As filed with the Securities and Exchange Commission on May 15, 1997
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 March 31, 1997
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 May 12, 1997, there were 17,518,436 shares of the Registrant's
common stock outstanding (as adjusted to reflect the 100% stock dividend
announced on April 15, 1997).
<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
March 31, 1997 and December 31, 1996 3
Consolidated Statements of Income for the three
months ended March 31, 1997 and 1996 4
Consolidated Statement of Changes in Stockholders' Equity for
the three months ended March 31, 1997 5
Consolidated Statements of Cash Flows for the three
months ended March 31, 1997 and 1996 6
Notes to Unaudited Consolidated Financial Statements 7-11
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 12-18
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk 18
PART II -- OTHER INFORMATION
ITEM 1. Legal Proceedings 19
ITEM 2. Changes in Securities 19
ITEM 3. Defaults Upon Senior Securities 19
ITEM 4. Submission of Matters to a Vote of Security Holders 19-20
ITEM 5. Other Information 20
ITEM 6. Exhibits and Reports on Form 8-K 20-21
Signature Page 22
================================================================================
Statements contained in this Form 10-Q which are not historical facts are
forward-looking statements, as that term is defined in the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements are subject to
risks and uncertainties which could cause actual results to differ materially
from those projected. Such risks and uncertainties include the final results of
the disposition of the Nationar estate by the Superintendent of Banks of the
State of New York, potential changes in interest rates, competitive factors in
the financial services industry, general economic conditions, the effect of new
legislation and other risks detailed in documents filed by the Company with the
Securities and Exchange Commission from time to time.
================================================================================
2
<PAGE>
PART I - FINANCIAL INFORMATION
---------------------
ITEM 1. FINANCIAL STATEMENTS - UNAUDITED
--------------------------------
<TABLE>
T R FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<CAPTION>
March 31, December 31,
1997 1996
----------- ------------
<S> <C> <C>
ASSETS
Cash and cash equivalents $17,707 $18,128
Securities available for sale:
Bonds and equities 389,089 337,446
Mortgage-backed securities 102,323 104,401
----------- ----------
Total securities available for sale 491,412 441,847
----------- ----------
Securities held to maturity, net (estimated fair value of $1,047,803 and
$1,017,702 at March 31, 1997 and December 31, 1996, respectively):
Bonds 47,314 53,632
Mortgage-backed securities 1,006,345 955,300
---------- ----------
Total securities held to maturity, net 1,053,659 1,008,932
----------- ----------
Loans receivable 1,768,935 1,716,182
Allowance for possible loan losses (14,701) (14,370)
----------- ----------
Loans receivable, net 1,754,234 1,701,812
----------- ----------
Other real estate owned, net 2,890 3,264
Banking house and equipment, net 14,294 13,320
Accrued interest receivable 21,495 21,517
Federal Home Loan Bank stock, at cost 33,390 33,390
Deferred tax asset, net 7,986 6,668
Other assets 7,259 10,749
----------- ----------
Total assets $3,404,326 $3,259,627
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Due to depositors $2,403,419 $2,343,513
Borrowed funds 718,728 637,835
Mortgagors' escrow deposits 28,801 19,585
Accounts payable and accrued expenses 11,944 11,190
Official checks outstanding 13,896 24,251
Accrued taxes payable 1,851 --
Other liabilities 15,886 19,215
----------- ----------
Total liabilities 3,194,525 3,055,589
---------- ---------
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; 22,724,000 shares
issued; 17,636,472 shares and 17,574,040 shares outstanding at March 31, 1997
and December 31, 1996, respectively 227 227
Additional paid-in-capital 106,353 104,880
Retained earnings, partially restricted 163,541 157,716
Net unrealized depreciation in certain securities, net of tax (3,178) (1,501)
Less:
Unallocated common stock held by Employee Stock Ownership Plan ("ESOP") (5,388) (5,650)
Unearned common stock held by Bank's Recognition and Retention Plans and
Trusts (RRP's) (317) (346)
Common stock held by Bank's Supplemental Executive Retirement
Plan and Trust, at cost (103,054 shares and 78,192 shares at
March 31, 1997 and December 31, 1996, respectively) (1,161) (721)
Treasury stock, at cost (5,087,528 shares and 5,149,960 shares
at March 31, 1997 and December 31, 1996, respectively) (50,276) (50,567)
----------- -----------
Total stockholders' equity 209,801 204,038
----------- -----------
Total liabilities and stockholders' equity $3,404,326 $3,259,627
========== ==========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
3
<PAGE>
<TABLE>
T R FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<CAPTION>
For the
three months ended
March 31,
-------------------------------------------
1997 1996
--------------- ---------------
(in thousands, except per share amounts)
<S> <C> <C>
Interest income:
Mortgage loans $30,466 $26,068
Mortgage-backed securities 20,331 18,372
Bonds, equities and other investments 6,538 6,266
Other loans 2,122 1,452
----- -----
Total interest income 59,457 52,158
------ ------
Interest expense:
Deposits 27,884 24,011
Borrowed funds 9,558 8,569
----- -----
Total interest expense 37,442 32,580
------ ------
Net interest income 22,015 19,578
Provision for possible loan losses 350 500
--- ---
Net interest income after provision
for possible loan losses 21,665 19,078
------ ------
Non-interest income:
Loan fees and other charges, net 1,450 1,447
Net gain on sales of securities 966 2,755
Gain on sales of whole loans 131 1
Other income 433 417
--- ---
Total non-interest income 2,980 4,620
----- -----
Non-interest expense:
Salaries and employee benefits 6,766 6,326
Occupancy and equipment expense 1,365 1,297
Marketing expense 650 668
Other real estate owned expense 77 369
FDIC assessment 74 1
Other operating expense 2,496 2,151
----- -----
Total non-interest expense 11,428 10,812
------ ------
Income before provision for income taxes 13,217 12,886
Provision for income taxes 5,453 5,702
----- -----
Net income $7,764 $7,184
========= =========
Net income per common and common
equivalent share $0.44 $0.40
========= =========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
4
<PAGE>
<TABLE>
T R FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(UNAUDITED)
<CAPTION>
For the
three months ended
March 31, 1997
--------------
(in thousands, except share
and per share amounts)
<S> <C>
COMMON STOCK (PAR VALUE: $.01)
Balance at beginning and end of period............................................. $ 227
----------
ADDITIONAL PAID-IN-CAPITAL
Balance at beginning of period..................................................... 104,880
Excess of ESOP compensation cost measured
using fair value of stock over its related cost................................. 755
Common stock acquired by Supplemental
Executive Retirement Plan and Trust............................................. 440
Tax benefits attributable to vested RRP shares and stock option exercises........ 278
---
Balance at end of period........................................................... 106,353
-------
RETAINED EARNINGS, PARTIALLY RESTRICTED
Balance at beginning of period..................................................... 157,716
Net income....................................................................... 7,764
Cash dividends declared on common stock ($0.11 per share)....................... (1,799)
Loss on reissuances of treasury stock (72,432 shares)............................ (140)
----
Balance at end of period........................................................... 163,541
-------
NET UNREALIZED DEPRECIATION IN CERTAIN
SECURITIES, NET OF TAX
Balance at beginning of period..................................................... (1,501)
Increase in net unrealized depreciation in certain securities, net of tax........ (1,677)
------
Balance at end of period........................................................... (3,178)
------
UNALLOCATED/UNEARNED COMMON STOCK HELD BY STOCK PLANS
Balance at beginning of period..................................................... (5,996)
Amortization relating to allocation of stock held by ESOP and
earned portion of RRP stock.................................................... 291
---
Balance at end of period........................................................... (5,705)
------
COMMON STOCK HELD BY BANK'S SUPPLEMENTAL EXECUTIVE
RETIREMENT PLAN AND TRUST
Balance at beginning of period..................................................... (721)
Common stock acquired............................................................ (440)
----
Balance at end of period........................................................... (1,161)
------
TREASURY STOCK, AT COST
Balance at beginning of period..................................................... (50,567)
Common stock acquired at cost (10,000 shares).................................... (175)
Common stock reissued for options exercised (72,432 shares)...................... 466
---
Balance at end of period........................................................... (50,276)
-------
Total stockholders' equity......................................................... $ 209,801
==========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
5
<PAGE>
<TABLE>
T R FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
For the three months ended March 31,
1997 1996
---- ----
(in thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.................................................................... $ 7,764 $ 7,184
Adjustments to reconcile net income to net cash provided (used)
by operating activities:
Provision for possible loan losses.......................................... 350 500
Provision for possible other real estate owned losses....................... -- 34
Depreciation of banking house and equipment................................. 504 396
Gain on calls of securities................................................. -- (30)
Net gain on sales of securities available for sale.......................... (962) (2,765)
Gain on sales of whole loans................................................ (131) (1)
Net gain on sale of other real estate owned................................. (277) (23)
Amortization of net deferred loan origination costs......................... 92 155
Amortization of premiums in excess of accretion of discounts................ 330 392
Income taxes deferred and tax benefits attributable to stock plans.......... 278 --
Amortization relating to allocation and earned portions of stock plans...... 1,046 1,029
Increase/decrease in:
Trading account securities.................................................. -- (2,962)
Accrued interest receivable................................................. 22 956
Accounts payable and accrued expenses....................................... 754 3,841
Official checks outstanding................................................. (10,355) (10,281)
Other assets................................................................ 3,490 (2,626)
Accrued taxes payable....................................................... 1,851 3,334
Other liabilities........................................................... (3,329) (43)
------- ------
Net cash provided (used) by operating activities......................... 1,427 (910)
----- ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for the purchase of:
Securities held to maturity and FHLB Capital Stock.......................... (82,323) (137,297)
Securities available for sale............................................... (82,010) (150,069)
Banking house and equipment................................................. (1,478) (329)
Proceeds from:
Redemption of FHLB Capital Stock and calls of securities.................... 4,095 15,555
Sales of securities available for sale...................................... 21,726 178,718
Repayments on securities.................................................... 41,857 104,894
Sales of whole loans........................................................ 7,790 401
Principal collected on real estate loans.................................... 54,766 36,928
Sales of other real estate owned............................................ 1,159 1,850
Principal collected on other loans.......................................... 8,346 4,090
Real estate loans originated and purchased.................................... (110,275) (116,371)
Other loans originated and purchased.......................................... (13,868) (11,837)
------- -------
Net cash used in investing activities..................................... (150,215) (73,467)
-------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Interest credited to deposits................................................. 22,172 24,011
Net deposits in savings accounts, certificate of deposit accounts,
money market accounts and checking accounts................................. 37,734 28,428
Net proceeds from exercise of stock options................................... 326 293
Net deposits to escrow accounts............................................... 9,216 8,510
Net (repayments of) proceeds from short-term borrowed funds................... (7,185) 31,000
Repayments of long-term borrowed funds........................................ (22,400) (14,800)
Proceeds from long-term borrowed funds........................................ 110,478 35,900
Purchase of treasury stock.................................................... (175) (14,582)
Cash dividends paid........................................................... (1,799) (1,155)
------ ------
Net cash provided by financing activities.................................. 148,367 97,605
------- -------
Net (decrease) increase in cash and cash equivalents.......................... (421) 23,228
Cash and cash equivalents at beginning of period.............................. 18,128 21,204
------ ------
Cash and cash equivalents at end of period.................................... $ 17,707 $ 44,432
========= ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes.................................................... $ 434 $ 2,368
========= ===========
Cash paid for interest on deposits and borrowed funds......................... $ 13,732 $ 13,766
========= ==========
Non-cash investing activities:
Additions to other real estate owned, net................................... $ 508 $ 3,973
========= ===========
</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 months ended March 31, 1997 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,
1996.
On April 15, 1997, the Board of Directors announced a stock split in the form of
a 100% stock dividend to stockholders of record at the close of business on May
1, 1997. As a result, all share and per share amounts contained in these
unaudited consolidated financial statements have been restated to give effect to
the 100% stock dividend. The new shares will be distributed on May 14, 1997.
Effective January 1, 1997, the Company adopted the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities," as amended by
SFAS No. 127, "Deferral of the Effective Date of Certain Provisions of FASB
Statement No. 125." The adoption of SFAS No. 125, as amended, did not have a
material effect on the Company's results of operations.
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 months ended March 31, 1997 and 1996, the weighted
average number of shares of common stock and common stock equivalents
outstanding was 17,569,754 and 17,960,472, respectively. Such shares have been
reduced, in accordance with the provisions of the Accounting Standards Executive
Committee of the American Institute of Certified Public Accountants Statement of
Position 93-6, "Employers' Accounting for Employee Stock Ownership Plans," by
the weighted average number of unallocated shares of common stock held by the
Company's Employee Stock Ownership Plan ("ESOP") of 1,226,534 and 1,470,378,
respectively, for the three months ended March 31, 1997 and 1996.
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 March 31, 1997 and December 31, 1996, respectively.
7
<PAGE>
<TABLE>
<CAPTION>
MARCH 31, 1997
--------------
Gross Unrealized
Amortized Estimated ----------------
Cost Fair Value Gains Losses
--------- ---------- ----- ------
(in thousands)
<S> <C> <C> <C> <C>
Available for Sale:
Bonds and equities:
United States Government
obligations $ 255,825 $ 253,513 $ 78 $ (2,390)
Federal agency obligations 110,054 108,002 54 (2,106)
Industrial, financial corporation
and other bonds 2,052 2,091 39 --
Common and preferred stocks 21,861 25,483 3,827 (205)
------ ------ ----- ----
Total bonds and equities 389,792 389,089 3,998 (4,701)
------- ------- ----- ------
Mortgage-backed securities:
FNMA, net (1) 17,071 16,851 132 (352)
GNMA, net 60,778 60,332 82 (528)
FHLMC, net (1) 25,037 25,140 335 (232)
------ ------ --- ----
Total mortgage-backed securities 102,886 102,323 549 (1,112)
------- ------- --- ------
Total available for sale $ 492,678 $ 491,412 $ 4,547 $ (5,813)
============ ============ ============ =============
Held to Maturity, Net:
Bonds:
Federal agency obligations $ 6,000 $ 5,921 $ -- $ (79)
Public utility bonds 1,001 931 -- (70)
Municipal bonds 6,661 6,748 98 (11)
Industrial and financial
corporation bonds 33,652 33,560 85 (177)
------ ------ --- ----
Total bonds 47,314 47,160 183 (337)
------ ------ --- ----
Mortgage-backed securities:
FNMA, net 95,341 91,636 82 (3,787)
GNMA, net 811,733 810,246 8,902 (10,389)
FHLMC, net (2) 96,364 95,731 575 (1,208)
CMOs, net (2) 2,907 3,030 123 --
----- ----- --- --
Total mortgage-backed securities 1,006,345 1,000,643 9,682 (15,384)
--------- --------- ----- -------
Total held to maturity, net $ 1,053,659 $ 1,047,803 $ 9,865 $ (15,721)
=========== =========== =========== ===========
</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 March 31, 1997 the
amortized cost of these securities was reduced by $1,621,000 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 March 31, 1997 the amortized cost of these
securities was reduced by $2,789,000 of gross unrealized losses existing as of
March 31, 1995, adjusted for subsequent accretion.
8
<PAGE>
<TABLE>
<CAPTION>
December 31, 1996
-----------------
Gross Unrealized
Amortized Estimated ----------------
Cost Fair Value Gains Losses
--------- ---------- ----- ------
(in thousands)
<S> <C> <C> <C> <C>
Available for Sale:
Bonds and equities:
United States Government obligations $ 214,989 $ 214,585 $ 448 $ (852)
Federal agency obligations 98,057 97,074 138 (1,121)
Industrial, financial corporation
and other bonds 4,059 4,126 67 --
Common and preferred stocks 19,448 21,661 2,237 (24)
------ ------ ----- ---
Total bonds and equities 336,553 337,446 2,890 (1,997)
------- ------- ----- ------
Mortgage-backed securities:
FNMA, net (1) 17,393 17,453 259 (199)
GNMA, net 60,259 60,552 422 (129)
FHLMC, net (1) 25,717 26,396 807 (128)
------ ------ ----- ----
Total mortgage-backed securities 103,369 104,401 1,488 (456)
------- ------- ----- ----
Total available for sale $ 439,922 $ 441,847 $ 4,378 $ (2,453)
========== ========== ========== ============
Held to Maturity, Net:
Bonds:
Federal agency obligations $ 6,000 $ 5,926 $ -- $ (74)
Public utility bonds 1,001 947 -- (54)
Municipal bonds 6,921 7,102 182 (1)
Industrial and financial
corporation bonds 39,710 39,690 169 (189)
------ ------ --- ----
Total bonds 53,632 53,665 351 (318)
------ ------ --- -----
Mortgage-backed securities:
FNMA, net 98,178 96,258 239 (2,159)
GNMA, net 755,479 764,530 13,296 (4,245)
FHLMC, net (2) 98,737 100,211 1,474 --
CMOs, net (2) 2,906 3,038 132 --
----- ----- --- --
Total mortgage-backed securities 955,300 964,037 15,141 (6,404)
------- ------- ------ ------
Total held to maturity, net $ 1,008,932 $1,017,702 $ 15,492 $ (6,722)
=========== ========== ========= ===========
</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 December 31, 1996
the amortized cost of these securities was reduced by $1,666,000 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 December 31, 1996 the amortized cost of
these securities was reduced by $2,940,000 of gross unrealized losses existing
as of March 31, 1995, 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
March 31, 1997 and 1996, compensation expense attributable to the ESOP was
$1,017,000 and $785,000, respectively. The average quoted price of the
underlying shares for the three months ended March 31, 1997 and 1996 was $17.51
and $12.70, respectively.
5. STOCKHOLDERS' EQUITY
During the three months ended March 31, 1997, a total of 10,000 shares of T R
Financial common stock were repurchased by the Company at an aggregate cost of
$175,000.
On January 23, 1997 the Board of Directors declared a cash dividend on the
Company's outstanding common stock of $0.11 per common share to stockholders of
record on February 14, 1997. This dividend, which aggregated $1,799,000, was
paid on March 3, 1997.
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 in 1996 received $3,572,000 of liquidating distributions, representing 100%
of the Bank's deposit claim balances and 100% of the collateral portion of its
subordinated capital debenture claims. In January 1997 and April 1997, the Bank
received $27,500 and $93,250, respectively, towards its claims against Nationar.
As of December 31, 1996, however, the Bank had either fully collected or
charged-off its remaining Nationar claims. Accordingly, such distributions
increased recorded income.
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 April 15, 1997 the Board of Directors announced a stock split in the form of
a 100% stock dividend. Stockholders of record at the close of business on May 1,
1997 will receive one additional share of T R Financial Corp. common stock for
each share of common stock they own on that date. The new shares will be
distributed on May 14, 1997. In addition, on April 15, 1997 the Board of
Directors declared a cash dividend on the Company's outstanding common stock of
$0.13 per common share to stockholders of record on May 15, 1997. The dividend
is payable on June 2, 1997.
8. LEGISLATION REGARDING TAX BAD DEBT RESERVES
In March 1997, New York City legislative changes were enacted to permit
continued future use of bad debt reserve methods similar to New York State tax
law. The Company reduced its provision for
10
<PAGE>
income taxes during the three months ended March 31, 1997 by $275,000
principally as a result of the change in New York City bad debt tax legislation.
9. RECENT ACCOUNTING PRONOUNCEMENT
In February 1997, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 128, "Earnings Per Share," which supersedes APB Opinion No. 15, "Earnings
Per Share." SFAS No. 128 replaces the current presentation of primary earnings
per share with basic earnings per share and replaces the current presentation of
fully diluted earnings per share with diluted earnings per share.
Basic earnings per share, unlike primary earnings per share, excludes dilution
and is computed by dividing income available to common stockholders by the
weighted average number of common shares outstanding during the period. Diluted
earnings per share reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised, converted
into common stock or otherwise resulted in the issuance of common stock. Diluted
earnings per share is similar to fully diluted earnings per share under APB
Opinion No. 15.
SFAS No. 128 is effective for financial statements with interim and annual
periods ending after December 15, 1997. As a result, the Company will be
required to apply the provisions of SFAS No. 128 beginning with financial
statements for the three and twelve months ended December 31, 1997. SFAS No. 128
also requires that, upon adoption of this statement, all prior period earnings
per share data will be restated to conform with the provisions of SFAS No. 128.
While SFAS No. 128 dos not permit early application, earnings per share data
computed pursuant to the provisions of SFAS No. 128, on a pro forma basis, for
the three months ended March 31, 1997 and 1996 is as follows:
<TABLE>
<CAPTION>
Three Months Ended March 31,
1997 1996
---- ----
<S> <C> <C>
Basic earnings per share:
Income available to common stockholders $ 7,764,000 $ 7,184,000
=========== ===========
Weighted average number of common
shares outstanding 16,347,434 16,782,132
Weighted average pro rata allocation to
interim periods of common stock held
by the ESOP and to be allocated on
December 31st of each year 28,972 32,496
----------- ------------
Total denominator-basic earnings per share 16,376,406 16,814,628
=========== ===========
Basic earnings per share $0.47 $0.43
=========== =============
Diluted earnings per share:
Income available to common stockholders $ 7,764,000 $ 7,184,000
=========== ============
Total denominator-basic earnings per share 16,376,406 16,814,628
Plus: Weighted average number of shares
that would be issued upon exercise
of dilutive options assuming proceeds
would be used to repurchase shares
pursuant to the treasury stock method 1,193,348 1,145,844
----------- -----------
Total denominator-diluted earnings per share 17,569,754 17,960,472
=========== ===========
Diluted earnings per share $0.44 $0.40
============= =============
</TABLE>
11
<PAGE>
ITEM 2. 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 $144.7 million, or 4.4%, to $3.40 billion at
March 31, 1997 from $3.26 billion at December 31, 1996, primarily as a result of
management's continued strategy to leverage its capital position through asset
growth. This growth was funded primarily by increased borrowed funds and by
attracting new deposits.
Of the increase in total assets, $52.4 million was attributable to an
increase in net loans due primarily to the origination and purchase of
residential real estate loans. Securities available for sale increased $49.6
million, or 11.2%, to $491.4 million at March 31, 1997 from $441.8 million at
December 31, 1996 due principally to purchases of securities totaling $82.0
million during the three months ended March 31, 1997, offset by sales of $21.7
million. Securities held to maturity, net increased $44.7 million, or 4.4%, to
$1.05 billion at March 31, 1997 from $1.01 billion at December 31, 1996. 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. As of March 31, 1997, the
available for sale portfolio had net unrealized depreciation of $1.3 million as
compared to net unrealized appreciation at December 31, 1996 of $1.9 million.
This $3.2 million decrease in unrealized appreciation, when tax effected,
increased deferred tax asset, net by $1.3 million.
Total deposits increased $59.9 million, or 2.6%, to $2.40 billion at
March 31,1997 from $2.34 billion at December 31, 1996. This increase was
primarily attributable to the successful marketing efforts for the Bank's
competitively priced deposit products. Borrowed funds increased $80.9 million,
or 12.7%, to $718.7 million at March 31, 1997 from $637.8 million at December
31, 1996. This increase in borrowings is primarily attributable to a $140.0
million increase at March 31, 1997 in securities sold under agreements to
repurchase as compared to December 31, 1996, which was partially offset by a
$59.1 million decrease in Federal Home Loan Bank ("FHLB") borrowings.
Stockholders' equity amounted to $209.8 million at March 31, 1997, or
6.2% of total assets, as compared to $204.0 million at December 31, 1996, or
6.3% of total assets. In accordance with Statement of Financial Accounting
Standards ("SFAS") No. 115, "Accounting for Investments in Certain Debt and
Equity Securities," stockholders' equity at March 31, 1997 and December 31, 1996
includes net unrealized depreciation in certain securities, net of tax, of $3.2
million and $1.5 million, respectively. The change in net unrealized
depreciation in certain securities from December 31, 1996 to March 31, 1997
resulted primarily from increases in market interest rates during the three
months ended March 31, 1997, 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. As of March 31, 1997, net unrealized depreciation in
certain securities, net of tax, included net depreciation of $2.5 million, net
of tax, relating to securities previously transferred from available for sale to
held to maturity. At December 31, 1996, such amount was $2.6 million of net
depreciation. In addition, during the three months ended March 31, 1997, the
12
<PAGE>
Company continued its stock buyback program, purchasing 10,000 shares of common
stock at a total cost of $175,000 for the period. See "Liquidity and Capital
Resources."
The Bank's leverage capital ratio decreased from 6.07% at December 31,
1996 to 5.99% at March 31, 1997 due to the increase in the Bank's quarterly
average assets, which was partially offset by a $4.2 million increase in the
Bank's regulatory capital. The Bank's risk-based capital ratio of 17.22% at
March 31, 1997 represents a 36 basis point increase as compared to that ratio at
December 31, 1996. These capital ratios are well in excess of Federal Deposit
Insurance Corporation ("FDIC") capital requirements applicable to the Bank. See
"Liquidity and Capital Resources -- Regulatory Capital Position."
Non-performing assets decreased $2.4 million to $13.5 million at March
31, 1997, from $15.9 million at December 31, 1996. The ratio of non-performing
assets to total assets decreased to 0.40% at March 31, 1997 from 0.49% at
December 31, 1996. Other real estate owned, net decreased $374 thousand to $2.9
million at March 31, 1997 from $3.3 million at December 31, 1996. Non-performing
loans decreased to $10.6 million at March 31, 1997 as compared to $12.6 million
at December 31, 1996 due to a $2.0 million reduction in non-accrual loans. The
ratio of non-performing loans to total loans decreased to 0.60% at March 31,
1997 as compared to 0.74% at December 31, 1996.
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 months ended March 31, 1997 and 1996, 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.
13
<PAGE>
<TABLE>
THREE MONTHS ENDED MARCH 31,
----------------------------
1997 1996
-------------------------------------------- -------------------------------------------
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 $ 1,622,825 $ 30,466 7.51% $ 1,373,044 $ 26,068 7.59%
Other Loans 109,818 2,122 7.73 69,336 1,452 8.38
Mortgage-Backed Securities 1,078,998 20,331 7.54 980,120 18,372 7.50
Short-Term Securities 41 1 5.66 16,846 223 5.30
Other Securities 444,895 6,537 5.88 405,193 6,043 5.97
------- ----- ------- -----
Total Earning Assets 3,256,577 59,457 7.30 2,844,539 52,158 7.34
------ ------
Non-Earning Assets 69,678 74,826
------ ------
Total Assets $ 3,326,255 $ 2,919,365
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-Bearing Liabilities:
Deposits:
Passbook Accounts $ 619,470 $ 4,495 2.90% $ 524,642 $ 3,478 2.65%
Now Accounts 8,640 60 2.78 63,840 473 2.96
Money Market Accounts 75,907 521 2.75 68,356 491 2.87
Certificate of Deposit Accounts 1,634,767 22,808 5.58 1,368,261 19,569 5.72
--------- ------ --------- ------
Total Interest-Bearing Deposits 2,338,784 27,884 4.77 2,025,099 24,011 4.74
Borrowings 673,444 9,558 5.68 603,013 8,569 5.68
------- ----- ------- -----
Total Interest-Bearing Liabilities 3,012,228 37,442 4.97 2,628,112 32,580 4.96
------ ------
Other Liabilities 108,018 100,704
------- -------
Total Liabilities 3,120,246 2,728,816
Stockholders' Equity 206,009 190,549
------- -------
Total Liabilities and Stockholders'
Equity $ 3,326,255 $ 2,919,365
=========== ===========
Net Interest Income/Interest Rate Spread $ 22,015 2.33% $ 19,578 2.38%
=========== ===== =========== =====
Net Earning Assets/Net Interest Margin $ 244,349 2.70% $ 216,427 2.75%
=========== ===== =========== =====
Ratio of Earning Assets to
Interest-Bearing Liabilities 1.08x 1.08x
===== =====
</TABLE>
14
<PAGE>
COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND
1996
GENERAL. The Company's net income for the three months ended March 31,
1997 increased $580 thousand to $7.8 million from $7.2 million for the same
period in 1996.
INTEREST INCOME. Interest income increased by $7.3 million, or 14.0%,
to $59.5 million for the three months ended March 31, 1997, from $52.2 million
for the same period in 1996, due to an increase in the average earning assets
during the period of $412.0 million to $3.26 billion for the three months ended
March 31, 1997, from $2.84 billion for the same period in 1996, reflecting the
Company's strategy to leverage its capital position through asset growth. Of the
increase in average earning assets, $249.8 million was attributable to growth in
mortgage loans, net, $98.9 million was attributable to growth in mortgage-backed
securities, $40.5 million was attributable to growth in other loans, and $39.7
million was attributable to other securities. Offsetting the increases in
average mortgage loans, net, mortgage-backed securities, other loans, and other
securities was a $16.8 million decrease in the average balance of short-term
securities. The average yield on earning assets decreased to 7.30% for the three
months ended March 31, 1997 from 7.34% for the same period in 1996, due
primarily to the downward repricing of interest-earning assets during the first
quarter of 1997 as compared to the comparable prior year period.
Of the $40.5 million increase in the average balance of other loans for
the three months ended March 31, 1997 as compared to the same period in 1996,
86.8% was attributable to automobile leases purchased from a third party leasing
company. As of April 1, 1997, the third party leasing company was acquired by
another third party and stopped selling its automobile lease receivables.
INTEREST EXPENSE. Interest expense increased by $4.9 million, or 14.9%,
to $37.4 million for the three months ended March 31, 1997, from $32.6 million
for the same period in 1996, due primarily to a $313.7 million increase in
average interest-bearing deposits and a 3 basis point increase in the average
rate paid on interest-bearing deposit accounts. In addition, average borrowings
increased $70.4 million to $673.4 million for the three months ended March 31,
1997 as compared to the same period in 1996 while the average cost of the
borrowings remained the same at 5.68%. The average rate paid on interest-bearing
liabilities increased to 4.97% for the three months ended March 31, 1997 from
4.96% for the same period in 1996. The average balance of interest-bearing
liabilities increased $384.1 million for the three months ended March 31, 1997,
to $3.01 billion from $2.63 billion for the same period in 1996.
NET INTEREST INCOME. Net interest income increased $2.4 million, or
12.4%, to $22.0 million for the three months ended March 31, 1997, from $19.6
million for the same period in 1996. This increase is the result, in part, of a
$412.0 million increase in the average balance of earning assets to $3.26
billion, offset by a $384.1 million increase in the average balance of
interest-bearing liabilities to $3.01 billion for the three months ended March
31, 1997 as compared to the comparable prior year period. As a result of these
increases, the net interest rate spread for the three months ended March 31,
1997 decreased to 2.33% from 2.38% for the same period in 1996.
PROVISION FOR POSSIBLE LOAN LOSSES. The provision for possible loan
losses decreased $150 thousand, or 30.0% to $350 thousand for the three months
ended March 31, 1997 from $500 thousand for the same period in 1996. 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 March 31, 1997 and
1996, loan charge-offs, net of recoveries, aggregated $19 thousand and $27
thousand, respectively. At March 31, 1997 and December 31, 1996, the allowance
for possible loan losses amounted to $14.7 million and $14.4 million,
respectively, and the ratio of such allowance to non-performing loans was
138.10% at March 31, 1997 as compared to 113.79% at December 31, 1996. Although
management believes its allowance for
15
<PAGE>
possible loan losses is adequate at March 31, 1997, 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 $1.6 million to $3.0
million for the three months ended March 31, 1997 from $4.6 million for the same
period in 1996. This decrease was primarily attributable to a $1.8 million
decrease in net gain on sales of securities. For the three months ended March
31, 1997, the Company sold available for sale securities for $21.7 million, and
recognized $962 thousand of net securities gains. The securities sold included
$13.0 million of bonds, $3.9 million of mortgage-backed securities and $4.8
million of equities. These securities were sold at net gains of $26 thousand,
$23 thousand and $913 thousand, respectively. The decrease in net gains on sales
of securities, however, was partially offset by a $130 thousand increase in gain
on sales of whole loans.
NON-INTEREST EXPENSE. Non-interest expense increased $616 thousand, or
5.7%, to $11.4 million for the three months ended March 31, 1997, from $10.8
million for the same period in 1996. Of this increase, salary and employee
benefits expense increased $440 thousand, or 7.0%, due primarily to higher costs
associated with certain health benefit plans, qualified stock-based compensation
plans and normal salary increases and offset partially by lower costs associated
with restricted stock plans which are now substantially fully vested. Occupancy
and equipment expense increased $68 thousand to $1.4 million for the three
months ended March 31, 1997, due primarily to increases in depreciation, which
resulted from capital expenditures on technology and building renovations, and
increased facilities costs for buildings. Marketing expense decreased $18
thousand to $650 thousand for the three months ended March 31, 1997 as compared
to the same period in 1996. Other real estate owned expense decreased $292
thousand to $77 thousand for the three months ended March 31, 1997 as compared
to the same period in 1996 due to fewer foreclosed properties being held. FDIC
assessment expense was $74 thousand for the three month period ending March 31,
1997 as compared to $1 thousand for the same period in 1996. This increase
resulted from an increase in 1997 FDIC Bank Insurance Fund ("BIF") assessment
rates from zero per $100 of insured deposits to $0.013 per $100 of insured
deposits. Other operating expense increased $345 thousand, or 16.0%, for the
three months ended March 31, 1997 as compared to the same period during 1996,
due in part to higher costs associated with computer costs, office supplies and
consulting costs.
PROVISION FOR INCOME TAXES. Provision for income taxes decreased $249
thousand to $5.5 million for the three months ended March 31, 1997 as compared
to $5.7 million during the same period in 1996. As a percentage of income before
provision for income taxes, the provision for income taxes decreased from 44.2%
of pre-tax earnings to 41.3%. This decrease resulted from New York City
legislative changes regarding tax bad debt reserves (see Note 8 of Notes to
Unaudited Consolidated Financial Statements.)
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 invested 50% of the net proceeds from the
stock offering in the Bank and initially invested the remaining proceeds in
short-term securities, corporate debt obligations, money market investments and
mortgage-backed securities. The Bank can pay dividends to T R Financial, to the
extent such payments are permitted by law or regulation, which serves as an
additional source of liquidity. T R Financial's liquidity is available to, among
other things, support future expansion of operations or diversification into
other banking related businesses, to pay dividends to its stockholders or
repurchase its common stock. During the three months ended March 31, 1997, T R
Financial repurchased 10,000 shares of its common stock at a total cost of $175
thousand. On April 16, 1996, the Board of Directors terminated the Company's
fifth stock repurchase program and authorized a sixth stock repurchase program
covering the repurchase of up to
16
<PAGE>
1,789,618 shares of common stock. As of March 31, 1997, 444,000 shares had
been repurchased pursuant to this program. On April 15, 1997, the Board of
Directors declared a quarterly cash dividend of $0.13 per common share to
stockholders of record on May 15, 1997. This dividend is payable on June 2,
1997.
The Bank's primary sources of funds are deposits, FHLB borrowings,
securities sold under agreements to repurchase and 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 and
purchase of mortgage loans and the purchase of securities, including
mortgage-backed 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 investing activities during
any given period.
Liquidity management for the Company is both a daily and long-term
component of the Company's management strategy. Excess funds are generally
invested in short-term and intermediateterm securities. In the event that the
Company should require funds beyond its ability to generate them internally,
additional sources of funds are available through the use of FHLB borrowings and
through the use of securities sold under agreements to repurchase. In addition,
the Bank may access funds, if necessary, through a $100 million overnight line
of credit and a $100 million one-month borrowing facility from the FHLB.
REGULATORY CAPITAL POSITION. The Bank is subject to minimum regulatory
requirements imposed by the 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 amount of at least 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 minimum leverage capital ratio is 3.0%,
the Federal Deposit Insurance Corporation Improvement Act of 1991 ("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 regulatory capital positions and
ratios at March 31, 1997:
17
<PAGE>
<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>
Stockholders' equity at
March 31, 1997............ $ 195,732 $ 195,732 $ 209,801 $ 209,801
Net unrealized
depreciation in certain
securities, net of tax.... 3,011 3,011 3,178 3,178
Mortgage servicing
rights not recognized..... (10) (10) (10) (10)
Allowance for possible
loan losses............... -- 14,701 -- 14,701
------------ ------------ ------------ ------------
Regulatory capital
position.................. 198,733 213,434 212,969 227,670
Minimum required
regulatory capital (3%
and 8%,
respectively (1).......... 99,599 99,140 100,017 99,251
------------ ------------ ------------ ------------
Excess...................... $ 99,134 $ 114,294 $ 112,952 $ 128,419
============ ============ ============ ============
Regulatory capital
ratio..................... 5.99% 17.22% 6.39% 18.35%
============ ============ ============ ============
</TABLE>
(1) Applying the 4% leverage capital ratio imposed by FDICIA, the Bank's
leverage capital requirement at March 31, 1997 was $132.8 million and as of such
date the Bank exceeded this requirement by $65.9 million. T R Financial's
leverage capital requirement, applying the 4% leverage capital ratio, was $133.4
million at March 31, 1997 and as of such date T R Financial exceeded this
requirement by $79.6 million.
REGULATORY MATTERS
On April 18, 1997, the FDIC formally approved the Bank's Community Reinvestment
Act ("CRA") Strategic Plan, which was submitted in accordance with Section
345.27 of the Rules and Regulations of the FDIC. The CRA Strategic Plan, which
became effective as of January 1, 1997, specifies measurable goals for lending,
investment and services through December 31, 1998.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
----------------------------------------------------------
Not applicable.
18
<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
- ------------------------------------------------------------
At the Company's Annual Meeting of Stockholders held on April 21, 1997,
the following matters were voted upon, with the results of the voting
on such matters indicated:
1. Election of the following persons to serve a three-year term
as directors of the Company:
FOR WITHHELD
John M. Tsimbinos 7,241,261 252,928
Edward J. Kowatch 7,243,370 250,819
James E. Orr, Jr. 7,243,370 250,819
Spiros J. Voutsinas 7,243,670 250,519
Broker Non-Votes: None
2. Ratification of the appointment of the firm of KPMG Peat
Marwick LLP as independent auditors for the Company for the year ending
December 31, 1997:
For: 7,403,106
Against: 70,545
Abstain: 20,538
Broker Non-Votes: None
19
<PAGE>
3. Approval of the Amended and Restated T R Financial Corp. 1993
Incentive Stock Option Plan:
For: 5,178,016
Against: 694,920
Abstain: 43,553
Broker Non-Votes: 1,577,700
4. Approval of the Roosevelt Savings Bank Performance
Compensation Plan:
For: 5,349,001
Against: 329,343
Abstain: 48,145
Broker Non-Votes: 1,767,700
ITEM 5. OTHER INFORMATION
- --------------------------
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- -----------------------------------------
(a) EXHIBITS
10.1 Employment Agreement by and between Roosevelt Savings Bank and
John M. Tsimbinos, amended and restated as of January 23, 1997
(1)
10.2 Employment Agreement by and between Roosevelt Savings Bank and
A. Gordon Nutt, amended and restated as of January 23, 1997
(1)
10.3 Employment Agreement by and between Roosevelt Savings Bank and
William R. Kuhn, amended and restated as of January 23, 1997
(1)
10.4 Employment Agreement by and between Roosevelt Savings Bank and
Dennis E. Henchy, amended and restated as of January 23, 1997
(1)
10.5 Employment Agreement by and between Roosevelt Savings Bank and
John J. DeRusso, amended and restated as of January 23, 1997
(1)
10.6 Employment Agreement by and between Roosevelt Savings Bank and
Ira H. Kramer, amended and restated as of January 23, 1997 (1)
10.7 Employment Agreement by and between T R Financial Corp. and
John M. Tsimbinos, amended and restated as of January 23, 1997
(1)
20
<PAGE>
10.8 Employment Agreement by and between T R Financial Corp. and A.
Gordon Nutt, amended and restated as of January 23, 1997 (1)
10.9 Employment Agreement by and between T R Financial Corp. and
William R. Kuhn, amended and restated as of January 23, 1997
(1)
10.10 Employment Agreement by and between T R Financial Corp. and
Dennis E. Henchy, amended and restated as of January 23, 1997
(1)
10.11 Employment Agreement by and between T R Financial Corp. and
John J. DeRusso, amended and restated as of January 23, 1997
(1)
10.12 Employment Agreement by and between T R Financial Corp. and
Ira H. Kramer, amended and restated as of January 23, 1997 (1)
10.13 Roosevelt Savings Bank Performance Compensation Plan (2)
10.14 T R Financial Corp. 1993 Incentive Stock Option Plan, amended
and restated as of January 23, 1997 (2)
10.15 T R Financial Corp. 1993 Stock Option Plan for Outside
Directors, amended and restated effective as of January 23,
1997 (1)
11. Statement re: Computation of Per Share Earnings
27. Financial Data Schedule (submitted only with filing in
electronic format)
(b) REPORTS ON FORM 8-K
A Current Report on Form 8-K was filed by the Company on April
15, 1997 disclosing that the Board of Directors of T R
Financial Corp. announced a stock split in the form of a 100%
stock dividend.
21
<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: May 13, 1997 By:/s/ John M. Tsimbinos
---------------------
John M. Tsimbinos
Chairman of the Board and
Chief Executive Officer
Date: May 13, 1997 By:/s/ Dennis E. Henchy
--------------------
Dennis E. Henchy
Executive Vice President
and Chief Financial Officer
22
<PAGE>
EXHIBIT INDEX
10.1 Employment Agreement by and between Roosevelt Savings Bank and
John M. Tsimbinos, amended and restated as of January 23, 1997 (1)
10.2 Employment Agreement by and between Roosevelt Savings Bank and
A. Gordon Nutt, amended and restated as of January 23, 1997 (1)
10.3 Employment Agreement by and between Roosevelt Savings Bank and
William R. Kuhn, amended and restated as of January 23, 1997 (1)
10.4 Employment Agreement by and between Roosevelt Savings Bank and
Dennis E. Henchy, amended and restated as of January 23, 1997 (1)
10.5 Employment Agreement by and between Roosevelt Savings Bank and
John J. DeRusso, amended and restated as of January 23, 1997 (1)
10.6 Employment Agreement by and between Roosevelt Savings Bank and
Ira H. Kramer, amended and restated as of January 23, 1997 (1)
10.7 Employment Agreement by and between T R Financial Corp. and
John M. Tsimbinos, amended and restated as of January 23, 1997 (1)
10.8 Employment Agreement by and between T R Financial Corp. and
A. Gordon Nutt, amended and restated as of January 23, 1997 (1)
10.9 Employment Agreement by and between T R Financial Corp. and
William R. Kuhn, amended and restated as of January 23, 1997 (1)
10.10 Employment Agreement by and between T R Financial Corp. and
Dennis E. Henchy, amended and restated as of January 23, 1997 (1)
10.11 Employment Agreement by and between T R Financial Corp. and
John J. DeRusso, amended and restated as of January 23, 1997 (1)
10.12 Employment Agreement by and between T R Financial Corp. and
Ira H. Kramer, amended and restated as of January 23, 1997 (1)
10.13 Roosevelt Savings Bank Performance Compensation Plan (2)
10.14 T R Financial Corp. 1993 Incentive Stock Option Plan, amended and
restated as of January 23, 1997 (2)
10.15 T R Financial Corp. 1993 Stock Option Plan for Outside Directors,
amended and restated effective as of January 23, 1997 (1)
11. Statement re: Computation of Per Share Earnings
27. Financial Data Schedule (submitted only with filing in electronic
format)
- ----------
(1) Incorporated herein by reference to the Exhibits to the Registrant's
Annual Report on Form 10-K for fiscal year 1996.
(2) Incorporated herein by reference to the Registrant's Definitive Proxy
Statement for its 1997 Annual Meeting of Stockholders.
23
EXHIBIT 11
<TABLE>
T R FINANCIAL CORP.
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
<CAPTION>
Three Months Ended
March 31,
---------------------------------------------------
1997 1996
---- ----
<C> <C> <C>
1. Net income $ 7,764,000 $7,184,000
=========== ==========
2. Weighted average common
shares outstanding 16,347,434 16,782,132
3. Pro rata allocation to
interim periods of ESOP
shares to be allocated on
December 31st of each year 28,972 32,496
4. Common stock equivalents
attributable to dilutive effect
of stock options 1,193,348 1,145,844
----------- -----------
5. Total weighted average
common shares and
equivalents outstanding for
primary earnings per share
computations 17,569,754 17,960,472
============== ============
6. Primary earnings per share $ 0.44 $ 0.40
============== ============
</TABLE>
24
<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>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 17,707
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 491,412
<INVESTMENTS-CARRYING> 1,053,659
<INVESTMENTS-MARKET> 1,047,803
<LOANS> 1,768,935
<ALLOWANCE> 14,701
<TOTAL-ASSETS> 3,404,326
<DEPOSITS> 2,403,419
<SHORT-TERM> 75,500
<LIABILITIES-OTHER> 72,378
<LONG-TERM> 643,228
0
0
<COMMON> 114
<OTHER-SE> 209,687
<TOTAL-LIABILITIES-AND-EQUITY> 3,404,326
<INTEREST-LOAN> 32,588
<INTEREST-INVEST> 26,869
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 59,457
<INTEREST-DEPOSIT> 27,884
<INTEREST-EXPENSE> 37,442
<INTEREST-INCOME-NET> 22,015
<LOAN-LOSSES> 350
<SECURITIES-GAINS> 966
<EXPENSE-OTHER> 11,428
<INCOME-PRETAX> 13,217
<INCOME-PRE-EXTRAORDINARY> 7,764
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,764
<EPS-PRIMARY> 0.44
<EPS-DILUTED> 0.44
<YIELD-ACTUAL> 2.70
<LOANS-NON> 10,135
<LOANS-PAST> 510
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 14,370
<CHARGE-OFFS> 90
<RECOVERIES> 71
<ALLOWANCE-CLOSE> 14,701
<ALLOWANCE-DOMESTIC> 14,701
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
