<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999 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: 000-21628
HAVEN BANCORP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
11-3153802
(I.R.S. Employer Identification No.)
615 MERRICK AVENUE, WESTBURY, NEW YORK 11590
(Address of principal executive offices) (Zip Code)
(516) 683-4100
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. X Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
There were 8,918,542 shares of the Registrant's common stock
outstanding as of May 12, 1999.
<PAGE>
HAVEN BANCORP, INC.
FORM 10-Q
INDEX
PART I - FINANCIAL INFORMATION PAGE
Item 1. Financial Statements (Unaudited)
Consolidated Statements of Financial Condition
as of March 31, 1999 and December 31, 1998 3
Consolidated Statements of Income for the
Three Months ended March 31, 1999 and 1998 4
Consolidated Statement of Changes in
Stockholders' Equity for the Three Months
ended March 31, 1999 5
Consolidated Statements of Cash Flows for the
Three Months ended March 31, 1999 and 1998 6
Notes to Consolidated Financial Statements 7-10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10-24
Item 3. Quantitative and Qualitative Disclosure
About Market Risk 24
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 24
Item 2. Changes in Securities and Use of Proceeds 24
Item 3. Defaults Upon Senior Securities 24
Item 4. Submission of Matters to a Vote of Security
Holders 24-25
Item 5. Other Information 25
Item 6. Exhibits and Reports on Form 8-K 25
Signature Page
2
<PAGE>
HAVEN BANCORP, INC.
Consolidated Statements of Financial Condition
(Dollars in thousands, except for share data)
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
--------- ------------
<S> <C> <C>
ASSETS
Cash and due from banks $ 31,759 $ 43,088
Money market investments 1,421 1,720
Securities available for sale (note 2) 941,027 889,251
Loans held for sale 59,440 54,188
Federal Home Loan Bank of NY stock, at cost 22,255 21,990
Loans receivable:
First mortgage loans 1,384,483 1,271,784
Cooperative apartment loans 3,432 3,970
Other loans 36,211 34,926
--------- ---------
Total loans receivable 1,424,126 1,310,680
Less allowance for loan losses (14,573) (13,978)
--------- ---------
Loans receivable, net 1,409,553 1,296,702
Premises and equipment, net 37,772 39,209
Accrued interest receivable 13,586 12,108
Other assets 33,346 37,267
--------- ---------
Total assets $2,550,159 $2,395,523
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $1,804,795 $1,722,710
Borrowed funds 586,330 440,346
Due to broker 10,000 97,458
Other liabilities 29,904 15,142
--------- ---------
Total liabilities 2,431,029 2,275,656
--------- ---------
Stockholders' Equity:
Preferred stock, $.01 par value, 2,000,000
shares authorized, none issued (note 7) - -
Common stock, $.01 par value, 30,000,000 shares authorized,
9,918,750 issued; 8,867,814 and 8,859,692 shares outstanding
in 1999 and 1998, respectively (note 7) 100 100
Additional paid-in capital 51,580 51,383
Retained earnings, substantially restricted 81,020 79,085
Accumulated other comprehensive income:
Unrealized (loss) gain on securities available for sale, net
of tax effect (2,107) 945
Treasury stock, at cost (1,050,936 and 1,059,058 shares in
1999 and 1998, respectively) (9,753) (9,800)
Unallocated common stock held by Bank's ESOP (1,149) (1,222)
Unearned common stock held by Bank's Recognition Plans and Trusts (262) (263)
Unearned compensation (299) (361)
--------- ---------
Total stockholders' equity 119,130 119,867
--------- ---------
Total liabilities and stockholders' equity $2,550,159 $2,395,523
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
HAVEN BANCORP, INC.
Consolidated Statements of Income
(Dollars in thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
1999 1998
---- ----
<S> <C> <C>
Interest income:
Mortgage loans $24,885 $21,739
Other loans 850 787
Mortgage-backed securities 12,650 8,931
Money market investments 30 104
Debt and equity securities 2,065 3,402
------ ------
Total interest income 40,480 34,963
------ ------
Interest expense:
Deposits:
Savings accounts 4,669 2,416
NOW accounts 324 261
Money market accounts 419 423
Certificate accounts 11,753 11,863
Borrowed funds 7,109 6,506
------ ------
Total interest expense 24,274 21,469
------ ------
Net interest income before provision for loan losses 16,206 13,494
Provision for loan losses 675 670
------ ------
Net interest income after provision for loan losses 15,531 12,824
------ ------
Non-interest income:
Loan fees and servicing income 505 518
Sevicing released premiums and fees on loans sold 4,531 -
Savings/checking fees 3,125 1,811
Net gain on sales of interest-earning assets 335 352
Insurance annuity and mutual fund fees 1,975 1,187
Other 590 591
------ ------
Total non-interest income 11,061 4,459
------ ------
Non-interest expense:
Compensation and benefits 12,055 7,577
Occupancy and equipment 3,344 2,219
Real estate owned operations, net (151) 49
Federal deposit insurance premiums 254 207
Other 6,887 4,015
------ ------
Total non-interest expense 22,389 14,067
------ ------
Income before income tax expense 4,203 3,216
Income tax expense 1,603 1,067
------ ------
Net income $ 2,600 $ 2,149
====== ======
Net income per common share: Basic $ 0.30 $ 0.25
====== ======
Diluted $ 0.29 $ 0.24
====== ======
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> HAVEN BANCORP, INC.
Consolidated Statement of Changes in Stockholders' Equity
Three Months Ended March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Accumulated
Other Unallocated Unearned
Additional Comprehen- Common Common
Common Paid-In Retained sive Treasury Stock Held Stock Held Unearned
Total Stock Capital Earnings Income Stock by ESOP by RRP Compensation
(Dollars in thousands) ----- ------ ---------- -------- ---------- -------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1998 $119,867 100 51,383 79,085 945 (9,800) (1,222) (263) (361)
Comprehensive Income:
Net income 2,600 - - 2,600 - - - - -
Other comprehensive income, net of tax
Net unrealized depreciation on
certain securities, net of
reclassification adjustment (1) (3,052) - - - (3,052) - - - -
-------
Comprehensive Loss (452) - - - - - - - -
Dividends declared (note 5) (665) - - (665) - - - - -
Treasury stock issued for RRP and deferred
compensation plan (3,630 shares) - - 35 - - 21 - (20) (36)
Stock options exercised, net of tax
effect (4,492 shares) (note 4) 22 - (4) - - 26 - - -
Allocation of ESOP stock and
amortization of award of RRP stock
and related tax benefits 260 - 166 - - - 73 21 -
Amortization of deferred compensation plan 98 - - - - - - - 98
------- --- ------ ------ ------ ------ ------ ----- -----
Balance at March 31, 1999 $119,130 100 51,580 81,020 (2,107) (9,753) (1,149) (262) (299)
======= === ====== ====== ====== ====== ====== ===== =====
(1) Disclosure of Reclassification Adjustment:
(in thousands) Three Months Ended
March 31, 1999
------------------
Net unrealized holding loss arising during period (2,844)
Less: reclassification adjustment for net gains included in net income 208
-----
Net unrealized loss on securities available for sale (3,052)
=====
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
HAVEN BANCORP, INC.
Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
1999 1998
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 2,600 2,149
Adjustments to reconcile net income to net cash (used in) provided by
operating activities:
Amortization of cost of stock benefit plans 358 490
Amortization of net deferred loan origination fees (23) (10)
Amortization of premiums and accretion of discounts on
loans, mortgage-backed and debt securities (70) (473)
Provision for loan losses 675 670
Provision for losses on real estate owned - 5
Deferred income taxes (404) (389)
Net gain on sales of interest-earning assets (335) (352)
Loans originated and purchased for sale, net of proceeds from sale (5,252) -
Depreciation and amortization 1,178 625
(Increase) decrease in accrued interest receivable (1,478) 524
Decrease in due to broker (87,458) (10,000)
Increase in other liabilities 14,762 8,715
Decrease (increase) in other assets 6,187 (930)
------ ------
Net cash (used in) provided by operating activities (69,260) 1,024
------ ------
Cash flows from investing activities:
Net increase in loans (113,517) (45,347)
Proceeds from disposition of assets (including REO) 22 1,876
Purchases of securities available for sale (191,880) (186,510)
Principal repayments and maturities on securities available for sale 64,373 50,366
Proceeds from sales of securities available for sale 71,214 123,249
Principal repayments, maturities and calls on debt securities
held to maturity - 16,020
Principal repayments on mortgage-backed securities held to maturity - 10,580
Purchases of FHLB stock, net (265) -
Net decrease (increase) in premises and equipment 259 (2,191)
------- ------
Net cash used in investing activities (169,794) (31,957)
------- ------
Cash flows from financing activities:
Net increase in deposits 82,085 109,816
Net increase (decrease) in borrowed funds 145,984 (66,877)
Payment of common stock dividends (665) (546)
Stock options exercised 22 418
------- -------
Net cash provided by financing activities 227,426 42,811
------- -------
Net (decrease) increase in cash and cash equivalents (11,628) 11,878
Cash and cash equivalents at beginning of period 44,808 40,306
------ ------
Cash and cash equivalents at end of period $33,180 $52,184
====== ======
Supplemental information:
Cash paid during the period for:
Interest $24,011 $20,523
Income taxes 1 1
Additions to real estate owned - 310
Securities purchased, not yet received 10,000 -
====== ======
</TABLE>
See accompanying notes to consolidated financial statements.
6
<PAGE>
HAVEN BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1999 and 1998
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION. The accompanying unaudited
consolidated financial statements include the accounts of Haven
Bancorp, Inc. ("Haven Bancorp" or the "Company") and its wholly-
owned subsidiaries, including CFS Bank ("CFS" or the "Bank") as of
March 31, 1999 and December 31, 1998 and for the three-month period
ended March 31, 1999 and 1998, respectively. Material intercompany
accounts and transactions have been eliminated in consolidation.
The accompanying unaudited consolidated financial statements have
been prepared in accordance with generally accepted accounting
principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
necessary adjustments, consisting only of normal recurring accruals
necessary for a fair presentation have been included. The results
of operations for the three-month period ended March 31, 1999 are
not necessarily indicative of the results that may be expected for
the entire fiscal year.
These 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 fiscal year ended December 31, 1998.
NOTE 2 - DEBT, EQUITY AND MORTGAGE-BACKED SECURITIES ("MBSs").
Debt securities and MBSs which the Company has the ability and the
intent to hold until maturity, are carried at cost adjusted for
amortization of premiums and accretion of discounts. Debt and
equity securities and MBSs to be held for indefinite periods of
time and not intended to be held to maturity or on a long-term
basis are classified as available for sale securities which are
recorded at fair value, with unrealized gains (losses), net of tax,
reported as accumulated other comprehensive income, a separate
component of stockholders' equity. At March 31, 1999 and December
31, 1998, all of the Company's debt, equity and mortgage-backed
securities were classified as available for sale.
7
<PAGE>
SECURITIES AVAILABLE FOR SALE
The amortized cost and estimated fair values of securities
available for sale at March 31, 1999 are summarized as follows:
<TABLE>
<CAPTION>
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- ---------
(In thousands)
<S> <C> <C> <C> <C>
Debt and equity securities available for sale:
U.S. Government and Agency obligations $ 81,699 6 (909) 80,796
Preferred Stock 10,992 - (277) 10,715
Corporate debt securities 46,025 - - 46,025
------- ----- ------ -------
138,716 6 (1,186) 137,536
------- ----- ------ -------
MBSs available for sale:
GNMA Certificates 428 8 - 436
FNMA Certificates 167,589 1,105 (797) 167,897
FHLMC Certificates 45,422 606 (58) 45,970
CMOs and REMICS 592,269 1,166 (4,247) 589,188
------- ----- ------ -------
805,708 2,885 (5,102) 803,491
------- ----- ------ -------
Total $944,424 2,891 (6,288) 941,027
======= ===== ====== =======
</TABLE>
The net unrealized loss on securities available for sale at March
31, 1999, was reported as a separate component of stockholders'
equity, in the amount of $2.1 million which is net of a tax effect
of $1.3 million.
NOTE 3 - CAPITAL SECURITIES. On April 13, 1999, Haven Bancorp,
Inc. filed a registration statement with the Securities and
Exchange Commission to issue $35.0 million of capital securities
through Haven Capital Trust II. The registration statement
relating to these securities has been filed with the Securities and
Exchange Commission but has not yet become effective. The Company
currently intends to use the net proceeds from the sale of the
capital securities to invest in the Bank to increase its capital
level. The increased capital will enable the Bank to expand its
deposit base and also invest in residential and commercial real
estate loans in its market area and in investment-grade mortgage-
backed and investment securities. It is also possible that, if the
Company's Board of Directors determines that it is in the best
interest of its shareholders, a portion of the net proceeds may be
used for repurchases of the Company's stock.
8
<PAGE>
NOTE 4 - STOCK PLANS. Changes in outstanding options for the
benefit of directors, officers and other key employees of the Bank
for the three months ended March 31, 1999 are as follows:
<TABLE>
<CAPTION>
Weighted Average
Options Exercise Price
------- ----------------
<S> <C> <C>
Balance at December 31, 1998 1,305,268 9.44
Granted 176,500 13.77
Forfeited (10,000) 25.70
Exercised (4,492) 5.00
--------- -----
Balance at March 31, 1999 1,467,276 9.86
========= =====
Shares exercisable at March 31, 1999 1,035,022 7.20
========= =====
</TABLE>
NOTE 5 - DIVIDENDS PAYABLE. On March 24, 1999, the Company's Board
of Directors approved a regular quarterly cash dividend of $0.075
per share, payable on April 23, 1999, to shareholders of record as
of April 3, 1999.
NOTE 6 - RECENT ACCOUNTING/REGULATORY PRONOUNCEMENTS. In June
1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133,
"Accounting for Derivative Instruments and Hedging Activities".
SFAS No. 133 establishes accounting and reporting standards for
derivative instruments and for hedging activities. It requires
that an entity recognize all derivatives as either assets or
liabilities in the statement of financial condition and measure
those instruments at fair value. The accounting for changes in the
fair value of a derivative (that is, gains and losses) depends on
the intended use of the derivative and the resulting designation.
SFAS No. 133 is effective for fiscal years beginning after June 15,
1999 and does not require restatement of prior periods. Management
of the Company currently believes the implementation of SFAS No.
133 will not have a material impact on the Company's financial
condition or results of operations.
NOTE 7 - NET INCOME PER SHARE OF COMMON STOCK. There were
8,634,171 basic shares outstanding and 9,021,614 diluted shares
outstanding for the three months ended March 31, 1999. The
weighted average number of shares outstanding does not include
229,769 shares which are unallocated by the Employee Stock
Ownership Plan ("ESOP") as of March 31, 1999 in accordance with
American Institute of CPAs ("AICPA") Statement of Position ("SOP")
93-6, "Employers' Accounting for ESOPs". Basic EPS excludes
9
<PAGE>
dilution and is computed by dividing income available to common
stockholders by the weighted average number of common shares
outstanding for the relevant period. Diluted EPS reflects the
potential dilution that could occur if securities or other
contracts to issue common stock were exercised or converted into
common stock or resulted in the issuance of common stock that then
shared in the earnings of the entity.
NOTE 8 - COMPREHENSIVE (LOSS) INCOME. Comprehensive (loss) income
was $(452,000) and $878,000 for the three month periods ended March
31, 1999 and 1998, respectively.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
GENERAL
Haven Bancorp, Inc. ("Haven Bancorp" or the "Company") is the
holding company for CFS Insurance Agency, Inc. and CFS Bank ("CFS"
or the "Bank"), a federally chartered stock savings bank. CFS
converted from a mutual to a stock savings bank on September 23,
1993 in conjunction with the issuance of the Bank's capital stock
to Haven Bancorp.
Haven Bancorp's business currently consists primarily of the
business of the Bank. The Bank's principal business has been and
continues to be attracting retail deposits from the general public
and investing those deposits, together with funds generated from
operations primarily in one- to four-family, owner occupied
residential mortgage loans. In addition, the Bank will invest in
debt, equity and mortgage-backed securities ("MBSs") to supplement
its lending portfolio. The Bank also invests, to a lesser extent,
in multi-family residential mortgage loans, commercial real estate
loans and other marketable securities. The Bank's results of
operations are dependent primarily on its net interest income,
which is the difference between the interest income earned on its
loan and securities portfolios and its cost of funds, which
primarily consists of the interest paid on its deposits and
borrowed funds. The Bank's net income also is affected by its non-
interest income, including servicing released premiums and fees on
loans sold in the secondary market, its provision for loan losses
and operating expenses consisting primarily of compensation and
benefits, occupancy and equipment, real estate owned operations,
net, federal deposit insurance premiums and other general and
administrative expenses. The earnings of the Bank are
significantly affected by general economic and competitive
conditions, particularly changes in market interest rates, and to
a lesser extent by government policies and actions of regulatory
authorities.
10
<PAGE>
ANALYSIS OF FINANCIAL CONDITION CHANGES FROM
DECEMBER 31, 1998 TO MARCH 31, 1999
ASSETS
Total assets increased by $154.6 million, or 6.5% to $2.55 billion
at March 31, 1999 from $2.40 billion at December 31, 1998.
Securities available for sale ("AFS") increased by $51.8 million,
or 5.8% to $941.0 million at March 31, 1999 from $889.2 million at
December 31, 1998 resulting primarily due to purchases during the
quarter for the AFS portfolio. During the quarter ended March 31,
1999, the Bank purchased $136.9 million of MBSs and $55.0 million
of debt and equity securities for its AFS portfolio. The emphasis
on MBS securities was due to the availability of more favorable
rates and shorter durations. These increases were partially offset
by sales and principal repayments of $71.2 million and $64.4
million, respectively.
Net loans increased by $112.9 million, or 8.7% to $1.41 billion at
March 31, 1999 from $1.30 billion at December 31, 1998. Loan
originations during the quarter totaled $329.9 million (comprised
of $292.8 million of residential one- to four-family mortgage
loans, $3.0 million of equity loans and lines of credit, $26.8
million of multi-family loans and $7.3 million of commercial real
estate loans). Originations of residential one- to four-family
mortgage loans included purchases of $112.6 million of residential
loans in the secondary market. Residential loans originated or
purchased for sale in the secondary market for the three months
ended March 31, 1999 totaled $160.6 million. During the first
quarter of 1999, the Bank sold $155.4 million of residential loans
on a servicing released basis to third party investors. During the
first quarter of 1999, principal repayments totaled $53.6 million.
LIABILITIES
Deposits increased by $82.1 million, or 4.8% to $1.80 billion at
March 31, 1999 from $1.72 billion at December 31, 1998 primarily
due to deposit inflows in the Bank's supermarket branches.
Deposits in the supermarket branches totaled $578.1 million at
March 31, 1999 compared to $504.0 million at December 31, 1998.
The Bank had fifty-nine supermarket bank branches as of March 31,
1999 compared to fifty-seven supermarket branches at December 31,
1998. The Bank expects to open one additional in-store branch
during May of 1999. Core deposits (comprised of checking, savings
and money market accounts) were equal to 58.3% of total in-store
branch deposits at March 31, 1999 compared to 45.3% in the Bank's
eight traditional branches. Core deposits for the supermarket
branches included $209.3 million of "Liquid Asset" account balances
at March 31, 1999. Overall, core deposits represented 53.6% of
total deposits at March 31, 1999 compared to 47.7% at December 31,
11
<PAGE>
1998. Borrowed funds increased by $146.0 million, or 33.2% to
$586.3 million at March 31, 1999 from $440.3 million at December
31, 1998 primarily due to the funding requirements for loan
origination volume and wholesale purchases of CFS Intercounty, the
Bank's residential lending division.
STOCKHOLDERS' EQUITY
Haven Bancorp's stockholders' equity decreased to $119.1 million at
March 31, 1999 from $119.9 million at December 31, 1998. The
decrease in stockholders' equity was due to a reduction of $3.1
million in the unrealized gain on securities available for sale and
dividends declared totaling $665,000. These decreases were
partially offset by net income of $2.6 million for the quarter and
$380,000 related to the amortization of awards of shares of stock
by the Bank's RRPs, and amortization of the deferred compensation
plan, and stock options exercised.
12
<PAGE>
NON-PERFORMING ASSETS
The following table sets forth information regarding all non-
accrual loans (which consist of loans 90 days or more past due and
restructured loans that have not yet performed in accordance with
their modified terms for the required six-month seasoning period),
restructured loans and real estate owned ("REO").
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
--------- ------------
(Dollars in thousands)
<S> <C> <C>
Non-accrual loans
One- to four-family $ 5,374 3,779
Cooperative 387 367
Multi-family 620 308
Non-residential and other 2,215 2,074
------ ------
Total non-accrual loans 8,596 6,528
------ ------
Restructured loans
One- to four-family 193 544
Cooperative 182 183
Multi-family 1,123 1,130
------ ------
Total restructured loans 1,498 1,857
------ ------
Total non-performing loans 10,094 8,385
------ ------
REO, net
One- to four-family 44 66
Cooperative 38 38
Non-residential and other 121 121
------ ------
Total REO 203 225
Less allowance for REO (12) (25)
------ ------
REO, net 191 200
------ ------
Total non-performing assets $10,285 8,585
====== ======
Non-performing loans to total loans 0.71% 0.64%
Non-performing assets to total assets 0.40 0.36
Non-performing loans to total assets 0.40 0.35
</TABLE>
The increase in non-performing assets was primarily due to an
increase of $1.7 million in non-performing loans from December 31,
1998 to March 31, 1999. The ratios of non-performing loans to
13
<PAGE>
total loans, non-performing assets to total assets and non-
performing loans to total assets all increased primarily due to the
increase of $1.7 million in non-performing loans during the
quarter.
The Bank maintains an allowance for loan losses and an allowance
for REO, which it believes are adequate for potential losses at
each period end. Management's judgment as to potential losses is
based on its review of the loan and REO portfolios and its judgment
regarding prevailing and anticipated economic conditions and a
variety of other factors which have an impact on those portfolios.
Although management believes that the allowances are adequate as of
the period end, additional provisions may be required in the
future.
ALLOWANCE FOR LOAN LOSSES
The following table sets forth the changes in the allowance for
loan losses for the three months ended March 31, 1999 and 1998:
<TABLE>
<CAPTION>
1999 1998
------- -------
(Dollars in thousands)
<S> <C> <C>
Balance at beginning of period $13,978 12,528
Charge-offs:
Residential (324) (84)
Cooperative - (56)
Multi-family - (708)
Non-residential and other - (291)
------ ------
Total charge-offs (324) (1,139)
------ ------
Recoveries 244 857
------ ------
Net charge-offs (80) (282)
Provision for loan losses 675 670
------ ------
Balance at end of period $14,573 12,916
====== ======
Ratio of net charge-offs during the
period to average loans outstanding
during the period 0.02% 0.10%
Ratio of allowance for loan losses to
total loans at the end of the period 1.02 1.08
Ratio of allowance for loan losses to non-
performing loans at the end of the period 144.37 119.05
</TABLE>
The ratio of net charge-offs to average loans outstanding during
14
<PAGE>
the first quarter of 1999 decreased compared to the same period in
1998 primarily due to the decrease in net charge-offs for the first
quarter of 1999 compared to the first quarter of 1998, as well as
the increase in average loans outstanding. The ratio of allowance
for loan losses to total loans decreased for the quarter due to the
increase in loans outstanding at March 31, 1999. The ratio of
allowance for loan losses to non-performing loans increased between
the periods due to an increase of $1.7 million in the allowance for
loan losses. The Bank's allowance for loan losses was $14.6
million and $12.9 million at March 31, 1999 and March 31, 1998,
respectively, whereas non-performing loans totaled $10.1 million
and $10.8 million, respectively, at those dates.
ASSET/LIABILITY MANAGEMENT
The Company has attempted to reduce its exposure to interest rate
risk through the origination and purchase of ARM loans, debt
securities and MBSs and maintaining an AFS securities portfolio.
During the first quarter of 1999, the Bank originated or purchased
for its portfolio $77.7 million of residential adjustable-rate
mortgages and $34.1 million of adjustable-rate multi-family,
commercial real estate and construction loans which are expected to
help protect net interest margins during periods of rising interest
rates. During the same period, the Bank purchased $176.6 million
of fixed rate debt securities and MBSs to take advantage of higher
yields compared to rates offered on adjustable-rate securities. At
March 31, 1999, $240.5 million, or 25.6% of the Company's AFS
portfolio were adjustable-rate securities and $700.5 million, or
74.4% of the portfolio were fixed rate securities.
Historically, the Company has been able to maintain a substantial
level of core deposits (comprised of checking, savings and money
market accounts) which the Company believes helps to limit interest
rate risk by providing a relatively stable, low cost, long-term
funding base. At March 31, 1999, core deposits represented 53.6%
of deposits compared to 47.7% of deposits at December 31, 1998.
Core deposits included $209.3 million of "Liquid Asset" account
balances at March 31, 1999. This account was introduced at the
supermarket branches in the second quarter of 1998 and currently
pays an initial rate of 4.25% for balances over $2,500. During the
first quarter of 1999, savings accounts increased by $62.6
million, net of interest, whereas, certificates of deposit
decreased by $10.8 million, net of interest. The number of
checking accounts increased by 14,997, or 9.9% to 166,436 at March
31, 1999 from 151,439 at December 31, 1998. Most of the increase,
13,678 accounts, is attributable to the Bank's supermarket bank
branches. The Company expects to attract a higher percentage of
core deposits from its supermarket branch locations as the
supermarket branching program continues to grow and mature.
15
<PAGE>
LIQUIDITY AND CAPITAL
The Bank is required to maintain minimum levels of liquid assets as
defined by the Office of Thrift Supervision ("OTS") regulations.
This requirement, which may be varied by the OTS depending upon
economic conditions and deposit flows, is based upon a percentage
of withdrawable deposits and short-term borrowings. The required
ratio is currently 4%. The Bank's ratio was 5.43 at March 31, 1999
compared to 4.24% at December 31, 1998.
The Company's primary sources of funds are deposits, advances from
Federal Home Loan Bank of New York ("FHLB-NY"), principal and
interest payments on loans and MBSs and retained earnings.
Proceeds from the sale of AFS securities and loans held for sale
are also a source of funding, as are, to a lesser extent, the sales
of insurance, annuities and securities brokerage activities
conducted by the Company's subsidiary, CFS Insurance Agency, Inc.
and the Bank's subsidiary, CFS Investments, Inc. ("CFSI"). While
maturities and scheduled amortization of loans and MBSs are
somewhat predictable sources of funds, deposit flows and mortgage
prepayments are greatly influenced by general interest rates,
economic conditions, competition and regulatory changes.
The Company's most liquid assets are cash and short term
investments. The levels of these assets are dependent on the
Company's operating, financing, lending and investing activities
during any given period. At March 31, 1999 and December 31, 1998,
cash and short and intermediate-term investments totaled $33.2
million and $44.8 million, respectively.
The Company and the Bank have other sources of liquidity which
include debt securities maturing within one year, loans held for
sale and AFS securities. Other sources of funds include FHLB
advances, which at March 31, 1999, totaled $397.9 million. At
March 31, 1999, the Bank had unused lines of credit totaling $39.4
million with the FHLB-NY.
As of March 31, 1999, the Bank exceeded all regulatory capital
requirements as detailed in the following table:
<TABLE>
<CAPTION>
Tangible Capital Core Capital(1) Risk-Based Capital(2)
------------------ ------------------ -------------------
Amount Ratio (3) Amount Ratio (3) Amount Ratio (3)
------ --------- ------ --------- ------ ----------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Capital for regulatory purposes $133,259 5.20% $133,259 5.20% $146,565 11.24%
Minimum regulatory requirement 51,212 2.00 102,423 4.00(3) 104,359 8.00
------- ---- ------- ---- ------- ----
Excess $ 82,047 3.20% $ 30,836 1.20% $ 42,206 3.24%
======= ==== ======= ==== ======= ====
</TABLE>
(1) Under the OTS's prompt corrective action regulations, the core
16
<PAGE>
capital requirement was effectively increased to 4.00% since OTS
regulations stipulate that as of that date an institution with less
than 4.00% core capital will be deemed to be classified as
"undercapitalized".
(2) The OTS regulations require that certain institutions with
more than a "normal level" of interest rate risk to maintain
capital in addition to the 8.0% risk-based capital requirement.
The Bank currently is not, and does not anticipate that its risk-
based capital requirement will be materially affected as a result
of this OTS requirement.
(3) For tangible and core capital, the ratio is to adjusted total
assets. For risk-based capital, the ratio is to total risk-
weighted assets.
ANALYSIS OF CORE EARNINGS
The Company's profitability is primarily dependent upon net
interest income, which represents the difference between income on
interest-earning assets and expenses on interest-bearing
liabilities. Net interest income is dependent on the average
balances and rates received on interest-earning assets and the
average balances and rates paid on interest-bearing liabilities.
Net income is further affected by non-interest income, non-interest
expense and income taxes.
17
<PAGE>
The following table sets forth certain information relating to the
Company's average consolidated statements of financial condition
and consolidated statements of income for the three months ended
March 31, 1999 and 1998, respectively, 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 were derived
from average daily balances. The average balance of loans includes
loans on which the Company has discontinued accruing interest. The
yields and costs include fees which are considered adjustments to
yields.
<TABLE>
<CAPTION>
Three Months Ended March 31,
1999 1998
------------------------ ------------------------
Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
------- -------- ------- ------- -------- -------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Assets:
Interest-earning assets:
Mortgage loans $1,377,235 $24,885 7.23% $1,136,919 $21,739 7.65%
Other loans 37,178 850 9.15 32,833 787 9.59
Mortgage-backed securities 762,234 12,650 6.64 537,116 8,931 6.65
Money market investments 1,516 30 7.92 8,175 104 5.09
Debt and equity securities 133,067 2,065 6.21 200,415 3,402 6.79
--------- ------ --------- ------
Total interest-earning assets 2,311,230 40,480 7.01 1,915,458 34,963 7.30
Non-interest-earning assets 147,604 ------ 93,488 ------
--------- ---------
Total assets 2,458,834 2,008,946
========= =========
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Savings accounts 576,044 4,669 3.24 384,701 2,416 2.51
Certificate accounts 892,050 11,753 5.27 824,774 11,863 5.75
NOW accounts 222,499 324 0.58 159,088 261 0.66
Money market accounts 57,986 419 2.89 55,260 423 3.06
Borrowed funds 530,099 7,109 5.36 432,750 6,506 6.01
--------- ------ --------- ------
Total interest-bearing liabilities 2,278,678 24,274 4.26 1,856,573 21,469 4.63
Other liabilities 60,133 ------ 38,074 ------
--------- ---------
Total liabilities 2,338,811 1,894,647
Stockholders' equity 120,023 114,299
--------- ---------
Total liabilities and stockholders' equity $2,458,834 2,008,946
========= =========
Net interest income/net interest rate spread $16,206 2.75% $13,494 2.67%
====== ==== ====== ====
Net interest earning assets/net interest margin $32,552 2.80% $58,885 2.82%
====== ==== ====== ====
Ratio of interest-earning assets to
interest-bearing liabilities 101.43% 103.17%
====== ======
</TABLE>
COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS
ENDED MARCH 31, 1999 AND 1998
GENERAL. The Company reported net income of $2.6 million for the
18
<PAGE>
three months ended March 31, 1999 compared to net income of $2.1
million for the three months ended March 31, 1998. The increase
was primarily attributable to an increase of $2.7 million in net
interest income and an increase of $6.6 million in non-interest
income. These increases were partially offset by an increase of
$8.3 million in non-interest expense from the prior year period.
Income tax expense increased $536,000 from the same period last
year due to an increase of $1.0 million in pre-tax income.
INTEREST INCOME. Interest income increased by $5.5 million, or
15.8% to $40.5 million for the three months ended March 31, 1999
from $35.0 million for the three months ended March 31, 1998. The
increase was primarily the result of a $3.1 million increase in
interest income on mortgage loans and an increase of $3.7 million
in interest income on MBS securities. These increases were
partially offset by decreases in interest income on debt and equity
securities and money market investments of $1.3 million and
$74,000, respectively.
Interest income on mortgage loans increased by $3.1 million, or
14.5% to $24.9 million for the three months ended March 31, 1999,
from $21.7 million for the comparable three-month period in 1998.
The increase was primarily the result of an increase in the average
balance of mortgage loans of $240.3 million, partially offset by a
decline in the average yield on mortgage loans of 42 basis points
from the first quarter of 1998. The increase in the average
balance of mortgage loans between the periods was primarily due to
mortgage originations, including purchases, for the entire year of
1998 and the first quarter of 1999 which totaled $1.22 billion and
$326.8 million, respectively. The increased originations reflect
the addition of the loan production franchise of CFS Intercounty.
The originations for both periods were partially offset by prin-
cipal payments of $279.7 million and $51.8 million, respectively.
The decline in the average yield from the prior year was primarily
due to the general decline in market interest rates in 1998.
Interest income on MBSs increased by $3.7 million, or 41.6% to
$12.6 million for the three months ended March 31, 1999 from $8.9
million for the comparable three-month period in 1998 primarily due
to an increase of $225.1 million in the average balance of MBSs at
March 31, 1999 compared to March 31, 1998. During the first
quarter of 1999, the Bank purchased $136.9 million of MBSs for its
AFS portfolio which were partially offset by sales of MBSs totaling
$54.3 million.
Interest income on debt and equity securities decreased by $1.3
million, or 39.3% to $2.1 million for the three months ended March
31, 1999 from $3.4 million for the comparable three-month period in
1998 primarily as a result of a decrease in average balances of
$67.3 million coupled with a 58 basis point decrease in the average
yield. During the first quarter of 1999, the Bank purchased $55.0
19
<PAGE>
million of debt and equity securities for the AFS portfolio,
partially offset by sales totaling $16.9 million. The emphasis on
MBS securities over debt and equity securities was due to the
availability of competitive rates along with shorter durations.
INTEREST EXPENSE. Interest expense increased by $2.8 million, or
13.1% to $24.3 million for the three months ended March 31, 1999
from $21.5 million for the three months ended March 31, 1998. The
increase was primarily the result of a $2.2 million increase in
interest expense on deposits and an increase of $0.6 million in
interest expense on borrowed funds.
Interest on deposits increased by $2.2 million, or 14.7% to $17.2
million for the three months ended March 31, 1999 from $15.0
million for the comparable three-month period in 1998. The
increase in interest on deposits was primarily due to the increased
average balance of $324.8 million. The deposit growth is primarily
attributable to the Bank's supermarket banking program. At March
31, 1999, the Bank had fifty-nine supermarket bank branches with
deposits totaling $578.1 million, compared to thirty-nine
supermarket branches with deposits of $238.2 million at March 31,
1998. The increase in average balance was primarily due to savings
account balances which increased by $191.3 million, or 49.7% to
$576.0 million for the three months ended March 31, 1999 from
$384.7 million for the comparable three-month period in 1998.
Interest expense on savings accounts increased by $2.3 million, or
93.3% to $4.7 million for the three months ended March 31, 1999
from $2.4 million in the same period in 1998. The average cost of
savings accounts was 3.24% for the first quarter of 1999 compared
to 2.51% for the first quarter of 1998. The increase in the
average cost of savings accounts was due to the "Liquid Asset"
account which was introduced at the supermarket bank branches
during the second quarter of 1998. This account currently pays an
initial rate of 4.25% for balances over $2,500. The Bank's
supermarket branches had $267.1 million in savings balances as of
March 31, 1999 compared to $45.6 million as of March 31, 1998.
Interest expense on certificate accounts decreased by $110,000, or
0.9% to $11.8 million for the three months ended March 31, 1999
from $11.9 million in the same period in 1998. This was primarily
due to the decline in the average cost of these deposits to 5.27%
for the period ended March 31, 1999 from 5.75% for the same period
last year. The average cost of all deposits was 3.92% for the
three months ended March 31, 1999 compared to 4.20% for the first
quarter of 1998 reflecting the general decline in market interest
rates.
Interest on borrowed funds increased by $603,000, or 9.3% to $7.1
million for the three months ended March 31, 1999 from $6.5 million
for the comparable three-month period in 1998. Borrowed funds on
an average basis increased by $97.3 million between the periods
primarily due to the addition of short-term FHLB advances and
20
<PAGE>
securities sold under agreements to repurchase during 1999 in order
to complement deposit growth as a funding mechanism for mortgage
loan originations. The average rate paid on borrowings decreased
to 5.36% for the three months ended March 31, 1999 from 6.01% for
the comparable prior-year period primarily due to a decline in
market rates in 1998.
NET INTEREST INCOME. Net interest income increased by $2.7
million, or 20.1% to $16.2 million for the three months ended March
31, 1999 from $13.5 million for the three months ended March 31,
1998. The increase is primarily due to the total average balance
of interest-earning assets which increased by $395.8 million, or
20.7% to $2.31 billion for the three months ended March 31, 1999
from $1.92 billion for the same period last year. This growth is
mainly due to growth in the Bank's residential mortgage loan and
mortgage-backed securities portfolios. This increase was partially
offset by the average yield on interest-earning assets which
decreased to 7.01% for the three month period ended March 31, 1999
from 7.30% for the three-month period in 1998. However, the
average cost of interest-bearing liabilities decreased to 4.26%
from 4.63% for the three months ended March 31, 1999 and 1998,
respectively, reflecting the general decline in market interest
rates in 1998. Therefore, the net interest spread was 2.75% for
the three months ended March 31, 1999 compared to 2.67% for the
comparable period in 1998.
PROVISION FOR LOAN LOSSES. The Bank provided $675,000 for loan
losses for the three months ended March 31, 1999 compared to
$670,000 for the comparable three-month period in 1998. The
provision for loan losses is established based on management's
periodic review and evaluation of the loan portfolio.
NON-INTEREST INCOME. Non-interest income increased by $6.6
million, or 148.1% for the three months ended March 31, 1999 to
$11.1 million from $4.5 million for the comparable three-month
period in 1998. Non-interest income for the first quarter of 1999
included $4.5 million in servicing released premiums and fees
related to loans sold in the secondary market in the quarter. The
Bank generally recognizes fee income, including servicing released
premiums, from its mortgage banking activities as loan sales are
settled. Savings and checking fees increased by $1.3 million, or
72.6% to $3.1 million for the first quarter of 1999 compared to
$1.8 million for the same period last year. The significant
increase in savings and checking fees is primarily due to the
number of checking accounts which increased by 54,902, or 49.2% to
166,436 accounts at March 31, 1999 from 111,534 accounts at March
31, 1998. A significant portion of this growth is attributable to
the Bank's supermarket banking program. The supermarket branches
generated savings and checking fees of $2.2 million for the first
quarter of 1999 compared to $1.0 million for the first quarter of
last year. Insurance, annuity and mutual fund fees for the first
21
<PAGE>
quarter of 1999 increased by $788,000, or 66.4% to $2.0 million
from $1.2 million for the same period last year which included
$946,000 in revenue from sales originating from supermarket
branches compared to $330,000 for the three months ended March 31,
1998.
NON-INTEREST EXPENSE. Non-interest expense increased by $8.3
million, or 59.2% for the three months ended March 31, 1999 to
$22.4 million from $14.1 million for the comparable three-month
period in 1998. The increase was due primarily to the addition of
the expenses of the loan production franchise of CFS Intercounty
and the Bank's expansion of its supermarket banking program from
thirty-nine branches at March 31, 1998 to fifty-nine branches at
March 31, 1999. As a result of the increased headcount,
compensation and benefits costs increased by $4.5 million, or 59.1%
to $12.1 million for the three months ended March 31, 1999 from
$7.6 million for the same period last year. Occupancy and
equipment costs increased by $1.1 million, or 50.7% to $3.3 million
for the first quarter of 1999 from $2.2 million for the same period
last year primarily due to the addition of twenty supermakret
branches as well as the expansion of the Bank's residential lending
function through CFS Intercounty. Occupancy and equipment expense
also increased as a result of the purchase of the Company's new
headquarters, which was completed in the third quarter 1998. Other
operating costs increased by $2.9 million, or 71.5% to $6.9 million
for the three months ended March 31, 1999 from $4.0 million for the
same period last year primarily due to the addition of CFS
Intercounty and the additional supermarket branches.
INCOME TAX EXPENSE. Income tax expense was $1.6 million for an
effective tax rate of 38.1% for the three months ended March 31,
1999 compared to income tax expense of $1.1 million for an
effective tax rate of 33.2% for the comparable period in 1998. The
1998 quarter included a reversal of previously provided income
taxes.
COMPUTER ISSUES FOR THE YEAR 2000. Many of the Company's existing
computer systems use two digits to identify the year in the date
fields. As a result, these systems may not be able to distinguish
the year 2000 from the year 1900. Software, hardware and equipment
both within and outside the Company's direct control and with which
the Company electronically or operationally interfaces (e.g. third
party vendors providing data processing, information system
management, maintenance of computer systems, and credit bureau
information) are likely to be affected. Further, if computer
systems are not adequately changed to identify the year 2000, many
computer applications could fail or create erroneous results. As a
result, many calculations which rely on the date field information,
such as interest, payment or due dates and other operating
functions, could generate results which could be significantly
misstated, and the Company could experience a temporary inability
22
<PAGE>
to process transactions, send invoices or engage in similar normal
business activities. If not corrected, these computer systems
could fail by or at the year 2000.
The Company primarily uses a third party vendor to process its
electronic data. This vendor has made modifications or
replacements of its computer applications and systems necessary to
correct the year 2000 date issue. Management has substantially
completed the testing of the modifications to these systems and
applications. The Company also utilizes a combination of purchased
and contract-based software as well as other third party vendors
for a variety of data processing needs. The Company's assessment
of potential computer issues for the year 2000 have been
substantially completed. Where potential computer issues have been
identified, the vendors have committed to definitive dates to
resolve such issues. Under regulatory guidelines issued by the
federal banking regulators, the Bank and the Company must
substantially complete testing of both internally and externally
supplied systems and all renovations, by June 30, 1999. In the
event that the Company's significant vendors do not achieve year
2000 compliance, the Company's operations could be adversely
affected.
The Company has established contingency plans for these systems for
which year 2000 issues will not be corrected. The OTS, the
Company's primary federal bank regulatory agency, along with the
other federal bank regulatory agencies has published guidance on
the year 2000 compliance and has identified the year 2000 issue as
a substantive area of examination for both regularly scheduled and
special bank examinations. These publications, in addition to
providing guidance as to examination criteria, have outlined
requirements for creation and implementation of a compliance plan
and target dates for testing and implementation of corrective
action, as discussed above. As a result of the oversight by and
authority vested in the federal bank regulatory agencies, a
financial institution that does not become year 2000 compliant
could become subject to administrative remedies similar to those
imposed on financial institutions otherwise found not to be
operating in a safe and sound manner, including remedies available
under prompt corrective action regulations.
There has been limited litigation filed against corporations
regarding the year 2000 problem and such corporations' compliance
efforts. To date, no such litigation has resulted in a decided
case imposing liability on the corporate entity. Nonetheless, the
law in this area will likely continue to develop well into the new
millennium. Should the Company experience a year 2000 failure,
exposure of the Company could be significant and material, unless
there is legislative action to limit such liability. Legislation
has been introduced in several jurisdictions regarding the year
2000 problem. However, no assurance can be given that legislation
23
<PAGE>
will be enacted in jurisdictions where the Company does business
that will have the effect of limiting any potential liability.
Through March 31, 1999, the Company did not incur any costs
associated with achieving year 2000 compliance. However, the
Company expects to incur approximately $451,000 in costs to achieve
year 2000 compliance during the remainder of 1999.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
In management's opinion, there has not been a material change in
market risk from December 31, 1998 as reported in item 7A of the
Company's Form 10-K.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In February, 1983, a burglary of the contents of safe deposit boxes
occurred at a branch office of the Bank. At March 31, 1999, the
Bank has a class action lawsuit related thereto pending, whereby
the plaintiffs are seeking recovery of approximately $12.9 million
in actual damages and an additional $12.9 million of unspecified
damages. The Banks ultimate liability, if any, which might arise
from the disposition of these claims cannot presently be
determined. Management believes it has meritorious defenses
against these actions and has and will continue to defend its
position. Accordingly, no provision for any liability that may
result upon adjudication has been recognized in the accompanying
consolidated financial statements.
The Company is involved in various other legal actions arising in
the ordinary course of business, which in the aggregate, are
believed by management to be immaterial to the financial position
of the Company.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The Company's Annual Meeting of Stockholders was held on
April 21, 1999.
(b) Not applicable.
24
<PAGE>
(c) At such meeting, the shareholders approved the following
matters:
1. The election of the following individuals as Directors for a
term of 3 years each:
<TABLE>
<CAPTION>
Votes Broker
Votes For Withheld Abstentions Non-Votes
<S> <C> <C> <C> <C>
George S. Worgul 7,103,456 914,489 -0- -0-
Michael J. Levine 7,113,320 904,625 -0- -0-
</TABLE>
2. The ratification of KPMG LLP as independent auditors of the
Company for the fiscal year ending December 31, 1999, as reflected
by 7,863,457 votes for, 134,216 votes against, 20,272 abstentions
and no broker non-votes.
(d) Not applicable.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
3.1 Bylaws of Haven Bancorp, Inc., as amended on April 21,
1999.
a) 27.1 Financial Data Schedule.
b) The Company filed a Form 8-K on April 29, 1999
regarding the press release announcing its 1999 first quarter
earnings.
25
<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.
HAVEN BANCORP INC.
(Registrant)
Date: May 13, 1999 By: /s/ Philip S. Messina
---------------------------
Philip S. Messina
Chairman, President and Chief
Executive Officer
Date: May 13, 1999 By: /s/ Catherine Califano
---------------------------
Catherine Califano
Senior Vice President
and Chief Financial Officer
26
<PAGE>
EXHIBIT 3.1
HAVEN BANCORP, INC.
BYLAWS
ARTICLE I - STOCKHOLDERS
Section 1. Annual Meeting.
An annual meeting of the stockholders, for the election of
Directors to succeed those whose terms expire and for the
transaction of such other business as may properly come before
the meeting, shall be held at such place, on such date, and at
such time as the Board of Directors shall each year fix, which
date shall be within thirteen (13) months subsequent to the later
of the date of incorporation or the last annual meeting of
stockholders.
Section 2. Special Meetings.
Subject to the rights of the holders of any class or series of
preferred stock of the Corporation, special meetings of
stockholders of the Corporation may be called only by the Board
of Directors pursuant to a resolution adopted by a majority of
the total number of Directors which the Corporation would have if
there were no vacancies on the Board of Directors (hereinafter
the "Whole Board").
Section 3. Notice of Meetings.
Written notice of the place, date, and time of all meetings of
the stockholders shall be given, not less than ten (10) nor more
than sixty (60) days before the date on which the meeting is to
be held, to each stockholder entitled to vote at such meeting,
except as otherwise provided herein or required by law (meaning,
here and hereinafter, as required from time to time by the
Delaware General Corporation Law or the Certificate of
Incorporation of the Corporation).
When a meeting is adjourned to another place, date or time,
written notice need not be given of the adjourned meeting if the
place, date and time thereof are announced at the meeting at
which the adjournment is taken; provided, however, that if the
date of any adjourned meeting is more than thirty (30) days after
the date for which the meeting
<PAGE>
was originally noticed, or if a new record date is fixed for the
adjourned meeting, written notice of the place, date, and time of
the adjourned meeting shall be given in conformity herewith. At
any adjourned meeting, any business may be transacted which might
have been transacted at the original meeting.
Section 4. Quorum.
At any meeting of the stockholders, the holders of a majority of
all of the shares of the stock entitled to vote at the meeting,
present in person or by proxy (after giving effect to the
provisions of Article FOURTH of the Corporation's Certificate of
Incorporation), shall constitute a quorum for all purposes,
unless or except to the extent that the presence of a larger
number may be required by law. Where a separate vote by a class
or classes is required, a majority of the shares of such class or
classes present in person or represented by proxy (after giving
effect to the provisions of Article FOURTH of the Corporation's
Certificate of Incorporation) shall constitute a quorum entitled
to take action with respect to that vote on that matter.
If a quorum shall fail to attend any meeting, the chairman of the
meeting or the holders of a majority of the shares of stock
entitled to vote who are present, in person or by proxy, may
adjourn the meeting to another place, date, or time.
If a notice of any adjourned special meeting of stockholders is
sent to all stockholders entitled to vote thereat, stating that
it will be held with those present in person or by proxy
constituting a quorum, then except as otherwise required by law,
those present in person or by proxy at such adjourned meeting
shall constitute a quorum, and all matters shall be determined by
a majority of the votes cast at such meeting.
Section 5. Organization.
Such person as the Board of Directors may have designated or, in
the absence of such a person, the Chairman of the Board of the
Corporation or, in his or her absence, such person as may be
chosen by the holders of a majority of the
<PAGE>
shares entitled to vote who are present, in person or by proxy,
shall call to order any meeting of the stockholders
and act as chairman of the meeting. In the absence of the
Secretary of the Corporation, the secretary of the meeting shall
be such person as the chairman appoints.
Section 6. Conduct of Business.
(a) The chairman of any meeting of stockholders shall determine
the order of business and the procedures at the meeting,
including such regulation of the manner of voting and the conduct
of discussion as seem to him or her in order. The date and time
of the opening and closing of the polls for each matter upon
which the stockholders will vote at the meeting shall be
announced at the meeting.
(b) At any annual meeting of the stockholders, only such
business shall be conducted as shall have been brought before the
meeting (i) by or at the direction of the Board of Directors or
(ii) by any stockholder of the Corporation who is entitled to
vote with respect thereto and who complies with the notice
procedures set forth in this Section 6(b). For business to be
properly brought before an annual meeting by a stockholder, the
business must relate to a proper subject matter for stockholder
action and the stockholder must have given timely notice thereof
in writing to the Secretary of the Corporation. To be timely, a
stockholder's notice must be delivered or mailed to and received
at the principal executive offices of the Corporation not less
than ninety (90) days prior to the date of the annual meeting;
provided, however, that in the event that less than one hundred
(100) days' notice or prior public disclosure of the date of the
meeting is given or made to stockholders, notice by the
stockholder to be timely must be received not later than the
close of business on the 10th day following the day on which such
notice of the date of the annual meeting was mailed or such
public disclosure was made. A stockholder's notice to the
Secretary shall set forth as to each matter such stockholder
proposes to bring before the annual meeting (i) a brief
description of the business desired to be brought before the
annual meeting and the reasons for conducting such business at
the annual meeting, (ii) the name and address, as they appear on
the Corporation's books, of the stockholder proposing such
business, (iii) the class and number of shares of the
Corporation's capital stock that
<PAGE>
are beneficially owned by such stockholder and (iv) any material
interest of such stockholder in such business.
Notwithstanding anything in these Bylaws to the contrary, no
business shall be brought before or conducted at an annual
meeting except in accordance with the provisions of this Section
6(b). The Officer of the Corporation or other person presiding
over the annual meeting shall, if the facts so warrant, determine
and declare to the meeting that business was not properly brought
before the meeting in accordance with the provisions of this
Section 6(b) and, if he or she should so determine, he or she
shall so declare to the meeting and any such business so
determined to be not properly brought before the meeting shall
not be transacted.
At any special meeting of the stockholders, only such business
shall be conducted as shall have been brought before the meeting
by or at the direction of the Board of Directors.
(c) Only persons who are nominated in accordance with the
procedures set forth in these Bylaws shall be eligible for the
election as Directors. Nominations of persons for election to
the Board of Directors of the Corporation may be made at a
meeting of stockholders at which directors are to be elected only
(i) by or at the direction of the Board of Directors or (ii) by
any stockholder of the Corporation entitled to vote for the
election of Directors at the meeting who complies with the notice
procedures set forth in this Section 6(c). For a nomination to
be brought properly before the meeting, other than those made by
or at the direction of the Board of Directors, a stockholder must
have made timely notice of the proposed nomination in writing to
the Secretary of the Corporation. To be timely, a stockholder's
notice shall be delivered or mailed to and received at the
principal executive offices of the Corporation not less than
ninety (90) days prior to the date of the meeting; provided,
however, that in the event that less than one hundred (100) days'
notice or prior disclosure of the date of the meeting is given or
made to stockholders, notice by the stockholder to be timely must
be so received not later than the close of business on the 10th
day following the day on which such notice of the date of the
meeting was mailed or such public disclosure was made. Such
stockholder's notice to the Secretary shall set forth (i) as to
each person whom such stockholder proposes
<PAGE>
to nominate for election or re-election as a Director, all
information relating to such person that is required to be
disclosed in solicitations of proxies for election of directors,
or is otherwise required, in each case pursuant to Regulation 14A
under the Securities Exchange Act of 1934, as amended (including
such person's written consent to being named in the proxy
statement as a nominee and to serving as a director if elected);
and (ii) as to the stockholder giving the notice (a) the name and
address, as they appear on the Corporation's books, of such
stockholder and (b) the class and number of shares of the
Corporation's capital stock that are beneficially owned by such
stockholder. At the request of the Board of Directors any person
nominated by the Board of Directors for election as a Director
shall furnish to the Secretary of the Corporation that
information required to be set forth in a stockholder's notice of
nomination which pertains to the nominee. No person shall be
eligible for election as a Director of the Corporation unless
nominated in accordance with the provisions of this Section 6(c).
The Officer of the Corporation or other person presiding at the
meeting shall, if the facts so warrant, determine that a
nomination was not made in accordance with such provisions and,
if he or she shall so determine, he or she shall so declare to
the meeting and the defective nomination shall be disregarded.
Section 7. Proxies and Voting.
At any meeting of the stockholders, every stockholder entitled to
vote may vote in person or by proxy authorized by an instrument
in writing filed in accordance with the procedure established for
the meeting. Any facsimile telecommunication or other reliable
reproduction of the writing or transmission created pursuant to
this paragraph may be substituted or used in lieu of the original
writing or transmission for any and all purposes for which the
original writing or transmission could be used, provided that
such copy, facsimile telecommunication or other reproduction
shall be a complete reproduction of the entire original writing
or transmission.
All voting, including on the election of Directors but excepting
where otherwise required by law or by the governing documents of
the Corporation, may be made by a voice vote; provided, however,
that upon demand therefor by
<PAGE>
a stockholder entitled to vote or his or her proxy, a stock vote
shall be taken. Every stock vote shall be taken by ballot, each
of which shall state the name of the stockholder or proxy voting
and such other information as may be required under the
procedures established for the meeting. The Corporation shall,
in advance of any meeting of stockholder, appoint one or more
inspectors to act at the meeting and make a written report
thereof. The Corporation may designate one or more persons as
alternate inspectors to replace any inspector who fails to act.
If no inspector or alternate is able to act at a meeting of
stockholders, the person presiding at the meeting shall appoint
one or more inspectors to act at the meeting. Each inspector,
before entering upon the discharge of his or her duties, shall
take and sign an oath faithfully to execute the duties of
inspector with strict impartiality and according to the best of
his or her ability.
All elections shall be determined by a plurality of the votes
cast, and except as otherwise required by law, all other matters
shall be determined by a majority of the votes cast.
Section 8. Stock List.
A complete list of stockholders entitled to vote at any meeting
of stockholders, arranged in alphabetical order for each class of
stock and showing the address of each such stockholder and the
number of shares registered in his or her name, shall be open to
the examination of any such stockholder, for any purpose germane
to the meeting, during ordinary business hours for a period of at
least ten (10) days prior to the meeting, either at a place
within the city where the meeting is to be held, which place
shall be specified in the notice of the meeting, or if not so
specified, at the place where the meeting is to be held.
The stock list shall also be kept at the place of the meeting
during the whole time thereof and shall be open to the
examination of any such stockholder who is present. This list
shall presumptively determine the identity of the stockholders
entitled to vote at the meeting and the number of shares held by
each of them.
<PAGE>
Section 9. Consent of Stockholders in Lieu of Meeting.
Subject to the rights of the holders of any class of series of
preferred stock of the Corporation, any action required or
permitted to be taken by the stockholders of the Corporation must
be effected at an annual or special meeting of stockholders of
the Corporation and may not be effected by any consent in writing
by such stockholders.
ARTICLE II - BOARD OF DIRECTORS
Section 1. General Powers, Number and Term of Office.
The business and affairs of the Corporation shall be under the
direction of its Board of Directors. The number of Directors who
shall constitute the Whole Board shall be such number as the
Board of Directors shall from time to time have designated except
in the absence of such designation shall be seven. The Board of
Directors shall annually elect a Chairman of the Board from among
its members who shall, when present, preside at its meetings.
The Directors, other than those who may be elected by the holders
of any class or series of Preferred Stock, shall be divided, with
respect to the time for which they severally hold office, into
three classes, with the term of office of the first class to
expire at the first annual meeting of stockholders, the term of
office of the second class to expire at the annual meeting of
stockholders one year thereafter and the term of office of the
third class to expire at the annual meeting of stockholders two
years thereafter, with each Director to hold office until his or
her successor shall have been duly elected and qualified. At
each annual meeting of stockholders, Directors elected to succeed
those Directors whose terms then expire shall be elected for a
term of office to expire at the third succeeding annual meeting
of stockholders after their election, with each Director to hold
office until his or her successor shall have been duly elected
and qualified.
Section 2. Vacancies and Newly Created Directorships.
Subject to the rights of the holders of any class or series of
Preferred Stock, and unless the Board of Directors otherwise
determines, newly created directorships resulting from any
increase in the authorized number of directors or
<PAGE>
any vacancies in the Board of Directors resulting from death,
resignation, retirement, disqualification, removal from office or
other cause may be filled only by a majority vote of the
Directors then in office, though less than a quorum, and
Directors so chosen shall hold office for a term expiring at the
annual meeting of stockholders at which the term of office of the
class to which they have been elected expires and until such
Director's successor shall have been duly elected and qualified.
No decrease in the number of authorized directors constituting
the Board shall shorten the term of any incumbent Director.
Section 3. Regular Meetings.
Regular meetings of the Board of Directors shall be held at such
place or places, on such date or dates, and at such time or times
as shall have been established by the Board of Directors and
publicized among all Directors. A notice of each regular meeting
shall not be required.
Section 4. Special Meetings.
Special meetings of the Board of Directors may be called by one-
third (1/3) of the Directors then in office (rounded up to the
nearest whole number), by the Chairman of the Board or the
President and shall be held at such place, on such date, and at
such time as they, or he or she, shall fix. Notice of the place,
date, and time of each such special meeting shall be given each
Director by whom it is not waived by mailing written notice not
less than five (5) days before the meeting or by telegraphing or
telexing or by facsimile transmission of the same not less than
twenty-four (24) hours before the meeting. Unless otherwise
indicated in the notice thereof, any and all business may be
transacted at a special meeting.
Section 5. Quorum.
At any meeting of the Board of Directors, a majority of the Whole
Board shall constitute a quorum for all purposes. If a quorum
shall fail to attend any meeting, a majority of those present may
adjourn the meeting to another place, date, or time, without
further notice or waiver thereof.
<PAGE>
Section 6. Participation in Meetings by Conference Telephone.
Members of the Board of Directors, or of any committee thereof,
may participate in a meeting of such Board or committee by means
of conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear
each other and such participation shall constitute presence in
person at such meeting.
Section 7. Conduct of Business.
At any meeting of the Board of Directors, business shall be
transacted in such order and manner as the Board may from time to
time determine, and all matters shall be determined by the vote
of a majority of the Directors present, except as otherwise
provided herein or required by law. Action may be taken by the
Board of Directors without a meeting if all members thereof
consent thereto in writing, and the writing or writings are filed
with the minutes of proceedings of the Board of Directors.
Section 8. Powers.
The Board of Directors may, except as otherwise required by law,
exercise all such powers and do all such acts and things as may
be exercised or done by the Corporation, including, without
limiting the generality of the foregoing, the unqualified power:
(1) To declare dividends from time to time in accordance with
law;
(2) To purchase or otherwise acquire any property, rights or
privileges on such terms as it shall determine;
(3) To authorize the creation, making and issuance, in such form
as it may determine, of written obligations of every kind,
negotiable or non-negotiable, secured or unsecured, and to do all
things necessary in connection therewith;
(4) To remove any Officer of the Corporation with or without
cause, and from time to time to devolve the powers
<PAGE>
and duties of any Officer upon any other person for the time
being;
(5) To confer upon any Officer of the Corporation the power to
appoint, remove and suspend subordinate Officers, employees and
agents;
(6) To adopt from time to time such stock, option, stock
purchase, bonus or other compensation plans for Directors,
Officers, employees and agents of the Corporation and its
subsidiaries as it may determine;
(7) To adopt from time to time such insurance, retirement, and
other benefit plans for Directors, Officers, employees and agents
of the Corporation and its subsidiaries as it may determine; and,
(8) To adopt from time to time regulations, not inconsistent
with these Bylaws, for the management of the Corporation's
business and affairs.
Section 9. Compensation of Directors.
Directors, as such, may receive, pursuant to resolution of the
Board of Directors, fixed fees and other compensation for their
services as Directors, including, without limitation, their
services as members of committees of the Board of Directors.
ARTICLE III - COMMITTEES
Section 1. Committees of the Board of Directors.
The Board of Directors, by a vote of a majority of the Board of
Directors, may from time to time designate committees of the
Board, with such lawfully delegable powers and duties as it
thereby confers, to serve at the pleasure of the Board and shall,
for these committees and any others provided for herein, elect a
Director or Directors to serve as the member or members,
designating, if it desires, other Directors as alternate members
who may replace any absent or disqualified member at any meeting
of the committee. Any committee so designated may exercise the
power and authority of the Board of Directors to declare a
dividend, to authorize the issuance of stock or to adopt a
certificate of ownership and merger pursuant to
<PAGE>
Section 253 of the Delaware General Corporation Law if the
resolution which designates the committee or a supplemental
resolution of the Board of Directors shall so provide. In the
absence or disqualification of any member of any committee and
any alternate member in his or her place, the member or members
of the committee present at the meeting and not disqualified from
voting, whether or not he or she or they constitute a quorum, may
by unanimous vote appoint another member of the Board of
Directors to act at the meeting in the place of the absent or
disqualified member.
Section 2. Conduct of Business.
Each committee may determine the procedural rules for meeting and
conducting its business and shall act in accordance therewith,
except as otherwise provided herein or required by law. Adequate
provision shall be made for notice to members of all meetings;
one-third (1/3) of the members shall constitute a quorum unless
the committee shall consist of one (1) or two (2) members, in
which event one (1) member shall constitute a quorum; and all
matters shall be determined by a majority vote of the members
present. Action may be taken by any committee without a meeting
if all members thereof consent thereto in writing, and the
writing or writings are filed with the minutes of the proceedings
of such committee.
Section 3. Nominating Committee.
The Board of Directors shall appoint a Nominating Committee of
the Board, consisting of not less than three (3) members. The
Nominating Committee shall have authority (a) to review any
nominations for election to the Board of Directors made by a
stockholder of the Corporation pursuant to Section 6(c) (ii) of
Article I of these By-laws to determine compliance with such By-
law and (b) to recommend to the Whole Board nominees for election
to the Board of Directors to replace those Directors whose terms
expire at the annual meeting of stockholders next ensuing.
ARTICLE IV - OFFICERS
Section 1. Generally.
(a) The Board of Directors as soon as may be practicable after
the annual meeting of stockholders shall choose a
<PAGE>
Chairman of the Board, a Chief Executive Officer and President,
one or more Vice Presidents, a Secretary and a Treasurer and from
time to time may choose such other officers as it may deem
proper. The Chairman of the Board shall be chosen from among the
Directors. Any number of offices may be held by the same person.
(b) The term of office of all Officers shall be until the next
annual election of Officers and until their respective successors
are chosen but any Officer may be removed from office at any time
by the affirmative vote of a majority of the authorized number of
Directors then constituting the Board of Directors.
(c) All Officers chosen by the Board of Directors shall have such
powers and duties as generally pertain to their respective
Offices, subject to the specific provisions of this ARTICLE IV.
Such officers shall also have such powers and duties as from time
to time may be conferred by the Board of Directors or by any
committee thereof.
Section 2. Chairman of the Board of Directors.
The Chairman of the Board shall, subject to the provisions of
these Bylaws and to the direction of the Board of Directors,
serve in general executive capacity and unless the Board has
designated another person, when present, shall preside at all
meetings of the stockholders of the Corporation. The Chairman of
the Board shall perform all duties and have all powers which are
commonly incident to the office of Chairman of the Board or which
are delegated to him or her by the Board of Directors. He or she
shall have power to sign all stock certificates, contracts and
other instruments of the Corporation which are authorized.
Section 3. President and Chief Executive Officer.
The President and Chief Executive Officer (the "President") shall
have general responsibility for the management and control of the
business and affairs of the Corporation and shall perform all
duties and have all powers which are commonly incident to the
offices of President and Chief Executive Officer or which are
delegated to him or her by the Board of Directors. Subject to
the direction of the Board of Directors, the President shall have
power to sign all stock certificates, contracts and other
instruments of
<PAGE>
the Corporation which are authorized and shall have general
supervision of all of the other Officers (other than the Chairman
of the Board), employees and agents of the Corporation.
Section 4. Vice President.
The Vice President or Vice Presidents shall perform the duties of
the President in his or her absence or during his or her
disability to act. In addition, the Vice Presidents shall
perform the duties and exercise the powers usually incident to
their respective offices and/or such other duties and powers as
may be properly assigned to them by the Board of Directors, the
Chairman of the Board or the President. A Vice President or Vice
Presidents may be designated as Executive Vice President, Senior
Vice President or First Vice President
Section 5. Secretary.
The Secretary or Assistant Secretary shall issue notices of
meetings, shall keep their minutes, shall have charge of the seal
and the corporate books, shall perform such other duties and
exercise such other powers as are usually incident to such office
and/or such other duties and powers as are properly assigned
thereto by the Board of Directors, the Chairman of the Board or
the President. Subject to the direction of the Board of
Directors, the Secretary shall have the power to sign all stock
certificates.
Section 6. Chief Financial Officer.
The Chief Financial Officer shall have the responsibility for
maintaining the financial records of the Corporation. He or she
shall make such disbursements of the funds of the Corporation as
are authorized and shall render from time to time an account of
all such transactions and of the financial condition of the
Corporation. The Chief Financial Officer shall also perform such
other duties as the Board of Directors, the Chairman of the Board
or the President may from time to time prescribe. Subject to the
direction of the Board of Directors, the Chief Financial Officer
shall have the power to sign all stock certificates.
<PAGE>
Section 7. Treasurer.
The Treasurer shall assist the Chief Financial Officer. The
Treasurer shall also perform such other duties as the Board of
Directors, the Chairman of the Board or the President may from
time to time prescribe.
Section 8. Comptroller
The Comptroller shall assist the Chief Financial Officer. The
Comptroller shall also perform such other duties as the Board of
Directors, the Chairman of the Board or the President may from
time to time prescribe.
Section 9. Assistant Secretaries and Other Officers.
The Board of Directors may appoint one or more Assistant
Secretaries and such other Officers who shall have such powers
and shall perform such duties as are provided in these Bylaws or
as may be assigned to them by the Board of Directors, the
Chairman of the Board or the President.
Section 10. Action with Respect to Securities of Other
Corporations.
Unless otherwise directed by the Board of Directors, the
President or any Officer of the Corporation authorized by the
President shall have power to vote and otherwise act on behalf of
the Corporation, in person or by proxy, at any meeting of
stockholders of or with respect to any action of stockholders of
any other corporation in which this corporation may hold
securities and otherwise to exercise any and all rights and
powers which this Corporation may possess by reason of its
ownership of securities in such other corporation.
ARTICLE V - STOCK
Section 1. Certificates of Stock.
Each stockholder shall be entitled to a certificate signed by, or
in the name of the Corporation by, the Chairman of the Board or
the President, and by the Secretary or an Assistant Secretary, or
any Treasurer or Assistant Treasurer, certifying the number of
shares owned by him or
<PAGE>
her. Any or all of the signatures on the certificate may be by
facsimile.
Section 2. Transfers of Stock.
Transfers of stock shall be made only upon the transfer books of
the Corporation kept at an office of the Corporation or by
transfer agents designated to transfer shares of the stock of the
Corporation. Except where a certificate is issued in accordance
with Section 4 of Article V of these Bylaws, an outstanding
certificate for the number of shares involved shall be
surrendered for cancellation before a new certificate is issued
therefor.
Section 3. Record Date.
In order that the Corporation may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders,
or to receive payment of any dividend or other distribution or
allotment of any rights or to exercise any rights in respect of
any change, conversion or exchange of stock or for the purpose of
any other lawful action, the Board of Directors may fix a record
date, which record date shall not precede the date on which the
resolution fixing the record date is adopted and which record
date shall not be more than sixty (60) nor less than ten (10)
days before the date of any meeting of stockholders, nor more
than sixty (60) days prior to the time for such other action as
hereinbefore described; provided, however, that if no record date
is fixed by the Board of Directors, the record date for
determining stockholders entitled to notice of or to vote at a
meeting of stockholders shall be at the close of business on the
day next preceding the day on which notice is given or, if notice
is waived, at the close of business on the next day preceding the
day on which the meeting is held, and, for determining
stockholders entitled to receive payment of any dividend or other
distribution or allotment or rights or to exercise any rights of
change, conversion or exchange of stock or for any other purpose,
the record date shall be at the close of business on the day on
which the Board of Directors adopts a resolution relating
thereto.
A determination of stockholders of record entitled to notice of
or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however,
<PAGE>
that the Board of Directors may fix a new record date for the
adjourned meeting.
Section 4. Lost, Stolen or Destroyed Certificates.
In the event of the loss, theft or destruction of any certificate
of stock, another may be issued in its place pursuant to such
regulations as the Board of Directors may establish concerning
proof of such loss, theft or destruction and concerning the
giving of a satisfactory bond or bonds of indemnity.
Section 5. Regulations.
The issue, transfer, conversion and registration of certificates
of stock shall be governed by such other regulations as the Board
of Directors may establish.
ARTICLE VI - NOTICES.
Section 1. Notices.
Except as otherwise specifically provided herein or required by
law, all notices required to be given to any stockholder,
Director, Officer, employee or agent shall be in writing and may
in every instance be effectively given by hand delivery to the
recipient thereof, by depositing such notice in the mails,
postage paid, or by sending such notice by prepaid telegram or
mailgram or other courier. Any such notice shall be addressed to
such stockholder, Director, Officer, employee or agent at his or
her last known address as the same appears on the books of the
Corporation. The time when such notice is received, if hand
delivered, or dispatched, if delivered through the mails or by
telegram or mailgram or other courier, shall be the time of the
giving of the notice.
Section 2. Waivers.
A written waiver of any notice, signed by a stockholder,
Director, Officer, employee or agent, whether before or after the
time of the event for which notice is to be given, shall be
deemed equivalent to the notice required to be given to such
stockholder, Director, Officer, employee or agent. Neither the
business nor the purpose of any meeting need to specified in such
a waiver.
<PAGE>
ARTICLE VII - MISCELLANEOUS
Section 1. Facsimile Signatures.
In addition to the provisions for use of facsimile signatures
elsewhere specifically authorized in these Bylaws, facsimile
signatures of any officer or officers of the Corporation may be
used whenever and as authorized by the Board of Directors or a
committee thereof.
Section 2. Corporate Seal.
The Board of Directors may provide a suitable seal, containing
the name of the Corporation, which seal shall be in the charge of
the Secretary. If and when so directed by the Board of Directors
or a committee thereof, duplicates of the seal may be kept and
used by the Treasurer or by an Assistant Secretary or an
assistant to the Treasurer.
Section 3. Reliance Upon Books, Reports and Records.
Each Director, each member of any committee designated by the
Board of Directors, and each Officer of the Corporation shall, in
the performance of his or her duties, be fully protected in
relying in good faith upon the books of account or other records
of the Corporation and upon such information, opinions, reports
or statements presented to the Corporation by any of its Officers
or employees, or committees of the Board of Directors so
designated, or by any other person as to matters which such
Director or committee member reasonably believes are within such
other person's professional or expert competence and who has been
selected with reasonable care by or on behalf of the Corporation.
Section 4. Fiscal Year.
The fiscal year of the Corporation shall be as fixed by the Board
of Directors.
Section 5. Time Periods.
In applying any provision of these Bylaws which requires that an
act be done or not be done a specified number of days prior to an
event or that an act be done during a period of a specified
number of days prior to an event,
<PAGE>
calendar days shall be used, the day of the doing of the act
shall be excluded, and the day of the event shall be included.
ARTICLE VIII - AMENDMENTS.
The Board of Directors may amend, alter or repeal these Bylaws at
any meeting of the Board, provided notice of the proposed change
was given not less than two days prior to the meeting. The
stockholders shall also have power to amend, alter or repeal
these Bylaws at any meeting of stockholders provided notice of
the proposed change was given in the notice of the meeting;
provided, however, that, notwithstanding any other provisions of
the Bylaws or any provision of law which might otherwise permit a
lesser vote or no vote, but in addition to any affirmative vote
of the holders of any particular class or series of the voting
stock required by law, the Certificate of Incorporation, any
Preferred Stock Designation or these Bylaws, the affirmative
votes of the holders of at least 80% of the voting power of all
the then-outstanding shares of the Voting Stock, voting together
as a single class, shall be required to alter, amend or repeal
any provisions of these Bylaws.
The above Bylaws are effective as of March 24, 1993, the date of
incorporation of Haven Bancorp, Inc. and incorporates all
amendments through April 21, 1999.
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information from the
Consolidated Statement of Financial Condition at March 31, 1999 and the
Consolidated Statement of Operations for the three months Ended March 31,
1999 and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 31,759
<INT-BEARING-DEPOSITS> 1,560,473
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 941,027
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 1,424,126
<ALLOWANCE> 14,573
<TOTAL-ASSETS> 2,550,159
<DEPOSITS> 1,804,795
<SHORT-TERM> 293,951
<LIABILITIES-OTHER> 39,904
<LONG-TERM> 292,379
0
0
<COMMON> 100
<OTHER-SE> 119,030
<TOTAL-LIABILITIES-AND-EQUITY> 2,550,159
<INTEREST-LOAN> 25,735
<INTEREST-INVEST> 14,745
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<INTEREST-TOTAL> 40,480
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<EXPENSE-OTHER> 22,389
<INCOME-PRETAX> 4,203
<INCOME-PRE-EXTRAORDINARY> 4,203
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,600
<EPS-PRIMARY> 0.30
<EPS-DILUTED> 0.29
<YIELD-ACTUAL> 7.01
<LOANS-NON> 8,596
<LOANS-PAST> 0
<LOANS-TROUBLED> 1,498
<LOANS-PROBLEM> 13,131
<ALLOWANCE-OPEN> 13,978
<CHARGE-OFFS> 324
<RECOVERIES> 244
<ALLOWANCE-CLOSE> 14,573
<ALLOWANCE-DOMESTIC> 14,573
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
