APPENDIX C
SALOMON SMITH BARNEY
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A member of Citigroup
June 27, 2000
The Board of Directors
Queens County Bancorp, Inc.
38-25 Main Street
Flushing, NY 11354
Members of the Board:
You have requested our opinion as to the fairness, from a financial
point of view, to Queens County Bancorp, Inc. (the "Company") of the Exchange
Ratio (as defined below) set forth in the Agreement and Plan of Merger (the
"Agreement") to be entered into by and between the Company and Haven Bancorp,
Inc. ("Haven").
As more fully described in the Agreement and subject to the terms
and conditions thereof, (i) Haven will be merged with and into the Company (the
"Merger") under the name "New York Community Bank" or another name and (ii) each
outstanding share of the common stock, $.0l par value, of Haven (the "Haven
Common Stock") (other than Excluded Shares (as defined in the Agreement)) will
be converted into and exchangeable for the right to receive 1.04 shares (the
"Exchange Ratio") of common stock, par value $.01 per share, of the Company (the
"Company Common Stock") (with cash paid in lieu of fractional shares).
In arriving at our opinion, we reviewed a draft of the Agreement
dated June 26, 2000, and held discussions with certain senior officers,
directors and other representatives and advisors of the Company and certain
senior officers and other representatives and advisors of Haven concerning the
businesses, operations and prospects of the Company and Haven. We examined
certain publicly available business and financial information relating to the
Company and Haven and discussed certain other information for the Company and
Haven with the managements of the Company and Haven, including information
relating to certain strategic implications and operational benefits anticipated
to result from the Merger. We reviewed the financial terms of the Merger as set
forth in the Agreement in relation to, among other things: current and
historical market prices and trading volumes of the Company Common Stock and
Haven Common Stock; the historical and other operating data of the Company and
Haven; publicly available forecasts, published by equity analysts, as to the
future earnings of the Company and Haven; and the historical and forecasted
capitalization and financial condition of the Company and Haven. We considered,
to the extent publicly available, the financial terms of certain other similar
transactions that we considered relevant in evaluation of the Exchange Ratio and
analyzed certain financial, stock market and other publicly available
information relating to the businesses of other companies whose operations we
considered relevant in evaluating those of the Company and Haven. We also
evaluated the pro forma financial impact of the Merger on the Company. In
addition to the foregoing, we conducted such other analyses and examinations and
considered such other information and financial, economic and market criteria as
we deemed appropriate in arriving at our opinion.
In rendering our opinion, we have assumed and relied, without
independent verification, upon the accuracy and completeness of all financial
and other information and data publicly available or furnished to or otherwise
reviewed by or discussed with us and have further relied upon the assurances of
managements of the Company and Haven that they are not aware of any facts that
would make any of such information inaccurate or misleading. With respect to
financial forecasts regarding the Company and Haven, we have relied on publicly
available third-party equity research forecasts, and we express no view with
respect to such forecasts or the assumptions on what they were based. With
respect to forecasts of cost savings and operating synergies forecasted by
management of the Company to result from the Merger, we have been advised by the
management of the Company that such forecasts were reasonably prepared on bases
reflecting the best currently available estimates and judgments of the
management of the Company as to the strategic implications and operational
benefits anticipated to result from the Merger. We express no view with respect
to such forecasts and other information and data or the assumptions on which
they were based. We have assumed, with your consent, that the Merger will be
treated as a tax-free reorganization for federal income tax purposes and that it
qualifies, and will be accounted for, as a "purchase" in
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Queens County Bancorp, Inc.
June 27, 2000
Page 2
accordance with generally accepted accounting principles. Although, at the
Company's request, we have participated in an evaluation of selected individual
credit files of Haven, for purposes of this opinion we have, with your consent,
assumed that the aggregate allowances for such losses for each of the Company
and Haven are in the aggregate adequate to cover such losses. We are not experts
in the evaluation of loan or lease portfolios for purposes of assessing the
adequacy of the allowances for losses with respect thereto and we have not made
an independent evaluation of the adequacy of such allowances of the Company or
Haven. Although, at the Company's request we prepared an estimate of the
potential sale value of certain of Haven's loans and securities, we have not
sought any buyers for such loans or securities and no assurances can be given as
to the terms on which such loans or securities could actually be sold. We have
not made or been provided with an independent evaluation or appraisal of any of
the other assets or liabilities (contingent or otherwise) of the Company or
Haven nor have we made any physical inspection of the properties or assets of
the Company or Haven. Representatives of the Company have advised us, and we
have assumed, that the final terms of the Agreement will not vary materially
from those set forth in the draft reviewed by us. We have further assumed that
the Merger will be consummated in a timely fashion in accordance with the terms
of the Agreement, without waiver of any of the conditions to the Merger
contained in the Agreement.
Our opinion, as set forth herein, relates to the relative values of
the Company and Haven. We are not expressing any opinion as to what the value of
the Company Common Stock actually will be when issued pursuant to the Merger or
the price at which the Company Common Stock will trade subsequent to the
announcement or consummation of the Merger. We were not requested to consider,
and our opinion does not address, the relative merits of the Merger as compared
to any alternative business strategies that might exist for the Company or the
effect of any other transaction in which the Company might engage. Our opinion
is necessarily based upon information available to us, and financial, stock
market and other conditions and circumstances existing and disclosed to us, as
of the date hereof and we assume no responsibility to update or revise our
opinion based upon circumstances or events after the date hereof.
Salomon Smith Barney Inc. is acting as financial advisor to the
Company in connection with the proposed Merger and will receive a fee for such
services, substantially all of which is payable only upon execution of the
Agreement or consummation of the Merger. In the ordinary course of our business,
we and our affiliates may actively trade or hold the securities of the Company
and Haven for our own account or for the accounts of our customers and,
accordingly, may at any time hold a long or short position in such securities.
In addition, we and our affiliates (including Citigroup Inc. and its affiliates)
may maintain relationships with the Company, Haven and their respective
affiliates.
Our advisory services and the opinion expressed herein are provided
for the information of the Board of Directors of the Company in its evaluation
of the proposed Merger and our opinion is not intended to be and does not
constitute a recommendation to any stockholder as to how such stockholder should
vote on any matters relating to the proposed Merger.
Based upon and subject to the foregoing, our experience as
investment bankers, our work as described above and other factors we deemed
relevant, we are of the opinion that, as of the date hereof, the Exchange Ratio
is fair, from a financial point of view, to the Company.
Very truly yours,
/s/ SALOMON SMITH BARNEY INC.
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SALOMON SMITH BARNEY INC.
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