<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 10-Q
/ X / Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
----------------------
For the Quarter Ended
June 30, 1997
OR
/ / Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
0-22516
-------
Securities and Exchange Commission File Number
GreenPoint Financial Corp.
--------------------------
(Exact name of registrant as specified in its charter)
Delaware 06-1379001
-------- ----------
(State or other jurisdiction of (I.R.S. employer identification number)
incorporation or organization)
90 Park Avenue, New York, New York 10016
---------------------------------- -----
(Address of principal executive offices) (Zip Code)
(212) 834-1711 Not Applicable
-------------- --------------
(Registrant's telephone number, (Former name, former address and former
including area code) 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 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
--- ---
As of August 8, 1997 there were 43,312,976 shares of common stock
outstanding.
<PAGE>
GreenPoint Financial Corp.
FORM 10-Q
FOR THE QUARTER ENDED
June 30, 1997
INDEX
PART I--FINANCIAL INFORMATION PAGE
----
Item 1--Financial Statements
Consolidated Statements of Financial Condition (unaudited)
as of June 30, 1997 and December 31, 1996...................... 3
Consolidated Statements of Income (unaudited) for the quarters
and six month periods ended June 30, 1997 and 1996............. 4
Consolidated Statements of Changes in Stockholders' Equity
(unaudited) for the six month periods ended June 30, 1997
and 1996....................................................... 5
Consolidated Statements of Cash Flows (unaudited) for the six
month periods ended June 30, 1997 and 1996..................... 6
Notes to the Unaudited Consolidated Financial Statements....... 7
Item 2--Management's Discussion and Analysis of Financial
Condition and Results of Operations...................... 11
PART II--OTHER INFORMATION
Item 1--Legal Proceedings........................................ 25
Item 4--Submission of Matters to a Vote of Security Holders...... 25
Item 6--Exhibits and Reports on Form 8-K......................... 26
<PAGE>
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
------------- -------------
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<S> <C> <C>
ASSETS
Cash and due from banks........................... $ 89,550 $ 81,914
Money market investments.......................... 729,349 494,060
Loans receivable held for sale.................... 4,600 4,829
Securities available for sale..................... 3,124,585 4,355,432
Securities held to maturity (fair value of
$3,929 and $4,016 respectively)................. 3,892 3,978
Trading assets.................................... 29 --
Loans receivable held for investment:
Mortgage loans.................................. 8,266,156 7,423,993
Other loans..................................... 21,567 23,490
Deferred loan fees and unearned discount........ (41,023) (48,216)
Allowance for possible loan losses.............. (107,000) (105,000)
------------- -------------
Loans receivable held for investment, net..... 8,139,700 7,294,267
------------- -------------
Other interest-earning assets..................... 111,036 --
Accrued interest receivable, net.................. 89,137 89,460
Banking premises and equipment, net............... 122,535 128,207
Deferred income taxes, net........................ 78,439 80,202
Other real estate owned, net...................... 23,968 28,566
Goodwill.......................................... 600,337 623,600
Other assets...................................... 182,889 141,070
------------- -------------
Total assets.................................. $13,300,046 $13,325,585
------------- -------------
LIABILITIES AND STOCKHOLDER'S EQUITY ------------- -------------
Liabilities:
Deposits:
N.O.W. and checking............................. $ 534,019 $ 524,181
Savings and club................................ 1,846,345 1,901,682
Variable rate savings........................... 1,758,079 1,853,683
Money market.................................... 507,269 561,331
Term certificates of deposit.................... 6,531,210 6,611,389
------------- -------------
Total deposits................................ 11,176,922 11,452,266
------------- -------------
Mortgagors' escrow................................ 78,240 66,929
Securities sold under agreements to repurchase.... 236,256 89,500
Guaranteed preferred beneficial interest in
Company's junior subordinated debentures........ 199,717 --
Accrued income taxes payable...................... 33,607 45,081
Other liabilities................................. 200,559 208,383
------------- -------------
Total liabilities............................. 11,925,301 11,862,159
------------- -------------
Commitments and Contingencies
Preferred shares of subsidiary.................... 3,629 3,623
Stockholders' equity:
Preferred stock ($0.01 par value; 50,000,000
shares authorized; none issued)............... -- --
Common stock ($0.01 par value; 220,000,000
shares authorized; 55,130,582 and 55,115,582
shares issued, respectively).................. 551 551
Additional paid-in capital...................... 821,521 810,170
Unallocated Employee Stock Ownership Plan
(ESOP) shares................................. (117,256) (119,573)
Unearned stock plans shares..................... (7,882) (8,317)
Retained earnings............................... 1,089,952 1,037,993
Net unrealized loss on securities available
for sale, net................................. (22,552) (23,324)
Treasury stock, at cost (10,086,197 and
7,871,400 shares, respectively)............... (393,218) (237,697)
------------- -------------
Total stockholders' equity.................... 1,371,116 1,459,803
------------- -------------
Total liabilities and stockholders' equity.... $13,300,046 $13,325,585
------------- -------------
------------- -------------
</TABLE>
(See the accompanying notes to the unaudited consolidated financial
statements)
3
<PAGE>
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
QUARTER ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------- ----------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
Interest income:
Mortgages...................................................... $177,564 $144,566 $346,436 $285,915
Money market investments....................................... 7,598 21,356 11,941 44,746
Securities..................................................... 53,931 79,872 117,049 165,583
Trading assets................................................. 32 -- 71 --
Other interest-earning assets.................................. 1,658 -- 3,069 --
Other loans.................................................... 564 684 1,126 1,341
---------- ---------- ---------- ----------
Total interest income........................................ 241,347 246,478 479,692 497,585
---------- ---------- ---------- ----------
Interest expense:
Deposits....................................................... 117,336 133,096 233,982 276,175
Trading liabilities............................................ 73 -- 73 --
Short-term and other borrowing................................. 2,181 1,153 3,444 1,604
Long-term debt................................................. 1,423 -- 1,423 --
---------- ---------- ---------- ----------
Total interest expense....................................... 121,013 134,249 238,922 277,779
---------- ---------- ---------- ----------
Net interest income.............................................. 120,334 112,229 240,770 219,806
Provision for possible loan losses............................... (4,444) (3,701) (9,461) (7,347)
Net interest income after provision for possible loan losses..... 115,890 108,528 231,309 212,459
Non-interest income:
Income from fees and commissions:
Mortgage loan operations fee income............................ 3,444 2,979 6,982 7,542
Mortgage servicing fees........................................ 1,787 2,122 3,612 4,382
Banking services fees and commissions.......................... 5,745 3,998 10,610 8,059
Other income................................................... 423 2,637 915 2,966
Net gain on securities......................................... 211 81 472 354
Net (loss) gain on sales of loans.............................. (160) 2,761 (197) 2,780
Net gain on sale of assets..................................... -- -- 2,416 --
Gain on sale of branches....................................... -- 8,876 5,850 8,876
---------- ---------- ---------- ----------
Total non-interest income.................................... 11,450 23,454 30,660 34,959
---------- ---------- ---------- ----------
Non-interest expense:
Salaries and benefits.......................................... 22,621 20,516 45,314 43,077
Employee Stock Ownership and stock plans expense............... 4,711 4,699 9,521 8,942
Net expense of premises and equipment.......................... 12,297 11,890 24,397 23,588
Advertising.................................................... 2,238 2,208 4,478 4,199
Federal deposit insurance premiums............................. 726 1,725 1,500 3,435
Charitable and educational foundation.......................... 2,373 1,419 4,358 2,412
Other administrative expenses.................................. 10,416 12,997 22,867 26,070
Other real estate owned operating (income) expense, net........ (955) 165 (1,417) 50
Goodwill amortization.......................................... 11,620 11,630 23,263 23,258
Restructuring charge........................................... 2,500 -- 2,500 --
---------- ---------- ---------- ----------
Total non-interest expense................................... 68,547 67,249 136,781 135,031
---------- ---------- ---------- ----------
Income before income taxes....................................... 58,793 64,733 125,188 112,387
Income taxes..................................................... 23,664 27,578 50,388 47,880
---------- ---------- ---------- ----------
Net income....................................................... $ 35,129 $ 37,155 $ 74,800 $ 64,507
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Earnings per share............................................... $ 0.86 $ 0.83 $ 1.80 $ 1.43
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Net income (excluding non-recurring items)*...................... $ 36,622 $ 32,060 $ 71,354 $ 59,412
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Earnings per share (excluding non-recurring items)*.............. $ 0.89 $ 0.72 $ 1.72 $ 1.32
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
* Non-recurring items include branch sales, asset sales and restructuring
charge.
(See the accompanying notes to the unaudited consolidated financial
statements)
4
<PAGE>
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
--------------------------
<S> <C> <C>
1997 1996
------------ ------------
Common stock
Balance at beginning of period........................................................ $ 551 $ 550
Issuance of common stock to stock plans............................................... -- 1
------------ ------------
Balance at end of period.............................................................. 551 551
------------ ------------
Additional paid-in capital
Balance at beginning of period........................................................ 810,170 801,382
Issuance of common stock to stock plans............................................... 832 3,693
Amortization of ESOP shares committed to be released.................................. 5,680 2,387
Amortization of stock plans shares during the period.................................. 257 257
Tax benefit for vested stock plans shares............................................. 4,582 --
------------ ------------
Balance at end of period.............................................................. 821,521 807,719
------------ ------------
Unallocated ESOP shares
Balance at beginning of period........................................................ (119,573) (123,987)
Amortization of ESOP shares committed to be released.................................. 2,317 3,617
------------ ------------
Balance at end of period.............................................................. (117,256) (120,370)
------------ ------------
Unearned stock plans shares
Balance at beginning of period........................................................ (8,317) (9,838)
Issuance of common stock to stock plans............................................... (832) (3,694)
Amortization of stock plans shares during the period.................................. 1,267 2,681
------------ ------------
Balance at end of period.............................................................. (7,882) (10,851)
------------ ------------
Retained earnings
Balance at beginning of period........................................................ 1,037,993 942,137
Net income for the period............................................................. 74,800 64,507
Dividends declared.................................................................... (19,814) (17,619)
Exercise of stock options from treasury stock......................................... (3,027) (1,400)
------------ ------------
Balance at end of period.............................................................. 1,089,952 987,625
------------ ------------
Net unrealized (loss) gain on securities available for sale, net
Balance at beginning of period........................................................ (23,324) 14,862
Net unrealized gain (loss) on securities available for sale........................... 772 (67,297)
------------ ------------
Balance at end of period.............................................................. (22,552) (52,435)
------------ ------------
Treasury stock, at cost
Balance at beginning of period........................................................ (237,697) (73,789)
Exercise of stock options from treasury stock......................................... 7,820 3,264
Purchase of treasury stock............................................................ (163,341) (75,460)
------------ ------------
Balance at end of period.............................................................. (393,218) (145,985)
------------ ------------
Total stockholders' equity............................................................ $ 1,371,116 $ 1,466,254
------------ ------------
------------ ------------
</TABLE>
(See accompanying notes to the unaudited consolidated financial statements)
5
<PAGE>
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
-----------------------
1997 1996
---------- -----------
(IN THOUSANDS)
<S> <C> <C>
Cash flows from operating activities:
Net income.............................................................................. $ 74,800 $ 64,507
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for possible loan losses.................................................... 9,461 7,347
Depreciation and amortization of premises and equipment............................... 8,323 8,570
Goodwill amortization................................................................. 23,263 23,258
Accretion of discount on securities, net of premium amortization...................... (5,167) (42,653)
ESOP and stock plans expense.......................................................... 9,521 8,942
Gain on securities transactions....................................................... (472) (354)
Net change in loans held for sale..................................................... 229 153,342
Net gain on sales of other real estate owned.......................................... (4,360) (3,243)
Net gain on sale of branches.......................................................... (5,850) (8,876)
Deferred income taxes................................................................. 490 8,889
Increase in trading related assets.................................................... (29) --
Decrease in other assets.............................................................. 11,198 21,582
(Decrease) increase in other liabilities.............................................. (9,672) 12,667
Other, net............................................................................ (13,552) 2,119
---------- -----------
Net cash provided by operating activities........................................... 98,183 256,097
---------- -----------
Cash flows from investing activities:
Loan originations, net of principal repayments........................................ (853,148) (371,383)
Proceeds from sales of other real estate owned........................................ 9,688 7,595
Purchases of securities available for sale............................................ (564,649) (4,365,166)
Purchase of securities held to maturity............................................... (100) --
Proceeds from maturities of securities available for sale............................. 720,000 3,188,263
Proceeds from sales of securities available for sale.................................. 807,758 1,185,042
Principal repayments on securities.................................................... 133,091 129,397
Investment in corporate officer life insurance policy................................. (101,794) --
Purchases of premises and equipment................................................... (5,532) (14,658)
---------- -----------
Net cash provided by (used in)investing activities.................................. 145,314 (240,910)
---------- -----------
Cash flows from financing activities:
Net withdrawals from depositors' accounts............................................. (144,713) (435,490)
Cash paid on transfer of deposit liabilities.......................................... (124,781) (143,443)
Payments for cash dividends........................................................... (19,814) (17,619)
Exercise of stock options............................................................. 4,793 1,864
Purchase of treasury stock............................................................ (163,341) (75,460)
Securities sold under agreements to repurchase........................................ 236,256 284,850
Guaranteed preferred beneficial interest in Company's junior subordinated debentures.. 199,717 --
Other, net............................................................................ 11,311 8,548
---------- -----------
Net cash used in financing activities............................................... (572) (376,750)
---------- -----------
Net increase (decrease) in cash and cash equivalents.................................. 242,925 (361,563)
---------- -----------
Cash and cash equivalents at beginning of period...................................... 575,974 1,704,379
---------- -----------
Cash and cash equivalents at end of period............................................ $ 818,899 $ 1,342,816
---------- -----------
---------- -----------
Non-cash investing and financing activities:
Additions to other real estate owned, net............................................. $ 13,265 $ 1,338
---------- -----------
---------- -----------
Loans to facilitate sales of other real estate........................................ $ 11,907 $ 8,552
---------- -----------
---------- -----------
Unsettled trades...................................................................... $ 142,507 $ --
---------- -----------
---------- -----------
Supplemental disclosure of cash flow information:
Cash paid for income taxes............................................................ $ 53,575 $ 16,255
---------- -----------
---------- -----------
Interest paid......................................................................... $ 236,088 $ 283,694
---------- -----------
---------- -----------
</TABLE>
(See accompanying notes to the unaudited consolidated financial statements)
6
<PAGE>
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The unaudited consolidated financial statements of GreenPoint Financial Corp.
and Subsidiaries ("GreenPoint" or the "Company") are prepared in accordance
with generally accepted accounting principles for interim financial
information. In the opinion of management, all adjustments (consisting only
of normal recurring accruals) necessary for a fair presentation of the
Company's interim financial condition as of the dates indicated and the
results of operations for the periods presented have been included. The
results of operations for the interim periods shown are not necessarily
indicative of results that may be expected for the entire year.
The unaudited consolidated interim financial statements presented herein
should be read in conjunction with the consolidated financial statements and
notes thereto included in the Company's Annual Report to shareholders for the
period ended December 31, 1996.
2. STOCK INCENTIVE PLAN
During the six months ended June 30, 1997, GreenPoint granted 15,000 shares
of the Company's common stock to an executive officer pursuant to plans
approved by the Company's shareholders in 1994. These shares vest ratably
over four years on the anniversary dates of the award. The market price at the
grant date was $55.50.
For the six months ended June 30, 1997, the Company granted options to
purchase 619,500 shares of the Company's common stock to certain officers, at
an average exercise price of $55.16. These awards vest ratably over three
years on the anniversary dates of the awards.
3. NON-EMPLOYEE DIRECTORS STOCK OPTION GRANTS
During the six months ended June 30, 1997, the Company granted options to
purchase 26,000 shares of the Company's common stock to non-employee
directors, at an average exercise price of $57.75. These awards vest after
one year on the anniversary date of the awards.
4. COMMON STOCK REPURCHASE PROGRAM
Under the 1997 5% stock repurchase program, the Company repurchased shares of
GreenPoint common stock at a cost of $146.2 million. The repurchase was
completed on June 23, 1997. During the quarter, GreenPoint sold $200 million
of Guaranteed Preferred Beneficial Interest in Company's Junior Subordinated
Debentures ("Capital Securities"), the proceeds of which may be used to
repurchase up to $200 million of common stock, over an unspecified period of
time, subject to management's evaluation of market conditions and capital
needs.
7
<PAGE>
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
5. SECURITIES AVAILABLE FOR SALE AND HELD TO MATURITY
Securities held at June 30, 1997 are summarized as follows:
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
------------ ------------- ------------ ----------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
Securities Available for Sale
U.S. Government and Federal Agency Obligations:
U.S. Treasury notes/bills.................................... $ 1,100,784 $ -- $ (15,690) $1,085,094
Agency discount notes........................................ 59,741 9 -- 59,750
Commercial paper............................................. 105,131 -- (18) 105,113
Mortgage-backed securities................................... 1,417,048 -- (22,458) 1,394,590
Collateralized mortgage obligations.......................... 69,006 -- (93) 68,913
Trust certificates collateralized by GNMA securities......... 383,145 -- (2,048) 381,097
Other........................................................ 30,016 12 -- 30,028
------------ ----- ------------ ----------
Total securities available for sale...................... $ 3,164,871 $ 21 $ (40,307) $3,124,585
------------ ----- ------------ ---------
------------ ----- ------------ ---------
Securities Held to Maturity
Tax exempt municipals........................................ $ 626 $ 37 $ -- $ 663
Other........................................................ 3,266 -- -- 3,266
------------ ----- ------------ ---------
Total securities held to maturity........................ $ 3,892 $ 37 $ -- $ 3,929
------------ ----- ------------ ---------
------------ ----- ------------ ---------
</TABLE>
Securities held at December 31, 1996 are summarized as follows:
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED
COST GAINS LOSSES FAIR VALUE
------------ ---------- ------------ ----------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
Securities Available for Sale
U.S. Government and Federal Agency Obligations:
U.S. Treasury notes/bills.................................... $ 1,944,272 $ 316 $ (16,178) $1,928,410
Agency discount notes/Asset backed securities................ 66,358 3 (40) 66,321
Mortgage-backed securities................................... 1,880,991 -- (23,091) 1,857,900
Collateralized mortgage obligations.......................... 32,432 -- (3) 32,429
Trust certificates collateralized by GNMA securities......... 409,859 -- (3,332) 406,527
Other........................................................ 63,852 255 (262) 63,845
------------ ----- ------------ ----------
Total securities available for sale...................... $ 4,397,764 $ 574 $ (42,906) $4,355,432
------------ ----- ------------ ----------
------------ ----- ------------ ----------
Securities Held to Maturity
Tax exempt municipals........................................ $ 640 $ 38 $ -- $ 678
Other........................................................ 3,338 -- -- 3,338
------------ ----- ------------ ----------
Total securities held to maturity........................ $ 3,978 $ 38 $ -- $ 4,016
------------ ----- ------------ ----------
------------ ----- ------------ ----------
</TABLE>
Estimated fair values for securities are based on published market or
securities dealers' estimated prices.
During the quarter ended June 30, 1997, the Company sold
available-for-sale securities aggregating $628.7 million, resulting in
gross realized gains of $0.8 million and gross realized losses of $0.6
million.
The average maturities of the securities available for sale and held to
maturity at June 30, 1997 are approximately 9.0 years and 12.5 years,
respectively. Mortgage-backed securities, almost all of which have
contractual maturities of more than 10 years, are subject to scheduled and
non-scheduled principal payments which shorten the average life to an
estimated 5.2 years. The estimated average life for all securities
available for sale is approximately 4.3 years.
8
<PAGE>
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
6. PURCHASE ACQUISITION OF MORTGAGE SERVICING OPERATIONS
On April 30, 1997, the Company purchased the Columbus, GA mortgage servicing
operations of Citizens Financial Group, for a net purchase price of
approximately $4 million. The purchase of the Georgia facility gives the
Company a more efficient platform for servicing its national mortgage
portfolio.
7. EARNINGS PER SHARE IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS
In February 1997, FASB issued Statement of Financial Accounting Standards No.
128, ("SFAS 128") "Earnings per Share". SFAS 128 establishes standards for
computing and presenting earnings per share and applies to entities with
publicly held common stock or potential common stock. SFAS 128 simplifies the
standards for computing earnings per share previously found in APB Opinion
No. 15, "Earnings per Share", and makes them comparable to international EPS
standards. It replaces the presentation of primary EPS with a presentation of
basic EPS. It also requires dual presentation of basic and diluted EPS on the
face of the income statement for all entities with complex capital structures.
The statement is effective for financial statements issued for periods ending
after December 15, 1997, including interim periods, earlier application is
not permitted. This statement requires restatement of all prior-period EPS
data presented. The Company does not believe that implementation of SFAS 128
will have a material effect on the financial statements of the Company.
8. RESTRUCTURING CHARGE
In the second quarter of 1997, the Company recorded a pre-tax restructuring
charge of $2.5 million pertaining to the transfer of mortgage servicing from
New York to Georgia. The charge includes costs such as employee severance
benefits, and write-downs of software and fixed assets.
9. GUARANTEED PREFERRED BENEFICIAL INTEREST IN COMPANY'S JUNIOR SUBORDINATED
DEBENTURES
On June 3, 1997 the Company's newly formed subsidiary, GreenPoint Capital
Trust I, issued $200 million of 9.10% Capital Securities with a maturity date
of June 1, 2027, with an effective annual yield of 9.16%. The proceeds from
the offering will be used for general corporate purposes including the
repurchase of stock and financing growth. The Capital Securities were sold in
a private placement to qualified institutional buyers. During the second
quarter, the Company incurred $1.4 million of interest expense associated
with GreenPoint Capital Trust I.
9
<PAGE>
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
10. SUBSEQUENT EVENT--MEDIUM-TERM BANK NOTE PROGRAM
On July 3, 1997, the Company published an Offering Circular under Regulation
D authorizing it to issue, from time to time, up to $3 billion of Senior and
Subordinated Bank Notes ("Notes") with maturities ranging from 7 days to 30
years (the "Medium-Term Note Program" or "Program"). Notes issued under the
Program can be offered only to accredited investors within the meaning of
Rule 501(a) of Regulation D. Additionally, on July 10, 1997, the Company
issued the first tranche under the Program of 6.70% Senior Bank Notes in a
principal amount of $200 million maturing on July 15, 2002. The proceeds of
the Notes will be used by the Company for general corporate and banking
purposes in the ordinary course of its business.
10
<PAGE>
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
<TABLE>
<CAPTION>
QUARTER ENDED
----------------------------------------------------------------
JUN. 30, MAR. 31, DEC. 31, SEPT. 30, JUN. 30,
1997 1997 1996 1996 1996
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Performance Ratios (Annualized):
Core cash earnings return on average assets(8).... 1.61%(1) 1.55%(2) 1.43%(1) 1.42% 1.36%(2)
Core cash earnings return on average equity(8).... 15.13 (1) 14.02 (2) 13.25 (1) 13.55 13.04 (2)
Return on average assets.......................... 1.07 1.05 (2) 1.02 1.00 0.90 (2)
Return on average equity.......................... 10.04 9.51 (2) 9.46 9.51 8.64 (2)
Net interest margin............................... 3.99 3.97 3.82 3.61 3.45
Net interest spread during period................. 3.67 3.64 3.52 3.34 3.20
Operating expense to average assets (4)........... 1.69 1.73 1.61 1.58 1.56
Efficiency ratio (5).............................. 42.0 43.4 (2) 42.7 43.6 43.7 (2)
Average interest-earning assets to average
interest- bearing liabilities................... 1.08 x 1.08 x 1.07 x 1.07 x 1.06 x
Regulatory Capital Ratios:
Company:
Leverage capital (6)............................. 7.95% 6.90% 6.78% 6.38% 6.43%
Risk-based capital (6):
Tier 1.......................................... 16.37 15.33 15.47 15.72 16.62
Total........................................... 17.62 16.58 16.72 16.90 17.87
Bank:
Leverage capital (6)............................. 6.66 6.20 6.64 6.26 6.31
Risk-based capital (6):
Tier 1........................................ 13.92 13.76 15.15 15.42 16.35
Total......................................... 15.17 15.01 16.40 16.67 17.60
Per Share Data:
Core cash earnings(8)*........................... $ 1.29 (1) $ 1.21 (2) $ 1.13 (1) $ 1.13 $ 1.09 (2)
Common book value**.............................. $ 34.27 $ 34.57 $ 34.77 $ 33.89 $ 33.65
Tangible common book value**..................... $ 19.27 $ 19.81 $ 19.92 $ 18.72 $ 18.80
* Average shares used in calculation............. 40,930,000 42,235,000 42,069,000 43,138,000 44,664,000
** Period-end shares used in calculation.......... 40,007,000 41,452,000 41,984,000 41,849,000 43,573,000
Total shares issued and outstanding............ 45,044,000 46,888,000 47,481,000 47,656,000 49,924,000
Asset Quality Ratios:
Non-performing loans to total loans.............. 4.35% 4.45% 4.78% 5.21% 5.77%
Non-performing assets to total assets............ 2.89 2.84 2.89 2.91 2.86
Allowance for possible loan losses to:
Non-performing loans............................. 29.69 30.32 29.48 29.05 28.07
Total loans...................................... 1.29 1.35 1.41 1.51 1.63
Earnings to combined fixed charges and
preferred stock dividends (7):
Excluding interest on deposits................. 23.09 x 55.92 x 44.04 x 48.12 x 59.91 x
Including interest on deposits................. 1.49 x 1.56 x 1.46 x 1.43 x 1.48 x
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED
----------------------
JUN. 30, JUN. 30,
1997 1996
---------- ---------
<S> <C> <C>
Performance Ratios (Annualized):
Core cash earnings return on average assets(8).... 1.58%(3) 1.27%(2)
Core cash earnings return on average equity(8).... 14.56 (3) 12.06 (2)
Return on average assets.......................... 1.06 (2) 0.82 (2)
Return on average equity.......................... 9.77 (2) 7.82 (2)
Net interest margin............................... 3.98 3.33
Net interest spread during period................. 3.65 3.07
Operating expense to average assets (4)........... 1.71 1.55
Efficiency ratio (5).............................. 42.7 (2) 45.4 (2)
Average interest-earning assets to average
interest- bearing liabilities................... 1.08 x 1.06 x
Regulatory Capital Ratios:
Company:
Leverage capital (6).............................
Risk-based capital (6):
Tier 1..........................................
Total...........................................
Bank:
Leverage capital (6).............................
Risk-based capital (6):
Tier 1........................................
Total.........................................
Per Share Data:
Core cash earnings(8)*...........................
Common book value**..............................
Tangible common book value**.....................
* Average shares used in calculation.............
** Period-end shares used in calculation..........
Total shares issued and outstanding............
Asset Quality Ratios:
Non-performing loans to total loans..............
Non-performing assets to total assets............
Allowance for possible loan losses to:
Non-performing loans.............................
Total loans......................................
Earnings to combined fixed charges and
preferred stock dividends (7):
Excluding interest on deposits................. 33.34 x 56.92 x
Including interest on deposits................. 1.53 x 1.40 x
</TABLE>
- ------------------------
(1) Excludes restructuring charge (recovery).
(2) Excludes branch and asset sales.
(3) Excludes branch sales, asset sales and restructuring charge (recovery).
(4) Excludes goodwill expense, OREO (income) expense and restructuring
charge (recovery).
(5) The efficiency ratio is calculated by dividing the Company's operating
expense excluding goodwill expense, OREO (income) expense and restructuring
charge (recovery) by the sum of net interest income and non-interest
income.
(6) These ratios are calculated using regulatory guidelines which exclude the
impact on stockholders' equity resulting from the adoption of Statement of
Financial Accounting Standards No. 115, "Accounting for Certain Investments
in Debt and Equity Securities" ("SFAS 115").
(7) For purposes of computing the ratio of earnings to combined fixed charges
and preferred stock dividend requirements, earnings represent net income
plus applicable income taxes, fixed charges and preferred stock dividend
requirements of a consolidated subsidiary. Fixed charges, excluding interest
expense on deposits, represent interest expense on long-term debt and
one-third (the portion deemed to be representative of the interest factor)
of rents. Fixed charges, including interest expense on deposits, represent
interest expense on long-term debt, and one-third (the portion deemed to be
representative of the interest factor) of rents and interest expense on
deposits.
(8) Core cash earnings is net income, net of non-recurring items, adding back
goodwill amortization and Employee Stock Ownership and stock plans expense.
11
<PAGE>
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations-- (Continued)
1. GENERAL
The Bank has historically operated as a traditional consumer-oriented
institution serving the markets in which its branches are located.
Management's objective has been to become a major niche loan originator in
the national residential mortgage market and to become a major consumer
banking force within the attractive, rapidly consolidating New York
metropolitan consumer banking market.
GreenPoint regularly explores opportunities for acquisitions of and holds
discussions with financial institutions and related businesses, and also
regularly explores opportunities for acquisitions of liabilities and assets
of financial institutions and other financial services providers. The Company
routinely analyzes its lines of business and from time to time may increase,
decrease or terminate one or more of its activities.
2. OPERATING RESULTS
The second quarter's results include the following:
- - The Company's loan originations totaled $713 million, up 32% over the
second quarter of 1996, and up 11% over the first quarter of 1997. The
percentage of new loans originated outside of New York increased to 65%,
and ARMs as a percentage of total originations increased to 39%.
- - Asset quality remains stable as the ratio of non-performing loans to total
loans declined 142 basis points to 4.35%, a 25% decrease from June 30, 1996
and 10 basis points lower than the first quarter.
- - Net interest margin rose to 3.99%, 54 basis points over the second quarter
of 1996, and 2 basis points over the first quarter of 1997.
Net income for the quarter ended June 30, 1997 was $35.1 million, or $0.86
per share, a 4% per share increase over the $0.83 per share ($37.2 million)
for the comparable 1996 period. The 1997 quarter's results include a pre-tax
restructuring charge of $2.5 million pertaining to the transfer of mortgage
servicing from New York to Georgia. The 1996 quarter's results include a $8.9
million pre-tax non-recurring gain on branch sales. Accordingly, core
earnings, which exclude non-recurring items were $0.89 per share, up 24% over
the second quarter of 1996, and up 9% over the first quarter of 1997.
12
<PAGE>
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations--(Continued)
NET INTEREST INCOME
Net interest income increased by $8.1 million, or 7%, in the second quarter
of 1997, versus the comparable period in 1996. The increase was due to an
improvement in the net interest margin offset partially by a $1.1 billion
decline in total average assets and liabilities. Compared to the first
quarter of 1997, net interest income was flat. Net interest margin rose to
3.99%, 54 basis points over the second quarter of 1996, and 2 basis points
over the first quarter of 1997. Net interest income and net interest margin
in the second quarter of 1997 were reduced by the effect of the Company's
stock repurchase activity and the issuance of $200 million of Capital
Securities at an effective annual yield of 9.16%.
Interest income decreased by $5.1 million, or 2.1%, to $241.3 million in the
second quarter of 1997, and by $17.9 million, or 3.6%, to $479.7 million in
the first six months of 1997, from $246.5 million and $497.6 million,
respectively for the 1996 periods. The primary reason for the decrease was a
decline in the average balances of securities and money market investments,
which was partially offset by the rise in average mortgage loans.
Interest income on money market investments decreased by $13.8 million, or
64.4%, to $7.6 million in the second quarter of 1997, and by $32.8 million,
or 73.3%, to $11.9 million in the first six months of 1997, from $21.4
million and $44.7 million respectively for the comparable 1996 periods. The
decrease was due to declines in the average money market investment balance
of $1.1 billion and $1.2 billion, for the three months and six months ended
June 30, 1997 respectively, from $1.6 billion and $1.7 billion for the
comparable 1996 periods.
Interest income on securities declined by $25.9 million, or 32.5%, to $53.9
million in the second quarter of 1997, and by $48.5 million, or 29.3%, to
$117.0 million in the first six months of 1997 from $79.9 million and $165.6
million respectively for the comparable 1996 periods. The decrease was due to
declines in the average securities balance of $1.7 billion and $1.6 billion,
for the three months and six months ended June 30, 1997 respectively, from
$5.3 billion and $5.5 billion for the comparable 1996 periods.
Interest income on mortgages increased by $33.0 million, or 22.8%, to $177.6
million, in the second quarter of 1997, and by $60.5 million, or 21.1%, to
$346.4 million in the first six months of 1997 from $144.6 million and $285.9
million respectively for the comparable 1996 periods. The increase reflects
the growth in the Company's loan portfolio to average balances of $8.0
billion and $7.8 billion, for the three months and six months ended June 30,
1997 respectively, from $6.2 billion in each of the comparable 1996 periods.
Interest expense decreased by $13.2 million, or 9.9%, to $121.0 million in
the second quarter of 1997, and by $38.9 million, or 14.0%, to $238.9 million
in the first six months of 1997, from $134.2 million and $277.8 million
respectively for the comparable 1996 periods. The decrease reflects a $1.1
billion and $1.3 billion decline in average interest-bearing liabilities and
a 7 basis point and 16 basis point decrease in the average cost of funds,
respectively, from the comparable 1996 periods.
13
<PAGE>
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations--(Continued)
Interest expense on time deposits decreased by $11.9 million, or 12.4%, to
$84.1 million in the second quarter of 1997, and by $33.8 million, or 16.8%,
to $167.2 million for the first six months of 1997, from $96.0 million and
$201.1 million for the comparable 1996 periods. The primary reason for the
decline was the decrease in average time deposits of $0.8 billion in the
second quarter of 1997, and of $1.0 billion in the first six months of 1997,
resulting from a net deposit outflow between the periods. The average cost of
time deposits decreased by 9 basis points and 22 basis points from the
comparable 1996 periods.
Interest expense on savings accounts, which include money market and variable
rate savings, decreased by $3.8 million, or 10.7%, to $31.5 million in the
second quarter of 1997, and by $8.1 million, or 11.4%, to $63.4 million in
the first six months of 1997, from $35.3 million and $71.5 million for the
comparable 1996 periods. The decline in interest expense reflects a decrease
in the average balance of $417.6 million and $406.5 million in the second
quarter of 1997 and first six months of 1997 respectively, versus the
comparable periods in 1996.
14
<PAGE>
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations--(Continued)
Average Balance Sheets and Interest Yield/Cost
The following table sets forth certain information relating to the Company's
average statements of financial condition (unaudited) and statements of
income (unaudited) for the quarters ended June 30, 1997 and 1996, and
reflects the average yield on assets and average cost of liabilities for the
periods indicated. Such annualized yields and costs are derived by dividing
income or expense by the average balance of assets or liabilities,
respectively, for the periods shown. Average balances are derived from
average daily balances. Average balances and yields include non-accrual
loans. The yields and costs include fees which are considered adjustments to
yields. Interest and yields are presented on a taxable equivalent yield basis.
<TABLE>
<CAPTION>
QUARTER ENDED
---------------------------------------------------------------
JUNE 30, 1997 JUNE 30, 1996
------------------------------ ------------------------------
AVERAGE AVERAGE
AVERAGE YIELD/ AVERAGE YIELD/
BALANCE INTEREST COST BALANCE INTEREST COST
----------- -------- ------- ----------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Assets:
Interest-earning assets:
Mortgage loans (1)................................ $ 7,973,607 $177,564 8.91% $ 6,240,179 $144,566 9.27%
Other loans (1)................................... 26,027 564 8.67 32,192 684 8.50
Money market investments (2)...................... 546,735 7,604 5.58 1,604,158 21,356 5.35
Securities (3).................................... 3,559,060 54,834 6.17 5,269,745 81,399 6.21
Trading assets.................................... 1,950 32 6.58 -- -- --
Other interest-earning assets..................... 111,217 2,582 9.31 -- -- --
----------- -------- ----------- --------
Total interest-earning assets................. 12,218,596 243,180 7.96 13,146,274 248,005 7.56
-------- --------
Non-interest earning assets (4)..................... 902,462 1,049,272
----------- -----------
Total assets.................................. $13,121,058 $14,195,546
----------- -----------
----------- -----------
Liabilities & Stockholders' Equity:
Interest-bearing liabilities:
Savings........................................... $ 1,863,335 12,297 2.65% $ 2,001,434 13,866 2.79%
NOW............................................... 334,034 1,421 1.71 334,452 1,522 1.83
Money market and variable rate savings............ 2,297,411 19,263 3.36 2,576,936 21,464 3.35
Term certificates of deposit...................... 6,470,908 84,097 5.21 7,288,174 96,003 5.30
Mortgagors' escrow................................ 93,638 258 1.11 81,111 241 1.20
Trading liabilities............................... 4,911 73 5.96 -- -- --
Repurchase agreements............................. 194,194 2,181 4.50 89,244 1,153 5.20
Guaranteed preferred beneficial interest in
Company's junior subordinated debentures........ 62,134 1,423 9.16 -- -- --
----------- -------- ----------- --------
Total interest-bearing liabilities............ 11,320,565 121,013 4.29 12,371,351 134,249 4.36
-------- --------
Other liabilities (5)............................... 396,710 339,959
----------- -----------
Total liabilities............................. 11,717,275 12,711,310
Preferred shares of subsidiary...................... 3,626 --
Stockholders' equity................................ 1,400,157 1,484,236
----------- -----------
Total liabilities & stockholders' equity...... $13,121,058 $14,195,546
----------- -----------
----------- -----------
Net interest income/interest rate spread (6)........ $122,167 3.67% $113,756 3.20%
-------- ------- -------- -------
-------- ------- -------- -------
Net interest-earning assets/net interest margin
(7)............................................... $ 898,031 3.99% $ 774,923 3.45%
----------- ------- ----------- -------
----------- ------- ----------- -------
Ratio of interest-earning assets to interest-bearing
liabilities....................................... 1.08x 1.06x
------- -------
------- -------
</TABLE>
- ------------------------
(1) In computing the average balances and average yield on loans, non-accruing
loans and loans held for sale have been included.
(2) Includes overnight federal funds sold and securities purchased under resale
agreements.
(3) Securities available for sale are reported at average amortized cost.
(4) Includes goodwill, banking premises and equipment-net, net deferred tax
assets, accrued interest receivable, and other miscellaneous non-interest-
earning assets.
(5) Includes accrued interest payable, accounts payable, official checks drawn
against the Bank, accrued expenses, and other miscellaneous
non-interest-bearing obligations of the Company.
(6) Net interest rate spread represents the difference between the average yield
on interest-earning assets and the average cost of interest-bearing
liabilities.
(7) Net interest margin represents net interest income on a tax equivalent
basis before the provision for possible loan losses divided by average
interest-earning assets.
15
<PAGE>
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations--(Continued)
Average Balance Sheets and Interest Yield/Cost
The following table sets forth certain information relating to the Company's
average statements of financial condition (unaudited) and statements of income
(unaudited) for the six months ended June 30, 1997 and 1996, and reflects the
average yield on assets and average cost of liabilities for the periods
indicated. Such annualized yields and costs are derived by dividing income or
expense by the average balance of assets or liabilities, respectively, for the
periods shown. Average balances are derived from average daily balances. Average
balances and yields include non-accrual loans. The yields and costs include fees
which are considered adjustments to yields. Interest and yields are presented
on a taxable equivalent yield basis.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
---------------------------------------------------------------
JUNE 30, 1997 JUNE 30, 1996
------------------------------ ------------------------------
AVERAGE AVERAGE
AVERAGE YIELD/ AVERAGE YIELD/
BALANCE INTEREST COST BALANCE INTEREST COST
----------- -------- ------- ----------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Assets:
Interest-earning assets:
Mortgage loans (1)................................ $ 7,770,651 $346,436 8.92% $ 6,199,401 $285,915 9.22%
Other loans (1)................................... 26,916 1,126 8.37 33,942 1,341 7.90
Money market investments (2)...................... 438,103 11,954 5.50 1,664,304 44,746 5.41
Securities (3).................................... 3,894,855 119,273 6.15 5,482,540 168,041 6.16
Trading assets.................................... 2,207 71 6.49 -- -- --
Other interest-earning assets..................... 107,376 4,886 9.18 -- -- --
----------- -------- ----------- --------
Total interest-earning assets................. 12,240,108 483,746 7.91 13,380,187 500,043 7.49
-------- --------
Non-interest earning assets (4)..................... 913,046 1,051,508
----------- -----------
Total assets.................................. $13,153,154 $14,431,695
----------- -----------
----------- -----------
Liabilities & Stockholders' Equity:
Interest-bearing liabilities:
Savings........................................... $ 1,869,911 24,535 2.65% $ 2,008,635 27,852 2.79%
NOW............................................... 334,690 2,830 1.71 336,177 3,070 1.84
Money market and variable rate savings............ 2,333,399 38,886 3.36 2,601,140 43,691 3.38
Term certificates of deposit...................... 6,489,221 167,222 5.20 7,462,874 201,058 5.42
Mortgagors' escrow................................ 89,724 509 1.14 78,984 504 1.28
Trading liabilities............................... 2,469 73 5.96 -- -- --
Repurchase agreements............................. 169,396 3,444 4.10 87,270 1,604 3.70
Guaranteed preferred beneficial interest in
Company's junior subordinated debentures........ 31,067 1,423 9.16 -- -- --
----------- -------- ----------- --------
Total interest-bearing liabilities............ 11,319,877 238,922 4.26 12,575,080 277,779 4.42
-------- --------
Other liabilities (5)............................... 399,474 337,395
----------- -----------
Total liabilities............................. 11,719,351 12,912,475
Preferred shares of subsidiary...................... 3,625 --
Stockholders' equity................................ 1,430,178 1,519,220
----------- -----------
Total liabilities & stockholders' equity...... $13,153,154 $14,431,695
----------- -----------
----------- -----------
Net interest income/interest rate spread (6)........ $244,824 3.65% $222,264 3.07%
-------- ------- -------- -------
-------- ------- -------- -------
Net interest-earning assets/net interest margin
(7)............................................... $ 920,231 3.98% $ 805,107 3.33%
----------- ------- ----------- -------
----------- ------- ----------- -------
Ratio of interest-earning assets to interest-bearing
liabilities....................................... 1.08x 1.06x
------- -------
------- -------
</TABLE>
- ------------------------
(1) In computing the average balances and average yield on loans, non-accruing
loans and loans held for sale have been included.
(2) Includes overnight federal funds sold and securities purchased under resale
agreements.
(3) Securities available for sale are reported at average amortized cost.
(4) Includes goodwill, banking premises and equipment-net, net deferred tax
assets, accrued interest receivable, and other miscellaneous non-interest-
earning assets.
(5) Includes accrued interest payable, accounts payable, official checks drawn
against the Bank, accrued expenses, and other miscellaneous
non-interest-bearing obligations of the Company.
(6) Net interest rate spread represents the difference between the average
yield on interest-earning assets and the average cost of interest-bearing
liabilities.
(7) Net interest margin represents net interest income on a tax equivalent basis
before the provision for possible loan losses divided by average
interest-earning assets.
16
<PAGE>
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations-- (Continued)
RATE/VOLUME ANALYSIS
The following table presents the effects of changes in interest rates and
changes in volume of interest-earning assets and interest-bearing liabilities on
the Company's interest income on a tax equivalent basis and interest expense
during the periods indicated. Information is provided in each category on
changes (i) attributable to changes in volume (changes in volume multiplied by
prior rate), (ii) changes attributable to changes in rate (changes in rate
multiplied by prior volume), and (iii) the net change. The changes attributable
to the combined impact of volume and rate have been allocated proportionately to
volume and rate.
<TABLE>
<CAPTION>
QUARTER ENDED JUNE 30, 1997 SIX MONTHS ENDED JUNE 30, 1997
COMPARED TO COMPARED TO
QUARTER ENDED JUNE 30, 1996 SIX MONTHS ENDED JUNE 30, 1996
INCREASE/(DECREASE) INCREASE/(DECREASE)
----------------------------- ------------------------------
DUE TO DUE TO
----------------- ----------------
AVERAGE AVERAGE NET AVERAGE AVERAGE NET
VOLUME RATE CHANGE VOLUME RATE CHANGE
--------- --------- --------- --------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Mortgage loans (1)..................................... $ 38,793 $ (5,795) $ 32,998 $ 70,331 $ (9,810) $ 60,521
Other loans (1)........................................ (134) 14 (120) (290) 75 (215)
Money market investments (2)........................... (14,667) 915 (13,752) (33,448) 656 (32,792)
Securities............................................. (25,843) (722) (26,565) (47,558) (1,210) (48,768)
Trading assets......................................... 32 -- 32 71 -- 71
Other interest-earning assets.......................... 2,582 -- 2,582 4,886 -- 4,886
--------- --------- --------- --------- --------- ---------
Total interest-earning assets........................ 763 (5,588) (4,825) (6,008) (10,289) (16,297)
--------- --------- --------- --------- --------- ---------
Interest-bearing liabilities:
Savings................................................ (931) (638) (1,569) (1,866) (1,451) (3,317)
NOW.................................................... (2) (99) (101) (14) (226) (240)
Money market and variable rate savings................. (2,343) 142 (2,201) (4,464) (341) (4,805)
Term certificates of deposit........................... (10,500) (1,406) (11,906) (25,241) (8,595) (33,836)
Mortgagors' escrow..................................... 36 (19) 17 65 (60) 5
Trading liabilities.................................... 73 -- 73 73 -- 73
Repurchase agreements.................................. 1,198 (170) 1,028 1,655 185 1,840
Guaranteed preferred beneficial interest in
Company's junior subordinated debentures.............. 1,423 -- 1,423 1,423 -- 1,423
--------- --------- --------- --------- --------- ---------
Total interest-bearing liabilities................... (11,046) (2,190) (13,236) (28,369) (10,488) (38,857)
--------- --------- --------- --------- --------- ---------
Net change in net interest income........................ $ 11,809 $ (3,398) $ 8,411 $ 22,361 $ 199 $ 22,560
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
</TABLE>
- ------------------
(1) In computing the volume and rate components of net interest income for
loans, non-accrual loans and loans held for sale have been included.
(2) Includes overnight federal funds and securities purchased under resale
agreements.
17
<PAGE>
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations-- (Continued)
PROVISION FOR POSSIBLE LOAN LOSSES
The provision for possible loan losses increased by $0.7 million, or
20.0%, to $4.4 million for the second quarter of 1997, and increased by $2.1
million, or 28.8%, to $9.5 million, from $3.7 million and $7.3 million for
the comparable 1996 periods. The provision exceeded net charge-offs by $1.0
million for the second quarter of 1997 and by $2.0 million for the first six
months of 1997, to reflect the effect of loan portfolio growth.
NON-INTEREST INCOME
Non-interest income decreased by $12.0 million, or 51.2%, to $11.5
million in the second quarter of 1997, and by $4.3 million, or 12.3%, to
$30.7 million in the first six months of 1997, from $23.5 million and $35.0
million, respectively for the comparable 1996 periods. The second quarter
decrease results primarily from an $8.9 million non-recurring gain on branch
sales in the second quarter of 1996. For the first six months, the decrease
relates to a $5.9 million non-recurring gain on branch sales in the first six
months of 1997 versus $8.9 million in the first six months of 1996.
NON-INTEREST EXPENSE
Non-interest expense increased by $1.3 million, or 1.9%, to $68.5
million in the second quarter of 1997, and by $1.8 million, or 1.3%, to
$136.8 million in the first six months as compared to $67.2 million and
$135.0 million for the comparable 1996 periods. The second quarter 1997
results include a pre-tax restructuring charge of $2.5 million relating to
the transfer of mortgage servicing from New York to Georgia. Excluding the
non-recurring restructuring charge, non-interest expense decreased by $1.2
million, or 1.8%, for the second quarter of 1997 and decreased by $0.8
million, or 0.6%, in the first six months of 1997 as compared to the
comparable 1996 periods.
FDIC premiums decreased by $1.0 million in the second quarter of 1997 and
$1.9 million in the first six months of 1997 due to the reduction in
assessment rates and the recapitalization of the Savings Association
Insurance Fund in 1996. Other administrative expense decreased by $2.6
million in the second quarter of 1997 and $3.2 million in the first six
months of 1997. Other real estate (ORE) expense decreased by $1.1 million in
the second quarter and $1.5 million in the first six months of 1997 compared
with the comparable periods in 1996. The decreases were partially offset by
an increase in salaries and benefits of $2.1 million in the second quarter of
1997 and $2.2 million in the first six months of 1997 and an increase in
charitable foundation expense of $1.0 million in the second quarter of 1997
and $1.9 million in the first six months of 1997 compared with the comparable
1996 periods.
18
<PAGE>
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations-- (Continued)
INCOME TAX EXPENSE
Income tax expense decreased by $3.9 million, or 14.2%, to $23.7 million in
the second quarter of 1997, and increased by $2.5 million, or 5.2%, to $50.4
million in the first six months of 1997 from $27.6 million and $47.9 million
for the comparable periods of 1996. The decrease in the second quarter of
1997 compared with 1996 is primarily due to a $5.9 million, or 9.2%, decrease
in income before income taxes. Additionally, income tax expense was further
reduced by the decrease in the effective tax rate from 42.60% in the 1996
period to 40.25% in the 1997 period. The increase in the first six months of
1997 compared with 1996 is primarily due to the $12.8 million increase, or
11.4%, in income before income taxes partially offset by the decrease in the
effective tax rate from 42.60% in 1996 to 40.25% in the 1997 period.
3. FINANCIAL CONDITION
Total assets remained flat at June 30, 1997 compared with December 31, 1996.
Total loans held for investment, net, rose $845.4 million to $8.14 billion at
June 30, 1997, from $7.29 billion at December 31, 1996. Securities available
for sale decreased $1.23 billion, to $3.12 billion at June 30, 1997, from
$4.36 billion at December 31, 1996, primarily as a result of the usage of
proceeds from the maturities and sales of securities to fund loan
originations.
GreenPoint's operating results include significant amortization of goodwill
and employee stock compensation plans expense. These non-cash expenditures,
unlike all other expenses reported by the Company, result in net increases in
GreenPoint's tangible capital and related core cash earnings. Additional core
cash earnings enable the Company to pursue increases in shareholder value
through growth of earning assets, increases of cash dividends, and additional
repurchases of the Company's stock.
<TABLE>
<CAPTION>
QUARTER ENDED SIX MONTHS ENDED
------------------------------------- ------------------------
JUNE 30, MARCH 31, JUNE 30, JUNE 30, JUNE 30,
1997 1997 1996 1997 1996
-------- --------- -------- --------- ---------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
Net income................................................ $ 35,129 $ 39,671 $ 37,155 $ 74,800 $ 64,507
Non-recurring items, net of tax (1)....................... 1,493 (4,939) (5,095) (3,446) (5,095)
--------- --------- --------- ---------- ---------
Core net income......................................... 36,622 34,732 32,060 71,354 59,412
Add back:
Goodwill expense........................................ 11,620 11,643 11,630 23,263 23,258
Employee stock plans expense............................ 4,711 4,810 4,699 9,521 8,942
--------- --------- --------- ---------- ---------
Core cash earnings...................................... $ 52,953 $ 51,185 $ 48,389 $ 104,138 $ 91,612
--------- --------- --------- ---------- ---------
--------- --------- --------- ---------- ---------
Core cash earnings per share (2)........................ $ 1.29 $ 1.21 $ 1.08 $ 2.50 $ 2.03
--------- --------- --------- ---------- ---------
--------- --------- --------- ---------- ---------
</TABLE>
- ------------------
(1) Non-recurring items include branch sales, asset sales and restructuring
charge.
(2) Based on the weighted average shares used to calculate earnings per share.
19
<PAGE>
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations-- (Continued)
INTEREST RATE SENSITIVITY GAP ANALYSIS
The table below depicts the Company's interest rate sensitivity as of
June 30, 1997. Allocations of assets and liabilities, including non
interest-bearing sources of funds, to specific periods are based upon
management's assessment of contractual or anticipated repricing
characteristics, adjusted periodically to reflect actual experience.
Those gaps are then adjusted for the net effect of off-balance sheet
financial instruments such as interest rate swaps.
<TABLE>
<CAPTION>
REPRICING PERIODS
---------------------------------------------------------------------------------
MORE THAN MORE THAN MORE THAN
THREE MONTHS THREE MONTHS SIX MONTHS ONE YEAR MORE THAN
OR LESS TO SIX MONTHS TO ONE YEAR THREE YEARS THREE YEARS TOTAL
------------ ------------- ----------- ----------- ----------- -------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Total loans, net.......................... $ 1,133 $ 761 $ 1,256 $ 1,453 $ 3,541 $ 8,144
Money market investments (1).............. 729 -- -- -- -- 729
Securities held to maturity............... -- -- -- -- 4 4
Securities available for sale............. 633 354 104 824 1,210 3,125
Trading assets............................ -- -- -- -- -- --
Other interest-earning assets............. 111 -- -- -- -- 111
------ ------ ---------- ------ ----------- ---------
Total interest-earning assets........... 2,606 1,115 1,360 2,277 4,755 12,113
------ ------ ---------- ------ ---------- ---------
Cash and due from banks................... 90 -- -- -- -- 90
Goodwill.................................. 11 11 21 84 473 600
Other non-interest-earning assets......... 497 -- -- -- -- 497
------ ------ ---------- ------ ---------- ---------
Total assets............................ $ 3,204 $ 1,126 $ 1,381 $ 2,361 $ 5,228 $ 13,300
------ ------ ---------- ------ ---------- ---------
------ ------ ---------- ------ ---------- ---------
Term certificates......................... $ 1,384 $ 1,195 $ 1,891 $ 1,774 $ 287 $ 6,531
Core deposits............................. 255 255 511 1,800 1,825 4,646
Guaranteed preferred beneficial interest
in Company's junior subordinated
debentures.............................. -- -- -- -- 200 200
------ ------ ---------- ------ ---------- ---------
Total interest-bearing liabilities...... 1,639 1,450 2,402 3,574 2,312 11,377
------ ------ ---------- ------ ---------- ---------
Other liabilities......................... 548 -- -- -- -- 548
Preferred shares of subsidiary............ -- -- -- -- 4 4
Stockholders' equity...................... -- -- -- -- 1,371 1,371
------ ------ ---------- ------ ---------- ---------
Total liabilities and stockholders'
equity................................ $ 2,187 $ 1,450 $ 2,402 $ 3,574 $ 3,687 $ 13,300
------ ------ ---------- ------ ---------- ---------
------ ------ ---------- ------ ---------- ---------
Off balance sheet financial instrument.... $ 400 -- -- $ (300) $ (100) --
------ ------ ---------- ------ ---------- ---------
------ ------ ---------- ------ ---------- ---------
Interest rate sensitivity gap............. $ 1,417 $ (324) $ (1,021) $ (1,513) $ 1,441
Cumulative gap............................ $ 1,417 $ 1,093 $ 72 $ (1,441)
Interest rate sensitivity gap as a
percentage of total assets.............. 10.65% (2.44)% (7.68)% (11.37)% 10.84%
Cumulative gap as a percentage of total
assets.................................. 10.65% 8.21% 0.53% (10.84)%
</TABLE>
- ------------------
(1) Consists of overnight federal funds sold and securities purchased under
agreements to resell.
20
<PAGE>
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations-- (Continued)
INTEREST RATE RISK MANAGEMENT
Interest rate risk is defined as the sensitivity of the Company's
current and future earnings to changes in the level of market interest rates.
It arises in the ordinary course of the Company's business, as the repricing
characteristics of its mortgage loans do not match those of its deposit
liabilities. The resulting interest rate risk is managed by adjustments to
the Company's investment portfolio and through the use of off balance sheet
instruments such as interest rate swaps and options.
Management responsibility for interest rate risk resides with the Asset
and Liability Management Committee ("ALCO"). The committee is comprised of
the Chairman and Chief Executive Officer, the Vice Chairman and the Company's
senior business-unit and financial executives. Interest rate risk management
strategies are formulated and monitored by ALCO within policies and limits
approved by the Board of Directors. These policies and limits set forth the
maximum risk which the Board of Directors deems prudent, govern permissible
investment securities and off balance sheet instruments and identify
acceptable counter parties to securities and off balance sheet transactions.
ALCO risk management strategies allow for the assumption of interest
rate risk within the Board approved limits. The strategies are formulated
based upon ALCO's assessments of likely market developments and trends in the
Company's mortgage and consumer banking businesses. Strategies are developed
with the aim of enhancing the Company's net income and capital, while
ensuring the risks to income and capital from adverse movements in interest
rates are acceptable.
In assessing various interest rate risk strategies, ALCO makes use of a
variety of risk measures. One such measure is the consolidated gap analysis
reported above as of June 30, 1997. Assets and liabilities are allocated to
the various maturities in accordance with the earlier of their contractual
maturity or repricing dates. For mortgage loans and mortgage-backed
securities, estimates of scheduled amortization plus prepayments are used,
rather than contractual maturity. For assets and liabilities with indefinite
repricing schedules, notably core deposits, the gap analysis reflects ALCO's
judgements of likely repricing behavior.
As indicated in the gap analysis, the twelve-month cumulative gap,
representing the total net assets and liabilities that are projected to
reprice over the next twelve months, was asset sensitive $72.0 million at
June 30, 1997. An asset sensitive interest rate gap would tend to increase
earnings over a period of rising interest rates, where declining rates would
decrease earnings. The cumulative one-year sensitivity gap was positive 0.53%
of total assets at June 30, 1997, compared to negative 0.08% at December 31,
1996.
The use of interest rate instruments such as interest rate swaps are
integrated into the Company's interest rate risk management. The notional
amounts of these instruments are not reflected in the Company's balance
sheet. However, these instruments are included in the interest rate
sensitivity table for purposes of analyzing interest rate risk.
21
<PAGE>
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations-- (Continued)
The Company has entered into interest rate swaps, with a total notional
amount of $400 million, to reduce the Company's overall interest rate risk
arising from its origination of fixed rate mortgages. These instruments are
considered derivative financial instruments held for purposes other than
trading and the effects of these instruments are reported as an adjustment to
mortgage loan income. The unrealized gains or losses on these instruments are
not recorded on the balance sheet, since they are used as a hedge against
held-to-maturity loans. For the quarter ended June 30, 1997, the interest
rate swaps had a negative $1.1 million impact on mortgage loan income. The
interest rate swaps require the Company to pay a weighted average fixed rate
of 6.37% and receive three month LIBOR. As of June 30, 1997, the weighted
average LIBOR rate that the Company will receive is 5.80%. All agreements
will expire by the second quarter of 2002. As of the quarter ended June 30,
1997 the interest rate swaps had a gross positive market value of $0.7
million. The Company has a policy to enter into mutual collateral agreements
with each counter party, which requires either party to submit U.S.
Government or U.S. Government Agency collateral when the market value of the
instrument reaches a predetermined threshold.
NON-PERFORMING ASSETS
The Company's asset quality remained stable during the six months ended
June 30, 1997, as non-performing assets decreased by 0.1%. The ratio of
non-performing loans to total loans fell to 4.35% at June 30, 1997 from 4.78%
at December 31, 1996 while the ratio of non-performing assets to total assets
at June 30, 1997 remained at 2.89% .
Non-performing assets, net of related specific reserves, were as follows:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
---------- ------------
(IN THOUSANDS)
<S> <C> <C>
Mortgage loans secured by:
Residential one-to-four family................................... $ 276,132 $ 271,192
Residential multi-family......................................... 47,173 48,270
Commercial property.............................................. 36,185 36,515
Other loans...................................................... 879 170
---------- ------------
Total non-performing loans (1)..................................... 360,369 356,147
---------- ------------
Total other real estate owned, net................................. 23,968 28,566
---------- ------------
Total non-performing assets...................................... $ 384,337 $ 384,713
---------- ------------
---------- ------------
</TABLE>
- ------------------
(1) Includes $25.7 million and $31.6 million of non-accrual mortgage loans under
90 days past due at June 30, 1997 and December 31, 1996, respectively.
22
<PAGE>
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations--(Continued)
Allowance for Possible Loan Losses
The following is a summary of the provision and allowance for possible loan
losses:
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
June 30, June 30,
----------------------- --------------------
1997 1996 1997 1996
---------- --------- -------- --------
(In thousands)
<S> <C> <C> <C> <C>
Balance beginning of period........................... $106,000 $105,000 $105,000 $105,500
Provision charged to income........................... 4,444 3,701 9,461 7,347
Charge-offs........................................... (3,562) (4,043) (7,715) (8,632)
Recoveries............................................ 118 342 254 785
-------- -------- -------- --------
Balance end of period................................. $107,000 $105,000 $107,000 $105,000
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>
Capital Ratios
The Company's ratio of period-end stockholders' equity to ending total assets
at June 30, 1997 was 10.31% compared to 10.95% at December 31, 1996.
The Company and the Bank are subject to various regulatory capital
requirements administered by the Federal and state banking agencies. The
Board of Governors of the Federal Reserve System establishes minimum capital
requirements for the consolidated bank holding company, as well as for the
Bank.
Under capital adequacy guidelines and the regulatory framework for prompt
corrective action, the Bank must meet specific capital guidelines that
involve quantitative measures of its assets, liabilities, and certain off
balance sheet items as calculated under regulatory accounting practices.
These guidelines require minimum ratios of risk-based capital to risk
adjusted assets of 4% for Tier 1 capital and 8% for total capital. The
Federal Reserve Board also has guidelines for a leverage ratio that is
designed to complement the risk-based capital ratios in determining the
overall capital adequacy of banks and bank holding companies. A minimum
leverage ratio of Tier 1 capital to average total assets of 3% is required
for banks and bank holding companies, with an additional 100 to 200 basis
points required for all but the highest rated institutions. Management
believes, as of June 30, 1997, that the Company and the Bank meet all capital
adequacy requirements to which it is subject.
23
<PAGE>
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations--(Continued)
As of June 30, 1997, the most recent notification from the FDIC categorized
the Bank as well capitalized under the regulatory framework for prompt
corrective action. To be categorized as well capitalized, the Bank must
maintain minimum Tier 1 capital, total capital and leverage ratios of 6%, 10%
and 5%, respectively. There have been no conditions or events since that
notification that management believes have changed the Company's or Bank's
category.
<TABLE>
<CAPTION>
REQUIRED FOR CAPITAL
ACTUAL ADEQUACY PURPOSES
-------------------- ----------------------
(IN MILLIONS) AMOUNT RATIO AMOUNT RATIO
- --------------------------------------------------------------------- --------- --------- --------- --------
<S> <C> <C> <C> <C>
As of June 30, 1997
Total Capital
(to Risk Weighted Assets):
Company............................................................ $ 1,072.8 17.62% $ 487.0 8.00%
Bank............................................................... 906.3 15.17% 478.0 8.00%
Tier 1 Capital
(to Risk Weighted Assets):
Company............................................................ $ 996.7 16.37% $ 243.5 4.00%
Bank............................................................... 831.6 13.92% 239.0 4.00%
Tier 1 Capital
(to Average Assets):
Company............................................................ $ 996.7 7.95% $ 501.7 4.00%
Bank............................................................... 831.6 6.66% 499.2 4.00%
</TABLE>
<TABLE>
<CAPTION>
REQUIRED FOR CAPITAL
ACTUAL ADEQUACY PURPOSES
------------------ ---------------------
<S> <C> <C> <C> <C>
(IN MILLIONS) AMOUNT RATIO AMOUNT RATIO
- --------------------------------------------------------------------- --------- --------- --------- ----------
As of December 31, 1996
Total Capital
(to Risk Weighted Assets):
Company............................................................ $ 932.8 16.72% $ 446.2 8.00%
Bank............................................................... 914.2 16.40% 445.8 8.00%
Tier 1 Capital (to Risk Weighted Assets):
Company............................................................ $ 863.1 15.47% $ 223.1 4.00%
Bank............................................................... 844.5 15.15% 222.9 4.00%
Tier 1 Capital (to Average Assets):
Company............................................................ $ 863.1 6.78% $ 509.0 4.00%
Bank............................................................... 844.5 6.64% 508.4 4.00%
</TABLE>
24
<PAGE>
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
PART II--OTHER INFORMATION
Item 1--Legal Proceedings
With the exception of the matters set forth below, the Company is not
involved in any pending legal proceedings other than routine legal
proceedings occurring in the ordinary course of business which, in the
aggregate, involve amounts which are believed by management to be immaterial
to the consolidated financial statements of the Company. The Bank has been
named as a defendant in fifteen unrelated legal complaints which assert that
infant plaintiffs sustained personal injuries from the ingestion of lead
based paint, chips or dust. Additionally there are eleven other instances of
threatened litigation. The complaints are in various early stages of
discovery. Outside counsel has advised the Bank that because discovery on
these claims has only recently begun, counsel is not yet in a position to
express an opinion as to the Bank's liability or to quantify the Bank's
potential exposure, if any, in dollar terms at this time. The Company
currently believes that such liability exposure, if any, would not be
material to the Bank's financial condition.
The Bank is a defendant in a recently filed purported class action lawsuit
titled Joseph Sabbatino and Jean Sabbatino, and all others similarly
situated, v. GreenPoint Savings Bank, CV-97 -1838, United States District
Court, Eastern District of New York, in which plaintiffs allege that the Bank
collected monthly mortgage escrow reserves in excess of the amounts it is
entitled to collect under applicable law and the mortgage contract.
Plaintiffs seek, among other things, treble damages and injunctive relief
under breach of contract theories and alleged violation of the Federal
Racketeer Influenced and Corrupt Organization Act ("RICO"), and a judgment
based upon alleged breach of contract, breach of fiduciary duty and
intentional and/or negligent misrepresentation. The Bank has filed an answer
denying all of the Plaintiff's claims, believes its mortgage loan servicing
practices with respect to escrow deposits comply in all material respects
with applicable requirements, and intends to defend vigorously this action.
While the ultimate outcome of this lawsuit, whether by judgment or a
satisfactory settlement, cannot be predicted, management does not believe
that the outcome of this litigation is likely to have a material adverse
effect on the consolidated financial condition of the Company.
Item 4--Submission of Matters to a Vote of Security Holders
At the Company's annual meeting of shareholders held on May 2, 1997, the
following matters were voted upon with the results of the voting on such
matters indicated:
1. Election of the following five directors of the Company to three-year
terms:
FOR WITHHELD
------------ -----------
Edward C. Bessey.................. 44,362,727 267,331
William M. Jackson................ 44,362,350 267,708
Charles B. McQuade................ 44,361,076 268,982
Alvin N. Puryear.................. 44,361,791 268,267
Robert P. Quinn................... 44,360,639 269,419
25
<PAGE>
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
The following sets forth the names of Directors continuing in office after
the annual meeting:
Bernard S. Berman Edward C. Schmults
Dan F. Huebner Wilfred O. Uhl
Thomas S. Johnson Robert F. Vizza
Susan J. Kropf Jules Zimmerman
Robert M. McLane
2. Approval of an amendment to the Company's Amended and Restated 1994
Stock Incentive Plan to increase the number of authorized shares under
the Plan from 3,500,000 to 5,500,000.
For: 39,013,963
Against: 5,348,357
Abstain: 267,738
3. Ratification of the appointment of Price Waterhouse LLP as the
Company's independent accountants for the year ending December 31, 1997.
For: 44,240,115
Against: 193,733
Abstain: 196,210
Item 6--Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
Number
-----------
11.1 Statement Regarding Computation of Per Share Earnings
12.1 Ratios of Earnings to Fixed Charges
27.1 Financial Data Schedule
26
<PAGE>
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
(b) Reports on Form 8-K
No current reports on Form 8-K were filed by the Company with the
Securities and Exchange Commission during the quarter ended June 30,
1997.
27
<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.
GreenPoint Financial Corp.
By: /s/ Thomas S. Johnson
------------------------------------
Thomas S. Johnson
Chairman of the Board, President
and Chief Executive Officer
By: /s/ Charles P. Richardson
-----------------------------------------
Charles P. Richardson
Executive Vice President and
Chief Financial Officer
Dated August 8, 1997
28
<PAGE>
Exhibit 11.1
Statement Regarding Computation of Per Share Earnings
(In thousands, except per share amounts )
<TABLE>
<CAPTION>
QUARTER ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------- --------------------
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net income............................................................ $ 35,129 $ 37,155 $ 74,800 $ 64,507
Weighted average number of common stock and common stock equivalents
outstanding during each period--primary............................. 40,930 44,664 41,577 45,161
Weighted average number of common stock and common stock equivalents
outstanding during each period--fully diluted....................... 41,136 44,675 41,857 45,302
Net earnings per share--primary....................................... $ 0.86 $ 0.83 $ 1.80 $ 1.43
--------- --------- --------- ---------
--------- --------- --------- ---------
Net earnings per share--fully diluted................................. $ 0.85 $ 0.83 $ 1.79 $ 1.42
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
<PAGE>
EXHIBIT 12.1
Ratios of Earnings to Combined Fixed Charges and
Preferred Stock Dividends
(Dollars in millions)
The Company's consolidated ratios of earnings to combined fixed charges and
preferred stock dividends for each of the periods indicated are set forth below:
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
------------------------------------------------------------------- --------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
June 30, March 31, December 31, September 30, June 30, June 30, June 30,
1997 1997 1996 1996 1996 1997 1996
----------- ----------- ------------- ------------- ----------- ----------- -----------
Income before income taxes........ $ 58.8 $ 66.4 $ 57.2 $ 54.9 $ 64.7 $ 125.2 $ 112.4
Combined fixed charges and
preferred stock dividends:
Interest expense on deposits.... 117.3 116.7 122.8 126.8 133.1 234.0 276.2
Interest expense on long-term
debt........................... 1.4 -- -- -- -- 1.4 --
Appropriate portion (1/3) of
rent expense.................. 1.1 1.1 1.2 1.1 1.1 2.2 2.0
Preferred stock dividend
requirements.................. 0.1 0.1 0.1 0.1 -- 0.2 --
Total combined fixed charges
and preferred stock dividends 119.9 117.9 124.1 128.0 134.2 237.8 278.2
Earnings before income taxes and
combined fixed charges and
preferred stock dividends....... 178.7 184.3 181.3 182.9 198.9 363.0 390.6
Ratio of earnings to
combined fixed charges and
preferred stock dividends....... 1.49x 1.56x 1.46x 1.43x 1.48x 1.53x 1.40x
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<CIK> 0000911935
<NAME> Greenpoint Financial Corp.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 88,085
<INT-BEARING-DEPOSITS> 1,465
<FED-FUNDS-SOLD> 729,349
<TRADING-ASSETS> 29
<INVESTMENTS-HELD-FOR-SALE> 3,124,585
<INVESTMENTS-CARRYING> 3,892
<INVESTMENTS-MARKET> 3,929
<LOANS> 8,251,300
<ALLOWANCE> (107,000)
<TOTAL-ASSETS> 13,300,046
<DEPOSITS> 11,176,922
<SHORT-TERM> 236,256
<LIABILITIES-OTHER> 312,406
<LONG-TERM> 199,717
0
0
<COMMON> 551
<OTHER-SE> 1,370,565
<TOTAL-LIABILITIES-AND-EQUITY> 13,300,046
<INTEREST-LOAN> 347,562
<INTEREST-INVEST> 129,061
<INTEREST-OTHER> 3,069
<INTEREST-TOTAL> 479,692
<INTEREST-DEPOSIT> 233,982
<INTEREST-EXPENSE> 238,922
<INTEREST-INCOME-NET> 240,770
<LOAN-LOSSES> (9,461)
<SECURITIES-GAINS> 472
<EXPENSE-OTHER> 136,781
<INCOME-PRETAX> 125,188
<INCOME-PRE-EXTRAORDINARY> 74,800
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 74,800
<EPS-PRIMARY> 1.80
<EPS-DILUTED> 1.79
<YIELD-ACTUAL> 3.98
<LOANS-NON> 360,369
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> (105,000)
<CHARGE-OFFS> (7,715)
<RECOVERIES> 254
<ALLOWANCE-CLOSE> (107,000)
<ALLOWANCE-DOMESTIC> (107,000)
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
