<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
March 31, 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 May 9, 1997 there were 46,369,003 shares of common stock outstanding.
<PAGE>
GreenPoint Financial Corp.
FORM 10-Q
For the Quarter Ended
March 31, 1997
INDEX
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION PAGE
<S> <C>
Item 1 - Financial Statements
Consolidated Statements of Financial Condition (unaudited) as of March 31, 1997
and December 31, 1996 3
Consolidated Statements of Income (unaudited) for the quarter ended March 31,
1997 and 1996 4
Consolidated Statements of Changes in Stockholders' Equity (unaudited)
for the quarter ended March 31, 1997 and 1996 5
Consolidated Statements of Cash Flows (unaudited) for the quarter ended
March 31, 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 10
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings 22
Item 6 - Exhibits and Reports on Form 8-K 22
</TABLE>
<PAGE>
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
---------------- ----------------
ASSETS (In thousands, except share amounts)
------
<S> <C> <C>
Cash and due from banks $ 75,406 $ 81,914
Money market investments 378,052 494,060
Loans receivable held for sale 4,989 4,829
Securities available for sale 3,970,504 4,355,432
Securities held to maturity (fair value of $4,089
and $4,016 respectively) 4,051 3,978
Trading assets 24,551 ---
Loans receivable held for investment:
Mortgage loans 7,822,745 7,423,993
Other loans 21,833 23,490
Deferred loan fees and unearned discount (44,912) (48,216)
Allowance for possible loan losses (106,000) (105,000)
------------ ------------
Loans receivable held for investment, net 7,693,666 7,294,267
------------ ------------
Other interest-earning assets 109,426 ---
Accrued interest receivable, net 95,091 89,460
Banking premises and equipment, net 131,868 128,207
Deferred income taxes, net 93,999 80,202
Other real estate owned, net 26,756 28,566
Goodwill 611,957 623,600
Other assets 40,905 141,070
------------ ------------
Total assets $ 13,261,221 $ 13,325,585
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Liabilities:
Deposits:
N.O.W. and checking $ 525,600 $ 524,181
Savings and club 1,870,254 1,901,682
Variable rate savings 1,810,396 1,853,683
Money market 536,396 561,331
Term certificates of deposit 6,487,849 6,611,389
------------ ------------
Total deposits 11,230,495 11,452,266
------------ ------------
Mortgagors' escrow 92,721 66,929
Securities sold under agreements to repurchase 288,113 89,500
Accrued income taxes payable 28,898 45,081
Other liabilities 184,462 208,383
------------ ------------
Total liabilities 11,824,689 11,862,159
------------ ------------
Commitments and Contingencies
Preferred shares of subsidiary 3,623 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 817,180 810,170
Unallocated Employee Stock Ownership Plan (ESOP) shares (118,414) (119,573)
Unearned stock plans shares (8,429) (8,317)
Retained earnings 1,066,051 1,037,993
Net unrealized loss on securities available for sale, net (46,553) (23,324)
Treasury stock, at cost (8,666,400 and 7,871,400 shares, respectively) (277,477) (237,697)
------------ ------------
Total stockholders' equity 1,432,909 1,459,803
------------ ------------
Total liabilities and stockholders' equity $ 13,261,221 $ 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
March 31,
---------------------------
1997 1996
--------- ---------
(In thousands, except per share amounts)
<S> <C> <C>
Interest income:
Mortgages $ 168,872 $ 141,349
Money market investments 4,343 23,390
Securities 63,118 85,711
Trading assets 39 ---
Other interest-earning assets 1,411 ---
Other loans 562 657
--------- ---------
Total interest income 238,345 251,107
--------- ---------
Interest expense:
Deposits 116,646 143,079
Short-term and other borrowing 1,263 451
--------- ---------
Total interest expense 117,909 143,530
--------- ---------
Net interest income 120,436 107,577
Provision for possible loan losses (5,017) (3,646)
--------- ---------
Net interest income after provision for possible loan losses 115,419 103,931
--------- ---------
Non-interest income:
Income from fees and commissions:
Mortgage loan operations fee income 3,538 4,563
Mortgage servicing fees 1,825 2,260
Banking services fees and commissions 4,865 4,061
Other fee income 492 329
Net gain on securities 261 273
Net (loss) gain on sales of loans (37) 19
Net gain on sale of assets 2,416 ---
Gain on sale of branches 5,850 ---
--------- ---------
Total non-interest income 19,210 11,505
--------- ---------
Non-interest expense:
Salaries and benefits 22,693 22,561
Employee Stock Ownership and stock plans expense 4,810 4,243
Net expense of premises and equipment 12,100 11,698
Advertising 2,240 1,991
Federal deposit insurance premiums 774 1,710
Charitable and educational foundation 1,985 993
Other administrative expenses 12,451 13,073
Other real estate owned operating income, net (462) (115)
Goodwill amortization 11,643 11,628
--------- ---------
Total non-interest expense 68,234 67,782
--------- ---------
Income before income taxes 66,395 47,654
Income taxes 26,724 20,302
--------- ---------
Net income $ 39,671 $ 27,352
========= =========
Earnings per share $ 0.94 $ 0.60
========= =========
Net income (excluding non-recurring items)* $ 34,732 $ N/A
========= =========
Earnings per share (excluding non-recurring items)* $ 0.82 $ N/A
========= =========
</TABLE>
*Non-recurring items include branch and asset sales.
(See the accompanying notes to the unaudited consolidated financial statements)
4
<PAGE>
<TABLE>
<CAPTION>
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Unaudited)
(In thousands)
Quarter Ended
March 31,
-------------------------------
1997 1996
----------- -----------
<S> <C> <C>
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 3,692
Amortization of ESOP shares committed to be released 2,740 1,042
Amortization of stock plans shares during the period 191 110
Tax benefit for vested stock plans shares 3,247 ---
----------- -----------
Balance at end of period 817,180 806,226
----------- -----------
Unallocated ESOP shares
Balance at beginning of period (119,573) (123,987)
Amortization of ESOP shares committed to be released 1,159 1,809
----------- -----------
Balance at end of period (118,414) (122,178)
----------- -----------
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 720 1,282
----------- -----------
Balance at end of period (8,429) (12,250)
----------- -----------
Retained earnings
Balance at beginning of period 1,037,993 942,137
Net income for the period 39,671 27,352
Dividends declared (10,087) (8,979)
Exercise of stock options from treasury stock (1,526) (859)
----------- -----------
Balance at end of period 1,066,051 959,651
----------- -----------
Net unrealized (loss) gain on securities available for sale, net
Balance at beginning of period (23,324) 14,862
Net unrealized loss on securities available for sale (23,229) (44,721)
----------- -----------
Balance at end of period (46,553) (29,859)
----------- -----------
Treasury stock, at cost
Balance at beginning of period (237,697) (73,789)
Exercise of stock options from treasury stock 4,497 2,136
Purchase of treasury stock (44,277) ---
----------- -----------
Balance at end of period (277,477) (71,653)
----------- -----------
Total stockholders' equity $ 1,432,909 $ 1,530,488
=========== ===========
</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>
Quarter Ended
March 31,
-----------------------------
1997 1996
----------- -----------
(In thousands)
<S> <C> <C>
Cash flows from operating activities:
Net income $ 39,671 $ 27,352
Adjustments to reconcile net income to net cash used in operating activities:
Provision for possible loan losses 5,017 3,646
Depreciation and amortization of premises and equipment 3,970 4,601
Goodwill amortization 11,643 11,628
Accretion of discount on securities, net of premium amortization (11,228) (24,685)
ESOP and stock plans expense 4,810 4,243
Gain on securities transactions (261) (273)
Net change in loans held for sale (160) (163,893)
Net gain on sales of other real estate owned (2,077) (1,824)
Net gain on sale of branches (5,850) ---
Deferred income taxes 3,804 4,600
Decrease in other assets 10,665 6,550
Decrease in other liabilities (48,548) (2,664)
Other, net (29,543) 2,908
----------- -----------
Net cash used in operating activities (18,087) (127,811)
----------- -----------
Cash flows from investing activities:
Loan originations, net of principal repayments (394,674) 12,064
Proceeds from sales of other real estate owned 3,378 4,047
Purchases of securities available for sale (140,355) (2,793,988)
Purchase of securities held to maturity (100) ---
Proceeds from maturities of securities available for sale 100,000 3,088,263
Proceeds from sales of securities available for sale 321,378 398,140
Principal repayments on securities 67,528 56,925
Investment in corporate officer life insurance policy (100,544) ---
Purchases of premises and equipment (7,631) (5,894)
----------- -----------
Net cash (used in) provided by investing activities (151,020) 759,557
----------- -----------
Cash flows from financing activities:
Net withdrawals from depositors' accounts (91,140) (200,356)
Cash paid on transfer of deposit liabilities (124,781) ---
Payments for cash dividends (10,087) (8,979)
Exercise of stock options 2,971 1,277
Purchase of treasury stock (44,277) ---
Securities sold under agreements to repurchase 288,113 ---
Other, net 25,792 22,434
----------- -----------
Net cash provided by (used in) financing activities 46,591 (185,624)
----------- -----------
Net (decrease) increase in cash and cash equivalents (122,516) 446,122
Cash and cash equivalents at beginning of period 575,974 1,704,379
----------- -----------
Cash and cash equivalents at end of period $ 453,458 $ 2,150,501
=========== ===========
Non-cash investing and financing activities:
Additions to other real estate owned, net $ 5,818 $ 6,533
=========== ===========
Loans to facilitate sales of other real estate $ 5,883 $ 4,335
=========== ===========
Unsettled trades $ 24,551 $ ---
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid for income taxes $ 33,753 $ 2,265
=========== ===========
Interest paid $ 116,550 $ 152,511
=========== ===========
</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 quarter ended March 31, 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 awards. The market price at the grant
date was $55.50.
For the quarter ended March 31, 1997, the Company granted options of 538,000
shares of the Company's common stock to certain officers, at an average
exercise price of $55.50. These awards vest ratably over three years on the
anniversary dates of the awards.
3. COMMON STOCK REPURCHASE PROGRAM
Under the 1997 5% stock repurchase program, the Company has used $44.3
million to repurchase shares of GreenPoint common stock. The current program
has not yet been completed. The repurchase is at the Company's discretion,
based on ongoing assessments of the capital needs of the business and the
market valuation of its stock.
7
<PAGE>
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
4. SECURITIES AVAILABLE FOR SALE AND HELD TO MATURITY
Securities held at March 31, 1997 are summarized as follows:
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized
Cost Gains Losses Fair Value
----------- -------- --------- -----------
(In thousands)
<S> <C> <C> <C> <C>
Securities Available for Sale
U.S. Government and Federal Agency
Obligations:
U.S. Treasury notes/bills $ 1,749,617 $ --- $ (25,899) $ 1,723,718
Agency discount notes 63,006 3 (135) 62,874
Mortgage-backed securities 1,708,448 --- (51,368) 1,657,080
Collateralized mortgage obligations 71,539 --- (829) 70,710
Trust certificates collateralized by GNMA
securities 397,204 --- (5,018) 392,186
Other 63,852 370 (286) 63,936
----------- -------- --------- -----------
Total securities available for sale $ 4,053,666 $ 373 $ (83,535) $ 3,970,504
=========== ======== ========= ===========
Securities Held to Maturity
Tax exempt municipals $ 641 $ 38 $ --- $ 679
Other 3,410 --- --- 3,410
----------- -------- --------- -----------
Total securities held to maturity $ 4,051 $ 38 $ --- $ 4,089
=========== ======== ========= ===========
Securities held at December 31, 1996 are summarized as follows:
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized
Cost Gains Losses Fair Value
----------- -------- --------- -----------
(In thousands)
<S> <C> <C> <C> <C>
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 March 31, 1997, the Company sold available-for-sale
securities aggregating $321.1 million, resulting in gross realized gains of
$0.5 million and $0.3 in gross realized losses.
The average maturities of the securities available for sale and held to
maturity at March 31, 1997 are approximately 8.6 years and 12.4 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 5.7 years. The estimated average life for all securities available
for sale is approximately 3.8 years.
8
<PAGE>
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
5. PURCHASE ACQUISITION OF MORTGAGE SERVICING OPERATIONS
On March 25, 1997, the Company announced the signing of a definitive
agreement in which the Company will purchase the Columbus, GA mortgage
servicing operations of Citizens Financial Group, Inc., for a net purchase
price of approximately $4 million. The purchase of the Georgia facility will
give the Company a stronger platform for servicing its national mortgage
portfolio.
6. 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.
9
<PAGE>
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
<TABLE>
<CAPTION>
Quarter Ended
----------------------------------------------------------------
Mar. 31, Dec. 31, Sept. 30, Jun. 30, Mar. 31,
1997 1996 1996 1996 1996
------------ ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Performance Ratios (Annualized):
Core cash earnings return on average assets 1.55%(1) 1.43% 1.42% 1.36%(1) 1.18%
Core cash earnings return on average equity 14.02 (1) 13.25 13.55 13.04 (1) 11.12
Return on average assets 1.05 (1) 1.02 1.00 0.90 (1) 0.75
Return on average equity 9.51 (1) 9.46 9.51 8.64 (1) 7.04
Return on average tangible equity (2) 16.05 (1) 16.37 16.08 14.62 (1) 12.42
Net interest margin 3.97 3.82 3.61 3.45 3.16
Net interest spread during period 3.64 3.52 3.34 3.20 2.87
Operating expense to average assets (3) 1.73 1.61 1.58 1.56 1.53
Efficiency ratio (4) 43.4 (1) 42.7 (1) 43.6 43.7 (1) 47.3
Average interest-earning assets to average
interest- bearing liabilities 1.08 x 1.07 x 1.07 x 1.06 x 1.07 x
Capital Ratios:
Company:
Period-end stockholders' equity to ending
total assets 10.81% 10.95% 10.58% 10.36% 10.58%
Period-end stockholders' equity less
intangible assets to tangible assets 6.83 6.75 6.13 6.07 6.31
Bank Regulatory Capital Ratios:
Leverage capital (5) 6.20 6.64 6.26 6.31 6.33
Risk-based capital ratios (5):
Tier 1 13.76 15.15 15.42 16.35 16.73
Total capital 15.01 16.40 16.67 17.60 17.98
Per Share Data:
Core cash earnings* $ 1.21 (1) $ 1.13 (1) $ 1.13 $ 1.09 (1) $ 0.95
Book value** $ 34.57 $ 34.77 $ 33.89 $ 33.65 $ 33.35
Tangible book value** $ 19.81 $ 19.92 $ 18.72 $ 18.80 $ 18.99
* Average shares used in calculation 42,235,000 42,069,000 43,138,000 44,664,000 45,653,000
** Period-end shares used in calculation 41,452,000 41,984,000 41,849,000 43,573,000 45,898,000
Total shares issued and outstanding 46,888,000 47,481,000 47,656,000 49,924,000 52,457,000
Asset Quality Ratios:
Non-performing loans to total loans 4.45% 4.78% 5.21% 5.77% 6.25%
Non-performing assets to total assets 2.84 2.89 2.91 2.86 2.94
Allowance for possible loans losses to:
Non-performing loans 30.32 29.48 29.05 28.07 26.49
Total loans 1.35 1.41 1.51 1.63 1.66
</TABLE>
(1) Excludes branch sales, asset sales and 4th quarter restructuring recovery.
(2) Average tangible equity has been calculated in accordance with regulatory
guidelines.
(3) Excludes goodwill expense, OREO (income) or expense and 4th quarter
restructuring recovery.
(4) The efficiency ratio is calculated by dividing the Company's operating
expense excluding goodwill expense, OREO (income) or expense and the 4th
quarter restructuring recovery by the sum of net interest income and
non-interest income.
(5) 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").
10
<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 service 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 first quarter's results include the following:
- - GreenPoint Mortgage Corp. (GPMC) opened regional mortgage production
offices in Atlanta, Denver, Phoenix and San Francisco.
- - The Company's loan originations were up 73% from the first quarter of
1996, due to the increasing national expansion of the Company's No Doc
mortgage business.
- - Asset quality continues to improve as non-performing loans and
non-performing assets decline. As a result of the decline in
non-performing loans and the growth of the loan portfolio, the ratio of
non-performing loans to total loans decreased to 4.45%.
- - Net interest margin increased to 3.97%, primarily from a decrease in
cost of deposits, and reinvestment of funds from the investment
portfolio into higher yielding mortgage loans.
Net income for the quarter ended March 31, 1997 was $39.7 million, or $0.94
per share, a 45% increase over the $27.4 million, or $0.60 per share, for the
comparable 1996 period. The quarter ended results include an after-tax gain
of $3.5 million on the sale of the Company's two banking offices in
Westchester County, New York and a $1.4 million after-tax gain on the sale of
bank-owned property. Excluding the branch and asset sale gains, the quarter
ended results were $34.7 million, or $0.82 per share, a 27% increase over the
comparable 1996 period.
11
<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 $12.9 million, or 12.0%, in the first
quarter of 1997, versus the comparable period in 1996. The increase was
primarily due to an improvement in the net interest margin. The average yield
on interest-earning assets rose 47 basis points to 7.86% and the average cost
of funds declined 30 basis points to 4.22%, compared to the first quarter of
1996.
Interest income decreased by $12.8 million, or 5.1%, to $238.3 million in the
first quarter of 1997, from $251.1 million for the comparable 1996 period.
The primary reason for the decrease was the decline of average money market
investments and investment securities, which was partially offset by the rise
in average mortgage loans.
Interest income on money market investments decreased by $19.0 million, or
81.4%, to $4.3 million in the first quarter of 1997, from $23.3 million for
the comparable 1996 period. The decrease was due to a decline in the average
money market investment balance of $1.4 billion, from $1.7 billion for the
first quarter of 1996 period.
Interest income on securities declined by $22.6 million, or 26.3%, to $63.1
million for the quarter ended March 31, 1997, from $85.7 million for the
comparable 1996 period. The decrease was primarily due to a decline in the
average securities balance of $1.5 billion, to $4.2 billion from $5.7 billion
for the first quarter of 1996.
Interest income on mortgages increased by $27.5 million, or 19.5%, to $168.8
million, in the first quarter of 1997, from $141.3 million for the comparable
1996 period. The increase reflects a higher average balance of $7.6 billion,
from $6.2 billion in the first quarter of 1996, principally as a result of
retained no-doc loan origination volume generated by GPMC.
Interest expense decreased by $25.6 million, or 17.9%, to $117.9 million in
the first quarter of 1997, from $143.5 million for the comparable 1996
period. The decrease reflects a $1.5 billion decline in average
interest-bearing liabilities and a 30 basis point decrease in the average
cost of funds, from the first quarter of 1996.
Interest expense on time deposits decreased by $21.9 million, or 20.9%, to
$83.1 million in the first quarter of 1997, from $105.0 million for the
comparable 1996 period. The primary reason for the decline was the decrease
in average time deposits of $1.1 billion in the first quarter of 1997,
resulting from deposit run-off. The average cost of time deposits decreased
by 35 basis points from the first quarter of 1996.
Interest expense on savings accounts decreased by $1.7 million, to $12.2
million in the first quarter of 1997, from $13.9 million for the comparable
1996 period. The decline in interest expense reflects a decrease in the
average balance of $139.3 million in the first quarter of 1997, versus the
same period in 1996.
12
<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 March 31, 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.
<TABLE>
<CAPTION>
Quarter Ended
-------------------------------------------------------------------------------------------
March 31, 1997 March 31, 1996
--------------------------------------------- --------------------------------------------
Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
--------------- ------------- ------------ ------------- --------------- ------------
Assets: (Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Mortgage loans (1) $ 7,565,440 $ 168,872 8.93% $ 6,158,622 $ 141,349 9.18%
Other loans (1) 27,815 562 8.08 35,693 657 7.36
Money market investments (2) 328,264 4,350 5.37 1,724,449 23,390 5.46
Securities (3) 4,234,381 64,439 6.13 5,695,334 85,711 6.04
Trading assets 2,468 39 6.41 --- --- ---
Other interest-earning assets 103,493 2,304 9.03 --- --- ---
--------------- ------------- ------------- ---------------
Total interest-earning assets 12,261,861 240,566 7.86 13,614,098 251,107 7.39
------------- ---------------
Non-interest earning assets (4) 923,744 1,053,743
--------------- -------------
Total assets $ 13,185,605 $ 14,667,841
=============== =============
Liabilities & Stockholders' Equity:
Interest-bearing liabilities:
Savings $ 1,876,561 12,238 2.64% $ 2,015,837 13,986 2.79%
NOW 335,353 1,409 1.70 337,902 1,548 1.84
Money market and variable rate savings 2,369,786 19,623 3.36 2,625,344 22,227 3.41
Term certificates of deposit 6,507,739 83,125 5.18 7,637,573 105,055 5.53
Mortgagors' escrow 85,766 251 1.19 76,858 263 1.38
Repurchase agreements 144,323 1,263 3.55 85,295 451 2.13
--------------- ------------- ------------- ---------------
Total interest-bearing liabilities 11,319,528 117,909 4.22 12,778,809 143,530 4.52
------------- ---------------
Other liabilities (5) 401,921 334,830
--------------- -------------
Total liabilities 11,721,449 13,113,639
Preferred shares of subsidiary 3,623 ---
Stockholders' equity 1,460,533 1,554,202
=============== =============
Total liabilities & stockholders'
equity $ 13,185,605 $ 14,667,841
=============== =============
Net interest income/interest rate
spread (6) $ 122,657 3.64% $ 107,577 2.87%
============= ===== =============== =====
Net interest-earning assets/net
interest margin (7) $ 942,333 3.97% $ 835,289 3.16%
=============== ===== =============== =====
Ratio of interest-earning assets to
interest-bearing liabilities 1.08x 1.07x
===== =====
</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.
13
<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 March 31, 1997
Compared to
Quarter Ended March 31, 1996
Increase/(Decrease)
--------------------------------------
Due to
--------------------------
Average Average Net
Volume Rate Change
--------- -------- ---------
(In thousands)
<S> <C> <C> <C>
Interest-earning assets:
Mortgage loans (1) $ 31,497 $ (3,974) $ 27,523
Other loans (1) (155) 60 (95)
Trading assets 39 --- 39
Money market investments (2) (18,514) (526) (19,040)
Securities (21,635) 363 (21,272)
Other interest-earning assets 2,304 --- 2,304
--------- -------- ---------
Total interest-earning assets (6,464) (4,077) (10,541)
--------- -------- ---------
Interest-bearing liabilities:
Savings (935) (813) (1,748)
NOW (12) (127) (139)
Money market and variable rate savings (2,125) (479) (2,604)
Term certificates of deposit (14,793) (7,137) (21,930)
Mortgagors' escrow 28 (40) (12)
Repurchase agreements 417 395 812
--------- -------- ---------
Total interest-bearing liabilities (17,420) (8,201) (25,621)
--------- -------- ---------
Net change in net interest income $ 10,956 $ 4,124 $ 15,080
========= ======== =========
</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.
14
<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 $1.4 million, or 37.6%, to
$5.0 million for the first quarter of 1997, from $3.6 million for the comparable
1996 period. The provision exceeded net charge-offs by $1.0 million for the
first quarter of 1997, to reflect the net effect of loan portfolio growth and
improving loan quality.
NON-INTEREST INCOME
Non-interest income increased by $7.7 million, or 67.0%, to $19.2 million for
the first quarter of 1997 from $11.5 million for the comparable 1996 period. The
increase is primarily the result of a $5.9 million gain on the sale of two
banking offices and a $2.4 million gain on the sale of bank-owned properties.
NON-INTEREST EXPENSE
Non-interest expense increased by $0.5 million, to $68.2 million for the first
quarter of 1997, as compared to the 1996 period. Charitable and educational
foundation contributions expense increased by $1.0 million, ESOP and stock plans
expense increased by $0.6 million due to a higher average stock price during
1997 and premises and equipment expense increased by $0.4 million, compared to
the first quarter of 1996. The increases were partially offset by the decrease
of $0.9 million in FDIC deposit insurance premiums due to the reduction in
assessment rates and the recapitalization of the Savings Association Insurance
Fund and a decrease of $0.6 million in other administrative expenses.
15
<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 increased by $6.4 million, or 31.6%, to $26.7 million in the
first quarter of 1997, from $20.3 million for the same period of 1996. The
increase in income tax expense is primarily due to a $18.7 million, or 39.3%
increase in income before income taxes, which was partially offset by the
decrease in the effective rate from 42.60% in the 1996 period to 40.25% in the
1997 period.
3. FINANCIAL CONDITION
Total assets decreased by $64.4 million, to $13.26 billion at March 31, 1997,
from $13.33 billion at December 31, 1996. Total loans held for investment, net,
rose $399.4 million to $7.69 billion at March 31, 1997, from $7.29 billion at
December 31, 1996. Securities available for sale decreased $384.9 million, to
$3.97 billion at March 31, 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
-----------------------------------------------
March 31, December 31, March 31,
1997 1996 1996
------------- -------------- ----------
(In thousands, except per share amounts)
<S> <C> <C> <C>
Net Income $ 39,671 $ 33,897 $ 27,352
Less: Non-recurring items, net of tax (1) 4,939 948 ---
------------- -------------- ----------
Core net income 34,732 32,949 27,352
Add back:
Goodwill expense 11,643 11,630 11,628
Employee stock plans expense 4,810 2,910 4,243
------------- -------------- ----------
Core cash earnings $ 51,185 $ 47,489 $ 43,223
============= ============== ===========
Core cash earnings per share (2) $ 1.21 $ 1.13 $ 0.95
============= ============== ===========
</TABLE>
- ----------------------
(1) Non-recurring items include branch sales, asset sales and 4th quarter
restructuring recovery.
(2) Based on the average shares used to calculate earnings per share.
16
<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 March
31, 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 to three years three years Total
------------ -------------- -------------- -------------- ----------- ------------
(in millions)
<S> <C> <C> <C> <C> <C> <C>
Total loans, net $ 969 $ 693 $ 1,338 $ 1,365 $ 3,334 $ 7,699
Money market investments (1) 378 --- --- --- --- 378
Securities held to maturity --- --- --- --- 4 4
Securities available for sale 971 212 519 956 1,313 3,971
Trading assets 25 --- --- --- --- 25
Other interest-earning assets 109 --- --- --- --- 109
------------ -------------- -------------- ------------- ------------ ------------
Total interest - earning assets 2,452 905 1,857 2,321 4,651 12,186
------------ -------------- -------------- ------------- ------------ ------------
Cash and due from banks 75 --- --- --- --- 75
Goodwill 11 11 21 84 485 612
Other non-interest-earning assets 388 --- --- --- --- 388
------------ -------------- -------------- ------------- ------------ ------------
Total assets $ 2,926 $ 916 $ 1,878 $ 2,405 $ 5,136 $ 13,261
============ ============== ============== ============= ============ ============
Term certificates $ 1,433 $ 1,335 $ 1,697 $ 1,769 $ 254 $ 6,488
Core deposits 258 258 516 1,819 1,891 4,742
------------ -------------- -------------- ------------- ------------ ------------
Total interest-bearing liabilities 1,691 1,593 2,213 3,588 2,145 11,230
------------ -------------- -------------- ------------- ------------ ------------
Other liabilities 595 --- --- --- --- 595
Preferred shares of subsidiary --- --- --- --- 4 4
Stockholders' equity --- --- --- --- 1,432 1,432
============ ============== ============== ============= ============ ============
Total liabilities and
stockholders' equity $ 2,286 $ 1,593 $ 2,213 $ 3,588 $ 3,581 $ 13,261
============ ============== ============== ============= ============ ============
Off balance sheet financial instrument $ 300 $ --- $ --- $ (300) $ --- $ ---
============ ============== ============== ============= ============ ============
Interest rate sensitivity gap $ 940 $ (677) $ (335) $ (1,483) $ 1,555
Cumulative gap $ 940 $ 263 $ (72) $ (1,555)
Interest rate sensitivity gap as a
percentage of total assets 7.09% (5.11)% (2.53)% (11.18)%
Cumulative gap as a percentage of
total assets 7.09% 1.98% (0.54)% (11.73)%
</TABLE>
(1) Consists of overnight federal funds sold and securities purchased under
agreements to resell.
17
<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 March 31, 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 liability sensitive $72.0 million at March 31, 1997. A
liability sensitive interest rate gap would tend to decrease earnings over a
period of rising interest rates, where declining rates would increase earnings.
The cumulative one-year sensitivity gap was negative 0.5% of total assets at
March 31, 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.
18
<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 $300 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 March 31, 1997, the interest rate swaps had
negative $0.6 million impact on mortgage loan income. The interest rate swaps
require the Company to pay a weighted average fixed rate of 6.33% and receive
three month LIBOR. As of March 31, 1997, the weighted average LIBOR rate that
the Company will receive is 5.54%. The agreements will expire in the third
quarter of 1999. As of the quarter ended March 31, 1997 the interest rate swaps
had a gross positive market value of $1.9 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 improved its asset quality during the quarter ended March 31, 1997,
as non-performing loans decreased by $6.5 million, or 1.8%, while non-performing
assets decreased by $8.3 million, or 2.2%. The ratio of non-performing loans to
total loans fell to 4.45% at March 31, 1997 from 4.78% at December 31, 1996. The
ratio of non-performing assets to total assets fell to 2.84% at March 31, 1997
from 2.89% at December 31, 1996.
Non-performing assets, net of related specific reserves, were as follows:
March 31, December 31,
1997 1996
----------- -------------
(In thousands)
Mortgage loans secured by:
Residential one-to-four family $ 267,192 $ 271,192
Residential multi-family 45,931 48,270
Commercial property 36,309 36,515
Other loans 182 170
----------- -----------
Total non-performing loans (1) 349,614 356,147
----------- -----------
Total other real estate owned, net 26,756 28,566
----------- -----------
Total non-performing assets $ 376,370 $ 384,713
=========== ===========
- ----------------------
(1) Includes $27.4 million and $31.6 million of non-accrual mortgage loans
under 90 days past due at March 31, 1997 and December 31, 1996,
respectively.
19
<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:
Quarter Ended
March 31,
--------------------------
1997 1996
----------- -----------
(In thousands)
Balance beginning of period $ 105,000 $ 105,500
Provision charged to income 5,017 3,646
Charge-offs (4,153) (4,589)
Recoveries 136 443
----------- -----------
Balance end of period $ 106,000 $ 105,000
----------- -----------
----------- -----------
CAPITAL RATIOS
The Company's ratio of period-end stockholders' equity to ending total assets
at March 31, 1997 was 10.81% 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 March 31, 1997, that the Company and
the Bank meet all capital adequacy requirements to which it is subject.
20
<PAGE>
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations - (Continued)
As of March 31, 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>
For Capital
Actual Adequacy Purposes
- ---------------------------------------------------------------------------------------------------
(In millions) Amount Ratio Amount Ratio
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
As of March 31, 1997
Total Capital
(to Risk Weighted Assets):
Company $ 942.1 16.58% $ 454.5 8.00%
Bank 849.2 15.01% 452.7 8.00%
Tier 1 Capital
(to Risk Weighted Assets):
Company $ 871.1 15.33% $ 227.2 4.00%
Bank 778.5 13.75% 226.3 4.00%
Tier 1 Capital
(to Average Assets):
Company $ 871.1 6.90% $ 504.8 4.00%
Bank 778.5 6.20% 502.4 4.00%
<CAPTION>
For Capital
Actual Adequacy Purposes
- ---------------------------------------------------------------------------------------------------
(In millions) Amount Ratio Amount Ratio
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
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>
21
<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 fourteen
unrelated legal complaints which assert that infant plaintiffs sustained
personal injuries from the ingestion of lead based paint, chips or dust.
Additionally there are ten 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.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
EXHIBIT
NUMBER
11.1 Statement Regarding Computation of Per Share Earnings
27.1 Financial Data Schedule
22
<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 March 31,
1997.
23
<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 May 9, 1997
24
<PAGE>
Exhibit 11.1
Statement Regarding Computation of Per Share Earnings
(In thousands, except per share amounts )
Quarter Ended
March 31,
------------------
1997 1996
------- -------
Net income $39,671 $27,352
Weighted average number of common stock
and common stock equivalents outstanding during
each period - primary 42,235 45,653
Weighted average number of common stock
and common stock equivalents outstanding during
each period - fully diluted 42,132 45,782
Net earnings per share - primary $ 0.94 $ 0.60
------- -------
------- -------
Net earnings per share - fully diluted $ 0.94 $ 0.60
------- -------
------- -------
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 73,866
<INT-BEARING-DEPOSITS> 1,540
<FED-FUNDS-SOLD> 378,052
<TRADING-ASSETS> 24,551
<INVESTMENTS-HELD-FOR-SALE> 3,970,504
<INVESTMENTS-CARRYING> 4,051
<INVESTMENTS-MARKET> 4,089
<LOANS> 7,804,655
<ALLOWANCE> (106,000)
<TOTAL-ASSETS> 13,261,221
<DEPOSITS> 11,230,495
<SHORT-TERM> 288,113
<LIABILITIES-OTHER> 306,081
<LONG-TERM> 0
0
0
<COMMON> 551
<OTHER-SE> 1,432,358
<TOTAL-LIABILITIES-AND-EQUITY> 13,261,221
<INTEREST-LOAN> 169,434
<INTEREST-INVEST> 67,500
<INTEREST-OTHER> 1,411
<INTEREST-TOTAL> 238,345
<INTEREST-DEPOSIT> 116,646
<INTEREST-EXPENSE> 117,909
<INTEREST-INCOME-NET> 120,436
<LOAN-LOSSES> (5,017)
<SECURITIES-GAINS> 261
<EXPENSE-OTHER> 68,234
<INCOME-PRETAX> 66,395
<INCOME-PRE-EXTRAORDINARY> 39,671
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 39,671
<EPS-PRIMARY> 0.94
<EPS-DILUTED> 0.94
<YIELD-ACTUAL> 3.97
<LOANS-NON> 349,614
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> (105,000)
<CHARGE-OFFS> (4,153)
<RECOVERIES> 135
<ALLOWANCE-CLOSE> (106,000)
<ALLOWANCE-DOMESTIC> (106,000)
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
