SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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 June 30, 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: 0-21386
T R FINANCIAL CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 11-3154382
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
1122 FRANKLIN AVENUE, GARDEN CITY, NEW YORK 11530
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(516) 742-9300
(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 for the past 90 days.
Yes X No
----- -----
As of August 8, 1996, there were 8,955,305 shares of the Registrant's
common stock outstanding.
<PAGE>
FORM 10-Q
T R FINANCIAL CORP.
INDEX
Page
PART I - FINANCIAL INFORMATION Number
- ------------------------------ ------
ITEM 1. Financial Statements - Unaudited
Consolidated Statements of Financial
Condition at June 30, 1996 and
December 31, 1995 3
Consolidated Statements of Income for
the three and six months ended
June 30, 1996 and 1995 4
Consolidated Statement of Stockholders'
Equity for the six months ended
June 30, 1996 5
Consolidated Statements of Cash Flows for
the six months ended June 30, 1996
and 1995 6
Notes to Unaudited Consolidated
Financial Statements 7-12
ITEM 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 13-21
PART II - OTHER INFORMATION
- ---------------------------
ITEM 1. Legal Proceedings 22
ITEM 2. Changes in Securities 22
ITEM 3. Defaults Upon Senior Securities 22
ITEM 4. Submission of Matters to a Vote of
Security Holder 22
ITEM 5. Other Information 22
ITEM 6. Exhibits and Reports on Form 8-K 22
Signature Page 23
2
<PAGE>
<TABLE>
<CAPTION>
T R FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
June 30, December 31,
ASSETS 1996 1995
- ------ ------------- --------------
<S> <C> <C>
Cash and cash equivalents $26,290 $21,204
Trading account securities 2,952 --
Securities available for sale:
Bonds and equities 291,935 304,154
Mortgage-backed securities 148,406 226,842
---------- ----------
Total securities available for sale 440,341 530,996
---------- ----------
Securities held to maturity, net (estimated market value of $925,687 and
$880,197 at June 30, 1996 and December 31, 1995, respectively):
Bonds 57,588 98,792
Mortgage-backed securities 873,135 756,831
---------- ----------
Total securities held to maturity, net 930,723 855,623
---------- ----------
Loans, net of deferred income 1,596,868 1,423,574
Allowance for possible loan losses (14,152) (13,267)
---------- ---------
Net loans 1,582,716 1,410,307
---------- ----------
Other real estate owned, net 4,691 6,547
Banking house and equipment, net 11,634 11,877
Accrued interest receivable 20,721 20,223
Federal Home Loan Bank stock, at cost 32,628 33,603
Deferred tax asset, net 8,132 4,410
Other assets 12,630 9,833
---------- ----------
Total Assets $3,073,458 $2,904,623
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Due to depositors $2,165,974 $2,038,341
Borrowed funds 652,550 594,563
Mortgagors' escrow deposits 17,076 16,852
Accounts payable and accrued expenses 8,131 12,987
Official checks outstanding 17,969 25,102
Accrued taxes payable 2,698 3,095
Other liabilities 18,131 13,999
---------- ----------
Total liabilities 2,882,529 2,704,939
---------- ---------
Commitments and contingencies -- --
Stockholders' equity:
Preferred stock, $.01 par value, 5,000,000 shares authorized; none issued -- --
Common stock, $.01 par value, 30,000,000 shares authorized;
11,362,000 shares issued; 8,915,189 shares and 9,480,557 shares outstanding
at June 30, 1996 and December 31, 1995, respectively 114 114
Additional paid-in-capital 102,576 101,063
Retained earnings, partially restricted 144,895 133,111
Net unrealized appreciation (depreciation)
in certain securities, net of tax (3,379) 4,230
Less:Unallocated common stock held by ESOP (6,206) (6,763)
Unearned common stock held by Bank's Recognition and Retention
Plans and Trusts (RRP's) (424) (907)
Common stock held by Bank's Supplemental Executive Retirement
Plan and Trust, at cost (38,321 shares and 25,110 shares at
June 30, 1996 and December 31, 1995, respectively) (700) (351)
Treasury stock, at cost (2,446,811 shares and 1,881,443 shares
at June 30, 1996 and December 31, 1995, respectively) (45,947) (30,813)
---------- ----------
Total stockholders' equity 190,929 199,684
---------- ----------
Total liabilities and stockholders' equity $3,073,458 $2,904,623
========== ==========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
T R FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
For the For the
three months ended six months ended
JUNE 30, JUNE 30,
------------------------------------ ---------------------------
1996 1995 1996 1995
--------------- ------------------ -------------- ----------
(in thousands, except per share amounts)
<S> <C> <C> <C> <C>
Interest income:
Mortgage loans $ 27,732 $ 22,213 $ 53,800 $ 43,826
Mortgage-backed securities 18,972 15,659 37,344 29,140
Bonds, equities and other investments 5,617 8,832 11,883 17,764
Other loans 1,599 1,190 3,051 2,152
-------- -------- -------- --------
Total interest income 53,920 47,894 106,078 92,882
-------- -------- -------- --------
Interest expense:
Deposits 24,379 22,358 48,390 42,212
Borrowed funds 8,969 8,317 17,538 16,692
-------- -------- -------- --------
Total interest expense 33,348 30,675 65,928 58,904
-------- -------- -------- --------
Net interest income before provision
for possible loan losses 20,572 17,219 40,150 33,978
Provision for possible loan losses 500 950 1,000 1,550
-------- -------- -------- --------
Net interest income after provision
for possible loan losses 20,072 16,269 39,150 32,428
-------- -------- -------- --------
Non-Interest income:
Loan fees and other charges, net 1,544 1,360 2,991 2,636
Net gain on sales of securities 2,004 2,285 4,759 2,183
Gain on sales of whole loans 2 15 3 15
Other income 258 365 675 747
-------- -------- -------- --------
Total non-interest income 3,808 4,025 8,428 5,581
-------- -------- -------- --------
Non-Interest expense:
Salaries and employee benefits 6,178 5,751 12,504 11,514
Occupancy and equipment expense 1,196 1,067 2,493 2,129
Marketing expense 603 649 1,271 1,435
Other real estate owned expense 292 653 661 990
FDIC assessment -- 923 1 1,847
Other operating expense 2,611 2,721 4,762 4,599
-------- -------- -------- --------
Total non-interest expense 10,880 11,764 21,692 22,514
-------- -------- -------- --------
Income before provision for income taxes 13,000 8,530 25,886 15,495
Provision for income taxes 5,786 3,782 11,488 6,856
-------- -------- -------- --------
Net income $ 7,214 $ 4,748 $ 14,398 $ 8,639
======== ======== ======== ========
Net income per common and common
equivalent share $ 0.82 $ 0.50 $ 1.62 $ 0.90
======== ======== ======== ========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
T R FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(UNAUDITED)
For the
six months ended
June 30, 1996
----------------------------
(in thousands except share
and per share amounts)
<S> <C>
Common Stock (Par Value)
- ------------------------
Balance at beginning and end of period............................................. $ 114
----------
Additional Paid-in Capital
- --------------------------
Balance at beginning of period..................................................... 101,063
Excess of ESOP compensation cost measured
using fair value of stock over its related cost................................. 1,046
Increase in common stock held by Supplemental
Executive Retirement Plan and Trust............................................. 349
Tax benefit attributable to vested RRP shares...................................... 118
----------
Balance at end of period........................................................... 102,576
----------
Retained Earnings, Partially Restricted
- ---------------------------------------
Balance at beginning of period..................................................... 133,111
Net income....................................................................... 14,398
Cash dividends declared ($0.30 per share) (2,467)
Loss on reissuances of treasury stock (39,632 shares)............................ (147)
-----------
Balance at end of period........................................................... 144,895
-----------
Unallocated/Unearned Common Stock Held by Stock Plans
- -----------------------------------------------------
Balance at beginning of period..................................................... (7,670)
Amortization relating to allocation of ESOP stock and
earned portion of RRP.......................................................... 1,040
-----------
Balance at end of period........................................................... (6,630)
-----------
Common Stock Held by Supplemental Executive
- -------------------------------------------
Retirement Plan and Trust
- -------------------------
Balance at beginning of period..................................................... (351)
Increase in carrying value of common stock held.................................. (349)
-----------
Balance at end of period........................................................... (700)
-----------
Unrealized Appreciation (Depreciation) in certain
- -------------------------------------------------
Securities, net of tax
- ----------------------
Balance at beginning of period..................................................... 4,230
Decrease in net unrealized appreciation in certain securities, net of tax........ (7,609)
-----------
Balance at end of period........................................................... (3,379)
-----------
Treasury Stock
- --------------
Balance at beginning of period..................................................... (30,813)
Treasury stock purchased, at cost (605,000 shares)............................... (15,637)
Exercise of stock options (39,632 shares)........................................ 503
-----------
Balance at end of period........................................................... (45,947)
-----------
Total stockholders' equity......................................................... $ 190,929
===========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
T R FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the six months ended June 30,
1996 1995
----------- ----------
(in thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ................................................................ $ 14,398 $ 8,639
Adjustments to reconcile net income to net cash provided (used)
by operating activities:
Provision for possible loan losses ...................................... 1,000 1,550
Provision for possible other real estate owned losses ................... 82 255
Depreciation of banking house and equipment ............................. 791 688
Net gain on calls of securities held to maturity ........................ (30) --
Net gain on sales of securities ......................................... (4,776) (2,169)
Gain on sales of whole loans ............................................ (3) (15)
Net gain on sale of other real estate owned ............................. (74) (313)
Net deferred loan origination costs ..................................... 278 221
Accretion of unearned discounts, net of amortization of premiums ........ 694 312
Income taxes deferred or credited to equity ............................. 118 404
Amortization relating to allocation and earned portions of stock plans .. 2,086 1,618
Increase/decrease in:
Trading account securities .............................................. (2,952) --
Accrued interest receivable ............................................. (498) (1,288)
Accounts payable and accrued expenses ................................... (4,856) (981)
Official checks outstanding ............................................. (7,133) (10,540)
Other assets ............................................................ (539) (3,720)
Accrued taxes payable ................................................... (397) 280
Other liabilities ....................................................... 4,132 3,681
--------- ---------
Net cash provided (used) by operating activities ..................... 2,321 (1,378)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for the purchase of:
Securities held to maturity and FHLB Capital Stock ...................... (203,656) (240,321)
Securities available for sale ........................................... (221,491) (166,196)
Banking house and equipment ............................................. (548) (1,191)
Proceeds from:
Redemption of FHLB Capital Stock and calls of held to maturity securities 17,051 12,000
Sales of securities available for sale .................................. 267,121 173,672
Repayments on securities ................................................ 148,028 177,562
Sales of whole loans .................................................... 550 1,234
Principal collected on real estate loans ................................ 74,571 43,061
Sales of other real estate owned ........................................ 6,087 8,671
Principal collected on other loans ...................................... 10,027 7,125
Real estate loans originated and purchased ................................ (233,378) (110,254)
Other loans originated and purchased ...................................... (29,693) (24,590)
--------- ---------
Net cash used in investing activities ................................. (165,331) (119,227)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Interest credited to deposits ............................................. 48,390 32,234
Net deposits in savings accounts, certificate of deposit accounts,
money market accounts and checking accounts ............................. 79,243 178,518
Net deposits to escrow accounts ........................................... 224 353
Net proceeds from (repayments of) short-term borrowed funds ............... 53,000 (57,500)
Repayments of long-term borrowed funds .................................... (33,913) (48,256)
Proceeds from long-term borrowed funds .................................... 38,900 40,119
Net proceeds from exercise of stock options ............................... 356 810
Purchase of treasury stock ................................................ (15,637) (6,947)
Cash dividends paid ....................................................... (2,467) (1,380)
--------- ---------
Net cash provided by financing activities .............................. 168,096 137,951
--------- ---------
Net increase in cash and cash equivalents ................................. 5,086 17,346
Cash and cash equivalents at beginning of period .......................... 21,204 39,818
--------- ---------
Cash and cash equivalents at end of period ................................ $ 26,290 $ 57,164
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes ................................................ $ 11,718 $ 6,204
========= =========
Cash paid for interest on deposits and borrowed funds ..................... $ 27,189 $ 27,516
========= =========
Non-cash investing activities:
Additions to other real estate owned, net ............................... $ 4,239 $ 13,581
========= =========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
6
<PAGE>
T R FINANCIAL CORP. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements include the
accounts of T R Financial Corp. ("T R Financial"), its direct wholly-owned
subsidiary Roosevelt Savings Bank (the "Bank"), and the subsidiaries of the Bank
(collectively the "Company").
The unaudited consolidated financial statements included herein reflect all
normal recurring adjustments which are, in the opinion of management, necessary
to present a fair statement of the results for the interim periods presented.
The results of operations for the three and six months ended June 30, 1996 are
not necessarily indicative of the results of operations that may be expected for
the entire year. Certain information and note disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to the rules and regulations
of the U.S. Securities and Exchange Commission.
These unaudited consolidated financial statements should be read in conjunction
with the audited consolidated financial statements and notes thereto included in
the Company's Annual Report to Stockholders for the year ended December 31,
1995.
2. EARNINGS PER SHARE
Earnings per share is computed by dividing net income by the weighted average
number of shares of common stock and dilutive common stock equivalents
outstanding. For the three and six months ended June 30, 1996, the weighted
average number of shares of common stock and common stock equivalents
outstanding was 8,809,224 (9,482,977 for the equivalent period in 1995) and
8,894,760 (9,562,147 for the equivalent period in 1995), respectively. For the
three and six months ended June 30, 1996 such shares have been reduced, in
accordance with the provisions of Statement of Position 93-6, by the weighted
average number of unallocated shares of common stock held by the Company's
Employee Stock Ownership Plan ("ESOP") of 703,349 (835,933 for the equivalent
period in 1995) and 719,258 (851,842 for the equivalent period in 1995),
respectively.
3. DEBT AND EQUITY SECURITIES
The following tables set forth certain information regarding amortized cost,
estimated fair values and gross unrealized gains and losses on debt and equity
securities of the Company at June 30, 1996 and December 31, 1995, respectively.
7
<PAGE>
<TABLE>
<CAPTION>
JUNE 30, 1996
---------------------------------------------------------------------------------
Amortized Estimated GROSS UNREALIZED
COST FAIR VALUE GAINS LOSSES
--------- ---------- ----- ------
<S> <C> <C> <C> <C>
Available for Sale:
Bonds and equities:
United States Government
obligations $184,062 $182,890 $ 281 ($ 1,453)
Federal agency obligations 89,061 87,383 123 (1,801)
Public utility bonds 489 473 -- (16)
Industrial, financial corporation
and other bonds 5,091 5,203 112 --
Common and preferred stocks 14,936 15,986 1,199 (149)
-------- -------- -------- --------
Total bonds and equities 293,639 291,935 1,715 (3,419)
-------- -------- -------- --------
Mortgage-backed securities:
FNMA, net (1) 34,541 34,702 491 (330)
GNMA, net 83,066 83,438 751 (379)
FHLMC, net (1) 29,997 30,266 508 (239)
-------- -------- -------- --------
Total mortgage-backed securities 147,604 148,406 1,750 (948)
-------- -------- -------- --------
Total available for sale $441,243 $440,341 $ 3,465 ($ 4,367)
======== ======== ======== ========
Held to Maturity, Net:
Bonds:
Federal agency obligations $ 6,000 $ 5,895 $ -- ($ 105)
Public utility bonds 1,001 957 -- (44)
Municipal bonds 7,867 7,980 131 (18)
Industrial, financial corporation
and other bonds 42,720 42,731 221 (210)
-------- -------- -------- --------
Total bonds 57,588 57,563 352 (377)
-------- -------- -------- --------
Mortgage-backed securities:
FNMA, net(2) 103,700 100,197 157 (3,660)
GNMA, net 662,078 663,675 9,802 (8,205)
FHLMC, net (2) 104,452 101,183 640 (3,909)
CMOs, net (2) 2,905 3,069 164 --
-------- -------- -------- --------
Total mortgage-backed securities 873,135 868,124 10,763 (15,774)
-------- -------- -------- --------
Total held to maturity, net $930,723 $925,687 $ 11,115 ($16,151)
======== ======== ======== ========
</TABLE>
(1) Includes securities which were transferred on December 15, 1995 from held to
maturity to available for sale after having been previously transferred on March
31, 1995 from available for sale to held to maturity. As of June 30, 1996 the
amortized cost of these securities was reduced by $1,799,000 of gross unrealized
losses existing as of March 31, 1995, adjusted for subsequent accretion and
sales of these securities.
(2) Includes securities which were transferred on March 31, 1995 from available
for sale to held to maturity. As of June 30, 1996 the amortized cost of these
securities was reduced by $3,332,000 of gross unrealized losses existing as of
March 31, 1995, adjusted for subsequent accretion.
8
<PAGE>
<TABLE>
<CAPTION>
DECEMBER 31, 1995
--------------------------------------------------------------------------------
Amortized Estimated GROSS UNREALIZED
COST FAIR VALUE GAINS LOSSES
--------- ---------- ----- ------
<S> <C> <C> <C> <C>
Available for Sale:
Bonds and equities:
United States Government obligations $178,699 $182,584 $ 4,088 ($ 203)
Federal agency obligations 82,318 83,139 956 (135)
Public utility bonds 804 795 7 (16)
Industrial, financial corporation
and other bonds 26,420 27,289 869 --
Common and preferred stocks 9,067 10,347 1,322 (42)
-------- -------- -------- --------
Total bonds and equities 297,308 304,154 7,242 (396)
-------- -------- -------- --------
Mortgage-backed securities:
FNMA, net (1) 48,717 50,379 1,750 (88)
GNMA, net 125,056 128,569 3,575 (62)
FHLMC, net (1) 37,546 39,343 1,841 (44)
CMOs, net (1) 8,235 8,551 316 --
-------- -------- -------- --------
Total mortgage-backed securities 219,554 226,842 7,482 (194)
-------- -------- -------- --------
Total available for sale $516,862 $530,996 $ 14,724 ($ 590)
======== ======== ======== ========
Held to Maturity, Net:
Bonds:
Federal agency obligations $ 14,424 $ 14,432 $ 24 ($ 16)
Public utility bonds 1,050 1,021 1 (30)
Municipal bonds 7,962 8,208 258 (12)
Industrial, financial corporation
and other bonds 75,131 75,048 378 (461)
Canadian Bonds 225 243 18 --
-------- -------- -------- --------
Total bonds 98,792 98,952 679 (519)
-------- -------- -------- --------
Mortgage-backed securities:
FNMA, net(2) 109,281 109,210 664 (735)
GNMA, net 533,301 553,292 20,595 (604)
FHLMC, net (2) 111,347 115,630 4,450 (167)
CMOs, net (2) 2,902 3,113 211 --
-------- -------- -------- --------
Total mortgage-backed securities 756,831 781,245 25,920 (1,506)
-------- -------- -------- --------
Total held to maturity, net $855,623 $880,197 $ 26,599 $ 2,025
======== ======== ======== ========
</TABLE>
(1) Includes in the aggregate $48,462,000 of securities which were transferred
on December 15, 1995 from held to maturity to available for sale after having
been previously transferred on March 31, 1995 from available for sale to held to
maturity. As of December 31, 1995 the amortized cost of these securities was
reduced by $2,873,000 of gross unrealized losses existing as of March 31, 1995
and adjusted for subsequent accretion.
(2) Includes in the aggregate $97,948,000 of securities which were transferred
on March 31, 1995 from available for sale to held to maturity. As of December
31, 1995 the amortized cost of these securities was reduced by $3,706,000 of
gross unrealized losses existing as of March 31, 1995 and adjusted for
subsequent accretion.
9
<PAGE>
4. EMPLOYEE STOCK OWNERSHIP PLAN
The Company recognizes compensation expense attributable to its ESOP ratably
over the year based upon the estimated number of ESOP shares to be allocated
each December 31st. The amount of compensation expense recorded is equal to the
estimate of shares to be allocated by the ESOP multiplied by the average fair
value of the underlying shares during the period. For the three months ended
June 30, 1996 and 1995, compensation expense attributable to the ESOP was
$818,000 and $580,000, respectively. The average fair value of the underlying
shares for the three months ended June 30, 1996 and 1995 was $26.46 and $17.59,
respectively. For the six months ended June 30, 1996 and 1995, compensation
expense attributable to the ESOP was $1,604,000 and $1,065,000, respectively.
The average fair value of the underlying shares for the six months ended June
30, 1996 and 1995 was $25.93 and $16.15, respectively.
5. STOCKHOLDERS' EQUITY
During the three months ended June 30, 1996, the Company repurchased 40,000
shares of its common stock at an aggregate cost of $1,055,000. For the six
months ended June 30, 1996, a total of 605,000 shares have been repurchased at
an aggregate cost of $15,637,000.
During the six months ended June 30, 1996, dividends totaling $2,467,000 were
paid, representing two declarations of $0.14 per common share (or $1,155,000
paid on March 1, 1996) and $0.16 per common share (or $1,312,000 paid on June 3,
1996).
6. CONTINGENCIES
On February 6, 1995, the Superintendent of Banks of the State of New York (the
"Superintendent") took possession of Nationar, a check-clearing and trust
company, freezing all of its assets. The Bank used Nationar for certain
depository and collection services and maintained deposit balances with Nationar
in connection therewith.
The Bank filed claims against Nationar in accordance with the procedures
established under the Banking Law of the State of New York, and all but $11,789
of the Bank's deposit claims were accepted by the Superintendent and approved by
the court.
The Superintendent obtained judicial approval to pay in full the accepted claims
for which priority of payment had been established and to make an initial
partial payment of 40% of the amount of accepted nonpriority claims. On or about
June 27, 1996 the Superintendent forwarded such payments to claimants, including
the Bank.
On July 17, 1996, the Superintendent issued a fifth interim status report with
respect to Nationar (the "Fifth Report"). The Fifth Report included an unaudited
statement of net assets and liabilities of Nationar as of June 30, 1996, which
showed total assets of $78,147,000 (of which $74,724,000 represents cash and
cash equivalents) and total liabilities of $80,619,000 (including $12,000,000 of
reserves for rejected claims, operating expenses and expenses of
administration). The unaudited statement of net assets and liabilities in the
Fifth Report suggests that claimants with accepted nonpriority claims may
receive payment in excess of the approximately 90% of such claims that had been
previously estimated, subject to a number of factors yet to be resolved,
including the results of the claims reconciliation process, litigation over
rejected claims and resolutions of objections to claims and the court's
determinations regarding the priority of claims. The Fifth Report also states
that the Superintendent expects to request, before the end of 1996, the court's
approval to make a second dividend payment.
10
<PAGE>
As of June 30, 1996, the Bank had a remaining unpaid balance of its accepted
claims in the amount of $2,696,000 against which it maintains a $1,100,000
reserve. None of the Bank's claims, however, have been given any priority of
payment. While it is still not clear what percentage of its claims may
ultimately be recovered, the Bank believes that, based upon the Fifth Report, a
substantial portion of its remaining accepted deposit claims will be paid from
the Nationar estate and that it has reserved for the potential losses on the
recovery of its deposit and non-deposit claims.
The Company is not involved in any other pending legal proceedings other than
routine legal proceedings occurring in the ordinary course of business, which in
the aggregate involve amounts which are believed by management to be immaterial
to the financial condition and results of operations of the Company.
7. RECENT DEVELOPMENTS
On July 19, 1996 the Board of Directors declared a cash dividend on the
Company's outstanding common stock of $0.18 per common share to stockholders of
record on August 15, 1996. The dividend is payable on September 3, 1996.
8. REGULATORY MATTERS
The Bank is a member of the Bank Insurance Fund ("BIF") of the FDIC, and the
deposits of the Bank are insured up to applicable limits of the law by the BIF.
The FDIC also maintains the Savings Association Insurance Fund ("SAIF"), and, in
general, the deposits of federal and state savings associations and federal
savings banks ("thrifts") are insured up to applicable limits of the law by the
SAIF. Applicable law requires that the BIF and SAIF be recapitalized to a ratio
of 1.25% of reserves to deposits. The BIF achieved the 1.25% ratio in May 1995.
Having determined that the BIF had sufficient reserves in excess of the 1.25%
ratio, the FDIC adopted regulations under which "well capitalized" BIF-insured
institutions without any significant supervisory concerns will pay deposit
insurance assessments at the statutory minimum of $2,000 annually beginning with
the first quarter of 1996. The BIF assessment rate for other institutions will
range from 0.03% to 0.27% of deposits annually. The FDIC also reported that,
under current law and reasonably optimistic financial projections, the SAIF was
not expected to achieve the 1.25% ratio until 2001 and that SAIF-insured
institutions will continue to pay assessments at rates ranging from a minimum of
0.23% to 0.31% of deposits. A potential consequence of the disparity in the
assessment rates for the BIF and the SAIF is the transfer of deposits from
SAIF-insured institutions to BIF-insured institutions, and any significant
reduction in SAIFinsured deposits could result in SAIF assessments becoming
inadequate to meet the obligations for payments on the bonds issued by the
Financing Corporation ("FICO"), which was established in 1989 to finance the
resolution of failed thrifts. In view of these factors, the federal banking
regulators continue to seek a legislative solution for the recapitalization of
the SAIF.
In the past, Congress has considered and adopted legislative proposals to
recapitalize SAIF that would have also had the potential effect of increasing
the assessment rates of BIF- insured institutions. However, to date none of
these legislative proposals has been enacted into law. Under these proposals,
the assessment base for the payments on the FICO bonds would be expanded to
include the deposits of BIF-insured institutions. Another proposal provided that
as long as the reserves of the BIF remained at 1.25% or higher, the BIF can
assess regular insurance assessments only on those of its member institutions
that had been found to have "moderately severe" or "unsatisfactory" financial,
operational, or compliance concerns. At this time, the Company cannot predict
whether any legislative proposal for the recapitalization of the SAIF will be
adopted and what consequences any such legislation will have on BIF-insured
institutions.
11
<PAGE>
9. LEGISLATION REGARDING TAX BAD DEBT RESERVES
Under section 593 of the Internal Revenue Code, thrift institutions such as the
Bank, which meet certain definitional tests, primarily relating to their assets
and the nature of their business, are permitted to establish a tax reserve for
bad debts and to make annual additions thereto, which additions may, within
specified limitations, be deducted in arriving at their taxable income. The
Bank's deduction with respect to "qualifying loans," which are generally loans
secured by certain interests in real property, may currently be computed using
an amount based on the Bank's actual loss experience (the "Experience
Method"),or a percentage equal to 8% of the Bank's taxable income (the "PTI
Method"), computed without regard to this deduction and with additional
modifications and reduced by the amount of any permitted addition to the
non-qualifying reserve. Similar deductions for additions to the Bank's bad debt
reserve are permitted under the New York State Bank Franchise Tax and the New
York City Banking Corporation Tax; however, for purposes of these taxes, the
effective allowable percentage under the PTI method is 32% rather than 8%.
Under the Small Business Job Protection Act of 1996 (the "1996 Act"), as passed
by the House and Senate on August 2, 1996, section 593 of the Code would be
amended, and the Bank, as a "large bank" (one with assets having an adjusted
basis of more than $500 million), would be unable to make additions to its tax
bad debt reserve, would be permitted to deduct bad debts only as they occur and
would additionally be required to recapture (that is, take into taxable income)
over a multi-year period, beginning with the Bank's taxable year beginning on
January 1, 1996, the excess of the balance of its bad debt reserves (other than
the supplemental reserve) as of December 31, 1995 over the balance of such
reserves as of December 31, 1987, or over a lesser period if the Bank's loan
portfolio has decreased since December 31, 1987. However, such recapture
requirements would be suspended for each of two successive taxable years
beginning January 1, 1996 in which the Bank originates a minimum amount of
certain residential loans based upon the average of the principal amounts of
such loans made by the Bank during its six taxable years preceding January 1,
1996. It is anticipated that the President will sign the 1996 Act in the near
future, in which case the Bank would incur additional federal tax liability.
Management does not believe that this will materially impact the Bank's results
of operations. The New York State tax law has been amended to prevent a similar
recapture of the Bank's bad debt reserve, and to permit continued future use of
the bad debt reserve methods, for purposes of determining the Bank's New York
State tax liability. The Bank's officers and industry leaders continue to seek
such amendments to the New York City tax law; however, the Company cannot
predict whether such changes to New York City law will be adopted and, if so, in
what form.
12
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
T R Financial Corp. ("T R Financial") is the bank holding company for
Roosevelt Savings Bank (the "Bank"), a New York chartered stock savings bank.
While the following discussion of financial condition and results of operations
includes the collective results of T R Financial and the Bank (collectively the
"Company"), this discussion reflects principally the Bank's activities.
FINANCIAL CONDITION
Total assets increased $168.8 million, or 5.8%, to $3.07 billion at
June 30, 1996 from $2.90 billion at December 31, 1995, primarily as a result of
management's continued strategy to leverage its capital position through asset
growth. This growth was funded primarily by attracting new deposits and through
increased utilization of overnight borrowings from the Federal Home Loan Bank of
New York ("FHLB"). Of the increase in total assets, $172.4 million was
attributable to an increase in net loans due primarily to the origination and
purchase of residential real estate loans. This increase was partially offset by
a $15.6 million net decrease in the available for sale and held to maturity
securities portfolios.
Securities available for sale decreased $90.7 million, or 17.1%, to
$440.3 million at June 30, 1996 from $531.0 million at December 31, 1995 due
principally to sales of securities totaling $267.1 million during the six months
ended June 30, 1996, offset by purchases of $221.5 million. Securities held to
maturity, net increased $75.1 million, or 8.8%, to $930.7 million at June 30,
1996 from $855.6 million at December 31, 1995. These changes in securities
portfolios reflect the effects of securities purchases, securities repayments
and maturities, and in the case of the available for sale securities portfolio
also reflects the effects of securities sales and changes in the estimated fair
values of the securities.
Total deposits increased $127.6 million, or 6.3%, to $2.17 billion at
June 30, 1996, from $2.04 billion at December 31, 1995. This increase was
primarily attributable to the promotion of certain deposit products and
successful marketing efforts for the Bank's competitively priced deposit
products. Borrowed funds increased $58.0 million, or 9.8%,to $652.6 million at
June 30, 1996 from $594.6 million at December 31, 1995. This increase in
borrowings is primarily attributable to a $53.0 million increase in overnight
borrowings from the FHLB at June 30, 1996 as compared to December 31, 1995.
Stockholders' equity amounted to $190.9 million at June 30, 1996, or
6.2% of total assets, as compared to $199.7 million at December 31, 1995, or
6.9% of total assets. In accordance with Statement of Financial Accounting
Standards ("SFAS") No. 115, stockholders' equity at June 30, 1996 and December
31, 1995 includes net unrealized appreciation (depreciation) in certain
securities, net of tax, of $3.4 million of depreciation, and $4.2 million of
appreciation, respectively. The change in unrealized appreciation (depreciation)
in certain securities from December 31, 1995 to June 30, 1996 resulted primarily
from increases in market interest rates during the six months ended June 30,
1996, which lowered the estimated fair value of fixed rate debt securities and,
to a lesser extent, from the realization of net gains from sales of securities.
In addition, during the six months ended June 30, 1996, the Company continued
its stock buyback program. See "Liquidity and Capital Resources."
The Bank's leverage capital ratio decreased from 6.27% at December 31,
1995 to 6.06% at June 30, 1996 due to the increase in the Bank's quarterly
average assets, which was partially offset by an increase in the Bank's
regulatory capital. The Bank's risk-based capital ratio of 16.79% at June 30,
1996
13
<PAGE>
represents a 14 basis point decrease as compared to that ratio at December 31,
1995. These capital ratios are well in excess of Federal Deposit Insurance
Corporation ("FDIC") capital requirements. See "Liquidity and Capital
Resources - Regulatory Capital Position."
Non-performing assets decreased $9.3 million to $15.9 million at June
30, 1996, from $25.2 million at December 31, 1995. The ratio of non-performing
assets to total assets decreased to 0.52% at June 30, 1996 from 0.87% at
December 31, 1995. Other real estate owned, net decreased $1.9 million to $4.7
million at June 30, 1996 from $6.5 million at December 31, 1995. Non-performing
loans decreased to $11.2 million at June 30, 1996 as compared to $18.7 million
at December 31, 1995 primarily due to a $7.5 million reduction in non-accrual
loans. The ratio of non-performing loans to total loans decreased to 0.70% at
June 30, 1996 as compared to 1.31% at December 31, 1995.
ANALYSIS OF NET INTEREST INCOME
Net interest income represents the difference between income on earning
assets and expense on interest-bearing liabilities. Net interest income depends
upon the volume of earning assets and interest-bearing liabilities and the
interest rates earned or paid on them.
The following table sets forth certain information regarding the
Company's average statements of financial condition and its statements of income
for the three and six months ended June 30, 1996 and 1995, and reflects the
average yield on assets and average cost of liabilities for the periods
indicated. Such yields and costs are derived by dividing income or expense,
annualized, by the average balance of assets or liabilities, respectively, for
the periods shown. Average balances are derived from daily balances. Average
balances and yields include non-accrual loans.
14
<PAGE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30,
---------------------------
1996 1995
------------------------------------------ ----------------------------------------
Average Average
Average Yield/ Average Yield/
BALANCE INTEREST COST BALANCE INTEREST COST
------- -------- ---- ------- -------- ----
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Earning Assets:
Mortgage Loans, Net $ 1,466,258 $ 27,732 7.57% $ 1,167,879 $ 22,213 7.61%
Other Loans 77,687 1,599 8.23 54,337 1,190 8.76
Mortgage-Backed Securities 1,014,317 18,972 7.48 820,114 15,659 7.64
Short-Term Securities -- -- -- 9,132 131 5.74
Securities 391,044 5,617 5.75 573,608 8,701 6.07
----------- --------- ----------- ---------
Total Earning Assets 2,949,306 53,920 7.31 2,625,070 47,894 7.30
--------- ---------
Non-Earning Assets 69,807 72,653
----------- -----------
Total Assets $ 3,019,113 $ 2,697,723
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-Bearing Liabilities:
Deposits:
Passbook Accounts $ 535,112 $ 3,581 2.68% $ 494,543 $ 3,246 2.63%
Now Accounts 13,283 121 3.64 54,580 454 3.33
Money Market Accounts 110,719 709 2.56 55,565 449 3.23
Certificate of Deposit Accounts 1,432,540 19,968 5.58 1,231,189 18,209 5.92
----------- --------- ----------- ---------
Total Interest-Bearing Deposits 2,091,654 24,379 4.66 1,835,877 22,358 4.87
Borrowings 631,696 8,969 5.68 584,728 8,317 5.69
----------- --------- ----------- ---------
Total Interest-Bearing Liabilities 2,723,350 33,348 4.90 2,420,605 30,675 5.07
--------- ---------
Other Liabilities 106,256 89,658
----------- -----------
Total Liabilities 2,829,606 2,510,263
Stockholders' Equity 189,507 187,460
----------- -----------
Total Liabilities and Stockholders'
Equity $ 3,019,113 $ 2,697,723
=========== ===========
Net Interest Income/Interest Rate Spread $ 20,572 2.41% $ 17,219 2.23%
========= ===== ========= =====
Net Earning Assets/Net Interest Margin $ 225,956 2.79% $ 204,465 2.62%
=========== ===== =========== =====
Ratio of Earning Assets to
Interest-Bearing Liabilities 1.08x 1.08x
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
-------------------------
1996 1995
------------------------------------------- --------------------------------------------
Average Average
Average Yield/ Average Yield/
BALANCE INTEREST COST BALANCE INTEREST COST
------- -------- ---- ------- -------- ----
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Earning Assets:
Mortgage Loans, Net $ 1,419,651 $ 53,800 7.58% $ 1,157,178 $ 43,826 7.57%
Other Loans 73,512 3,051 8.30 49,791 2,152 8.64
Mortgage-Backed Securities 997,219 37,344 7.49 769,341 29,140 7.58
Short-Term Securities 8,423 223 5.30 5,077 145 5.71
Securities 398,119 11,660 5.86 594,103 17,619 5.93
----------- ---------- ----------- ---------
Total Earning Assets 2,896,924 106,078 7.32 2,575,490 92,882 7.21
---------- ---------
Non-Earning Assets 72,317 70,636
----------- -----------
Total Assets $ 2,969,241 $ 2,646,126
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-Bearing Liabilities:
Deposits:
Passbook Accounts $ 529,877 $ 7,059 2.66% $ 488,180 $ 6,117 2.51%
==
Now Accounts 38,562 594 3.08 53,091 848 3.19
Money Market Accounts 89,538 1,200 2.68 50,884 739 2.90
Certificate of Deposit Accounts 1,400,401 39,537 5.65 1,190,621 34,508 5.80
----------- ---------- ----------- ---------
Total Interest-Bearing Deposits 2,058,378 48,390 4.70 1,782,776 42,212 4.74
Borrowings 617,355 17,538 5.68 590,072 16,692 5.66
----------- ---------- ----------- ---------
Total Interest-Bearing Liabilities 2,675,733 65,928 4.93 2,372,848 58,904 4.96
---------- ---------
Other Liabilities 103,480 89,221
----------- -----------
Total Liabilities 2,779,213 2,462,069
Stockholders' Equity 190,028 184,056
----------- -----------
Total Liabilities and Stockholders'
Equity $ 2,969,241 $ 2,646,125
=========== ===========
Net Interest Income/Interest Rate Spread $ 40,150 2.39% $ 33,978 2.25%
========== ===== ========= =====
Net Earning Assets/Net Interest Margin $ 221,191 2.77% $ 202,642 2.64%
=========== ===== =========== =====
Ratio of Earning Assets to
Interest-Bearing Liabilities 1.08x 1.09x
</TABLE>
16
<PAGE>
COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND
1995.
GENERAL. The Company's net income for the three months ended June 30,
1996 increased $2.5 million to $7.2 million from $4.7 million for the same
period in 1995.
INTEREST INCOME. Interest income increased by $6.0 million, or 12.6%,
to $53.9 million for the three months ended June 30, 1996, from $47.9 million
for the same period in 1995, due to an increase in the average earning assets
during the period and a slight increase in the average yield on earning assets.
Average earning assets increased $324.2 million to $2.95 billion for the three
months ended June 30, 1996, from $2.63 billion for the same period in 1995,
reflecting the Company's strategy to leverage its capital position through asset
growth. Of the increase in average earning assets, $298.4 million was
attributable to growth in mortgage-loans, net, $194.2 million was attributable
to growth in mortgage-backed securities and $23.4 million was attributable to
growth in other loans. Offsetting the increases in average mortgage loans,
mortgage-backed securities, and other loans was a $191.7 million decrease in the
average balance of securities, including short-term securities. The average
yield on earning assets increased to 7.31% for the three months ended June 30,
1996 from 7.30% for the same period in 1995, due primarily to a change in the
mix of earning assets away from lower yielding shorter-term securities and into
higher yielding longer-term mortgage loans and mortgage-backed securities.
INTEREST EXPENSE. Interest expense increased by $2.7 million, or 8.7%,
to $33.3 million for the three months ended June 30, 1996, from $30.7 million
for the same period in 1995, due primarily to a $255.8 million increase in
average interest-bearing deposits which was partially offset by a 21 basis point
decrease in the average rate paid on interest-bearing deposit accounts. In
addition, average borrowings increased $47.0 million to $632.0 million for the
three months ended June 30, 1996 as compared to the same period in 1995 while
the average cost of the borrowings decreased 1 basis point to 5.68% over this
same period. The average rate paid on interest-bearing liabilities decreased to
4.90% for the three months ended June 30, 1996 from 5.07% for the same period in
1995. The average balance of interest-bearing liabilities increased $302.7
million for the three months ended June 30, 1996, to $2.72 billion from $2.42
billion for the same period in 1995.
NET INTEREST INCOME. Net interest income before provision for possible
loan losses increased $3.4 million, or 19.5%, to $20.6 million for the three
months ended June 30, 1996, from $17.2 million for the same period in 1995. This
increase is the result, in part, of a $324.2 million increase in the average
balance of earning assets to $2.95 billion, offset by a $302.7 million increase
in the average balance of interest-bearing liabilities to $2.72 billion for the
three months ended June 30, 1996, as compared to the comparable prior year
period. Net interest income was also affected by an increase in the average net
interest rate spread to 2.41% for the three months ended June 30, 1996 from
2.23% for the same period in 1995. The Company's net interest rate spread at
June 30, 1996 represented a 3 basis point increase as compared to the three
months ended March 31, 1996. These increases in the net interest rate spread
were primarly attributable to decreases in rates paid during the respective
periods. See "Management's Discussion and Analysis of Financial Condition -
Interest Rate Sensitivity" appearing in the Company's Annual Report to
Stockholders for the year ended December 31, 1995.
PROVISION FOR POSSIBLE LOAN LOSSES. The provision for possible loan
losses decreased $450 thousand, or 47.4% to $500 thousand for the three months
ended June 30, 1996 from $950 thousand for the same period in 1995. The decrease
resulted from management's assessment of the loan portfolio, the level of the
Bank's allowance for possible loan losses and its assessment of the local
economy and market conditions. For the three months ended June 30, 1996 and
1995, loan charge-offs net of recoveries aggregated $88 thousand and $615
thousand, respectively. At June 30, 1996 and December 31, 1995, the allowance
for possible loan losses amounted to $14.2 million and $13.3 million,
respectively, and the
17
<PAGE>
ratio of such allowance to non-performing loans was 125.97% at June 30, 1996 as
compared to 70.94% at December 31, 1995. Although management believes its
allowance for possible loan losses is adequate at June 30, 1996, if general
economic conditions and real estate values deteriorate, the level of
non-performing loans may increase and higher provisions for possible loan losses
may be necessary, which would adversely affect future operating results.
NON-INTEREST INCOME. Non-interest income decreased $217 thousand to
$3.8 million for the three months ended June 30, 1996 from $4.0 million for the
same period in 1995. This decrease was primarily attributable to a $281 thousand
decrease in net gain on securities and a $107 thousand decrease in other income.
These decreases, however, were partially offset by a $184 thousand increase in
loan fees and other charges, net. For the three months ended June 30, 1996, the
Company sold available for sale securities having an aggregate book value of
$83.3 million, and recognized $2.0 million of net securities gains. The
securities sold included $80.9 million of bonds and $2.4 million of equities.
Respectively these securities were sold at net gains of $1.0 million each.
NON-INTEREST EXPENSE. Non-interest expense decreased $884 thousand, or
7.5%, to $10.9 million for the three months ended June 30, 1996, compared to the
same period in 1995. Of this decrease, salary and employee benefits expense
increased $427 thousand, or 7.4%, due primarily to higher costs associated with
certain stock based compensation plans and salary increases. Occupancy and
equipment expense increased $129 thousand to $1.2 million for the three months
ended June 30, 1996, due primarily to higher depreciation and building
maintenance costs. Marketing expense decreased $46 thousand to $603 thousand for
the three months ended June 30, 1996 as compared to the same period in 1995.
Other real estate owned expense decreased $361 thousand to $292 thousand for the
three months ended June 30, 1996 as compared to the same period in 1995. FDIC
assessment decreased $923 thousand to zero for the three months ended June 30,
1996 as compared to $923 thousand for the same period in 1995 due to a decrease
in Bank Insurance Fund ("BIF") assessment rates. For the Bank, such rates were
$0.23 per $100 of insured deposits through June 1, 1995, at which time such
rates decreased to $0.04 per $100 of insured deposits. Beginning January 1,
1996, the BIF assessment rate for the Bank was reduced to zero per $100 of
insured deposits plus a $2 thousand annual fee. Other operating expense
decreased $110 thousand, or 4.0% for the three months ended June 30, 1996 as
compared to the same period during 1995.
PROVISION FOR INCOME TAXES. Provision for income taxes increased $2.0
million to $5.8 million for the three months ended June 30, 1996 from $3.8
million during the same period in 1995, due to higher net earnings for the three
months ended June 30, 1996 as compared to the same period for 1995.
COMPARISON OF OPERATING RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995.
GENERAL. The Company's net income for the six months ended June 30,
1996 increased $5.8 million to $14.4 million from $8.6 million for the same
period in 1995.
INTEREST INCOME. Interest income increased by $13.2 million, or 14.2%,
to $106.1 million for the six months ended June 30, 1996, from $92.9 million for
the same period in 1995, due to an increase in the average earning assets during
the period and an increase in the average yield on earning assets. Average
earning assets increased $321.4 million to $2.90 billion for the six months
ended June 30, 1996, from $2.58 billion for the same period in 1995, reflecting
the Company's strategy to leverage its capital position through asset growth. Of
the increase in average earning assets, $262.5 million was attributable to
growth in mortgage loans, $227.9 million was attributable to growth in
mortgage-backed securities and $23.7 million was attributable to growth in other
loans. Offsetting the increases in average mortgage loans, mortgage-backed
securities, and other loans was a $196.0 million decrease in the average balance
18
<PAGE>
of securities. The average yield on earning assets increased to 7.32% for the
six months ended June 30, 1996 from 7.21% for the same period in 1995, due
primarily to a change in the mix of earning assets away from lower yielding
shorter-term securities and into higher yielding longer-term mortgage loans and
mortgage backed securities.
INTEREST EXPENSE. Interest expense increased by $7.0 million, or 11.9%,
to $65.9 million for the six months ended June 30, 1996, from $58.9 million for
the same period in 1995, due primarily to a $275.6 million increase in average
interest-bearing deposits which was partially offset by a 4 basis point decrease
in the average rate paid on interest-bearing deposit accounts. In addition,
average borrowings increased $27.3 million to $617.4 million for the six months
ended June 30, 1996 as compared to the same period in 1995 while the average
cost of the borrowings increased 2 basis points to 5.68% over this same period.
The average rate paid on interest-bearing liabilities decreased to 4.93% for the
six months ended June 30, 1996 from 4.96% for the same period in 1995. The
average balance of interest-bearing liabilities increased $302.9 million for the
six months ended June 30, 1996, to $2.68 billion from $2.37 billion for the same
period in 1995.
NET INTEREST INCOME. Net interest income before provision for possible
loan losses increased $6.2 million, or 18.2%, to $40.2 million for the six
months ended June 30, 1996, from $34.0 million for the same period in 1995. This
increase is the result, in part, of a $321.4 million increase in the average
balance of earning assets to $2.90 billion, offset by a $302.9 million increase
in the average balance of interest-bearing liabilities to $2.68 billion for the
six months ended June 30, 1996, as compared to the comparable prior year period.
Net interest income was also affected by an increase in the average net interest
rate spread to 2.39% for the six months ended June 30, 1996 from 2.25% for the
same period in 1995. The increase in the net interest rate spread was primarily
attributable to an increase in rates earned during the respective periods and
the change in mix of earning assets discussed above. See "Management's
Discussion and Analysis of Financial Condition - Interest Rate Sensitivity"
appearing in the Company's Annual Report to Stockholders for the year ended
December 31, 1995.
PROVISION FOR POSSIBLE LOAN LOSSES. The provision for possible loan
losses decreased $550 thousand or 35.5%, to $1.0 million for the six months
ended June 30, 1996 from $1.6 million for the same period in 1995. The decrease
resulted from management's assessment of the loan portfolio, the level of the
Bank's allowance for possible loan losses and its assessment of the local
economy and market conditions. For the six months ended June 30, 1996 and 1995,
loan charge-offs net of recoveries aggregated $115 thousand and $1.2 million,
respectively.
NON-INTEREST INCOME. Non-interest income increased $2.8 million to $8.4
million for the six months ended June 30, 1996 from $5.6 million for the same
period in 1995. This increase was primarily attributable to a $2.6 million
increase in net gain on sales of securities and a $355 thousand increase in loan
fees and other charges, net. These increases, however, were partially offset by
a $72 thousand decrease in other income and a $12 thousand decrease in gain on
sales of whole loans. For the six months ended June 30, 1996, the Company sold
available for sale securities having an aggregate book value of $267.1 million,
and recognized $4.8 million of net securities gains. The securities sold
included $199.3 million of bonds, $63.6 in mortgage-backed securities and $4.2
million of equities. Respectively, these securities were sold at net gains of
$2.4 million, $998 thousand and $1.4 million.
NON-INTEREST EXPENSE. Non-interest expense decreased $822 thousand, or
3.7%, to $21.7 million for the six months ended June 30, 1996, compared to the
same period in 1995. Of this increase, salary and employee benefits expense
increased $990 thousand or 8.6%, due primarily to higher costs associated with
certain stock based compensation plans and salary increases. Occupancy and
equipment expense increased $364 thousand to $2.5 million for the six months
ended June 30, 1996, due primarily to higher
19
<PAGE>
depreciation and building maintenance costs. Marketing expense decreased $164
thousand to $1.3 million for the six months ended June 30, 1996 as compared to
the same period in 1995. Other real estate owned expense decreased $329 thousand
to $661 thousand for the six months ended June 30, 1996 as compared to the same
period in 1995. FDIC assessment decreased $1.8 million to $1 thousand for the
six months ended June 30, 1996 as compared to the same period in 1995 due to a
decrease in BIF assessment rates. For the Bank, such rates were $0.23 per $100
of insured deposits through June 1, 1995, at which time such rates decreased to
$0.04 per $100 of insured deposits. Beginning January 1, 1996, the 1996 BIF
assessment rate for the Bank was reduced to zero per $100 of insured deposits
plus a $2 thousand annual fee. Other operating expense increased $163 thousand
or 3.5% for the six months ended June 30, 1996 as compared to the same period
during 1995.
PROVISION FOR INCOME TAXES. Provision for income taxes increased $4.6
million to $11.5 million for the six months ended June 30, 1996 from $6.9
million during the same period in 1995, due to higher net earnings for the six
months ended June 30, 1996 as compared to the same period for 1995.
LIQUIDITY AND CAPITAL RESOURCES
GENERAL. Following the completion of the Bank's conversion and T R
Financial's stock offering, T R Financial's principal business was that of its
subsidiary, the Bank. T R Financial initially invested $39.3 million of the net
proceeds of the offering in short-term securities, corporate debt obligations,
money market investments and mortgage-backed securities. T R Financial also has
available dividend sources from the Bank to the extent such payments are
permitted by law or regulation. T R Financial's liquidity is available to, among
other things, support future expansion of operations or diversification into
other banking related businesses, payment of dividends or repurchase of its
common stock. During the six months ended June 30, 1996, T R Financial
repurchased 605,000 shares of common stock at a total cost of $15.6 million. On
April 16, 1996, the Board of Directors of T R Financial terminated the fifth
stock repurchase program and authorized a sixth stock repurchase program for the
repurchase of up to 10%, or 894,809 shares, of the common stock. As of June 30,
1996, 854,809 shares remained available for repurchase under this sixth stock
repurchase program. On July 19, 1996, the Board of Directors declared a
quarterly cash dividend of $0.18 per share to stockholders of record on August
15, 1996. This dividend is payable on September 3, 1996.
The Bank's primary sources of funds are deposits, FHLB advances,
proceeds from principal and interest payments on loans, mortgage- backed
securities and debt securities. Proceeds from the sale of securities available
for sale and, to a lesser extent, loans are also sources of funding. While
maturities and scheduled amortization of loans and investments are predictable
sources of funds, deposit flows and mortgage prepayments are greatly influenced
by general interest rates, economic conditions and competition.
The primary investing activities of the Company are the origination of
mortgage loans and the purchase of securities. The Company's most liquid assets
are cash and cash equivalents, short-term securities, securities available for
sale and securities held to maturity due within one year. The levels of these
assets are dependent on the Company's operating, financing, lending and
investment activities during any given period.
REGULATORY CAPITAL POSITION. The Bank is subject to minimum regulatory
requirements imposed by the Federal Deposit Insurance Corporation ("FDIC") which
vary according to the institution's capital level and the composition of its
assets. An insured institution is required to maintain core capital of not less
than 3.0% of total assets plus an additional 100 to 200 basis points ("leverage
capital ratio"). An insured institution must also maintain a ratio of total
capital to risk-based assets of 8.0%. Although the
20
<PAGE>
minimum leverage capital ratio is 3%, the Federal Deposit Insurance Corporation
Improvement Act ("FDICIA") stipulates that an institution with less than a 4.0%
leverage capital ratio is deemed to be an "undercapitalized" institution and
results in the imposition of regulatory restrictions. The Bank's capital ratios
qualify it to be deemed "well capitalized" under FDICIA. In addition, the
Company's capital ratios exceed the minimum regulatory capital requirements
imposed by the Federal Reserve Board, which are substantially similar to the
requirements of the FDIC. The following table sets forth the Bank's and T R
Financial's capital positions under generally accepted accounting principles and
their regulatory capital position at June 30, 1996:
<TABLE>
<CAPTION>
BANK T R FINANCIAL (CONSOLIDATED)
---------------------------------------- -------------------------------------
TOTAL TOTAL
LEVERAGE RISK-BASED LEVERAGE RISK-BASED
CAPITAL CAPITAL CAPITAL CAPITAL
------------- --------------- ------------- -------------
(dollars in thousands)
<S> <C> <C> <C> <C>
Capital position
under GAAP.................. $ 179,211 $ 179,211 $ 190,929 $ 190,929
Net unrealized
depreciation in
certain securities,
net of tax.................. 3,207 3,207 3,379 3,379
Allowance for
possible loan losses........ -- 14,152 -- 14,152
------------ ------------ ------------ ------------
Regulatory capital
position.................... 182,418 196,570 194,308 208,460
Minimum required
regulatory capital
(3% and 8%,
respectively)(1)............ 92,141 92,791 90,504 93,752
------------ ------------ ------------ ------------
Excess........................ $ 90,277 $ 103,779 $ 103,804 $ 114,708
============ ============ ============ ============
Regulatory capital
ratio....................... 6.06% 16.79% 6.44% 17.79%
============ ============ ============ ============
</TABLE>
(1) Applying the 4% leverage capital ratio imposed by FDICIA, the Bank's
leverage capital requirement at June 30, 1996 was $122.9 million and as of such
date the Bank exceeded this requirement by $59.6 million. T R Financial's
leverage capital requirement, applying the 4% leverage capital ratio, was $120.7
million at June 30, 1996 and as of such date T R Financial exceeded this
requirement by $73.6 million.
21
<PAGE>
PART II - OTHER INFORMATION
---------------------------
ITEM 1. LEGAL PROCEEDINGS
- --------------------------
Not applicable
ITEM 2. CHANGES IN SECURITIES
- ------------------------------
Not applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
- ----------------------------------------
Not applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------------------------------------------------------------
Not applicable
ITEM 5. OTHER INFORMATION
- --------------------------
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- -----------------------------------------
(a) Exhibits
--------
11. Statement re: Computation of Per Share Earnings
19. T R Financial Corp. 1996 Midyear Report
27. Financial Data Schedule*
(b) Reports on Form 8-K
-------------------
Not applicable.
- --------
* Submitted only with filing in electronic format.
22
<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.
T R FINANCIAL CORP.
(Registrant)
Date: August 12, 1996 By:/s/ John M. Tsimbinos
------------------------
John M. Tsimbinos
Chairman of the Board and
Chief Executive Officer
Date: August 12, 1996 By:/s/ Dennis E. Henchy
----------------------
Dennis E. Henchy
Executive Vice President
and Chief Financial Officer
23
<PAGE>
EXHIBIT INDEX
PAGE
11. Statement re: Computation of Per Share Earnings.....................
19. T R Financial Corp. 1996 Midyear Report..............................
27. Financial Data Schedule (submitted only with filing in
electronic format)..................................................
24
EXHIBIT 11
<TABLE>
<CAPTION>
T R FINANCIAL CORP.
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
Three Months Ended Six Months Ended
June 30 June 30
---------------------------------------------- -------------------------------------------
1996 1995 1996 1995
--------------------- ------------------ ------------------ -------------------
<S> <C> <C> <C> <C>
1. Net income $ 7,214,000 $ 4,748,000 $ 14,398,000 $ 8,639,000
============= ============ ============= ==============
2. Weighted average common
shares outstanding 8,184,861 8,990,052 8,287,848 9,108,129
3. Pro rata allocation to interim
periods of ESOP shares to be
allocated on December 31st of
each year (results from the
adoption of SOP 93-6) 48,242 48,088 32,333 32,179
4. Common stock equivalents
attributable to dilutive effect 576,121
of stock options 444,837 574,579 421,839
--------- ------- ---------
5. Total weighted average common
shares and equivalents
outstanding for primary earnings
per share computations 8,809,224 9,482,977 8,894,760 9,562,147
========== ========= ========== =========
6. Primary earnings per share $ 0.82 $ 0.50 $ 1.62 $ 0.90
======== ======= ======== =======
</TABLE>
EXHIBIT 19
T R Financial Corp.
1996 MIDYEAR REPORT
<PAGE>
TO OUR STOCKHOLDERS:
We are pleased to present to you our results for the first six months of 1996.
NET INCOME INCREASES 66%
Net income for the six months ended June 30, 1996 totalled $14.4 million, or
$1.62 per share, an increase of $5.8 million or 66% from $8.6 million, or $0.90
per share for the 1995 comparable period. This represents an annualized return
on stockholders' equity of 15.15%, compared to 9.39% for the first six months of
1995.
Core earnings, net interest income before provision for possible loan
losses, increased 18.2% to $40.2 million for the first half of 1996 compared to
$34.0 million for the 1995 comparable period. During the first six months of
1996, the Company's net interest margin increased to 2.77% compared to 2.64% for
the first six months of 1995.
During the first six months of 1996, T R Financial took advantage of
favorable market conditions and sold approximately $267.1 million of securities
available for sale, recognizing $4.8 million of net gains compared to $2.2
million in net gains for the 1995 comparable period. These gains contributed on
an after tax basis $0.30 per share for the 1996 period compared to $0.13 per
share for the 1995 period.
ASSETS, LOANS AND DEPOSITS REACH RECORD LEVELS
During the first six months of 1996, T R Financial Corp. experienced growth in
assets, loans and deposits to record levels. Your equity as stockholders of T R
Financial Corp. was $190.9 million, representing 6.21% of total assets and a
book value of $23.21 per share at June 30, 1996, an increase from $22.88 at
December 31, 1995. At June 30, 1996 T R Financial had assets of $3.07 billion,
an increase of $168.8 million or 5.8% from December 31, 1995. Total loans, net
of the allowance for possible loan losses, reached $1.58 billion at June 30,
1996, an increase of $172.4 million or 12.2% from December 31, 1995. Total
deposits increased $127.6 million or 6.3% from the end of 1995 to $2.17 billion
at June 30, 1996.
ASSET QUALITY CONTINUES TO IMPROVE
At June 30, 1996 non-performing assets totaled $15.9 million or 0.52% of total
assets, representing a $9.3 million or 35 basis point decrease from December 31,
1995. Non-performing loans decreased to $11.2 million, or 0.70% of total loans
at June 30, 1996, a decrease of $7.5 million or 61 basis points from December
31, 1995.
The provision for possible loan losses for the six months ended June
30, 1996 was $1.0 million, a decrease from $1.6 million for the 1995 comparable
period. This provision reflects management's ongoing assessment of the quality
of its loan portfolio and the adequacy of the allowance for possible loan
losses. At June 30, 1996 the allowance for possible loan losses was $14.2
million or 126.0% of non-performing loans compared to $13.3 million or 70.9% of
non-performing loans at December 31, 1995.
REGULATORY CAPITAL
At June 30, 1996 T R Financial Corp.'s leverage and risk-based capital ratios
were 6.44% and 17.79%, respectively, compared to 6.75% and 18.20% at December
31, 1995. In addition, at June 30, 1996 Roosevelt Savings Bank's leverage and
risk-based capital ratios were 6.06% and 16.79%, respectively, compared to 6.27%
and 16.93% at December 31, 1995. These capital ratios are well in excess of the
FDIC requirements of 4% and 8%, respectively, and qualify the Bank to be
designated as a well capitalized institution by regulatory agencies.
DIVIDEND INCREASED
During the first half of 1996, the Board of Directors increased the Company's
dividend twice. On April 16, 1996 the dividend was increased to $0.16 per share
and most recently, on July 19, 1996 the dividend was increased for the seventh
consecutive quarter to $0.18 per share. This dividend will be paid on September
3, 1996 to stockholders of record at the close of business on August
<PAGE>
15, 1996.
* * *
STOCK REPURCHASE
On April 16, 1996 the Board announced that they had authorized the repurchase of
up to 10% or 894,809 shares of T R Financial Corp. outstanding common stock. The
Board continues to believe that the repurchase of stock under favorable
conditions is consistent with the goal of enhancing long-term shareholder value,
which remains the Company's primary objective.
The announcements of both our eighth consecutive quarterly cash
dividend and the authorization of our sixth stock repurchase program are
evidence of our continuing commitment to enhancing your long-term stockholder
value. This commitment coupled with our solid earnings performance since
becoming a public company, eleven consecutive quarters of increased per share
earnings, demonstrates that the Board of Directors and management of T R
Financial Corp. and Roosevelt Savings Bank continue to follow a strategic
business plan designed to enhance long-term stockholder value. All of these
factors have contributed towards a 206% increase in our common stock price from
our June 1993 initial public offering of $9.00 per share to our June 30, 1996
price of $27.50.
On behalf of the Board of Directors, Officers and staff of both T R
Financial Corp. and Roosevelt Savings Bank, we thank you for your continued
support.
John M. Tsimbinos
Chairman and Chief Executive Officer
<PAGE>
<TABLE>
<CAPTION>
T R FINANCIAL CORP. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
June 30, December 31,
ASSETS 1996 1995
----------------- -----------
<S> <C> <C>
Cash and cash equivalents ..................................................... $ 26,290 $ 21,204
Trading account securities .................................................... 2,952 --
Securities available for sale:
Bonds and equities ........................................................ 291,935 304,154
Mortgage-backed securities ................................................ 148,406 226,842
----------- -----------
Total securities available for sale ....................................... 440,341 530,996
----------- -----------
Securities held to maturity, net (estimated market value of $925,687 and
$880,197 at June 30, 1996 and December 31, 1995, respectively):
Bonds ..................................................................... 57,588 98,792
Mortgage-backed securities ................................................ 873,135 756,831
----------- -----------
Total securities held to maturity, net .................................... 930,723 855,623
----------- -----------
Loans, net of deferred income ................................................. 1,596,868 1,423,574
Allowance for possible loan losses ............................................ (14,152) (13,267)
----------- -----------
Net loans ................................................................ 1,582,716 1,410,307
----------- -----------
Other real estate owned, net .................................................. 4,691 6,547
Banking house and equipment, net .............................................. 11,634 11,877
Accrued interest receivable ................................................... 20,721 20,223
Federal Home Loan Bank stock, at cost ......................................... 32,628 33,603
Deferred tax asset, net ....................................................... 8,132 4,410
Other assets .................................................................. 12,630 9,833
----------- -----------
TOTAL ASSETS .............................................................. $ 3,073,458 $ 2,904,623
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Due to depositors ............................................................. $ 2,165,974 $ 2,038,341
Borrowed funds ................................................................ 652,550 594,563
Mortgagors' escrow deposits ................................................... 17,076 16,852
Accounts payable and accrued expenses ......................................... 8,131 12,987
Official checks outstanding ................................................... 17,969 25,102
Accrued taxes payable ......................................................... 2,698 3,095
Other liabilities ............................................................. 18,131 13,999
----------- -----------
Total liabilities ......................................................... 2,882,529 2,704,939
----------- -----------
Commitments and contingencies ................................................. -- --
Stockholders' equity:
Preferred stock, $.01 par value, 5,000,000 shares authorized; none issued ... -- --
Common stock, $.01 par value, 30,000,000 shares authorized; 11,362,000 shares
issued; 8,915,189 shares and 9,480,557 shares outstanding at June 30, 1996
and December 31, 1995, respectively ....................................... 114 114
Additional paid-in-capital .................................................. 102,576 101,063
Retained earnings, partially restricted ..................................... 144,895 133,111
Net unrealized appreciation (depreciation)
in certain securities, net of tax ......................................... (3,379) 4,230
Less:
Unallocated common stock held by ESOP ....................................... (6,206) (6,763)
Unearned common stock held by Bank's Recognition and Retention
Plans and Trusts (RRP's) .................................................. (424) (907)
Common stock held by Bank's Supplemental Executive Retirement Plan and
Trust, at cost (38,321 shares and 25,110 shares at June 30, 1996 and
December 31, 1995, respectively) .......................................... (700) (351)
Treasury stock, at cost (2,446,811 shares and 1,881,443 shares at June 30,
1996 and December 31, 1995, respectively) ................................. (45,947) (30,813)
----------- -----------
Total stockholders' equity ............................................. 190,929 199,684
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ............................. $ 3,073,458 $ 2,904,623
=========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
T R FINANCIAL CORP. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended Six Months Ended
JUNE 30, JUNE 30,
------------------------------------ ---------------------------
1996 1995 1996 1995
--------------- ------------------ -------------- ----------
(In Thousands, Except Per Share Amounts)
<S> <C> <C> <C> <C>
INTEREST INCOME:
Mortgage loans................................... $ 27,732 $ 22,213 $ 53,800 $ 43,826
Mortgage-backed securities....................... 18,972 15,659 37,344 29,140
Bonds, equities and other investments............ 5,617 8,832 11,883 17,764
Other loans...................................... 1,599 1,190 3,051 2,152
-------- -------- -------- --------
Total interest income.......................... 53,920 47,894 106,078 92,882
-------- -------- -------- --------
INTEREST EXPENSE:
Deposits......................................... 24,379 22,358 48,390 42,212
Borrowed funds................................... 8,969 8,317 17,538 16,692
-------- -------- -------- --------
Total interest expense......................... 33,348 30,675 65,928 58,904
-------- -------- -------- --------
Net interest income before provision
for possible loan losses....................... 20,572 17,219 40,150 33,978
Provision for possible loan losses................. 500 950 1,000 1,550
-------- -------- -------- --------
Net interest income after provision
for possible loan losses....................... 20,072 16,269 39,150 32,428
-------- -------- -------- --------
NON-INTEREST INCOME:
Loan fees and other charges, net................. 1,544 1,360 2,991 2,636
Net gain (loss) on securities.................... 2,004 2,285 4,759 2,183
Gain on sales of whole loans..................... 2 15 3 15
Other income..................................... 258 365 675 747
-------- -------- -------- --------
Total non-interest income...................... 3,808 4,025 8,428 5,581
-------- -------- -------- --------
NON-INTEREST EXPENSE:
Salaries and employee benefits................... 6,178 5,751 12,504 11,514
Occupancy and equipment expense.................. 1,196 1,067 2,493 2,129
Marketing expense................................ 603 649 1,271 1,435
Other real estate owned expense.................. 292 653 661 990
FDIC assessment.................................. 0 923 1 1,847
Other operating expense.......................... 2,611 2,721 4,762 4,599
-------- -------- -------- --------
Total non-interest expense..................... 10,880 11,764 21,692 22,514
-------- -------- -------- --------
Income before provision for income taxes........... 13,000 8,530 25,886 15,495
-------- -------- -------- --------
Provision for income taxes......................... 5,786 3,782 11,488 6,856
-------- -------- ---------- --------
NET INCOME......................................... $ 7,214 $ 4,748 $ 14,398 $ 8,639
======== ======== ======== ========
Net income per common and common
equivalent share ................................ $ 0.82 $ 0.50 $ 1.62 $ .90
======== ======== ======== ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
T R FINANCIAL CORP. & SUBSIDIARIES
SELECTED FINANCIAL RATIOS AND OTHER DATA
AT OR FOR THE THREE MONTHS ENDED
JUNE 30, JUNE 30,
1996 1995
------------------------------------------------------
<S> <C> <C>
PERFORMANCE RATIOS:
Return on average assets........................................... 0.96% 0.70%
Return on average stockholders' equity............................. 15.23 10.28
Average stockholders' equity to average assets..................... 6.28 6.85
Stockholders' equity to total assets............................... 6.21 6.95
Interest rate spread............................................... 2.41 2.23
Net interest margin................................................ 2.79 2.62
Non-interest expense to average assets............................. 1.44 1.75
Efficiency ratio................................................... 48.63 62.10
Net interest income to non-interest expense........................ 1.89x 1.46x
Average earning assets to average interest-bearing
liabilities...................................................... 1.08x 1.08x
</TABLE>
<TABLE>
<CAPTION>
AT JUNE 30, AT DECEMBER 31,
1996 1995
--------------------------------------------------------
<S> <C> <C>
ASSETS QUALITY RATIOS:
Non-performing loans to total loans.............................. 0.70% 1.31%
Non-performing assets to total assets............................ 0.52 0.87
Net charge-offs to average loans
(Year to date, annualized)..................................... 0.01 0.13
Allowance for possible loan losses to total loans................ 0.89 0.93
Allowance for possible loan losses to
non-performing loans........................................... 125.97 70.94
REGULATORY CAPITAL RATIOS:
T R Financial Corp.:
Leverage capital ratio...................................... 6.44% 6.75%
Total risk-based capital ratio.............................. 17.79 18.20
Bank only:
Leverage capital ratio...................................... 6.06% 6.27%
Total risk-based capital ratio.............................. 16.79 16.93
</TABLE>
<PAGE>
OFFICE OF THE CHAIRMAN
John M. Tsimbinos
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
A. Gordon Nutt
PRESIDENT AND CHIEF ADMINISTRATIVE OFFICER
Dennis E. Henchy
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
William R. Kuhn
EXECUTIVE VICE PRESIDENT AND
CHIEF REAL ESTATE LENDING OFFICER
Ira H. Kramer
SENIOR VICE PRESIDENT AND CORPORATE SECRETARY
John J. DeRusso
SENIOR VICE PRESIDENT,
STRATEGIC PLANNING AND SPECIAL PROJECTS
BOARD OF DIRECTORS
Maureen E. Clancy John C. Mesloh
Robert F. Eisen, Sr. A. Gordon Nutt
Michael P. Galgano James E. Orr, Jr.
Leonard Genovese John M. Tsimbinos
Edward J. Kowatch Spiros J. Voutsinas
Ernest L. Loser
- -------------------------------------------------------
INVESTOR RELATIONS
Stockholders, investors and analysts interested in
additional information about T R Financial Corp. are
invited to contact:
Theodore S. Ayvas
Assistant Vice President
Investor Relations
T R Financial Corp.
1122 Franklin Avenue
Garden City, New York 11530
(516) 739-4219
TRANSFER AGENT AND REGISTRAR
Stockholders are asked to contact the Bank's transfer agent, Chase Mellon
Shareholder Services, for consolidation of accounts, changes of registration,
address corrections or replacement of lost stock
certificates.
Chase Mellon Shareholder Services
P.O. Box 590
Ridgefield Park, NJ 07660
1-800-851-9677
STOCK LISTING
T R Financial Corp., the holding company for Roosevelt Savings Bank, is traded
and quoted on the Nasdaq National Market System under the symbol "ROSE". Price
information appears daily in THE WALL STREET JOURNAL under "T R FINLCP" and in
other major newspapers as "T R FIN".
ROOSEVELT SAVINGS BANK LOCATIONS
ADMINISTRATIVE HEADQUARTERS
1122 Franklin Avenue
Garden City, New York 11530
(516) 742-9300 (718) 347-2020
NASSAU
- -----------------------------------------------------
Bellmore: Sunrise Highway at Bellmore Ave.
Garden City: 1122 Franklin Ave.
108 Seventh St.
Massapequa Park: 4848 Merrick Rd.
New Hyde Park: Jericho Tpke. at South 12th St.
North Woodmere: 497 Hungry Harbor Rd.
(Hungry Harbor Shopping Center)
SUFFOLK
- -----------------------------------------------------
Deer Park: Deer Park Avenue at Bay Shore Rd.
Deer Park Avenue at Fairview Ave.
Dix Hills: 699 Old Country Rd.
QUEENS
- -----------------------------------------------------
Bellerose: 247-53 Jamaica Ave.
Deepdale: L.I. Expressway at 254th St.
Howard Beach: 156-02 Cross Bay Blvd.
Union Turnpike: Springfield Blvd. at Union Tpke.
BROOKLYN
- -----------------------------------------------------
Gates Avenue: Gates Ave. at Broadway
Marine Park: Avenue U at Nostrand Ave.
CUSTOMER SERVICE AND INFORMATION:
(516) 877-1010 OR (718) 347-1010
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated condensed statement of financial condition and the consolidated
condensed statement of income and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 26,290
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 2,952
<INVESTMENTS-HELD-FOR-SALE> 440,341
<INVESTMENTS-CARRYING> 930,723
<INVESTMENTS-MARKET> 925,687
<LOANS> 1,596,868
<ALLOWANCE> 14,152
<TOTAL-ASSETS> 3,073,458
<DEPOSITS> 2,165,974
<SHORT-TERM> 72,000
<LIABILITIES-OTHER> 64,005
<LONG-TERM> 580,550
<COMMON> 114
0
0
<OTHER-SE> 190,815
<TOTAL-LIABILITIES-AND-EQUITY> 3,073,458
<INTEREST-LOAN> 56,851
<INTEREST-INVEST> 49,227
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 106,078
<INTEREST-DEPOSIT> 48,390
<INTEREST-EXPENSE> 65,928
<INTEREST-INCOME-NET> 40,150
<LOAN-LOSSES> 1,000
<SECURITIES-GAINS> 4,759
<EXPENSE-OTHER> 21,692
<INCOME-PRETAX> 25,886
<INCOME-PRE-EXTRAORDINARY> 14,398
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14,398
<EPS-PRIMARY> 1.62
<EPS-DILUTED> 1.62
<YIELD-ACTUAL> 2.77
<LOANS-NON> 9,756
<LOANS-PAST> 1,478
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 13,267
<CHARGE-OFFS> 293
<RECOVERIES> 178
<ALLOWANCE-CLOSE> 14,152
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 14,152
</TABLE>
