906,396 166,661 76,645
Karen Noble Hanson 10,896,360 176,697 76,645
Salvatore R. Martoche 10,900,026 173,031 76,645
Michael P. Morley 10,895,128 177,929 76,645
Nominee for Director for One-
Year Term Expiring in 1997:
Leonard Schutzman 10,900,498 172,559 76,645
Broker
For Against Abstentions Non-Votes
---------- --------- ----------- ---------
Approval of the Company's 1996
Non-Employee Director Stock
Plan and Approval of
Conforming Amendments to the
1992 Stock-Based Compensation
Plan and Non-Employee Director
Deferred Compensation Plan 9,343,681 1,302,429 177,080 326,512
Ratification of Appointment of
KPMG Peat Marwick LLP as
Independent Auditors 10,921,547 117,590 33,920 76,645
</TABLE>
-19-
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits
Exhibit
Number Document
Compensatory plans or arrangements:
10.1 Non-Employee Director Stock Plan of RCSB Financial, Inc.
10.2 Non-Employee Director Deferred Compensation Plan of RCSB
Financial, Inc.
10.3 Amendment to the Rochester Community Savings Bank 1992
Stock Based Compensation Plan, dated November 22, 1995
*****************************
27 Article 9 Financial Data Schedule
(B) Reports on Form 8-K
None
-20-
<PAGE>
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.
RCSB FINANCIAL, INC.
--------------------
(registrant)
July 11, 1996 /s/ Leonard S. Simon
------------- --------------------
Date Leonard S. Simon
Chairman of the Board, President
and Chief Executive Officer
July 11, 1996 /s/ Paul R. Wuest
------------- -----------------
Date Paul R. Wuest
Senior Vice President and
Chief Financial Officer
-21-
<PAGE>
EXHIBIT INDEX
-------------
Regulation
S-K Exhibit
Number Document
------ --------
10.1 Non-Employee Director Stock Plan of RCSB Financial,
Inc.
10.2 Non-Employee Director Deferred Compensation Plan of
RCSB Financial, Inc.
10.3 Amendment to the Rochester Community Savings Bank 1992
Stock Based Compensation Plan, dated November 22, 1995
27 Article 9 Financial Data Schedule
-22-
EXHIBIT 10.1
THE RCSB FINANCIAL, INC.
NON-EMPLOYEE DIRECTOR STOCK PLAN
ARTICLE I
PURPOSE OF THE PLAN
The purpose of the RCSB Financial, Inc. (''the Company'') 1996
Non-Employee Director Stock Plan is to promote shareholder value by increasing
the proprietary interest of Non-Employee Directors in the Company which aligns
their interests more closely with those of the Company's shareholders; and to
attract and retain highly qualified and capable Non-Employee Directors by
offering them competitive compensation for their services as directors of the
Company.
ARTICLE II
DEFINITIONS
Unless the context clearly indicates otherwise, the following terms shall
have the following meanings:
2.1 ''Annual Retainer''. The annual cash retainer fee payable by the
Company to a Non-Employee Director for services as a director of the Company
or any subsidiary of the Company, as such amount may be changed from time to
time.
2.2 ''Award''. An award granted to a Non-Employee Director under the
Plan in the form of Options or Shares.
2.3 ''Board''. The Board of Directors of RCSB Financial, Inc.
2.4 ''The Company''. RCSB Financial, Inc.
2.5 ''Non-Employee Director''. A director of the Company who is not an
employee of the Company or any subsidiary of the Company.
2.6 ''Option''. An option to purchase Shares awarded under Article VIII
of this Plan in accordance with the 1992 RCSB Stock-Based Compensation Plan as
amended.
2.7 ''Option Grant Date''. The date upon which an Option is granted to
a Non-Employee Director.
2.8 ''Optionee''. A Non-Employee Director of the Company to whom an
Option has been granted or, in the event of such Non-Employee Director's death
prior to the expiration of an Option, such Non-Employee Director's executor,
administrator, beneficiary or similar person as provided in Section 9(c) of
the RCSB Financial, Inc. 1992 Stock-Based Compensation Plan.
2.9 ''Plan'' The RCSB Financial, Inc. Non-Employee Director Stock Plan,
as amended and restated from time to time.
- 1 -
<PAGE>
2.10 ''Quarterly Fees Earned''. The sum of one-fourth of the annual
retainer, Board Meeting and Committee Meeting fees and fees for services above
and beyond those services in connection with his or her Board and committee
responsibilities, payable to a Non-Employee Director for services as a
director of the Company during a calendar quarter.
2.11 ''Shares''. Shares of the Common Stock, par value $1.00 per share,
of the Company.
2.12 ''Stock Award Date''. The date on which Shares are awarded to a
Non-Employee Director.
2.15 ''Stock Award Fair Market Value''. For the purposes of this Plan,
the closing sale price of a Share of the Common Stock, as quoted in Nasdaq
National Market listings, on the Stock Award Date as defined in the Plan.
2.16 ''Stock Option Agreement''. A written agreement between a
Non-Employee Director and the Company evidencing an Option under the terms of
the RCSB Financial, Inc. 1992 Stock-Based Compensation Plan.
ARTICLE III
ADMINISTRATION OF THE PLAN
3.1 Administrator of the Plan. The Plan shall be administered by the
Human Resources Committee of the Board (''Committee'').
3.2 Authority of Committee. The Committee shall have full power and
authority to: (i) interpret and construe the Plan and adopt such rules and
regulations as it shall deem necessary and advisable to implement and
administer the Plan and (ii) designate persons other than members of the
Committee to carry out its responsibilities, subject to such limitations,
restrictions and conditions as it may prescribe, such determinations to be
made in accordance with the Committee's best business judgment as to the best
interests of the Company and its stockholders and in accordance with the
purposes of the Plan. The Committee may delegate administrative duties under
the Plan to one or more agents as it shall deem necessary or advisable.
3.3 Determinations of Committee. A majority of the Committee shall
constitute a quorum at any meeting of the Committee, and all determinations of
the Committee shall be made by a majority of its members. Any determination of
the Committee under the Plan may be made without a meeting of the Committee by
a written consent signed by all members of the Committee.
3.4 Effect of Committee Determinations. No member of the Committee or
the Board shall be personally liable for any action or determination made in
good faith with respect to the Plan or any Award or for any settlement of any
dispute between a Non-Employee Director and the Company. Any decision or
action taken by the Committee or the Board with respect to an Award or the
administration or interpretation of the Plan shall be conclusive and binding
upon all persons.
- 2 -
<PAGE>
ARTICLE IV
AWARDS UNDER THE PLAN
Awards in the form of Options shall be granted to Non-Employee Directors
under Article VIII of this Plan in accordance with the RCSB Financial, Inc.
1992 Stock-Based Compensation Plan as amended. Awards in the form of Shares
may be granted to Non-Employee Directors in accordance with Articles IX and X.
Each Option granted under the Plan shall be evidenced by a Stock Option
Agreement.
ARTICLE V
ELIGIBILITY
Non-Employee Directors of the Company shall be eligible to participate in
the Plan in accordance with Articles VIII, IX and X.
ARTICLE VI
SHARES SUBJECT TO THE PLAN
Subject to adjustment as provided in Article XII, the aggregate number of
Shares which may be issued upon the award of Shares shall not exceed 500,000
Shares. The aggregate number of Shares which may be issued upon the exercise
of Options is subject to the Shares available under Section 3 of the RCSB
Financial, Inc. 1992 Stock-Based Compensation Plan which determines the total
number of Shares which may be issued to employees or directors under that
Plan.
ARTICLE VII
THE RCSB FINANCIAL, INC. NON-EMPLOYEE DIRECTOR DEFERRED COMPENSATION PLAN
Non-Employee Directors may defer the payment of all or a specified
portion of the compensation payable to the Non-Employee Director, including
the annual retainer and meeting fees. The RCSB Financial, Inc. Non-Employee
Director Deferred Compensation Plan (''the Deferral Plan'') requires an
irrevocable election by the Director to make a deferral and the selection of a
Deferral Payment Date. The Deferral Plan allows the Non-Employee Director to
select a method to accrue interest earnings for prospective deferrals. One
method provides interest based on the average rate of return on assets of
Rochester Community Savings Bank while the other method provides earnings
based on the change in stock price and dividends paid on deferred shares paid
to a Non-Employee Director. The terms of the Deferral Plan shall govern any
deferrals elected by Non-Employee Directors under the terms of this Plan.
- 3 -
<PAGE>
ARTICLE VIII
NON-ELECTIVE OPTIONS
Each Non-Employee Director shall be granted Options, subject to the
following terms and conditions:
8.1 Time of Grant. On the fourth Wednesday of May each year, each
person who is a Non-Employee Director shall be granted an Option to purchase
1,000 Shares as provided by Section 11 of the RCSB Financial, Inc. 1992
Stock-Based Compensation Plan.
8.2 Terms of the Grant. All of the terms of the grant including, but
not limited to, the determination of the purchase price and all aspects of the
exercisability of the grant shall be determined in accordance with the terms
of the 1992 Stock-Based Compensation Plan.
ARTICLE IX
NON-ELECTIVE SHARES
Each Non-Employee Director shall be granted Shares, subject to the
following terms and conditions:
9.1 Time of Stock Award. On the first business day of each calendar
quarter each person who is a Non-Employee Director shall be granted Shares in
lieu of 20% of the Quarterly Fees Earned for the prior calendar quarter.
9.2 Number of Shares. The number of Shares granted pursuant to this
Article shall be the whole number of Shares equal to (i) 20% of the Quarterly
Fees Earned for the prior calendar quarter for the Non-Employee Director,
divided by (ii) the Stock Award Fair Market Value on the Stock Award Date. Any
fraction of a Share shall be disregarded and the remaining amount of such
Quarterly Fees Earned shall be paid in cash unless the Non-Employee Director
has elected to defer receipt of the compensation under the Deferral Plan.
Where no deferral election exists, the stock certificate representing such
Shares shall be issued and transferred to the Non-Employee Director, whereupon
the Non-Employee Director shall become a Shareholder of the Company with
respect to such Shares and shall be entitled to vote the Shares. In the event
the Non-Employee Director has elected to defer the compensation described in
this article under the Deferral Plan, fractional Shares of stock shall be
accumulated in the Deferral Plan and Shares in the Deferral Plan shall not be
issued until the Deferral Payment Date elected under the terms of that plan.
- 4 -
<PAGE>
ARTICLE X
ELECTIVE SHARES
Each Non-Employee Director shall be granted Shares, subject to the
following terms and conditions:
10.1 Time of Grant. On the first business day of each calendar quarter,
Shares shall be granted to each Non-Employee Director who, by December 31 of
the prior calendar year, files with the Committee or its designee a written
election to receive Shares in lieu of all or a portion of such Non-Employee
Director's Quarterly Fees Earned not already subject to Article IX of this
Plan. In the event a Non-Employee Director does not file a written election in
accordance with the preceding sentence by reason of becoming a Non-Employee
Director after January 1 of that year, Shares shall be granted to such
Non-Employee Director on the first day (the ''Effective Date'' ) which is six
months after the date such Non-Employee Director files with the Committee or
its designee a written election to receive Shares in lieu of all or a portion
of such Non-Employee Director's Quarterly Fees Earned not already subject to
Article IX of this Plan; provided, however, that such election may apply only
to the Non-Employee Director's Quarterly Fees Earned earned after the
Effective Date. An election pursuant to the first sentence of this Section
10.1 may be revoked or changed only on or prior to January 1 of any succeeding
calendar year.
10.2 Number of Shares. The number of Shares granted pursuant to this
Article shall be the whole number of Shares equal to (i) the portion of the
Quarterly Fees Earned for the prior calendar quarter which the Non-Employee
Director has elected pursuant to Section 10.1 shall be payable in Shares,
divided by (ii) the Stock Award Fair Market Value on the Stock Award Date. Any
fraction of a Share shall be disregarded and the remaining amount of such
Quarterly Fees Earned shall be paid in cash unless the Non-Employee Director
has elected to defer receipt of such compensation under the Deferral Plan.
Where no deferral election exists, the stock certificate representing such
Shares shall be issued and transferred to the Non-Employee Director, whereupon
the Non-Employee Director shall become a shareholder of the Company with
respect to such Shares and shall be entitled to vote the Shares. In the event
the Non-Employee Director has elected to defer the compensation described in
this article under the Deferral Plan, fractional shares of stock shall be
accumulated in the Deferral Plan and Shares in the Deferral Plan shall not be
issued until the Deferral Payment Date elected under the terms of that plan.
ARTICLE XI
AMENDMENT AND TERMINATION
The Board may amend the Plan from time to time or terminate the Plan at
any time; provided, however, that with regard to Options it complies with
Section 19 of the 1992 Stock-Based Compensation Plan.
- 5 -
<PAGE>
ARTICLE XII
ADJUSTMENT PROVISIONS
If the Company shall at any time change the number of issued Shares
without new consideration to the Company (such as by stock dividend, stock
split, recapitalization, reorganization, exchange of shares, liquidation,
combination or other change in corporate structure affecting the Shares) or
make a distribution of cash or property which has a substantial impact on the
value of issued Shares, the total number of Shares reserved for issuance under
the Plan shall be appropriately adjusted. Section 10 of the 1992 Stock-Based
Compensation Plan describes circumstances requiring an adjustment and the
effect of an adjustment on outstanding Options and available options.
ARTICLE XIII
EFFECTIVE DATE
The Plan shall be submitted to the shareholders of the Company for
approval and, if approved by a majority of all the votes cast at the 1996
Annual Meeting of Shareholders, shall become effective as of the date of
approval by the Board. If Shareholder approval is not obtained at the 1996
Annual Meeting of Shareholders, the Plan shall be nullified.
- 6 -
EXHIBIT 10.2
THE RCSB FINANCIAL, INC.
NON-EMPLOYEE DIRECTOR DEFERRED COMPENSATION PLAN
1. PURPOSE OF PLAN
The purpose of the RCSB Financial, Inc. Non-Employee Director Deferred
Compensation Plan (''Plan'') is to provide a procedure whereby members of the
Board of Directors of RCSB Financial, Inc. (''the Company'') who are not
employees of the Company or any of its subsidiaries (''Director'') may defer
the payment of all or a specified portion of the compensation payable to the
Director for services as a Director, including the annual retainer, meeting
fees, and fees payable to a Director for services above and beyond those
services in connection with his or her Board and committee responsibilities
(''Fees'').
2. ADMINISTRATION
The Plan shall be administered by a committee (''Committee'') consisting
of no fewer than two persons appointed from time to time by the Board of
Directors. Subject to the express provisions of the Plan, the Committee shall
have plenary authority in its discretion to interpret the Plan, to prescribe,
amend, and rescind rules and regulations relating to it, and to make all other
determinations deemed necessary or advisable for the administration of the
Plan. The determinations of the Committee on the foregoing matters shall be
conclusive and binding on all interested parties.
3. ELECTION TO DEFER
A Director may irrevocably elect, on or before December 31 of any year,
to defer payment of all or a specified portion of any unearned Fees scheduled
to be paid to such Director in succeeding calendar years. Such election shall
be effective on the first day of the calendar year following receipt by the
Secretary of the Company of written notice thereof.
4. DIRECTORS' ACCOUNTS
There shall be established for each Director participating in the Plan an
account on the books of the Company, to be designated as such Director's
deferred compensation account (''Account''). This Account shall contain one or
more sub-accounts as described below. All amounts deferred pursuant to the
Plan, together with any further amounts accrued thereon, as hereinafter
provided, shall be held in the general funds of the Company and shall
represent an unsecured claim against the general assets of the Company. Such
amounts shall be credited to the Director's Account. The Company shall furnish
quarterly or upon request to each participating Director a statement of such
Director's Account.
- 1 -
<PAGE>
A Director may elect that the balance in his or her Account be determined
by reference to one or a combination of the following factors (''Factors''),
provided that allocations must be made in multiples of 20%:
(A) the addition of interest, to be accrued during each quarter and to be
credited to such Account on the first business day following the end of such
quarter on the basis of the average balance in such Account during each
quarter, at a rate equal to the average rate of return on assets of the
Company for the quarter being credited (the ''Guaranteed Rate Sub-Account'');
or
(B) a number of shares (''Shares''), to be determined and valued in accordance
with the fair market value of Shares of the Company's Common Stock, $1.00 par
value per Share (''the Company Stock''), the method of such determination and
valuation being set forth in Attachment A to the Plan (''Company Stock
Sub-Account''), or
(C) for deferral elections made prior to January 1, 1996, a number of units
(Units), to be determined in accordance with the fair market value of the
Company's Common Stock, $1.00 par value per Share (''the Company Stock''), the
method of such determination and valuation being set forth in Attachment B of
the Plan (''the Share Unit Sub-Account'').
The Director's election as to the Factor or Factors to be referenced to
determine the balance in his or her Account and any change in such election,
shall be effective on the first day of the calendar year following receipt by
the Secretary of the Company of written notice thereof; provided, however,
that in the absence of any such election, the Factor for a Director's Account
shall be deemed to be the Guaranteed Rate Sub-Account; and provided further
that, during any period after the third anniversary of any Deferral Payment
Date, the remaining balance in a Director's Share Unit Sub-Account shall
thereafter be determined by the Guaranteed Rate Sub-Account.
5. PAYMENT FROM DIRECTORS' ACCOUNTS
At the time a Director elects to participate in the Plan, he or she shall
also make an election, which election shall be irrevocable, except as
hereinafter provided, as to his or her deferral payment date, which shall be
the first business day of a calendar year selected by the Director (''Deferral
Payment Date''); provided, however, that such year shall in no event be later
than the fifth calendar year following the calendar year in which the Director
shall have become ineligible for election or re-election as a Director under
the Company's By-Laws. In no event may a Deferral Payment Date be changed
except as provided in Section 6.
- 2 -
<PAGE>
Payment of the balance in a Director's Guaranteed Rate Sub-Account and
Share Unit Sub-Accounts shall be made in cash in a lump sum or in the number
of annual installments elected by such Director at the time of his or her
election of a Deferral Payment Date. Subsequently, the Committee may, with the
consent of a Director, on a one-time basis reduce the number of annual
installments (including a reduction to a lump sum payment) payable to such
Director, provided that any such reduction is made no later than 30 days prior
to such Director's Deferral Payment Date. The first installment or the lump
sum, as the case may be, shall be paid on the Deferral Payment Date, and
subsequent installments, if any, shall be paid on the first business day of
each succeeding calendar year until the entire remaining balance in a
Director's Account shall have been paid. When a Director is to receive the
balance of his or her Account in annual installments, each such annual
installment shall be a fraction of the balance in such Account on the date
such annual installment is to be paid, the numerator of which is one and the
denominator of which is the total number of installments then remaining to be
paid.
Payment of the balance in a Director's Company Stock Sub-Account shall be
made only as a single payment in Shares of the Company stock. The number of
Shares of Company Stock shall be equal to the number of whole Share
Equivalents credited to a Director's Company Stock Sub-Account as of the
Deferral Payment Date. The stock certificate representing such Shares shall be
issued and transferred to the Director on the Deferral Payment Date elected at
the time of his or her election of a Deferral Payment Date, whereupon the
Director shall become a shareholder of the Company with respect to such Shares
and shall be entitled to vote the Shares. Any fractional Share Equivalent
shall be paid in cash in a lump sum on the Deferral Payment Date.
6. PAYMENT IN EVENT OF DEATH OR HARDSHIP
If a Director should die before the balance in his or her Guaranteed Rate
Sub-Account or Share Unit Sub-Account shall have been paid in full, the
balance then remaining shall be paid promptly in a lump sum to such Director's
estate or to his or her designated beneficiary or beneficiaries. If a Director
should die before the balance in his or her Company Stock Sub-Account is paid,
a stock certificate representing such Shares shall be issued and transferred
to the Director's estate or designated beneficiary or beneficiaries. A
Director may designate one or more beneficiaries (which may be an entity other
than a natural person) to receive any payments to be made upon the Director's
death. At any time, and from time to time, any such designation may be changed
or canceled by the Director without notice to or the consent of any
beneficiary. Any such designation, change, or cancellation shall be effective
upon receipt by the Secretary of the Company of written notice thereof. If a
Director designates more than one beneficiary, any payments to such
beneficiaries shall be made in equal Shares unless the Director has designated
otherwise. If no beneficiary has been named by the Director, or if the
designated beneficiary or beneficiaries shall have predeceased him or her, or
shall no longer exist, the balance shall be paid to the Director's estate.
The Committee may, at any time, under rules which it may prescribe,
direct the Company to pay in a lump sum to a Director all or any portion of
the balance then in the Director's Accounts, if the Committee finds, in its
sole discretion, that continued deferral of all or any portion of such balance
shall result in a financial hardship to such Director or that such Director
has become disabled. In the case of a then existing election to defer, the
Committee's determination to pay all or any portion of such balance shall
immediately operate as a termination of such election to defer.
- 3 -
<PAGE>
7. TERMINATION OF ELECTION TO DEFER
A Director may at any time terminate his or her election to defer payment
of Fees. Such termination shall become effective on the last day of the
calendar year in which written notice thereof is received by the Secretary of
the Company; provided, however, that any balance in the Account of a Director
prior to the effective date of termination of an election to defer shall not
be affected thereby and shall be paid only in accordance with Sections 5 and
6. A Director who has filed a termination of election to defer or whose
election to defer has been terminated in accordance with Section 6 may
thereafter again file an election to defer in accordance with Section 3.
8. NONASSIGNABILITY
During a Director's lifetime, the right to the balance in his or her
Account shall not be transferable or assignable. Nothing contained in the Plan
shall create, or be deemed to create, a trust, actual or constructive, for the
benefit of a Director or his or her beneficiary, or shall give, or be deemed
to give, to any Director or his or her beneficiary any interest in any
specific assets of the Company. The right of a Director to receive future
payments under the Plan shall be an unsecured claim against the general assets
of the Company.
9. AMENDMENT
The Board of Directors of the Company may, at any time, without the
consent of the participants, amend, suspend, or terminate the Plan. Subject to
any applicable laws and regulations, no amendment, suspension, or termination
of the Plan shall operate to annul an election already in effect for the then
current year or for any preceding calendar year and Fees shall continue to be
deferred until the end of such current calendar year in accordance with a
Director's then current election; and the balance in the Director's Account
shall continue to be Payable in accordance with a Director's then current
election and, until paid, to be measured by a factor to be determined from
time to time by the Committee.
10. GOVERNING LAW
The Plan shall be construed and enforced according to the laws of the
State of New York, and all the provisions thereof shall be administered
according to the laws of said State.
11. SEVERABILITY OF PROVISIONS
If any of the provisions of the Plan or the application thereof to any
Director shall be held invalid, neither the remainder of the Plan nor its
application to any other Director shall be affected thereby.
- 4 -
<PAGE>
12. PRIOR PLAN
This Plan is intended to supersede, in all respects, the RCSB Deferred
Compensation Plan for Directors and the Fee Deferral Plan for Trustees
(''Prior Plans'') previously adopted by the then Board of Directors or
Trustees of The Rochester Community Savings Bank, and its predecessors, which
Prior Plans were effective as of November 10, 1986 and January 1, 1980,
respectively. The Prior Plans shall be terminated as of the effective date of
this Plan provided, however, that such termination shall not affect the rights
of any director, trustee, former director or trustee, or beneficiary in a
deferred fee account as it exists prior to the effective date of this Plan.
Any individual with an account balance in the Prior Plans may, by written
election to be effective on the first day of the calendar year following its
receipt by the Secretary of the Company, elect to have the balance in such
account hereafter determined by reference o either or both Factor (A) or (B)
as described in Section 4 of this Plan.
13. EFFECTIVE DATE
The plan is hereby amended, effective on the date of approval by
shareholders at the 1996 Annual Meeting of Shareholders. If such Shareholder
approval is not obtained at the 1996 Annual Meeting of Shareholders, the
amendments to the plan contained herein and any anticipatory elections made
under this Plan shall be nullified.
- 5 -
<PAGE>
ATTACHMENT A
DEFINITIONS
(a) ''Common Stock''. The Common Stock of RCSB Financial, Inc.
(b) ''Share or Shares'' means one or more shares of Common Stock, par
value $1.00, of the Company.
(c) ''Fair Market Value''. For the purposes of this Plan the closing
sale price of a share of Common Stock, as quoted by the Nasdaq National
Market, on the Stock Award Date, as defined in the Plan.
(d) ''Valuation Date''. The earlier of the date on which a Director's
election to decrease the portion of his or her Company Stock Sub-Account is
effective, or the ''Deferral Payment Date'', as defined in the Plan.
(e) ''Share Equivalents''. Describes the sum of: (1) the number of
Shares determined by dividing the deferral amount by the Fair Market Value of
the Common Stock on the first business day following the end of each quarter
for which a deferral is elected in accordance with the Plan, and (2) for each
dividend paid by the Company, a number of additional Share Equivalents
determined in accordance with the following paragraph. Equivalents are not
Shares of Common Stock and have none of the voting powers associated with
Shares.
AWARDING OF SHARE EQUIVALENTS
The Company shall, on the first day of each calendar quarter, credit to a
Director's Company Stock Sub-Account an amount of Share Equivalents equal to
the value of all or part of the Director's Quarterly Fees Earned elected to be
deferred in accordance with the Plan divided by the Fair Market Value of the
Common Stock. In addition, the Company shall, on the payment date for each
dividend payment, credit to Director's Company Stock Sub-Account Share
Equivalents determined by a number, the numerator of which is the per Share
value of the dividend multiplied by the number of Share Equivalents credited
to the Director's Company Stock Sub-Account as of the record date and the
denominator of which is the Fair Market Value of the Common Stock on the
dividend payment date.
VALUATION OF SHARE EQUIVALENTS
Share Equivalents are valued as of any date by multiplying the number of
Share Equivalents in a Director's Company Stock Sub-Account by the Fair Market
Value of the Common Stock on the date for which the valuation is made.
Accordingly, the valuation of the Company Stock Sub-Account will change as the
Fair Market Value of the Common Stock changes and will appreciate and
depreciate with the changing Fair Market Value.
- 6 -
<PAGE>
TRANSFERS INTO AND OUT OF THE COMPANY STOCK SUB-ACCOUNT
In the event a Director elects to transfer amounts from the Guaranteed
Rate Sub-Account or the Share Unit Sub-Account in accordance with the Plan
into the Company Stock Sub-Account, such transfer will be made effective the
first business day in January following the transfer election and the number
of Equivalent Shares will be determined by dividing the value of the
transferred amount by the Fair Market Value as of the transfer date. In the
event a Director elects to transfer amounts from the Company Stock Sub-Account
in accordance with the Plan into the Guaranteed Rate Sub-Account or the Share
Unit Sub-Account, such transfer will be made effective the first business day
in January following the transfer election and will be determined by
multiplying the number of Equivalent Shares transferred by the Fair Market
Value as of the transfer date.
CHANGES IN STOCK
In the event that (a) the number of outstanding shares of Common Stock
shall be changed by reason of split-ups, combinations of shares,
recapitalizations, stock dividends or otherwise, or (b) the Common Stock is
converted into or exchanged for other shares as a result of any merger or
consolidation (including a sale of assets) or other recapitalization, the
number of Units then credited to the account of any Director and the Initial
Value of all Share Units included therein shall be appropriately adjusted so
as to reflect such change.
- 7 -
<PAGE>
ATTACHMENT B
DEFINITIONS
(a) ''Common Stock''. The common stock of RCSB Financial, Inc., (''the
Company'').
(b) ''Share Unit''. Subject to the provisions herein, the equivalent of one
(1) share of Common Stock.
(c) ''Initial Value''. Unless the Committee shall determine otherwise, the
closing sale price of a share of Common Stock, as quoted by the Nasdaq
National Market, on the date of credit of Share Units.
(d) ''Valuation Date''. The earlier of the date on which a Director's
election to decrease the portion of his or her account to be determined by
reference to this factor is effective, or the ''Deferral Payment Date'' as
defined in the Plan.
(e) ''Maturity Value''. The closing sale price of a share of Common Stock,
as quoted by the Nasdaq National Market, on the Valuation Date.
(f) ''Dividend Unit''. The equivalent of that number of shares of Common
Stock obtained by dividing the fair value of any dividend or other
distribution paid or made by the Company with respect to a share of its Common
Stock (but not including a distribution of Common Stock) by the average of the
means between the high and low sales prices of a share of Common Stock, as
quoted on the Nasdaq National Market, for the five (5) consecutive days
commencing on the date on which the Common Stock first trades ''ex'' such
dividend or distribution. In the case of a cash dividend, the ''fair value''
thereof shall be such amount as shall be determined in good faith by the
Committee.
(g) ''Units''. Share Units and Dividend Units, collectively.
SHARE UNIT ACCOUNTS
The Company shall, at such times as credits are made to Accounts under
the Plan, record in a ledger (the ''Ledger'') with respect to each Director
who has elected to have the value of all or a part of his or her account to be
determined by reference to this factor, a number of Share Units which shall be
equal to that percentage of the amount credited to such Director's Account
under the Plan as will be determined by this factor divided by the Initial
Value. Whenever the Company shall pay any dividend (other than in Common
Stock) upon issued and outstanding Common Stock, or shall make a distribution
(other than in Common Stock) with respect thereto, there shall be credited to
such Ledger such number of Dividend Units as shall be allocable to the Share
Units then credited to such Ledger. In the event that any Director shall at
any time decrease the portion of his or her account to be determined by
reference to this factor, then there shall be removed from the Ledger on the
effective date of such decrease a number of Share Units which shall be a
fraction of the number of Share Units then recorded in the Ledger, the
numerator of which fraction shall be the new percentage to be determined by
reference to this factor and the denominator of which shall be the percentage
theretofore determined by reference to this factor.
- 8 -
<PAGE>
VALUATION OF UNITS
The value of that portion of a Director's account to be determined by
reference to this factor shall be determined on the Valuation Date and shall
consist of the sum of (a) the designated portion of the balance in the Account
under the Plan and (b) the excess, if any, of the Maturity Value over the
Initial Value of all Share Units included in the Ledger in the case of a
valuation made on the Deferral Payment Date or the excess, if any, of the
Maturity Value over the Initial Value with respect to that portion of the
Share Units as to which this factor will no longer be referenced in the case
of a valuation made on any other date, and (c) the Maturity Value of the
Dividend Units included in the Ledger. In the event that any Director has
elected to receive the balance of his or her Account in annual installments,
then, any balance in the Account shall, from and after the Deferral Payment
Date, bear interest at the Guaranteed Rate, as defined in the Plan.
CHANGES IN STOCK
In the event that (a) the number of outstanding shares of Common Stock
shall be changed by reason of split-ups, combinations of shares,
recapitalizations, stock dividends or otherwise, or (b) the Common Stock is
converted into or exchanged for other shares as a result of any merger or
consolidation (including a sale of assets) or other recapitalization, the
number of Units then credited to the Ledger of any Director and the Initial
Value of all Share Units included therein shall be appropriately adjusted so
as to reflect such change.
- 9 -
EXHIBIT 10.3
AMENDMENT TO THE
ROCHESTER COMMUNITY SAVINGS BANK
1992 STOCK BASED COMPENSATION PLAN
WHEREAS, Rochester Community Savings Bank (the "Bank") sponsors its
1992 Stock-Based Compensation Plan (the "Plan"), and
WHEREAS, the Bank is a wholly owned subsidiary of RCSB Financial,
Inc. (the "Parent"), and
WHEREAS, the Parent wishes to amend the Plan concerning the stock
options provided to directors who serve on the Board of Directors of the
Parent,
NOW, THEREFORE, the Plan is amended as follows:
1. Section 1 of the Plan titled "Introduction and Statement of
Purpose", is amended to read in full as follows:
This Stock-Based Compensation Plan (the "Plan") is intended to
encourage stock ownership by selected officers, employees, and directors of
RCSB Financial, Inc. (the "Bank"), and its wholly owned subsidiaries
(collectively, the "Subsidiaries" and individually, a "Subsidiary"), in order
to increase their proprietary interest in the success of the Bank and to
encourage them to remain in the employ of the Bank or a Subsidiary. Options
granted under this Plan may be either Incentive Stock Options (as defined and
provided for in Section 5(a) of this Plan) or Nonstatutory Stock Options (as
defined and provided for in Section 5(b) of this Plan), and shall be
determined in each specific case by a duly appointed committee of the Board of
Directors of the Bank (the "Committee") as hereinafter provided. As used in
this Plan, the term "option" shall refer to either Incentive Stock Options or
Nonstatutory Stock Options, or both.
2. Subsection (a) of Section 10 of the Plan, titled "Adjustment
Upon Changes in Capitalization: Changes in Control", is amended to delete the
reference to approval of the Superintendent of Banks of the State of New York
- 1 -
<PAGE>
3. Section 11 of the Plan, titled "Director Stock Options", is
hereby amended to read in full as follows:
(a) On the fourth Wednesday of May following the director's election at
the annual meeting of shareholders of the Bank and on the fourth Wednesday of
each May thereafter during such director's term, each director of the Bank who
is not otherwise an employee of the Bank or a Subsidiary shall automatically
be granted Nonstatutory Stock Options to purchase 1,000 shares of the Bank's
Stock. Any director's stock option granted hereunder shall be fully vested on
the date of grant.
(b) Automatic director stock option grants shall only be made if, as of
each date of grant (i) there remains in effect a standing resolution duly
adopted by the Board of Directors authorizing such grants, which resolution
may not be adopted or rescinded more frequently than once each year, (ii) the
director is not otherwise an employee of the Bank or a Subsidiary, (iii) the
director has not been an employee of the Bank or a Subsidiary for any part of
the preceding year, and (iv) the director has served on the Board of Directors
continuously since the commencement of his or her term.
IN WITNESS WHEREOF, this Amendment has been executed this 22nd day
of November, 1995.
RCSB FINANCIAL, INC.
By: /s/ Paula D. Dolan
Title: Sr. Vice President/Administration
- 2 -
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM RCSB
FINANCIAL, INC'S QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED MAY 31,
1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<CIK> 0000840068
<NAME> RCSB FINANCIAL, INC.
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1996
<PERIOD-END> MAY-31-1996
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0
2989
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