<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
AMENDMENT NO. 1
Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 30, 1997
ASTORIA FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-22228 11-3170868
(State of other jurisdiction of (Commission File Number) (IRS Employer
incorporation or organization) Identification No.)
One Astoria Federal Plaza, Lake Success, New York 11042-1085
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (516) 327-3000
Not Applicable
(Former name or former address, if changed since last report)
<PAGE> 2
The Registrant hereby amends the items, financial statements, exhibits
or other portions of its Current Report on Form 8-K dated October 3, 1997 as set
forth herein.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a)(1) The following documents filed with the Federal Deposit Insurance
Corporation ("FDIC") by the Greater New York Savings Bank (FDIC Insurance
Certificate No. 16015-6) as part of The Greater New York Savings Bank and
Subsidiaries' Annual Report on Form F-2 for the year ended December 31, 1996
pursuant to the Securities Exchange Act of 1934, as amended, have been filed as
Exhibits to Greater New York Bancorp's Registration Statement on Form S-4 filed
with the Securities and Exchange Commission (the "Commission") on February 20,
1997, as amended (File No. 333-22127) pursuant to the Securities Act of 1933, as
amended (the "Securities Act"), and are incorporated by reference in this Form
8-K/A:
a) Consolidated Statements of Financial Condition as of December
31, 1996 and 1995;
b) Consolidated Statements of Income for the Years Ended December
31, 1996, 1995, and 1994;
c) Consolidated Statements of Changes in Stockholders' Equity for
the Years Ended December 31, 1996, 1995 and 1994;
d) Consolidated Statements of Cash Flows for the Years Ended
December 31, 1996, 1995 and 1994;
e) Notes to Consolidated Financial Statements;
f) Independent Auditors' Report dated as of January 23, 1997.
(a)(2) The following unaudited consolidated financial statements as of and for
the nine months ended September 30, 1997 of The Greater New York Savings Bank
and Subsidiaries are attached hereto as Exhibit No. 99.2 and are incorporated
herein by reference:
a) Consolidated Statements of Financial Condition as of September
30, 1997 and December 31, 1996.
b) Consolidated Statements of Operations for the quarter and nine
months ended September 30, 1997 and 1996.
c) Consolidated Statements of Changes in Stockholders' Equity for
the nine months ended September 30, 1997 and 1996.
d) Consolidated Statements of Cash Flows for the nine months
ended September 30, 1997 and 1996.
e) Notes to Consolidated Financial Statements.
(b) The pro forma financial information that is required pursuant to Article 11
of Regulation S-X is attached hereto as Exhibit No. 99.3 and is incorporated
herein by reference.
(c) Exhibits:
Exhibit No. Description
2.1 Agreement and Plan of Merger, dated as of the 29th day of
March 1997, by and among Astoria Financial Corporation,
Astoria Federal Savings and Loan Association and The Greater
New York Savings Bank, as amended. *
1
<PAGE> 3
13.1 Quarterly Report on Form 10-Q of The Greater New York Savings
Bank for the quarter ended June 30, 1997, previously filed
with the Federal Deposit Insurance Corporation. **
23.1 Consent of Independent Certified Public Accountants dated as
of December 12, 1997.
99.1 Press Release issued on October 1, 1997. **
99.2 The Greater New York Savings Bank and Subsidiaries Unaudited
Consolidated Financial Statements as of September 30, 1997 and
December 31, 1996 and for the nine
months ended September 30, 1997 and 1996.
99.3 Astoria Financial Corporation and Subsidiary and The Greater
New York Savings Bank and Subsidiaries, Unaudited Pro Forma
Combined Condensed Consolidated Statements of Financial
Condition as of September 30, 1997 and Statement of Operations
for the Year Ended December 31, 1996 and for the Nine Months
Ended September 30, 1997 and related notes.
* This exhibit has been previously filed by the Registrant with the Form S-4
(Registration No. 333-29901) filed by Astoria Financial Corporation on June 24,
1997, and is incorporated herein by reference.
** This exhibit has been previously filed by the Registrant with the Form 8-K
filed by Astoria Financial Corporation on October 3, 1997, and is incorporated
herein by reference.
2
<PAGE> 4
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 organized.
ASTORIA FINANCIAL CORPORATION
/s/ Monte N. Redman
-------------------------------------
Monte N. Redman
Senior Vice President,
Treasurer and Chief Financial Officer
Dated: December 12, 1997
3
<PAGE> 5
EXHIBIT INDEX
Exhibit No. Description
2.1 Agreement and Plan of Merger, dated as of the 29th day of
March 1997, by and among Astoria Financial Corporation,
Astoria Federal Savings and Loan Association and The Greater
New York Savings Bank, as amended. *
13.1 Quarterly Report Form 10-Q of The Greater New York Savings
Bank for the quarter ended June 30, 1997, previously filed
with the Federal Deposit Insurance Corporation. **
23.1 Consent of Independent Certified Public Accountants dated as
of December 12, 1997.
99.1 Press Release issued on October 1, 1997. **
99.2 The Greater New York Savings Bank and Subsidiaries Unaudited
Consolidated Financial Statements as of September 30, 1997
and December 31, 1996 and for the nine months ended September
30, 1997 and 1996.
99.3 Astoria Financial Corporation and Subsidiary and The Greater
New York Savings Bank and Subsidiaries, Unaudited Pro Forma
Combined Condensed Consolidated Statements of Financial
Condition as of September 30, 1997 and Statement of Operations
for the Year Ended December 31, 1996 and for the Nine Months
Ended September 30, 1997 and related notes.
* This exhibit has been previously filed by the Registrant with the Form S-4
(Registration No. 333-29901) filed by Astoria Financial Corporation on June 24,
1997, and is incorporated herein by reference.
** This exhibit has been previously filed by the Registrant with the Form 8-K
filed by Astoria Financial Corporation on October 3, 1997, and is incorporated
herein by reference.
<PAGE> 1
Exhibit 23.1
Consent of Independent Certified Public Accountants
KPMG Peat Marwick LLP Letterhead
345 Park Avenue
New York, NY 10154
The Board of Directors
Astoria Financial Corporation as acquiror of
The Greater New York Savings Bank
We consent to incorporation by reference in the Current Report Amendment No. 1
on Form 8-K/A of Astoria Financial Corporation of our report dated January 23,
1997, related to the consolidated statements of financial condition of The
Greater New York Savings Bank and Subsidiaries as of December 31, 1996 and 1995,
and the related consolidated statements of income, changes in stockholders'
equity, and cash flows for each of the years in the three-year period ended
December 31, 1996, which report is included in the Annual Report to Stockholders
of The Greater New York Savings Bank for the year 1996, which report has been
incorporated by reference in the December 31, 1996 Annual Report on Form F-2 of
The Greater New York Savings Bank.
/s/ KPMG PEAT MARWICK LLP
New York, New York
December 12, 1997
4
<PAGE> 1
Exhibit 99.2
THE GREATER NEW YORK SAVINGS BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
(Unaudited)
September 30, December 31,
($ in thousands, except par value) 1997 1996
----------- -----------
<S> <C> <C>
Assets
Cash and due from banks ...................................................... $ 21,247 $ 22,396
Federal funds sold ........................................................... 8,175 5,750
Securities available-for-sale, net, at estimated fair value .................. 196,340 215,961
Securities held-to-maturity, net:
Mortgage-backed securities, net (estimated fair value
of $996,033 and $1,027,922, respectively) .............................. 992,453 1,042,843
Other bonds and notes, net (estimated fair value
of $72,469 and $131,117, respectively) ................................. 72,323 131,478
Federal Home Loan Bank of New York stock ..................................... 24,250 23,600
Loans receivable, net:
Mortgage loans on real estate ............................................. 761,970 835,600
Other loans ............................................................... 155,591 132,968
----------- -----------
Loans receivable .......................................................... 917,561 968,568
Allowance for loan losses ................................................. (40,357) (17,228)
----------- -----------
Loans receivable, net .................................................. 877,204 951,340
Accrued interest receivable .................................................. 12,840 15,343
Premises and equipment, net .................................................. 29,630 28,273
Deferred tax asset, net ...................................................... 52,966 45,365
Other assets ................................................................. 65,648 59,539
----------- -----------
Total assets ........................................................ $ 2,353,076 $ 2,541,888
=========== ===========
Liabilities and Stockholders' Equity
Liabilities:
Deposits .................................................................. $ 1,598,072 $ 1,656,702
Borrowed funds, including securities sold under agreements
to repurchase of $339,000 and $409,500, respectively ................... 507,774 640,384
Accrued expenses and other liabilities .................................... 39,209 35,154
----------- -----------
Total liabilities ................................................... 2,145,055 2,332,240
----------- -----------
Stockholders' Equity:
Preferred stock, 8.25%, cumulative, ESOP convertible Series A ($1.00 par
value, 1,800,000 shares authorized, 1,536,391 shares
issued and outstanding at December 31, 1996 ............................ -- 1,537
Preferred stock, 12%, noncumulative, perpetual Series B
($1.00 par value, 2,000,000 shares authorized, issued
and outstanding) ....................................................... 2,000 2,000
Additional paid-in capital, preferred ..................................... 45,312 63,111
ESOP debt guarantee ....................................................... (13,464) (14,230)
Common stock ($1.00 par value, 45,000,000 shares authorized, 15,669,124 and
13,534,448 shares issued and outstanding, respectively) ................ 15,669 13,534
Additional paid-in capital, common ........................................ 129,975 102,883
Surplus fund .............................................................. 22,998 22,998
Undivided profits ......................................................... 4,503 17,845
Net unrealized gain (loss) on securities available-for-sale, net of taxes . 1,028 (30)
----------- -----------
Total stockholders' equity .......................................... 208,021 209,648
----------- -----------
Total liabilities and stockholders' equity .......................... $ 2,353,076 $ 2,541,888
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE> 2
THE GREATER NEW YORK SAVINGS BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the Quarter Ended
September 30,
------------------------
($ in thousands, except per share data) 1997 1996
-------- --------
<S> <C> <C>
Interest income:
Mortgage loans on real estate ......................... $ 14,734 $ 18,070
Other loans ........................................... 3,155 2,916
-------- --------
Total interest on loans ............................... 17,889 20,986
Securities available-for-sale ......................... 3,380 3,245
Securities held-to-maturity:
Mortgage-backed securities ......................... 17,560 17,103
Other bonds and notes .............................. 1,785 2,210
Other ................................................. 596 521
-------- --------
Total interest income ........................... 41,210 44,065
-------- --------
Interest expense:
Deposits .............................................. 15,856 16,597
Securities sold under agreements to repurchase ........ 5,880 5,795
Other borrowed funds .................................. 3,253 3,732
-------- --------
Total interest expense .......................... 24,989 26,124
-------- --------
Net interest income ...................................... 16,221 17,941
Provision for loan losses ................................ 21,000 500
-------- --------
Net interest (loss) income after provision for loan losses (4,779) 17,441
-------- --------
Non-interest income:
Income from mortgage activities ....................... 238 2,102
Customer service fees ................................. 1,029 1,125
Fees from sales of investment products ................ 533 354
Net loss on sales of securities ....................... (7,279) --
Other ................................................. 319 24
-------- --------
Total non-interest (loss) income ................ (5,160) 3,605
-------- --------
Non-interest expense:
Compensation and benefits ............................. 5,659 5,981
Occupancy, net ........................................ 2,007 1,942
Equipment and data processing services ................ 2,468 1,447
Advertising and promotion ............................. 254 583
Federal deposit insurance premiums .................... 53 129
Non-performing loan and real estate activities ........ 2,046 591
Other ................................................. 2,485 2,107
-------- --------
Total non-interest expense ...................... 14,972 12,780
-------- --------
(Loss) income before taxes ............................... (24,911) 8,266
Income tax (benefit) expense ............................. (9,314) 3,284
-------- --------
Net (loss) income ............................... $(15,597) $ 4,982
======== ========
Primary (loss) earnings per share ........................ $ (1.12) $ 0.23
Fully diluted (loss) earnings per share .................. (1.12) 0.22
Dividends declared per common share ...................... 0.05 --
</TABLE>
See accompanying notes to consolidated financial statements.
6
<PAGE> 3
THE GREATER NEW YORK SAVINGS BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the Nine Months Ended
September 30,
--------------------------
($ in thousands, except per share data) 1997 1996
--------- ---------
<S> <C> <C>
Interest income:
Mortgage loans on real estate .................. $ 49,516 $ 57,204
Other loans .................................... 8,982 8,118
--------- ---------
Total interest on loans ........................ 58,498 65,322
Securities available-for-sale .................. 10,534 9,766
Securities held-to-maturity:
Mortgage-backed securities .................. 53,746 49,549
Other bonds and notes ....................... 5,960 6,485
Other .......................................... 1,585 1,797
--------- ---------
Total interest income .................... 130,323 132,919
--------- ---------
Interest expense:
Deposits ....................................... 47,633 50,443
Securities sold under agreements to repurchase . 18,125 16,840
Other borrowed funds ........................... 10,392 11,758
--------- ---------
Total interest expense ................... 76,150 79,041
--------- ---------
Net interest income ............................... 54,173 53,878
Provision for loan losses ......................... 21,500 1,500
--------- ---------
Net interest income after provision for loan losses 32,673 52,378
--------- ---------
Non-interest income:
Income from mortgage activities ................ 1,013 3,608
Customer service fees .......................... 2,914 2,861
Fees from sales of investment products ......... 1,438 1,289
Net (loss) gain on sales of securities ......... (7,279) 20
Other .......................................... 625 405
--------- ---------
Total non-interest (loss) income ......... (1,289) 8,183
--------- ---------
Non-interest expense:
Compensation and benefits ...................... 17,132 17,827
Occupancy, net ................................. 5,882 5,881
Equipment and data processing services ......... 5,860 4,430
Advertising and promotion ...................... 851 1,282
Federal deposit insurance premiums ............. 411 383
Provision for real estate losses ............... 500 --
Non-performing loan and real estate activities . 3,535 2,430
Other .......................................... 7,029 6,463
--------- ---------
Total non-interest expense ............... 41,200 38,696
--------- ---------
(Loss) income before taxes ........................ (9,816) 21,865
Income tax (benefit) expense ...................... (3,668) 8,419
--------- ---------
Net (loss) income ........................ $ (6,148) $ 13,446
========= =========
Primary (loss) earnings per share ................. $ (0.79) $ 0.59
Fully diluted (loss) earnings per share ........... (0.79) 0.55
Dividends declared per common share ............... 0.15 --
</TABLE>
See accompanying notes to consolidated financial statements.
7
<PAGE> 4
THE GREATER NEW YORK SAVINGS BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
For the Nine Months Ended
September 30,
--------------------------
($ in thousands) 1997 1996
--------- ---------
<S> <C> <C>
Preferred stock - Series A:
Balance at beginning of period ........................................ $ 1,537 $ 1,595
Conversion of 1,536,391 and 58,236 shares to common stock ............. (1,537) (58)
--------- ---------
Balance at end of period ........................................ -- 1,537
--------- ---------
Preferred stock - Series B:
Balance at beginning and end of period .......................... 2,000 2,000
--------- ---------
Additional paid-in capital, preferred:
Balance at beginning of period ........................................ 63,111 63,810
Conversion of 1,536,391 and 58,236 shares to common stock ............. (17,799) (699)
--------- ---------
Balance at end of period ........................................ 45,312 63,111
--------- ---------
ESOP debt guarantee:
Balance at beginning of period ........................................ (14,230) (15,670)
Payment of principal on ESOP debt ..................................... 766 705
--------- ---------
Balance at end of period ........................................ (13,464) (14,965)
--------- ---------
Common stock:
Balance at beginning of period ........................................ 13,534 13,289
Issuance of 2,134,676 and 150,907 shares of common stock .............. 2,135 151
--------- ---------
Balance at end of period ........................................ 15,669 13,440
--------- ---------
Additional paid-in capital, common:
Balance at beginning of period ........................................ 102,883 100,648
Issuance of 2,134,676 and 150,907 shares of common stock,
including applicable tax benefit ................................... 27,092 1,329
--------- ---------
Balance at end of period ........................................ 129,975 101,977
--------- ---------
Surplus fund:
Balance at beginning and end of period .......................... 22,998 22,998
--------- ---------
Undivided profits:
Balance at beginning of period ........................................ 17,845 7,231
Net (loss) income ..................................................... (6,148) 13,446
Dividends declared on preferred stock, net of applicable tax benefit .. (5,088) (5,090)
Dividends declared on common stock, net of applicable tax benefit ..... (2,106) --
--------- ---------
Balance at end of period ........................................ 4,503 15,587
--------- ---------
Net unrealized gain (loss) on securities available-for-sale, net of taxes:
Balance at beginning of period ........................................ (30) 36
Change in net unrealized gain (loss), net of taxes .................... 1,058 (882)
--------- ---------
Balance at end of period ........................................ 1,028 (846)
--------- ---------
Total stockholders' equity at end of period ..................... $ 208,021 $ 204,839
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
8
<PAGE> 5
THE GREATER NEW YORK SAVINGS BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Nine Months Ended
September 30,
--------------------------
($ in thousands) 1997 1996
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net (loss) income ........................................................ $ (6,148) $ 13,446
--------- ---------
Items to reconcile net (loss) income to net cash provided by
operating activities:
Depreciation and amortization ....................................... 1,657 1,718
Provisions for loan and real estate losses .......................... 22,000 1,500
Deferred tax (benefit) expense ...................................... (4,081) 8,005
Decrease in net deferred fees ....................................... (906) (782)
Amortization of premiums and accretion of discounts, net ............ 2,035 1,505
Net loss (gain) on sales of assets and loans originated for sale .... 6,857 (113)
Net gain on sale of mortgage servicing rights ....................... -- (1,504)
Sales of loans originated for sale, net ............................. 4,736 1,701
(Increase) decrease in accrued interest receivable and other assets . (433) 3,244
Decrease in accrued expenses and other liabilities .................. (591) (4,243)
--------- ---------
Net cash provided by operating activities ..................... 25,126 24,477
--------- ---------
Cash flows from investing activities:
Principal repayments of securities available-for-sale ............... 21,473 19,471
Sales of securities available-for-sale .............................. -- 4,982
Purchases of securities available-for-sale .......................... -- (7,734)
Principal repayments of mortgage-backed securities .................. 138,660 143,050
Sales of mortgage-backed securities ................................. 23,821 --
Purchases of mortgage-backed securities ............................. (121,553) (232,090)
Principal repayments of other bonds and notes ....................... 2,618 4,023
Principal repayments and sales of loans receivable .................. 149,760 148,753
Originations and purchases of loans receivable ...................... (112,761) (85,223)
Sale of mortgage servicing rights ................................... -- 450
Sales of other real estate .......................................... 5,024 9,355
(Purchases) redemptions of FHLB stock, net .......................... (650) 4,250
Purchases of premises and equipment, net ............................ (3,014) (922)
Investment in joint ventures, net ................................... (135) (196)
--------- ---------
Net cash provided by investing activities ..................... 103,243 8,169
--------- ---------
Cash flows from financing activities:
Decrease in deposits ................................................ (53,159) (20,768)
(Repayment of) proceeds from securities sold under agreements
to repurchase, maturing in 90 days or less, net .................. (70,500) 237,000
Proceeds from borrowed funds ........................................ -- 15,000
Repayment of borrowed funds ......................................... (889) (250,862)
Dividends paid on preferred stock ................................... (6,117) (6,178)
Dividends paid on common stock ...................................... (2,124) --
Proceeds from issuance of common stock .............................. 5,696 612
--------- ---------
Net cash used by financing activities ......................... (127,093) (25,196)
--------- ---------
Net increase in cash and cash equivalents ..................... 1,276 7,450
Cash and cash equivalents at beginning of period ............................ 28,146 26,502
--------- ---------
Cash and cash equivalents at end of period .................................. $ 29,422 $ 33,952
========= =========
Supplemental disclosures:
Cash paid during the period for:
Interest ............................................................ $ 78,076 $ 81,373
========= =========
Income taxes, net ................................................... 449 432
========= =========
Noncash investing activities:
Loans to finance sales of real estate ............................... 1,800 4,006
========= =========
Loans transferred to real estate acquired through foreclosure, net .. 5,155 3,542
========= =========
Noncash financing activities:
Elimination of Municipal Investment Trust Funds repurchase agreements 60,455 --
========= =========
Conversion of preferred stock to common stock ....................... 19,336 757
========= =========
Reduction in ESOP debt guarantee .................................... 766 705
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
9
<PAGE> 6
THE GREATER NEW YORK SAVINGS BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL
The consolidated financial statements of The Greater New York Savings
Bank and Subsidiaries (the "Greater") in this report have not been audited
except for the information derived from the audited Consolidated Statement of
Financial Condition as of December 31, 1996. These statements should be read in
conjunction with the audited consolidated financial statements and related notes
thereto included in the Greater's Annual Report to Stockholders and in the
related Annual Report on Form F-2 for the year ended December 31, 1996, which
has been filed as an exhibit to The Greater New York Bancorp's Registration
Statement on Form S-4 filed with the Commission on February 20, 1997, as amended
(File No. 333-22127) pursuant to the Securities Act, and is incorporated by
reference in this Form 8-K/A, as supplemented by its Quarterly Reports on Form
10-Q for the quarters ended March 31, 1997 and June 30, 1997. The June 30, 1997
Quarterly Report on Form 10-Q has been filed as an exhibit to Astoria Financial
Corporation's (the "Company") Current Report on Form 8-K filed with the
Commission on October 3, 1997, pursuant to the Securities Act, and is
incorporated by reference in this Form 8-K/A.
In the opinion of management, all material adjustments necessary for a
fair presentation of financial condition and results of operations for the
interim periods presented have been made. These adjustments are of a normal
recurring nature, except for certain adjustments made in connection with the
merger of the Greater into Astoria Federal Savings and Loan Association (the
"Association") (see Note 4). The results of operations for the interim periods
are not necessarily indicative of the results that may be expected for the
entire year or any other interim period. Certain reclassifications have been
made to prior period amounts. In preparing the consolidated financial
statements, management is required to make estimates and assumptions that affect
the reported amounts of assets, liabilities, revenues and expenses. Actual
results could differ from those estimates.
2. (LOSS) EARNINGS PER SHARE
Both primary and fully diluted loss per share are calculated by
dividing net loss plus preferred stock dividend requirements by the
weighted-average number of shares of common stock outstanding. Primary and fully
diluted earnings per share are calculated by dividing net income less preferred
stock dividend requirements by the weighted-average number of shares of common
stock and dilutive common stock equivalents outstanding. Common stock
equivalents consist of options to purchase common stock.
Prior to the actual conversion of ESOP Series A 8.25% Cumulative
Convertible Preferred Stock (the "Preferred Stock") on July 3, 1997 (see Note
3), the computation of fully diluted earnings per share also included certain
adjustments to net income and the addition of other potentially dilutive
securities outstanding. The adjustments to net income represented the
elimination of ESOP dividends and the addition of incremental expense, which
would have arose as a result of a hypothetical conversion into common stock of
the Preferred Stock. Other potentially dilutive securities represented the
shares of common stock that would have arose from such a conversion.
Preferred stock dividend requirements, adjusted net (loss) income
applicable to common stock and the average number of shares used for primary and
fully diluted (loss) earnings per share computations are summarized as follows:
10
<PAGE> 7
<TABLE>
<CAPTION>
For the Quarter Ended For the Nine Months Ended
September 30, September 30,
-------------------------------- --------------------------------
($ in thousands) 1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Preferred dividend requirements ............. $ 1,485 $ 1,803 $ 5,088 $ 5,408
Adjusted net (loss) income applicable to:
Primary (loss) earnings per share ........ $ (17,082) $ 3,179 $ (11,236) $ 8,038
Fully diluted (loss) earnings per share .. $ (17,082) $ 3,274 $ (11,236) $ 8,321
Average number of common shares outstanding . 15,193,364 13,426,146 14,169,672 13,353,802
Average number of common and dilutive
common equivalent shares outstanding for:
Primary (loss) earnings per share ..... 15,193,364 13,587,948 14,169,672 13,513,735
Fully diluted (loss) earnings per share 15,193,364 15,151,124 14,169,672 15,113,588
</TABLE>
3. CONVERSION OF SERIES A 8.25% CUMULATIVE CONVERTIBLE PREFERRED STOCK
On July 3, 1997, the United States Trust Company of New York, the
trustee of the Greater's Employee Stock Ownership Plan ("ESOP"), converted all
the outstanding shares of the Greater's Preferred Stock into the Greater's
common stock. The Preferred Stock was converted at a rate of 0.9448 per share of
common stock for each share of the Preferred Stock. As a result, 1,396,227
shares of the Greater's common stock was issued upon the conversion of 1,477,802
shares of the Preferred Stock. The conversion had no impact on the Greater's
reported financial position at September 30, 1997 or its results of operations
for the quarter and nine months ended September 30, 1997. The conversion
resulted in a reclassification of $5.1 million of preferred equity to common
equity.
4. MERGER INTO ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION
Following the close of business on September 30, 1997, the Greater was
acquired by and merged into the Association, a wholly-owned subsidiary of the
Company, in a transaction that was accounted for as a purchase (the "Merger").
The Merger contained restrictions on the operations of the Greater
pending the completion of the Merger and also required the Greater, at the
written request of the Company, to modify and change its loan, litigation, real
estate valuation policies and practices (including loan classifications and
level of reserves) and investment and asset/liability management policies and
practices before the consummation of the Merger so as to be consistent on a
mutually satisfactory basis with those of the Association, subject to compliance
with generally accepted accounting principles, and all applicable laws and
regulations. The Greater was not obligated to take any such action until after
the date on which all required regulatory and shareholder approvals were
received, and after receipt of written confirmation from the Company that the
Greater was not aware of any fact or circumstance that would prevent completion
of the Merger.
In September 1997, the Company advised the Greater in writing to: (i)
record an incremental pre-tax provision for loan losses of $21.0 million, (ii)
transfer approximately $25 million of commercial real estate and multi-family
loans that would have been categorized as 60-89 days past due and still accruing
interest at September 30, 1997 to a nonperforming status, and (iii) record pre-
tax charges totaling $3.5 million related to the transfer of the aforementioned
loans (of which $2.0 million was recorded as expenses for nonperforming loans
and real estate activities and $1.5 million was recorded as a reversal of
interest income previously accrued).
11
<PAGE> 8
5. LEGAL MATTERS
On April 3, 1997, a purported class action was commenced in the Supreme
Court of the State of New York (Kings County) against the Greater, its directors
and certain of its executive officers. The suit is entitled Leonard Minzer and
Harry Schipper v. Gerard C. Keegan, et al. The suit alleges, among other things,
that the directors and certain executive officers of the Greater have breached
their fiduciary duties in entering into the merger agreement and related
arrangements.
The complaint seeks, among other things, a preliminary and permanent
injunction against the Merger and the related transactions, an order to the
directors and executive officers to carry-out their fiduciary duties, and
unspecified damages and costs. The Greater believes that the allegations made in
this action are without merit. On May 16, 1997, Mr. Keegan and the Greater filed
an initial motion to dismiss the action.
On July 18, 1997, a purported class action was commenced in the U.S.
District Court for the Eastern District of New York entitled Leonard Minzer and
Harry Schipper v. Gerard C. Keegan, et al. against the Greater, its directors,
certain of its executive officers, the Company and the Association. The suit
alleges, among other things, that the Greater, its directors and certain of its
executive officers solicited proxies in violation of Section 14(a) of the
Securities Exchange Act of 1934 and Rule 14a-9, promulgated thereunder by
failing to disclose certain allegedly material facts in the proxy statement, as
amended, that was circulated to the Greater's shareholders in connection with
the merger, and that the Greater's directors and certain executive officers have
breached their fiduciary duties in entering into the merger agreement and
related arrangements. Plaintiff's also claim, among other things, that the
Company and the Association aided the Greater's officers and directors in
allegedly breaching their fiduciary duties. Plaintiffs sought, among other
things, a preliminary and permanent injunction against consummation of the
Merger and the related transactions, an order directing the directors and
executive officers of the Greater to carry-out their fiduciary duties, and
unspecified damages and costs. The Greater and the Association were served with
the complaint in the Federal Action on July 30, 1997. On July 31, 1997, the
plaintiffs made an application to the Court for expedited discovery and to set a
hearing on their prospective application for a preliminary injunction. Shortly
thereafter, all defendants filed motions to dismiss the complaint in this
action.
At a hearing on August 11, 1997, the Court permitted certain limited,
particularized discovery to be had by the plaintiffs. On September 2, 1997, the
plaintiffs filed an amended complaint and an application for a preliminary
injunction. An evidentiary hearing on the plaintiffs' application was held on
September 10, 1997. On September 22, 1997, the court issued a written decision
denying the plaintiffs' application in all respects. On or about November 18,
1997, a stipulation signed by counsel for all parties was filed withdrawing
plaintiffs claims, without prejudice, against certain of the Greater's officers
who were not also directors of the Greater, that stipulation must be so ordered
by the Court. Certain of the Greater's non-director officers also entered into
an agreement providing, among other things, that the running of time is tolled
for one year for purposes of all legal or equitable defenses which they may have
with respect to the claims asserted in the lawsuits. The Greater has indicated
that it believes that the allegations made in this action are without merit. All
defendants filed motions to dismiss the plaintiff's amended complaint on or
about November 19, 1997.
12
<PAGE> 1
Exhibit 99.3
UNAUDITED PRO FORMA
COMBINED CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The following Unaudited Pro Forma Combined Condensed Consolidated
Statement of Financial Condition combines the historical Consolidated Statements
of Financial Condition of the Company and the Greater giving effect to the
consummation of the Greater's merger into the Association, using the purchase
method of accounting and giving effect to the related pro forma adjustments
described in the accompanying Notes to the Unaudited Pro Forma Combined
Condensed Consolidated Financial Statements. A description of the Merger, which
was consummated following the close of business on September 30, 1997, is set
forth in Item 2 of the Company's Form 8-K Current Report dated October 3, 1997
and is incorporated by reference herein. The following pro forma combined
condensed consolidated financial information is required pursuant to Article 11
of Regulation S-X. The Unaudited Pro Forma Combined Condensed Consolidated
Statements of Operations for the Year Ended December 31, 1996 and the Nine
Months Ended September 30, 1997 combine the historical consolidated statements
of operations of the Company and the Greater giving effect to the Merger as if
the Merger had become effective on January 1, 1996, using the purchase method of
accounting and giving effect to the related pro forma adjustments described in
the accompanying Notes to the Unaudited Pro Forma Combined Condensed
Consolidated Financial Statements.
The unaudited pro forma combined condensed consolidated financial
statements included herein are presented for informational purposes only. This
information includes various estimates and may not necessarily be indicative of
the financial position or results of operations that would have occurred if the
Merger had been consummated on the date or at the beginning of the periods
indicated or which may be obtained in the future. The Unaudited Pro Forma
Combined Condensed Consolidated Statements of Operations for the Year Ended
December 31, 1996 and the Nine Months Ended September 30, 1997 do not reflect
anticipated cost savings to be recognized by the Company subsequent to the
consummation of the Merger. The unaudited pro forma combined condensed
consolidated financial statements and accompanying notes should be read in
conjunction with and are qualified in their entirety by reference to the
historical financial statements and related notes thereto of the Company and the
Greater which are incorporated by reference herein.
13
<PAGE> 2
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARY AND THE GREATER NEW YORK SAVINGS
BANK AND SUBSIDIARIES UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED
STATEMENT OF FINANCIAL CONDITION AS OF SEPTEMBER 30, 1997
(IN THOUSANDS)
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA PRO FORMA
COMPANY GREATER ADJUSTMENTS COMBINED
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
ASSETS
Cash and due from banks ............................... $ 96,537 $ 21,247 $ (74,428)(E) $ 43,356
Federal funds sold and repurchase agreements .......... 67,000 8,175 -- 75,175
Securities available-for-sale (at estimated fair value) 1,860,464 196,340 1,068,502 (F) 3,125,306
Securities held-to-maturity ........................... 2,222,270 1,064,776 3,726 (D) 2,222,270
(1,068,502)(F)
Federal Home Loan Bank of New York Stock .............. 35,800 24,250 -- 60,050
Loans and real estate held-for-sale ................... -- -- 269,358 (F) 223,106
(46,252)(D)
Loans receivable ...................................... 3,365,417 917,561 13,131 (D) 4,057,761
(238,348)(F)
Less allowance for loan losses ...................... (14,464) (40,357) 14,830 (D) (39,991)
------------ ------------ ------------ ------------
Loans receivable, net ............................... 3,350,953 877,204 (210,387) 4,017,770
Real estate owned and investments in real estate, net . 10,111 31,385 (31,010)(F) 10,486
Accrued interest receivable ........................... 44,348 12,840 -- 57,188
Premises and equipment, net ........................... 84,435 29,630 (2,319)(D) 111,746
Excess of cost over fair value of net assets acquired
and other intangibles ............................... 93,937 -- 165,010 (E) 258,947
Other assets .......................................... 38,508 87,229 24,895 (D) 102,862
(19,497)(F)
13,483 (D)
(41,756)(E)
------------ ------------ ------------ ------------
Total Assets ..................................... $ 7,904,363 $ 2,353,076 $ 50,823 $ 10,308,262
============ ============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits ............................................ $ 4,559,692 $ 1,598,072 $ 3,240 (D) $ 6,161,004
Borrowed funds ...................................... 2,636,509 507,774 (13,949)(D) 3,130,334
Accrued expenses and other liabilities .............. 98,378 39,209 5,757 (D) 123,847
(19,497)(F)
------------ ------------ ------------ ------------
Total Liabilities ................................ 7,294,579 2,145,055 (24,449) 9,415,185
------------ ------------ ------------ ------------
Stockholders' Equity:
Preferred stock ..................................... -- 2,000 (2,000)(G) 2,000
2,000 (E)
Common stock ........................................ 264 15,669 (15,669)(G) 264
Additional paid-in capital .......................... 341,109 175,287 (175,287)(G) 491,937
150,828 (E)
Retained earnings ................................... 416,840 27,501 (27,501)(G) 416,840
Treasury stock ...................................... (130,465) -- 130,465 (E) --
Net unrealized gains on securities
net of taxes ...................................... 8,258 1,028 (1,028)(G) 8,258
Unallocated common stock held by ESOP ............... (22,247) (13,464) 13,464 (G) (22,247)
Unearned common stock held by the RRPs .............. (3,975) -- -- (3,975)
------------ ------------ ------------ ------------
Total stockholders' equity ....................... 609,784 208,021 75,272 893,077
------------ ------------ ------------ ------------
Total liabilities and stockholders' equity ....... $ 7,904,363 $ 2,353,076 $ 50,823 $ 10,308,262
============ ============ ============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS.
14
<PAGE> 3
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARY AND THE GREATER NEW YORK SAVINGS
BANK AND SUBSIDIARIES UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1996
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA PRO FORMA
COMPANY GREATER ADJUSTMENTS COMBINED
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Total interest income .......................... $ 491,174 $ 176,934 $ (6,619)(H) $ 661,489
Total interest expense ......................... 304,481 104,577 (1,144)(H) 407,914
------------ ------------ ------------ ------------
Net interest income ............................ 186,693 72,357 (5,475) 253,575
Provision for loan losses ...................... 3,963 1,500 -- 5,463
------------ ------------ ------------ ------------
Net interest income after provision for
loan losses .................................. 182,730 70,857 (5,475) 248,112
Non-interest income ............................ 13,722 10,797 -- 24,519
Non-interest expense:
General and administrative ................... 96,165 48,151 -- 144,316
Real estate operations, net .................. (2,723) 3,457 -- 734
(Recovery of) provision for real estate losses (1,747) 500 -- (1,247)
Amortization of excess of cost over
fair value of net assets acquired .......... 8,684 -- 11,001(L) 19,685
SAIF recapitalization assessment ............... 28,545 -- -- 28,545
------------ ------------ ------------ ------------
Total non-interest expense ..................... 128,924 52,108 11,001 192,033
------------ ------------ ------------ ------------
Income before income taxes ..................... 67,528 29,546 (16,476) 80,598
Income taxes ................................... 30,675 11,047 (5,131) 36,591(I)
------------ ------------ ------------ ------------
Net income ..................................... $ 36,853 $ 18,499 $ (11,345) $ 44,007
============ ============ ============ ============
Primary weighted average number of
common stock and common stock
equivalents outstanding during the year ...... 20,872,779 13,528,303 26,658,154(J)
Fully diluted weighted average number
of common stock and common stock equivalents
outstanding during the year .................. 21,581,770 15,134,708 27,367,145(J)
Net income per common share:
Primary ...................................... $ 1.77 $ 0.83 $ 1.43(K)
Fully diluted ................................ $ 1.71 $ 0.77 $ 1.39(K)
============= ============ ===============
</TABLE>
SEE ACCOMPANYING NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS.
15
<PAGE> 4
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARY AND THE GREATER NEW YORK SAVINGS
BANK AND SUBSIDIARIES UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA PRO FORMA
COMPANY GREATER ADJUSTMENTS COMBINED
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Total interest income ........................ $ 401,460 $ 130,323 $ (4,973)(H) $ 526,810
Total interest expense ....................... 252,467 76,150 (879)(H) 327,738
------------ ------------ ------------ ------------
Net interest income .......................... 148,993 54,173 (4,094) 199,072
Provision for loan losses .................... 2,809 21,500 -- 24,309
------------ ------------ ------------ ------------
Net interest income after provision for
loan losses ................................ 146,184 32,673 (4,094) 174,763
Non-interest income (loss) ................... 14,861 (1,289) -- 13,572
Non-interest expense:
General and administrative ................. 71,976 37,165 -- 109,141
Real estate operations, net ................ 276 3,535 -- 3,811
Provision for real estate losses ........... 387 500 -- 887
Amortization of excess of cost over
fair value of net assets acquired ........ 6,330 -- 8,251(L) 14,581
------------ ------------ ------------ ------------
Total non-interest expense ................... 78,969 41,200 8,251 128,420
------------ ------------ ------------ ------------
Income (loss) before income taxes ............ 82,076 (9,816) (12,345) 59,915
Income taxes expense (benefit) ............... 34,543 (3,668) (5,659) 25,216(I)
------------ ------------ ------------ ------------
Net income (loss) ............................ $ 47,533 $ (6,148) $ (6,686) $ 34,699
============ ============ ============ ============
Primary weighted average number of
common stock and common stock equivalents
outstanding during the year ................ 21,092,003 14,169,672 26,877,378(J)
Fully diluted weighted average number
of common stock and common stock equivalents
outstanding during the year ................ 21,211,393 14,169,672 26,996,768(J)
Net income (loss) per common share:
Primary .................................... $ 2.25 $ (0.79) $ 1.12(K)
Fully diluted .............................. $ 2.24 $ (0.79) $ 1.12(K)
============ ============= ===============
</TABLE>
SEE ACCOMPANYING NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS.
16
<PAGE> 5
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARY AND
THE GREATER NEW YORK SAVINGS BANK AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND SEPTEMBER 30, 1997
(A) Basis of Presentation
The Unaudited Pro Forma Combined Condensed Consolidated Statement of
Financial Condition of the Company and the Greater at September 30,
1997 has been prepared as if the Merger had been consummated on that
date. The Unaudited Pro Forma Combined Condensed Consolidated
Statements of Operations for the Year Ended December 31, 1996 and the
Nine Months ended September 30, 1997 were prepared as if the Merger had
been consummated on January 1, 1996. The unaudited pro forma combined
condensed consolidated financial statements are based on the historical
financial statements of the Company and the Greater after giving effect
to the Merger under the purchase method of accounting and the
assumptions and adjustments in the notes that follow.
Assumptions relating to the pro forma adjustments set forth in the
unaudited pro forma combined condensed consolidated financial
statements are summarized as follows:
(i) Estimated fair values - Estimated fair values for securities
held-to-maturity and loans were valued as of September 30, 1997. Their
resulting net purchase premiums are being amortized into interest
income to produce a constant yield-to-maturity. Estimated fair values
for deposits and borrowings were valued based upon interest rates for
comparable products as of September 30, 1997. Their resulting discount
and premium are being accreted and amortized, respectively, into
interest expense on a straight-line basis over their remaining
maturities.
(ii) The amortization of the excess of cost over fair value of net
assets acquired is being amortized on a straight-line basis over a
period of fifteen years.
(iii) Income taxes - a net deferred tax asset was recorded equal to the
deferred tax consequences associated with the differences between the
tax basis and book basis of the assets acquired and liabilities
assumed, using a statutory rate of 43.07%.
(B) The Merger Agreement required the Greater at the written request of the
Company to modify and change certain of its policies and practices,
including loan policies and practices, before the consummation of the
Merger so as to be consistent on a mutually satisfactory basis with
those of the Association subject to compliance with generally accepted
accounting principles and all applicable laws and regulations. During
the third quarter of 1997, the Greater complied with the Company's
request to record an additional provision for loan losses of
$21,000,000. The provision is reflected in the Greater's historical
Consolidated Statement of Operations for the Nine Months Ended
September 30, 1997.
(C) Under the terms of the Merger Agreement, holders of the Greater common
stock received, subject to certain election, allocation and proration
procedures, either 0.50 shares of the Company common stock or $19.00 in
cash for each share of the Greater common stock, subject to 75% of the
Greater common stock being converted into the right to receive the
Company common stock and 25% being converted into the right to receive
cash. The total cost of the transaction is summarized as follows:
17
<PAGE> 6
<TABLE>
<CAPTION>
25% CASH 75% STOCK TOTAL
-------- --------- --------
(In thousands)
<S> <C> <C> <C>
Greater's total common shares
outstanding (i) $ 73,288 $ 214,658(vii) $287,946
Cash-out and exchanged stock
options (ii) 41 8,571 8,612
Adjustment for shares owned
by the Company (iii) 4,560 (1,936) 2,624
Issuance of Preferred Stock
Series B (iv) -- 62,000 62,000
Total transaction costs 38,295(v) -- 38,295
-------- --------- --------
Totals $116,184(vi) $ 283,293 $399,477
======== ========= ========
<FN>
(i) Based on 15,429,124 shares of the Greater common stock outstanding as
of September 30, 1997 (excluding 240,000 shares owned by the Company -
see item (iii)), of which 25% represents 3,857,281 shares and 75%
represents 11,571,843 shares.
(ii) Represents 36,000 options cashed-out by the Greater's directors and
241,840 options which certain Greater executive officers elected to
exchange for options to purchase the Company common stock.
(iii) Calculated as if the Company elected 100% cash consideration for
240,000 shares previously owned. The previously recorded unrealized
gain on such shares reduced the excess of cost over fair value of net
assets acquired.
(iv) The Company issued 2,000,000 shares of Series B preferred stock at
$1.00 par value, with a liquidation preference of $25 per share.
(v) Total transaction costs of $38,295,000 consist of the following:
Merger-related compensation and severance $22,050,000
Professional services 9,200,000
Systems and facilities conversion and other expenses 7,045,000
(vi) The funds for the 25% cash portion was or will be obtained from the
Company's normal cash flows.
(vii) The Company reissued common stock through its treasury account with an
average cost per share of $22.91. For accounting purposes, the fair
market value of the Company common stock was $37.10 per share, for
determination of total stock consideration.
</TABLE>
18
<PAGE> 7
(D) Purchase accounting adjustments were estimated as follows:
<TABLE>
<CAPTION>
<S> <C>
(In thousands)
Greater's historical net assets at September 30, 1997 $208,021
Total
Net
Adjustment
--------------
Securities held-to-maturity 3,726
Loans and real estate held-for-sale (46,252)
Loans receivable 13,131
Allowance for loan losses 14,830
Premises and equipment (2,319)
Other assets 13,483
Deposits (3,240)
Borrowed funds 13,949
Accrued expenses (5,757)
Deferred taxes 24,895
Total effect on Net Assets 26,446
---------
Total Net Assets Recorded for Acquisition $234,467
---------
</TABLE>
(E) The excess of cost over the fair value of net assets acquired (and
related tax effects) is set forth below:
<TABLE>
<CAPTION>
(In thousands)
<S> <C>
Total cost:
Cash portion $116,184(1)
Stock portion 283,293
--------
399,477
--------
Fair value of net assets acquired 234,467
--------
Total excess of cost over fair value of net asset acquired $165,010
--------
<FN>
(1) Cash portion consists of $74,428 of funds paid to the
Greater's shareholders upon closing of the Merger and $41,756
of merger-related costs which have been either paid and
deferred by the Greater and the Company or have been
accrued-for by the Company.
</TABLE>
(F) Reclassifications of various items were recorded as follows:
<TABLE>
<CAPTION>
Reclassified Amount
From To (In thousands)
<S> <C> <C>
Securities held-to-maturity Securities available-for-sale $1,068,502
Loans receivable Loans and real estate held-for-sale $ 238,348
Real estate owned and
investments in real estate, net Loans and real estate held-for-sale $ 31,010
Deferred tax asset Current taxes payable $ 19,497
</TABLE>
19
<PAGE> 8
(G) Represents purchase accounting adjustments to eliminate the Greater's
stockholders' equity accounts.
(H) Pro forma adjustments to interest income and interest expense were
calculated as followed:
<TABLE>
<CAPTION>
For the Nine Months
For the Year Ended Ended
December 31, 1996 September 30, 1997
----------------- ------------------
(In thousands)
<S> <C> <C>
Reduction in interest income on initial cash
outlay to fund acquisition (74,428 x 5.50%) $(4,094) $(3,070)
Amortization of premium on securities ........ (1,972) (1,479)
Amortization of premium on loans ............. (553) (424)
------- -------
Total Net Adjustments - Interest Income ... $(6,619) $(4,973)
======= =======
Amortization on premium on deposits .......... $ 1,514 $ 948
Accretion of discount on borrowings .......... (370) (69)
------- -------
Total Net Adjustments - Interest Expense .. $ 1,144 $ 879
======= =======
</TABLE>
(I) Income tax expense was calculated using the Company's actual nine
months ended September 30, 1997 and year ended December 31, 1996
effective rates of 42.1%, and 45.4%, respectively.
(J) Primary and fully diluted weighted average number of common stock and
common stock equivalents utilized for the calculation of earnings per
share for the periods presented were calculated using the Company's
historical weighted average common stock and common stock equivalents
plus 5,785,375 shares issued to Greater shareholders under the terms of
the Merger Agreement.
(K) Net income per common share was adjusted for dividends on preferred
shares of $6,000,000 annually and $4,500,000 for the nine months ended
September 30, 1997.
(L) The following table summarizes the estimated impact of the amortization
and accretion of the purchase accounting adjustments made in connection
with the Merger on the Company's results of operations for the next
five years:
20
<PAGE> 9
<TABLE>
<CAPTION>
($ in thousands)
Projected Future Excess of Cost Over Net Net Decrease
Amounts for the Year Fair Value of (Accretion) in Income
Ended December 31 Net Assets Acquired Amortization Before Taxes
----------------- ------------------- ------------ ------------
<S> <C> <C> <C>
1997 $ 11,001 $ 1,381 $ 12,382
1998 11,001 1,366 12,367
1999 11,001 2,136 13,137
2000 11,001 2,548 13,549
2001 11,001 2,579 13,580
2002 and thereafter 110,005 14,052 124,057
--------- ------------ ------------
$ 165,010 $ 24,062 $ 189,072
========= ============ ============
</TABLE>
21
